China experiencing dramatic slowdown in its economy, Xi has 2 options: US Congressman

Beijing has two paths going forward - continue with its aggression against its neighbours or reform its economy and reduce aggression, said an influential Indian-American Congressman on Wednesday.

Talking to PTI, Congressman Raja Krishnamoorthi said that Xi Jinping has two choices before him considering that China is experiencing a dramatic slowdown in its economy.

Severe economic pain

"Essentially, China is experiencing a dramatic slowdown in its economy to the point where it might be on the verge of deflation in certain sectors in the economy. Consumer confidence has vanished. You are looking at youth unemployment of upwards of 25 per cent in a country with a one-child policy for decades," said Krishnamoorthi, pointing out that is a "very, very bad statistic".

"It has racked up tremendous debt, especially at the provincial and local level, and then people's net worth, which is mostly invested in real estate, has fallen significantly. So right now, Xi Jinping, the paramount leader, finds himself in a position where his populist is experiencing severe economic pain," he said.

The four-term Congressman representing the eighth Congressional District of Illinois, Krishnamoorthi is the ranking member of the House Select Committee on Strategic Competition between the United States and the Chinese Communist Party.

Two choices

He said Xi Jinping has two choices. "Either, on the one hand, he continues with the current course, which is increasing economic aggression, increasing technological and military aggression toward neighbours, clamping down on descent, stifling kind of the animal spirits in the economy, through further exerting control over almost all sectors of the economy and life in China. That is the current course," he said.

"Or he can adopt a different tack, which is reducing aggression, reducing the sabre rattling, loosening control, allowing entrepreneurship to flourish again. Also, when he reduces the aggression, reduces the sabre rattling, also reducing countermeasures that other countries, including the United States, have to take because of their sabre rattling and their aggression. It will also attract foreign investment and so forth. That is the choice that he has," Krishnamoorthi said.

The China committee, he said, is focused on a couple of things. "One, the nature of the economic, technological and military aggression, and the challenges posed by those risks, coupled with what do you do about them, and how do you ultimately win the strategic competition between the US and the Chinese Communist Party," he said.

"I think that the committee is actually very bipartisan, collaborative. It is perhaps one of the most serious and productive and certainly bipartisan committees in Congress right now. So I think that we want to keep up that spirit and now, see through various pieces of legislation to address those risks that I was talking about before.

"Ultimately, it is up to Xi Jinping. If he chooses the latter course that I talked about instead of continuing the former, then I think it allows for greater engagement with other countries and it also affects the work of our committee. But as of right now, we have to kind of deal with the cards that have been built," Krishnamoorthi said.

Path of military aggression

China, he said, looks like it is opting for the first course. This is essentially continuing with the status quo and continuing with the aggression that kind of marks China's national security, technological and economic policy.

"You look at military aggression, look at the South China Sea, which the CCP claims as its own lake. Essentially, this is a massive piece of the ocean and they basically claim it as their own and no international tribunal, no law, no international forum recognises their claims. Yet they need to persist with this absurd claim that the South China Sea belongs to them and as a consequence, you have these pretty serious security flare-ups in different parts of that world," he said.

"So for instance, in the Second Thomas Shoal, which is about 100 to 200 miles off the coast of the Philippines, which the Philippines claims as its own exclusive economic zone, which is true under the law, under international law, the Chinese are routinely ramming vessels. They boarded a vessel with knives and clubs and other kinds of tools of warfare, and one Philippine sailor almost died. So, this is the type of unnecessary aggression, along with all the other things that they are doing with Taiwan and other countries, that is unnecessary, that really could escalate into something very serious," Krishnamoorthi said.

"I do not need to tell you on the Indian border, what has happened at some of the highest altitudes in the world. And yet they persist in that domain as well. I think that all of its neighbours are feeling as though the CCP does not understand that you settle your differences peacefully, as opposed to through force, and as a consequence, they are taking measures. They are taking countermeasures," he said.

Responding to a question, Krishnamoorthi said the Chinese are flummoxed when multi-lateral institutions or groups of countries come together to assert their rights.

"I think that needs to happen more and more. We need to kind of establish the international rules of the road that you do not change orders through invading other countries, as Russia did with Ukraine. You do not ram vessels in waters after making bogus claims over territory that does not belong to you," he said. 

(With inputs from agencies)