People's Liberation Army soldiers wave a Chinese national flag at a stadium in Beijing. Kevin Zhao / Reuters
People's Liberation Army soldiers wave a Chinese national flag at a stadium in Beijing. Kevin Zhao / Reuters
People's Liberation Army soldiers wave a Chinese national flag at a stadium in Beijing. Kevin Zhao / Reuters
People's Liberation Army soldiers wave a Chinese national flag at a stadium in Beijing. Kevin Zhao / Reuters

Why the Chinese military’s rising clout troubles Xi Jinping


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China's president Xi Jinping has stepped up his domestic political moves in the run-up to the critical 19th national congress of the Chinese Communist Party next month, but he is still struggling to keep the People's Liberation Army (PLA) in line. China's political system makes it hard to get a clear picture, yet Mr Xi's actions underscore the troublesome civil-military relations in the country.

Take the recent standoff with India that raised the spectre of a Himalayan war, with China threatening reprisals if New Delhi did not unconditionally withdraw its forces from a small Bhutanese plateau, which Beijing claims is Chinese territory. After 10 weeks, the face-off on the Doklam Plateau ended with both sides pulling back troops and equipment from the site on the same day, signalling that Beijing, not New Delhi, had blinked.

The mutual-withdrawal deal was struck just after Mr Xi replaced the chief of the PLA’s joint staff department. This key position, equivalent to the chairman of the US joint chiefs of staff, was created only last year as part of Mr Xi’s military reforms to turn the PLA into a force “able to fight and win wars”. The Doklam pullback suggests that the removed chief, Gen Fang Fenghui, who has since been detained for alleged corruption, was an obstacle to clinching a deal with India.

To be sure, this was not the first time that the PLA's belligerent actions in the Himalayas imposed diplomatic costs on China. A classic case happened when Mr Xi reached India on a state visit in September 2014. He arrived on Indian prime minister Narendra Modi's birthday with a strange gift for his host, a predawn Chinese military encroachment deep into India's northern region of Ladakh. The encroachment, the worst in many years in terms of the number of intruding troops, overshadowed Mr Xi's visit.

It appeared bizarre that the military of an important power would seek to mar the visit of its own head of state to a key neighbouring country. Yet Chinese premier Li Keqiang’s earlier visit to New Delhi in 2013 was similarly preceded by a PLA incursion into another part of Ladakh that lasted three weeks.

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Such provocations might suggest that they are intentional, with the Chinese government in the know, thus reflecting a preference for blending soft and hard tactics. But it is also possible that these actions underscore the continuing “disconnect between the military and the civilian leadership” in China that then US defence secretary Robert Gates warned about in 2011.

During his 2014 India trip, Mr Xi appeared embarrassed by the accompanying PLA encroachment and assured Mr Modi that he would sort it out upon his return.

Soon after he returned, the Chinese defence ministry quoted Mr Xi as telling a closed-door meeting with PLA commanders that “all PLA forces should follow the president’s instructions” and that the military must display “absolute loyalty and firm faith in the party”. Recently Xi conveyed that same message yet again when he addressed a parade marking the 90th anniversary of the PLA’s creation on August 1, 1927. Donning military fatigues, Mr Xi exhorted members of his 2.3-million-strong armed forces to “unswervingly follow the absolute leadership of the party.”

Had civilian control of the PLA been working well, would Mr Xi repeatedly be demanding “absolute loyalty” from the military or asking it to “follow his instructions”?

China does not have a national army; rather the party has an army. So the PLA has traditionally sworn fealty to the party, not the nation.

Under Mr Xi’s two immediate predecessors, Hu Jintao and Jiang Zemin, the PLA gradually became stronger at the expense of the party. The military’s rising clout has troubled Mr Xi because it hampers his larger ambition.

As part of his effort to reassert party control over the military, Mr Xi has used his anti-corruption campaign to ensnare a number of top PLA officers. He has also cut the size of the ground force and established a new command-and-control structure.

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But just as a dog’s tail cannot be straightened, asserting full civil control over a politically ascendant PLA is proving unachievable. After all, the party depends on the PLA to ensure domestic order and sustain its own political monopoly.

The regime’s legitimacy increasingly relies on an appeal to nationalism. But the PLA, with its soaring budgets and expanding role to safeguard China’s overseas interests, sees itself as the ultimate arbiter of nationalism.

To make matters worse, Mr Xi has made many enemies at home in his effort to concentrate power in himself, including through corruption purges. It is not known whether the PLA's upper echelon respects him to the extent to be fully guided by his instructions.

In the past decade, the PLA’s increasing clout has led China to stake out a more muscular role. This includes resurrecting territorial and maritime disputes, asserting new sovereignty claims, and using construction activity to change the status quo.

China’s cut-throat internal politics and troubled civil-military relations clearly have a bearing on its external policy. The risks of China’s rise as a praetorian state are real and carry major implications for international security.

Brahma Chellaney is a geostrategist and the author of nine books.

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6pm: Wathba Stallions Cup – Handicap (PA) Dh70,000 (T) 2,200m; Winner: AF Fakhama, Fernando Jara, Mohamed Daggash

6.30pm: Wadi Shees – Handicap (PA) Dh80,000 (T) 2,200m; Winner: Mutaqadim, Antonio Fresu, Ibrahim Al Hadhrami

7pm: Arabian Triple Crown Round-1 – Listed (PA) Dh230,000 (T) 1,600m; Winner: Bahar Muscat, Antonio Fresu, Ibrahim Al Hadhrami

7.30pm: Wadi Tayyibah – Maiden (TB) Dh80,000 (T) 1,600m; Winner: Poster Paint, Patrick Cosgrave, Bhupat Seemar

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Final scores

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Results

Ashraf Ghani 50.64 per cent

Abdullah Abdullah 39.52 per cent

Gulbuddin Hekmatyar 3.85 per cent

Rahmatullah Nabil 1.8 per cent

Brief scoreline:

Al Wahda 2

Al Menhali 27', Tagliabue 79'

Al Nassr 3

Hamdallah 41', Giuliano 45 1', 62'

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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match info

Manchester United 3 (Martial 7', 44', 74')

Sheffield United 0