China in Xi Era

The western watchers have been debating the character and extent of China's power under Xi's leadership. They find the rise of China under Xi's leadership an object of concern – primarily arising based on two assumptions. The first concern arises from the failure of the western assumption that as China rose up the economic ladder and opened itself to the World, the forces of globalisation and the free market would compel it to adopt a capitalist model and, ultimately, China would become a democratic country, as observed in the case of Japan in the 19th century. This faulty assumption is mainly based on the opinion of political philosopher Francis Fukuyama, as he writes in his book 'The End of History and the Last Man', where he asserted that sooner or later the World would come to accept liberal democracy and western capitalism as the triumphant institution. The second is the fact that since the beginning of Industrial Revolution, the world order has been dominated by the Trans-Atlantic powers. Great Britain sailed on the boat of technological advancement and colonialism to become the world's factory. The model was later followed by the other Western European countries like Germany, France and, lately, by Japan in the post-Meiji Restoration era.

The financial reserves of the European countries helped them in strengthening their military and, consequently, in establishing their hegemony on the global map. The axis of power remained with Europe till the end of the Second World War. The Second World War devastated Europe, and the baton of power shifted to the USA, which was itself a product of the European Civilisation. The Europeans lived with a sense of pride, believing that they commanded the World from the other side of the Atlantic.

The USA introduced the World to a new Multilateral World Order which is fairer if not equal to all participating countries. However, since the inception of the 21st century, the axis of the economic power has started to shift towards the Asia Pacific lead by China. The share of Europe and USA in the global GDP fell from 25 per cent and 21 per cent in 1990 to 17 and 16 per cent in 2015 respectively. On the other hand, the share of China increased from 4 per cent in 1990 to 17 per cent in 2015. India's share in global GDP has also risen from 3 per cent in 1990 to 7 per cent in 2015. The combined share of China and India in the global GDP now stands higher than EU and USA.

China's ascendancy to the global stage is further demonstrated by its new multilateral initiatives like Asian Infrastructure and the Investment Bank and Belt and Road Initiative. The rise of China as an alternative hegemon in Asia has put the Western powers into aghast. The receding western influence in Asia and the failure of the western assumption regarding China has put the west on the backfoot. They have failed to recognise that the experience of China suggests that Chinese Capitalism is different from Western Capitalism, and, additionally, an increasingly authoritarian Communist Party rule in China may last longer than expected.

The West needs to have a more open-minded and pragmatic interpretation of China's rise. China has lifted millions of people out of poverty without adhering to the conventional western economic model. China's model should be seen as an alternative and competitive political-economic system to solve the complex global challenges such as trade protectionism, Climate Change and infrastructure financing. This holds true, especially given that the western-style democracies are facing severe threat form populist leaders who are favouring policies of anti-migration and trade protectionism.

The West and China's neighbours including India, therefore, need to practice realpolitik while dealing with China under Xi's leadership. Xi Jinping wants to restore China to its past glory of 'Middle Kingdom Era'. Xi aims to accomplish the task of "Great Rejuvenation of Chinese Nation" which he called the Chinese Dream. A dream wherein China becomes a "moderately well-off society" by 2022 — specifically by doubling China's per capita GDP by 2022 and becoming a "fully developed nation" by the 100th anniversary of the People's Republic of China. Xi's Chinese dream is closely linked with military might, which has frightened China's neighbours. The pursuit of the past glory is pushing China towards a muscular foreign policy. The approach marks a fundamental shift in its foreign policy from that during the Deng Xiaoping era who had advised the country to lie low in global affairs and instead concentrate on domestic economic development. Xi Jinping had abandoned this approach and strived to make the nation a most significant player in global affairs.

China's Asian neighbours and India need to observe the developments in China very closely. How will China behave towards its Asian neighbour in near future will determine its behaviour as a great power. Two schools of thought deal with such questions. First, the realist school of international relations which lays emphasis on the importance of interest and further stressed that great powers tend to behave similarly when it comes to realising power. According to this view, China will be expected to behave like the USA. The second school of thought emphasises that great powers tend to behave as per their unique wishes and circumstances, and, therefore, they dominate in distinct ways. Either of the two thoughts will shape China's behaviour towards its neighbours. Consequently, it is in India's best interest to pragmatically observe China's strategies and figure out which way Chinese foreign economic policy is tilting and then, act accordingly.