The Dragon and the Elephant started as proverbial co-passengers in the late 1940s recovering after centuries of warfare, bloodshed and foreign occupations; but they both took divergent turns in History. One swung in the traditional way and experienced resurgence (after a massive purge) and the other took inspiration from what the Westerners preached (but didn't practice) and is still trying to find its footing. Today the Dragon and the Elephant are overtly and covertly enemies, and this is their dance to the death.
China, under Jiang Zemin onwards (circa early 1990s), has achieved a near permanent strategic normalcy on its northern borders for the first time in over two millennia. In addition, it has had enormous economic growth for over four decades due to the quasi-alliance with the USA, which began in the late 1970s under the Nixon presidency and lasted till the end of the Obama presidency. The alliance and its perks were rewards for ending on the right side of the Cold War.
Today, we are entering the realm of fifth generation warfare, wherein the blur between public and private, war and peace, trade and gunboats has almost totally disappeared. A terrorist organisation is a weapon, and so is a media organisation or a social media organisation. It is here that China has taken a decisive lead vis-à-vis most nations. The genesis of this lies in the way the one-party dictatorship established by Mao, nurtured by Deng and now expanded by Xi behaves.
The Chinese Way
The Chinese students write an exam called The National College Entrance Examination (NCEE), informally called the Gaokao. This standardized test is a prerequisite for entrance into almost all higher education institutions at the undergraduate level and is the toughest exam in the world with maximum repercussions. It creates a chain of meritocratic leaderships dispersed liberally with CPC ideology and forms a formidable pyramid-hierarchy. Even if a few bricks crumble down now and then, the edifice remains strong as long as the majority of the constituents believe in the pyramid. Chinese hackers, who number around 100000 as per Foreign Policy magazine and human intelligence-gathering (HUMINT), have – as per the CIA and FBI itself – stolen almost all useful secrets in the last two decades out of the USA and smuggled them into China wherein they have used them to develop newer and better offensive & defensive weapons systems.
To paraphrase the Prussian general and military theorist Clausewitz, Cyber warfare is an extension of policy by actions taken in cyberspace by state actors (or quasi state actors) that constitute a serious threat to another state's security.
The governments of USA, Canada, Australia, India as well as dozens of MNCs have witnessed first-hand the capabilities and prowess of the Chinese hacker army. Indians often wish our government also had the ability to retaliate online the way the Chinese or Russian hackers do, or even the ISI sponsored ones do, with their online anti-India propaganda using fake names and VPNs. Unfortunately, a democracy cannot attract or retain the talent needed to carry out such tasks unless it is a very wealthy one. Unlike India or even most other countries, the common applications such as Google, Facebook, Twitter etc which engage in data access and data mining are either downgraded or outright banned in China. Instead they have Baidu, Renren and Weibo. What this essentially means is that the "New-age Oil", aka Data, is stored on Chinese servers located on mainland China and not farmed by servers in California. This results in a major advantage to the government at large and a minor disadvantage to law breaking citizens.
Modern China isn't based on Communism or Maoism, to which it continues to pay lip service but on Han Ethno-Nationalism, Materialism and the promise to re-establish the semi-mythical Middle Kingdom.
The trade-off is that the ruling Oligarchy consistently delivers good economic growth with little inflation and very little turbulence. This in turn gives a massive advantage when it comes to information warfare, spying, technical espionage, hacking etc. Further, the Chinese communicating in Mandarin means even if the rivals are equipped with codes and hacks, they need to be equipped linguistically to decipher what they decode.
The nation that proudly claims that it's the foremost IT hub and has revenues totalling nearly $200 Billion p.a. (over half of it from exports) has not managed to create even a single social or commercial APP which is even a national leader, leave alone world leader. The few like Flipkart have also been purchased by global cartels. The main reason why India lacks a homegrown internet ecosystem is due to lack of intent on part of the government, though the private sector is also to be blamed for resting too long on past laurels.
All economies and all major companies existing today have grown under the active protection of their national governments. So, the precedents exist for the Indian Government to create its own Internet based platforms and applications. The reason for the massive brain-drain of IT engineers is due to lack of home-grown opportunities for them, which is mainly due to lack of government support and private funding.
The Chinese Vassal Policy
In full blown laissez-faire capitalism, you get the piracy of the East India companies of Netherlands and England, which promptly is followed by Colonialism. The Chinese "vassal-policy" is just Colonialism with Chinese characteristics. Its usual modus operandi is giving a large loan to the "vassal" to build a colossal infrastructure project (which isn't really required), then adding to the pomp and regalia of the ruling strongman with a few lollipops like a mansion or new weapons, and finally extracting usurious rates of interest from the "vassal" or taking over the said assets as military bases. This policy is rinsed and repeated at Gwadar of Pakistan, Coco Islands (formerly of India and now Myanmar's), Hambantota of Sri Lanka (where a Rajapakse who is a China supporter is soon to return to power) and many others.
It is a well-known fact that the Chinese armed forces are the strongest in Asia and the second or third strongest in the world (after USA and maybe Russia). However, China's strength lies in the fact that like Imperial Germany at the turn of the 20th Century, it has surpassed its two giant neighbours – Russia and India – in terms of manufacturing strength, industrial output and GDP. China is also a demographic powerhouse, unlike Imperial Germany which then feared Russia's burgeoning demographics.
Western commentators often peddle two extremes, one that China will easily vanquish the USA and establish PAX SINA/PAX SINICA, and the other that China will collapse soon economically. Both these extreme opinions are just too farfetched. Even if we assume a Chinese economic collapse, the infrastructure is all state-built and state-controlled, as are most large manufacturing facilities. These will remain active, even if they become less profitable. But they can be potentially into weapons production centres quite easily.
A lot of commentators have paralleled the East Asian Scenario of the 21st Century as the repeat of the "Sleepwalkers of Europe" in the early 1900s, but they miss one key element – the modern reigning superpower doesn't have a backup across the Atlantic to save itself if it lands in the soup. Furthermore, the USA itself is facing declining demographics and increasing chasms within due to the huge influx of migrants who have a different idea than the establishment's idea of the PAX AMERICANA.
What lies in store
So, we come around to the key players of the upcoming potential conflict, on one side stands the resurgent Mr. Xi who has created a string of "vassals" and "puppets" in his quest to assure a secure supply of raw material for his country in times of conflict, and on the other side stand Mr. Trump who heads the world's only Superpower and Mr. Modi. The undecided are the economic giant but militarily diminutive Europe, which is itself facing substantial demographic decline and potential economic disintegration, and the vast land power of Russia, which today has lesser citizens than the Tsar had in 1914. The swing players are the Islamist blocs of the Sunnis led by Saudi Arabia which mostly swings pro-USA and the Shia bloc led by Iran which mostly swings pro-Russia or pro-China. The unknown quantity is the African bloc. The tinder box is the Indo-Pacific region – the Indian Subcontinent, East Asia and South East Asia. All these factors are making for a very interesting and lively future ahead, though it may end up being terrifying.