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Power doesn't guarantee competence and China's President Xi Jinping's handling of the domestic economy in the past half-decade suggests a dearth of the latter in the country, an expert has said, pegging another journalist's comparison of Beijing with Washington.
Gwynn Guilford, a journalist for the Quartz Media, in an analytical piece titled 'Don't be fooled by China's grand plan to rule the world,' has referred to an American journalist, who opined "China has a master plan to oust the United States as preeminent global superpower-and this time it just might work," and has refuted his claims.
Citing that the arguments by Washington Post's David Ignatius overlooked what's happening within China's borders, Guilford said the economic problems limited the country's future prosperity even as it has doubled down on the policies that caused them in the first place - at home and, increasingly, abroad.
An article written by Ignatius cited two Pentagon briefs.
Referring to one of the studies cited by Ignatius in his article, Guilford emphasised that the model China was using on the lines of the United States' Marshal plan for its Belt and Road Initiative (BRI) included a credit-driven growth model that had left debt growing faster than the economy, the continued dominance of inefficient state-owned enterprises (SOEs) at the expense of dynamic private firms, and a fiscal system that depends on a housing bubble to sustain it.
"One of the studies Ignatius cites pegs funding for China's Belt and Road Initiative (BRI)-the signature plan of Chinese Communist Party chairman Xi Jinping to rebuild the old Silk Road trade route through central Asia-at $1 trillion. The program will involve at least 64 countries. By comparison, the Marshall Plan, through which the US established power in Europe after World War II, ponied up only around $150 billion in current dollars, primarily flowing to just six countries," the author wrote.
Guilford pointed out that Beijing's USD 250 billion plan to invest in ports in countries like Sri Lanka, Myanmar, and Kenya, would absorb these nations into China's industrial complex by funding infrastructure projects that used its capital and labour.
"Launched in 2013, BRI and its maritime complement-the USD 250 billion plan by which China will invest in ports in countries like Sri Lanka, Myanmar, and Kenya-essentially absorb developing countries in Asia, Africa, and Europe into China's industrial complex by funding infrastructure projects that use Chinese capital and labor," he said.
He further mentioned Ignatius' concerns over the rail line build-out connecting China to Europe and Eurasia while by-passing US-controlled sea lanes.
The journalist went on to quote an expert on China's relations with Eurasia, Theresa Fallon, who noted that "many of the energy projects that dot China's BRI map were completed long before the programme's launch."
Guilford further drew attention towards how China's neighbouring countries would generate enough to pay back the Chinese banks.
He further quoted an expert in China's financial system, Christopher Balding, as saying, "It will be mathematically impossible for Sri Lanka and Pakistan to repay big yuan-denominated loans when they're running trade deficits with China close to USD 2 billion and USD 9 billion, respectively."
Guilford stated that considering China's size, even a slight surplus would thrust deficits on its trade partners, as well as the debt and unemployment that accompany those.
"More foreboding is the intensifying of the Party's control of digital networks and personal information, and the spread of China's tightly sealed internet into Africa and central Asia. Major vehicles for this 'internet sovereignty' strategy are the Chinese tech companies once praised as the embodiment of dynamism and innovation. Whether swearing fealty to Xi boosts the global competitiveness of Tencent, Alibaba, and the others may be revealing," he added.
Guilford concluded by citing that China's core problem lay in its president's understanding of handling of the economic problems.
"The more wealth China throws away on wasteful investments, the longer and more painful its process of economic rebalancing will be-for its people and the global economy. And as Ignatius rightly argues, America's global leadership is indeed crumbling (evident in the simple fact that China has been able to dragoon so many infrastructure-starved countries into its Faustian world-order underbelly). And while the dimming of American influence predates Donald Trump, he seems plenty keen on hastening it," he wrote.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)