China is in trouble. It is in trouble both on the economic and political front. To begin with, a word on the former. For years, China started accumulating foreign exchange reserves. As of now they amount to an estimated $ two trillion which is ten times larger than that of India which has hardly about $ 200 billion to boast of. China raised its reserves, to put in simple terms, by selling cheap goods in the international market, but more especially in the United States, Europe and Asia. From 2001 to 2007 Chinese exports grew at an unprecedented yearly average of 28 per cent. If 45 per cent of its trade came from Asia, Europe and the US each contributed 21 per cent. Because cheap labour was available in China, foreign investment poured in.
Since the late 1980s Taiwanese companies invested a minimum of $ 100 billion in China. It paid Taiwan to do so, considering that some four lakh Taiwanese got work permits to stay in China. Investment in China helped Taiwan both ways: it provided jobs for Taiwanese and it could benefit economically by being a participant in Chinese exports. With the United States in a recession mode, overnight as it were and export falling drastically, the labour-intensive small and medium-sized enterprises, largely situated on China’s coastal belt, and apparently closing down.
According to a report in Economic & Political Weekly (June 27), “67,000 such companies, each with an annual turnover exceeding $ 735,000 closed and laid off more than 20 million employees”. Chinese sources are quoted as saying that two-thirds of the toy exporters, mainly small-size businesses in Guandong province, shut down in the first nine months of 2008. The flow of migrant workers from inland provinces to coastal areas has now been reversed.
According to Beijing’s Human Resources and Social Security Ministry out of China’s total of 130 million migrant workers, as many as 10 million have gone back jobless to their rural place of origin in 2008. That is pretty massive displacement. China could produce cheap goods like toys, shoes, clothing, furniture, even pharmaceutical products through harsh methods. These included low salaries, ban on workers’ unions and long hours of work, openly violating all international rules and regulations. The whole idea was to exploit international markets and thereby accumulate foreign reserves. The poor in China had no options but to obey government dictates and be content to live as slaves.
In recent years as many as 130 million rural peasants had flocked to the cities to work in factories or construction sites. They are now returning to the homes they once deserted and are reported to be in serious trouble. A Qinghua University report has been quoted as saying that at least 120 million farmers need loans but only 60 per cent of them have been able to obtain some financing. If things are bad for farmers in India, they are worse for farmers in China. More than 40 million farmers had apparently used their farmland, partially or wholly, for non-farming purposes and they now need help.
Many had sold their lands and one estimate is that between 80 and 100 million out of a total of 730 million are landless and have no means for subsistence. Talk of communism is a joke. Social polarisation in China is a grim reality. 10 per cent of the richest Chinese families now own more than 40 per cent of China’s total wealth, while the poorest 10 per cent share less than two per cent. Somebody must inform India’s Maoist terrorist groups to go to China to help the Chinese poor. India does not need Maoists. China obviously needs them more. China obviously has no scruples where trading is concerned. Thanks to India’s reputation as a manufacturer of pharmaceuticals, China has apparently sought to produce fake drugs to market them in Africa under the label: Made in India.
Early in June, Nigeria’s National Agency for Food and Drug Administration issued a press release stating that a large consignment of fake anti-malaria generic pharmaceuticals labelled ‘Made in India’ were found to have been produced in China. China seems determined to damage India in every possible way. Meanwhile it is in grave trouble in one of its western provinces, Xinjiang (known in the West as Sinkiang) where a Muslim majority has been resentful of Han Chinese fellow-citizens. What is happening in Xinjiang is ethnic conflict. The Uighur Muslim ethnic group hate the Han Chinese who have usurped land and jobs in oil-rich Xinjiang. China had done the same thing in Tibet in an attempt to reduce Tibetans into a minority in their home land.
Now the Uighurs are revolting and there have been Uighur risings not only in Xinjiang’s capital, Urumqi, but in the border city of Kashgar. The Pakistan-based Al Qaeda is being blamed for encouraging separatism in Xinjiang and on July 14 the Chinese Government “strongly urged” countries in South and Central Asia to step up efforts to clamp down on terrorist groups, such as the East Turkistan Islamic Movement (ETIM) which has been receiving military training in Pakistan camps. So far some 156 Uighurs have been killed in riots and China is learning what Islamic fundamentalism and separatism means. Having befriended Pakistan all these years as a counterweight to India, China is beginning to realise that where Islam is concerned Pakistan is an unreliable political partner. Where power is concerned, China has no scruples.
Xinjiang is an oil rich state that has more than 20 per cent of the country’s oil reserves. To maintain control over it, Beijing has unhesitatingly encouraged Han Chinese to settle down in Xinjiang, causing a forced demographic change. Xinjiang was originally known as East Turkestan Republic before China in its Imperialist avatar annexed it heartlessly in 1949. But the Sunni Uighurs have never reconciled themselves to Chinese rule and the latter’s heavy-handed suppression has only made matters worse.
Hatred of China is simmering in Xinjiang. India has never sought to neutralise Kashmiris by dumping non-Kashmiris in the Vale. One hopes that Pakistan will now understand the nature of its Chinese “friend”. India is a civilised nation. China believes in power as the ultimate source of self-assertion. India respects Kashmiri feelings. China couldn’t care less to Uighur feelings in Xinjiang. One hopes Pakistan will now understand that now. It has allowed itself to be used as much by China as by the United States and is paying for it. When will Pakistan ever learn that its best friend is not either China or the United States, but neighbourly India which has sought to hurt these sixty-odd years? A nation which is willing to sell its soul for “tactical” purposes should remember that in the final analysis wrong means can never serve right ends.