‘There is great disorder under Heaven, the situation is excellent’

The eyes of the world were fixed on Xi Jinping’s speech inaugurating the 20th Congress of the Communist Party of China for a variety of reasons. In the short term, we wanted to know whether there would be a quick reversal of the zero-COVID policy, which has not just disrupted growth in China, but also led to disaffection among the masses -- a banner in Beijing on the eve of the meeting read, ‘’We want food, not PCR tests. We want freedom, not lockdowns… ’’.

The world’s interest in seeing an end to the zero-COVID policy lies in the hope that, if Chinese growth resumes, it would provide a market to offset the recession likely to grip the West. Investors were also keen to see whether there would be signals of a U-turn in the crackdown on tech companies in China and a climbdown of Xi’s stance on reining in the private sector. These hopes have been dashed and the message from the conclave seems to be that there will be no change in recent policies. In The Eastern Window, Saibal Dasgupta says the final line-up of the members of the Standing Committee of the Politburo, the highest policy making body in China, will tell us whether Xi has been able to pack it with his yes-men, or whether there is some opposition to his policies.

From India’s point of view, though, Xi’s continuation in power, if it results in a weaker China, may not be a bad thing. After all, China’s success in the last few decades has been the result of opening up the economy and the vitality of its private sector, rather than state planning. But Xi’s abrasive foreign policy and American alarm at China’s rapid catching up have led to a pushback by the US and its allies. Small wonder then that Xi in his speech said the CPC “must be mindful of potential dangers, be prepared to deal with the worst-case scenario, and be ready to withstand high winds, choppy waters and even dangerous storms”.

From our perspective, the longer it takes for China to junk its zero-COVID policy and its lockdowns and the lower its growth, the lower will be commodity prices, which benefits India as a commodity importer.

In the longer-term, the Sino-US rivalry is a great opportunity to push the China+1 strategy and invite more multinationals to set up businesses in India. China’s loss will be India’s gain, not just in economic terms, but also politically. The US government’s latest National Security Strategy says, ‘’As India is the world’s largest democracy and a Major Defence Partner, the United States and India will work together, bilaterally and multilaterally, to support our shared vision of a free and open Indo-Pacific.’’

Buy why exactly is Xi bent on reversing the policies that led to so much prosperity and prestige for China? The answer lies in the contradiction between the one-party state and capitalism and open markets. Capitalism has a way of setting up countervailing centres of power that co-exist uneasily with a totalitarian state. It is exactly the same problem that Lenin had with the New Economic Policy in the Soviet Union, a policy that was soon reversed by Stalin. Xi is attempting to assert the supremacy of the Party, which, it goes without saying, also cements his absolute power. But what is good for the Party may not be good for China. It remains to be seen whether Xi is able to successfully ride out the storms that he mentioned in his speech.

As for India, the new world order that is unfolding offers an excellent opportunity. For us, as Chairman Mao said in an altogether different context, ‘’There is great disorder under Heaven, the situation is excellent.’’