ISSN 0971-9318 HIMALAYAN AND CENTRAL ASIAN STUDIES (JOURNAL OF HIMALAYAN RESEARCH AND CULTURAL FOUNDATION) NGO in Special Consultative Status with ECOSOC, United Nations Vol. 17 No. 3-4 July-December 2013 Political change in China and the new 5th Generation Leadership Michael Dillon Financial Diplomacy: The Internationalization of the Chinese Yuan Ivanka Petkova Understanding China’s Policy and Intentions towards the SCO Michael Fredholm Cyber Warfare: China’s Role and Challenge to the United States Arun Warikoo India and China: Contemporary Issues and Challenges B.R. Deepak The Depsang Standoff at the India-China Border along the LAC: View from Ladakh Deldan Kunzes Angmo Nyachu China- Myanmar: No More Pauk Phaws? Rahul Mishra Pakistan-China Relations: A Case Study of All-Weather Friendship Ashish Shukla Afghanistan-China Relations: 1955-2012 Mohammad Mansoor Ehsan HIMALAYAN AND CENTRAL ASIAN STUDIES Guest Editor : MONDIRA DUTTA © Himalayan Research and Cultural Foundation, New Delhi. * All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted by any means, electrical, mechanical or otherwise without first seeking the written permission of the publisher or due acknowledgement. * The views expressed in this Journal are those of the authors and do not necessarily represent the opinions or policies of the Himalayan Research and Cultural Foundation. SUBSCRIPTION IN INDIA Single Copy (Individual) : Rs. 500.00 Annual (Individual) : Rs. 1000.00 Institutions : Rs. 1400.00 & Libraries (Annual) OVERSEAS (AIRMAIL) Single Copy : US $ 30.00 UK £ 20.00 Annual (Individual) : US $ 60.00 UK £ 40.00 Institutions : US $ 100.00 & Libraries (Annual) UK £ 70.00 Himalayan and Central Asian Studies is included within the ProQuest products Himalayan and Central Asian Studies is included and abstracted in Worldwide Political Science Abstracts and PAIS International, CSA, USA Subscriptions should be sent by crossed cheque or bank draft in favour of HIMALAYAN RESEARCH AND CULTURAL FOUNDATION, B-6/86, Safdarjung Enclave, New Delhi - 110029 (India) Printed and published by Prof. K. Warikoo on behalf of the Himalayan Research and Cultural Foundation, B-6/86, Safdarjung Enclave, New Delhi-110029. Distributed by Anamika Publishers & Distributors (P) Ltd, 4697/3, 21-A, Ansari Road, Daryaganj, New Delhi-110002. Printed at Nagri Printers, Delhi-110032. EDITORIAL ADVISORY BOARD Lt. Gen. (Rtd.) Hridaya Kaul Prof. Harish Kapur New Delhi (India) Professor Emeritus Graduate Institute of International Studies Geneva (Switzerland) Prof. Vitaly Naumkin Prof. Devendra Kaushik Director Gurgaon, Haryana (India) Institute of Oriental Studies Moscow (Russia) Dr. Lokesh Chandra Prof. Priyankar Upadhyaya Director Director International Academy of Malaviya Centre for Peace Indian Culture Research New Delhi (India) Banaras Hindu University Varanasi (India) Prof. Kh. Umarov Dr. Sanjyot Mehendale Head, Institute of Economy Executive Director and Development Caucasus and Central Asia Program Tajik Academy of Sciences University of California Dushanbe, Tajikistan Berkeley, USA Prof. R. S. Yadav Prof. T.S. Sarao Chairman Head Department of Political Science Department of Buddhist Studies Kurukshetra University University of Delhi Kurukshetra Delhi (India) Haryana (India) CONTRIBUTORS Prof. Mondira Dutta is Chairperson, Centre for Inner Asian Studies, Jawaharlal Nehru University, Delhi. Dr. Michael Dillon was founding Director, Centre for Contemporary Chinese Studies, University of Durham, UK. Currently he is Consultant, Europe China Research and Advice Network (ECRAN), based at the Royal Institute of International Affairs, London. Late Dr. Ivanka D. Petkova was Deputy Dean, Technical University, Sofia, Bulgaria. Dr. Michael Fredholm who is associated with the Stockholm International Program for Central Asian Studies (SIPCAS), is an historian and defence analyst who has written extensively on the history, defence strategies, security policies, and energy sector developments of Eurasia. His recent books include The Shanghai Cooperation Organization and Eurasian Geopolitics (Copenhagen: NIAS Press, 2013). Arun Warikoo is a cyber security specialist based in the United States. His areas of research include cyber security and security metrics. Manuel Rocha-Pino is associated with Autonomous University of Barcelona, Spain. Dr. K. Warikoo is Professor of Central Asian Studies, School of International Studies, Jawaharlal Nehru University, New Delhi. Dr. B.R. Deepak is Professor of Chinese and China Studies and Chairperson, Centre of Chinese and Southeast Asian Studies, Jawaharlal Nehru University. He has been Asia and Nehru Fellow, Chinese Academy of Social Sciences, China. Dr. Baatr U. Kitinov is Associate Professor, Peoplesí Friendship University of Russia, Moscow, Russia. Dr. Amit Ranjan is Research Fellow, Indian Council of World Affairs, New Delhi. Deldan Kunzes Angmo Nyachu born in Leh, Ladakh is a doctoral research scholar in the School of International Studies, Jawaharlal Nehru University, New Delhi. Dr Rahul Mishra is a Research Fellow, Indian Council of World Affairs, New Delhi. Earlier he was associated with Institute for Defence Studies & Analyses, New Delhi for four years. In 2012-13, Dr Mishra was a Visiting Fellow at S. Rajaratnam School of International Studies, Nanyang Technological University (Singapore). In 2011, Dr Mishra was affiliated with National University of Singapore (Singapore) as a Visiting Fellow. Ashish Shukla is an ICSSR Doctoral Fellow at the Centre for South Asian Studies, Jawaharlal Nehru University, New Delhi. He is the author of Deadly Connection: The Cost of Becoming a Frontline State (Delhi, Vijaya Books, 2013). Mohammad Mansoor Ehsan of Afghanistan is a doctoral research scholar in the School of International Studies, Jawaharlal Nehru University, New Delhi. Said Reza ëHuseinií is a research scholar at Department of History, Jawaharlal Nehru University, New Delhi. HIMALAYAN AND CENTRAL ASIAN STUDIES Vol. 17 No. 3-4 July-December 2013 CONTENTS Editorís Page 1-4 Political change in China and the new 5th Generation Leadership Michael Dillon 5-22 Financial Diplomacy: The Internationalization of the Chinese Yuan Ivanka Petkova 23-37 Understanding Chinaís Policy and Intentions towards the SCO Michael Fredholm 38-60 Cyber Warfare: Chinaís Role and Challenge to the United States Arun Warikoo 61-71 The China-European Union Strategic Partnership and the Shanghai Cooperation Organization Manuel Rocha-Pino 72-94 Central Asia - China Cooperation: Lessons for India K. Warikoo 95-109 India and China: Contemporary Issues and Challenges B.R. Deepak 110-132 India, China and Russia: Civilizational Links over Political Processes Baatr U. Kitinov 133-149 IndiañChina Strategic Rivalry: Has the Dragon Replaced the Elephant in South Asia? Amit Ranjan 150-170 The Depsang Standoff at the India-China Deldan Kunzes Border along the LAC: View from Ladakh Angmo Nyachu 171-182 China- Myanmar: No More Pauk Phaws? Rahul Mishra 184-205 Pakistan-China Relations: A Case Study of All-Weather Friendship Ashish Shukla 206-229 Afghanistan-China Relations: 1955-2012 Mohammad Mansoor Ehsan 230-250 Medieval Tibet in Perso-Islamic Sources Said Reza ëHuseinií 251-283 Editor’s Page While China is rising as a major international power eager to assume and assert a bigger role in world affairs, Chinese leadership is attaching equal rather even more importance to address domestic concerns simultaneously with the expansion and consolidation of its infrastructure, industry, economy, science, technology, education and health sectors. Social cohesion, national unity, political stability, sustainable development, energy security, financial stability, containing price rise, employment, better education and health services and ecological protection are on the constant agenda of the Chinese leadership. New approach is to turn Chinese economic growth from quantity based to quality oriented development by promoting indigenous scientific and technological innovations. While retaining its basic structure, functions and doctrines the Chinese Communist Party is adapting to the new social, economic and political realities to meet the challenges of modernization and globalization. The Chinese are acutely conscious of their history and importance as a major power and they never let their countryís interests down, with Han nationalism binding the nation together. China has efficient, organized, disciplined, committed, innovative, enterprising and educated work force, ever eager to remain ahead of time. China overtook Japan to become the worldís second largest economy having recorded a GDP of 5,365 billion US dollars in the year 2010 (Japan recorded GDP of 5,273 billion US dollars), though its per capita income of about 3,800 US dollars is still way behind Japan and USA. China emerged as worldís top exporter of manufactured goods and by organizing Shanghai World Expo-2010, China showcased its economic prowess to the outside world. China has become 3rd country after USA and Russia to have developed Beidou-independent satellite navigation system, which will be Chinaís eye from the space over the globe. This satellite covers Asia and Pacific and seeks to cover the entire world by 2020. China is investing 700 billion yuan for building 13, 000 kms high speed rail network from north to south and east to west China, so that it would take only five hours to travel from Beijing to Shanghai or Beijing to Guangzhou. Notwithstanding all round and fast development of infrastructure-