Month: September 2018

Will Mounting Contestations in the Economic Domain Burden Chinese Innovation and Growth?

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Uday Khanapurkar, Research Intern, Institute of Chinese Studies

China and the USA, the world’s two largest economies, are currently embroiled in an acrimonious two-front geo-economic tussle. On the trade front, a 10 per cent tariff on 200 billion USD of Chinese exports to the USA came into effect on September 24, 2018; with President Trump threatening further duties on 267 billion USD should the Chinese retaliate. On the financial front, the USA enacted a law in August, 2018, aimed at strengthening the Committee on Foreign Investment in the United States (CFIUS) in order that it may undertake more meticulous scrutiny of Chinese investments in the US and prevent undesirable technology transfers. Combined, these contestations in the economic domain put China under significant pressure.

To be sure, China is at a precarious stage in its economic development. Rising wages and an aging population entail that low-quality manufacturing and assembly cannot generate more growth. Investment spending experiences decreasing returns to scale. Continue reading “Will Mounting Contestations in the Economic Domain Burden Chinese Innovation and Growth?” →

Gwadar, in China-Pakistan relations

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Saurav Sarkar, Research Assistant, Institute of Chinese Studies

Pakistan’s Chief of Army Staff General Qamar Javed Bajwa went to China on September 16 on a three day visit to discuss issues of bilateral and regional significance. Prior to this visit, the Imran Khan government sent mixed signals on the flagship project of the Belt and Road Initiative (BRI) – the China-Pakistan Economic Corridor (CPEC). The visit was a gesture on the part of Pakistan to try and contain the fallout of the statements reportedly made by senior officials in the Pakistani government. President Xi in his meeting with General Bajwa pledged China’s continued support to Pakistan as a ‘strategic partner’ and said that opponents of CPEC and BRI will ‘never succeed.’ General Bajwa reciprocated by saying that Pakistan is committed to thwart any plan by other parties to sabotage CPEC.

Despite minor resentments the core basis of the CPEC in particular, and China-Pakistan relations in general, would continue to persevere. Even the risks associated with Chinese nationals in Pakistan such as terrorist attacks and kidnapping are something that China seems willing to put up with. CPEC in China-Pakistan ties is a product of the relationship and not the relationship.

CPEC – more than just economics

China and Pakistan have continued to expand their security ties ever since the opening of the Karakoram Highway in 1963-64. CPEC also utilises this highway in traversing from Gilgit-Baltistan to Xinjiang. The southern tip of CPEC lay at Gwadar, a deep water port  in Baluchistan province, which is significantly closer to Iran than to Karachi in Pakistan.

The port’s strategic value cannot be stated enough. It is good for submarine operations due to its unique bathymetries and it also provides Continue reading “Gwadar, in China-Pakistan relations” →

China’s tryst in the South Pacific

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Prarthana Basu, Research Assistant, Institute of Chinese Studies

The focus of attention of geopolitics now lie greatly in the Indo-Pacific region, especially the South Pacific islands, which have gained prominence over the years due to varied reasons such as: climate change, geo-strategic importance etc. Even though the South Pacific islands are geographically located far-off in the middle of the Pacific Ocean they occupy a large portion which has proven to be of great strategic importance for all the major contending powers. Currently, this area shows great power struggle which is two-pronged: China and Taiwan and China and the US. Although Australia and Britain also happen to be major players trying to spread their influence over these islands, the South Pacific now happens to be one of the highly contested regions among these powers.

The allegiance of the South Pacific countries is grossly divided between Taiwan and China. While countries such as Kiribati, Marshall Islands, Palau, Nauru, the Solomon Islands and Tuvalu have established diplomatic ties with Taiwan, China is diplomatically recognized by the Cook Islands, Fiji, Vanuatu, Tonga, Samoa, Papua New Guinea, Federal States of Micronesia and Niue.

Chinese President Xi Jinping intends to increase his sphere of influence among those six countries which still remain under the ambit of its ‘breakaway province’, by upholding a summit for all the South Pacific countries in the month of November (dates if available) in New Papua Guinea, Continue reading “China’s tryst in the South Pacific” →

Nepal’s foreign policy options in its immediate neighbourhood

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Gunjan Singh, Research Associate, Institute of Chinese Studies

Nepal was one of the first countries to welcome the Chinese Belt and Road Initiative (BRI). It expressed its desire to be a part of the project hoping to benefit from the investments in infrastructure. This was perceived as an attempt by Nepal to reduce its dependence on its southern neighbor India.

In the past two decades, there has been an increasing effort within the Nepalese leadership to find ways to get out of the Indian sphere of influence. The most logical alternative, then, is China.

Nepal is a landlocked, small Himalayan nation, which is looking for ways to assert its “independent” foreign policy by maneuvering between India and China. This, in turn, is creating a lot of concern within the Indian foreign-policymaking circle. However, the most pertinent question is whether Nepal can ever be able to move out of the Indian sphere of influence completely Continue reading “Nepal’s foreign policy options in its immediate neighbourhood” →

Tsai’s Cross-Straits Conundrum

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Gunjan Singh, Research Associate, Institute of Chinese Studies

The rise of China to an economic and military power has had the most significant effect on its relationship with Taiwan. China has always been assertive about the use of One-China Principle in its dealings with Taiwan. However, the change of the political system in Taiwan from an authoritarian to a democratic system has further complicated this relationship. China was comfortable dealing with Taiwan until it was dominated by the single Kuomintang Party but the recent development of a vibrant multi-party democracy in Taiwan appears confusing to China. To face such a problematic issue when it comes to dealing with its own ‘getaway province’ is rather ironical. The oscillation between reunification, supporting Kuomintang, and a pro-independence Democratic People’s Party (DPP) government in Taipei has led to a very muddled policy in Beijing towards Taiwan.

Under the leadership of Xi Jinping there have been very strong assertions towards ‘not giving up’ even an inch of its territory (indicating towards Taiwan, which is currently under the DPP rule). The 19thParty Congress report provided some insights into the upcoming Chinese policies towards Taiwan under Xi Jinping. Continue reading “Tsai’s Cross-Straits Conundrum” →