Also published in the Daily Guardian as a three part series
Myths and Reality
Xi’s Call. China is real. The dragon is mythical. However we will stick to the real China in this analysis. In May, Xi Jinping called on the PLA to be prepared for wars. He signalled what he was up to and conveyed it. We did not heed to his intent. How wrong were we? Similarly When Xi Jinping, spoke to scientists it was one such moment when a vista was revealed. Two significant aspects of that talk stuck a chord in me. He spoke of the ‘deep and complex’ changes that China faced in the domestic and international environment. He also spoke of the big problems that were ‘choking’ and ‘strangling’ China. These included lack of advanced agricultural technology and reliance on imported seed, critical component shortcoming in core manufacturing technology, dependence on overseas oil supplies, pollution, poor distribution of water resources and an ageing population which needed improvements in pharmaceuticals and medical equipment. These issues are underlying and permanent to China. They are largely pre virus. The chemistry of ‘deep’ complex’ with ‘chokers and stranglers’ needs better appreciation to get to realism.
The World According to Xi. China is modernising. Its economy, power and influence have grown. It is set to overtake USA shortly. However the Wuhan virus has changed things. Issues and events are panning out in a manner that forces a rethink. In the last six months China has alienated major powers of the Indo Pacific – India, Japan and Australia. All other countries of the region feel threatened. t has also managed to alienate USA, Canada and Europe. It has got into a military conflict with India and USA; when it was really not needed. It is shaking up the entire global order. It is trying to impose its vision on the whole world. When we see and read commentaries on China , they are one dimensional and often magnify China to proportions of a mythical dragon all set to conquer the world. It appears that China is unstoppable. The world according to Xi looks forbidding. However the reality is far different. There are logical opinions which suggest that China has peaked and will actually decline from hereon. The Wuhan Virus only hastens the process. There are many discordant issues in China which will inhibit and eventually cap China’s rise. That is what Xi Jinping had on his mind when he spoke what he did. In India, we need to get a handle on the entirety of China to deal with it squarely. This analysis presents the large canvas of China.
Jekyll and Hyde Cycle. Step back into history. Ever since the CCP came into the scene a century back, China has had periodic convulsions. Mao unleashed ‘The Great Leap Forward and The Cultural Revolution’. In four decades China was taking ‘The Great Leap Backwards’. China talks of a ‘Century of Humiliation’. However the CCP wreaked half of that humiliation through the greatest man made famine in which 35-45 million people died and were reduced to cannibalism. In the 70s, China adopted the ‘One Child Policy’. It appeared to be the greatest of social reforms of that era. Half a century later it is one of the greatest disasters in Chinese and human history. Mao spoke of ‘Conquest of Nature’ and Deng Xiao Ping felt that ‘To Become Rich is Glorious’ when he kickstarted the four modernizations. Their successors ‘Conquered Nature’ mercilessly and ‘Made China Rich’ through dizzy economic growth. Four decades later China seeks glory but is entering a decline, seeded at the start itself. The Jekyll and Hyde cycle of the CCP is discernible –revolutionary idea, electrifying start, great promise and seemingly impressive progress to disastrous ends due to unsustainability, unpredictability and unintended outcomes.
Freedom Vs Prosperity. CCP and Xi Jinping view national economic growth and power as commodities fungible with people. The transaction being – ‘you give up your freedoms and we will give you prosperity’. From an economic point of view, China is already a superpower. However growth has to be for the people. Their perspective tells a different story. Discrepancies have surfaced ever since the Wuhan Virus has struck the world. Some instability is discernible in the Chinese monolith. India needs to be cognisant of this. Whether China is a superpower or not, India has to live with it as a neighbour. Realism will enable us to deal with it better. Historically an unstable China has been troublesome – to India and the world at large.
Pre Virus Economic Growth. China has clocked stupendous economic growth. It was poised to overtake USA. Its future trajectory up to 2050 indicates that it will continue to rise. (see table). All set to achieve the ‘China Dream’ through prosperity, collective effort, socialism, and national glory. The great rejuvenation of the Chinese nation is imminent. The Chinese aim is to be a ‘moderately well-off society’ by 2021 and a ‘fully developed nation’ by 2050. Inherent in this is to be the sole superpower on earth. Herein lies the rub. The ‘chokers and stranglers’ of Xi Jinping are lying in ambush.
Aging Choker. An aging population is the main ‘Choker’. The one child policy reduced birth rates drastically. As against the standard replacement rate of 2.1, the birth rates fell to 1.18. Despite lifting the one child policy in 2015, the birth rates will not cross 1.7. People are not marrying or having a second child. Reasons include rising prosperity, opportunities for single women, young couples opting for single child and gender imbalance. As a result the population is expected to peak at 1.4 billion around 2030 and decline thereafter (see graph). The population will reduce to about 1 billion by 2100.
Child population (0-15) and dependency is expected to be around 20%. Simultaneously the share of the aged (65+) is set to steeply grow due to increasing lifespans (see graph). China is the fastest aging country in history. Overall, Child and Old-aged dependency will keep increasing. This has manifold implications. Some are highlighted. One. The working population will keep decreasing. A smaller number of workers will have to take care of an increasing number of old and young people. The overall standards of life will correspondingly decrease. Two. As population ages, additional resources are needed to meet the needs of the elderly – medical, energy, housing, food. China has a very weak social welfare system for the aged. An estimated 23 % of the old-aged cannot take care of themselves. The aged also represent a shrinking tax base. Overall, the government revenues will be strained. Three. The percentage of unmarried men in their late 30’s will quintuple by 2030. This will have adverse societal impacts. Four. When the work force declines, wages increase, productivity goes down and profits go down. Lesser workers means lesser consumption spending. China has no choice but to export. However most consuming countries are also aging. Their consumption will go down. The overall economy will dip. The key to Chinese prosperity lies in countries capable of consuming in the future like India, Indonesia and Nigeria. The prediction is that in the period 2020-30 the economy will start shrinking. Five. An aging society and increased urbanisation reduces availability of farmers. It brings up the issue of food security. Six. The one child condition, limited youth and urbanisation will have an adverse impact on the availability of the right material for armed forces (see graph). There are other unforeseeable issues which will vector themselves in as China goes along.
Food Problems. Currently China is facing a food crisis. It is likely to have domestic and geopolitical fallouts. This brings focus on to an issue which has been choking China historically. Chinese history is full of famines. However, ever since Mao’s policies induced the Great Famine, China has not really faced a food crisis. In fact China has carried out vast agriculture reforms. Today China is the world’s largest producer and consumer of agricultural products. Recent developments have however raised concerns about its food security. China has 19% of the global population but only 7% of arable land and freshwater resources. Both are diminishing. There are questions of sustainable development due to environmental degradation, pollution, climate change, disease, urbanisation, industrial growth and demography. More than 40% of China’s arable land is degraded seriously. Food production is reducing. Demand for agricultural products has grown due to a burgeoning population, growing industrial economy, and expanding consumerism. Believe it or not, China has the maximum obese people in the world. China became a net food importer in 2004. Its import dependence is irreversible. It will face a domestic grain supply gap of about 130 million tonnes by the end of 2025. It continues to import seeds due to lack of technology. Wheat, corn and rice are the main ingredients of the Chinese food basket. These crops have been threatened by floods, typhoons and draughts – all in one season. Climate change might also be playing its part. Pork is the main meat. However availability of pork has been affected badly due to the African Swine Flu for the past three years. Corruption/inefficiency in logistics and storage as also insect infestation threaten its inventory. About one-sixth of the total grain produced in China is wasted annually in the production, processing and transportation cycle. China might not run out of food but prices are rising and there are creases of economic worry.
Unprecedented Chokers. China has faced unprecedented rainfall, floods, typhoons and droughts this year. Diseases specific to this year include the Wuhan Virus and Brucellosis (an infectious disease caused by bacteria from livestock which can also infect humans and leave men infertile). African Swine Flu, Plague, Yellow Fever, Polio, Avian Influenza, SARs are recurring diseases in the recent past. It raises a lot of issues. Is it due to pollution, environmental degradation, climate change or all? In any case the effect of this continued disease and pestilence is only going to get more serious as China ages. This budding superpower is unhealthy.
PART 2 – QIA BOZI (STRANGLERS) OF CHINA
Stranglers – Pollution and Environmental Degradation
Overview. Environmental degradation and pollution are serial stranglers. Environmental degradation began with Mao’s ‘conquest of nature’ idea. The Chinese economy and severe environmental degradation took off together five decades back. China embraced industrialisation and economic progress unhesitatingly. Quick time centralised decision making without due checks and balances was the norm. Polluting industry was, in fact, enabled. Environmental regulation was blindsided. As China’s economy and geopolitical power grew, the negative consequences were on food, water and health securities. China has faced three-fold environmental degradation. One. Developing an overpopulated and underdeveloped society, at frenetic pace has induced ecological stresses of land and water shortage, deforestation, and desertification. Two. Its gigantic industrialisation and rapidly increasing urbanisation in a globalised economy has resulted in huge pollution including generation of marine and toxic wastes. Three. Climate change has started to make its presence felt . At some stage the economy will be impacted, slow down and start shrinking.
Dammed Degradation. Since the 1950s, the Chinese have built around 22000 dams which are more than 15 meters tall. It is roughly half the world’s total. More than 16 million Chinese have been relocated to make way for these hydro projects. They have over 125 mega dams with heights more than 100m. These mega-dams, block the flow of rivers, create floods, affect agriculture and fisheries, increase the chances of earthquakes, and destroy environments. To quote a view ‘rather than benefiting populations with non-polluting power, China’s dam builders are making a Faustian bargain with nature, selling their country’s soul in their drive for economic growth’. Extreme view? It was recently borne out by the massive flooding of the Yangtze basin in the course of which it was feared that the Three Gorges Dam, the biggest dam in the world, would collapse. It is so massive that it has the capacity to slow the earth’s rotation, It is now internationally recognised that the entire exercise has been a huge environmental disaster. The sheer number of dams has created so many water bodies that it has induced local climate change whose effect is being felt within China. The larger issue of global climate change will wreak greater disasters. To illustrate the argument, the analysed complexity of issues surrounding the Three Gorges Dam is reproduced ‘Factors are color-coded whereby green factors signify ecological issues and blue ones signify sociological issues. Beginning with the left, the Three Gorges Dam project has causing forced migration of many people both directly due to Chinese government policy as well as indirectly through landslides and erosion. Furthermore, forced migrants put pressure on urban centers insofar as they need housing and jobs that may not necessarily be available. This in turn affected the standard of living by contributing to poverty, among other things. All of this acted to erode social stability, which is itself a form of latent conflict and which is requisite for violent of overt conflict. On the right hand side we see that the dam disturbs fault lines and causes watershed erosion, both of which negatively affect ecological stability. Furthermore, the dam is believed to be connected to earthquakes in the area due to its massive size. All of these disruptions signal the potential for grave ecological problems such as ecological collapse, biodiversity loss, erosion, etc.’
Kingdom of Rare Earths. China is the ‘Kingdom of Rare Earths’ with a market share of 80-90% in the past two decades. Rare earths are used in semiconductors and energy saving devices (see graphic). China’s rare earth map is shown below.
Rare earth mining has a parallel and thriving huge black market. It is extremely polluting and contaminating to the extent that ‘cancer villages’ have sprung/springing up near mines. Rare earth mining is a contamination time bomb for the Yellow River in the North. In the South, China’s mega-cities like Guangzhou, Shenzhen and Hong Kong may have already been affected by the radioactive toxicity related to uranium. It is no more a matter of ‘if’, but ‘when’. Water for agriculture and drinking in all rare earth mining areas and in downstream areas is heavily contaminated by excessive amounts of ammonia, nitrogen, cadmium, lead and its compounds. Remuneration from rare earths is inadequate to offset costs in health and environmental cleaning. Take another case of Titanium. China is the dominant player in the international market. Titanium mines destroy nature and habitat. The extracted ore is refined with Chlorine which is a huge environmental hazard. It is another saga of pollution and contamination. Sichuan, Hubei, Yunnan, Hainan, Guangxi and Guangdong have Titanium deposits. Sichuan has the largest deposits. Incidentally, India has huge reserves of Titanium. However its extraction will defoliate the Deccan. Not an option and that is why we have not gone for it. A similar pollution / degradation story repeats with every form of resource extraction in China. The ‘Cancer Village’ map , which is result of all such pollution, can be seen below.
Presently, more than 50% of China’s surface water is not fit for human consumption. 60% of the groundwater under Chinese cities is considered to be ‘severely polluted’. The World Bank (2007) estimated that the health cost of cancers and diarrhoea associated with water pollution reached approximately US$8 billion in 2003 in rural areas of China. Today it must be many times more. Resource extraction will extract more from China than imaginable. The damage has already been done and that too in its prosperous coastal belt.
Other Stranglers. There are other environmental degradation, pollution and contamination examples. Approximately 70% of the electronic waste generated worldwide used to be processed in China. It poses substantial risk to health and the environment (Ni and Zeng 2009). Small-scale rural factories known as ‘township and village enterprises’ contribute significantly to China’s growing rural pollution problems. China is world’s largest manufacturer, trader and fossil fuel consumer. It is responsible for 47% of the world’s coal burning, which is more than all other countries in the world combined. The list is endless.
Energy. China’s energy demand is likely to peak between 2035 and 2040 (see graphs). Its oil demand is expected to peak in 2030. However its petrochemical and gas demand will increase till 2050. China’s import dependence on oil and gas will continue to be around 50%. Coal is set to lose ground to renewables. However it is still expected to account for 40% of power generation in 2035. The share of coal in China’s primary energy mix is expected to fall as shown in the graph. Renewables, oil and gas combined will overtake coal’s share of primary energy consumption by 2050. Having said all that coal will still remain the single largest supply sourcethrough to 2050. If one analyses this data , a few things stand out. China will continue to be energy dependant and vulnerable. It will never attain energy security. Coal based energy will not vanish. Its effect on pollution will endure. Overall CO2 emissions are expected to fall only after 2035. China has committed to Carbon neutrality by 2060. By then it might be too late. Per capita requirement and consumption of energy will continue to increase as China modernises. China will continue to extract rare earths. Rare earths are extensively used in magnets for wind generation. Hence reduction in pollution due to renewables will be offset by pollution due to rare earths. Pollution will not decrease. China, in all likelihood, will enter into a state of energy entropy. Click Here For Balance Parts
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