11 April 2016

PME, DSSC Wellington and Indo China Relations

1. Recently a two day seminar on "Economic and Security Dimensions of India-China Relations." was organised by Defence Services Staff College, Wellington. There was a galaxy of speakers. Shri Shiv Shankar Menon, Ex NSA delivered the opening address and Prof Mohan Guruswami the valedictory address. 


2. Armed forces are great event managers. They go to the minutest details, conduct the events with lot of pride and finesse and I am sure the seminar was a grand success. Great, good job done. 

3. My point is : if I want to read this valuable papers/presentations, how can I get those. Every professional soldier, sailor or airman must look at the Modernization of Chinese Armed forces seriously. What better opportunity than this seminar. Lot of papers are coming out on this subject. Sadly the military implications for India is missing. We have so many China specialists from Armed Forces brethren. What we get is information. You can lift bulletised slides from the Chinese Defence white paper. Where is the analysis for our Armed Forces. Khair ........ 

4. Those of you who have been receiving my mails for so many years will agree with me how fanatically I have been propagating the need for distribution of knowledge. Our people, senior officers after retirement will write some "gambhir" paper on Professional Military Education (PME). Where is the education? It is all training. Our senior officers would never write in professional military journals except just before retirement or when ordered to do so. Why should one stick his neck out. Jo bole kunda Khole, If you don't write or speak you commit no mistakes. Zero error syndrome at its very best. Better to discuss back nine performance of you boss at the golf course. You go to the golf course at 3, come back dog tired, attend evening social engagements. Where is the time for professional, military reading or PME. Time Nehi Deda. 

5. While in service I have tried my very best on this issue . It was at spectacular failure. I have been very very sarcastic and acidic. One of the former Service Chief and Chairman CSOC, whom I consider was the only one suitable for becoming NSA, whom I hold in great esteem, got very hurt by my scathing writings on this issue. He wrote to me that my job is to make water available to the horses. Whether they drink or not is none of my business. Similarly somebody wrote, people will read whenever they require. You don't have to show you knowledge, we have no time. Fair enough. 

6. I have done all these, while in uniform. After retirement I have no business to write like this. People will say, you are Ex, what do you know what happens now. Rightly so. While writing these acerbic, acidic comments I generate lot of negative energy/vibration, body gets plenty of toxic material. This is not good for my health and mind. Now I should try to do yoga, meditation, Bipsana and what have you and imbibe essence of Bhagwat Gita. "Whatever happened in the past, it happened for the good; Whatever is happening, is happening for the good; Whatever shall happen in the future, shall happen for the good only. Do not weep for the past, do not worry for the future, concentrate on your present life." I say Amen to that. 

7. Yesterday I met Shri Shiv Shankar Menon, our Ex NSA at Carnegie India's inauguration function. I requested him for a copy of his speech. Immediately he took out his phone and e-mailed to me. He also said, Prof Mohan Guruswami made an excellent presentation. He had carried out a net assessment type of thing on China. I am requesting Prof Mohan Guruswami to send me his presentation. Shri Menon told me these have been given to DSSC. I could not tell him that they will never share. 

8. I am reproducing below Shri Shiv Shankar Menon's speaking note of his opening address. Please read and see to your self whether you should be reading this or not. 

9. This e-mail goes to a very large number of people, both serving and retired. I never get any in put from anybody except some veterans who send their papers which have been published. Can somebody get these papers from DSSC. These are absolutely on open domain, no security classification is needed, unless you don't want to share. 

        Either way I don't care. Sannu Ki, Maro Jharu. 

              --   PKM 

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The China Problem 
(DSSC, Wellington, 30 March 2016) 
Speaking Notes 
S. Menon 

Lt-Gen. Gadeock, Commandant, DSSC, 

Ladies and Gentlemen. 

Thank you for asking me to speak to your China Seminar. I thought that I would start things off by speaking about the complications of dealing with China. 



Let us begin by looking at China and its likely behaviour, before we look at how that affects India. 

China 

To begin with, China today and the China that we are likely to face in the foreseeable future is and will be very different from what we have known so far. Since 2008, China believes that her own achievements and the economic crisis in the Western led global economy have created space for her to step out and pursue her own interests more assertively, and to play a much greater role in the international system. At the same time she is undergoing a major internal restructuring. 

China’s economic achievements in three decades of 10%-plus GDP growth are known to everyone.. Today China is the world’s manufacturing workshop, with trillion dollar foreign exchange surpluses, the ability to determine commodity prices in world markets, present in most global value and production chains, and so on. In a little over thirty years China has made herself the world’s largest economy in PPP terms, the world’s largest trading nation, and the engine of world economic growth. The consequence has been the simultaneous and rapid accumulation of hard power in all its forms. This makes China a multidimensional challenge to us: political, economic, diplomatic and military. 

The PLA is now the transformed product of two decades of double digit budgetary growth and the building of hard infrastructure to support the military. For us the direct consequence is that mobilisation times in Tibet have shrunk from two seasons to two weeks, as we have seen in PLA exercises in Tibet since 2010, practicing for contingencies on the border with India and displaying China’s rapid mobilisation capabilities. More broadly, China has modernised her nuclear and ICBM forces into a more capable second-strike force and developed MRBM and cruise missile capabilities and systems that are altering the regional military balance, even with the USA. A repeat of the 1996 Taiwan Straits crisis is no longer possible. Her merchant marine fleet is built to PLA specifications, a large fleet of Coast Guard vessels and modern diesel submarines can project power and threaten surface vessels in the western Pacific, East China Sea, South China Sea and, to a lesser extent, into the Indian Ocean. Its fighter aircraft inventory has grown to the point where it felt strong enough to declare an Air Defence Identification Zone in the East China Sea in November 2013, with hints of one to follow in the SCS. 

Alongside the hardware of power is a shift in Chinese declared policy about her willingness to project and use power, as you would have seen in the May 2015 White Paper on Military Strategy. This is one more confirmation of Xi Jinping’s shift away from Deng Xiaoping’s 24 character strategy of “hiding one’s light and not taking a leadership role”. The latest round of PLA reform, not just of the military commands and regions but in the role of the Political Commissars, and in the functional and other military changes shows a determination to change the PLA in fundamental ways into an instrument for power projection and to fight short, intense high-technology wars in “informationalised” conditions, outside China’s own territory and immediate periphery, and therefore further developing a maritime and air capability. We have seen a regular presence of the PLAN in the Indian Ocean since 2008, including SSBN patrols since 2014. 

These steps are a proactive attempt to provide the military underpinnings for the much greater economic and political role that China seeks for herself in her periphery and the Asia-Pacific today, and in the world tomorrow. Xi Jinping’s signature connectivity and economic integration initiative of the One-Belt-One-Road linking China with Eurasia overland and to Europe by the maritime route will soon have Chinese military capacity to back it. The ports and other infrastructure that she has built or is buying in the Indian Ocean littoral and the Mediterranean are now useful to the PLAN. Djibouti is the first acknowledged PLAN base abroad, and we should expect the same of Gwadar and, if India-Sri Lanka relations deteriorate, Hambantota. 

China has made it clear that while she, (like India), was a major beneficiary of the US led era of open markets and free trade and investment flows in the two decades before 2008, she is also determined to have an independent say in the economic, political and security order around her and in the world. Her goal is the China Dream, defined as the “Two 100s”.[1] Her attempt to shape the environment in her periphery, and to use her economic strength to build connectivity and institutions consolidating the Eurasian landmass and tying her neighbours to herself became more evident after the 2008 global economic crisis. China saw the crisis as a moment of opportunity, with the US and West preoccupied with reviving their own economies and entangled in Iraq, Afghanistan, and, later, in North Africa and Eastern Europe. Ten years ago all except one of China’s neighbours traded more with the US than China. Today China is the largest trading partner of all her neighbours, including US allies like the Philippines and Japan. Faced with Western sanctions, Russia looks to China to buy the energy and commodity exports on which her economy depends for survival. Even the US, China’s main strategic competitor, is economically tied to China in deep and fundamental ways that were never true of her previous great rival, the Soviet Union. 

China has now taken steps to convert her economic strength into strategic influence, in the One-Belt-One-Road proposal and the creation of the Asian Infrastructure Investment Bank, the BRICS New Development Bank, the negotiation of the RCEP, (as opposed to the US sponsored TPP with 12 Asia-Pacific nations), promoting the use of the RMB as an international currency, and other initiatives to build an economic order in the Asia-Pacific, not so much as an alternative to the Western order but as an expansion, an additional option, that suits her particular needs. These will have global impact. Increasingly the Asia-Pacific is the centre of gravity of the global economy and politics, the major source of global economic growth and activity, and the locus of political contention between the old Western order and the new one that is a-forming. We see a Eurasian continental order being formed under Chinese and Russian auspices; the maritime order in China’s near seas and the western Pacific remains contested. 

Will China’s internal condition permit her to fulfil her ambitions? 

Internally, China’s rapid economic growth gave the CCP legitimacy, — originally provided by its Maoist revolutionary ideology, since abandoned — and the means to maintain its social and political control. The only real challenge it has faced since reform began was in 1989 when the leadership was itself divided and reform had not yet delivered prosperity. That crisis culminated in the Tiananmen killings. But the subsequent success of Deng’s strategy of accelerated reform has made a repetition of such events unlikely, even when, like 1989, there are clear divisions within the leadership as the Bo Xilai and Zhou Yongkang affair showed. 

The CCP today is a victim of its own success. With a 11.21 trillion US$ economy[2], and per capita income over US$ 8,000 (nominal)/ 13,992 (PPP), China cannot sustain the high 10% plus growth rates for ever. She also needs to readjust her economy from a reliance on exports and government led investment, to internal demand and consumption led growth, undertaking a gradual macro deceleration. (Last year exports were a negative contributor to GDP.) Estimates of whether she would be able to make this adjustment without a major internal economic crisis or collapse vary widely. My own sense is that a command economy like China, where government has fiscal and other tools not available in market economies, should find it possible to transition relatively smoothly to a lower growth path of about 3-5% GDP growth each year, even though this will not be easy and will cause social pain.[3] But even 5% growth in China’s economy now means that she is adding India’s GDP every couple of years or so. [It has been suggested the XI is a Keynesian who believes that military spending will promote economic growth in China.] 

The social consequences of the nature and speed of China’s growth have also diminished the CCP’s ability to control and manage the lives and thoughts of the ordinary Chinese citizen, as has the effects of the ICT revolution. The CCP has had to enter into uneasy cooption of religions like Buddhism, and now looks for new sources of ideological legitimacy while trying to turn modern technology to buttress its exclusive hold on power. 

As China faces the middle income trap and as economic growth slows, the CCP turns increasingly to nationalism to provide legitimacy in the eyes of its own people. Hence some of the recent shrillness in Chinese responses to external events. In 1990, Deng Xiaoping had urged a 24-character strategy on China: “ observe calmly; secure our position; cope with affairs calmly; hide our capacities and bide our time; be good at maintaining a low profile; and never claim leadership”. In 2009 President Hu Jintao amended the last eight characters to “firmly uphold (jianchi) keeping a low profile and actively (jiji) achieve something (taoguang yanghui, yousuo zuowei)”. Since 2012, China has dropped these modest and humble references and speaks of playing her role and assuming her responsibilities in the world. She also now officially describes herself in public as a great power, implicitly the equal of the US in seeking “a new type of great power relationship” with the US. It is clear that Deng’s humility (whether mock Confucian or not) is no longer the declared guiding principle for China’s external behaviour. Instead, China now seeks to “display her prowess” and “assume her responsibilities”. We now have Chinese scholars like Yan Xuetong speaking of the need for China to start building a series of military alliances in her neighbourhood to countervail the US alliance system and its credibility. 

So, in effect, the search for internal legitimacy and internal fragility and opposition will likely lead the regime to rely increasingly on nationalism to mobilise and control the population and public opinion, and will lead to more assertive Chinese behaviour abroad. 

China’s likely behaviour 

What does this presage for China’s future behaviour as a power? 

The world has been so fascinated by the rise of China that reactions, even from scholars, have been extreme, predicting China’s imminent collapse or, at the other extreme, “When China Rules the World”, as one recent book was called. Logic, Chinese history, geography, and China’s present condition tell us that the truth is somewhere in between and much more complex. 

China’s history, from the so-called Tributary System, to ancient Chinese barbarian-handling manuals, and so on, is only a partial guide to her behaviour though it is a useful one. It is true that, like India, China has a well developed tradition of statecraft, stretching back at least two and a half thousand years. But, unlike India, China’s is essentially a history of statecraft within a closed system of ideologically and ethnically homogenous states or entities. Those who were not of the same ethnicity, or not Han, were regarded as cultural or civilisational inferiors, and were sought to be assimilated or Sinicised through a process of acculturation, starting with the Chinese language and philosophy which acknowledged no equal. The Chinese saw no alternative or other manner of statecraft until the contact with India and Buddhism in the Tang. The shock of contact with the modern world, and of the military and economic superiority of the West in the nineteenth century, was thus much more for China than for Japan or India, for a proud people who had no real experience of coping with diversity or a world of equals, (except under “barbarian” dynasties like the Mongols and Manchus). 

History has left China with a fear of barbarian encirclement, and a strong drive to status/“face” and power after what they regard as “a century of humiliation” and colonial degradation. (Sun Yat Sen once described China’s nineteenth century fate as worse than India’s because, he said, ‘India was the favoured wife of Britain while China was the common prostitute of all the powers’, or words to that effect.) The goals that China pursues in the international system today, of status/‘face’, of the China Dream, of military power and dominance, are a direct result of this narrative of Chinese history, which the CCP has appropriated to argue that only the Communist Party can realise and restore China’s pride. (MTT: “China has stood up”, Tiananmen, 1 Oct 1949; “Without the CCP there is no new China!”). 

Taken together, history and the trauma of the long nineteenth century have left China self-centred, touchy, lonely, and seeking respect. 
These are heightened by the effects of geography and China’s present condition. 
Unlike the US, which is protected by two of the world’s largest oceans, China is in a crowded neighbourhood, has land boundaries with 14 countries, has only two allies — Pakistan and North Korea— and some of her neighbours with whom she has difficult relations have also been accumulating hard and soft power and working with each other, such as Japan, India and Vietnam. The rising nationalism in China has led to a steady worsening of her relations with most of her neighbours. 

Despite the considerable strides that China has made in acquiring power she still lacks the capability to manage, devise or impose a political or security order in her immediate neighbourhood, the Asia-Pacific. Hence the nature of China’s recent assertions — she changes the status quo and ground realities (in the South China Sea and elsewhere) without crossing the threshold that would provoke a direct countervailing response. There are clear limits to how far she is willing to test her power. This is a function not just of the balance of power and the presence of the USA, but also of her inability to offer a normative framework, and, because of the nature of China’s relations with significant countries like India, Japan, Vietnam, Indonesia, Russia and others. If China can not, and the US will not continue to, provide security in the commons through alliances and bases, we should expect continued instability in the Asia-Pacific. What we are likely to see is continued jockeying among the powers, rather than the outbreak of generalised conflict. 

Will the external environment permit China to fulfil her ambitions? 

The natural reaction to prolonged insecurity and strategic competition between the powers in the region and the rapid rise of China’s power would be internal and external balancing by the other states — strengthening themselves and forming countervailing coalitions and alliances, formal or informal. And that is precisely what we have seen. In the last two decades we have seen the world’s greatest arms race ever in the Asia-Pacific region. We have seen the formation of informal coalitions coordinating defence, security and intelligence among China’s neighbours from Japan to Vietnam to Indonesia to India. And we have seen the US announce a rebalance or pivot to the region. 
China’s professions of win-win diplomacy, Confucian benevolence, and economic priorities are unlikely to indicate future Chinese behaviour. Instead, as I have said, the drivers of Chinese foreign policy are likely to remain the quest for status and to acquire power,— political, military and economic. The only consideration that might override them, in some hard to conceive and unlikely circumstances, is regime continuity in China. If rule by the CCP elite is threatened by the consequences of the drive for status and power, that push will be limited or modified. But for the present expect more of the “assertive” China. Her own ambitious goals of a China Dream make it so. 

India 

What does this mean for India? 

What this analysis suggests is that, (absent drastic modifications in Chinese or US behaviour, which I consider unlikely), the rise of China promises an extended period of political and security instability, tension and jockeying among powers in Asia and the Pacific, that there will be no quick recovery for the world economy and certainly no return to the pre-2008 good times of globalisation and open markets, and, that security competition between the US and China will remain the principal contradiction, as Mao would have said. The assertive China that we have seen since 2008 is here to stay for the foreseeable future. Security dilemmas between China and Japan, China and India, China and Vietnam and others will intensify. 
In other words the environment in which we pursue our interests will get more complex. And the very complexity of the situation in the Asia-Pacific gives India a choice of partners and collaborators to work with in the pursuit of our interests. 

An assertive China is unlikely to seek an early settlement of the boundary issue no matter how reasonable we may be, even though the technical work has all been done. Fifty years of stability on the border suggests that give and take on the basis of the status quo is the logical way forward. However, China’s other interests, her relationship with Pakistan, her suspicions about Tibet, and her desire to maintain levers in the relationship with India suggest that a boundary settlement is not a Chinese priority at present. (Nor, for that matter, does it seem to be a priority of the present government in New Delhi as the leaders’ Special Representatives for the boundary have not met or discussed these issues in detail yet.) 

China’s other priorities have made Pakistan even more crucial to China’s purposes — (religious extremism and terrorism in Xinjiang, overland access to the Indian Ocean, keeping India in check, a window on western arms technology, the Chinese commitment and presence in Pakistan Occupied Kashmir, etc.). Pakistan’s game is to suck India into confrontation, thus establishing Pakistan’s utility to those who feel the need to balance India’s rise and acquisition of power and agency — China, the US and others. Today Russia sells arms to Pakistan, the US is supplying arms and discussing Pakistan’s nuclear weapons and Afghanistan’s future with her, and China has committed US$ 46 billion to an economic corridor and Gwadar in Pakistan. Each of these represents an increased commitment to Pakistan which is an order of magnitude bigger than ever before. In the last year we have chosen to equate ourselves with Pakistan and are asking the West to refrain from supporting Pakistan, but they follow their interests not sentiment or logic. So long as Pakistani terrorism is not a threat to them, (as when General Musharraf handed over Al Qaeda elements and they went after Osama bin Laden themselves), they will not expend blood or treasure eliminating Pakistan origin terrorism for us. 
Add to this China’s dependence on the Indian Ocean, and her suspicions about India-US defence cooperation and strategic coordination. 

Taken together these factors make it likely that China will keep the boundary issue alive as a lever in the relationship with India. Nor is it likely that a CCP leadership that increasingly relies on nationalism for its legitimacy will find it easy to make the compromises necessary for a boundary settlement. (This is also true of India.) That is one reason why public Chinese rhetoric on the boundary has become stronger in the last few years, even though their posture on the border has not changed. 

But there is more to India and China than the boundary. In fact the overall salience of the boundary in the relationship has diminished considerably over time, now that the Border Peace and Tranquility Agreement of 1993 and subsequent CBMs have stabilised the status quo, which neither side has tried to change fundamentally in the last thirty years, while improving their own infrastructure, capabilities and position. However, settling the boundary will not settle or eliminate strategic competition between India and China in the their shared periphery. 

Today’s situation is different from the past. The railway into Tibet, PLA exercises in Tibet since 2010, China’s behaviour in Chumar during Xi Jinping’s September 2014 visit, the assertive China in the South China Sea since 2008, Xi Jinping’s US$ 46 billion commitment to the China-Pakistan Economic Corridor one week before PM Modi’s May 2015 visit to China, and China’s new role with Pakistan in Afghanistan to try and bring the Taliban into the power structure are all signs of the new assertive China in our periphery. 

At the same time positive elements too, remain in the relationship. 

Bilaterally, China is now our largest trading partner in goods, while we compete for global markets. Today, over 11,000 Indian students study in China, and we have mechanisms to deal with issues like trans-border rivers, the trade deficit and so on. 
And on several global issues in multilateral forums we have worked together, each in pursuit of our own interests — the WTO, climate change negotiations and so on. 

So the prospect is that even if we do not settle the boundary, there is much to be done and addressed. 

Fundamentally we have a relationship with elements of cooperation and competition at the same time. That duality is also true in terms of national interests. Both countries have an interest in improving on the existing security and economic order. This is why India has been among the founders of the AIIB and NDB. But we compete in the periphery that we share, hence the hesitation on the OBOR and our sensitivity about Chinese military presence in the Indian Ocean littoral. And neither thinks the other has accepted its territorial integrity. 

Maritime security is a good example of that duality. Both countries have a common interest in keeping sea lanes of communication open, but each will oppose any attempt by the other to control the seas and straits through which these sea lanes pass. 

In this situation the rest of the world can only be a limited enabler in India-China relations. They will use India-China competition for their own purposes to a lesser or greater degree, as we see most clearly with our smaller neighbours like Nepal. Ultimately, bilateral India-China ties are a critical relationship which will determine our future. We will have to deal with it ourselves. Today we are entering a new phase in the relationship, and I hope we will be successful in smoothly attaining a new equilibrium. It will take a judicious mix of policies and some innovation to keep India-China relations on track, even if it is simultaneous competition and cooperation, in the years to come. 

Risks 
But there are at least two risks I can foresee. 

One thing that could affect this prognosis is the fact that India and China, (and Japan too), have seen the rise to power since 2012 of strong, authoritarian, centralisers, conservative by the standards of their own parties and societies, with little experience of central government and foreign policy, and strong ideological predispositions to nationalist and even chauvinist rhetoric. While the leaders have been careful in their public utterances, the terms in which foreign and security policy are discussed in China, India, (and Japan), have become much more shrill. Anti-foreign views, jingoistic slogans, intolerant ideas, and downright bad manners are common not just on the internet. These would not matter in normal times but these are times when governments are under stress, and could seek external release from internal difficulties. 

The other risk in India-China relations comes from the mutual gap between perception and reality. Quite frankly, the China that I see described in Indian commentary on China bears little relationship to the China that I have worked with, lived in and see on my visits. The same is true of Chinese perceptions of India, though to a lesser degree. The problem has become more acute recently. Narratives of inevitable conflict and clashing interests can be self fulfilling prophecies. Before 1962, both India and China operated on the basis of an idealised construct of the other which was quite distinct from reality. Besides, throughout the fifties the gap between scholarship and policy in both India and China grew wider and wider. The result was conflict. 

It is not my point that we are in a similar situation today. Far from it. In fact, I am convinced that we are at a moment of both challenge and opportunity for India-China relations as a result of the rapid development of both countries in the last thirty years, of what we have achieved bilaterally in this period, and of the evolution of the international situation. And we have enough negative and positive experience to have learnt how to deal with China. If our China policy was a failure between 1956 and 1962, and was in stasis thereafter until 1976, it has been successful in the last thirty years in achieving the goals set for it by our political leadership, by a combination of internal and external balancing. However, China, the international situation, and we, are now in a new phase and we will have to adjust policy accordingly. 

Today we have both opportunities and challenges in dealing with China. China’s own assertive behaviour has given us new friends who are willing to cooperate with us in defence, intelligence and other security fields. China’s economic capabilities can be used judiciously by us to build India’s infrastructure as they have tremendous surplus capacity. And her worries reveal her vulnerabilities. Equally we need to meet the challenge of China’s military capabilities, her actions in our neighbourhood, her support to Pakistan and insurgents in our north-east. 

Our problem is that Indian responses to China are segmented: the military and security response is, rightly, that India must make herself strong, whatever the cost; diplomats say simultaneously engage China, negotiate differences, find external allies and balance China’s rise; politicians say do a deal; and the economists say that we should increase trade, get China to invest in India and develop a stake in India and the relationship to soften security conflicts. All of them are right and wrong at the same time. They are right because China is an economic, security, political and foreign policy challenge, all at the same time. And they are wrong because none of these approaches has a chance of success on its own. 

George Kennan, the author of US containment policy towards the USSR, used to say that he could think of nothing more likely to make the US insecure than the pursuit of absolute security. One could add that nothing is more likely to make us poor than the single minded pursuit of economic growth, to the neglect of security. Clearly we need to do all these things at the same time in dealing with China. 

The first problem is therefore, how to integrate Indian responses to China, coming up with a whole-of-country response across sectors that are not used to working together. 
Secondly, policy choices present themselves as small, discreet, individual choices — not as grand Eureka moments of revelation or decision but as several choices scattered in time and amidst the mundane. Only cumulatively and in hindsight, in the historian’s gaze, do they amount to a grand strategy. 

I do hope that your seminar will successfully answer these questions about how we should deal with this new China in the new situation. 
Before I close, let me quote to you something from a very different context which, to my mind, is good advice on how to think about such problems: The IDF CGS said to a group of us in January this year that the IDF was reviewing its strategy in the light of the Iran nuclear deal: 
“It has many risks, but also presents many opportunities. Our role is to look at the risk prism and the capability prism and to judge from that — not to assume that the worst-case scenario will take place, because that is as dangerous as the best-case scenario.”[4] 
In fact that is exactly what the Chinese want — for you to assume that the worst-case scenario will take place and to act on that assumption. Chinese strategy is to use psychological dominance, to inspire awe, and to use your own fear to make their victory certain even before a single shot is fired. We must and will prevent that. 

[1] “Two 100s”: China becoming a “moderately well off society” by 2021, the 100th anniversary of the CCP; and, China becoming a fully developed nation by 2049, the 100th anniversary of the People’s Republic of China. 

[2]Nominal GDP, April 2015, US$ 18.976 trillion PPP April 2015; IMF says China is second largest economy by nominal GDP and largest by PPP though China National Bureau of Statistics rejects this claim. — India: US$ 2.582 trillion (nominal) or 8.427 (trillion PPP) in April 2015; all figures from IMF. 

[3] Rothman argues that China’s old economy of the Li Keqiang index (power, credit and freight) is weak, but the new economy (consumption, personal income and services) is strong. In the last decade real incomes grew 130% in China, inflation is around 1.5%, and retail sales increased 11% in 2015. 2015 was the fourth successive year in which manufacturing and construction were a smaller part of the economy than consumption and services. Consumption accounted for about 2/3rds of GDP growth in 2015. China has already rebalanced away from exports, investment and heavy industry. 

[4] Lt.-Gen Gadi Eizenkot, IDF CGS, on the Iran Nuclear Deal on 19 Jan 2016 at INSS, explaining why the IDF is now revisiting its strategy. 

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