1 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1)

Contents- 17. Difference between New Development Bank and ASIA INFRASTRUCTURE 1. China – Important events (1271-2016) AND INVESTMENT 2. Foreign Policy Evolution of China (1949 - 18. The Chinese fault line in foreign policy - present) MK Narayanan (The Hindu) 3. Present Scenario - China Sees Itself at 19. Exclusive- India and China in a multipolar Center of New Asian Order (The Wall world (SANJAYA BARU) Street Journal) 20. China’s long game in West Asia 4. One Belt One Road’ initiative 21. China-Pakistan Economic Corridor 5. Whether India should be part of the new 22. Exclusive - Charting a new Asian history Silk Route ? (The Hindu) (The Hindu) 6. Mausam and Spice Route initiative of  Bangladesh-China-India-Myanmar India (BCIM) 7. Why OBOR of China is not at all a good  Analysis of BCIM and CPEC idea for India? 23. India and the new great game (The Hindu) 8. Cultural Relations between India and 24. The Manama Declaration China: The Tradition of Continuity 25. Summary 9. South China Sea issue 10. Recent Ruling of PCA 11. India- China relations Timeline (1959- 2016) 12. G-20 , China 13. Analysis of G -20 14. 'China-India synergy will energise G20, BRICS' (The Hindu) 15. The building of the BRICS bank 16. The Asian Infrastructure Investment Bank

2 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) Defeated by foreign intervention, with Western powers, Russia and Japan extracting further concessions from weakened Qing government.

The Republic

1911-12 - Military revolts by reform-minded officers lead to proclamation of Republic of China under Sun Yat-sen and abdication of last Qing emperor. Republic struggles to consolidate its rule amid regional warlordism and the rise of the Communist Party.

1925 - The death of Sun Yat-sen brings Chiang Kai- shek to the fore. He breaks with the Communists and confirms the governing Kuomintang as a nationalist party. China profile – Important events 1931-45 - Japan invades and gradually occupies more Mongol rule and more of China.

1271-1368 - Mongols conquer China and establish 1934-35 - Mao Zedong emerges as Communist their own Yuan Dynasty, founded by Kublai Khan. leader during the party's "Long March" to its new base Marco Polo and other Westerners visit. Beijing in Shaanxi Province. becomes the capital of a united China. 1937 - Kuomintang and Communists nominally unite 1368 - Ming Dynasty overthrows Mongols and against Japanese. Civil war resumes after Japan's establishes sophisticated agricultural economy, defeat in Second World War. underpinning strong centralised bureaucracy and military. Great Wall of China completed in the form Communist victory seen today. 1949 - 1 October - Mao Zedong, having led the 1644 - Manchu Qing Dynasty drives out Ming. Communists to victory against the Nationalists after Chinese empire reaches its zenith, with the annexation more than 20 years of civil war, proclaims the of Tibet, Mongolia and present-day Xinjiang founding of the People's Republic of China. The (Turkestan). Nationalists retreat to the island of Taiwan and set up a government there. 19th Century - Qing Dynasty begins a long decline. Western powers impose "unequal treaties" that create 1950 October - China sends People's Liberation Army foreign concessions in China's ports. Regional (PLA) troops into Tibet enforcing a longstanding warlords rise as central government atrophies. claim.

1899-1901 - "Boxer Rebellion" in Northern China 1958 - Mao launches the "Great Leap Forward", a seeks to stifle reforms in the Qing administration, drive five-year economic plan. Farming is collectivised and out foreigners and re-establish traditional rule. labour-intensive industry is introduced. The drive

3 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) produces economic breakdown and is abandoned after The International Monetary Fund (IMF) ranks China's two years. Disruption to agriculture is blamed for the economy as third largest in the world after the US and deaths by starvation of millions of people following Japan. poor harvests. 1996 - China, Russia, Kazakhstan, Kyrgyzstan and 1959 - Chinese forces suppress large-scale revolt in Tajikistan - dubbed the Shanghai Five - meet in Tibet. Shanghai and agree to cooperate to combat ethnic and religious tensions in each others' countries. 1962 - Brief conflict with India over disputed Himalayan border. 2001 June - Leaders of China, Russia and four Central Asian states launch the Shanghai Cooperation 1966-76 - "Cultural Revolution", Mao's 10-year Organisation (SCO) and sign an agreement to fight political and ideological campaign aimed at reviving ethnic and religious militancy while promoting trade revolutionary spirit, produces massive social, and investment. The group emerges when the Shanghai economic and political upheaval. Five - China, Russia, Kazakhstan, Kyrgyzstan and From 1977 Deng Xiaoping emerges as the dominant Tajikistan - are joined by Uzbekistan. figure among pragmatists in the leadership. Under him, 2001 June - China carries out military exercises China undertakes far-reaching economic reforms. simulating an invasion of Taiwan, at the same time as 1979 - Diplomatic relations established with the US. the island's armed forces test their capability to defend Taiwan against a missile attack from China. Government imposes one-child policy in effort to curb population growth. 2001 November - China joins the World Trade Organisation. 1986-90 - China's "Open-door policy" opens the country to foreign investment and encourages 2002 November - Vice-President Hu Jintao is named development of a market economy and private sector. head of the ruling Communist Party, replacing Jiang Zemin, the outgoing president. Jiang is re-elected head 1989 - Troops open fire on demonstrators who have of the influential Central Military Commission, which camped for weeks in Tiananmen Square initially to oversees the armed forces. demand the posthumous rehabilitation of former CCP General Secretary Hu Yaobang, who was forced to 2003 June - China, India reach de facto agreement over resign in 1987. The official death toll is 200. status of Tibet and Sikkim in landmark cross-border International outrage leads to sanctions. trade agreement.

1989 - Jiang Zemin takes over as Chinese Communist Tibet unrest Party general secretary from Zhao Ziyang, who refused 2008 March - Anti-China protests escalate into the to support martial law during the Tiananmen worst violence Tibet has seen in 20 years, five months demonstrations. before Beijing hosts the Olympic Games. 1992 - Russia and China sign declaration restoring Pro-Tibet activists in several countries focus world friendly ties. attention on the region by disrupting progress of the Olympic torch relay.

4 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) 2008 May - A massive earthquake hits Sichuan Tokyo published figures showing a Japanese GDP rise province, killing tens of thousands. of only four per cent in 2010.

2008 June - China and Taiwan agree to set up offices 2012 May - Philippines and Chinese naval vessels in each other's territory at the first formal bilateral talks confront one another off the Scarborough Shoal reef in since 1999. the South China Sea. Both countries claim the reef, which may have significant reserves of oil and gas. Japan and China reach a deal for the joint development of a gas field in the East China Sea, resolving a four- China launches its first aircraft carrier, the Liaoning - year-old dispute. a converted former Soviet vessel.

2008 July - China and Russia sign a treaty ending 40- 2012 November - Communist Party holds congress year-old border dispute which led to armed clashes expected to start a once-in-a-decade transfer of power during the Cold War. to a new generation of leaders. Vice-President and heir-apparent Xi Jinping takes over as party chief 2008 August - Beijing hosts Olympic Games. and assumes the presidency in March 2013. Global financial crisis 2014 A row with Vietnam over disputed islands 2008 November - The government announces a escalates, as ships from the two countries collide in the $586bn (£370bn) stimulus package to avoid the waters of the South China Sea. Chinese workers flee economy slowing. Chinese Premier Wen Jiabao says Vietnam after the row sparks anti-China riots. the effect of the global financial crisis on China is China signs a 30-year deal worth an estimated $400bn worse than expected. for gas supplies from Russia's Gazprom. 2009 February - Russia and China sign $25bn deal to Hong Kong protests supply China with oil for next 20 years in exchange for loans. 2014 September-October - Protests against Beijing's plans to vet candidates for elections in 2017 grip Hong Tensions with US, Japan Kong. 2010 January - China posts a 17.7% rise in exports in 2015 November - China's President Xi Jinping and December, suggesting it has overtaken Germany as the Taiwan's President Ma Ying-jeou hold historic talks in world's biggest exporter. Singapore, the first such meeting since the Chinese 2010 September - Diplomatic row erupts over Japan's Civil War finished and the nations split in 1949. arrest of Chinese trawler crew in disputed waters in 2016 January - Economic growth in 2015 falls to East China Sea. Japan later frees the crew but rejects lowest rate in 25 years (6.9%, down from 7.3% in Chinese demands for an apology. 2014), and International Monetary Fund predicts No.2 world economy further deceleration over next two years. 2011 February - China formally overtakes Japan to Foreign Policy Evolution of China (1949 become the world's second-largest economy after - present)

5 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) In the PRC, there had always been firm connectivity at home of a ‘Harmonious Socialist Society’ and between the identified domestic goals and foreign ‘Sustainable development’ constituted main elements. policy objectives. At the time of ‘liberation’ in 1949, Designed to suit to the conceived ‘primary stage of the founder of the nation, Mao Zedong, concentrated socialism’, the model provided for carrying out the on “ starting anew" and "putting the house in order” as country’s ‘own development practice, learning side by domestic priorities; to serve that purpose, he chose the side from experiences of other countries’. paths of ‘mass mobilisation’ and nationalisation of Correspondingly, Hu put in place a foreign policy line industries. To ensure there is no ‘imperialists’ based on the idea of a “Harmonious World” which interference in the country’s domestic course, Mao laid emphasis on accomplishing ‘lasting peace and chose an external strategy of ‘leaning to one side’, i.e. common prosperity, through a win-win solution in seeking the backing of Socialist allies. international relations’. It was left to the then Premier Wen Jiabao to pinpoint the links between his country’s Internal imperatives underwent a major change in the domestic goals and external approach. In his words, post-1978 period, with veteran leader Deng Xiaoping “what China needs for its development first and initiating a policy of reforms under the framework of foremost are an international environment of long term ‘Socialism with Chinese Characteristics’; it stability and a stable surrounding environment.” was matched by an ‘open door’ foreign policy. As a break from Mao-era policy, no alliance with any What should not be missed at the same time is that in outside power was envisaged. the middle of 2009, a new ‘core interests’ element had begun to dominate Hu Juntao’s “Harmonious World” The essence of Deng’s line continues till today, albeit external line; this persists till today. Central to this with additional conceptual inputs from his successors line is China’s resolve not to make any compromise to suit perceived conditions at different times. To on issues concerning national sovereignty, with illustrate, Jiang Zemin ( 1989-2002) formulated option to use force in carrying it out. Though the ‘core national policies centering round his theory of “ Three interest’ areas, now being officially listed, are Represents”, aimed at making the Chinese Communist Xinjiang, Tibet and Taiwan, sometimes, South Party (CCP) a representative of majority of the people China Sea is also figuring under that category. The and codified ‘three major historic tasks’ for China – Senkaku islands, called Diao Yu by China, are the  Modernization, latest addition of Beijing to these areas (PRC foreign  National Reunification and ministry spokesperson, 26 April 2013, as reported by  Safeguarding World Peace and Common Kyodo). Sino-Indian border has not so far come under Development. China’s “core-interests” category. With equal priority being given to ‘core interests’, China’s external He selected a matching external line of ‘Independent relations are now being marked by a big increase in the Foreign Policy of Peace’. level of its territorial assertiveness in its Jiang’s successor Hu Jintao ( 2002-2012) brought neighborhood, leading to Beijing’s increasing friction forth a development model marking a shift in emphasis with ASEAN nations, Japan and India on its claims in – from GDP centric growth to ‘balanced South China Sea, East China Sea and land borders development’; it was backed by his own idea of “ respectively. Scientific Outlook of Development”, of which creation

6 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) The new leader Xi Jinping’s domestic and foreign 2050, the year around the PRC’s policy thinking began to take shape soon after his take 100th anniversary, when the annual per capita over from Hu Jintao. He announced (29 November GDP can reach US$ 40,000, making China 2012) his internal goal as achieving ‘great renewal or one among top 40 countries in the world’ ( rejuvenation of Chinese nation’ which was not new; Hao Tiechuan, Hongkong Government the then Chinese Premier Zhao Ziyang promoted it in official, China Daily, 16 January 2013). Full the late 1980s and so did later Xi’s predecessors, Jiang military modernization will also get completed Zemin and Hu Jintao. The explanation in China is by that time. that the term “renewal” or “rejuvenation” means Turning attention to Xi Jinping regime’s foreign policy ‘revival of Chinese glories of the past’. As some approach, providing context is the Report adopted in overseas scholars (Prof John Lee, Project Syndicate, 1 the 18th CCP congress in November 2012, which August 2013) put it, they are glories of the Ming and maintained the tradition in the PRC of linking the Qing dynasties periods; experts in China on the other country’s domestic and foreign policies. It said, hand explain that the PRC, to achieve ‘rejuvenation’, “Peaceful development is China's basic state policy, will not repeat past ‘imperialist’ mentality, have an and win-win cooperation is a banner for China's open attitude to the outside world and try learn from friendly relations with other countries. To realise it (Han Baojiang, Director, International Institute for ‘China dream’, we must have a peaceful international Strategic Studies, CCP central Committee Party environment. At the same time, the country will School, Global Times, 9 July 2013). Xi has called resolutely safeguard its national sovereignty, the goal as reflecting a national aspiration for security, and core interests. The two policies are two a ‘China Dream’ about making the country pillars of Chinese diplomacy, and do not conflict with stronger through development; he has contrasted each other” (China Daily, 14 June 2013). this to the ‘ status of weakness prevailed for 170 years since the Opium War, subjecting China to For the first time in a party congress report, references bullying’ (Global Times, 30 November 2012). to “never yielding to outside pressure” and “protecting legitimate rights and interests overseas’ found a His stated targets for development are – place. Strongly echoing the Congress guideline, Xi (i) building of “ moderately prosperous society in Jinping in his speech at a party politburo session held all respects” by 2020, the year around in January 2013 stated that China would remain on a 100th anniversary of the CCP’s path of peaceful development, yet it will "never give founding, when in all provinces, the average up" legitimate rights or sacrifice ‘core interests’. income of the middle class , will reach Observing that China would adhere to an "open, international standards, China's GDP of 2000 cooperative and win-win" development model, Xi will be quadrupled to approximately $4 trillion cautioned that "no country should presume that we will with a per capita level of some $3,000. engage in trade involving our ‘core interests’ or that Military mechanization and major progress we will swallow the 'bitter fruit' of harming our in informatisation will be achieved by this sovereignty, security or development interests” (China time, and Daily, 30 January 2013). Statements made by other (ii) establishment of an ‘affluent, strong, civilized, Chinese leaders reiterated Xi’s stand. As an instance, harmonious, socialist modern country’ by addressing the Shangrila Dialogue in Singapore on 2

7 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) June 2013, Lt Gen Qi Jianguo, the Deputy Chief of report.What Xi said of late on NTGPR principle was General Staff of the People’s Liberation Army (PLA) succinct. He stated (at meeting with US President observed, “China would adhere to key principles in Obama, 7-8 June 2013), “in great power relations, foreign policy – open development, win-win situations there should be no conflicts and confrontation; and cooperative relationships. China's hope for contradictions and divergences should be properly sustained peace and stability in this region and stress handled through dialogue and cooperation and there on dialogues and consultations for the sake of peace by should be mutual respect to ‘core interests’ of no means denote unconditional compromise, our concerned countries”, besides informing that resolve and commitment to safeguarding core national Senkakus islands are a matter of ‘core interest’ to interests always stands steadfast”. China.

In March 2013, Xi formally conceptualized his foreign policy idea of “New Type of International Relations” (NTIR) with “New Type of Great-Power Assessment Relations (NTGPR) as its integral part. In his While evaluating China’s overall foreign policy exposition at Moscow Strategic Institute of performance so far, a mixed picture of successes and International Relations (23 March 2013), he stated that failures can be seen. In Mao era, land mark events the NTIR “will have win cooperation at the core and included Beijing’s formulations of “Five Principles of involve combining of efforts by the people of all Co-existence” concept, along with India as well as the nations to safeguard world peace and promote “three world” theory. Their international impact common development”. In strategic terms, interesting cannot be doubted. On the other hand, there were was his application of the NTIR framework to China’s setbacks, like the damage to China’s foreign relations relations with Russia; while in Moscow, he called from the Cultural Revolution and the virtual upon the two nations to ‘support each other in marginalization of the PRC in the international protecting their core interests’. Earlier, he laid a similar system. stress in the case of China-India ties. He said in a press meet (19 March 2013) that both China and India should ‘accommodate core concerns of each other’.

Coming to NTGPR idea, contours of it were visible in February 2012 itself when Xi, then the PRC Vice- President, while in the US, emphasized the need to build “a new type of relationship between major countries in the 21st century” and wished for Beijing and Washington establishing ‘a good example of constructive and cooperative state-to-state relations for countries with different political systems’. This was followed by the PRC Foreign Ministry’s official adoption of the phrase “New Type of Great Power Relations” ( xinxing daguo guanxi, 20 July , 2012). It was included in the November 2012 party congress

8 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) military policy towards the island as well as with Japan.

In the subsequent Hu Jintao period, achievements included holding the Summer Olympics, China's diplomatic reach to Africa, the Middle East, and Latin America and stable ties with the US. The biggest failure in this period arose from the assertive ‘core- interest’- based foreign policy which damaged relations with Asian neighbors.

How the present Xi Jinping administration is performing in the foreign policy front? Standing out while considering this question is the firm indication now that Deng’s principle of ‘keeping a low profile’ in international affairs has undergone a revision. The main reason seems to be the changed perception in China now that the country cannot remain isolated internationally at this time of its rapid growth and increasing inter-dependence among nations. The Coming to Deng Xiaoping period, a prominent prescription now is as follows- “To make China Dream achievement was emergence of China as a global a reality, the PRC needs the world. China will shoulder economic player, thanks to “reforms” and “Four international responsibilities commensurate with its Modernisations” policies initiated by the veteran position and development capability “(The PRC vice leader. On the negative side, the PRC’s global image Foreign Minister Song Tao, speech at Munich Security suffered in the aftermath of Tian An Men square Conference, 3 February 2013). Demonstrating his student demonstrations in 1989. Foreign relations regime’s intention to maintain ‘appropriate’ profile, challenges arose following the collapse of the Soviet not ‘low profile ’ in foreign relations, Xi Jinping Union in 1991. To set the house in order, Deng within a short time of his assumption of office, has invented a strategic course, central to which was a visited abroad and interacted with foreign leaders , ’24-character” concept demanding the country to notably in the US, Russia, BRICS nations and ‘observe calmly, cope with the situation cool-headedly, countries in Africa and Latin America. There is no keep a low profile and make a difference in foreign doubt that a leadership consensus in China has led to affairs” (taoguang yanghui, yousuo zuowei). the revision of ‘low profile” approach; while final Coming to Jiang Zemin era, the accomplishments word has not been said officially so far, there are made were neutralization of the impact of Asian ongoing foreign policy debates in China , presumably, financial crisis, getting the return of Hongkong and with official blessings, based on the premise that the Macao to the mainland and introduction of ‘new US power is on a decline and a multi-polar world is security concept’ as a step to gain confidence of gradually emerging. Two major shades of scholarly neighbors. Failures were inability to reduce tensions opinion are being seen - the ‘realists’ who emphasize with Taiwan which arose from Jiang’s aggressive sovereignty and reject ‘globalism’ and

9 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) ‘internationalists’ who focus on the PRC’s relations demonstration of the PRC’s determination with other great powers and blocs. Both agree that to claim entire South China Sea ; locking of fire Deng’s policy is no longer relevant and support control radar by a Chinese frigate at a Japanese China’s active involvement in international affairs; destroyer on the high seas near the Senkaku Islands the two groups have fundamental differences over in January 2013 and the PLA intrusion into India’s specific diplomatic approaches and strategies. The Ladakh in April 2013. China’s resorting to tough internationalists disapprove the use of force, urge self- rhetoric, is also equally important. restraint, advocate compliance with international • Xi, under his ‘new type’ external approach , has norms, and utilize the international system to desired China and Russia ‘to support each other participate in global governance while putting in protecting their core interests’; emphasis on the role of society – not just sovereign • power (Professor Li Wei, Renmin University China’s called upon China and India ‘to accommodate School of International Studies , 20 February core concerns of each other’ and 2013, Century Business Herald). Xi’s idea of “new • pleaded for China and the US ‘showing mutual type of major power relations” appears closer to the respect to core interests’ of each other. opinions of ‘internationalists’. Why China has added assertiveness to its foreign The second striking point in Xi Jinping’s policy policy approach? position is that the country’s development ‘requires a The contributing factors, not difficult to identify, are peaceful and stable international and neighboring the following - environment’ and that there can be ‘no compromise on the national core interests’. China sees no (i) Beijing’s growing confidence internationally conflict among the two, calling them as ‘two pillars’ especially after its success in holding the of diplomacy, Xi’s idea of ‘ new type international Olympics and in maintaining high growth rates /great power relations’ now being implemented, has despite the global recession, these pillars as Thus, China, while taking diplomatic (ii) China’s feeling that an opportunity has arisen initiatives to improve its foreign relations, is also for itself to increase its influence globally as conveying its sensitivity to governments abroad on the world balance of power shifts from the matters of its ‘core interests’. West to East and a multi-polar world gradually emerges, Notwithstanding its latest charm offensive in (iii) the PRC’s growing need to protect land and international relations, China is not hesitating to adopt sea trade routes in the interest of the much aggressive postures on sovereignty issues, apparently needed import of resources from abroad , setting an opposite trend. Examples are Beijing’s (iv) deepening Chinese fears concerning stability ongoing sabre rattling with respect to South China in Tibet and Xinjiang, Sea and East China sea issues, for e.g establishment (v) suspicions on US strategy towards Taiwan and of a PLA garrison in Sansha city in Hainan Asia-Pacific and province; conduct of a training exercise in South (vi) Perceived aggravation of challenges to China’s China Sea and Western Pacific Ocean during March claims over territories, especially in South and 2013 of the Chinese Navy’s South Fleet, reaching up East China seas. to Zeng Mu reef, contested by Malaysia, symbolizing

10 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) Also, the ‘Active Defence’ strategy set for the PLA, of conducting a dialogue with ASEAN nations as a tasked with protecting national sovereignty, does not group on reaching a legally binding Code of Conduct rule out the armed forces resorting to ‘offensive with respect to South China Sea (Wang Yi, the operational postures’. The Chinese traditional idea on Chinese foreign minister, Bangkok, 2 August 2013). Is peace (heping) contains ‘unity of opposites’ of the PRC departing from its existing line of approving idealism and realism; the idea while stressing peace, only direct bilateral talks with concerned nations on has simultaneously an aggressive connotation implying South China Sea and opposing a ‘multilateral’ an option ‘to rule or stabilize the world’ . The PRC is approach on the issue? also visualizing ‘local wars under informatisation conditions’. Besides ‘show of force’, China is also Present Scenario deploying administrative, legal and propaganda means to press its territorial claims. This trend is important China Sees Itself at Center of New for countries in the neighbourhood having unsolved Asian Order (The Wall Street Journal) territorial disputes with China. The Chinese government in September 2012 announced base points In a valley flanked by snow-capped peaks on China’s and baselines in waters near the Senkakus and its border with Kazakhstan, a vision of Beijing’s affiliated islets, as well as the names and coordinates ambitions to redraw the geopolitical map of Asia is of 17 base points, after the Japanese government taking shape. This remote outpost, once a transit point moved to "purchase" part of the Senkakus, islands. for Silk Road merchants, is where China is building one of its newest cities. Seen in the following November was stamping of Chinese map on passports showing India’s Covering more than twice the area of New York City, Arunachal Pradesh and disputed Aksai Chin as Horgos had just 85,000 residents when it was founded Chinese territories; including South China Sea with in September, enveloping several towns and villages in the nine dashed lines to claim Chinese sovereignty an area known for lavender fields. and including Taiwan as China’s territory. In January China’s plan is to transform the sleepy frontier 2013, a law, enacted by China’s Hainan province crossing into an international railway, energy and which empowers the police of this island province to logistics hub for a “Silk Road Economic Belt” board and control foreign ships which enter the unveiled by President Xi Jinping last year to establish province’s waters without permission, was put in new trade and transport links between China, Central force. Examples of other forms of Chinese Asia and Europe. assertiveness included upgradation of status of Sansha city in Hainan as a base point to administer Horgos is a small element of China’s wider effort to the disputed Paracels, opening disputed territories bind surrounding regions more closely to it through under Chinese control for tourism and broadcast on pipelines, roads, railways and ports, weather in the contested areas in national TV network. The plans also include an Asian-Pacific free-trade Xi Jinping has expressed his support to ‘shared deal, a $50 billion Asian Infrastructure Investment security’ in the Asia-Pacific region (Boao forum Bank and a $40 billion Silk Road Fund that Mr. Xi speech, April 2012); this needs to be read in the announced last week, promising aid aswell as context of the Chinese tendency visible now in favour investment from Chinese private and state firms.

11 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) In a speech to business executives Sunday, he said Plan that helped rebuild Europe after 1945. Others China’s plans would boost growth and improve compare it to the tributary system through which China infrastructure across the region to help fulfill an “Asia- dominated East Asia for much of the last two Pacific dream,” echoing his domestic political slogan millennia. of a “Chinese Dream” to rejuvenate the nation. “With Still, the plans have stirred debate among Western and the rise of its overall national strength,” he said, Asian governments, with some welcoming China’s “China has the capability and the will to provide more development drive and others wary of its strategic public goods to the Asia-Pacific and the whole world.” designs The push is a counterpoint to China’s recent military China has long sought to extend its influence in Asia assertiveness, which has antagonized many neighbors through aid and investment, and to gain access to and prompted the U.S. to launch its “pivot to Asia” Central Asian energy resources. Some efforts now strategy of focusing more military and other assets on under way are rebranded versions of earlier projects. the region. Beijing is now trying to convince countries in Asia and beyond that it is in their interests to accept But the push has expanded and taken on greater China as the alpha power in the continent. urgency under Mr. Xi, who has articulated a more expansive role for China in the world than his Some foreign and Chinese scholars, including Zhai predecessor did. Kun, a Peking University international-relations professor, liken China’s push to the U.S. Marshall

12 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1)

‘One Belt One Road’ initiative (The Frontline)

China substantiated its integrated blueprint of the Silk Road Economic Belt (SREB) and the 21st-Century Maritime Silk Road (MSR)—the twin initiatives covered by the conceptual umbrella of the “One Belt One Road”. China’s soaring vision envisages that the Silk Roads, once completed, would impact 4.4 billion people and, within a decade, generate trade above a jaw-dropping $2.5 trillion. Projects like these were the real reasons for backing the resurgence of Eurasia, marking a real paradigm shift in the global economy under President Xi.

A vision document jointly prepared by a composite team from the Ministries of Commerce, Foreign Affairs and the National Development and Reform Commission (NDRC)—a top organisation that steers the Chinese economy—has, with precision, revealed the vast geographic parameters of China’s “One Belt One Road” initiative.

The “belt and road” run through the continents of Asia, Europe and Africa, connecting the vibrant East Asian economic circle at one end with the developed European economic circle at the other, says the government report. Specifically, the SREB focusses on bringing together China, Central Asia, Russia and Europe (the Baltic); linking China with the Persian Gulf and the Mediterranean Sea through Central Asia and West Asia; and connecting China with South-East Asia, South Asia and the Indian Ocean. The 21st-Century MSR, in turn, is designed to go from China’s coast to Europe through the South China Sea and the Indian Ocean in one route, and from China’s coast

13 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) through the South China Sea to the South Pacific in the other.

On land, the initiative will focus on jointly building a new Eurasian Land Bridge and developing China-Mongolia- Russia, China-Central Asia-West Asia and China-Indochina Peninsula economic corridors.

The document identifies specific gateways that will connect China with other Silk Road economies. Xinjiang province in the west will be the connecting hub for Central, South and West Asian countries. It would be one of the terminals of the Pakistan-China economic corridor.

Similarly, China’s province of Heilongjiang will become the gateway for Mongolia and Russia’s Far East. The area would be central for the development of the Eurasian high-speed transport corridor linking Beijing with Moscow.

China wishes to leverage Tibet’s geographic location to extend a Silk Road node to Nepal. It wants to connect with Nepal and South Asia through an extension of the Qinghai-Tibet railway.

The rail line from Lhasa has already been extended to Shigatse, Tibet’s second largest city. The Chinese plan to build two lines from Shigatse. One would lead to Kerung, the nearest Chinese town from Nepal, from where it would be extended to Rasuwagadhi in Nepal. The other line would head to Yadong on the India-Bhutan border.

Observers say that both sides visualise the extension of the line from the Nepalese capital to Lumbini, the starting point of a Buddhism tourist circuit. Two areas in south-west China—Guangxi Zhuang Autonomous Region and the Yunnan province—will establish links with the Association of Southeast Asian Nations (ASEAN). Yunnan, which borders Vietnam, Laos and Myanmar, is ideal for connecting with the Greater Mekong Sub-region, and serve as a pivot to link China with South and South- East Asia. Yunnan’s provincial capital, Kunming, is the end point of the proposed Bangladesh-China-India- Myanmar (BCIM) economic corridor, which starts in Kolkata.

China has plans to integrate and globalise its inland economies around specific, strategically located hubs, which will be located along the cross-border international Silk Road transportation network. Thus, Chongqing would be developed as “an important pivot” to open up the hinterland in the country’s western region. A similar role is assigned to cities such as Chengdu and Wuhan, to open up and enmesh other inland areas with the belt and road economies. The “belt and road” would be serviced by a network of  roads,  high-speed railways,  fibre-optic lines,  transcontinental submarine optical cable projects, and  satellite information passageways

14 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) Whether India should be part As OBOR connects its landlocked and underdeveloped southern and western provinces with of the new Silk Route ? (The Central Asia and Europe, offering new markets for Hindu) Chinese firms, it is expected that the future manufacturing hub would be based in this region Chinese President Xi Jingping officially unveiled the allowing for the underdeveloped part of China to One Belt One Road (OBOR) initiative in 2014 along industrialise, develop and modernise. with the establishment of a $40 billion Silk fund. One Belt will be a land based economic corridor slated to Further, Chinese interests in strategically important run from Shaanxi province, China, to Venice in Italy regions to its West are a response to the much-hyped passing through Central Asia and Europe, whereas the “pivot to Asia” by the US. As most of the OBOR Road is a 21st Century Maritime Silk Route — a sea projects need huge funds in billions dollars and can be based route originating from Quanzhou in Fijian funded by China and institutions supported by China, province China, passing through the Strait of Malacca all infrastructure demand orders pertaining to cement, and Nairobi (Kenya), before merging with the Belt at steel, power will go to Chinese companies with excess Venice. capacity.

The OBOR covers about 40 to 60 countries consisting China with $4 trillion forex will be the principal of about 65 per cent of the world’s population funding country in infrastructure projects of OBOR, generating 30 per cent of the World’s GDP and likely thereby by getting a significant voice in the recipient to be completed in 2049. or participant countries’ economic policies favouring its own industries. OBOR has four major explicit objectives to connect participating countries, such as development of road The currency factor and rail infrastructure; high speed optic fibre cables and energy pipelines; development of ports and Further, China’s investment in the form of a credit establishment of trade logistics and institutions. line would be used for trade in goods and services between China and participant countries, paving the Infrastructure push way for faster internationalisation of the Renminbi.

The Chinese economy is experiencing a new normal Internationalisation of the RMB offers advantages growth rate of 6-7 per cent after an average growth rate for China such as shifting from its dollar dominated 10 per cent over the last three decades. Rising labour exposure, thereby sharing its currency risk with rest of costs, declining global demand for exports leading to the world. It would facilitate faster financial sector excess capacity, weakening of stock markets and rising reforms, including opening up the capital account income inequality are some signs of overheating. and making its currency as one of the reserve currencies of the world. Therefore, the Chinese economy needs a new momentum for balanced growth.

15 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) All this would not only help China to increase its trade OBOR is multi trillion dollars project passing through and investment within the region, but also its position many different countries and China alone cannot lead and say in the international financial architecture. it without taking India on board. India should partner and negotiate to gain maximum economic and Further, as Chinese firms and institutions invest in geopolitical advantage out of the Corridor. OBOR projects, there is a possibility of participant countries giving preferential treatment, market access In the process India should seek to add more Indian and fiscal concessions to China, creating trade nodes in the OBOR Schemes, re-route the China- diversion which would hurt countries like India, Pakistan economic Corridor to pass through the particularly in certain sectors like steel, coal, cement. Indian portion of Kashmir, connect more Indian ports like Kochi or Mumbai along the Maritime Road and Further, higher output along with quality infrastructure demand connecting Bangladesh-China-India-Myanmar connectivity with participant countries will make (BCIM) corridor with OBOR. Chinese manufactured goods like steel, petrochemicals, telecommunication cement and Further, India should try to make OBOR Initiative an machinery globally more competitive, thereby hurting international project by convincing countries like the ‘Make in India’ . United States, Japan, Australia and multilateral financial institutions such as the World Bank, the Preferential treatment in trade and investment to Asian Development Bank to invest financially and China in lieu of funding infrastructure projects not technologically in OBOR projects. The road ahead for only leads to trade diversion but also decline in China is long. Execution of cross national and large investment in excluded countries. In countries like projects is full of challenges. Myanmar, Maldives and Pakistan, existing policies are being tweaked to suit Chinese interest post receipt of It is beneficial for China to convince India to be a aid or investment. partner and accept India’s needs. However, India should be there from these early days in finalising Example of preferential treatment OBOR schemes.

There are also other examples — like the Kashagan oil At the same time, India should have its own plan to field sale in Kazakhstan 2013 to Chinese energy firms link with its trading partners for trade and geo-political like CNPC and CNOOC instead of an Indian company strategy. The Indian government has recently initiated and termination of international airport contract given ‘Mausam’ and ‘Spice Route’. to an Indian company by the Government of Maldives Mausam and Spice Route initiative of Given that OBOR initiative of China may hamper India India’s efforts in increasing its share in global trade and commerce, India needs to have strategy of its own. While ‘Mausam’ is a foreign policy initiative that The best is ‘join them if you can not fight’. attempts to re-establish India’s ancient maritime routes China has reached out to India to partner in OBOR. with its traditional trading partners,

16 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) The ‘Spice Route’ envisages linking India’s historic between the government and Indian corporate sea routes in Asia, Europe and Africa. India does not entities on taking up infrastructure projects abroad. have any plan to invest and develop economic infrastructure along ‘Mausam’ and ‘Spice Route’ With a policy for achieving these objectives in place, projects like OBOR. These projects are foreign policy India can cooperate and compete with China on initiatives and meant to improve cultural linkages. regional connectivity. But if Modi ducks the issue, he will be paving the way for India’s marginalisation Overall, OBOR, if implemented successfully, will from the unfolding geo-economic transformation in serve multiple objectives of rebooting the Chinese Asia and the Indo-Pacific. economy and maintaining its geo-political dominance.

Whether India should be part of the new Silk Route ? On the other side

A view from Indian Express Why OBOR of China is not at all a good idea for India? Modi’s Choice - (-RS Vasan, South Asia Analysis Group) Summary It is no secret that the Indian security establishment is by Aspire IAS deeply suspicious of China’s silk road initiatives. The UPA government, which did not want to say “no” to From the time the OBOR was conceptualized towards Beijing, simply strung the Chinese along. Delhi’s end of 2013, there have been plenty of discussions on strategic community has long objected to China’s road the usefulness of this project to Asia, Africa and construction on land frontiers and port-building in the beyond. It is also being made out that it will bring Indian Ocean as “strategic encirclement”. Modi, about greater connectivity, prosperity and regional however, needs to take a fresh look. economic integration. Many countries across continents have joined the initiative. India the India badly needs connectivity and, despite much regional power in Indian Ocean and an emerging rhetoric on the subject, Delhi has made little advance economy has rightly chosen to defer the in recent years. Modi, then, must ask: What is wrong decision to join the Maritime Silk Route initiative. with India partnering China on the belt and the road? Probing further, Modi will find China is not the China has become the manufacturing hub of the world only option on connectivity; Japan and America are and has captured markets across continents. China eager to collaborate with India. Upon deeper reflection therefore has to scale up in terms of its reach, Modi might see three urgent imperatives: connectivity and production to sustain its GDP growth. So the OBOR is essentially a ploy to use its  Upgrade India’s own frontier connectivity, surplus stagnating reserves of about 3.2 trillion US  Modernize border management, Dollars and also utilize the excess capacity that it has  Build new ports and develop better coordination built over the last few decades to achieve the number

17 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) one position in manufacturing and meeting the needs of its veto power, the border incursions, of the global markets. So as is being made out by presence of nuclear submarines in the Indian China in all forums, OBOR is not a charity Ocean, objecting to India’s off shore explorations initiative and that factor needs to be borne in mind with Vietnam in so called disputed EEZ while while evaluating this initiative. having no qualms in planning the China Pakistan Economic Corridor through the The assumption that India would be a loser if it does disputed territory of Pak Occupied Kashmir are all not get onboard the MSR initiative is flawed in any indicative of the mindset of China. which way for many reasons underlined below:- 7. India is a large enough economy albeit with its own worries of development with plenty of 1. India is a huge growing market and already has a corrections to be applied. Its own economic huge trade deficit with China. By facilitating the growth trajectory has shown good trends that need process of creating more captive ports or other to be sustained by proactive initiatives and joining infrastructure with Chinese help, it will provide MSR is definitely not one of them. greater access to emerging markets and only 8. Within the South China Sea, the smaller increase the trade deficit beyond unmanageable neighbours are very angry with the aggressive proportions. behaviour of China. While most of them continue 2. By heavy investments in the neighbourhood, China to do business with China, would keep working on would eat in to the market share of India alternative engagements with India, Japan, Korea, 3. India with its size, population and form of USA and other European economies. India needs governance has many other alternatives for to work with other economies to identify the moving its own trade and transacting with other alternatives for the smaller nations. Surely the economies of the world by working on other sea nations doing business with China do not want all and land routes and by using the advantage of its the eggs in one basket. location in the Indian Ocean. 9. The North South Transport Corridor which 4. The most recent case of the MoU signed for uses the ship, rail and road route to connect Asia, developing Chabahar in Iran provides wonderful Europe, Russia, Iran and Central Asia is again a alternatives to the cleverly camouflaged Chinese wonderful counter to the OBOR. Dry runs have MSR. already been carried out on this corridor in 2014 5. The fear that India would lose out on the inflow and it has been established that there is a saving of from China in terms of FDI in the maritime sector about 2500 US Dollars for each 15 tons. is unfounded as India has many other economies in 10. By the Chabahar initiative, India has lot more to East Asia and South East Asia including Japan, gain than by the OBOR. Even when there ports Vietnam, Indonesia, Malaysia and other built using the funds from China, India will not be developing and developed economies willing to denied the use of those ports for any commercial invest in India in mutually beneficial initiatives. operation as they would be on commercial terms 6. The recent example of snubbing India on its entry as applicable for international charters. in to the NSG unless it signs the NPT, Refusal to allow India in to the UNSC, the bailing out of From all that has been said above it is clear that it is Pakistan on the issue of blocking JeM by misuse unwise for India to join either the land segment or the

18 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) MSR which only benefits China with very marginal being sponsored by those whose motives and benefits to India even if it joins the initiative at a later agenda are not clear and members of which date. are apt to pull in different directions.”

Last but the most important issue is about the new plans on the anvil as outlined in the Maritime India Summit that concluded in Mumbai on 16th April Cultural Relations between India and 2016 China: The Tradition of Continuity

Conclusion Prime Minister’s visit to the Great Wild Goose Pagoda, joined by President Xi, and his So there are grand plans afoot to realize the full attendance at the Yoga-Taichi event along with potential of Maritime India without looking at or Premier Li exemplified the importance that our linking with China’s plans. Seen in the context of the leaders attach to tapping the shared cultural regional integration through Chabahar, the Trilateral heritage. Moreover, three new institutions: the transport and transit corridor (TTTC) of peace Centre for Gandhian and Indian Studies in and prosperity in the words of Modi passing Shanghai, Yoga College in Kunming, and National through Iran, Afghanistan and the Central Asian Institute for Skill Development and Republic along with the North South corridor India has Entrepreneurship in Ahmedabad were launched. the potential to work on its own steam while reaching out to the new markets and countries . India has a lot On December 11, 2014, the 193 member UNGA more geographical advantage in terms of its reach and approved by consensus with a record 177 co- access in comparison with China . sponsoring countries including China a resolution to establish 21st June as "International Day of Yoga". In In conclusion, it is in the best interests of India not to its resolution, the UNGA recognized that Yoga go overboard on the Chinese initiative of Maritime provides a holistic approach to health and well-being Silk Route which only benefits China in the long run in and wider dissemination of information about the economic and strategic terms. China has neither been a benefits of practicing Yoga for the health of the world friend nor has it been an advocate for a prosperous population. Embassy of India Beijing and Consulates India that is seeking its own place in the high seat of at Shanghai, Guangzhou and Hong Kong celebrated United Nations. the First International Day of Yoga today on 21st June, 2015 in China.

Both India and China have vibrant cultures and vibrant people. Buddhism, Xuan Zhang, Tagore, Dr. Kotnis, Nalanda, Yoga and Cinema are only symbols of our long tradition of exchanges. They are testimonies of our shared heritage. The momentum has been set and Both Arthashastra and Panchatantra the pace can only increase in the 21st century. warn against joining alliances which are

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South China Sea issue

20 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1)

21 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) The SCS is also resource rich, with numerous offshore oil and gas blocks.

The South China Sea dispute and So what is the dispute about? India’s Stand (The Hindu) There are a few hundred small islands in the SCS, a Background part of the Pacific Ocean. Some of the main ones are Spratly Islands, Paracel Islands and Scarborough Shoal — the bone of contention between China and the Philippines.

China claims most of these islands as its The Permanent Court of Arbitration (PCA) in The own. Vietnam, Malaysia, Brunei, the Philippines Hague, Netherlands, has ruled that China’s claims of and Taiwan have rival claims. China has said it will historical rights over South China Sea (SCS) has no not permit other nations to infringe on what it legal basis. The case against China was initiated by considers its sovereign rights in the strategically vital the Philippines. area.

The PCA is not a ‘court’ per se, but organises The U.S. has no claim in the South China Sea, but has arbitration tribunals between member countries, been assertiveness and says it will protect freedom of should issues arise navigation.

What did the arbitration panel rule? When did China start taking this position on SCS? It said Beijing “had no historic rights to resources in the waters of the South China Sea” and that “such China laid claim to the SCS back in 1947. It rights were extinguished to the extent they were demarcated its claims with a U-shaped line made up of incompatible with the exclusive economic zones eleven dashes on a map, covering most of the area. provided for in the Convention.” The Communist Party, which took over in 1949, Why is South China Sea considered so removed the Gulf of Tonkin portion in 1953, erasing important? two of the dashes to make it a nine-dash line.

The SCS is a busy international waterway, being one What is the ‘nine-dash’ line? of the main arteries of the global economy and trade. More than $5 trillion of world trade ships pass through The ‘nine-dash line’ stretches hundreds of kilometers the SCS every year. south and east of its southerly Hainan Island, covering the strategic Paracel and Spratly island chains. China

22 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) buttresses its claims by citing 2,000 years of history action based on those awards,” a Chinese Foreign when the two island chains were regarded as its Ministry statement read. integral parts. What is India’s stance? But Vietnam rejects the Chinese argument, justifying its own claims, on the basis of written records, which, India follows the policy of not involving in disputes in its view, establishes its administration over the area between sovereign nations. India, too, has commercial since the 17th century. Beijing and Manila clash on interest in the region. Vietnam has offered India seven account of their dispute over the jurisdiction of the oil blocks in its territory of SCS, a move that didn’t get Scarborough shoal, which is 160 kilometres from the down well with China. Philippines. India has signed energy deals with Brunei too. If the SCS islands are claimed by so many countries, why is the ruling about the In addition, the Ministry of External Affairs on Philippines alone? Tuesday released a statement saying India was “carefully studying” the Hague panel’s ruling. “India Back in 2013, the Philippines raised the dispute with has noted the Award of the Arbitral Tribunal China to the PCA, saying China’s claims violated constituted under Annex VII of the 1982 United Philippines’ sovereignty under the 1982 U.N. Nations Convention on the Law of the Sea (UNCLOS) Convention on the Law of the Sea. in the matter concerning the Republic of the Philippines and the People’s Republic of China and is A five-member panel of international legal experts was studying it carefully,” it said. appointed in June 2013 to hear the case. The result of this arbitration was announced on July 12, 2016, with India’s Stand the panel saying China had no “historic rights” over the SCS. India supports freedom of navigation and over flight, and unimpeded commerce, based on the principles of Will this ruling affect China? international law, as reflected notably in the UNCLOS (United Nations Convention on the Law of the Sea). Unlikely, because PCA is an intergovernmental organisation and not a ‘court’, hence the ruling is not India believes that states should resolve disputes binding. through peaceful means without threat or use of force and exercise self-restraint in the conduct of activities The Philippines has asked the tribunal to declare that could complicate or escalate disputes affecting China’s claims and actions invalid under the U.N. peace and stability. Convention on the Law of the Sea.

China has swiftly rejected the ruling, saying it was null and void and that Beijing would not accept it. “China opposes and will never accept any claim or

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India- China relations Timeline (Important events)

March 17, 1959: Tibet's spiritual leader Tenzin July 24, 1976: Diplomatic ties between India and Gyatso, the 14th Dalai Lama, flees his homeland on China are re-established for the first time since the horseback, crossing the border into Indian territory to Sino-Indian war in 1962, according to The escape China's crackdown on the Tibetan uprising. International Institute for Strategic Studies. New Delhi's decision to grant him asylum sours relations with Beijing. December 19, 1988: Prime Minister Rajiv Gandhi makes a five-day breakthrough visit to China, the first October 20, 1962: China's People's Liberation Army visit to China by an Indian prime minister in 34 years. attacks India. The PLA marches across the border from The two countries agree to set up a joint working two fronts -- Ladakh in the west and across the group to settle the boundary issue, according to China's McMahon Line on the east. Chinese forces capture Ministry of Foreign Affairs website. Tawang, an important cultural center for Tibetans in the north eastern state of Arunachal Pradesh. One November 28, 1996: Chinese President Jiang Zemin month later, China declares a ceasefire and announces visits India, the first visit to India by a head of state its withdrawal from the disputed area, but territorial from China. The two countries sign an Agreement on disputes along the 3,225-kilometer-long Himalayan Confidence Building Measures in the Military Field in border continue to strain relations. India says Beijing is regard to the India-China border areas. occupying 33,000 square kilometers of its territory in Jammu and Kashmir while China claims the whole of January 5, 2000: Tibetan Buddhist leader Karmapa Arunachal Pradesh, according to GlobalSecurity.org. Ugyen Trinley Dorje flees China and joins the Dalai

24 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) Lama in India, according to the Karmapa's official April 9, 2005: Chinese Premier Wen Jiabao visits website. Beijing warns New Delhi giving the Karmapa Bangalore to push for an increase in Sino-Indian asylum would violate the Five Principles of Peaceful cooperation in high-tech industries. India and China Coexistence. also sign an agreement aimed at resolving disputes over their Himalayan border. June 23, 2003: Indian Prime Minister Atal Bihari Vajpayee makes a landmark visit to China -- the first Indian head of government to visit China in ten years - - to strengthen relations

July 6, 2006: China and India re-open Nathu La Pass,

25 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) an ancient trade route through the Himalayas which in a dispute over Prime Minister Manmohan Singh's was once part of the Silk Road. This pass had been visit to Arunachal Pradesh. China expresses "strong closed since the Sino-Indian war in 1962. dissatisfaction" on the visit to the "disputed area." India responds by saying Arunachal Pradesh is an May 25, 2007: China denies a visa to a government "integral and inalienable" part of India. official from Arunachal Pradesh, arguing that since the state is in fact a part of China he would not require a August 27, 2010: India cancels defense exchanges visa to visit his own country. with China after Beijing refuses to permit a top Indian army officer a visa because he "controlled" the January 13, 2009: Indian Prime Minister Manmohan disputed area of Jammu and Kashmir. India Singh visits China. Bilateral trade surpasses $50 billion subsequently refuses to allow two Chinese defense and China becomes India's largest trading partner in officials to visit New Delhi, according to The Times of goods. India

October 13, 2009: India and China become embroiled OCTOBER 2013 - India and China sign the Border November 2014: Xi invites modi to attend the APEC Defence Cooperation Agreement (BDCA), a major (Asia Pacific Economic Cooperation) summit in “confidence-building” measure in light of several Beijing. Modi declines the offer, but travels to Chinese “incursions” along the Line of Actual Control Myanmar, Australia and Fiji. India also appoints (LAC) this past year. its national security advisor, Ajit Doval, as the country’s special representative for Sino-India Timeline of India-China relations since boundary negotiations. New Government took charge February 2015: Less than a week after Obama’s May 2014: China congratulates Modi’s election departure visit, foreign minister Swaraj leaves for victory. “By working together for peaceful, Beijing and meets president Xi. “I have full confidence cooperative and common development, China and on the future of China and India relations and I believe India will not only bring benefits to their own people that good progress will be achieved in the growth of but also contribute to peace, stability and prosperity of bilateral relations this year,” Xi tells Swaraj. Asia and beyond,” China’s prime minister Li Keqiang says in a statement. The same month, Modi also visits the northeast Indian state of Arunachal Pradesh, which China considers September 2014: Xi visits India, and Modi, breaking disputed territory. An unimpressed Chinese foreign protocol, receives him in Ahmedabad. The result: ministry spokesperson remarks that “the act of the China promises $20 billion worth of investments in Indian side is not conducive to properly resolving and India over five years. Through the entire visit, controlling disputes between the two sides, nor in however, both countries remain engaged in a face- conformity with the general situation of growth of off at the border in Ladakh, after Chinese troops bilateral relations.” allegedly crossed over to the Indian side.

26 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) March 2015: India starts the 18th round of talks with held in 2008. In September 2009, the Pittsburgh China over the land. National security advisor Doval Summit announced G20 as the premier forum for and China’s special representative Yang Jiechi meet in international economic cooperation, marking an Delhi. Meanwhile, Modi visits three nations— important progress in global economic governance Seychelles, Sri Lanka and Mauritius—to push for reform. The tenth Summit was held in Antalya Indian interests in the area where the Chinese have ,Turkey in November, 2015. been lately increasing their influence. “The visit of the prime minister to our friendly maritime neighbours is Some guest countries and the United Nations, the reflective of India’s desire to further strengthen our ties International Monetary Fund, the World Bank, the in the Indian Ocean region,” from India’s foreign World Trade Organization, the Financial Stability ministry says. Board, the International Labour Organisation, the Organisation for Economic Co-operation and May 2015: Modi leaves for China. His first stop is Development(OECD) were also invited to attend G20 Xian, Xi’s home town, after which he’ll head to Summit. Beijing. Engagement groups such as B20, L20, T20 also convene to prepare policy recommendations for the G20 Summit during the year.

Terror, NSG should not be issues between India, China: Foreign About G20 Secretary

G20 was initiated in 1999 and consists of Argentina, September 9, 2016 Summary by Aspire IAS Australia, Brazil, Canada, China, France, Germany,  Bilateral ties with China were “complicated” India, Indonesia, Italy, Japan, Mexico, Republic of but one should not approach the relationship as a Korea, Russia, Saudi Arabia, South Africa, Turkey, the zero sum game. United Kingdom, the United States and the European  China is expected to be appreciative of India’s Union (EU). interests, especially when they are not in conflict Before the outbreak of global financial crisis in 2008, with those of Beijing, as it is imperative for the G20 meetings of Finance Ministers and Central Bank future of Asia and the world, that the two nations Governors were held to discuss international financial approach each other with strategic maturity. and monetary policies, reform of international  Combating terrorism is one such area and financial institutions and world economic sanctioning of well-known terrorist leaders and development. The first G20 Leaders' Summit was organisations should not emerge as an issue of

27 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) difference. Nor should reservations on  Among the major issues that found mention in the developmental issues, such as India’s predictable summit was the question of access to international cooperation and i. Excess steel capacity in China resulting in investments in the field of civil nuclear energy a flood of cheap imports into India, the U.K. and other economies. Dr. Jaishankar was referring to ii. The document had a “call for increased information sharing and cooperation  China blocking India’s bid to put Pakistan-based through the formation of a Global Forum terrorist Masood Azhar’s on UN Security on steel excess capacity”. Council blacklist of groups linked to al-Qaeda or iii. Climate change was the other major Islamic State and agenda point . A symbolic show of  India’s entry in the Nuclear Suppliers Group. solidarity towards this goal in the form of the U.S. and China ratifying the Sino-Indian ties are a subject of heightened attention Agreement last week failed to produce because of any dramatic commitments in Hangzhou. iv. Numerous low-key objectives shared by  Historical Reasons and multiple G20 members, such as  Impact that it could have on regional and strengthening enforcement against global politics. international tax avoidance and advancing cooperation on Base Erosion and Profit India-China ties for the last three decades is much Shifting, certainly got a shot in the arm stronger from this G20 gathering. v. Yet, there is no comparison to the patchy and vague nature of progress in these smaller goals to the collaboratively Analysis G-20 2016 evolved financial regulation architecture that emerged from the ashes of the 2008 The Grumbling 20 meltdown and put the brakes on excessive risk-taking by banks. Summary by Aspire IAS Has the G20 lost its way, outlived its usefulness?  A noble mission of far-sighted global cooperation to avoid a looming economic Would it be more institutionally efficient to revert to crisis brought together a doughty group of nations, other regional groupings that have overlapping representing 85 per cent of the world’s GDP and conversations on these very subjects? two-thirds of its population, under the banner of the G20. It may well be time to re-examine the G20’s purpose  The annual gathering of the group has and, if necessary, recast its vision and mission entirely. degenerated into a publicity opportunity for divergent national concerns.

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highlighted, in the hope that G20 members can take the lead in implementing the 2030 agenda for 'China-India synergy will sustainable development and set a good example for the international community. energise G20, BRICS' 3. The importance of structural reform has been stressed, in the hope that reform will solve deep- Summary by Aspire IAS (The Hindu) seated problems in the global economy. 4. To reinvigorate the dual engines of trade and  Twenty-eight years ago, Deng Xiaoping, the chief investment, set up trade development strategy and architect of China’s reform and opening up policy, global investment guidelines, and guard against said that the Asian century can only be trade protectionism. realised when both China and India 5. To adopt specific and detailed measures to become developed. His words are becoming a enhance international anti-corruption reality. Today’s Asia is the new global economic cooperation. centre of gravity.  China and India are the second and seventh largest These topics are in line with the interests and needs of world economies, respectively, ranking the second developing countries, especially emerging economies and first in terms of growth rate, and first and third like India, and they are also consistent with the trends in terms of contribution to world economic of world development. G20 is the first global growth. mechanism that allows developed and developing countries to take an equal part in global economic G20 Summit governance. We need to take shared efforts to shift G20 from a crisis-response mechanism to one of long-  On September 4-5, the 11th G20 Summit will be term governance. held in Hangzhou, China.  The theme of the Summit will be “Toward an BRICS Summit Innovative, Invigorated, Interconnected and Inclusive World Economy”. (Prelims There have been some pessimistic views on BRICS 2017) countries’ development prospects. Indeed, some  China has also introduced some new important BRICS countries are facing downward economic topics into the Summit agenda on top of the pressure. In light of this, it is particularly important for traditional ones. BRICS leaders to meet this year (October 15-16) at the 8th BRICS Summit. 1. Innovation has been made one of the major topics in the Summit, in the hope that innovation can Next year, China will host the 9th BRICS summit. serve as a new driving forces for the world (Prelims 2017) economy. 2. The importance of development has been

29 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) Both China and India are major rising forces among BRICS countries. China and India have far more common interests than differences and far more areas of cooperation than competition. Meanwhile, we need to continue working for solutions to specific issues through dialogue and consultation.

The G20 summit will push the G20 countries to pass the action plan of the 2030 agenda of sustainable development, support to the industrialisation of Africa and other less developed countries, and invite more representatives from developing countries to participate in the Summit. To this end, China has invited a record number of developing countries to the G20 summit, including Laos, which holds the ASEAN Chairmanship; Chad, which holds the Presidency of the African Union; Senegal, which holds the Presidency of the New Partnership for Africa’s Development; and two representatives of major developing countries - Egypt and Kazakhstan. The Hangzhou Summit, with the participation of more developing countries than ever in the history of G20, will be more representative and inclusive in its composition.

Issue of Subsidy

Some Indian friends said that when a cow receives $2 government subsidy in the EU, a large population in developing countries live on less than $2 a day. It is obvious that although both South and North countries subsidise their farmers, the intentions are vastly different - as for the developing countries, the subsidy is to guarantee the farmers’ basic survival. We should adhere to the principle of common but differentiated responsibilities in many development issues, in order to achieve affordability, accessibility and availability for people in developing countries. The building of the BRICS bank

30 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) Last week, India named veteran banker K.V. Kamath alternative system to IMF/World Bank, one in which to be the first President of the New Development they have greater say. Bank, popular as the BRICS bank. The focus of this Q. How will the New Development Bank be bank will be to invest in infrastructure. different? Q. What is BRICS? So, BRICS account for about 40 per cent of the In 2001, the then Goldman Sachs Group economist world’s population and a combined economy of about Jim O’Neill coined the term BRIC to describe the $16 trillion. Although they account for over one-fifth growing prominence of Brazil, Russia, India and China of the global economy, together they garner only 11 in the global economy. Not yet considered developed per cent of votes at IMF. On the other hand, developed countries, the four were grouped together for being at countries such as the U.S., Japan, Germany, the U.K. the same stage of economic development. and France hold 40 per cent of the voting power. In the BRICS bank, the founding members have equal voting BRIC country leaders started meeting as a bloc in rights. 2009. South Africa joined them later, (PRELIMS 2014) though there was some scepticism that as a Q. Is there more to its founding? country of less than 50 million people it is too small to Definitely! Dissatisfaction toward traditional join the group. So, BRIC is now BRICS. multilateral financial institutions to be just one of the Q. What is BRICS bank? three reasons.

It is how the New Development Bank is better known One of the other reasons is that the creation of a joint as. Last July, the BRICS countries agreed to set up a development bank is a milestone in the evolution of development bank, whose purpose, according to its the BRICS. That is, it turns the informal co-operation articles, is to “mobilise resources for infrastructure among those countries into a concrete institution. and sustainable development projects” not just in Finally, the bank seeks to fill the enormous hole that BRICS countries but also in other emerging exists in infrastructure financing in many developing economies. It seeks to do so by supporting public and countries. private projects through loans, guarantees and equity. The last point assumes significance because the Q. But doesn’t the world already have enough traditional development banks have reduced funding institutions to do that — the IMF/World Bank, for for infrastructure in recent decades while private instance? investors have been reluctant to take on long-term projects of this kind. The infrastructure financing True. It’s clear their presence hasn’t been ignored in deficit in developing countries is estimated to be $1 the creation of the New Development Bank. The trillion annually. BRICS countries, especially China, articles of the bank do say that its creation is to have accumulated financial resources that enable them complement “the existing efforts or multilateral and to fill the gap to some degree. regional financial institutions.” But, in a sense, the BRICS bank was born because the countries that Q. How will the bank be structured and run? represent this have long realised they need an

31 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) The bank will begin with a subscribed capital of $50 Raj M. Desai, Non-resident Senior Fellow, Global billion, divided equally between its five founders, with Economy and Development, Brookings, says the main an initial total of $10 billion put in cash over the next challenges will be in setting up and operating a bank in seven years and $40 billion in guarantees. which shares are equally divided among countries that do not have much in common, apart from their distrust The group has also agreed to a $100 billion currency of the current global governance system. exchange reserve, which member-countries can tap during balance of payment problems. China, the The differences are many, as amplified by their biggest foreign exchange reserve-holder amongst  Political systems (example: China and Russia v. them, will contribute the major portion of the currency India, Brazil and South Africa), pool. Brazil, India and Russia will contribute $18  Economic interests (example: commodity billion each while South Africa will chip in with $5 exporters v. importers), and billion.  Enormous power discrepancies (China’s economy, In a crisis, China will be eligible to ask for half its trade, and foreign reserves being much larger than contribution, South Africa for double its contribution the rest combined). while the others can get back what they put in. Dr. Pallavi Roy, who teaches at the University of The bank will be based in Shanghai. After a five-year London, points out that one of the threats could, term at the helm by an Indian, the President’s post interestingly, be another development bank incubated would by turn go to a Brazilian and then to a Russian. by China. The Asian Infrastructure Investment Bank (AIIB), backed by China, has more capital and The bank can add more members. Even if more members than the BRICS Bank. members are added, the capital share of BRICS can’t drop below 55 per cent. Q. Can the BRICS bank take on IMF, World Bank? Q. How does the bank’s creation play out for each of its member-countries? Brookings’ Desai points out that the capital base of the World Bank and the ADB combined is about $400 Hongying Wang says, for China, this is an opportunity billion, so it would take the participation of several to export its infrastructure over-capacity. China can other middle-income countries for the BRICS bank to reduce its mammoth reserves and improve financial be able to compete with those institutions. returns on its external assets while at the same time learn to play a leading role among the developing But the contingency reserve account also proposed as countries. For India and South Africa, this promises to part of the BRICS effort may provide an alternative be a welcome source of much-needed infrastructure source of stabilisation support. In this, it could financing. For Russia, the benefit at the moment is potentially compete with the IMF, which has had very largely seen to be political, given that the country has few takers from BRICS economies on this front in been isolated in the international arena over the recent years. Ukraine issue. For Brazil, the new development bank could bring financing for its oil exploration projects.

Q. What would be the challenges?

32 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) power, transportation and telecommunications, rural infrastructure and agriculture development, water supply and sanitation, environmental protection, urban development and logistics, etc. The operational strategy and priority areas of engagement may be revised or further refined by its governing boards in the future as circumstances may warrant.

The AIIB will complement and cooperate with the

existing MDBs to jointly address the daunting The Asian Infrastructure Investment Bank infrastructure needs. The Bank's openness and inclusiveness reflects its multilateral nature. AIIB The Asian Infrastructure Investment Bank (AIIB) is a welcomes all regional and non-regional countries, multilateral development bank (MDB) conceived for developing and developed countries, that seek to the 21st century. Through a participatory process, its contribute to Asian infrastructure development and founding members are developing its core philosophy, regional connectivity. principles, policies, value system and operating platform. The Bank's foundation is built on the lessons of experience of existing MDBs and the private sector. Its modus operandi will be lean, clean and green: lean, with a small efficient management team and highly skilled staff; clean an ethical organization with zero tolerance for corruption; and green, an institution built on respect for the environment. The AIIB will put in place strong policies on governance, accountability, financial, procurement and environmental and social Difference between New Development Bank and frameworks. ASIA INFRASTRUCTURE AND INVESTMENT

The AIIB, a modern knowledge-based institution, will focus on the development of infrastructure and other productive sectors in Asia, including energy and

33 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1)

has been on a learning curve.

Jawaharlal Nehru’s errors of judgment in dealing Exclusive with China cast a long shadow on bilateral relations. India and China in a multipolar Every Prime Minister since has tread cautiously, world perhaps far too cautiously, in dealing with China. Prime Minister Manmohan Singh once said that he had devoted considerable time to reading carefully May 2015 SANJAYA BARU through the Nehru files on China so as not to repeat A week before marking the first anniversary of his any of his predecessor’s mistakes. I guess every Prime assumption of office, Prime Minister Narendra Modi Minister would have done that and Mr. Modi may well ends his year of hectic diplomacy with a visit to China. have done this too. For India, no other bilateral relationship is more complex and challenging than the one with its biggest Chinese assertiveness in Asia neighbour. Fortunately, the mistakes that could have been made by India’s political leadership in dealing But, Nehru’s errors of judgment were not inevitable. with a big neighbour were limited mostly to the very Indeed, we now know that as early as on November 7, first decade of the republic. For half a century, India 1950, Sardar Vallabhbhai Patel had cautioned Nehru about the trust deficit in the bilateral relationship and

34 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) of China’s expansionist instincts in Asia. Patel’s relations, precisely because the bilateral relationship prescient and cautionary note to Nehru, buried in has become more stable, despite episodic provocation government files for decades, was made public a on the border by China. There are several reasons why decade ago and is now freely available on the Internet. China may not want to push India beyond a point. First, India has demonstrated its ability to tide over a If China annexed Tibet in Nehru’s time, it now seeks variety of political and economic storms that have to usurp maritime territory in South China Sea. Time engulfed it from time to time, thereby establishing the was when Chairman Mao Zedong dubbed the Soviets resilience of the Indian state; second, despite all its as “social imperialists”. No one has yet so branded weaknesses, the Indian economy has demonstrated its China. However, unlike in the 1950s when the world capacity to sustain higher rates of economic growth; adopted a more benign approach to China’s land grab, third, India’s flexible diplomacy has enabled it to there has been greater concern about China’s widen its geopolitical options; finally, China’s assertiveness in Asia which has put its leadership on assertiveness in its neighbourhood has encouraged notice. While the Western leadership seems to be in many Asian nations to take a more benign view of disarray in responding to China’s smart diplomatic India’s rise. forays, India has pursued a balanced and wise policy of engaging China at every possible level while In a different league remaining on full alert in dealing with Chinese assertiveness. The problem that India’s political leadership has dealt with is the coming to terms with China’s manifest, One of the great positives of the India-China comprehensive national power. India was lulled into relationship over the past decade has been the complacency by the myth that the two civilisational increased business-to-business and people-to-people neighbours were somehow in the same league merely contacts between citizens of the two countries. A because both had a population of over a billion! Today, highlight of Mr. Modi’s visit will be a public meeting China’s economy is five times bigger than India’s. with the Indian community in China. While this draws attention to the increased presence of Indians in China, That China was already in a different league was made India can do more to facilitate the travel of Chinese to brutally clear to India even as early as in 1945 by none India. Millions of Chinese Buddhists would want to other than John Maynard Keynes who refused to give visit if India were to become a more attractive India the same voting share as that of China in the destination. Institutional and professional interaction newly formed International Monetary Fund. must also increase. Indian-Americans in the U.S. are Keynes’s student, J.J. Anjaria, representing the full of stories about how they find it easier to travel to government of India, fought for parity with China but and work with Chinese academics and businesses than failed to convince Keynes and the Americans. Then with Indian counterparts. As a U.S. analyst once put it, came the membership of the United Nations Security “China is a closed society with an open mind, Council and of the Nuclear Non-Proliferation India is an open society with a closed mind”. Treaty (NPT).

The time has come for the bilateral relationship to The ‘Asian century’ move well beyond official government-to-government

35 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) Recovering from the ignominy of the 1962 war, our were all continental powers. Multipolarity or political leadership went into a second bout of self- polycentric dispersal of power and prosperity defines delusion when it bought into the view, best expressed the normal state of the world. by China’s Great Moderniser, Deng Xiaoping, who famously told Rajiv Gandhi “An Asian Century is only If China succeeds in becoming both a predominant possible when India and China come together”. maritime power of the Indo-Pacific region and the predominant land power of the Eurasian land mass, it Deng said that in 1988 when China had not yet would of course emerge as the dominant world power demonstrated its capacity to emerge as the undisputed of the 21st century. China’s control of Tibet and its power of Asia. Today, few in China believe that as a sway over the Eurasian land mass, on the one side, and necessary precondition for the 21st century to be its control over South China Sea and the Indo-Pacific China’s. A new post-Deng generation of smart young region on the other become central to any quest for Chinese believe tomorrow belongs to them. In Chinese unipolar dominance. But that is not inevitable. President’s Xi Jinping’s words, they believe in the “Chinese dream” of a world in which China would If China seeks to dominate the land to its west and the once again be the cynosure of all eyes. waters to its east and south and thereby emerge as the hegemon of the century, it will force all other major How the India-China relationship develops in the powers, including Russia at some point, to come years to come will depend on whether the Chinese together and resist such a build-up. On the other hand, still believe in Deng’s view that the 21st century if China rejects such an imperialist view of history, and cannot be Asia’s without China and India coming truly believes in the creation of a multipolar world of together, or whether they come to imagine themselves the pre-imperial era, then it can work with India and to be the masters of this century, much like the other powers of Europe and Asia. What path China British were of the 19th and the Americans of the chooses for itself will determine how other nations 20th. respond to its rise.

Multipolarity and the world (important) Conclusion

Make no mistake. The 21st century will not be China’s For India, the task is cut out. At the end of a year of century alone nor will it remain America’s. The hectic diplomacy, Mr. Modi would have discovered geopolitical and geoeconomic conditions that enabled that all the king’s horses and all the king’s men cannot Britain to become ‘Great’ in the 19th century and put the Humpty-Dumpty of national power back in claim that century for itself, building a global empire, shape if its economy crumbles under the weight of bad and that enabled the U.S. to emerge as the dominant policy. A country’s international stature and world power of the 20th century do not exist for China power is built in its fields, factories, or anyone else today. The “unipolar” world of the classrooms, laboratories and British and American empires was a historical neighbourhoods. Not at the high tables of aberration. European scholarship wrongly viewed all diplomacy, nor on television. great powers in history as “global powers”. The global moment of many of them was short-lived. At best they

36 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) However, dealing with China is like dealing with the unknown. Rather than protocol-driven statements, one The Chinese fault line in foreign needs to look out for signals and nuances which are policy often better indicators of where the relationship is headed. Hence, references in the Joint Statement issued after Mr. Modi’s discussions with Chinese M. K. NARAYANAN THE HINDU leaders, to the “historic imperative for India and China to enrich their bilateral relations” and that “India- Foreign policy outcomes need a long period of China bilateral relations are poised to play a defining gestation and it would be naive to think that a single role in the 21st Century in Asia and Globally”, count visit would alter another country’s policies. This is for little. In specific terms, the Chinese have given no particularly true of countries like Sri Lanka and indication, whatsoever, that they would back India’s Nepal who tend to hedge their bets when it comes to claim to a seat in the United Nations Security Council; India versus China. Nevertheless, the energy and drive no assurance of helping India with nuclear Export on display has helped push the boundaries, enabling Control Regimes, and in overcoming the remaining India to demonstrate its determination to be the pre- obstacles to nuclear trade issues, and no signs of eminent power in the region. softening its stance on the vexed boundary question, Dealing with Beijing merely committing itself to maintaining peace and tranquillity in the border areas, pending a final The approach towards China has clearly needed to be resolution. As a keen observer, the Prime Minister more subtle and dexterous than has been the case. The would certainly have noted the absence of any reaction bonhomie on display during Chinese President Xi from the Chinese side during the visit, to both the Jinping’s visit to India in September 2014 and Mr. contents of the Joint Strategic Vision for the Asia- Modi’s visit to China in May 2015 was exceptional. Pacific and the Indian Ocean Region (unveiled by him Notwithstanding this, the hype and glamour have and U.S. President Barack Obama during Mr. Obama’s tended to obscure the reality that little progress on visit to India in January 2015), and to the deepening of most aspects of the relationship has taken place. Mr. India’s relations with Shinzo¯ Abe’s Japan. This is Modi’s recent visit did yield much in economic terms significant and disconcerting, compounded further by — agreements and business-related memoranda of the absence of any serious discussion on the situation understanding worth at least $22 billion. He also prevailing in Pakistan and West Asia, and the unveiled a vision of unlimited opportunities for implications for the region of Mr. Xi’s signature Chinese business and investment in infrastructure and initiative viz., the Maritime Silk Road. Apparently, the energy-related projects. The Joint Statement issued Chinese believe that there is not much scope for a after the visit is extremely positive on trade, meeting of minds on crucial issues. development and investment issues, and also on taking the necessary measures “to remove impediments to The Afghan vacuum bilateral trade and investment and facilitate greater market access”. Meanwhile, China continues to engage in a series of moves that are highly detrimental to India’s interests.

37 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) With Pakistan as the fulcrum of China’s approach to an aggressive China. This would need going beyond South Asia, China is now seeking to exploit the economic matters or viewing economic vacuum in Afghanistan, at a time when India’s interdependence as a means to limit the ambit of leverage there has been greatly reduced following China’s designs. His “Act East Policy” must involve Afghanistan President Ashraf Ghani taking charge. managing the “rise of China” which, with its China has also very recently hosted “secret talks” aggressive designs and military capabilities, is a cause between Afghan and Taliban leaders in China, which for deep concern to countries in the region. were attended by both Chinese officials and representatives of Pakistan’s Inter-Services In Mr. Modi, India has a leader who is credited with Intelligence (ISI). skills to penetrate the opaque. He must use his manifest skills in the coming years to create China also continues to stall India’s moves in the opportunities for a proper framework for a peaceful, United Nations to have Hizbul Mujahideen chief and political and strategic relationship across the region head of the ‘United Jihad Council’, Syed Salahuddin without succumbing or overreacting to fears of where declared as a “global terrorist”. The proposed China- China is headed. Pakistan Economic Corridor linking Western China with the Gwadar Port in Pakistan through Pakistan Occupied Kashmir (PoK), is an even more serious matter, directly impinging on India’s sovereignty and security. Its implications are far graver than the border dispute between India and China.

Enhancing strategic thinking

All this means that the element of strategic distrust between the two countries appears to be increasing. This will need to be tackled by Mr. Modi on a war footing over the next few years. Forging “strategic trust” does find a mention in the Joint Statement, but it is evident that frequent exchanges at the leadership level, regular visits at the level of heads of states/government, or enhanced military ties and joint military exercises and counter terrorist training (all reflected in the Joint Statement) would be hardly enough. Closing the gap that exists in the strategic thinking of the two sides will require a more sophisticated approach.

As Mr. Modi enters his second year in office, he needs to demonstrate that India can become a counterpoise to

38 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) Pivot to Persia

China’s long game in West Asia Beijing continues to claim its ‘equidistance principle’ remains intact in its West Asia policy. Mr. Xi chose to visit the three most powerful Muslim nations in the Summary by Aspire IAS region in his first trip to West Asia as president —  For decades China remained on the sidelines of Iran, Saudi Arabia and Egypt. These countries are West Asia’s stormy waters. important for China from an economic point of view.  The cornerstone of this engagement was non- 1. China is the world’s largest oil importer. Its interference: be it the Israeli-Palestinian conflict or demand for imported oil is expected to grow from the Saudi-Iran rivalry, the Chinese would continue 6 million barrels a day in 2014 to 13 million to sit on the fence. barrels a day by 2035. Much of this demand will  It didn’t want to get swamped in the complex be met by imports from West Asia. In 2015, Saudi geopolitics of the region at a time when its Arabia was China’s largest source of oil. Beijing primary focus was on economic development. has also sold intermediate range ballistic missiles  So it built ties with West Asian nations based on and DF-21 ballistic missile system to Riyadh. three principles — 2. Iran is important for the same reason. China  Secure energy supplies, would not like to be heavily reliant on Saudi  Expand markets for finished goods and Arabia for energy supplies and an immediate  Find investment opportunities — while alternative is Iran. Both countries also have strong leaving the U.S.’s primacy in the region defence cooperation. unchallenged. 3. Egypt is a major market for China’s machines and The contemporary Chinese foreign policy would electronics industries. Bilateral trade jumped close reveal that its overall approach to West Asia has to 14 per cent in 2014 to $11.62 billion. started changing. In recent years, Beijing has been Why Iran more active in global diplomacy concerning the region

Iran is vital for China’s continued rise.  (Iran nuclear deal);  Started taking strong positions at the UN 1. Its strategic location connecting West Asia and (Syria vetoes); and Central Asia is key to President Xi’s One Belt,  Begun flexing its military muscles (naval One Road initiative. exercise with Russia in the Mediterranean). 2. Iran offers immense investment opportunities for Chinese companies in several areas, particularly in This increased willingness to act as a regional power energy and infrastructure. in West Asia is in line with the larger 3. Iran’s energy resources help China diversify its changes President Xi Jinping is effecting in China’s import basket. foreign policy. 4. Moreover, the geopolitical value of Iran is immense for any power that seeks an ambitious

39 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) role in West Asia. The project, a key part of which will pass through 5. From China’s point of view, Iran is among the Gilgit-Baltistan in Pakistan Occupied Kashmir, is seen most stable countries in the region. And it’s the by many in Pakistan to have the potential of changing only major country in West Asia where the U.S. the country’s destiny — bringing unprecedented has practically no influence. growth, jobs and prosperity.

During Iran’s isolation era, China adopted a dual What exactly is the CPEC project? approach: it supported UN resolutions against Iran’s nuclear programme while expanding economic and It refers to a clutch of major infrastructure works security cooperation with Tehran. During this period, currently under way in Pakistan, intended to link China overtook the European Union as Iran’s largest Kashgar in China’s Xinjiang province to Gwadar deep trading partner. Chinese-Iranian trade increased from sea port close to Pakistan’s border with Iran. Several about $3 billion in 2001 to over $50 billion in 2014. other road, rail and power projects are associated with the corridor, and the project seeks to expand and So China is actually playing a long game in West Asia. upgrade infrastructure across the length and breadth of Even when complying with international sanctions, it Pakistan, and to widen and deepen economic ties with expanded ties with Iran so that it would be better its “all-weather friend”, China. Chinese firms will placed than any other power in a post-sanctions Iran. invest just under $ 46 billion in the project over six (India did the opposite, and failed to retain the balance years — including $ 33.8 bn in energy projects and $ between Western pressure and ties with Iran during the 11.8 bn in infrastructure, Reuters reported in sanctions era.) November 2014, quoting an agreement signed by the two countries during a visit by Pakistan Prime Minister But the Chinese position also bears challenges. Nawaz Sharif to China earlier that month.

1. After the nuclear deal, European companies are How does Pakistan stand to gain? keen to do business with Iran. President Hassan Rouhani is now on an expansive European visit The CPEC can theoretically be a gamechanger for doing deals. Iran will be less reliant on China for Pakistan. At a time when terrorism has severely economic benefits in coming years. affected Pakistan’s prospects of foreign investment, 2. China will be forced to take stronger positions in the $ 46 bn promised by China is three times the total West Asian conflicts such as the Iran-Saudi rift if FDI it has got in the last decade. The project is it wants to play a larger role in the region. estimated to directly create some 700,000 jobs up to 2030, and speed up GDP growth significantly. But the evolution of China’s foreign policy over the Investors will be backed by Beijing and Chinese past few years shows that its risk appetite is growing, banks, and Pakistan will not pick up any more debt in commensurate with its global position — something the process. The bulk of the investment will be in that’s a must for involvement in West Asia. energy. $ 15.5 bn worth of coal, wind, solar and hydro energy projects will come online by 2017 and add China-Pakistan Economic Corridor: 10,400 megawatts to the national grid, Dawn and Reuters reported, quoting officials. In all, Pakistan

40 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) expects to add 16,000 MW by 2021, and reduce power The development of Kashgar as a trade terminus will shortage by 4,000-7,000 MW. The shortage of power reduce the isolation of the restive Xinjiang province, has been a huge issue in Pakistan, including in deepen its engagement with the rest of China, and raise elections, and has sparked violent protests. its potential for tourism and investment. Central Asian republics are keen to plug their infrastructure networks The CPEC deal also includes $ 5.9 bn for road projects to the CPEC — this will allow them access to the and $ 3.7 bn for railway projects, all to be developed Indian Ocean, while contributing to the OBOR by 2017. A $ 44 million optical fibre cable between initiative. China and Pakistan will be built too. Pakistani newspapers have been reporting great enthusiasm for For Chinese companies, the massive scale of the CPEC the project, including domestic investment aligned to provides investment opportunities for several years to the CPEC’s goals. come. As per the terms of the agreement, they will be able to operate the projects as profit-making entities. Besides the potential for growth, power and jobs, Pakistan also expects the CPEC to bind it in an even Are there any problems? tighter embrace with close friend China, giving it greater strategic leverage with both India and the There is scepticism in some quarters over the extent of United States in the Indian Ocean region. the real gains that would come Pakistan’s way. Voices in Balochistan — where Gwadar is — have been And what’s in it for China? demanding that Chinese investors spell out exactly how they would be benefitted. Both Balochistan and Much more than what there is for Pakistan, many feel. Khyber Pakhtunkhwa have complained that power The CPEC is part of China’s larger regional projects that ought to be theirs have gone to Punjab. transnational ‘One Belt One Road’ (OBOR) initiative, The western arm of the CPEC, important for the whose two arms are the land-based New Silk Road and development of Balochistan and KP, remains the 21st century Maritime Silk Road, using which uncertain. And yet, cooperation among the provinces Beijing aims to create a Silk Road Economic Belt — traditionally not one of Pakistan’s strong points — sprawled over a large patch of Asia and eastern is key to the success of the CPEC. Europe, and crisscrossed by a web of transport, energy supply and telecommunications lines. The unpredictable security situation remains a huge concern, especially in KP and Balochistan. A major Gwadar lies close to the Strait of Hormuz, a key terrorist attack on a CPEC project will be a setback, oil shipping lane. It could open up an energy and trade and Pakistan has deployed 15,000 special security corridor from the Gulf across Pakistan to western forces for Chinese nationals and companies along the China, that could also be used by the Chinese Navy. corridor. There is some concern about the Uighur The CPEC will give China land access to the Indian militants in Xinjiang as well. Ocean, cutting the nearly 13,000 km sea voyage from Tianjin to the Persian Gulf through the Strait of How has India reacted? Malacca and around India, to a mere 2,000 km road journey from Kashgar to Gwadar.

41 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) In April 2015, however, TCA Raghavan, High by history. Now, thanks to advances in trade, transport Commissioner to Pakistan, was quoted by PTI as and technology, the geography of this region can be saying, “India has no worry over the made an ally to create a new history of shared construction of Pakistan-China Economic prosperity, progress and peace, in addition to a Corridor as an economically strong Pakistan revitalisation of age-old, cultural-spiritual- would bring stability in the region.” civilisational ties.

Exclusive This is what has been envisaged, on a broader expanse of Asia-Europe-Africa connectivity, by the super- Charting a new Asian history ambitious ‘Silk Road Economic Belt’ and the ‘21st Century Maritime Silk Road’ plans that have been All history is geographically located and influenced. unveiled by China’s President Xi Jinping. India also Similarly, all geography is shaped, defined and has been evolving its own regional cooperation redefined by history. This is evident not only from initiatives such as ‘Mausam’ and the ‘Spice ‘Route’ in world history but also from the history of Asia — the the Indian Ocean region and beyond, although these glory of old Asia, its decline in colonial times, and its are nowhere as comprehensively projected, nor backed more recent rise again. with requisite investments yet, as China is doing in the case of its ‘One Belt One Road’ vision. [The The dialectic between history and geography manifests ‘Mausam’ project envisages the re-establishment of itself through the interplay of three factors — India’s ancient maritime routes with its traditional geopolitical, geo-economic and geo- trade partners along the Indian Ocean. It was launched cultural/civilisational. In the case of Asia, for nearly in June 2014. The ‘Spice Route of India’ visualises the three centuries, the geopolitical and geo-economic India-centered link-up of historic sea routes in Asia, realities were negatively impacted by Europe and the Europe and Africa.] West in general. However, that is largely a thing of the past. Asia has begun to write its own destiny now. The Be it China’s strategy or India’s, neither can fully or 20th century was marked by Asia’s liberation from smoothly become a reality in South Asia without a colonial rule and imperialist subjugation. The history strong partnership between the world’s two most of the 21st century will chiefly be the story of Asia’s populous and civilisationally rich nations.The key to rise, a process that is already underway in some parts the success of this strategy is the early implementation of the continent. The other underdeveloped parts of of the Bangladesh-China-India-Myanmar (BCIM) Asia, especially in South Asia and South-East Asia, are corridor, which envisages a network of modern road, craving to become a part of this story. railway, port and communication and trade connectivities in a region stretching from Kolkata to Geography as ally of history Kunming in southern China. Even though BCIM is one of the richest regions in the world — in terms of Until now, the political boundaries carved out on the natural and human resources and home to nearly 500 geography of South Asia and South-East Asia had million people — it is also one of the least integrated become barriers for the countries in this vast region to areas, economically as well as socially. overcome socio-economic underdevelopment caused

42 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) Before history changed its map in the last century, the from Myanmar. Tourism too will get a boost. people of this region not only shared a geography Bangladesh attracts less than one million foreign without rigid borders, but also close racial, linguistic, tourists in a year. For India’s north-eastern States, the cultural and spiritual interconnections. Sadly, while the figure is less than 2,00,000. Contrast this to the fact neighbouring Association of South East Asian Nations that Vietnam attracts 8 million, Cambodia 5 million, community has become a zone of prosperity, the and Thailand 26 million foreign tourists annually. BCIM region (barring southern China) is mostly underdeveloped, India’s seven north-eastern States Prime Minister Narendra Modi should prioritise BCIM providing a stark example. because it can not only be a game-changer for this region in Asia, but is also pivotal for his ‘Act East’ The potential of BCIM Policy.

India will benefit from BCIM, which was Cooperation possible, essential conceptualised 16 years ago, in many self-evident ways. For instance, Agartala is 1,650 kilometres from In the last week of August, I participated in a Kolkata when one travels through the ‘Chicken’s conference in Beijing on BCIM and its interconnection Neck’, the narrow strip of land north of West Bengal, with “One Belt One Road”, organised by the Institute which is only 23 km wide. In contrast, the distance of World Economics and Politics (IWEP). Besides gets reduced to just 350 km if the journey passes arguing for BCIM’s expeditious implementation, I through Bangladesh. Similarly, India’s north-eastern emphatically said that the logic of India-China regional States have no access to the sea, even though Tripura’s cooperation needs to be extended westwards through southernmost border town, Sabroom, is only 72 km India by connecting BCIM with the ambitious China- from Chittagong, an international port in Bangladesh. Pakistan Economic Corridor (CPEC). During Mr. Xi’s At least one major reason behind Kolkata’s economic visit to Islamabad in April 2015, China pledged to decline after India’s independence is its unnatural invest $46 billion on CPEC — roughly one-fifth of isolation from its natural eastern neighbourhood. Apart Pakistan’s annual GDP. CPEC’s main from denting the development of West Bengal and infrastructural corridor, running over 3,000 km, India’s north-east, this has hurt Bangladesh too. will connect Kashgar in China’s Xinjiang province Landlocked from three sides, and with only sea access to the Gwadar port in Pakistan’s Balochistan to the rest of the world, this potential economic province. India should welcome this initiative. CPEC powerhouse (its population of 160 million is greater will no doubt boost Pakistan’s progress and prosperity. than that of Germany and France combined) is facing It will also help Pakistan tackle many social and other severe constraints in its overall development. internal problems, including the menace of religious extremism and terrorism. It is in India’s vital interest to BCIM also benefits India and Bangladesh in other see a stable, prosperous, progressive, united and ways. With natural gas reserves of about 200 trillion democratic Pakistan, which is at peace with itself and cubic feet, the largest in the Asia-Pacific, Bangladesh also at peace with all its neighbours. could become one of the major energy exporting countries. Yet, today it imports 500 MW of electricity However, CPEC in its present form, unlike BCIM, from India and is planning to import an equal amount does not comprehensively capture the benefits of

43 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) regional cooperation. It needs to be extended into account of American pressure. However, with the landlocked Afghanistan, which is in urgent need of likely thaw in relations between Iran and the United national reconstruction after several decades of war. It States after the Iran nuclear deal, and with China should also be extended into India through Kashmir playing the driver’s role in CPEC (and hence in a and Punjab, the two provinces which are today divided position to exert pressure on Islamabad), the Iran- between India and Pakistan. Its linkage with the Indian Pakistan-India gas pipeline can indeed become a side of Kashmir is especially important. At present, reality. Thus, the CPEC-BCIM interconnection many in India have objected to CPEC passing through has the potential to immensely bolster India’s a part of Pakistan Occupied Kashmir (PoK), on the energy security both on the western and ground that it is disputed territory. We should know eastern flanks. that India is in no position to stop CPEC. A better strategy would be to turn this reality into an advantage Indian critics of BCIM and CPEC state that China by proposing the construction of a sub-corridor cannot be trusted, and cite the divergent positions of bringing CPEC into the Indian side of Kashmir and the two countries on Arunachal Pradesh and PoK. I beyond. This will help make the disputed India- firmly believe that India’s concerns can be better Pakistan border in Kashmir largely irrelevant, a addressed by constructively engaging, rather than by solution that India under Prime Minister Manmohan trying to confront, China. Mutually beneficial regional Singh had been actively pursuing with Pakistan. cooperation builds trust, and trust in turn helps nations Simultaneously, extending CPEC into India through resolve their disputes amicably. Moreover, when two Punjab and Sindh will make the remaining stretches of big nations such as India and China cooperate in a the India-Pakistan border porous with modern regional cooperation framework, it generates transport and trade connectivities. In addition, sea confidence among other countries in the transport linking Pakistan, the western coast of India, neighbourhood. They become crucial stakeholders in Sri Lanka, the eastern coast of India, Bangladesh and making India and China stable and irreversible. It may Myanmar should be strengthened. also be noted here that China’s stakes in cooperating with India have become higher because of its slowing Enhancing security economy.

Interconnecting CPEC, with its extensions into Recent months have produced three encouraging signs Afghanistan and India, and BCIM is not really a novel of an India-China convergence on the issue of regional idea. It is simply a 21st century version of the 16th cooperation. In the joint statement issued after Mr. century road, built by Shershah Suri, the Afghan Modi’s visit to China in May this year, “the two sides emperor, connecting what later became the capitals of welcomed the progress made in promoting cooperation four countries — Bangladesh, India, Pakistan and under the framework of the BCIM”. Second, Beijing Afghanistan. As a new component of this regional has expressed its willingness to work with India to cooperation architecture, the Iran-Pakistan gas explore the synergy between its own “21st Century pipeline, which is already a part of CPEC, should be Maritime Silk Road” plans and India’s “Mausam” extended into India. New Delhi has until now project with a view to addressing New Delhi’s remained cool to this flagship proposal by Tehran, strategic concerns and gaining “common benefits”. partly due to perceived security issues and partly on Third, India has become an important founding

44 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) member of the Beijing-promoted Asian Infrastructure grown stronger. The CPEC project as it stands, seems Investment Bank, which can fund BCIM, CPEC and to discard Afghanistan completely from the project. other projects. Hence, the emerging regional This could become a catastrophic mistake, as the cooperation agenda in South Asia, if pursued with Afghan leadership may look towards this act as a mark sagacity and sincerity, promises to become a win-win of disrespect. On the contrary, a link to Central Asia game promoting development and security for all. via Afghanistan will add a new dimension to the scope of the CPEC project.

Leaving out Afghanistan could work to India’s benefit India and the new great game in the long run; India could use this opportunity to (Business Line) solidify its relationship as an all-weather partner. While the Chinese encircle India, India may end up The signing of the Chabahar agreement has set in encircling Pakistan. motion the new great game. The great game that started between the Russian and the British empires in Many in Pakistan consider the Chabahar agreement to 1812, is now witnessing the emergence of rising be peanuts compared to CPEC, but they are aware that protagonists India and China, both young, economic India has gained a toe-hold in the region. India will and military powerhouses with ancient cultural ties to never allow China to dominate the IOR but instead the region. would like to play the role of its guardian.

China has emerged as the Asian champion and with The Chabahar project which was proposed to be the help of a nuclear-armed Pakistan, is beginning to developed by India in 2004 suffering inordinate delays assert its dominance in the Indian Ocean Region may have come to see the light of day at the nick of (IOR). By announcing the massive $46 billion CPEC time.By announcing the much-delayed Chabahar (China Pakistan Economic Corridor) project, due to be agreement, India has seemingly outflanked the completed in three years, the Chinese have made their Chinese. intentions clear of a permanent entry into the IOR. CPEC also makes sure that China’s entry in POK is Chabahar port is less than 200 km from the port of pervasive and powerful. Gwadar. India aims to connect the Chabahar port to the 218-km Zaranj-Delaram highway in Afghanistan The CPEC project cuts the 12,000-km sea voyage from which it built at a heavy cost. Tianjin to the Persian Gulf through the Strait of Malacca and around India, to a 2,500-km road journey While it is likely that the mammoth CPEC project may from Kashgar to Gwadar. affirm Pakistan’s position as a vassal state in the new great game, India, on the other hand, has Iran as an Solidifying relationships equal partner. This status will put the onus of its security in the hands of the Iranians to a large extent The call from Afghan officials to link the CPEC but India too will have to protect its investments and project to the Afghanistan-Pakistan highway has also supply routes across the region.

45 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) Although India’s security role on the ground remains Will the story repeat itself this time with China? to be determined, India will most certainly have a formidable naval presence to keep an eye on the It is hoped that Pakistan will focus on economic maritime supply routes on which India’s energy needs benefits rather than use this as an opportunity for one- will be heavily dependent in the future. India has been upmanship against India. After all, Pakistan still steadily augmenting its maritime aircraft and retains its stranglehold on the deep factional divisions submarine fleet as well as aircraft carrier groups. It has within Afghanistan and is likely to use them to disrupt also put in place its own satellite navigation system, Indian ambitions in the region. GAGAN (GPS aided geo augmented navigation), and operates the Farkhor airbase in Tajikistan. The new Taliban chief Mawlawi Hibatullah Akhundzada and the all-powerful Haqqani network are Power play heavily influenced and controlled by the Pakistani leadership. The supply of weapons, ammunition to the India has also cleared the sale of the highly potent many factional groups is controlled by the ISI (Inter standoff Brahmos missile system to Vietnam, Service Intelligence), an important arm of the Pakistani indicating that India is willing to take on China head army. on. The Afghan balance The emerging power play between the rising Indian and the Chinese blue water navies will give a new How will the two deals impact Afghanistan which has meaning to the phrase ‘gunboat diplomacy’ in the early to give right of way for the success of both projects? decades of the 21{+s}{+t} century. Afghanistan will have to do a balancing act and should India has to regain at least part of its glory as a demand its share in the CPEC project. Afghanistan maritme power when the Cholas conquered distant cannot continue to remain a murky battle ground lands in the far east over a thousand years ago. perpetually, it must make sure the approach is dictated only by the long-term goal of peace and prosperity of The Obama administration has not opposed the Indian the Afghan people. Iran, after decades of sanctions, is investments in Chabahar: clearly the US is aware that eager to join the comity of nations as a full partner. It, India will assert its foreign policy to suit its economic too, must utilise this opportunity to promote its and geopolitical ambitions. Perhaps the US is economic development long mired in sanctions and beginning to see India as a credible deterrent to controversies. aggressive Chinese expansion in the IOR. These two projects will benefit the entire global Pakistan’s role is perhaps the most important in this community by fostering trade and easier movement of new game. Its role as the most important US ally in the people at greatly reduced cost. Therefore the world war on terror lasting well over a decade, give it a must view them in this context, rather than objects of leverage that no other nation can hope to achieve soon power play in a troubled region. with respect to Afghanistan. It must be recognised that after the loss of so many

46 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) lives here, the world owes to them an opportunity for  Pakistan Factor development and peace  Afghanistan Factor  South China Sea issue and India  OBOR: Impact on India  Trade Deficit  Dumping (Cheap Imports)

India-China trade deficit swells Common Interest 34% to $48 billion  BRICS (New Development bank) Trade deficit between India and China increased about  AIIB 34 per cent to USD 48.43 billion in 2014-15 from USD  36.21 billion in the previous fiscal G 20 (Terrorism)

India’s concern on the rising deficit has been discussed The Manama Declaration – with China at various fora, including the highest level of leadership of the two countries India and the Arab League vowed to combat terrorism “In order to boost exports and address the widening and called for developing a strategy to “eliminate” its trade deficit with China... the government has taken a sources and its funding as External Affairs Minister number of initiatives to identify specific product lines Sushma Swaraj made a strong pitch for delinking with export potential, actively taking up issues relating religion from terrorism. to tariff and non-tariff barriers in bilateral meetings and institutional dialogues

India has consistently sought greater market access for India’s exports to China, especially in fields like Application - India can pressurize China , through pharmaceuticals, agriculture bovine meat and IT Arab League on couter-terrorism front as - services.

There are three land customs station on India-China China blocked India’s bid to put Pakistan-based border — Gunji (Uttarakhand), Sherathang/Nathu-La terrorist Masood Azhar’s on UN Security Council (Sikkim) and Shipki-La/Namgia (Himachal Pradesh). blacklist of groups linked to al-Qaeda

Sources-

Summary The Hindu The BusinessLine Indo-China Issues The Indian Express  Problem of Tibet & Dalai Lama. southasiaanalysis.org  Two border disputes  Domination of Indian Ocean PIB

47 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1) Ministry of External Affairs

48 Newspaper Analysis Programe TM Additional Note-5 (UPSC PTcumMAINS-2020) (China foreign policy-1)