1962: THE WAR WITHIN CHINA AND NEHRU'S BLUNDER

Mao faced enemies within his party

In a 2019 article by Chaowu Dai, a distinguished professor at Yunnan University and director of the YNU Institute for Indian Studies in Kunming, China, admitted that from 1960 to October 1962, judging that India was unwilling to negotiate a solution, China “made preparations for the deployment of its military,” creating interlocking positions “for long-term armed coexistence on the border issue ultimately proceeding to the border conflict”1. 

This statement is nearest to the truth and India was not prepared for an attack. But the fact is that between 1960 to 1962, China was in a state of turmoil.

On September 8, 1962, Nehru left for London to attend the Commonwealth Prime Ministers’ Conference. He returned on October 2, after visiting Paris, Lagos and Accra, and then left for Colombo on October 12, returning to New Delhi on October 16. Defence Minister V K Krishna Menon was in New York from September 17-30 for the UNGA session. On October 2, the Chief of General Staff, Lt Gen B M Kaul, an inefficient close relative of Nehru, was holidaying in Kashmir.

No country that is preparing for an attack would allow its Prime Minister or senior generals responsible for war planning to be away from its capital.

Nehru with Mao in Beijing, 1954

The immediate provocation was an avoidable statement of the Prime Minister to journalists on October 12 while leaving for Colombo that “he had instructed the Army to clear the Indian territory of Chinese intrusions and the date had been left to the army to decide.”

He was perhaps referring to a decision taken in the Defence Ministry to clear the recent limited intrusion in the Kemong Division of NEFA, now Arunachal Pradesh. People’s Daily, the Chinese communist party mouthpiece, taking advantage of Nehru’s remarks, said on October 14, “so it seems Nehru had made up his mind to attack China on an even bigger scale”.

The unfortunate statement of Nehru has been used by Chinese communists to fabricate the theory of “self-defence counter-attack”. At the same time, India cannot escape blame for not being serious about settling the border question, despite repeated Chinese pleas. Whatever the Indian stand, it had certain fissures that do not stand scrutiny.

Nehru, in explaining his reluctance to discuss the border question, had said in Rajya Sabha on December 8, 1959, that since we’re “sure of our borders, the question was why to invite discussions about a thing on which we had no doubt”.

Even this statement was opaque. The western border, which created the major dispute, was “undefined” in the Survey of India maps that India inherited in 1947, and which were later reprinted. Similarly, Nehru was not unaware that China in the past had never accepted the McMahon Line in the eastern sector, the outcome of the Simla Convention of 1914, and it was unlikely to accept it — and yet insisted this was non-negotiable.

In 1954, at the time of talks on Tibet, India had taken the stand that the border question would not be discussed. An opportunity to settle the border was allowed to slip. The Tibet Agreement signed on April 29, 1954, also called the Panchsheel Agreement, officially the Agreement on Trade and Intercourse Between Tibet Region of China and India, was signed by China and India in Peking. The preamble of the agreement stated the panchsheel, or the five principles of peaceful coexistence, that China proposed and India favoured.

The agreement reflected the adjustment of the previously existing trade relations between Tibet and India to the changed context of India's decolonisation and China's assertion of suzerainty over Tibet. Swedish author and China/India expert, Bertil Lintner (3) records that in the agreement, "Tibet was referred to, for the first time in history, as 'the Tibet Region of China."The agreement expired on June 6, 1962, as per the original term limit, in the midst of Sino-Indian border tensions.

Nehru ordered in 1954 July that a line should be drawn to demarcate the Ladakh-Aksai Chin border, which would not be open for discussion — ignoring that this was an international border, and required consultations and agreement of the other stakeholder.

Having changed the status of the border unilaterally, he created a vacuum by not establishing a check post, or even unfurling a flag.

The area was neglected to the extent that India was unaware that China had constructed a 120 km highway through it. In his letter of January 23, 1959, the Chinese Premier Zhou Enlai had suggested talks since, as he said, historically no agreement on the boundary had ever been concluded, and the absence of formal delimitation created discrepancies which often led to “minor border incidents which are probably difficult to avoid”.

While these parleys were on, an event was waiting to happen, which would alter the Sino-Indian relationship forever.

Dalai Lama in India

On March 10, 1959, Chinese general Zhang Chenwu invited the Dalai Lama to a performance by a Chinese dance troupe. Soon after though, he received a message from the General asking him to appear without any soldiers or armed bodyguards. The peculiar request by the Chinese was expectedly met with a large amount of suspicion from the Tibetans who had in any case been suffering the oppression of the Chinese for over a decade.

 By the beginning of the 1950s, a large part of Tibet had been forcefully acquired by the Chinese. The next few years were witness to the Dalai Lama trying to evade a full-scale military takeover of Tibet by Chinese forces. The Chinese on the other hand had been trying their best to indoctrinate him into the Communist ideologies.

Given the backdrop of Chinese aggression in Tibet, the officials surrounding the Dalai Lama were quick to guess a sense of deceit in the Chinese invitation. As a cautionary measure, he was soon advised to escape from Tibet. On March 17, 1959, therefore, the Dalai Lama dressed up as a soldier and slipped out of the shelter of the monastery that he would never see again. Accompanying him were 20 of his officials. Barefoot, the spiritual leader made his way across the arduous Himalayan region, which included crossing the 500-yard-wide Brahmaputra river.

He finally reached India on March 30 and settled down at the Tawang monastery in Arunachal Pradesh. The following month he reached Mussoorie in present-day Uttarakhand, where he was later met by then Prime Minister Pandit Jawaharlal Nehru to discuss the future of the Tibetan refugees who followed him.

Meanwhile, back in Tibet the Chinese imposed a curfew in Lhasa and close to 2000 people died in the ensuing battle between the local people and the Chinese forces. Close to 800 artillery shells were fired into the summer palace of the Dalai Lama. A day later, China announced the dissolution of the Tibetan governing body and a Tibetan autonomous region was established within the People’s Republic of China.

Nehru with Dalai Lama, 1959

Politically, the arrival of the Dalai Lama in India was a crucial moment in Indo-Chinese relations. For Nehru, maintaining cordial relations with China was always seen as a diplomatic necessity. According to historian Ramachandra Guha, “Nehru saw China at once as a peer, comrade and soul mate.”

However, over time arguments emerged between India and China, particularly around the issue of border creation post the departure of the British. In this atmosphere of antagonism, India’s grant of refuge to the Dalai Lama was an essential trigger that pushed both countries to the point of the war. The Sino-Indian war of 1962 which was eventually won by China, was one of the most critical products of the Dalai Lama’s escape to India.

Five days after Dalai Lama fled with the help of the CIA, (2) on March 22, 1959, Nehru noted that the sector from the trijunction of the Nepal, India, and Tibet boundary up to Ladakh (Ladakh-Aksai Chin sector) was traditional and known by custom, usage, the application of the principle of watershed and old revenue records and maps, etc. These facts are important inputs when negotiating an agreement, but by themselves could not constitute an agreement.

Despite suffering from doubts, Nehru insisted in Rajya Sabha on December 9, 1959, that India should hold its position, hoping that “lapse of time and events would confirm it, and by the time challenge came, we would be in a much stronger position to face it”. There was an opportunity to clear the doubts at the summit talks in April 1960, but that too was allowed to slip because India insisted on China accepting its maximalist position — not realising that in a dispute, both sides have to make compromises to come to a settlement.

Even after the 1960 talks, China tried to bring India to the negotiable table many times, but Nehru’s rigidity did not help. Yet he did accept in Parliament the undemarcated status of the border.

China continued to insist on the need for a well-defined demarcation of borders on scientific lines. Unfortunately, India remained in denial. The result was 1962.

The war within

An alternate narrative is offered by Bertil Lintner, on the 1962 war. He maintains that the Chinese offensive was not a reaction to India’s “forward policy” but a pre-meditated operation, ordered well before October 1962 by Chairman Mao Zedong to divert attention from the ongoing domestic power struggle and to teach India a lesson.

Lintner cites the considerable time required to build roads, forward-deploy 80,000 PLA troops and position logistics in mountainous terrain. Lintner also attributes the detailed knowledge of Indian terrain, shown by advancing PLA troops, to months of prior reconnaissance and intelligence-gathering by Tibetan-speaking PLA officers.

Ever since the end of its Civil War in 1949, China has been engaged in serial strife, domestic as well as external; invading neighbours, Korea, Tibet, Russia, Vietnam and India. The prelude to the Sino-Indian war saw Mao launch the tumultuous and destructive Great Leap Forward, which resulted in 25-30 million deaths by starvation and state violence. In the midst of ongoing domestic turmoil and devastation, Mao’s ruthless calculus perceived advantage in mounting a military campaign to deliver a sharp blow to India, both as a distraction from the ongoing power struggle, and to prove China’s superiority.

In the spring of 1949, Mao proclaimed that, while in the past the Chinese revolution had followed the unorthodox path of “encircling the cities from the countryside,” it would in the future take the orthodox road of the cities leading and guiding the countryside. In harmony with that view, he had agreed in 1950 with Vice Chairman Liu Shaoqi that collectivization would be possible only when China’s heavy industry had provided the necessary equipment for mechanization.

In a report of July 1955, Mao reversed that position, arguing that in China the social transformation could run ahead of the technical transformation. Deeply impressed by the achievements of certain cooperatives that claimed to have radically improved their material conditions without any outside assistance, he came to believe in the limitless capacity of the Chinese people, especially of the rural masses, to transform at will both nature and their own social relations when mobilized for revolutionary goals.

He denounced those in the leadership who did not share that vision as “old women with bound feet.” He made those criticisms before an ad hoc gathering of provincial and local party secretaries, thus creating a groundswell of enthusiasm for rapid collectivization such that all those in the leadership who had expressed doubts about Mao’s ideas were soon presented with a fait accompli. The tendency thus manifested to pursue his own ends outside the collective decision-making processes of the party was to continue and to be accentuated.

Chinese farmers welcome tractors, 1958

Even before Stalin’s successor, Nikita S. Khrushchev, had given his secret speech (February 1956) denouncing his predecessor’s crimes, Mao and his colleagues had been discussing measures for improving the morale of the intellectuals in order to secure their willing participation in building a new China. At the end of April, Mao proclaimed the policy of “letting a hundred flowers bloom”—that is, the freedom to express many diverse ideas—designed to prevent the development in China of a repressive political climate analogous to that in the Soviet Union under Stalin.

In the face of the disorders called forth by de-Stalinization in Poland and Hungary, Mao did not retreat but rather pressed boldly forward with that policy, against the advice of many of his senior colleagues, in the belief that the contradictions that still existed in Chinese society were mainly nonantagonistic. When the resulting “great blooming and contending” got out of hand and called into question the axiom of party rule, Mao savagely turned against the educated elite, which he felt had betrayed his confidence. Henceforth he would rely primarily on the creativity of the rank and file as the agent of modernization. As for the specialists, if they were not yet sufficiently “red,” he would remould them by sending them to work in the countryside.

Chaos after the Great Leap Forward

It was against that background that Mao, during the winter of 1957–58, worked out the policies that were to characterize the Great Leap Forward, formally launched in May 1958. While his economic strategy was by no means so one-sided and simplistic as was commonly believed in the 1960s and ’70s and although he still proclaimed industrialization and a “technical revolution” as his goals, Mao displayed continuing anxiety regarding the corrupting influence of the fruits of technical progress and an acute nostalgia for the perceived purity and egalitarianism that had marked the moral and political world of the Jinggang Mountains and Yan’an eras.

Thus it was logical that he should endorse and promote the establishment of “people’s communes” as part of the Great Leap strategy. As a result, the peasants, who had been organized into cooperatives in 1955–56 and then into fully socialist collectives in 1956–57, found their world turned upside down once again in 1958. Neither the resources nor the administrative experience necessary to operate such enormous new social units of several thousand households was in fact available, and, not surprisingly, the consequences of those changes were chaos and economic disaster.

In retrospect, it is evident that Mao had in fact responded to the tensions in the Party by promoting free speech and criticism under the Hundred Flowers Campaign. This was also a ploy to allow critics of the regime, primarily intellectuals but also low-ranking members of the party critical of the agricultural policies, to identify themselves.

By the completion of the first five Year Economic Plan in 1957, Mao had come to doubt that the path to socialism that had been taken by the Soviet Union was appropriate for China. He was critical of Khrushchev's reversal of Stalinist policies and alarmed by the uprisings that had taken place in East Germany, Poland and Hungary, and the perception that the USSR was seeking "peaceful coexistence" with the Western powers. Mao had become convinced that China should follow its own path to communism. China's isolation from most of the rest of the world, along with the Korean War, had accelerated Mao's attacks on his perceived domestic enemies. It led him to accelerate his designs to develop an economy where the regime would get the maximum benefit from rural taxation.

Thus the Great Leap Forward (Second Five Year Plan) of China was an economic and social campaign led by the Chinese Communist Party (CCP) from 1958 to 1962. Local officials were fearful of Anti-Rightist Campaigns and they competed to fulfil or over-fulfil quotas which were based on Mao's exaggerated claims, collecting non-existent "surpluses" and leaving farmers to starve to death. Higher officials did not dare to report the economic disaster which was being caused by these policies, and national officials, blaming bad weather for the decline in food output, took little or no action. Millions of people died in China during the Great Leap, with estimates ranging from 15 to 55 million, making the Great Chinese Famine the largest or second-largest famine in human history.

The public canteen of a commune

Around 6 to 8% of those who died during the Great Leap Forward were tortured to death or summarily killed.

The major changes which occurred in the lives of rural Chinese people included the incremental introduction of mandatory agricultural collectivization. Private farming was prohibited, and those people who engaged in it were persecuted and labelled counter-revolutionaries. Restrictions on rural people were enforced with public struggle sessions and social pressure, and forced labour was also exacted on people. Rural industrialization, while officially a priority of the campaign, saw "its development ... aborted by the mistakes of the Great Leap Forward". The Great Leap was one of two periods between 1953 and 1976 in which China's economy shrank.

The Great Chinese Famine

The disorganization and waste created by the Great Leap, compounded by natural disasters and by the termination of Soviet economic aid, led to widespread famine in China.

The Great Chinese Famine was a period between 1959 and 1961 in the history of China, characterized by widespread famine. Some scholars have also included the years 1958 or 1962. It is widely regarded as the deadliest famine and one of the greatest man-made disasters in human history, with an estimated death toll due to starvation that ranges in the tens of millions (15 to 55 million). The most stricken provinces were Anhui (18% dead), Chongqing (15%), Sichuan (13%), Guizhou (11%) and Hunan (8%).

The major contributing factors to the famine were the policies of the Great Leap Forward (1958 to 1962) and people's communes, launched by Mao, such as inefficient distribution of food within the nation's planned economy; requiring the use of poor agricultural techniques; the Four Pests Campaign that reduced sparrow populations, which disrupted the ecosystem; over-reporting of grain production; and ordering millions of farmers to switch to iron and steel production.

Policy changes affecting how farming was organized coincided with droughts and floods. As a result, year-over-year grain production fell dramatically in China. The harvest was down by 15% in 1959 compared to 1958, and by 1960, it was at 70% of its 1958 level. Specifically, according to China's governmental data, crop production decreased from 200 million tons (or 400 billion jin) in 1958 to 170 million tons (or 340 billion jin) in 1959, and to 143.5 million tons (or 287 billion jin) in 1960.

There are widespread oral reports, though little official documentation, of human cannibalism being practised in various forms as a result of the famine. To survive, people had to resort to every possible means, from eating earth and poisons to stealing and killing and even eating human flesh. Due to the scale of the famine, some have speculated that the resulting cannibalism could be described as "on a scale unprecedented in the history of the 20th century."

Yang Jisheng's seminal book, Tombstone: The Chinese Famine 1958-1962 has described instances of cannibalism during that period.

In Henan alone, there were at least 20 cases of people eating human flesh. An 18-year-old girl drowned her five-year-old cousin and ate him. The boy's 14-year -old elder sister was also driven by hunger and ate her brother's flesh. In Anhui, there were 63 cases of cannibalism between 1959 and 1960. A couple strangled their eight-year-old son, and then cooked and ate him. In the same province, a man dug-up a corpse, ate some of it, and sold a kilo as pork.

Starving children in Shanghai during the famine

Famine along the mid-Yangzi was averted in 1956 through the timely allocation of food aid, but in 1957 the Party's response was to increase the proportion of the harvest collected by the state to insure against further disasters. Moderates within the Party, including Zhou Enlai, argued for a reversal of collectivization on the grounds that claiming the bulk of the harvest for the state had made the people's food security depends upon the constant, efficient, and transparent functioning of the government.

By the winter of 1958–59, Mao himself had come to recognize that some adjustments were necessary, including decentralization of ownership to the constituent elements of the communes and a scaling down of the unrealistically high production targets in both industry and agriculture. He insisted, however, that in broad outline his new Chinese road to socialism, including the concept of the communes and the belief that China, though “poor and blank,” could leap ahead of other countries, was basically sound.

In 1959, Mao had to delegate day-to-day leadership to pragmatic moderates like Chinese President Liu Shaoqi and Vice Premier Deng Xiaoping.

Mao retires, Shaoqi becomes head of state

As the horrifying (and almost entirely preventable) results of the Great Leap Forward became obvious, leaders began to discuss how to bring relief to those areas hardest hit by famine. 

in the midst of this chaos, on 25 March 1959, the expanded Politburo of the CCP met in Shanghai. Though the issue that topped the agenda was the Great Leap Forward, the Tibetan issue came up because the Tibetan revolt has just been crushed and the Dalai Lama had fled to India. Both Deng and Liu Shaoqi were advocating more realistic economic policies. But Deng was a hardliner when it came to dealing with Tibet. 

Despite the consensus on Tibet, Mao was still in trouble and the Shanghai meeting endorsed his retirement from his post as the Chairman of the People's Republic or the head of state. That post was given to Shaoqi. Mao stayed on as Chairman of the Party and continued manipulation.

The well-educated Zhou Enlai had actually been one of the first to initiate a campaign against Mao, as early as 1956. But Zhou, feeling insecurity, undertook 'self-criticism' in March 1958, for opposing Mao. He confessed in front of the Party commission: "I take the main responsibility for submitting the report opposing rash advance (of Mao), in effect dashing cold water on the upsurge among the masses...at the time I lacked perception, and it was only later that I gradually came to understand that this was a directional error on the issue of socialist construction."

With this opportunism,  a humiliated Zhou rescued himself from later purges by Mao. He demonstrated opportunism again when the CCP convened a meeting of its Politburo and a plenum of the CC at Lushan, a mountain resort in Jiangxi, in July 1959.

Peng Dehuai's missive to Mao

After a personal fact-finding trip through many of the regions most affected by the campaign, defence minister Peng Dehuai learned of the severe suffering and widespread starvation. Peng Dehuai, as a veteran of the Long March, hero of the Korean War, and longtime friend of Mao, felt compelled to broach the issue and to prevent any further deterioration of the situation. Peng presented his findings after the Central Committee had confirmed the “success" of the movement during the Lushan Meeting. 

The Lushan Conference was a meeting of the top leaders of the Chinese Communist Party (CCP) held between July and August 1959. The CCP Politburo met in an "expanded session" between July 2 and August 1, followed by the 8th Plenum of the CCP Eighth Central Committee from August 2 – 16. The major topic of discussion was the Great Leap Forward.

Although many of the more moderate leaders had reservations about the new policy, the only senior leader to speak out openly was Marshal Peng Dehuai. He denounced the excesses of the Great Leap and the economic losses they had caused.

While the Conference was on, Peng wrote a letter to Mao on July 13 and 14, 1959, in which he did not seek to grandstand and went to great lengths to make his comments constructive. He did, however, point out the failures of the movement in a frank and forthright manner, while most of his colleagues chose to remain silent. As a result of Mao Zedong's failure to address the agricultural mistakes, the country experienced three years of famine, killing over 30 million people.

In the letter, he said that " there is a growing tendency towards boasting and exaggeration on a fairly extensive scale" and "the exaggeration trend has become so common in various areas and departments that reports of unbelievable miracles have appeared in newspapers and magazines to bring a great loss of prestige to the Party." (4)

He further said: "Petty-bourgeois fanaticism which makes us vulnerable to "left" errors. In the Great Leap Forward of 1958,1, like many other comrades, was misled by the achievements of the Great Leap Forward and the zeal of the mass movement. As a result, some "Left" tendencies developed in our heads. We were thinking of entering a communist society in one stride, and the idea of trying to be the first to do this gained an upper hand in our minds for a time. So we banished from our minds the mass line and the working style of seeking truth from facts, which had been cultivated by the Party for a long time."

Peng Dehuai,1934-1935

With Peng's letter in hand, Mao set out to test the loyalty of each person in attendance at the Lushan Conference. And, to accomplish this, he personally circulated Peng’s letter of opinion to everyone present. By gauging their reactions, he could see who was steadfastly in support of Mao’s leadership, and who was not. Sensing what Mao was up to, Peng urgently requested to have all copies of his letter retrieved, claiming that it was a private missive intended for Mao’s eyes only. The request was denied.

Next, to prevent potential defectors from conspiring behind his back in small group meetings, Mao convened a full plenary session of the Lushan Conference. Speaking to the assembled party leaders on July 23, he addressed head-on the question of rising dissatisfaction with the Great Leap.

Mao confronts Peng

By turns humble, rambling, introspective, egotistical, sarcastic, and downright intimidating, Mao confronted his chief critic, Peng Dehuai:

Now that you’ve said so much, [Mao began,] let me say something … People say we’ve become isolated from the masses, but the masses still support us … [Some comrades] are wavering. They [pay lip service], affirming that the Great Leap and the people’s communes are good and correct. But we must see on whose side they [really] stand. I would advise them not to waver at this crucial point in time. [Their] brinkmanship is rather dangerous. If you don’t believe me, [just] wait and see what happens.

Having said this, Mao paused for effect. Casting his gaze in the general direction of a group of top PLA generals seated in the conference hall, he laid down the gauntlet: “If the People’s Liberation Army won’t follow me,” he said, “then I will go down to the countryside, reorganize the Red Army guerrillas, and organize other People’s Liberation Army.”

Pausing yet again for effect, he continued: “But I think the Army will follow me.” At that point, several Chinese generals stood up and shouted their pledges of allegiance to Mao.

When Mao finished speaking, Peng Dehuai’s famously short temper erupted. He accused Mao of despotism, comparing him to Stalin in his later years; and he warned that “if the Chinese peasants were not so patient, we’d have another Hungary [on our hands].”

The gloves were off, and Mao now responded in kind, accusing Peng of being a rightist, of sabotaging the people’s democratic dictatorship, and of attempting to organize an opposition faction within the Communist Party.

Things turned even uglier when Mao attempted to cut short the defence minister’s retort, at which point Peng angrily reminded the chairman of a quarrel they had had two decades earlier, during the anti-Japanese War. The defence minister had overplayed his hand. Several key leaders who had initially been inclined to endorse his criticism of the Great Leap, including such senior figures as Zhou Enlai, Liu Shaoqi, and Marshal Zhu De, now backed off, intimidated by the chairman’s display of full-bore combativeness. Mao had won.

Peng is sacked

In the days that followed, no one ventured to speak out in Peng Dehuai’s defence. At Mao’s initiative, Peng and his small inner circle of supporters, including the PLA chief of staff/  Vice Chairman of the Central Military Commission Zhu De,  deputy foreign minister Zhang Wentian, and Mao’s own longtime personal secretary Tian Jiaying, were officially charged with having formed an ‘anti-party clique’, and they were subjected to varying degrees of punishment. Peng himself was stripped of his post as defence minister and placed under house arrest in Beijing.

Zhang Wentian, a party veteran, a Politburo member, and General Secretary of the Party during 1935-1943, was outspoken in his criticism of Mao. Peng, Zhang and other critics were branded 'rightists' and 'counter-revolutionaries' and were purged after the Lushan conference. Zhang was accused of having 'illicit relations with a foreign country, which meant the Soviet Union, and buckets of sewage water were poured over his head as he was ordered to confess his mistakes. 

The lessons of Peng Dehuai’s abject defeat at the hands of Mao were not lost on anyone in the party’s leadership circle: First, it was clearly safer to err on the side of leftism than on the side of rightism. And second, despite Mao’s open invitation to his colleagues to speak out freely and openly, challenging the chairman could be extremely hazardous to one’s political health. As a senior Chinese diplomat put it, “After Lushan, the whole party shut up. We were all afraid to speak out.”

Mao denounced Peng (who came from a poor peasant family) and his supporters as "bourgeois", and launched a nationwide campaign against "rightist opportunism". Peng was replaced by Lin Biao, who began a systematic purge of Peng's supporters from the military. He was immediately removed from all party and state posts and placed in detention until his death during the Cultural Revolution.

From that time, Mao regarded any criticism of his policies as nothing less than a crime of lèse-majesté, meriting exemplary punishment. The old marshal Zhu De, founder of PLA, had tried to protect Peng at Lushan by criticising him only mildly. That was enough for Mao, and Zhu was dismissed from his post as vice chairman of the Central Military Commission.

 The CCP studied the damage which was done at conferences it held in 1960 and 1962, especially at the "Seven Thousand Cadres Conference". Mao did not retreat from his policies; instead, he blamed problems on bad implementation and "rightists" who opposed him.

Though few spoke up at Lushan in support of Peng, a considerable number of the top leaders sympathized with him in private. Almost immediately, in 1960, Mao began building an alternative power base in the People’s Liberation Army, which the new defence minister, Lin Biao, had set out to turn into a “great school of Mao Zedong Thought.” At about the same time, Mao began to denounce the emergence, not only in the Soviet Union but also in China itself, of “new bourgeois elements” among the privileged strata of the state and party bureaucracy and the technical and artistic elite. Under those conditions, he concluded, a “protracted, complex, and sometimes even violent class struggle” would continue during the whole socialist stage.

Peng was brought to Beijing in chains, in 1966

Thus the effects on the upper levels of government and the Party in response to the disaster were complex, with Mao purging Peng Dehuai,  temporary promoting Lin Biao, Liu Shaoqi, and Deng Xiaoping, and Mao himself losing some power and prestige following the Great Leap Forward, which led him to launch the Cultural Revolution in 1966.

Peng lived in virtual obscurity until 1965, when the reformers Liu Shaoqi and Deng Xiaoping supported Peng's limited return to government, developing military industries in Southwest China. In 1966, following the advent of the Cultural Revolution, Peng was arrested by Red Guards. From 1966–1970, radical factions within the Communist Party, led by Lin Biao and Mao's wife, Jiang Qing, singled out Peng for national persecution, and Peng was publicly humiliated in numerous large-scale struggle sessions and subjected to physical and psychological torture in organized efforts to force Peng to confess his "crimes" against Mao and the Communist Party.

In 1970, Peng was formally tried and sentenced to life imprisonment, and he died in prison in 1974. After Mao died in 1976, Peng's old ally, Deng Xiaoping, emerged as China's paramount leader. Deng led an effort to formally rehabilitate people who had been unjustly persecuted during the Cultural Revolution, and Peng was one of the first leaders to be posthumously rehabilitated, in 1978.

Mao's Spy

One big reason that Mao was able to intimidate his critics so consistently and so effectively—aside from his famous mercurial temper and iron will—was his chief of internal security, Kang Sheng. Ever since the mid-1930s, Kang Sheng had been entrusted by Mao with the task of compiling secret dossiers on all party leaders at or above the provincial level.

Knowing that such career-damaging ‘black materials’ existed and that Mao would not hesitate to use them to destroy his colleagues was a huge deterrent to would-be critics. In this respect, Kang Sheng was Mao’s chief enabler, in much the same way that Lavrentiy Beria had been Joseph Stalin’s principal spy. Without such loyal and utterly ruthless security chiefs, both Stalin and Mao might not have enjoyed such apparent invincibility.

Kang Sheng was a Chinese Communist Party (CCP) official, best known for having overseen the work of the CCP's internal security and intelligence apparatus during the early 1940s and again at the height of the Cultural Revolution in the late 1960s and early 1970s. A member of the CCP from the early 1920s, he spent time in Moscow during the early 1930s, where he learned the methods of the NKVD.

In 1936, Kang established the Office for the Elimination of Counterrevolutionaries and worked closely with the Soviet secret police, the NKVD, in purging perhaps hundreds of Chinese in Moscow.

After returning to China in 1937, Kang switched his allegiance to Mao and became a close associate of Mao during the Anti-Japanese War, the Chinese Civil War and after. Kang was a valuable catch for Mao as he strove to consolidate the power he had won at the Zunyi Conference in January 1935. Kang could betray all the secrets of Wang Ming, Mao's political rival in the Party, and his supporters.

At Yan'an, Kang was close to Jiang Qing, who may have been Kang's mistress when he visited Shandong in 1931. (5) In Yan'an, Jiang became the lover of Mao, who later married her.

Kang Sheng was the mastermind behind the "pain and friction" that underlay the Rectification process. He used a classic Soviet technique of accusing loyal party members of being Nationalist spies. Once they had confessed under torture, their confessions could then set off an avalanche of accusations and arrests. At the same time, Mao was not keen to have a single man in such a position of power. Accordingly, following the CCP's Seventh Congress in April 1945, Kang was replaced as head of both the Social Affairs Department and the Military Intelligence Department.

Kang with Mao

After his fall from the security posts, in December 1946 Kang was assigned by Mao Zedong, Zhu De and Liu Shaoqi to review the Party's land reform project in Longdong, Gansu Province. In the name of social justice, he encouraged the peasants to settle scores by killing landlords and rich peasants.

Early in 1948, he was appointed deputy chief of the Party's East China Bureau, under Rao Shushi. Some commentators speculate that the private humiliation of being placed under a former subordinate may be one reason why Kang "fell ill" and largely disappeared from view until after Rao's fall in 1954. Kang seems to have displayed, manic-depressive psychosis and temporal lobe epilepsy.

The challenges that Kang faced during the early months of 1956 underscored the dangers he would have risked by continuing his retreat. As soon as he reappeared, Kang encountered serious problems that caused his position in the hierarchy to fluctuate dramatically. After the purge of Gao Gang and Rao Shushi in 1954, he ranked sixth, below Chairman Mao, Liu Shaoqi, Zhou Enlai, Zhu De and Chen Yun. But in February 1956, just weeks after his return to public life, he was listed below Peng Zhen. 

By the end of April, he was reported in tenth place, even below Luo Fu, the only member of the 28 Bolsheviks who still held a Politburo seat. Yet on May Day of 1956, Kang was suddenly back in sixth place. Kang suffered a severe reversal of fortune at the Central Committee plenum that followed the first session of the CCP's Eighth Congress when he was demoted to alternate, nonvoting member of the Politburo.

Mao's own position was weakening, as evidenced by the decision of the CCP's Eighth Congress to delete the phrase "guided by the thought of Mao Zedong" from the new Party constitution and by re-establishing the role of General Secretary, abolished in 1937. Kang's emergence during the cultural revolution as one of the most important Maoist stalwarts suggests that it is not unlikely that at the 8th Congress Mao saved Kang from even greater humiliation.

Thereafter, Kang remained at or near the pinnacle of power until his death in 1975. After the death of Mao and the subsequent arrest of the Gang of Four, Kang was accused of sharing responsibility with the Gang for the excesses of the Cultural Revolution and in 1980 he was expelled posthumously from the CCP.

To divert the mass attention from the strife in China and the threat to his leadership inside the Party, Mao planned the attack on India.

The attack on India

The open split with the Soviet Union, though it can be traced to Mao’s resentment at Khrushchev’s failure to consult him before launching de-Stalinization—resulted, above all, from the Soviet reaction to the Great Leap policies. Khrushchev regarded Mao’s claims for the communes as ideologically presumptuous, and he heaped ridicule on them; he underlined his displeasure by withdrawing Soviet technical assistance in 1960, leaving many large industrial plants unfinished. Khrushchev also tried to put pressure on China in its dealings with Taiwan and India and in other foreign policy issues. Mao forgot neither the affront to his and China’s dignity nor the economic damage.

As for class struggle in China itself, Mao’s fear that revisionism might appear there was heightened by the policies pursued in the early 1960s to deal with the economic consequences of the Great Leap Forward. The response to the famine by Liu Shaoqi (who had succeeded Mao as chairman of the People’s Republic in 1959), Deng Xiaoping, and the economic planners was to make use of material incentives and to strengthen the role of individual households in agricultural production. At first, Mao agreed reluctantly that such steps were necessary, but during the first half of 1962, he came increasingly to perceive the methods used to promote recovery as implying the repudiation of the whole thrust of the Great Leap strategy. It was as a direct response to that challenge that at the 10th Plenary Session of the Central Committee in September 1962 he issued the call, “Never forget the class struggle!”

During the Seven Thousand Cadres Conference in early 1962, Liu Shaoqi, then President of China, formally attributed 30% of the famine to natural disasters and 70% to man-made errors.

Dr Li Zhisui, Mao's personal physician, wrote in Mao's biography later that Mao's support within the Party was waning even after Lushan. In January 1962, when Mao convened another expanded CC to discuss the continuing disaster, his support within the Party was at its lowest. At the meeting, President Shaoqi openly blamed the famine on 'man-made disasters.' Shaoqi wanted to bring back the leaders who had been purged, which made Mao furious.

A failed Mao, to win over the masses, show heroism, and regain control inside the Party, waged an attack on India, with his crony Lin Biao.

Before launching the Himalayan military intervention, Beijing sought and received reassurances from both superpowers. The US indicated that it had no immediate plans to either “unleash Taiwan” or to escalate the Indo-China conflict. Moscow, too, sent word that it would remain neutral in case of a Sino-Indian conflict.

In India’s remote and inaccessible Aksai Chin, it was months before New Delhi realised, in 1955, that China was building a road linking Xinjiang and Tibet. In 1961, to overcome the impression that India had not adequately pursued its territorial rights, PM Nehru adopted what came to be known as the “forward policy,” moving its outposts forward and closer to Chinese forces.

Nehru with Sikh Regiment, 1962

The Chinese attack on India took place in two stages; a brief preliminary offensive on October 20, 1962, followed by a massive assault in mid-November, reaching the Himalayan foothills. Indian soldiers fought gallantly in NEFA (now Arunachal) as well as in Ladakh, often to the last man and last bullet, but in vain. The rout lasted all the way up to November 20 when the Chinese declared a unilateral ceasefire and withdrew 20 km north of the LAC.

During the next three years Mao waged such a struggle, primarily through the Socialist Education Movement in the countryside, and it was over the guidelines for that campaign that the major political battles were fought within the Chinese leadership. At the end of 1964, when Liu Shaoqi refused to accept Mao’s demand to direct the main thrust of class struggle against “capitalist roaders” in the party, Mao decided that “Liu had to go.”

Liu's conflict with Mao

Liu Shaoqi had spoken very strongly in favour of the Great Leap Forward at the Eighth CCP National Congress in May 1958. At this Congress Liu stood together with Deng Xiaoping and Peng Zhen in support of Mao's policies against those who were more critical, such as Chen Yun and Zhou Enlai.

As a result, Liu gained influence within the party. In April 1959, he succeeded Mao as Chairman of the People's Republic of China (Chinese President). However, Liu began to voice concern about the outcomes of the Great Leap in the August 1959 Lushan Plenum. In order to correct the mistakes of the Great Leap Forward, Liu and Deng led economic reforms that bolstered their prestige among the party apparatus and the national populace. The economic policies of Deng and Liu were notable for being more moderate than Mao's radical ideas.

Liu was publicly acknowledged as Mao's chosen successor in 1961; However, by 1962, when Mao waged the war against India, Liu's opposition to Mao's policies had led Mao to mistrust him. After Mao succeeded in restoring his prestige during the 1960s, Liu's eventual downfall became "inevitable". Liu's position as the second-most powerful leader of the CCP contributed to Mao's rivalry with him at least as much as Liu's political beliefs or factional allegiances in the 1960s, especially during and after the Seven Thousand Cadres Conference (1962 January 11-February 7), indicating that Liu's later persecution was the result of a power struggle that went beyond the goals and well-being of either China or the Party.

In a conference at the seaside town resort of Beidaihe in August 1962, Mao blamed the disastrous consequences of his Great Leap Forward on Liu, Zhou, Deng, Chen Yun and other moderates.

According to Roderick MacFarquhar in his book, Origins of the Cultural Revolution (p303), a major build-up of war material and an increase in the number of Chinese troops along the border could be noticed only a few days after the Beidaihe conference was concluded on 27 August.

Liu was labelled as a "traitor" and "the biggest capitalist roader in the Party"; he was displaced as Party Deputy Chairman by Lin Biao in July 1966. By 1967, Liu and his wife Wang Guangmei were placed under house arrest in Beijing. Liu was removed from all his positions and expelled from the Party in October 1968. At Congress, Liu was denounced as a traitor and an enemy agent. Zhou Enlai read the Party verdict that Liu was "a criminal traitor, enemy agent and scab in the service of the imperialists, modern revisionists and the Kuomintang reactionaries". Liu's conditions did not improve after he was denounced in the Ninth Party Congress in 1969, and he died soon afterwards.

Liu with Indira Gandhi, 1954

By 1966, few senior leaders in China questioned the need for widespread reform to combat the growing problems of corruption and bureaucratisation within the Party and the government. With the goal of reforming the government to be more efficient and true to the Communist ideal, Liu himself chaired the enlarged Politburo meeting that officially began the Cultural Revolution. However, Liu and his political allies quickly lost control of the Cultural Revolution soon after it was called, when Mao used the movement to progressively monopolize political power and destroy his perceived enemies.

The Cultural Revolution declared in 1966, was overtly pro-Maoist, and gave Mao the power and influence to purge the Party of his political enemies at the highest levels of government. Along with closing China's schools and universities, and Mao's exhortations to young Chinese to randomly destroy old buildings, temples, and art, and to attack their teachers, school administrators, party leaders, and parents, the Cultural Revolution also increased Mao's prestige so much that entire villages adopted the practice of offering prayers to Mao before every meal.

Mao established himself as a demigod accountable to no one, purging any that he suspected of opposing him and directing the masses and Red Guards "to destroy virtually all state and party institutions". After the Cultural Revolution was announced, most of the senior members of the CCP who had voiced any hesitation in following Mao's direction, including Liu Shaoqi and Deng Xiaoping, were removed from their posts almost immediately and, with their families, subjected to mass criticism and humiliation.

Liu and Deng, along with many others, were denounced as "capitalist roaders". Liu was labelled as a "traitor" and "the biggest capitalist roader in the Party"; he was displaced as Party Deputy Chairman by Lin Biao in July 1966. By 1967, Liu and his wife Wang Guangmei were placed under house arrest in Beijing. Liu was removed from all his positions and expelled from the Party in October 1968. After his arrest, Liu disappeared from public view.

He was denied medicine for his diabetes, and for pneumonia, which developed after his arrest. Liu was eventually given treatment only when Jiang Qing, the actress wife of Mao, feared he would die; she desired that Liu be kept alive to serve as a "living target" during the Ninth Party Congress in 1969.

At Congress, Liu was denounced as a traitor and an enemy agent. Zhou Enlai read the Party verdict that Liu was "a criminal traitor, enemy agent and scab in the service of the imperialists, modern revisionists and the Kuomintang reactionaries". Liu's conditions did not improve after he was denounced in Congress, and he died soon afterwards, on November 12, aged 70.

After the launch of Reforms and Opening Up, the Chinese Communist Party officially stated in June 1981 that the famine was mainly due to the mistakes of the Great Leap Forward as well as the Anti-Rightist Campaign, in addition to some natural disasters and the Sino-Soviet split.

______________________

1. China’s Strategy for Sino-Indian Boundary Disputes, 1950-1962, Asian Perspective, Johns Hopkins University Press

2. The CIA's Secret War in Tibet, Kenneth Conboy, James Morrison, University Press of Kansas, 2002

3. China's India War, Bertil Lintner, Oxford University Press, 2018

4. Memoirs of a Chinese Marshal, Peng Dehuai, Foreign Languages Press, Beijing, 1984

5. Faligot, Roger; Kauffer, Remi (1989). The Chinese Secret Service. Translated by Christine Donougher

© Ramachandran 

THE MYRIAD FORMS OF GANAPATHI

Ganesha, the First God

Being considered the first god, it is our main duty to first worship Lord Ganesha before doing our daily routine work. Being the leader of the Vedas, he is also called Veda Ganesa, and since he is a master of dance, he is called as Narthana Ganapathy. Lord Ganesha is a very simple god, and that’s why we can find a lot of his temples situated under holy trees like the Vanni Tree and Arasa Tree.

Ganesha, also known as Ganapati, Vinayaka, and Pillaiyar, is one of the best-known and most worshipped deities in the Hindu pantheon.

Although Ganesha has many attributes, he is readily identified by his elephant head. He is widely revered, more specifically, as the remover of obstacles and thought to bring good luck; the patron of arts and sciences; and the deva of intellect and wisdom. As the god of beginnings, he is honoured at the start of rites and ceremonies. Ganesha is also invoked as a patron of letters and learning during writing sessions. Several texts relate mythological anecdotes associated with his birth and exploits.

Narthana Ganapathi

Lord Ganesha was well established by the 4th and 5th centuries CE, during the Gupta period. Hindu mythology identifies him as the son of Parvati and Shiva, and he is a pan-Hindu god found in its various traditions. In the Ganapatya tradition of Hinduism, Ganesha is the Supreme Being. The principal texts on Ganesha include the Ganesha Purana, the Mudgala Purana and the Ganapati Atharvasirsha.

While some texts say that Ganesha was born with an elephant head, he acquires the head later in most stories. The most recurrent motif in these stories is that Ganesha was created by Parvati using clay to protect her and Shiva beheaded him when Ganesha came between Shiva and Parvati. Shiva then replaced Ganesha's original head with that of an elephant.

Popular stories associate him with the concepts of Buddhi (intellect), Siddhi (spiritual power), and Riddhi (prosperity); these qualities are personified as goddesses, said to be Ganesha's wives. The Shiva Purana says that Ganesha had begotten two sons: Kşema (safety) and Lābha (profit). In northern Indian variants of this story, the sons are often said to be Śubha (auspiciousness) and Lābha. The family includes his brother, the god of war, Kartikeya, who is also called Skanda and Murugan.

Ganesha's earliest name was Ekadanta (One Tusked), referring to his single whole tusk, the other being broken. Some of the earliest images of Ganesha show him holding his broken tusk. The importance of this distinctive feature is reflected in the Mudgala Purana, which states that the name of Ganesha's second incarnation is Ekadanta.

Ganesha's protruding belly appears as a distinctive attribute in his earliest statuary, which dates to the Gupta period. This feature is so important that according to the Mudgala Purana, two different incarnations of Ganesha use names based on it: Lambodara (Pot Belly, or, literally, Hanging Belly) and Mahodara (Great Belly). The Brahmanda Purana says that Ganesha has the name Lambodara because all the universes of the past, present, and future are present in him.

The number of Ganesha's arms varies; his best-known forms have between two and sixteen arms. The serpent is a common feature in Ganesha iconography and appears in many forms. According to the Ganesha Purana, Ganesha wrapped the serpent Vasuki around his neck.

Of the eight incarnations of Ganesha described in the Mudgala Purana, Ganesha uses a mouse (shrew), as a vehicle in five of them, a lion in his incarnation as Vakratunda, a peacock in his incarnation as Vikata, and Shesha, the divine serpent, in his incarnation as Vighnaraja. Mohotkata uses a lion, Mayūreśvara uses a peacock, Dhumraketu uses a horse, and Gajanana uses a mouse, in the four incarnations of Ganesha listed in the Ganesha Purana.

The mouse symbolises those who wish to overcome desires and be less selfish. The rat is destructive and a menace to crops. The Sanskrit word mūṣaka (mouse) is derived from the root mūṣ (stealing, robbing). It was essential to subdue the rat as a destructive pest, a type of vighna (impediment) that needed to be overcome. Showing Ganesha as the master of the rat demonstrates his function as Vigneshvara (Lord of Obstacles).

The epic poem Mahabharata says that the sage Vyasa asked Ganesha to serve as his scribe to transcribe the poem as he dictated it to him. Ganesha agreed but only on the condition that Vyasa recites the poem uninterrupted, that is, without pausing. The sage agreed but found that to get any rest he needed to recite very complex passages so Ganesha would have to ask for clarifications.

According to Kundalini yoga, Ganesha resides in the first chakra, called Muladhara (mūlādhāra). Thus, Ganesha has a permanent abode in every being at the Muladhara.

Ganesha is identified with the Hindu mantra Om. The term oṃkārasvarūpa (Om is his form), when identified with Ganesha, refers to the notion that he personifies the primal sound. The Ganapati Atharvashirsa attests to this association. Swami Chinmayananda, in Glory of Ganesha, translates the relevant passage as follows:

(O Lord Ganapati!) You are (the Trimurti) Brahma, Vishnu, and Mahesa
You are Indra. You are fire [Agni] and air [Vāyu]

You are the sun [Sūrya] and the moon [Chandrama] 

You are Brahman

You are (the three worlds) Bhuloka [earth], Antariksha-Loka [space], and Swargaloka [heaven]

You are Om. (That is to say, You are all this).

Devotees offer Ganesha sweets such as modaka and small sweet balls called laddus. He is often shown carrying a bowl of sweets, called a modakapātra. Because of his identification with the colour red, he is often worshipped with red sandalwood paste (raktachandana) or red flowers. Dūrvā grass (Cynodon dactylon) and other materials are also used in his worship.

Females, especially married women circumambulate the holy trees, in order to give birth to a pious child. Vinayaka means the giver of happiness to us, and once we recite any one of his several names, we would become calm, and we would get good peace of mind.

Vinayaka's worship can be traced back to several millions of years, and still, his worship is going strong day by day. People consider Lord Vinayaka as one of their family members, and they affectionately offer his favourite food Modhakam to him in their homes, and also some would distribute it amongst the devotees in the Vinayaka temples. Vinayaka can also be described as a one-man army, and he is the only god, who removes the obstacles in our lives within a fraction of a second if we worship him sincerely.

The great almighty takes various forms in order to make us worship him easily. By worshipping a formless god, we would not get full confidence in our life. If we worship the god in some form, then we would get great confidence in our life, and we would get more happiness by enjoying the divine beauty of the god.

Thirty-two Forms of Ganapathi

Thirty-two forms of Ganesha are mentioned frequently in devotional literature related to the Hindu god Ganesha (Ganapati). The Ganesha-centric scripture Mudgala Purana is the first to list them.

Detailed descriptions are included in the Shivanidhi portion of the 19th-century Kannada Sritattvanidhi. There are also sculptural representations of these thirty-two forms in the temples at Nanjangud and Chāmarājanagar, both in Mysore district, Karnataka, done about the same time as the paintings were done and also at the direction of the same monarch. Each of the thirty-two illustrations is accompanied by a short Sanskrit meditation verse (dhyānaśloka), written in Kannada script. The meditation verses list the attributes of each form. The text says that these meditation forms are from the Mudgala Purana.

Nritya Ganapathi

Paul Martin-Dubost, in Gaņeśa: The Enchanter of the Three Worlds notes that while the Sritattvanidhi includes many of Ganesha's forms that were known at that time in that area, it does not describe earlier two-armed forms that existed from the 4th century, nor those with fourteen and twenty arms that appeared in Central India in the 9th and 10th centuries.

S K Ramachandra Rao, in The Compendium on Gaņeśa, says that:

"The first sixteen of the forms of Gaṇapati shown [in the Sritattvanidhi] are more popularly worshipped under the name shoḍaśa-gaṇapati. Among them, the thirteenth, viz. Mahāgaṇapati is especially widely worshipped. There is a tāntrik sect which is devoted to this form. Śakti-gaṇapati, Ucchishṭa-gaṇapati and Lakshmī-gaṇapati are also tāntrik forms, which receive worship which is cultic and esoteric. Heraṃba-gaṇapati is popular in Nepāl".

Significance of Narthana Ganapati

Nritya Ganapati is regarded as the 15th among the 32 different forms of Ganapati. The Sanskrit word ‘Nritya’ means ‘dance.’ Nritya Ganapati, as the name suggests, is a dancer or a happy dancer, and thus represents the relaxed and enjoyable form of the Lord. This Ganapati is depicted dancing under the divine, wish-fulfilling Kalpa Vriksha tree. With one foot placed on the ground and the other raised, as during a dance, he is shining in golden yellow colour and has four hands. While he holds his own broken tusk in his principal right hand, an elephant goad, a battle axe, and a noose are there in his other hands. Rings are seen in his fingers and his trunk, curled in the end, is holding his favourite snack, Modak (dumpling). In some depictions, one of his hands is shown as holding the sweet meat.

This form of Ganesha can be seen as a painting in the Kerala capital Thiruvananthapuram and also as a sculpture in the Pazhavangadi Ganesha temple there. The sculptures showing this form of Ganesha can also be found in some temples in the Mysore region, where all the 32 Ganapati forms are on display. Nritya Ganapati can also be worshipped in an idol form, in the Magudeshwarar temple in Kodumudi near Karur town, in the state of Tamil Nadu.

Magham Star, also known as Magha Nakshatra is said to be related to this aspect of Ganapati.

Nritya Ganapati is a happy and kind-hearted aspect of the Lord. This dancer form also shows Ganapati as a connoisseur of fine arts. Hence his worship is believed to bestow the devotees with an aptitude for learning fine arts, proficiency in them, and also success and fame in that field. Hence this Lord is widely worshipped by artists, and especially by dancers.

The mantra, which reads as under in Sanskrit, sings the praise of this ‘dancing Lord,’ describes his appearance and prays for his blessings.

Paashamkushaa Poopakutaar Dhanta-

Chanchath Karamkluptha Varaanguleeyakam

Peethaprabham Kukshihikarastha Dhantam

Bhajaaminruththop Padham Ganesham

Dancing under the boon tree, He has four arms. He is golden in colour. His hands hold the single tusk, the elephant goad, the noose, the axe (parashu) or the hatchet (kuthâra).

The dhyâna sloka specifies that one of the four hands can show a cake apûpa.

Chanting the Nritya Ganapati mantra with faith can be an effective means of propitiating the powerful Lord. Dancers and musicians, particularly in southern India, begin art performances such as the Bharatnatyam dance with a prayer to Ganesha.

© Ramachandran 

DOLLAR HEGEMONY OVER, A NEW ROAD MAP IN VIEW

 SCO Summit Decides on a New Course of Action

The leaders of the Shanghai Cooperation Organisation (SCO) at the recent summit at Samarkand have decided to conduct bilateral trade and investment and issue bonds in local and national currencies instead of US dollars and UK Pounds or Euros.

The group - which comprises China, India, Russia, Pakistan and Iran alongside four Central Asian states - in a declaration said "interested SCO member states" had agreed on a "roadmap for the gradual increase in the share of national currencies in mutual settlements", and called for an expansion of the practice.

The declaration did not say who the "interested states" were. It is significant that Iran, like Russia, subject to broad international economic and financial sanctions, has also joined the SCO and is an oil-producing country.

Both China and Moscow are the driving force behind the push toward national currencies as it tries to reduce their reliance on the U.S. dollar and other Western currencies for trade following the imposition of sweeping new Western sanctions in response to the Ukraine crisis.

In his speech at the summit, Chinese President Xi Jinping said: "We need to ensure implementation of the roadmap for SCO member states to expand shares of local currency settlement, better develop the system for cross-border payment and settlement in local currencies, work for the establishment of an SCO development bank, and thus speed up regional economic integration".

The Chinese yuan became the most traded currency on the Moscow Exchange for the first time on October 4, 2022, with trading turnover in the yuan-ruble pair reaching 70.3 billion rubles ($1.17 billion), surpassing the 68.2 billion rubles for the dollar-ruble pair. A total of 64,900 transactions were made using the yuan-ruble pair, compared with 29,500 for the dollar-ruble pair on the same day. The yuan also overtook trading in the euro-ruble pair, which recorded a trading volume of 47.5 billion rubles.

In the first eight months of 2022, trade between China and Russia totalled $117.2 billion, up 31.4 percent year on year.

In early September, China and Russia reportedly signed an agreement to switch trade payments for gas supplies to China to the yuan and the ruble based on a 50-50 split, instead of the dollar, paving the way for a more frequent ruble-yuan usage in bilateral trade.

In the first week of September, the Russian gas producer Gazprom said China would pay for half its Russian gas supplies in rubles and half in Chinese yuan. Previous contracts have been denominated in euros or dollars, the dominant reference currency for the global oil trade.

In August, Russia's largest gold miner, PJSC Polyus, completed the issuance of 4.6 billion yuan in bonds, less than one month after Russian aluminium company Rusal issued 4 billion yuan-denominated bonds in the Russian market. The bonds were listed on the Moscow Exchange with a coupon rate of 3.8 percent. The bond underwriter was Gazprombank.

The issuance of foreign-currency bonds means China is a strong economy, has stable financial and monetary policies and a large capital market volume. 

Russian firms and banks were involved in almost 4 percent of international yuan payments by value in July. That was an increase from 1.42 percent the previous month and zero in February when the Russia-Ukraine conflict began.

Yuan-ruble trading volumes have soared 1,067% since the Ukraine crisis, though this is broadly seen as a sign of the allies strengthening ties to help weaken the influence of the US.

Most recently, the People's Bank of China announced it is developing a yuan reserve with the Bank for International Settlements and five other nations, including Singapore and Hong Kong. Each of the members will contribute about 15 billion yuan, or $2.2 billion. 

Also, China will push for the expanded use of the digital yuan from the first four trial cities -- Shenzhen in South China's Guangdong Province, Suzhou in East China's Jiangsu Province, Xiongan New Area in North China's Hebei Province and Chengdu in Southwest China's Sichuan Province -- to province-wide testing, to ramp up the innovation of the digital yuan.

China's Ministry of Finance and the Macao Special Administrative Region (SAR) government have jointly announced a plan to issue yuan-denominated treasury bonds worth 3 billion yuan in Macau on September 7, a move to strengthen financial cooperation between the Chinese mainland and the SAR. And, the Ministry of Finance issued yuan-denominated treasury bonds worth 5 billion yuan in the Hong Kong SAR on August 10.

India is planning to buy Russian oil at discounted prices and even consider the Chinese yuan as a reference currency in an India-Russia payment settlement mechanism. Saudi Arabia is in active talks with Beijing to price some of its oil sales in yuan.

According to bankers, imports from Russia can be paid in yuan via multiple mechanisms. One way is that an India-based bank exchanges US dollars for yuan from its offshore branches in China or Hong Kong.

Another way is for an India-based bank to tie up with a Chinese bank for settlements. It is also possible for an Indian company to directly take a loan in yuan from a China-based bank.

Most state-run banks send dollars to their offshore branches in Singapore, Hong Kong or China.

In June, some 30% of the payments by Indian entities for the commodity were in the Chinese yuan and 28% in the Hong Kong dollar. The euro accounted for under a quarter and the UAE dirham around a sixth.

In July, Russia became India’s third-largest coal supplier with record imports of 2.06 million tonnes.

UltraTech is importing "157,000 tons of coal from Russian producer SUEK that is loaded on the bulk carrier MV Mangas from the Russian Far East port of Vanino," an Indian customs document reviewed by Reuters shows, while the settlement currency is in yuan, with the total cargo valued at 172,652,900 yuan ($25.81 million).

The Road Map

Details and a road map against the US dollar had been finalized and signed at SCO’s Finance Ministers’ meeting in Moscow as early as March 2020, after which the plan was temporarily shelved due to COVID. Representatives from the finance ministries and central banks of China, India, Russia, Pakistan, Kyrgyzstan, Tajikistan and Uzbekistan attended the Moscow conference. In addition, Iran, Afghanistan, Belarus, and Mongolia were also present as observer nations.

During the meeting, Russia’s Foreign Minister Sergey Lavrov suggested that "each SCO member decide whether they want to use the dollar for transactions, but facts are enough that this currency is unreliable".

The currency roadmap was also agreed upon at the  15 July 2022 meeting of the SCO countries’ industry ministers in Tashkent, as well.

The SCO is the largest regional organisation in the world in terms of geographical coverage and population, covering three-fifths of the Eurasian continent and nearly half of the human population. The new measure will contribute to the stability of monetary systems and the security of the financial activities of the SCO  countries.

Retaliation Against the US War

Former US President Donald Trump had deeply weaponised the dollar during COVID and trade with China was labelled a ‘war’. There have been unilateral sanctions placed on perceived threats and ‘enemy' countries. Countries like China, at the receiving end, have been preparing to hit back, and now it has become a reality.

Trump used sanctions and stopped Russian companies like Rusal Aluminium from accessing the dollar-based financial system in 2017 and then on Rosneft Oil in 2020. Since then the US has had over 30 active financial-and trade sanctions that cut access to the Federal Reserve that have severely destabilised and targeted weaker economies like Iran, Iraq and Venezuela. Trump tried to pressurise the IMF not to assist Iran with the COVID relief package.

As a consequence, all these countries established linkages with China and Russia for trade and economic sustainability. Russia is selling Venezuela’s crude oil. China diverted Iranian crude with Yuan payments and initiated the Iran-China silk route agreements. China is now Iran’s largest trade partner. Iran has diversified trade with Afghanistan and oil for gold with India.

China and Russia have several measures already as cross-border inter-bank payment systems parallel to SWIFT. Both have increased gold holdings to back their currencies and initiated national currency swap agreements in several regional and bilateral arrangements where they play a role.

The BRICS’s New Development Bank, proposed disbursements in national currencies in 2015. In the April 2020 annual board of governors meeting with BRICS finance ministers, the president of the bank K.V. Kamath said that in 2019, a quarter of the USD 15 billion of financial assistance was given in local currencies. He said that BRICS had no intention of destabilising the dollar but  “50 per cent (of projects) should be local currency financed”.

China is reducing its share in US treasury bonds and preparing for currency swap facilities as part of the Belt and Road Initiative (BRI) and in the Regional Comprehensive Economic Partnership with South-East Asian countries. Most of the ASEAN countries are ready for this.

Russia, previously a top holder of US sovereign debt, has radically decreased its holdings because of sanctions. Russia’s strategic relations with China deepened after the 2014 partnership and energy-centred agreements. In 2017, Ruble-Yuan's‘ payment versus payment’ started along the BRI. In 2019, the two countries switched to the Yuan RMB and Ruble in exchange for their USD 25 billion trade.

Russia has been pushing for currency swap agreements with various trade partners. The Eurasian Economic Union with Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia comprises the ‘road’ part of the BRI. With a population of 183 million and a GDP of some US$ 5 trillion, 70%  of its trade is in Rubles and local currencies. Several Central and West Asian countries want to join this union and Vietnam already has a full trade agreement with them. This saves the exchange charges of the dollar.

Russia revived trade in national currencies that were earlier used during the Soviet period within the communist bloc and with India. This exchange ended with the disintegration of the Soviet Union. 

In 2019, India switched again to Ruble payments for Russian S-400 defence systems because of US sanctions on Moscow. India worked out local currency trade with the UAE and approved USD 75 billion currency swaps with Japan and USD 400 million currency swaps with South Asian countries. India notified non-dollar-mediated rates of exchange for Turkish and Korean currencies. Turkey is trading in national currencies with China and Russia. Russia proposed trade in Euros with the EU.

China is internationalising the Yuan RMB which is included in the IMF basket, has risen to fifth place as a global currency and represents 15% of global currency holding. Russia has 25% of Chinese RMB international reserves.

The US Debt and Shadow Banks

The problem remains that the Yuan is not presently liquid enough for financial markets. So currency will be diversified with no currency maintaining complete hegemony.

Financial markets are complex and the US dollar is still the preferred currency. But countries have followed the contradictions within US policies – like raising debt ceilings to sustain the dollar as a global currency and even concealing lending to certain foreign banks – and have decided they need to protect themselves from this militarised dollar.

The debt ceiling is the maximum amount of money that the United States can borrow cumulatively by issuing bonds. If U.S. government national debt levels bump up against the ceiling, the Treasury Department must resort to other "extraordinary" measures to pay government obligations and expenditures until the ceiling is raised again.

The debt ceiling has been raised or suspended numerous times over the years to avoid the worst-case scenario, which would be a default by the U.S. government on its debt.

There has been controversy over whether the debt ceiling is constitutional. According to the 14th Amendment of the Constitution, "the validity of the public debt of the US, authorized by law...shall not be questioned." The majority of democratic countries do not have a debt ceiling, making the United States one of the few exceptions. The approximate amount of the current U.S. debt ceiling is $ 31.4 trillion, as set by the Congressional vote on 15 December 2021, and signed into law by President Biden on December 16 of the same year. The sum represents a $2.5 trillion increase in the ceiling.

Hitting the debt limit and failing to pay interest payments to bondholders would have grave economic consequences. The United States government would be in default, lowering its credit rating and increasing the cost of its debt. This would throw the U.S. economy into a tailspin.

Another worry for the US is shadow banking- it symbolizes one of the many failings of the US financial system leading up to the current financial crisis.  It is referred mainly to nonbank financial institutions that engaged in what economists call maturity transformation. Commercial banks engage in maturity transformation when they use deposits, which are normally short term, to fund loans that are longer term. Shadow banks do something similar. They raise  (mostly borrow) short-term funds in the money markets and use those funds to buy assets with longer-term maturities. But because they are not subject to traditional bank regulation, they cannot—as banks can—borrow in an emergency from the Federal Reserve (the US central bank) and do not have traditional depositors whose funds are covered by insurance; they are in the “shadows.”

There are now myriad types of entities in the US, performing these intermediation functions, and they are growing all the time. During the financial crisis, investors became skittish about what those longer-term assets were worth and many withdrew their funds at once. To repay these investors, shadow banks sell assets. These “fire sales” generally reduce the value of those assets. 

But in the US, real banks were caught in the shadows, too. Some shadow banks were controlled by commercial banks and for reputational reasons were salvaged by their stronger bank parent. In other cases, the connections were at arm’s length, but because shadow banks had to withdraw from other markets—including those in which banks sold commercial paper and other short-term debt—these sources of funding to banks were also impaired. And because there was so little transparency, it often was unclear who owed (or would owe later) what to whom.

The share of the US dollar assets in the foreign exchange reserves of global central banks, a sign of the dollar's supremacy, dropped to 59 percent in the fourth quarter of 2020 - a 25-year low, the IMF reported last May. The share further dropped to 58.88 percent in the first quarter of 2022, IMF data showed.

Thus, because of the US crisis, the Chinese aphorism “hide your capability and bide your time” has become popular in much of Eurasia’s national currency transitions. President Biden's absurd declaration that COVID is over, makes it clear that the economy is also sick.

© Ramachandran