How to cope with a drunken gorilla

Chinese banks, other lenders are owed anywhere between $25 trillion & $35 trillion

Other than the size of their countries, what is the difference between Xi Jinping, President of China, and Kim Jong-un, Great Leader of North Korea? Anyone who can spot it will get a copy of Mao’s and Kim’s thoughts from me.

But until then let us talk about the similarities. The comparison is very illuminating.

Thus, both are heads of naam ke vaaste Communist parties. Their parties run their governments, which are highly repressive.

Both have a strong sense of entitlement. Both break rules. Both also routinely break promises. 

Both spend a very high proportion of their GDP on the military. Both rely on their armies to keep them in power.

Both have nuclear weapons. Both indulge in a lot of bluster. Both threaten their neighbours.

Both get offended at the drop of a hat. Both try to bully everyone and have their own way. Both mostly fail.

Both are ridiculous figures who will remain in power for the foreseeable future. This is a very serious problem for the world. It is as if Hitler and Mussolini have been reincarnated. 

But while the world makes a lot of fun of poor Kim, no one dares to of Xi. Such is the successful propaganda by China.

This, however, is equalled only by Xi’s follies. For, who else would piss off every country except Pakistan and North Korea? 

But Xi’s follies are not his only problem. China is highly vulnerable on a variety of counts. Let’s look at two of the worst of them. 

Food

China has been quietly trying to plant the idea that just as we have a ban on chemical and biological weapons, there should also be an international convention that prohibits the use of food as a weapon.

This is because in spite of the supposed high productivity of China’s farms, the country is highly dependent on imports. Depending on how you define food, it imports between 7 and 10 per cent of its food requirements. This is not abnormal, though. Barring North America, which had plenty of land, every country that experienced rapid economic growth, and a consequent rise in incomes, has had to import food sooner or later.

This gives the West, which exports the most, a handle. If it cuts to half of what it currently sells to China, you can expect serious unrest. 

Before you object, the point is not that the exporters will not do so because they are making so much money. The point is that China is highly vulnerable on this count. That is why China can’t, in the end, afford to bite, not least the hand that feeds it. But barking harms no one. 

So remember this: At Doklam Narendra Modi has demonstrated to the world that much of what Xi does is posturing. More countries should call his bluff.

Barack Obama could have. But he chickened out. We must wait to see what Donald Trump does. 

Debt

Chinese banks and other lenders are owed anywhere between $25 trillion and $35 trillion. Yes, trillion. Is there anything more that needs to be said about Xi’s policies since he took over in 2013?

Like Kim, he will continue in power regardless. The Chinese media is putting it about that once he gets his second term in about eight weeks from now, he is going to tighten the screws.

Tighten the screws? On whom? How? With what deflationary consequences for the economy? We have to wait and see, but one thing is for sure: Whichever way you look at it, China’s goose is cooked just as Japan’s was in the early 1990s.

Now what?

Anyone can see the looming disaster for the ‘Communist’ Party of China. But if you were Xi, what would you do? 

You’d try and restart the cement and steel factories by getting other countries to pay for them via a long-term EMI scheme. So enter OBOR (One Belt One Road).

We have seen the results of ‘cooperating’ with Xi at Gwadar and Hambantota. China has taken over the land. In these two places, China is sovereign. 

India has refused to join the OBOR thing, whence Doklam and all the hissing and spitting over 300 metres of land. What happened? Xi had to back off, at least for now. His image has taken a beating.

In sum, China was, and remains, a paper tiger which has so far succeeded in scaring only Barack Obama. Trump may be made of sterner stuff.

Then the fun will truly begin. It will be Nut v Nut.