What's New

READING THE TEA LEAVES AHEAD OF CHINA’S THIRD PLENUM

UPSC Relevance:

GS Paper 2:

• This topic is crucial for understanding bilateral and regional groupings and agreements involving India. It also highlights the impact of global economic policies on India.
• Bilateral, Regional, and Global Groupings and Agreements
• Involving India and/or Affecting India’s Interests.

Essay Paper:

• The implications of China’s economic and strategic policies can be a potential essay topic,
• Requiring thorough understanding of international relations and their impact on India.

source: the diplomat

International Relations:

• Students should focus on China’s strategic initiatives like the GDI and GSI and their implications on global security and regional stability.

Focus:

• Analysing the anticipation and potential implications of the upcoming Third Plenum of China’s 20th Party Congress, set for mid-July 2024, regarding China’s economic and strategic direction.

Why in the News?

• Western commentators suggest moving past the optimistic vision of a post-Cold War era. With China closely aligning with Moscow and embracing a state-based international order, the outcomes of the Third Plenum are under keen scrutiny.

Introduction:

Attention is directed towards the Third Plenum of China’s 20th Party Congress, which holds the promise of pivotal changes. Scheduled from July 15-18, this Plenum is set to chart China’s course, especially as the country’s economic trajectory remains a critical focus amidst global uncertainties. The renewed attention underscores its enduring significance in shaping China’s future direction both economically and strategically.

Economic Reforms:

• Historically, Third Plenums set the economic agenda for the subsequent decade and are pivotal within China’s five-year planning cycles.
• Speculation is rife about China’s contemplation of sweeping reforms, analogous to Deng Xiaoping’s economic liberalisation in 1978.
• Presently, China faces pressing economic challenges such as an ageing population, high levels of debt, and workforce issues, fostering a sense of pessimism about the future.
• The hope is that the Plenum will introduce guidelines addressing these concerns, especially targeting the economic slowdown and improving global investor confidence.

Issues:

• Ageing Population: China’s rapidly ageing population presents a significant challenge, with a shrinking workforce unable to support the growing number of retirees. This demographic shift could impact productivity and economic growth.
• High Levels of Debt: Both corporate and local government debts have surged, raising concerns about financial stability. The Plenum is expected to address these issues through fiscal reforms and debt management strategies.
• Workforce Issues: High levels of youth unemployment and a mismatch between skills and job opportunities have created workforce challenges. Measures to enhance vocational training and education reforms are anticipated.
• Economic Slowdown: China’s economic growth has slowed, impacted by both domestic challenges and global economic uncertainties. The Plenum might introduce policies to stimulate domestic consumption, attract foreign investment, and boost innovation.
• Investor Confidence: Global investors are wary of China’s economic stability due to its opaque financial practices and regulatory unpredictability. Reforms aimed at increasing transparency and regulatory stability are likely to be discussed.

Strategic Concerns:

While the Plenum could offer economic changes, its broader strategic implications are also significant. China’s assertive policies in regions such as the South and East China Seas and the Taiwan Strait remain focal points. Moreover, China’s latest developments, including its Global Development Initiative (GDI) and Global Security Initiative (GSI), reflect its ambitions to integrate its beliefs into global security and economic frameworks.

• Assertive Policies: China’s strategic manoeuvres in the South and East China Seas and the Taiwan Strait continue to challenge regional stability. This includes militarization of disputed islands and increasing naval presence, which has escalated tensions with neighbouring countries and the United States.
• Global Security Initiatives: Through initiatives like the GDI and GSI, China aims to reshape global security and economic orders in alignment with its strategic interests. This includes expanding its influence in developing countries through infrastructure projects and economic investments.
• Technological Advancements: China’s advancements in military technology, including hypersonic missiles and space capabilities, pose significant strategic challenges to global powers. These developments could alter the balance of power and lead to a new arms race.
• Cybersecurity Threats: China’s cyber capabilities are another area of concern, with potential implications for global cybersecurity. Increased cyber espionage and attacks on critical infrastructure highlight the need for robust international cybersecurity frameworks.
• Nuclear Capabilities: The expansion of China’s nuclear arsenal and the modernization of its missile forces are viewed as strategic moves to counter the U.S. and its allies. This could lead to a reassessment of nuclear strategies and deterrence policies globally.

Impacts on Global Security:

• The United States and its allies must grapple with China’s increasing global security role, particularly as it enhances its military and nuclear capabilities.
• China’s cautious approach towards adjusting its security stance is evident in its internal preparations, further compounded by ongoing geopolitical tensions.
• Members of the strategic community also focus on the advancements made by China’s Rocket Force, highlighting the implications for both regional and global security dynamics.

Where India Stands?

• For India, positioning itself in response to China’s shifting policies is crucial. As India transitions from being seen as a ‘middle power’ to a ‘major power’, the strategic and economic decisions emanating from China will significantly influence India’s foreign policy.
• Enhanced cooperation with Western democracies, particularly in defence and security, alongside bolstering India’s indigenous capabilities, remains imperative.
• The upcoming BRICS Summit in India, coinciding with the Third Plenum, provides a timely platform for India to recalibrate its strategies in sync with global developments.
• Moreover, initiatives like the Personal Data Protection Bill and investments in technological advancements underline India’s efforts to secure its interests.

Conclusion:

In essence, the outcomes of China’s Third Plenum will reverberate across global economic and strategic arenas. While the exact nature of the proposed changes remains to be seen, the implications for international relations, particularly for neighbouring countries like India, are profound. Vigilance and strategic foresight will be key for India as it navigates this evolving geopolitical landscape.

Mains Practice Question:

Discuss the potential implications of China’s Third Plenum on its economic and strategic policies. Evaluate how these changes might impact India’s foreign policy and strategic interests.

Source: The Hindu

Associated Articles:

https://universalinstitutions.com/analyze-the-rise-of-china-as-a-global-power-and-its-implications-for-the-international-system/