A mysterious virus from Wuhan, China, has torpedoed global development and economy, leading to a geopolitical shift that is still unfathomable. The communist country’s march as the world’s sole superpower is halted in its tracks, creating governance issues for the Leader for Life Xi Jinping, who had been consolidating power for himself over the last few years.
Dr. Jagannath P. Panda, research fellow, Manohar Parrikar Institute for Defence Studies and Analysis (MPIDSA), talks to Rahul Kumar of <strong><a href="https://indianarrative.com/">IndiaNarrative.com</a></strong> about the challenges for China and President Xi. Panda is also the Series Editor for <em>Routledge Studies on Think Asia</em>. He can be <strong><a href="https://twitter.com/jppjagannath1?lang=en">found on Twitter</a></strong>.
<em><strong>India Narrative: Is there any opposition to Chinese President Xi Jinping in the party over his strong-arm policies? Do you think he faces a challenge now or in the near future?</strong></em>
<strong>Panda:</strong> The gradual unravelling of cracks in Xi Jinping’s hold over the Communist Party of China (CPC) is becoming more apparent to the international strategic community and the media. Notably, the unravelling has grave consequences for Xi as well as for China, which has been endorsing the image of a strong nation with a firm and decisive leader.<img class="wp-image-15310 size-full" src="https://indianarrative.com/wp-content/uploads/2020/09/DrJagannathPanda.jpg" alt="" width="362" height="399" /> Dr Jagannath P. Panda, research fellow, MPIDSA
This image had been carefully cultivated through China’s propaganda, diffused widely through the country’s State-controlled media. However, China’s (mis)handling of Covid-19, in terms of suppressing voices of dissent and undermining the initial magnitude of the health crisis, has exposed the structural cracks in the party. These have been echoed by Cai Xia, former professor expelled by the party, in her rebuke to Xi.
There has been widespread opposition within the party, but few dare to speak out due to Xi’s aggressive consolidation of power and penalization of dissenters. The opposition might only grow if Xi is unable to sustain and enhance economic growth, especially considering the recent trend of supply chain diversification desires by global players. If anything, the challenges for Xi would only enhance. However, it is essential to note that Xi might not be pushed out of power unless the CPC finds a competent candidate to replace Xi. This, for the near future, might not be seen an easy possibility, but surely won’t be impossible.
<em><strong>India Narrative: Do you think the coronavirus, which has come as a disaster for the world, has caused Xi embarrassment and created problems in the CPC?</strong></em>
<strong>Panda:</strong> The CPC’s handling of Covid-19 has affected Xi’s domestic as well as international standing. Covid-19 has questioned the inevitability and righteousness aura of Xi Jinping. The criticisms have also effected China (under Xi’s) domestic and international propaganda campaign, which would impact China’s charm offensive diplomacy to attract countries into its economic and connectivity initiatives, such as the Belt and Road Initiative (BRI).
The China (dis)connect narrative, to shift away from China-centric supply chain networks, could prove to be an even more significant challenge for Xi. Looking at the issue from a broader perspective, the prevalent criticisms might impact the legitimacy of the CPC, and if continued, can also threaten the regime survival in China.
<em><strong>India Narrative: There have been reports of people protesting in streets about the lockdowns and misery due to coronavirus? Are there any food shortages or severe unemployment problems?</strong></em>
<strong>Panda:</strong> There has been unrest in terms of protests since the Covid-19 hit the economical functionality of China. These protesters include many workers who have lost their jobs. Many businesses, as the CPC asks owners to avoid layoffs, have been unable to pay salaries, further enhancing the woes of workers. In fact, the unemployment rate of August 2020 remains at 5.6 per cent, slightly lower than 6.2 per cent in February, which was record highest since 2018.
Importantly, even businesses and business owners are disgruntled. This remains significant when companies are pulling out of China to move to other locations, which is challenging Xi’s legitimacy and guarantees of ensuring economic growth and investments.
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China is facing food shortage with Covid-19. China’s food prices climbed about 13.2 per cent in July 2020 while the prices of pork surged 86 per cent from earlier year. This has prompted China to buy record volumes of meat and import wheat at a 7-year high in June 2020. Further, Xi on August 11 stressed on putting an end to food wastage to fight the food crisis, primarily due to Covid-19.<img class="wp-image-15314 size-full" src="https://indianarrative.com/wp-content/uploads/2020/09/ChinaVirusWuhan.jpg" alt="" width="999" height="620" /> Medical staff check a patient's condition at a temporary hospital converted into a coronavirus centre in Wuhan, (Xinhua/IANS)
<em><strong>India Narrative: Has the massive Chinese economy, till now the factory to the world, been impacted due to the virus, the floods, shifting of industries and a break in global supply chains?</strong></em>
<strong>Panda:</strong> The Chinese economy has undoubtedly been hit due to all these reasons. China’s GDP, according to official records, declined by 6.8 per cent in the first quarter of 2020. However, it has picked up to be at 3.2 per cent in the second quarter. Industrial production climbed 4.8 per cent in June and has recovered to pre-Covid-19 levels. Retail sales, however, slid to 1.8 per cent, instead of the anticipated increase. It can be said that China is proceeding to bounce back post-slump.
However, the critical China narrative around the globe is driving nationalistic policies to bring companies out of China. China’s economy is also being affected as the US-China trade war intensifies and spills into the technological sector, impacting China’s global 5G plans.
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Importantly, while decoupling is not a viable option yet, the virus has been and would continue to accelerate a change that was already driven by market forces due to increasing wages and costs over the past few years. This has resulted in the departure of lower-value manufacturing, leading them to diversify to other places, such as South and Southeast Asia. These will certainly impact China as the global manufacturing hub and bring challenges to the leadership and to Xi.
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