China’s “Theory of Diversion”

Every time China has a new crisis to deal with, it never fails to find a scapegoat. The same was also the case explaining all the events leading up to the Galwan Valley Massacre that took place on the fateful day of 15th June 2020.

The year was 1949, and China, as a new communist state, emerged under the leadership of Mao Zedong. Mao was deeply influenced by the Soviet ideology of a communist state. Mao was on excellent terms with the Soviet leader Joseph Stalin due to ideological similarities. Now Stalin recruited the German Prisoners of War (POWs) from the Second World War, who subsequently helped him develop the soviet version of the German V2 missiles both for the erstwhile Soviet Union and its neighbourly China.

Nevertheless, bitter things started to crawl in after the death of Stalin in 1953. That same year saw the period of “De-Stalinization” where Stalin’s successors, notably Nikita Khrushchev started reversing the policies of Stalin. Mao, who once idealised the Soviet, saw his image at risk. He feared that the same fate might as well go down after his death.

Therefore, Mao launched one of his super ambitious programs, the Great Leap Forward (GLF) Policy, in 1958. As per the policy, he wanted to set an example by promising to industrialise China quickly. For this purpose, Chinese citizens were forced to work in government-run communes. In a fortnight, they became labourers to work on lands they once owned. People were starting to lose morale. Mao also ordered the extermination of pests under the Four Pests Campaign. While many pests maintained the region’s ecological balance, eliminating them completely was yet another disastrous idea. The whole countryside was in peril. Even then, the leader kept claiming that the production levels were skyrocketing.

An estimated 18-45 million Chinese citizens were starved to death during this period. All of this happened under the aegis of the GLF while overlooking the dire working conditions of the people. Finally, in 1962, Mao was forced to shut down this disastrous program of GLF. Now, this is where the story takes a turn because now Mao was, more than ever, in need to regain his lost image. He, therefore, turned his eye towards India and felt that a small scale conflict against it would inevitably calm the mutineers within his own country. It is now also an open secret that the grounds on which Mao declared war, such as – The Dalai Lama Issue, Border Dispute, Nehru’s Forward Policy etc., were not the immediate cause for the conflict. However, Mao had to find a scapegoat to win back the trust of the masses. Mao also had no intentions of continuing the war because he knew that the Cuban Missile Crisis of 1962 was over, and then US President J.F. Kennedy would not let another non-communist state be invaded in a hostile takeover by a communist giant.

If we perform simple math and relate it with the present situation, we find that much of it holds even today. With the outbreak of SARS-CoV-2, China has opened a Pandora’s box of trouble ranging from unemployment, economic slowdown, loss of trust, global isolation and an imminent food crisis, among others.

Though China has officially not recognised any one of them, plenty of evidence systematically establishes the aforementioned crisis.

First, President Xi had on 11th August 2020 re-launched Operation Empty Plate. Through this initiative, he had asked its citizens who visit restaurants to order ‘Food for 3’ while being in a ‘Group of 4’. All online eating shows have been banned. In one of the restaurants, they reportedly weighed customers to serve them equivalent food. Now this problem owes its origin to various factors. Earlier in 2020, there were widespread locust attacks and floods in Southern China (Specifically the Yunnan Province). Western China (Specifically the Xinjiang Province) faced drought while Eastern China (Specifically the Heilongjiang Province) faced lower productivity due to extreme hailstorms. African Swine Flu had also reduced the amount of meat available in the market. Super typhoon “Maysack” has only compounded the crisis.

Second, Chinese banks are on the verge of a significant financial crisis. A pilot scheme was active in the Heibei Province where customers had to mandatorily produce a prior one-day notice for large transactions ranging anywhere from 100,000 Chinese Yuans (Approx. INR 10,80,000/-) and onwards. Customers also had to produce the reason for such withdrawal. This scheme is supposedly scheduled to be spread to different parts of China, starting with the Zhejiang Province.

Interesting to note is that China’s Central Bank, i.e. People’s Bank of China (PBC), has officially reported that over 13% of the country’s banking institutions are at risk. Out of them, 10% are at very high risk. However, the Chinese central command has repeatedly put their deaf ears to the alarms raised by the PBC. The fear of default by Evergrande, the second-largest real-estate developer based in China, is also driving a frenzy in the investor community worldwide. After the company on December 6th’21 officially stated “No guarantee on repayments”, it is also risking the world towards another Lehman moment.

President Xi, just like late Mao, too seem to have been worried about his lost image. However, ordering the Galwan Valley Massacre did not help him either. The premier miscalculated India’s strength. In retaliation, when India and other countries banned Chinese apps, regulated Chinese investments and, most importantly, our PM’s clarion call for “Vocal for Local” has literally nuked the Chinese economy from inside.

President Xi must come out of his fairy-tale believing the world order to be the same as was in the 1960s. Communist Party of China’s top leadership must realise that all of this has to end at the earliest so that China’s Century of Humiliation does not come haunting it back.