Nations need to rethink about dependence on Chinese investment

The observers suggest all those nations, which have been too dependent on the Chinese investment for their growth, may think of diversifying their sources of investment

Once Chinese emperors believed that they had a mandate from heaven to rule the world. In modern times, Chinese Communist rulers seem to have been hardly different in their belief. In his speech on July 1 last year marking the centennial of China's ruling communist party, Chinese President Xi Jinping said, "The Chinese people are not only good at taking down the old world but also good at building a new one." Will China succeed in building a new world, a world in their own image?

Observers say possibilities thereof are bleak. After American President Richard M Nixon embraced then Chinese supremo Mao Zedong in the early seventies and the latter's successor Deng Xiaoping introduced the path of state capitalism in the communist nation, it rose very fast economically. Today it is the second largest economy in the world. Beijing used its economic prowess to invest in different parts of the world and increase its sphere of influence.

Communist China is likely to find it difficult to stick to its path of investing in other nations to increase its influence. Its economy has of late been falling very fast due to "unfavourable domestic and external circumstances."

Communist China's currently much-trumpeted 'Zero-COVID' policy has proved economically disastrous for the nation. The latest data shows its GDP growth slowed to 0.4% in the second quarter compared to a year ago.

The Covid policy has led to a poor employment rate across the country. The unemployment rate for the 16-24 age- group climbed to a record 19.3% last month. This ratio is far higher than what it is in the United States, Europe or Japan.

The observers warn there is little sign of the pandemic ending in the country any time soon. Far from it. As of July 15, there were still 31 cities under full or partial lockdown. Epidemiologists have predicted there may be a wave of at least 10 new variants of the virus in the country.

The situation is alarming. Recently, over 20 provincial-level regions have announced increase in locally transmitted cases. Chengdu in Sichuan has reduced public access to 'confined spaces' in the city. Lanzhou in Gansu has extended restrictions on movement in most districts. The Shanghai government has said that residents in more than half of the city's 16 districts need to be tested for the virus again.

The observers suggest all those nations ̶ India's neighbours, in particular ̶ which have been too dependent on the Chinese investment for their growth, may think of diversifying their sources of investment. Banking on the Chinese investment would be dicey.

(Jagdish N. Singh is a senior journalist based in New Delhi. He is also Senior Distinguished Fellow at the Gatestone Institute, New York)

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