This emergence of China as the number one country in terms of economic strength had its impact on the summit and the analysts in US media have already noted. President Biden did not give the impression of an aggressive China-baiter as he maintained in the course of earlier policy announcement. A confident Xi Jinping discussed the global issues with élan in the three-and-half hour summit and it is good for global peace and prosperity that both sides expressed a firm desire to go ahead in discussing the vexed issues in a mood of cooperation.

The geopolitical reality is that the economic strength gives the power to bargain in the international diplomatic arena. China has been consistently increasing its national wealth since year 2000 despite some hiccups in the last decade and its economic wealth went up from only $7 trillion in 2000 to $ 120 trillion in 2020, during this 20-year period, US economic wealth went up from $45 trillion to $90 trillion. This means that there was phenomenal growth in Chinese economy during the last two decades, during which the US economy, despite its neoliberal agenda, could not match. The US economy faced severe setbacks twice during this period and the most-affected years were after 2008 financial crisis.

For the Chinese supremeleader whois the general secretary of the Chinese Communist Party, the report has been released only a few days after the conclusion of the 19th session of the central committee of the Communist Party of China. At the session, President Xi presented his vision for the coming period of the Chinese economy and polity focusing much on his theme of ensuring ‘common prosperity’ for the Chinese citizens, who are the victims of widening inequality that has engulfed the Chinese society despite substantial improvement in the living standards of the people.

This ‘common prosperity’ has to be achieved in the next ten years and already, as a follow-up of this theme, actions have been taken by the Chinese government against many practices in the tech industry, which contributed to the growth of both hundreds of billionaires and also widening of inequality. As a part of the drive, the state-owned enterprises (SOEs), which are the mainstay of the Chinese economy, have been given a fresh boost. Moreover, a lot of entrepreneurs from the private industry are being drawn into the SOEs to project that as a model

This is not in the form of anysevere sanctions on the private tech industry. What Xi is doing means calibrating the growth process in the tech industry for doing away with the excesses that have been detected in the recent years. The crackdown on big entrepreneurs has been limited and this in no way, is going to hit the private tech industry in China. As China watchers see it, Xi has ensured the place of the Chinese economy at the top by 2020 and now he is focusing more on distributing the fruits of that to the comparatively marginalised sections of the Chinese society.

This is a new phase in Chinese socialism which will continue over the current decade. In order to guarantee that transition, the CCP general secretary has decentralised economic decision-making to serve the interests of the SOEs better. The McKinsey report has revealed that 60 percent of the global net worth is stored in real estate and two-thirds of the wealth is owned by the richest 10 per cent in both China and the US. The Chinese Communist Party, which still swears by Marxism, and in the recent years, has started more detailed study of Marxian policies and programmes in the party schools, cannotallow a situation, where the richest ten per cent holds two-thirds of the wealth, to continue.

Despite massive opposition and popular protests from the climate- and capitalism-conscious youngsters, the USA still remains a capitalist country, and large income inequality is seen as a natural consequence of individual entrepreneurial spirit. Yet, how can China, a socialist economy — at least Chinese “market socialism” contains the word socialism — continue with the policies that breed such stark inequality? This is the ringing question. Even within the USA, the issue of inequality was the top agenda at the last presidential elections. President Joe Biden had to pass a trillion-dollar package in an effort to bridge somewhat the massive inequality gap. It’s worrying that McKinsey report shows that Chinese growth process is leading to the same quantum of inequality as is prevalent now in USA.

Now, President Xi has been placed in an advantageous position after the publication of this wealth report to prove his point. The programme of ‘common prosperity’ is a must for the Chinese Communist Party to ensure a robust Chinese economy with all citizens sharing the prosperity arising out of the socialist growth engine. Some of his detractors, who opined that the intervention against the high-tech industry has been too harsh, will keep quiet now. Xi will be going to the 20th Party Congress of the CCP in the second half of 2022 with his impressive performance sheet, claiming that he has started the process of closing the inequality gap with great vigour. And in the light of the Central Committee meeting, Xi’s vision of a ‘New China’ seems feasible in the next decade and in the best interests of the Chinese nation.

How this number one global power status of China is going to affect other powers, including India? Xi Jinping made a very important remark at the summit with Biden. China has never taken any inch of any other nation’s territory. Similarly, China will not allow any inch of its territory to be grabbed. This has its own implications. China is determined to take back Taiwan during the Xi era, which will be extended at the 2022 party congress. This is a subtle message meant for USA as to how long it can continue to support Taiwan against prying eyes of China.

And for India, the apprehension is that China decides what falls under ‘its territory’ and there are some areas in India, including Arunachal and in Ladakh, which China claims as its own. Will the newfound status of China drive its leadership to more nationalistic tendencies? There is a possibility. China will be treating India as a significantly lesser power now compared to earlier times. It is also a fact that China is a bit apprehensive of India sustaining itself as a robust democracy, despite less economic progress and poor living standard of majority of people. China does not want India to emerge as a major global power. New Delhi has to calibrate its foreign policy perspective taking into account the new superlative economic clout of its prickly neighbour. (IPA Service)