Friday 14 October 2016

China does a Galtieri

Why did a Chinese paper make false accusations about Singapore in a move seemingly designed to coerce Singapore and put us on the defensive?

China today may be at an inflexion point. For the last 3 decades or so, it has been growing fast and strong, and the Chinese people were willing to let the CCP lead and govern. After all, it was leading to good times and better times for all (or almost all). What is there to worry?

But the good times may be ending - at least, there are signs that it may be ending. Growth is slowing and even suspect. Quality of life is dropping in the mega-cities. And the CCP knows that in the absence of strong growth, and betterment of living standards and quality of life, criticisms of the CCP govt will grow. And with those criticism, the authority of the CCP to govern will be questioned.

But there is no clear path to solving their economic growth questions. All the low-hanging fruits have been picked. Further growth will need hard, long-term strategies that may not work (SG faces this same problem). And even if those strategies work, growth for a newly developed economy, by math if not by definition, will almost always be lower than that of a developing economy. Which means that the CCP govt will not be able to give the Chinese people the rate of growth that they have enjoyed in the first 30 years. (Same for SG).

What can the CCP do to maintain their legitimacy, and the support of the people?

Do a Galtieri.

IOW, use outside threats to unify or distract your people/detractors. I am sure it is a strategy in "Art of War" or some ancient Chinese book of wisdom.

Certainly it is a time-tested strategy. By nominating an external threat, and building up that threat, and working out a plausible conspiracy theory with that threat in a central role, the CCP can use that external threat to explain almost every setback or failure, or even if not, it can distract attention from pressing internal issues by playing up existential threats from external bogeyman.

And to make the threat more germane, they have to raise the immediacy of the threat.

Take the South China Sea (SCS) issue. And Taiwan. And Hong Kong.

On the issue of Taiwan, China has shown that it can be patient. Reunification is inevitable, China believes. It will just take time. Not 50 years. Maybe not even 100 years. But 200 years? Who knows?

On the matter of HK, they gave HK 50 years as an Special Administrative Region (SAR). Now the winds of democracy are blowing. Maybe not winds. Just zephyrs. Are they concerned? Of course! Are they coming down on HK? No! Is it because HK is a major contributor to China's economy? Not any more. But they are willing to wait another 30 years. HK will come back completely to China.

Then we have the SCS issue. They have been in dispute for many years. Since the 90s or earlier. When China's growth was still miraculous and China could afford to be magnaminous. Then China felt the need to move aggressively.

Why? Why was it so urgent for them to reclaim islands, establish outposts, ADIZ, etc?

Why did they have to raise the stakes in the last 3 - 4 years?

As China's growth slows, we will see more belligerence from the grumpy dragon. Their "peaceful rise" is conditioned upon their GDP rising at a rate that will placate their constituents.

As for SG, the death of LKY last year has lifted his "protection" over SG. We are now fair game and an easy to target surrogate for US and the status quo.

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