Did Xi Jinping make a losing bet on Putin or a losing bet on China?

It has never been a good idea to bet against America. In the final analysis, when Xi bet against America, that may have been his worst bad bet yet

Breakfast with Bwana

By Anil Madan

A recent article in The Hill by Will Marshall, CEO of the Progressive Policy Institute, a Washington, DC based think tank, titled ‘Xi’s Losing Bet on Putin is Backfiring’ caught my eye.

Mr Marshall has marshaled an array of factual statements to make his case. It is not entirely clear that he has indeed made the case. It certainly appears that Putin is overall a loser when it comes to his lack of success in his invasion of Ukraine, his battlefield setbacks and enormous death toll Russia’s forces have tallied to this point.

Jinping and Putin. Pic – Foreign Policy

Some Western sideline cheerleaders, mostly media and politician types, marvel at the resilience of Ukrainian patriots repulsing Russian troops and missile attacks. Somewhat more sobering pronouncements from military types suggest the war is far from over and attrition continues to take its ugly toll on Ukraine as well. To what extent Ukraine can survive as a viable nation will be revealed in history books. Those chapters remain to be written.

First, there was Xi’s declaration of a “no limits” partnership with Russia — essentially the fundamental bet on Putin. Mr Marshall writes that the announcement, coming as the Beijing Olympics got underway in February 2022, was mistimed. Whether Xi knew from Putin that his invasion of Ukraine was imminent or not, is beside the point. American intelligence anticipated and telegraphed the move. As I have written in the past, sadly, President Biden failed to call Putin’s bluff and prevent it. Perhaps Xi ignored the reports by American intelligence and mistimed his declaration of a love fest with Putin.

That Xi was all-in with Putin became clear when China refused to support a UN resolution condemning Russia’s unprovoked aggression. In Trumpian fashion, Xi’s government parroted Putin’s lie that NATO expansion posed a mortal threat to Russia’s security.

But Russia’s invasion didn’t go as well as Putin and Xi expected. Russian forces did not blitz through its neighbour’s territory. And President Zelensky proved a formidable and heroic opponent.

As Putin’s inept war, labelled euphemistically, a special military operation eroded into a military debacle, Ukrainian morale soared, and a hitherto somewhat fragmented US-European-British alliance solidified. This was precisely what Xi’s embrace of Putin did not contemplate, indeed, sought to fracture.

It certainly looks as if Xi’s notion of forging a formidable Beijing-Moscow alliance to rival the US, and its European, British, Australian, and Japanese rivals came apart. Indeed, even India, ever recusant about condemning Russia’s invasion, has become a member of the QUAD — America, Japan, Australia, and India. And now, US-India relations look ever stronger.

Did Xi get anything out of this embrace of Putin? Yes, of course. Beijing secured a long-term supply of cheap energy. And so did India. And, as the Ruble has collapsed in value, to the extent that the oil is not paid for in US dollars — I wrote about the de-dollarization move in a previous comment — Russia suffers even more. Regardless, China and India have reaped a bonanza.

Not only has NATO’s decision to support Ukraine brought the European countries together, but NATO will have gained two new members as Sweden and Finland join. And, in defiance of Putin, NATO seems to be promising to admit Ukraine to membership.

French President Macron is less reluctant to criticize Beijing’s “imperial” ambitions and Germany has declared a new China strategy that emphasizes de-risking by reducing reliance on Chinese investment and trade. The US has become more aggressive with strategic restrictions on exports to China while disavowing, through high-level visits from Treasury Secretary Janet Yellen, and Secretary of State Blinken, that the US seeks to decouple entirely, from China. China cannot contemplate decoupling without crippling its economy.

Xi’s bet on China

Xi may have lost additional strategic advantages in Asia as its neighbours in the Pacific have heightened suspicions about China’s designs for domination of the area and perhaps even encroachment on their territories, whether just maritime or land as well. Certainly, Taiwan remains under ever-ratcheting threat from Beijing.

In one other sense, Xi’s bet on Putin has been a bad one. There is little doubt that China’s prestige and soft power have taken major hits and awe has been replaced by derision or even suspicion and loathing.

What about Xi’s bet on China itself? William Galston writing in the Wall Street Journal, notes that over the long haul, China’s population of 1.4 billion is projected to fall by almost 38%, down to 800 million, by 2080. Fifty-seven years is a long time away, but the impending decline is likely to demand ever-increasing attention from the CCP’s leadership and put a damper on dreams of world domination.

Galston also points to the debacle facing China’s housing sector as major developers have defaulted on bonds and sales of homes by China’s 100 biggest developers have fallen by more than 80% since 2020.

There is seemingly a push by American companies to diversify their suppliers and supply chains. In the final analysis, whether Chinese dominance in this area decreases sharply or not depends on how low China can keep its prices. But the lesson is clear. China has lost leverage.

We cannot know what China will do in respect of Taiwan. Recent efforts by Yellen and Blinken at achieving some sort of rapprochement will certainly come to a screeching halt if China invades Taiwan.

Soft power — a losing bet

It seems that Xi’s options are limited. The continued expansion of soft power seems like a losing bet whether on the Russian front or in the Pacific. Long-term demographics and the threat of economic stagnation caused by inability to service debt loom as large negative forces for Xi.

America is in political disarray. But the US economy is in relatively good shape compared to the rest of the world.

I have said in the past that it has never been a good idea to bet against America. In the final analysis, when Xi bet against America, that may have been his worst bad bet yet.

Cheerz…
Bwana

Mauritius Times ePaper Friday 18 August 2023