You are here: Home » Opinion » Columns
Business Standard

Nitin Pai: The East Asian kabuki

Curtain-raiser to a geopolitical drama in five acts

Nitin Pai 

Curtain-raiser to a geopolitical drama in five acts

This year’s kabuki performance got off to a start even before Hu Jintao, China’s president, set off on his state visit to the United States.

The first act began a few days ago when some online military buffs posted images of a new stealth aircraft, tested on the very day Robert Gates, US defence secretary, was in Beijing to discuss, well, military cooperation. The test surprised a lot of people — including, apparently, Mr Hu himself. The underlying message, however, should not. Powerful political constituencies within the People’s Republic not only see the US-China relationship as adversarial, but have developed the capacity to challenge US military power in East Asia and beyond. In recent years we have seen the People’s Liberation Army (PLA) deploy a submarine fleet that can counter the US Navy’s surface combatants, develop missiles that can destroy aircraft carriers and satellites, and now test next-generation fighter aircraft.

No, it is extremely unlikely that the United States and China will get into a war — hot or cold — in the near future, but China is attempting to shape a military balance that will give it greater leverage over Japan, South Korea and their primary protector, the United States. At the same time, Vietnam, Australia, Indonesia and India will either feel awed, more insecure or both. North Korea, Pakistan, Myanmar and Iran will be emboldened. Like the slow, initial act of traditional Japanese theatre, this sets the stage for the remaining acts of the unfolding drama. There are four more acts in this East Asian kabuki.

The Chinese economy forms the backdrop of the second one. While much of the world’s attention is focused on the valuation of the yuan, a narrative centred around China’s wage levels is far more interesting. Three decades of economic growth has increased Chinese labour productivity and hence should cause wages to rise. Labour shortages in Guangdong’s Pearl River delta are serious. Then there is inflation — the consumer price index rose 5.1 per cent in November 2010, the highest in over two years — which should also cause workers to demand a bigger pay packet. Allowing wages to rise is likely to affect China’s economic competitiveness, but keeping them down risks exacerbating labour unrest. Both undermine the Communist Party of China’s (CPC’s) political legitimacy.

Because of external pressure, China cannot easily weaken its currency either. How Beijing walks the wage tightrope is one thing, but it already presents an opportunity for other Asian economies to grab a greater share of manufacturing investments. South East Asian countries stand to benefit the most as they will be relatively more competitive. India can too — to the extent that it can implement labour reforms before the window closes.

On to the third act — China’s domestic politics. By most accounts, Mr Hu was as surprised by news of the stealth fighter’s flight as Mr Gates. The factional struggle within the top echelons of the CPC has been on for some time. It could be one reason why China’s recent actions appear far less astute compared to the period before the 2008 Beijing Olympics. You hear of the PLA jockeying for more power in a setting where top Communist party leaders, unlike their predecessors, no longer have military credentials. You hear of Jiang Zemin’s pro-business Shanghai faction in perpetual intrigue against Mr Hu’s Communist Youth League. Then there are the princelings, offspring of China’s old guard, who combine their connections and wealth to emerge as kingmakers. Opacity masks the exact contours of these factional divides, but it is clear that the common “hardliners vs moderates” characterisation is an oversimplification.

Vice President Xi Jinping’s appointment to a vice-chairmanship of the CPC’s Central Military Commission in October 2010 suggests that he will succeed Mr Hu as paramount leader in 2012. But the contest may not be over yet. It is certainly not over for the scores of positions that will become vacant as older cadre are eased out of their positions. This process will have an impact on China’s policy coherence, both domestic and external.

It is already palpable over Korean peninsula — the scene of the fourth act — where China’s inability (or refusal) to prevent North Korean aggression has been conveniently explained away as arising from its fear of the collapse of its totalitarian neighbour. There are only around 24 million people in North Korea. It is hard to accept that a state that can maintain order in restive regions like Tibet and Xinjiang somehow lacks the capacity to manage the influx of a few million impoverished North Korean refugees.

Meanwhile, South Korea’s situation should be familiar to us in India. Like Pakistan, North Korea is carrying out provocative acts of aggression, under the umbrella of nuclear weapons, in a bid to coerce the victim into making political concessions. Although Seoul responded by conducting a military mobilisation along with the United States, the measure is of limited utility as we know from Operation Parakram in 2002. So the question for South Korea is whether it can muster up the will to confront China, Pyongyang’s main sponsor. For Beijing, it is whether the PLA’s desire to degrade US military power by keeping it embroiled in North Korea is trumped by the strategic costs of uniting South Korea and Japan.

South Korea and Japan — between who there is no love lost — have recently agreed to help each other out in military intelligence and equipment. In the final act of this year’s drama, we will come to know how far this relationship will go. Or maybe Seoul will decide it can’t rely on alliances at all, and needs a nuclear arsenal of its own. If it comes to that, it will no longer remain just kabuki.

The author is founder and fellow for geopolitics at the Takshashila Institution and editor of Pragati — The Indian National Interest Review

RECOMMENDED FOR YOU

Nitin Pai: The East Asian kabuki

Curtain-raiser to a geopolitical drama in five acts

This year’s kabuki performance got off to a start even before Hu Jintao, China’s president, set off on his state visit to the United States.

Curtain-raiser to a geopolitical drama in five acts

This year’s kabuki performance got off to a start even before Hu Jintao, China’s president, set off on his state visit to the United States.

The first act began a few days ago when some online military buffs posted images of a new stealth aircraft, tested on the very day Robert Gates, US defence secretary, was in Beijing to discuss, well, military cooperation. The test surprised a lot of people — including, apparently, Mr Hu himself. The underlying message, however, should not. Powerful political constituencies within the People’s Republic not only see the US-China relationship as adversarial, but have developed the capacity to challenge US military power in East Asia and beyond. In recent years we have seen the People’s Liberation Army (PLA) deploy a submarine fleet that can counter the US Navy’s surface combatants, develop missiles that can destroy aircraft carriers and satellites, and now test next-generation fighter aircraft.

No, it is extremely unlikely that the United States and China will get into a war — hot or cold — in the near future, but China is attempting to shape a military balance that will give it greater leverage over Japan, South Korea and their primary protector, the United States. At the same time, Vietnam, Australia, Indonesia and India will either feel awed, more insecure or both. North Korea, Pakistan, Myanmar and Iran will be emboldened. Like the slow, initial act of traditional Japanese theatre, this sets the stage for the remaining acts of the unfolding drama. There are four more acts in this East Asian kabuki.

The Chinese economy forms the backdrop of the second one. While much of the world’s attention is focused on the valuation of the yuan, a narrative centred around China’s wage levels is far more interesting. Three decades of economic growth has increased Chinese labour productivity and hence should cause wages to rise. Labour shortages in Guangdong’s Pearl River delta are serious. Then there is inflation — the consumer price index rose 5.1 per cent in November 2010, the highest in over two years — which should also cause workers to demand a bigger pay packet. Allowing wages to rise is likely to affect China’s economic competitiveness, but keeping them down risks exacerbating labour unrest. Both undermine the Communist Party of China’s (CPC’s) political legitimacy.

Because of external pressure, China cannot easily weaken its currency either. How Beijing walks the wage tightrope is one thing, but it already presents an opportunity for other Asian economies to grab a greater share of manufacturing investments. South East Asian countries stand to benefit the most as they will be relatively more competitive. India can too — to the extent that it can implement labour reforms before the window closes.

On to the third act — China’s domestic politics. By most accounts, Mr Hu was as surprised by news of the stealth fighter’s flight as Mr Gates. The factional struggle within the top echelons of the CPC has been on for some time. It could be one reason why China’s recent actions appear far less astute compared to the period before the 2008 Beijing Olympics. You hear of the PLA jockeying for more power in a setting where top Communist party leaders, unlike their predecessors, no longer have military credentials. You hear of Jiang Zemin’s pro-business Shanghai faction in perpetual intrigue against Mr Hu’s Communist Youth League. Then there are the princelings, offspring of China’s old guard, who combine their connections and wealth to emerge as kingmakers. Opacity masks the exact contours of these factional divides, but it is clear that the common “hardliners vs moderates” characterisation is an oversimplification.

Vice President Xi Jinping’s appointment to a vice-chairmanship of the CPC’s Central Military Commission in October 2010 suggests that he will succeed Mr Hu as paramount leader in 2012. But the contest may not be over yet. It is certainly not over for the scores of positions that will become vacant as older cadre are eased out of their positions. This process will have an impact on China’s policy coherence, both domestic and external.

It is already palpable over Korean peninsula — the scene of the fourth act — where China’s inability (or refusal) to prevent North Korean aggression has been conveniently explained away as arising from its fear of the collapse of its totalitarian neighbour. There are only around 24 million people in North Korea. It is hard to accept that a state that can maintain order in restive regions like Tibet and Xinjiang somehow lacks the capacity to manage the influx of a few million impoverished North Korean refugees.

Meanwhile, South Korea’s situation should be familiar to us in India. Like Pakistan, North Korea is carrying out provocative acts of aggression, under the umbrella of nuclear weapons, in a bid to coerce the victim into making political concessions. Although Seoul responded by conducting a military mobilisation along with the United States, the measure is of limited utility as we know from Operation Parakram in 2002. So the question for South Korea is whether it can muster up the will to confront China, Pyongyang’s main sponsor. For Beijing, it is whether the PLA’s desire to degrade US military power by keeping it embroiled in North Korea is trumped by the strategic costs of uniting South Korea and Japan.

South Korea and Japan — between who there is no love lost — have recently agreed to help each other out in military intelligence and equipment. In the final act of this year’s drama, we will come to know how far this relationship will go. Or maybe Seoul will decide it can’t rely on alliances at all, and needs a nuclear arsenal of its own. If it comes to that, it will no longer remain just kabuki.

The author is founder and fellow for geopolitics at the Takshashila Institution and editor of Pragati — The Indian National Interest Review

image
Business Standard
177 22

Nitin Pai: The East Asian kabuki

Curtain-raiser to a geopolitical drama in five acts

Curtain-raiser to a geopolitical drama in five acts

This year’s kabuki performance got off to a start even before Hu Jintao, China’s president, set off on his state visit to the United States.

The first act began a few days ago when some online military buffs posted images of a new stealth aircraft, tested on the very day Robert Gates, US defence secretary, was in Beijing to discuss, well, military cooperation. The test surprised a lot of people — including, apparently, Mr Hu himself. The underlying message, however, should not. Powerful political constituencies within the People’s Republic not only see the US-China relationship as adversarial, but have developed the capacity to challenge US military power in East Asia and beyond. In recent years we have seen the People’s Liberation Army (PLA) deploy a submarine fleet that can counter the US Navy’s surface combatants, develop missiles that can destroy aircraft carriers and satellites, and now test next-generation fighter aircraft.

No, it is extremely unlikely that the United States and China will get into a war — hot or cold — in the near future, but China is attempting to shape a military balance that will give it greater leverage over Japan, South Korea and their primary protector, the United States. At the same time, Vietnam, Australia, Indonesia and India will either feel awed, more insecure or both. North Korea, Pakistan, Myanmar and Iran will be emboldened. Like the slow, initial act of traditional Japanese theatre, this sets the stage for the remaining acts of the unfolding drama. There are four more acts in this East Asian kabuki.

The Chinese economy forms the backdrop of the second one. While much of the world’s attention is focused on the valuation of the yuan, a narrative centred around China’s wage levels is far more interesting. Three decades of economic growth has increased Chinese labour productivity and hence should cause wages to rise. Labour shortages in Guangdong’s Pearl River delta are serious. Then there is inflation — the consumer price index rose 5.1 per cent in November 2010, the highest in over two years — which should also cause workers to demand a bigger pay packet. Allowing wages to rise is likely to affect China’s economic competitiveness, but keeping them down risks exacerbating labour unrest. Both undermine the Communist Party of China’s (CPC’s) political legitimacy.

Because of external pressure, China cannot easily weaken its currency either. How Beijing walks the wage tightrope is one thing, but it already presents an opportunity for other Asian economies to grab a greater share of manufacturing investments. South East Asian countries stand to benefit the most as they will be relatively more competitive. India can too — to the extent that it can implement labour reforms before the window closes.

On to the third act — China’s domestic politics. By most accounts, Mr Hu was as surprised by news of the stealth fighter’s flight as Mr Gates. The factional struggle within the top echelons of the CPC has been on for some time. It could be one reason why China’s recent actions appear far less astute compared to the period before the 2008 Beijing Olympics. You hear of the PLA jockeying for more power in a setting where top Communist party leaders, unlike their predecessors, no longer have military credentials. You hear of Jiang Zemin’s pro-business Shanghai faction in perpetual intrigue against Mr Hu’s Communist Youth League. Then there are the princelings, offspring of China’s old guard, who combine their connections and wealth to emerge as kingmakers. Opacity masks the exact contours of these factional divides, but it is clear that the common “hardliners vs moderates” characterisation is an oversimplification.

Vice President Xi Jinping’s appointment to a vice-chairmanship of the CPC’s Central Military Commission in October 2010 suggests that he will succeed Mr Hu as paramount leader in 2012. But the contest may not be over yet. It is certainly not over for the scores of positions that will become vacant as older cadre are eased out of their positions. This process will have an impact on China’s policy coherence, both domestic and external.

It is already palpable over Korean peninsula — the scene of the fourth act — where China’s inability (or refusal) to prevent North Korean aggression has been conveniently explained away as arising from its fear of the collapse of its totalitarian neighbour. There are only around 24 million people in North Korea. It is hard to accept that a state that can maintain order in restive regions like Tibet and Xinjiang somehow lacks the capacity to manage the influx of a few million impoverished North Korean refugees.

Meanwhile, South Korea’s situation should be familiar to us in India. Like Pakistan, North Korea is carrying out provocative acts of aggression, under the umbrella of nuclear weapons, in a bid to coerce the victim into making political concessions. Although Seoul responded by conducting a military mobilisation along with the United States, the measure is of limited utility as we know from Operation Parakram in 2002. So the question for South Korea is whether it can muster up the will to confront China, Pyongyang’s main sponsor. For Beijing, it is whether the PLA’s desire to degrade US military power by keeping it embroiled in North Korea is trumped by the strategic costs of uniting South Korea and Japan.

South Korea and Japan — between who there is no love lost — have recently agreed to help each other out in military intelligence and equipment. In the final act of this year’s drama, we will come to know how far this relationship will go. Or maybe Seoul will decide it can’t rely on alliances at all, and needs a nuclear arsenal of its own. If it comes to that, it will no longer remain just kabuki.

The author is founder and fellow for geopolitics at the Takshashila Institution and editor of Pragati — The Indian National Interest Review

image
Business Standard
177 22