The purge of the ‘excesses of capitalism’ is also a political putsch. Underlying the theme song of ‘Common Prosperity’ is an existential fear. China is haunted by fears of ideological meltdown, of the breakup of Soviet Union.
By Shankkar Aiyar |Published: 10th October 2021 07:10 AM |
Nearly a year back, in November 2020, the Xi Jinping regime blocked the $37 billion IPO of the Ant Group which would have catapulted its worth to nearly $300 billion. As Jack Ma went missing for months, pundits and punters waxed and waffled on what caused the eclipse of the icon. The consensus presented Jack Ma as an iconoclast who spoke out of turn and that this was a one-off battle of egos.
Deluded groupthink has rarely been extinguished so swiftly. In less than 10 months, in a series of measures — ranging from the crackdown on Didi aka China’s Uber to virtually shuttering online tutoring, to ban on crypto currencies to shackling gaming platforms — the Xi Jinping regime has dismantled convenient cocoons on Wall Street and elsewhere.
It scarcely mattered that the radical measures eroded over $2 trillion in the market value of companies and of investor wealth. The latest ingredient in the hot and sour soup is the animated suspense over Evergrande, the large Chinese real estate giant which owes over $350 billion to lenders and which hangs over the brink of default.
The systemic purge of what is characterised as the excesses of capitalism is also a political putsch. The organising principle of any political order is to estimate risks and manage them. The biggest threat to stability in any political system stems from untrammelled wealth wielded by billionaires and the control of information. At a social level, the spawning of billionaires clearly aggravated social schism. At a structural level, China’s tech giants represented a threat to the existing structure of power as they presented alternate modes of managing expectations and outcomes. Xi Jinping has virtually neutered the power of wealth by constraining the tech hegemons. And in corralling the control of data, he has consolidated his power over the Communist Party of China and the powerful People’s Liberation Army. Indisputably, this enables him to further his ambition of extension and expansion in the run up to the 2022 Party Congress.
Political stability is both a personal and political quest. The central theme of his current approach of ‘Common Prosperity’ borrows from what is apparently one of his favourite quotes from the central text of Taoism which states: “No calamity greater than to be discontented with one’s lot”.
As in any society, the middle class in China is subject to the angst and anxieties of life and livelihood. What distinguishes China is the scale of the constituency — the middle class is bigger than the population of say the US. Through the past year, Xi and his regime have focussed on crafting the narrative of victims and villains — for instance realtors who have been targeted to curb cost of rentals and housing.
It bears mention that in the last face-off between China and the US, the Chinese delegation spared no effort to pinpoint the spectacle witnessed on January 6 in Washington and listed issues — from the management of the pandemic to natural disasters, from income inequality to racial inequities ravaging the world’s oldest democracy.
The control over the levers of order, rather the semblance of order given the information gap, affords Xi to further the ideological case Beijing has been peddling on the geopolitical landscape — the economic prowess of China and stability as a seductive viable alternative to the chaos witnessed in democracies across the world.
Underlying the theme song of new China, stability and common prosperity is an existential fear. In the pre-Nixon era, China’s fears, as Zhou En Lai revealed to Henry Kissinger, were of dismemberment into three by the Soviet Union, the US and a rising Japan. Post the fall of the Berlin Wall, China has been haunted by fears of what happened to the Soviet Union.
In 1992, Deng Xiaoping had embarked on ‘the southern tour’ (inspired by similar tours by the emperors of the Qing dynasty), specifically to Shenzhen, to promote economic prosperity as the bulwark against a break up and directed that reforms be hastened and declared “whoever is opposed to reform must leave office.”
Xi Jinping, in stark contrast, on his 2013 ‘new southern tour’ questioned the potential of economic growth to stave off collapse and like Mao Zedong argued for ideological fervour. “Why did the Soviet Union disintegrate? Why did the Soviet Communist Party collapse? An important reason was that their ideals and beliefs had been shaken.”
Xi’s approach for achieving common prosperity is not without uncommon perils. Starving entrepreneurship and investment of returns will necessarily have repercussions and lower growth wrapped in repression could trigger the very social instability he aims to avert. How Xi’s new Maoism packaged in morality plays out will be determined by the will of the Chinese people.
The world is at the fork of history. Democracies invested in the idea of a rule-based world order which is defined by free will must challenge the ideological and territorial expansionist agenda of Xi Jinping. It must fix the inadequacies which representative democracy is shackled by so that the cult of autocracy draped in the faux ideology of common prosperity is effectively rejected.
Shankkar Aiyar, political economy analyst, is author of ‘The Gated Republic –India’s Public Policy Failures and Private Solutions’, ‘Aadhaar: A Biometric History of India’s 12-Digit Revolution’; and ‘Accidental India’. You can email him at email@example.com and follow him on Twitter @ShankkarAiyar. His previous columns can be found here. This column was first published here.