#
Did you know that Parsis in Mumbai, instead of being left at the Tower of Silence after
#
they die, are now cremated?
#
Because a cow fell sick in the early 1990s?
#
Did you know that the smog in Delhi is caused by something that farmers in Punjab do, and
#
that there's no way to stop them?
#
Did you know that there wasn't one gas tragedy in Bhopal, but three?
#
One of them was seen, but two were unseen.
#
Did you know that many well-intentioned government policies hurt the people they're supposed
#
Why was demonetization a bad idea?
#
How should GST have been implemented?
#
Why are all our politicians so corrupt when not all of them are bad people?
#
I'm Amit Verma, and in my weekly podcast, The Seen and the Unseen, I take a shot at
#
answering all these questions and many more.
#
I aim to go beyond the seen and show you the unseen effects of public policy and private
#
I speak to experts on economics, political philosophy, cognitive neuroscience, and constitutional
#
law so that their insights can blow not only my mind, but also yours.
#
The Seen and the Unseen releases every Monday.
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So do check out the archives and follow the show at seenunseen.in.
#
You can also subscribe to The Seen and the Unseen on whatever podcast app you happen
#
And now let's move on to the show.
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The two great powers in the world today are the USA and China.
#
And it's curious that although China is our neighbor, we know so much more about the USA.
#
We are steeped in American culture.
#
We sing their songs, we speak their language, not just English, but American English.
#
And we know as much about their celebrities' love lives as if they were our celebrities.
#
But we know next to nothing about China.
#
Some of this is due to language, of course.
#
We were colonized by the British.
#
We turned English into an Indian language.
#
So of course we would know more about America.
#
Some of it is because America is a more open society and this globalized world is actually
#
Those reasons explain a lot, but it is possible that China, our largest neighbor, could also
#
be our biggest ally, just as they could also be our biggest threat.
#
We really should know more about China.
#
Welcome to The Seen and the Unseen, our weekly podcast on economics, politics, and behavioral
#
Please welcome your host, Amit Bhatma.
#
Welcome to The Seen and the Unseen.
#
In my last two episodes, I focused on Pakistan, first on the electoral and political landscape
#
in Pakistan, and then on how going nuclear changed our relationship with them.
#
In this episode, I want to talk about China, in particular, Chinese foreign policy.
#
How does China see itself vis-a-vis the rest of the world?
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What are its foreign policy objectives?
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How does it aim to achieve them?
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Should India be worried or hopeful?
#
To discuss all this, I'll be speaking to Manoj Kevalramani, a fellow at the Takshashila
#
Manoj is a China expert and writes Eye on China, a weekly column about developments
#
For the website, I added Pragati at thinkpragati.com.
#
What's more, he's also going to be conducting an online course soon explaining China to
#
laymen called Inside She's China.
#
This four-week course, which consists of a bunch of webinars and can be done remotely,
#
To get more details of this course, head on over to takshashila.org.in slash special dash
#
courses, or just Google for it, Inside She's China by Manoj Kevalramani.
#
And now my conversation with him, but before that, a quick commercial break.
#
If this happens to be the only podcast you listen to well, you need to listen to some
#
Check out the ones from IVM Podcast who co-produced the show with me.
#
Go to ivmpodcast.com or download the IVM app and you'll find a host of great Indian podcasts
#
that cover every subject you could think of.
#
From the magazine I added, Pragati at thinkpragati.com, there is the Pragati podcast hosted by Hamsini
#
Hariharan and Pawan Srinath.
#
There is a brilliant Hindi podcast, Puliyabazi, hosted by Pranay Kutaswamy and Saurabh Chandra.
#
And apart from these policy podcasts, IVM has shows that cover music, films, finance,
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sports, sci-fi, tech, and the LGBT community, all under one roof, or rather all in one app.
#
So download the IVM Podcast app today.
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Manoj, welcome to The Scene in the Unseen.
#
Manoj, I've got to warn you before we start our conversation that I'm a complete newbie
#
about both China and about foreign policy.
#
So you know, doing an episode on Chinese foreign policy will require a lot of patience on your
#
No, I mean, that's wonderful for me because I can get away with a lot of errors I guess
#
But no, I'm sure it'll be fun.
#
The listeners of The Scene in the Unseen are very knowledgeable, they will find any errors.
#
So let me kind of start off by asking you this.
#
I'd done an episode on foreign policy in general a few weeks ago with your colleague Nitin Pai.
#
And Nitin pointed out the various different schools of foreign policy.
#
And about China, what he said in particular was that the impression I got from that episode
#
was that China has sort of had a very insular foreign policy where it doesn't look outward,
#
it's kind of happy with what it is and just defending its borders and so on and so forth.
#
What has been the historical outlook of China towards the rest of the world?
#
That's a good question.
#
I mean, I wouldn't characterize China's foreign policy outlook as insular.
#
I wouldn't do so at any point of time.
#
I mean, when you talk about China, what you really need to think of is that this is a
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political entity which has been there for at least 2000 plus 2500 years.
#
And that's how the Chinese also view themselves.
#
As a civilization, obviously much older, 5000 odd years, but as a political unified entity
#
from about 2000 years onwards.
#
And throughout that period, there have been periods of expansion, there have been periods
#
But the idea that China remains a serious actor internationally has been a core idea
#
within the political system, whether it was during the dynasties or whether it is during
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the People's Republic era.
#
So just a quick sense, I think I presume one of the concepts that Nitin must have spoken
#
about was this concept of Tianxia, which is a Chinese term referring to a broader concept
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of all under the heaven.
#
This is the fundamental concept from which we derive the idea of the Middle Kingdom.
#
So when you see a kingdom or a polity talking about itself as the center of the world, as
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the Middle Kingdom, you can't really see it as insular in that sense.
#
That's where I derive that logic from.
#
And what's traditionally been China's approach towards the world?
#
One of the things that Nitin did speak about is how international relations really evolved
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during the 20th century with different nation states looking outwards and trying to establish
#
a particular place for themselves in the world.
#
How has that evolved from China, the way China sees itself vis-a-vis the rest of the world?
#
And has ideology had an impact on that?
#
So I think this is great.
#
So this picks up on the point of the Middle Kingdom.
#
And then that's where I'll build further from.
#
So the idea of the Middle Kingdom is this central body through which everything emanates
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and civilization and culture emanates from it, commerce and trade emanates from it.
#
And it's the center of the world.
#
So in that sense, it sees itself or it saw itself as the center of the world as a exceptional
#
state in this larger international space.
#
Now, if I was to fast forward that to say 1949, from the fall of the Qing dynasty in
#
1911, 1912 to 1949, that chaotic period in China where you have colonization, you have
#
a civil war between nationalists and the communists, and you have the world war, invasions by the
#
And China goes through this entire period of turmoil, but it's questioning its place
#
And it's wondering where the idea of this Middle Kingdom has gone, where the glory of
#
the Middle Kingdom has gone.
#
And then in 1949, we have the People's Republic, which emerges.
#
And the People's Republic under Mao Zedong has an idea of itself as a revolutionary force.
#
So it sees its role in the international arena as a political entity that must promote revolution.
#
So this is obviously with the Soviet Union.
#
So China goes through that.
#
That's your first modern China, the People's Republic phase, where you establish the idea
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that you want to be a revolutionary force.
#
And then by the late 1970s, after Mao Zedong's death and the arrival of Deng Xiaoping in
#
charge of China's affairs, you have a new architecture of foreign policy, which comes
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out, which is not personality driven by Mao, which is not looking at revolution, which
#
is looking at China as a state within the community of states, and which is looking
#
at China as an actor in that arena.
#
And Deng Xiaoping goes on to develop this concept of Tao Guang Yang Hui, which essentially
#
roughly translates into hide your strength and bide your time, although the actual translation
#
is not that, but that's broadly what it's accepted to imply.
#
And what happens with that is that it's China now focusing on its own domestic growth, on
#
its economy, on its immediate interests, as opposed to this idea of a revolution, of a
#
And from that era we come to today, which is a new era under Xi Jinping, he defines
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That's the phrase that he uses.
#
And the idea now is that China has come to a point where it can express itself internationally,
#
it can pursue broader interests, and it no longer needs to necessarily hide its strength
#
and bide its time, it actually needs to express itself more on the international stage.
#
And what are these broader interests that under Xi Jinping, under this new era that
#
China is now exploring?
#
So I think these broader interests are that they build on the interests that have been
#
defined over the decades.
#
So one of the concepts that is very prevalent in Chinese foreign policy is the idea of core
#
As the name suggests, core interests, these are fundamental.
#
So these are the need to sustain development, economic development, the need to ensure territorial
#
One must remember that China has territorial disputes in the East and the West, and even
#
somewhere in the North.
#
So it's important for the Chinese therefore to ensure the integrity of their nation.
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That's how they see it as.
#
So the stability in Tibet, stability in Xinjiang, the border dispute with India, maritime dispute
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in the South China Sea, the Senkakus and Diaoyu dispute in the East China Sea.
#
These are all factors that have built over a period of time as core interests.
#
So development, territorial integrity, broader economic security in which you're expanding
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your enterprises, they are going global, and they are capturing market share, revenues,
#
resources internationally to ensure domestic development.
#
All of these are core interests which lead to a more fundamental core interest, if you
#
may, and that is the stability and the continuation of the rule of the Communist Party of China.
#
That is a predominant interest of the party, is for the system to survive.
#
So under Xi Jinping, he's built on that.
#
And you would see the idea of the Belt and Road.
#
You would see the idea of global governance reforms, all of these being part of China's
#
core interests, sort of accumulating within China's core interests.
#
Because it's through these that China becomes a bigger actor internationally, and it also
#
So that's where I would define the broad set of interests that the Chinese have.
#
So you sort of spoke about the focus then being on these three areas, that is China
#
continues developing, China looks after its territorial interests, whether it's in Tibet
#
or the South China Sea or wherever, and also the third one being broader economic security.
#
But one interesting thing you said which sort of intrigued me is that, and I hope I understood
#
it correctly, is that the reason for this is because Xi Jinping feels that the party
#
has to continue structurally being the entity in charge in China.
#
And the one thing that ensures that is if China itself is secure and stable within the
#
So in that sense, all of these are a means to the end, with the end being the continuation
#
Did I understand it correctly?
#
So if you read through Xi Jinping's speeches and government documents, what you will find
#
is that, and this was specifically noted by Xi in the 19th Party Congress, which is this
#
meeting that happens once every five years.
#
It elects a new Politburo, a new Politburo Standing Committee, which are your central
#
bodies that run the party, and also elects a new General Secretary every 10 years.
#
So Xi Jinping this year started his second term as the General Secretary of the Communist
#
So at this important meeting, which happened in October last year, Xi Jinping delivered
#
It was, I think, about three and a half hours long.
#
And one of the central ideas of the speech was the concept that the party has to have
#
a say in every sphere of society in life.
#
And the party must penetrate everything.
#
From there, Xi Jinping went on in March, where he became the president for the second time.
#
And again, at that meeting, he delivered a speech, which was mercifully just 30 odd minutes
#
And in that speech, he reiterates these points.
#
And thereafter, there is a reorganization of government, where the party is further merged
#
So this ensures that the party survives, the party begins to further cannibalize government
#
and state institutions.
#
And that's one of those fundamental goals, whether it's domestically or internationally.
#
The survival of the party is a precondition for anything else to happen.
#
And this reminds me of the old slogan we had in India back in the good old days, I say
#
India is Indira, Indira is India.
#
And here it would seem there are sort of two relevant slogans, one, of course, being that
#
China is the party, the party is China.
#
And the other could even be that Xi is a party, the party is Xi, because in a sense, what
#
Xi has also been trying to do, and again, correct me if I've misunderstood it, is consolidate
#
his own hold of the party, even as the party consolidates its dominance over Chinese institutions.
#
No, that's absolutely correct.
#
And so much of Xi Jinping's first five years in power, I mean, he came into power in late
#
2012, became the president in March 2013.
#
And what he's done is that he's structurally broken down networks of patronage in the name
#
of fighting corruption.
#
And he's also used that anti-corruption campaign to eliminate rivals, target rival factions,
#
streamline government processes, place confidence in key positions, and centralize the entire
#
decision-making apparatus further.
#
Now, this might sound quite odd to a lot of people who generally look at China from the
#
news and view the Communist Party as this one uniform actor.
#
It's quite a divided actor in some ways.
#
And decision-making can get paralyzed at multiple levels.
#
And that's evident from the fact that Xi has had to look to centralize so much authority
#
in order to ensure that decisions are taken and executed.
#
And that's resulted in this.
#
I mean, the culmination of all of this was the removal of presidential term limits in
#
March this year, where now Xi Jinping effectively can remain president for life if he wants
#
So he has, yes, centralized the party.
#
He's got his name entered in the constitution of the country with his banner idea, which
#
So that's now a part of the Communist Party and the Chinese state's constitution.
#
And that's a guiding vision now for the state.
#
So he's elevated himself to a position which is only, if not equal to, then probably secondary
#
to Mao because it's very difficult to be equal to Mao.
#
But he's gotten himself to a position like that.
#
And so, yeah, it has become that the party has become Xi Jinping's party.
#
The other idea that you spoke about, which was the party being China and China being
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the party, I think the Communist Party would like for people to think that way.
#
But we must remember that the Communist Party of China has about 90 million members at the
#
And China is a far more diverse, far more vibrant country in that sense.
#
There is a lot of different views and opinions that are expressed.
#
And the party remains this firm actor, which would like the image internationally to be
#
that China is the party and the party is China.
#
But China is far more diverse than that.
#
But I mean, are there other actors on the political stage, for example, apart from the
#
I mean, China is not a democracy.
#
The party basically rules it, right?
#
But when I say that China is very diverse, it's not necessarily in the context of formal
#
political activity, because yes, you have eight other political parties that operate
#
They operate under the guiding hand of the Communist Party of China.
#
So they don't effectively have any autonomy.
#
They don't really contest elections.
#
Elections in China occur at certain levels, at the village level.
#
Those are experiments that are being conducted.
#
But predominantly the political system is run through the party system.
#
So the party has a parallel system from center to provinces and further down to the state
#
system of central government, provincial government and further down.
#
And these two systems intermingle with each other.
#
So there isn't any room for other political actors to actually play any meaningful role.
#
But when I say that China is far more diverse, it's because not everybody necessarily or
#
at least a large majority don't necessarily recognize the party as necessarily this guiding
#
They see the party as an important actor, but they also see themselves as distinct from
#
A lot of people would like freedom of expression.
#
A lot of people would like freedom of association.
#
And so therefore I don't see necessarily disconnected.
#
A lot of people would have a different perspective from the party in terms of how the polity
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But it's also about where your interest lies.
#
Can you actually append the order?
#
Does appending the orders serve your interests?
#
So there are multiple factors at play.
#
But as a society, if you visit China, what you realize is that there are multiple different
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thoughts and the party's single ideological notions don't necessarily run through society.
#
It's not a society which is stop thinking.
#
So my sort of follow up question to there is you had mentioned Xi's sort of formulation
#
of quote unquote a new era, which is the sort of outward looking foreign policy.
#
Now is that something that has come from Xi himself or is that was that part of a developing
#
consensus within the party and was it at some point inevitable that China would move in
#
OK, that's a good question.
#
So a lot of this talk of the new era, OK, then the nomenclature for the new era comes
#
But you can see a shift that's happening in Chinese foreign policy from around 2008 onwards.
#
And this coincides with this financial crisis around the world, with the West struggling
#
with its banking system.
#
And you see the Chinese essentially adopt a far more aggressive or assertive approach
#
in their foreign relations.
#
This manifests in the South China Sea.
#
This manifests in a remarkable conversation between a Chinese delegation and an American
#
delegation where the Chinese delegation essentially tells the American delegation responding to
#
the credit crisis that's developed in 2008 that there was a point where you were our
#
masters and you were our teachers.
#
I think the word was teachers.
#
Yeah, that you were our teachers when it came to the economy.
#
But today you failed and we will have to find our own course.
#
According to that effect.
#
So there's a departure that starts to take place from that point of time.
#
And that departure is witnessed in this assertion in the South China Sea with regard to an oil
#
rig with Vietnam, with regard to the Scarborough Shoal in the context of the China Philippines
#
spat in South China Sea.
#
In 2011, 2012, we start seeing tensions with Japan in the East China Sea.
#
So you start to see this shift happening at that point of time.
#
And the perception is that there is an opportunity right now for us to express ourselves because
#
there is serious turmoil around the world.
#
And you can see that America is on a decline and this credit crisis is precipitating that
#
So you see that sort of conversation happening within China.
#
And in that milieu is when Xi Jinping comes to power.
#
And so there are these two philosophical arguments that are happening when Xi Jinping
#
So there are these two philosophical concepts.
#
The first is the Deng Xiaoping concept of Taoguang Yanghui, which I spoke about earlier.
#
And the second is this more assertive concept called Fenfai Youwei.
#
Fenfai Youwei essentially translates into striving for achievement.
#
That concept essentially implies that you need to actively shape the international or the
#
external environment to suit your interests.
#
So that implies a certain assertion in your foreign policy as opposed to trying to keep
#
a low profile and taking advantage of scenarios as and when they arrive to serve your interests.
#
And so there is this sort of shift that begins to happen.
#
Under Xi Jinping, what we see is that we see this get crystallized into a clear of vision,
#
the idea of a new era, the idea of Belt and Road and China actively going global, the
#
idea that China is going to invite countries over and political parties over to Beijing
#
to shape a discourse on human rights, which is something that the West has dominated,
#
the idea that China wants to reshape governance norms, whether it's related to artificial
#
intelligence, whether it's related to human rights, whether it's related to lending.
#
So it's these sorts of things that start to happen.
#
So I would trace this sort of shift in foreign policy starting from about 2008 onwards.
#
And under Xi Jinping, it gets crystallized further.
#
It becomes far more public and China becomes far more vocal about it.
#
So that's how I would categorize it.
#
And what you described as this striving for achievement, how does it manifest itself?
#
For example, how is Chinese foreign policy today?
#
What are the salient ways in which it is different from Chinese foreign policy of, say, 1995?
#
So how is it different?
#
It's different firstly in terms of what is the narrative that is being projected.
#
So the narrative today that is being projected is one of China as an innovative, leading
#
world power, as opposed to the 1990s and even through the 2000s, where the narrative was
#
essentially about China a developing power, a developing state, which is eyeing a peaceful
#
rise or which is eyeing peaceful development.
#
So there is a narrative shift that happens.
#
If you look at that in the context of how China now looks at providing aid, providing
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investments to countries as opposed to wanting to be a recipient of aid and investment.
#
So those are sort of a few tangible ways where this happens.
#
It also happens in the context of expanding military to military engagement.
#
China wants to sell weapons.
#
It wants to sell its arms.
#
It wants to build up this defense industrial base.
#
So from projection to actual changes in these financial support to countries, investment,
#
arms sales, the essentially the opening up and going abroad and actually projecting the
#
power that you now have built up over time.
#
That's the change that happens.
#
So I'm going to want to drill down on that in some more detail, but let's take a quick
#
commercial break first.
#
So it's been another great week on IVM podcast.
#
If you're not following us on social media, please do wear IVM podcasts on Twitter, Facebook
#
Last week, we launched a new podcast called the Kinetic Living Podcast with Urmi Kothari.
#
It's a show about keeping fit both physically and mentally.
#
Listen to our conversations with some of the most interesting people and how they went
#
on their fitness journeys.
#
On Cyrus Says, this week Cyrus speaks to Nihal Mariwala, co-founder of Setu India.
#
They speak about health culture in this country.
#
On Kolaba Cartel, I'm joined by Gauri, Jai, Abhishek and Sumit who reveal how they came
#
up with the concept for the new restaurant, Misty.
#
On Geek Fruit, this week Tejas and Dinkar discuss all things in pop culture that are
#
so bad, they're hilariously good.
#
This week on Shunya One, Sheila Ditya speaks to Nitya Sharma from Simple.
#
That's the sign you see every time you have to enter the OTP for your payments on the
#
On the Scene on the Unseen, Amit Verma speaks to journalist and China expert Manoj Kevar
#
Romani to dissect China's foreign policy and its impact on India.
#
And with that, let's continue with your show.
#
Welcome back to the Scene on the Unseen, Manoj.
#
So, we were sort of talking about this fundamental change that happened between the era of Deng
#
The era of Deng basically being hide your strengths and bide your time as you put it
#
with China was content to sort of focus on its own internal development and not worry
#
so much about the rest of the world.
#
And Xi's formulation, which as you pointed out is something that was happening anyway
#
and is not necessarily dependent on this person, was that of a new era where China takes a
#
much more active role in world affairs, where it tries to sort of sustain its development,
#
be more aggressive about its territorial integrity and search for broader economic security and
#
get more involved in the world, whether it's in terms of, you know, investing in other
#
countries around the world, including Africa recently, as you wrote about on Prakriti,
#
And all this is very interesting because this is happening at a time where like you refer
#
to the financial crisis of 2008 as sort of one of those points where something began
#
to turn, or maybe when it became visible, where America sort of losing its grip as the
#
sole superpower of the world.
#
And especially now that, you know, Donald Trump has come on the scene and he's starting
#
these trade wars and so on and so forth.
#
So how has the US like earlier, for example, the US was content to do its thing and the
#
China was content to do its thing and sort of build itself while America did what it
#
did and rule the world.
#
And now it's almost like, would it be fair to say, number one, that it's bipolar and
#
number two, that China is actively trying to be the one big player on the block?
#
I wouldn't categorize what's happening right now as bipolarity or a shift towards bipolarity.
#
I think a lot of Chinese analysts would like to believe that bipolarity is inevitable,
#
but I wouldn't categorize it as that right now.
#
What I would say is that what's more inevitable is what's more probable, what's more inevitable,
#
what's more probable is the idea of multipolarity with multiple power centers, whether it's
#
the US, whether it's India, China, Russia, the European Union, probably South Africa,
#
So you have multiple power centers that will emerge, each with their own capacity to project
#
power, whether it's economic, military power, hard power, soft power, economic.
#
So that's how I would see, that's the way I see the world, that's direction in which
#
I see the world going in.
#
And that would lead to some interesting combinations among states.
#
But as far as this notion that there would be bipolarity in the Chinese, the party is
#
looking at this as an opportunity to somewhere replace the US as a leading global power eventually.
#
You will see literature coming out of China, which argues that, and which argues that as
#
But my sense is that if you just look at capacities at the moment, you will see that the Chinese
#
don't necessarily have the hard power capacity to project power around the world.
#
Even in their region, which is East Asia, the capacities are limited just by geography,
#
just by US alliance systems.
#
So there's a lot that needs to change for some of this bipolarity or any of this to
#
That's how I would view it.
#
And, you know, one of the dissonances I've always felt between economics and geopolitics
#
and obviously I know the former much better than I understand the latter, is that economics
#
is fundamentally positive somewhere, you know, two parties interact and both of them can
#
benefit and geopolitics often plays out like a zero sum game, where, you know, there's
#
a lot of one upmanship and there's a lot of zero sum thinking.
#
And you know, with Trump becoming the president in the US, Trump is clearly a zero sum thinker.
#
I mean, that's the reason he started these trade wars, because he foolishly assumes that
#
a trade deficit is a bad thing.
#
And you know, if there's a winner, there must be a loser.
#
And if there's a trade deficit, the US must be a loser and so on and so forth.
#
And that's, that's obviously very fundamentally flawed thinking, but we can say that, okay,
#
Trump is an aberration.
#
But how does the Chinese view it?
#
Do they view it in positive some terms in the sense that, look, we just need to expand
#
our trade everywhere and everybody's benefiting and that's fine as long as, you know, we are
#
stronger or do they also have a little bit of the zero sum sense where other people have
#
to be outwitted and they have to establish their dominance?
#
I think that the Chinese, if you look at the rhetoric, you will see the Chinese being very
#
critical of the idea of zero sum politics.
#
They will essentially repeatedly, if you look at Chinese diplomatic communication, they'll
#
be talking about the fact that zero sum thinking is Cold War mentality and the world has moved
#
way past the Cold War and we need to get beyond this.
#
We need to look at win-win diplomacy.
#
We need to look at building a community of common destiny for all of mankind.
#
All of this is fine rhetoric, but it doesn't necessarily translate into as idealistic a
#
vision of the world in terms of practice.
#
So in terms of practice, how the Chinese go about it is, fundamentally, my interests need
#
to be taken care of, but yes, that does not necessarily mean that you need to be damaged,
#
which is zero sum mentality, which is what Trump is doing when he's saying that our relationship
#
I need to win every deal.
#
The Chinese view it as, can I serve my interests while also getting you something that you
#
want, which is that approach in Africa?
#
And just an example of that approach I'll give you, last week when Xi Jinping was in
#
Africa and when he visited Rwanda, there was a quote by the president of Rwanda, Paul Kagame,
#
where he talks about how China relates to Africa as an equal.
#
He says, we see ourselves as people on the road to prosperity.
#
China's actions demonstrate that you see us the same way.
#
This is a revolutionary posture in world affairs and it is much more important, much more precious
#
So you can see that there is an approach with China, which is not necessarily zero sum.
#
It's willing to play the game, it's willing to bargain, it's willing to trade off, provided
#
that its core interests are met.
#
And that's something that America under Trump is not doing so well.
#
So that's how I would characterize China's approach, which is that I have a certain set
#
Any engagement needs to make sure that those core interests are met.
#
Within those boundaries, I can work with you.
#
And that actually sounds eminently sensible.
#
And so I'm going to ask you to sort of take a step back from description to prescription
#
in the sense that if you then have to look at China's foreign policy as an expert, what
#
would you do differently?
#
Is there any reason for the approach to be different or does this all make spectacularly
#
I think it makes really good sense.
#
I think it makes really good sense.
#
I think the errors that the Chinese have made in the last few years have been this error
#
of assertion, this error of announcing themselves as a great power, as a big power before they
#
actually have got the kind of capacity that you need to be a great or a big power.
#
And you can see that manifesting in how the Chinese are now looking at scaling down some
#
of their rhetoric about, oh, we are not that innovative, we are not that technologically
#
So that rhetorical shift is what they are making, because this announcement of China
#
being this great power, which is going to play this leading role in world affairs, which
#
is once again, once to take the center stage in world affairs, leaves you open to a lot
#
of criticism about your domestic economy being highly shielded, about access to your markets,
#
about the problems that your investments are creating in other countries.
#
So I think rhetorically, those are the errors that they have made.
#
Practically, what they need to do is they need to look at their own.
#
If I was a Chinese analyst, if I was sitting in Beijing, what I would be advising the government
#
is that we need to fundamentally look at our debt issues, because our economy is perched
#
on a massive debt overhang, which we've been kicking this can down the road year after
#
year, sooner or later, it's something that's going to come to bite.
#
And this will damage us not just domestically, but also internationally.
#
What happens to you when all these pledges of Belt and Road investments that you've made
#
are no longer doable because you're struggling with debt at home?
#
It completely undermines the idea of China as this pillar on which a new sort of global
#
So I'd somewhere pull back on the rhetoric, and I'd also try and look at structured issues
#
The things that the Chinese have done right in the last few months or a year or so is
#
that they've looked to soften their positions with regard to Japan, India.
#
And despite all the conflict and confrontation with the Australians over issues of sharp
#
power and Chinese influence in domestic Australian politics, they have shown overtures where
#
they would like the Australians to work with them.
#
So they've identified that there is a potential for countries to coalesce against us.
#
And that's, again, a product of their policies, tangible policies in the South China Sea,
#
but also a product of their rhetorical approach, which has been one of China has arrived and
#
China will do what it wants to do.
#
And so the scaling down of the rhetoric, the reaching out to Japan, reaching out to India,
#
reaching out to Australia, looking to work with multiple actors, even though there are
#
political shifts in different countries, say Malaysia, which has just had an election and
#
the new leadership has blocked Chinese projects, but the Chinese haven't gone sour on them.
#
They've in fact reached out to them.
#
The Chinese foreign minister was one of the first foreign ministers to travel and have
#
a conversation with the Malaysians.
#
And it's quite likely that Mahathir Mohamad, the prime minister, would be visiting Beijing
#
So you can see that the Chinese are looking at deeper engagement and softening their positions.
#
And I think the biggest sort of giveaway that this is going to happen more in the coming
#
future is in the end of June, there was a Central Foreign Affairs Work Conference held
#
And Central Foreign Affairs Work Conference essentially is a conference where all the
#
senior most delegates of this party meet together and they deliberate on foreign policy and the
#
agenda and how they should go about it.
#
This is just the second time that such a conference has happened in Xi Jinping's tenure so far.
#
And during this conference, they came up with a list of 10 points which characterize Xi
#
Jinping's thought on diplomacy.
#
And the point of core interest was number nine, which indicates that they want to downgrade
#
a certain, their assertion.
#
They want to make sure that this assertive attitude is not that significant going forward.
#
And what was on the top, what was among the priority list was this idea of working with
#
countries, creating a shared community of common destiny.
#
So all that signifies that you're going to be looking to reaching out to countries.
#
You want to build partnerships because things around you are changing quite dramatically
#
or largely owing to Trump.
#
And so this is, I think they've adopted the right path, but it's just about, have you
#
Have you let the cat out of the bag already?
#
Can you put the genie back in the bottle?
#
I think that's the balance that the Chinese government needs to strike right now.
#
So I'm going to ask you about the implications in this for India, but before we go there,
#
I was intrigued by the debt crisis that you mentioned and the fact that they need to do
#
So give me a sense of what that debt crisis is, what is a worst case scenario in which
#
it plays out and what is it you would recommend that they do now to, you know, before things
#
Okay, so I should preface this by saying that I'm not an economist and I know very little
#
about how economies function, but here's my broad sense.
#
So why did the Chinese accumulate all this debt?
#
They accumulated all this debt is because they wanted to invest heavily at a point of
#
I'm going to go back to say about 2008 again, because again, that is one of those tipping
#
points that where this all this begins to happen.
#
So in 2008, once the world economy is going through this cash crunch, this liquidity crunch,
#
the People's Bank, the Chinese Central Bank, announces a massive stimulus package.
#
I can't remember the numbers, but it's hundreds of billions of dollars, hundreds of billions
#
of dollars as stimulus package for the economy.
#
And they hope that by stimulating investment, then you can create growth.
#
And that's what they do.
#
So you have more and more states and provinces and local governments undertaking massive
#
infrastructure projects because there is all this cash now available.
#
And all these infrastructure projects, you're not considering necessarily the economic viability
#
I mean, are they going to lead to any productivity gain?
#
You're investing because that looks good on your GDP because you're constructing.
#
And that's how growth continues for a significant amount of time.
#
Throughout that period of time, the Chinese government is talking about wanting to shift
#
from export and investment driven growth to consumption driven growth.
#
Now we've got a domestic market, we need to stimulate consumption and investments are
#
being wasteful to a large degree.
#
So we need to curtail this wasteful investment.
#
So what starts to happen is that because the government at the center, somewhere it wants
#
to contain this investment, but it also needs to sustain growth.
#
So there is this push and pull which is going on during which period of time, a lot of local
#
governments, a lot of companies are piling on massive amounts of debt because at the
#
end of the day, for a local mayor like me, if I'm the mayor of a city like Tianjin, bureaucratically
#
my progression up the ladder in the Chinese system is dependent on how I deliver on these
#
And if I'm supposed to meet 9% growth, 10% growth, I will take on the debt to meet that
#
Eventually those massive projects, whether it is a metro project or a massive park or
#
a massive housing system, that's going to be looked after by somebody else because in
#
a couple of years time, I'm going to move on to a different job.
#
So this is somebody else's problem who comes after me.
#
So that's how the system has piled on this massive amounts of debt largely.
#
At present Xi Jinping has been talking about deleveraging for the last few years.
#
He wants, he realizes that there's a lot of unnecessary debt that's been picked up, whether
#
it's in infrastructure, whether it's in things called zombie companies, which are essentially
#
companies which are no longer profitable, but are propped up by state subsidies.
#
And he wants to curtail all of this.
#
He wants to rein in this level of debt.
#
But the problem is that the more you strip the cashflow in the economy, it's not just
#
It's also going to lead to companies shutting down job losses, and that's going to lead
#
So how do you balance that push and pull between stability growth and wanting to have more
#
So that's broadly the nature of the beast at the moment.
#
That's incredibly fascinating.
#
And it sounds to me very similar to how the US financial crisis happened in terms of it
#
being enabled by easy money and bad incentives.
#
But moving on from the economics and back to the foreign policy, India's always had
#
a sort of an iffy relationship with China.
#
We've lost a war to them, we've kind of been wary of them, we have an ongoing border dispute
#
How does China's new approach to its place in the world affect India?
#
I want to answer this question with an anecdote to begin with.
#
So I spent five years living in the mainland.
#
And in those five years, anybody that I spoke to, whether it was from the media or it was
#
from the ordinary sort of intelligentsia, the ordinary public, factory people, people
#
who are in manufacturing and across the sector, I found only a handful of people perhaps who
#
knew that there had been a war between India and China.
#
It's not something that survived in public memory.
#
And that's probably because the party has not wanted it to survive as much.
#
Today, obviously, things are different, and that's because of the Doklam standoff last
#
year, where you had Chinese media being extremely critical of India.
#
You had a lot of racist content, you had content which called out India, which put out editorials
#
So the war essentially is now back in the memory, at least in public consciousness,
#
I presume people would know.
#
Because I got a lot of messages from friends in China at that point of time, saying that,
#
oh, we didn't realize that this had happened and that we had a war in the past and we hope
#
that there's no more war in the future.
#
So that's just an aside, an anecdote that a lot of people in India, I mean, in India,
#
the war with China is so deep in within our conscience.
#
But I don't think that's the same over there, it doesn't resonate similarly.
#
In terms of how China sees India today and what China's new position in the world implies
#
So I think we can take what happened in Wuhan as an example of China recognizing that India
#
I think we've seen this for the last two years, when India boycotted the Belt and Road Forum
#
You saw that when we boycotted the Belt and Road Forum, there was a lot of talk about
#
India being the only country which had not attended this forum.
#
And there was some degree of frustration from the Chinese point of view.
#
But there was repeated attempt to try and get India on board by talking about CPEC being
#
a development initiative and China's position on Kashmir does not change, and so on and
#
And thereafter, after the Doe Clam standoff, this accommodation by both parties, which
#
began at the meeting in Xiamen and BRICS in September last year, and then has further
#
gone on to Wuhan and thereafter, I think the Chinese see value in working with India.
#
They know that India is geographically well-placed.
#
If Belt and Road in South Asia has to yield some degree of success, a measure of success
#
for India, you need to get India on board.
#
India is also a massive market, Chinese companies for infrastructure investment, for Chinese
#
companies to set up manufacturing bases.
#
There's lots that the Chinese can do in India.
#
And so I think that there is a sense that India can be a partner.
#
But along with that, there is also this suspicion that persists with regards to India's relationship
#
Again, I don't think that the Chinese see the world necessarily as a zero-sum game,
#
but they are fundamentally cautious about the idea of India, the US, Australia, Japan,
#
this idea of these democracies coalescing together to contain China.
#
So they see India as a possible spoke in the US alliance network, the US alliance wheel,
#
and they see that as a possible occurrence.
#
So therefore, I feel that there is this sense that we need to engage with India.
#
And Wuhan was that example where there was, it was not just the Indian side which wanted
#
to engage, but it was also the Chinese who wanted to engage and who saw merit in working
#
So I feel that there is actually opportunities going forward.
#
So can you explain Wuhan to me?
#
Because I don't know much about what happened there.
#
So basically, it came as a bit of a surprise where, so Narendra Modi, after the Doklam
#
standoff prime minister, Narendra Modi, Indian prime minister, he traveled to Xiamen in September
#
last year, which is a city in Southeast China.
#
He traveled over there for the BRICS summit.
#
At that summit, from what we understand, there was sort of a breaking of the ice and Xi Jinping
#
and Modi spoke, and there was feelers put out of having a broader conversation.
#
That led to more diplomatic activity with the Chinese foreign minister visiting New
#
Delhi in December and talks again beginning on the boundary issue.
#
And that graduated in February this year.
#
We had Foreign Secretary Vijay Gokhale go to China, and that set up again a framework
#
of what sort of conversation we need to have.
#
And that essentially led to this meeting in Wuhan between Xi Jinping and Narendra Modi.
#
And the idea was that it's a two-day summit.
#
We're not necessarily going to be talking about specific issues and identifying specific
#
outcomes that we need to come up with.
#
We're going to have this broad-based conversation about what are your interests?
#
What are our interests?
#
How can we work together?
#
How can we prevent potential conflict-like situations erupting?
#
Because last year at Doklam, we ended up in a position where there was a lot of talk of
#
war and there was a lot of jingoism, largely from the Chinese side, actually.
#
The Indian side was very restrained.
#
So Wuhan was this opportunity for these two leaders to sit down together and say, look,
#
there are dramatic changes happening in the world.
#
At the end of the day, we're neighbors.
#
We are growing economies.
#
We have converging interests, and we need to engage.
#
We can't end up in some of these binaries.
#
That's the broad narrative that's been put out by both sides.
#
And since then, we've seen deeper engagement between the two countries.
#
What I mean by deeper engagement is that they're going to resume bilateral military exercises
#
India will be participating in the Shanghai Cooperation Organization's military exercises
#
along with China and Pakistan.
#
India has been probably a little more restrained in terms of its criticism of Belt and Road.
#
There are some analysts who would say that India has also scaled down its activity with
#
the quadrilateral group, which is the US, Australia, Japan, and India.
#
I don't necessarily subscribe to that.
#
But yeah, you can see that in terms of public rhetoric, there has been a general shift in
#
India's position where we're not necessarily being that critical while we are keeping our
#
fundamental oppositions to BRI, whether it be with related to CPEC or debt, still out
#
But we're not necessarily going out proselytizing or telling people that this is a real problem.
#
So I think there's a broad understanding that's been arrived at between the two sides that
#
we need to maintain peace at the border.
#
We need to look at our common interests and we need to work on them.
#
One of the tangible outcomes of that Wuhan meeting was this idea that India does not
#
need to look at China's engagement within South Asia with a lens of suspicion.
#
So the Chinese have proposed this model called India China Plus or India China X, under which
#
they want India and China to work together in a third country, carry out joint projects
#
The first country that they've announced for this is Afghanistan.
#
It's still not clear what exactly this joint project will be.
#
But what we know as of now is that there will be a joint capacity building project.
#
We're not still clear on the details of when that will happen, what that project is going
#
But the idea is you've set up a framework of working together as opposed to looking
#
at each other's actions with suspicion.
#
All of that is very heartening.
#
But I want to go back to a phrase you used a little earlier when you spoke about China's
#
attitude to China's position on Kashmir and you know, there's also been the sense that
#
China is sort of exploring deeper engagement with Pakistan and helping them in their conflict
#
Now, is that sort of a historical artifact of how the world used to be a while ago or
#
Okay, so that's a good question.
#
I would see the China-Pakistan relationship, yes, of course, it has implications for India,
#
but I would see it also as independent of India.
#
The China-Pakistan relationship is very deep.
#
It's deep political engagement, it's deep economic engagement, it's deep military engagement.
#
There is a strategic relationship between these two sides and which at some level has
#
implications for India, serious implications for India, but it's also independent.
#
So CPEC is an example of how it's independent of India.
#
I personally don't see CPEC as something that is targeted at India.
#
The Chinese could have managed CPEC better, the routing particularly, and they could have
#
managed to avoid some of these.
#
Just expand on what CPEC is.
#
So CPEC is China-Pakistan Economic Corridor, which is this massive corridor which begins
#
in Xinjiang in China and goes all the way down to Guadar in Pakistan.
#
This is going to be Chinese investments in building roads, bridges, rail networks, ports,
#
So it's part of the broader Belt and Road strategy.
#
As far as we know, the pledged investment is around $60 billion, and CPEC should be
#
completed, the time range for this is till 2030.
#
So it's over a period of 14-15 years is when the Chinese see this as being completed.
#
So the idea is to essentially support the Pakistanis in terms of building all this infrastructure
#
and facilities for them, and also deepen their own economic footprint within Pakistan.
#
So the India component of this obviously comes from the fact that part of the CPEC route
#
runs through what is Pakistani-occupied Kashmir.
#
And so that's where India's objections primarily are that, well, this is impinging on our sovereignty
#
because all of Kashmir is an integral part of India.
#
And the Chinese say, well, don't look at this as a political issue.
#
This is purely a development project, which is an argument that has weak legs to stand
#
I mean, the Chinese would not allow anybody else to build in an area that they claim as
#
theirs, but take it for what it is.
#
So that's what CPEC is.
#
So I would see the Pakistani-Chinese relationship as far broader because today Pakistan, if
#
you look at Pakistani politics today in the state of the army, Pakistan's fracture of
#
its relationship with the US, China has become an important patron for the Pakistanis.
#
It's always been an important partner, but today it's become a patron.
#
So that's how I would classify that.
#
Now what deeper Chinese engagement with Pakistan does is that it also raises the stakes for
#
China to ensure stability in Pakistan and also stability between India and Pakistan.
#
So there's an interesting dynamic that comes into play where China now becomes an actor
#
that has legitimate interest in averting conflict between these two rival states in some way.
#
So to me, that's the concept.
#
That's the idea that's interesting in all of this is that it raises China's stakes to
#
And if China does gain the kind of leverage that we imagine that it has, that Indians
#
imagine that China has deep say in Pakistan, it actually can motivate policy in Pakistan,
#
But if the stakes get higher and the Chinese can develop levers and drivers to at least
#
shape policies in Pakistan, that can have massive implications for India and probably
#
even positive implications.
#
No, positive implications exactly because just thinking aloud a couple of episodes back
#
your colleague Pranay Kutasane had done an episode with me on Pakistan where he spoke
#
about how there are basically two Pakistan's, one is the military jihadi complex which rules
#
Pakistan and the other is basically the putreative state of Pakistan or you could say the people
#
of Pakistan, the civil society of Pakistan and economic development of the kind that
#
China is clearly hoping to enable that would strengthen civil society vis-a-vis the military
#
jihadi complex and at the same time it would increase the incentives of the military jihadi
#
complex to sort of keep Pakistan stable and not enter into a conflict with India.
#
In that sense a deepening Chinese involvement in Pakistan is something that could actually
#
turn out pretty well for us contrary to rhetoric.
#
I've taken a lot of your time, I want to end by asking you a dual question that I ask all
#
my guests on whatever the subject of the expertise is that what makes you hopeful and what makes
#
you anxious about China's new direction in foreign policy?
#
What makes me hopeful is the, that's a good question, what makes me hopeful is the idea
#
that there is a desire now, there has been reflection, at least it appears so, that there
#
has been some reflection and there has been a desire to recast Chinese foreign policy
#
as less aggressive and the pressures that have come with this trade war have meant that
#
there has been a certain degree of rethink and a certain degree of imperative to actually
#
So there is hope that as China engages further and as some of these pressures hit further,
#
China will act more responsibly not just in terms of how it deals with conflicts whether
#
it's on its periphery or whether it's with regard to trade or whether it's regard to
#
So that is one thing that probably makes me hopeful is that if there is some degree of
#
rethink away from nationalistic rhetoric towards far more sane thought of how do we engage,
#
far more pragmatic approach to what's happening in the world, that can actually lead to benefits
#
not just for China but also for countries in the region, India, Japan, other South East
#
What makes me fearful is Xi Jinping's centralization of power, his centralization of power, the
#
building of a personality cult around him which is sort of like one can reminisce, one
#
does reminisce and if you read Chinese academics and authors who are writing today who have
#
dissenting voices and how some of these people are being silenced, there is a fear of China
#
slipping back into the chaos of the cultural revolution, we are still some way away from
#
that, but you are taking those first steps towards something like that and that's extremely
#
dangerous not just for people within China but also for the broader region because China
#
today is a driver of the global economy and to see a state like that slip into chaos has
#
broader implications for people around the world.
#
Manoj, the last one hour has been incredibly insightful, thank you so much for sharing
#
your knowledge with us.
#
My pleasure, this has been fun, thank you so much Amit.
#
If you enjoyed listening to the show, do follow Manoj on Twitter at TheChinaDude, all one
#
Also consider signing up for his course Inside Xi's China which is an online course which
#
runs for four weeks and starts on August 27th and consists of I think six webinars and you
#
can access the course by going to takshashila.org.in slash special-courses.
#
Also check out his column I on China which appears every Friday on the website I edit
#
pragati at thinkpragati.com.
#
You can follow me on Twitter at Amit Varma and for past episodes of the seen and the
#
unseen hop on over to seenunseen.in, thank you for listening.
#
The founders of the table Gauri Devi Dayal and Jay Yousaf partnered with the founders
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