Were the pomp and splendour on display at the military parade for marking the 70th anniversary of the World War II, on September 3, desperate attempts by China to deflect attention from its domestic problems?
The question is important given the difficulties China is going through. Most of these are economic, and while not indicative of a systemic collapse of the world’s second-largest economy, are significant enough to get Chinese authorities cracking on economic management. Massive wipeout of investor wealth from the stock market and corrections of the exchange rate do not entirely reveal the vulnerabilities in the Chinese economy. A substantive part of these are the bad debts held by the major banks that not only impact profitability and earnings, but also underline the looming fiscal stress of imminent recapitalisation. It is hardly surprising that GDP growth is slowing given the ability of Chinese banks to fund growth by on-lending to projects. In the medium-term, lesser projects can negatively impact jobs and employment.
The managers of the economy look prepared to bear the strain as China struggles to integrate its systems and processes closer with those in the rest of the world. The systemic changes are gradually taking place as is evident from the possibility of circuit breakers being introduced in the stock market. But this and more changes would take time to be implemented and deliver results. Till then, the Chinese authorities would have to reconcile to subdued economic outlooks and the obvious pains of structural adjustment.
Was the military parade aimed at sweetening the bitter pill by recalling the epic struggle of the Chinese during the WWII, the distance that China has travelled since, its undisputed rise, and the ‘awe’ of the world at China’s spectacular ascent? Was it also a signal for the rest of the world that China is strong and fine and ready to take on those who doubt its might?
The strategic objective of the humongous military show was undeniable. As far as the domestic constituency is concerned, the spectacle would have put at rest concerns over China’s capabilities in handling Japan, provided such an eventuality arose at any stage. The common man in China is yet to feel the pinch of economic troubles as hard as many are assuming. The larger signal—President Xi and his team are in control, with the firm backing of the PLA notwithstanding the doom portended by Western media—would have been conveyed well.
The response of the international community to the parade was rather subdued. Except for the Russian and South Korean presidents, and the UN Secretary General, there were hardly any peers of President Xi present at the gathering. This was notwithstanding invitations sent all across the world. While countries obliged by sending state representatives, the levels of representation chosen by most, like India, were not as significant as China would have wanted them to be. This would have been a bit of a let-down for the Chinese authorities.
Coming within less than six months of the world queuing up for membership of the AIIB, the less-than-enthusiastic response was probably unexpected. Some experts were quick to connect it to China, of then and now, by pointing to the economic ‘debacle’ the country suffered by the in between and the disillusionment it would have created among others as a result. This, however, is too superfluous an explanation.
The real reason behind the majority of heads of states staying away from the show was because of their discomfort in getting associated with an occasion that among other objectives was also aimed at slamming Japan hard. While there is little support across modern world for Japan’s wartime deeds, the current geopolitics in the Asia-Pacific region cuts the turf sharply between China and Japan. It is difficult to say who among the two has been more aggressive in staking territorial claims in the South China Sea.
Most countries would have felt that presence of their heads of state would have affirmed their allying with China: a China that was keen on showing Japan and its main ally the US, along with other strategic and military allies of both, that South China Sea and Asia-Pacific was no longer a place where China’s rivals can breathe easy. The military display was good enough evidence for the clarity, though, in characteristic fashion, China tried to downplay the show of strength by emphasising the PLA’s ‘peaceful’ ambitions that would manifest in cutting its size by 300,000 personnel by 2017.
Much as the world is keen on partnering China in constructive initiatives like the AIIB, it is careful in crossing the line between constructive cooperation and strategic alignment. On the latter, most countries would hedge their bets.
At the end, the spirited show of September 3 probably sent a bigger message from the rest of the world to China, rather than the other way round.
The author is senior research fellow at the Institute of South Asian Studies, National University of Singapore. He can be reached at isasap@nus.edu.sg. Views are personal