Gunners Shot - CORONA THE CHINESE CHERNOYBYL

suryakiran

Team StratFront
Dec 1, 2017
766
927
Bangalore
Part 1 - CORONA THE CHINESE CHERNOYBYL
By Lt. Gen. P R Shankar (Retired)

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THE DEFINING PICTURE OF THE CHINESE VIRUS

A piece of advice.
Do not hug a Chinese.
Maintain twice the recommended social distance.
That, in my vocabulary is the Viral Distance!

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THE DEFINING PICTURE OF VIETNAM WAR

It takes an idea to spark a revolution. The Chinese virus is more than an idea. In Oct 2018, in an article titled China an Overstretched Hegemon I had discussed the issue of Collapse of China. Very recently in my article China's Corona Wash, I had again brought forth this issue. In the overall scheme of things, the Chinese Virus was portending ominous things for its motherland. My analysis indicated that Collapse of China was one of the likely outcomes.

The Chinese Virus has spread to the rest of the world. It has crippled thriving economies and destroyed the subsistence economies of vastly underprivileged people. More importantly, it caused death and devastation of innocent people and their livelihood across all barriers. Slowly but steadily the finger of blame for this pandemic has swung unerringly towards China. Despite best Chinese PR attempts no one believes that China sacrificed itself or handled the situation better or provided global leadership or came to anyone’s aid. On the other hand the converging perception is that China bungled, delayed informing the rest about the pandemic in connivance with WHO and is involved in usurious ‘mask diplomacy’ tantamount to criminal negligence. The evolving consensus, and that is firmer by the passing day, is that there is a decoupling required from China. This had started even before the viral outbreak. It is now starting to gather steam with Japan and USA taking the lead. We will leave this here and come back to it later.

Very recently, China upwardly revised its death figures in Wuhan by 1290 (ie 40%). Why? I do not know. Probably to assuage the international community that it is coming clean. Probably to signal to its own population that it is transparent, and the world is griping foolishly about Chinese opacity. To me it signals something else. Firstly it is proof of Chinese under-reporting. If these are the figures for Wuhan, what are the figures for the rest of China? Coming later? Even with this upward revision, China has had only 3 deaths per million against South Koreas 5 per million. Surely China has not managed its situation better than South Korea? Hence the real figures are still hidden. It reinforces lack of trust in China. Secondly, by under-reporting, China has deprived all of us of some valuable research data which would have given better clues as to how to deal with the pandemic and saved lives. Under the circumstances it is criminal. The crucial issue is however something else.


The main context is that it has unmasked the real motive. Let me amplify. In my earlier article Coronation of the King, I had outlined four scenarios. These were Bumbling Ignorance, Loss of Control and Evading Reality, Exploiting the Situation and Biological Warfare. My take on ‘Exploiting the Situation’ was that the situation in Wuhan could have developed accidentally due to any scenario. However since it happened, why not deliberately export it to others? ‘Exploiting the Situation’ theory fits in well with the reality that internal movement was banned in China when external bans were being contested and resisted. Also, Beijing and other major cities being unscathed to the extent of Wuhan gives credibility to this line of thought.

Let us further granulate the scenario of ‘Exploiting the Situation’. The outbreak occurs. Human to Human transmission is confirmed. The SARs experience of 2003 suggests that things are bad. Realization sets in that an unknown uncontrolled evil genie is out of the bottle. The Virus is going to cripple China. Knock it out of its path of superpower glory. This is wargamed quickly. A course of action is put into execution. First downplay it by continuing with the huge feast in Wuhan. Nothing is wrong. Festivities continue. Smokescreen up. The leader makes a statement to show resolute intent to curb the virus. He then dives out of the scene. The numbers are underreported. The Virus is allowed to seep out to other parts of the world through departing international travelers; secure in the knowledge that the problem will surface all over the world only after two weeks. Right then things seemed to be ok for an onlooker from outside. Hugs are sought in public from gullible Italians. So others are lulled to think it is a minor local event. Information is suppressed. Outside health officials are kept at bay. They cannot assess the real deal. The WHO is subverted and used to endorse the Chinese view. All those who enforce travel bans are castigated. Meanwhile internal travel bans are put in place. The Chinese fight a valiant battle to defeat the Virus in its land. The leader then comes out of hiding to take the bows. The result. What we are seeing now. Rest of the World - crippled. China back on its feet. Advantage China. Leader of the World. Once everyone is grappling with their deaths and pandemic problems, quietly release some more figures in the confusion. The context and result are clear. Deliberate action is evident for those who can analyze. The only hitch is that this plan while succeeding in ‘Exploiting the Situation’ has done damage beyond the imaginable. The world will get wise to it. A matter of time. It will be a nail in the Chinese coffin. This is straight out of a Tom Clancy novel. Except that it is a true Chinese Script being played out sans Jack Ryan to save the world. He (CIA) was sleeping on duty or AWOL.

Now let us see the geo-economics. The Chinese economy is set to contract by 6.8% in the Quarter. Most of this is in the manufacturing sector, export driven and with minimal internal consumption. There are reports that many companies are already filing for bankruptcy and there are layoffs in China (real estate and startups are mostly hit). Internationally, there is clarity that a significant portion of manufacturing and supply chain capacities will have to be relocated to outside China. The minimum I foresee is 25%. That means 25% job losses too. That is huge. During this pandemic, many countries will be forced to become self-reliant on their capacities in many areas. It is a matter of survival. That business will never come back to China. There are reports that all BRI projects have ground to a halt. Many of these projects are in impoverished countries whose governments might not survive the Chinese Virus. As of now they are NPAs - Dead ends to Nowhere and will remain so. There will be renegotiation and downsizing of many of these. I do not see new projects commencing for at least a couple of years. The tail end will be closure of many more businesses in China. China has been a heavy investor in Africa. Many African nations are now upset with China for exhibiting ‘racism’. China will experience a back lash from some of these nations. China might have recovered. Others have not. Their economies are contracting too. Unless goods are essential, no country will have the appetite or the money to buy anything from China. That means the ‘Made in China’ plan to make export oriented hi tech items will get hit. There is also an emotional backlash from major sections of the international community. The viral images of Italians hugging Chinese and then dying by the droves due to the Chinese Virus will not go away. These are defining moments of this war. To me it as powerful as the photo of the Napalm Girl of the Vietnam War. It changed the course of that war. This might change the course of China. Some of us will carry it to our graves. While most of this is external to China let us see the internal dimension.

The Virus from Wuhan has not exited China. There are reports that it is surfacing in the outer rims of China. There are also reports of a second wave. So it is not as if China is home and dry in a post pandemic paradise where manufacturing is humming all over again. Then there is the issue of a debt bubble. China existed on a huge debt bubble. Which way will this bubble go? I do not know. It will not deflate or be filled up easily. A burst is on the cards. In any scenario, the outcomes for China will be nasty. Then there is the issue of military funding. Chinas huge investment in building the most powerful and modern military will hit a circuit breaker. Militaries cost money. Militaries under change and modernization cost even more. Unfortunately, if there are no wars or conflicts, huge expansion plans are dead end investments. All this will end in loss of jobs in China and “Food Off the Chinese Household Table”. I do not think that China has the fiscal space to print its way out of trouble. I also do not think that we will see visuals of Chinese lining up in cars maintaining prim social distances to collect their weekly social security cheques. If things go bad, there will unrest due to poverty and hunger. Then of course, there is this issue of suppression of people’s rights. Hong Kong has not vanished. If anything the pro-democracy move will only intensify.

In all this, just factor the Virus itself. It is noticeably clear that it will not vanish one fine morning. It is going to turn from a pandemic to an endemic. We will be sleeping with our enemy forever. Till a vaccine comes up the world will not move to a sense of normalcy. The new normal will be built on isolation or interest blocks based on openness and trust with a sense of shared values. Where does a China which has “Exploited the Situation” fit into this paradigm? You must be in Pakistan, Serbia or some such place to be considered a friend if you are a Chinese. Even there I doubt if people will respect a Chinese. Remember the Pakistani TV anchor saying China ne Chuna laga diya!

So what do we see? A China which is guilty. A China with huge losses in businesses and jobs. A Chinese debt bubble deflating or bursting. A China which will be shunned emotionally and physically. A China which will continue to grapple with its homemade Virus in the most unadulterated form. A China with unrest amongst its 1.6 Billion people. The Chinese Summer of Discontent is here. There is a pressure cooker situation in China. There was a similar situation in USSR after 1986 when Chernobyl happened, Gorbachev acknowledged that USSR ultimately collapsed in 1991 due to that disaster. It took five years in a situation where Chernobyl was a pure accident. This is a situation where Chinese guilt in “Exploiting the Situation” is clear. If this is compounded by any fact that the Virus leaked out of the Wuhan Virology Institute, the pressure in the cooker will only increase. All things considered; Corona is the Chinese Chernobyl. Change is afoot. Will the inflection point arrive to trigger the Chinese collapse? Will China face another revolution? Will China democratize? No direct answers now. The funny thing about revolutions is that it takes a tinder to light a forest fire. The Chinese Virus might have finally infected its own master. It is a slow burner. Boy, when it does explode it goes into an all-consuming fission. Watch out.

Team Strategic Front - The above article is being reproduced with the permission of Lt. Gen. P R Shankar. His personal blog can be accessed at Gunners Shot - Gunners Shot
 
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Quicksilver

Active member
Dec 6, 2019
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this wont fully develop unless a multi pronged strategy comes into force:
1) the blame for so many deaths and economic loss should be borne by china - where the virus emerged
2) A constant PR by the rest of the world asking china for taking moral responsibility
3) Take manufacturing our of China into multiple other countries
 

suryakiran

Team StratFront
Dec 1, 2017
766
927
Bangalore
Part 2 - Chinese Checkers
By Lt. Gen. P R Shankar (Retired)

A sequel to CORONA : THE CHINESE CHERNOBYL
THE INITIAL MOVES IN THE GAME OF INTERNATIONAL CHINESE CHECKERS HAS COMMENCED

Global Clarity. The world is clear that the Virus originated in China. Whether it originated from the laboratory or wet markets of Wuhan is a matter of debate. However one thing is certain. Once human to human transmission was confirmed, International Travel was allowed by the Chinese while Domestic travel was banned. Deliberately? The world has wised up to the fact that China has probably exploited the situation. Reactions from USA, West Germany, France, Australia, EU, Sweden, Japan, and other countries say it all.

Chinese Aggression. Initially China tried to suppress its shortcomings on handling the breakout in a maze of falsification, deceit and lies. We still do not have details of deaths or tests carried out in China. It graduated to aggressive ‘Mask Diplomacy’ to position itself as the savior of the globe. That came unstuck with reports of substandard and faulty PPE, Testing Kits, Healthcare Equipment and Masks. Even India, has had issues with faulty Rapid Antibody Testing Kits. China projected itself as having handled the problem better than everyone else forcing the French President Macron to term it as ‘Naïve’. China, then resorted to naked inducements, threats and derision to belittle or coerce other countries into toeing its line. Militarily, China is hyperactive in the South China Sea to extend and cement its illegal grab actions. Reports abound that production in China is back online. The economy is reportedly purring again for the world to witness a China led recovery. Rumors about China decoupling from the dollar went viral. Chinese are aggressively roving markets to acquire stakes in stressed assets all over. Overall their reaction has been overly aggressive. What does this aggression portend? Crowning of a king? Or the start of a downfall?

Decoupling. The process of decoupling supply chain and manufacturing from China was tee’d off by Japan. It was followed suit by USA and EU with their plans. This exodus is irreversible. Slowly but steadily, supply chains will get relocated to outside China. Hedging is fundamental management logic. Global value chain realignment will lead to job losses and business collapses. In the long-term China could be marginalized. This assessment is as per Chinese researchers and analysts.

Self Sufficiency. The pandemic has started a self-sufficiency chorus. This is not decoupling or relocating. Any product(s) considered critical will hereafter be produced within countries irrespective of costs and will be protected by them. WTO or not. Globalization or not. It is a matter of strategic independence for every nation. In any case in an era of looming recession, some cost related inflation and job creation will help. Our PM has already enunciated it. We have even started looking at revival of inactive API facilities so that we are self-sufficient in this sector. Similar moves will commence in all countries as per their critical areas. It will detract from China. It will also shave off numbers to make Chinese goods less competitive.

BRI. In Apr 19, the BRI was described as a Loose Belt and a Bumpy Road[1]. It is proving to be beyond that. Pakistan is seeking debt write offs/ delayed debt re-payments/ conversion to equity on BRI /CPEC projects. Others are also seeking such arrangements. Overall most of these projects which are in high risk countries are in standstill mode. With host countries still in grip of the Pandemic, a conservative estimate will be about a year for revival with at least 25-30% cost and time overruns. The viability of many of these projects in high risk countries was hugely suspect to start with. Today it is even worse. Further, on ground, African nations and people will push back due to the racism factor which has emerged. When you go into details, I am reminded of the ENRON project in Dhabol, Maharashtra. It was to change India’s fortunes. It sank without a trace. The similarities between the ENRON project and BRI projects is eerie. The BRI was also the route of travel for the virus to places which could have been altogether avoided. This is a people’s issue which will be remembered for long. Finally the sheer weight will make this project collapse like many other ‘Grand Corridors’ of the world[2]. Debt trap diplomacy might trap China itself.
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Made in China 2025. The Made in China 2025 plan was conceived to convert China from being a low-end manufacturer to becoming a high-end producer of goods. That would reboot a cooling economy. Ten core areas were targeted as shown in the graphic. The idea was to go from ‘Made in China’ to ‘Create in China’. However all this involved coercion and arm twisting for forced technology transfer and IPR theft. This was one of the issues in the Trade War. As it stood, the timelines of realizing the plan were delayed even before the Virus came into play. The Virus now impinges on this plan heavily. Intellectual input will dry up in all probability. The original plan envisaged export of these hi-tech goods to EU, USA and wealthy countries. That will now have to be taken off the table during the oncoming recession.
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Jobs. If you think that China is brimming with jobs you are mistaken. Even before the pandemic China had started losing jobs. The Trade War made them lose 2 million jobs[3]. China’s unemployment situation has worsened after the pandemic started. Consumer demand at home and abroad has fallen. 5 million job losses are reported in China. In turn a new debt bubble has emerged and is on the verge of bursting – that of deficit retail spending [4]. Small businesses are hurting. Things are not hunky dory. Job losses can lead to unrest. That is very tricky for authoritarian systems.

Military. All militaries are money suckers. The Chinese military is just a bigger one. Why? It is under transformation. Any modernization, refit or transformation is a costly process. Will China continue to economically fuel its military expansion? If not, there will be repercussions. There is no way it will become a superpower[5]. Unless Chinese military has a larger footprint, the global ambitions of China must be limited. If yes, the question is, can it afford the expenditure without other collaterals?

Hong Kong Unrest. Hong Kong and democracy protests have revived. Pepper guns were used to disperse a group in a mall. That is not great news for China. These issues can spread and be destabilizing.

Natural Resources. China, unlike USA, Australia or Europe is not endowed with natural resources. Water is not enough. Extraordinarily little fossil fuels. It must depend on food imports from USA and Africa. This will be a limiting factor as events go by. Its major coal deposits are locked in the Tarim Basin in Xinjiang . The major rationale for the CPEC is to unlock the coal from this area and get it to the Gulf[6]. The major projects in BRI are coal fired Thermal power plants to be fed eventually from the Tarim Basin Coal. Delayed monetization of this locked up resource will hurt China badly.

Debt Bubble. The fact that China was sitting on a huge debt bubble was well known. The debt to GDP ratio is estimated to be between 574-800% as per a report[7]. I am not an economist. I am not sure what these figures mean. However I know that if your economy contracts or stagnates the bubble of circular debt could burst. That is what happened during the subprime crisis right? Having said that, in the current situation all countries will run up a debt bubble. The question is that will China revive enough to fill or deflate the bubble, or will it burst?

The Pandemic Rages. The pandemic continues to rage. The real picture will emerge when others start flattening their curves and restart their recovery. Wait for a couple of months for a clearer picture to emerge. The effect of many issues outlined above will start manifesting slowly. Remember, this Virus is a slow burner. It explodes one day. Similarly it might have already lit a slow burning fuse in China. The longer the pandemic rages the harder it will be for China. In fact, the earlier a vaccine is found the better it is for China. They know it and that is why there are hurtling at breakneck speed to come up with a vaccine. The vaccine is not for the Virus alone. It is for their economy also.

The Internal View. Some time back there was an internal view in China that it was in a “historic period of strategic opportunity”. That has changed. It is now reported that Xi Jinping said words to the effect that China must make ideological and work preparations to respond to changes in the outside world and get ready for unprecedented external adversity and challenges that could last for a long time to come in the long run[8][9]. Self-prophetic or realistic?

Conclusion. Consider these and then draw your own conclusions.

a. Much of China’s export-oriented economy relies on the rest and the not the other way around.

b. When you meet an untrustworthy shop keeper selling substandard items, compounding it with coercion and threats, you change shops. Dont you?Chinese ‘Wolf Warrior’ diplomats have added fuel to fire by spewing derision, coercion and threats. They are creating the images of their country being an international villain except in Pakistan!

c. The first wave of the pandemic is not over, and people are talking of the second wave. By the second wave arrives, nations will be self-sufficient and rely less on China.

d. There is talk of the QUAD being an economic grouping. USA, Japan, India and Australia represent a hefty over-match.

e. Longer the pandemic greater the ‘Isolation’ and farther away the 'Globalization’ which China seeks.

f. We are talking of an authoritarian country under heavy information control. We do not know what is happening underneath.

All these events happening individually is bad news. Collectively it is even worse. In resonance it could be disastrous. The Virus is forcing resonance. Slowly and steadily. Soon China will reach an inflection point when its Chernobyl will go critical.

What is different from the last article two weeks back? The ideas are taking definite shape, numbers are falling in place and events are identifiable.


Soon China will reach an inflection point when its Chernobyl will go critical.
What is different from the last article two weeks back? The ideas are taking definite shape, numbers are falling in place and events are identifiable.

There is no reset button in this pandemic. The world will move to a different place.
That place will not be globalized the way Chinese want it to be.
Nations will be linked to each other, will be more self-sufficient and independent strategically.


[1] The Story Of BRI So Far—Loose Belt And Bumpy Road.
[2] The Grand Global Corridors & China Pakistan Economic Corridor
[3] US trade war has cost China ‘almost 2 million industrial jobs’, CICC says
[4] Coronavirus Job Losses Threaten To Burst China's $1 Trillion Consumer Debt Bubble
[5] IS CHINA'S POWER SUPER? BY LT GEN P R SHANKAR (RETD)
[6] Coal Firing ‘CPEC’: Colonisation Of Pakistan & Enrichment Of China
[7] China's debt bubble is immense and could destroy the global economy
[8] Is the pandemic a turning point for China’s role in the global economy?
[9] China braces for international backlash in a post-coronavirus world


Team Strategic Front - The above article is being reproduced with the permission of Lt. Gen. P R Shankar. His personal blog can be accessed at Gunners Shot - Gunners Shot
 
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suryakiran

Team StratFront
Dec 1, 2017
766
927
Bangalore
Part 3 - CHINA FIRST, SECOND AND THIRD CANNOT ENDURE
By Lt. Gen. P R Shankar (Retired)

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The World wants China to be like it!
China wants the World to be like it!


General

Things are moving quite rapidly globally. The Virus is raging on, under control or making a comeback depending on where you are. Equally Chinese aggression, Chinese Diplomacy, and China led New World Order are being debated hotly. Makes one wonder. Is China the only country in the world? However certain events suggest that things are not rosy. Outward appearances could bely the actual inside health. Within China itself things seem to be “IFFY”. Hence it is time to take a dive into China to see what is happening there.

Corona Virus Scene
Has the virus come back home to roost in Wuhan? The entire city of 11 million is now being tested. Shulan, in Jilin Province has seen an outbreak. It has set off alarm bells in neighboring provinces. Typical Chinese reaction. A Party official(s) has been sacked. 100 million under lock down. The point is that China is not out of the woods. The Chinese reaction represents a paranoia. The Virus will haunt them. Unfortunately, it does not react to communist edicts. As the Virus continues to rage globally, as it will, the stigma on China will keep magnifying. The danger China faces is that the power of democratic politicians to sway people and deflect their shortcomings. The Chinese Communist Party has vastly underestimated. Democracies can be more venal than autocracies since politicians practice survival and blame game on a daily basis. If Governments must survive their failings, China and Corona offer perfectly legal targets to aim at. Politicians will not miss it.

100 Nation Effort
100 nations have backed a joint Australian and European Union proposal to inquire into the origins of the Virus. Xi Jinping has offered a comprehensive review after the Pandemic recedes. That might never happen. These democracies have suffered, and their people hold China responsible for the pandemic. India has also joined in. These are also the more affluent nations. Hitherto fore China has been dealing independently with each and squaring them off. Things seem to be changing. Can China hold off countries whose determination stems from the suffering of their people? How determined are these countries? It is already being assessed internally that the aggression of Chinese ‘Wolf Warrior” diplomats who have often derided and threatened other systems and countries has only succeeded in stiffening the anti-China sentiment. A push for an independent inquiry into the coronavirus outbreak is significant. It will either force China to be more transparent or harden anti-China sentiment depending upon how things play out. Chinas rise and attitude is viewed as a threat to national interests. That is coming across very clearly unless of course one is from Pakistan.

Global Leadership Role
There is a question mark on the Chinese global leadership. China contributed just US$50 Million to WHO after USA withdrew support. Even Bill Gates, an individual, has donated six times more. The EU leaders raised US$8 billion to develop drugs and vaccines to fight the pandemic. China made no financial commitment. China is now offering US$2 billion to WHO. State media propaganda praises Chinese Leadership, Communist Party, and China as a world power. It highlights decisive Chinese response and shows the rest of the world as struggling. China saving the world is a great theme when failed mask diplomacy, rejection of substandard kits and PPE sold at exorbitant prices is hidden. An internal debate has however started where views are that, no matter what the international situation is, China must manage its own affairs well (which is a tacit admission that it has not). Xi Jinping has urged Chinese to be “mentally and professionally prepared for the worst-case scenarios”. Chinese expect a global backlash. More hostile than the Tiananmen crackdown backlash. Overall the fact is that China is not only unwilling to assume leadership but does not have the capacity, resources, and experience. This is co related by the fact that it contributes truly little to the UN also. The entire outlook of China can be summed up as - ‘China First, Second and Third’’. Rest be damned.

Unemployment and Loss of Jobs
It is reported that 80 million people have lost jobs, 20% Chinese households can survive 2-3 months without income and 40% a couple of months more. This is based on a survey of 120000 people by China Household Finance Survey and Research Centre, Chengdu. The situation is so serious that South China Morning Post has run a series of six articles on job loss and unemployment. Estimates of migrant workers in China vary from 175 to 290 million. Around 1/3rd are out of jobs. 8.7 million new graduates have come out of universities. Very few have jobs. 150 million self-employed business are facing steep fall in revenues. Many are folding up. Even before the pandemic, factories were closing but people could get jobs in an expanding service sector. That virtuous transformation is disrupted. Service sector jobs are vanishing, factories are closing and workers facing layoffs. Salaries are down to a quarter in many cases. Many jobs are traditionally under the radar and hence there is no unemployment insurance. China’s regional disparity is huge. The situation in smaller inland cities and rural areas is believed to be worse. People in inland provinces and poverty-stricken areas are losing their lifelines. Overall the situation is not dissimilar to our migrant scene. Ours has been magnified by international media. Severe censorship has hidden theirs. It is my hunch after reading the entire series of six articles that our social welfare schemes and benefits seem far better. However the stark issue is that China has major problem. Most of the jobless people of this generation have not faced this situation before in their lives. The unrest and instability potential is huge.

BRI
The BRI continues in a state of virtual standstill. Projects remain on the backburner for most countries. Lockdowns and closures continue to disrupt supply chains including from China. Migrant Chinese workers have been quarantined or repatriated or banned. Most African nations are asking China to forgive the debt. Countries include Angola, Nigeria, Congo, Equatorial Guinea, South Sudan, Seychelles, Mauritius, Zambia, Botswana, South Africa, Zimbabwe, Ethiopia, Kenya, and Sudan. China has lent US$143 billion to 49 African governments and their state-owned companies between 2000 and 2017. All this is under threat. Of course the status of the Flagship CPEC in Pakistan is too well known. China is now shifting focus to concentrate on two nonphysical components of BRI namely “Health Silk Road (HSR)” and “Digital Silk Road (DSR)”. These are salvaging attempts. I do not see revival of work this year. The burden of the BRI will be heavy and a drag on China.

Decoupling and Self Sufficiency
The decoupling and self-sufficiency process has started. Our own ‘Atma Nirbhar Bharat Abhiyaan ’ has been outlined. USA has started talking to Chip Makers to shift out of China. Japan has offered 2 Billion to its firms to move out. In fact most countries are coming out with their own ‘Atma Nirbharta’ programs as per their requirements. There is a resolve not to put health and other core security interests’ hostage to China anymore. There will be second order effects. Relocation of global supply chains has also commenced with companies looking for alternatives. The culmination will be less dependency on China. Which means China has less/ reduced leverages. Also China will lose that chunk of business for ever. Amidst all this one more thing which is clear is that Huawei is being blocked very aggressively by USA. If Huawei is blocked, areas /loopholes which China used to exploit for IPR theft will also get blocked.

Military
There was news that modernization of their military is likely to continue unabated. That is something I will take with a pinch of salt. During recessionary conditions, one starts looking at life extension / upgradation to match budgets. Replacing an old system with a new one is a very costly and extensive process since an entire ecosystem must be changed - new weapons, new storage, ammunition, spares, maintenance, and new production. This cycle would have been interrupted. Most important is training. PLA is a Conscript Armed Force. It needs high turnover rates of recruitment and training. This part has been disrupted. The longer the virus lasts, greater will be the problem for PLA which is a 2.3 million force. At some point combat efficiency will get hit.

Hongkong
The Hong Kong issue is still playing out. Demonstrations are happening and people are being arrested. It continues to be a festering sore. China views it as a weak link in its security. Things are working to a head.

Taiwan
There are repeated nationalistic calls within the mainland to capture Taiwan. Everyone knows that it is beyond China to do so now. It is like the Indo Pak scene. Whenever an incident happens, the clarion call of nationalists is to sort out Pakistan or retake POK by force. Such calls divert the attention of the masses from the main issue. Same there.

Economy
There is a lot of debate whether China will have a V (quick rebound), U (deep and prolonged), L (slow) or W (up and down) recovery. There is no clear answer. Which ever way it goes, it will not be rosy. Its huge debt fueled economy makes it tough to start infrastructure growth. There are suggestions that regional governments should start major infrastructure projects. It is like asking Orissa or MP to build an international airport instead of AAI. China has held back any major stimulus unlike other nations. The official view is that it is not needed. The opposite view is that any stimulus will only end up servicing debt. There is an export shock which is expanding with the feeling that the worst is yet to come. The export economy supports 112 million jobs. These are at risk. Recent South Korean data showed that in May, in ten days, exports fell 46.3 %. Chile’s export of copper (used in everything from cars to power transmission equipment to smartphones) fell by 7.8% in April mainly due to poor demand from China (worlds biggest buyer). These events are virtual canaries in the coal mine for global trade and manufacturing. China is part of the coal mine.

Conclusion

One thing for sure, 20 years back, when I wrote my first dissertation on China, it was a matter of ‘when’ and not ‘if’. Today there is more ‘if’ in the China story and ‘when’ seems indefinite. Its superpower journey has hit a detour. Whichever way it swings, there are implications for India’s security interests and consequently for the Indian Armed Forces. I reiterate - Ten feet tall Chinese do not exist. We should not build up our adversary based on figments of imagination but should assess him based on facts. The content for this article has been drawn from sources within China and written mostly by China watchers in China. The facts are presented as quoted and are available in references below. Please draw your conclusions. Kahani Abhi Baaki Hai!

“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”
― Sun Tzu, The Art of War
Time to keep track of the enemy as he is changing colors like a chameleon.
Not in the Art of War. Plain common sense.


References
https://www.beltandroad.news/2020/05/09/how-to-revive-the-belt-road-initiative/
China starts campaign to help new graduates find jobs as economy slumps
Africa has a question for Beijing: will you forgive us our debt?
Coronavirus spares China’s armed forces but disrupts PLA modernisation plans
Coalition of 62 countries backs joint Australian, EU push for independent inquiry into coronavirus outbreak - ABC News
India joins 62 nations seeking probe into Covid outbreak | India News - Times of India
China’s Aggressive Diplomacy Weakens Xi Jinping’s Global Standing
‘Wolf-warrior diplomacy’: China's new normal?
80 million Chinese may already be out of work. 9 million more will soon be competing for jobs, too
While the world spends on coronavirus bailouts, China holds back
China faces crisis as pandemic sends unemployment soaring
China tries to calm ‘nationalist fever’ calling for Taiwan invasion
Amid China tensions, Pentagon wants chip makers to build US factories
https://www.thecitizen.in//index.php/en/newsdetail/index/6/18721/india-china-border-clash---more-than-meets-the-eye
Evidence mounts that China’s economy to be hit by a global demand shock wave
‘Nobody will pay’: China’s jobless problem worse than before
No option off table in China jobs crisis
China’s local party officials under pressure to deliver jobs over growth
U.S. Military Finally Waking Up To The Threat That is China? -
Trump orders federal retirement money invested in Chinese equities to be pulled | Fox Business
https://www.scmp.com/economy/china-...nese-students-grapple-first-economic-downturn
https://www.scmp.com/news/china/soc...avirus-chinas-wealthy-cut-back-lifes-luxuries
https://www.scmp.com/news/china/mil...p-transits-taiwan-strait-pla-starts-live-fire
https://www.scmp.com/economy/china-...chinas-economic-recovery-path-uncertain-after
https://www.scmp.com/week-asia/opin...-china-rule-world-truth-its-neither-ready-nor
https://www.scmp.com/economy/china-...back-americas-unreasonable-suppression-huawei
https://www.scmp.com/news/china/soc...emoved-after-chinese-city-hit-new-coronavirus
https://www.scmp.com/tech/big-tech/article/3084658/us-restrict-huawei-development-semiconductors


Team Strategic Front - The above article is being reproduced with the permission of Lt. Gen. P R Shankar. His personal blog can be accessed at Gunners Shot - Gunners Shot


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