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Geopolitics of Tibet’s Rivers for Lower Riparian India

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Yash Johri, Research Intern, ICS
Shivi Sanyam, Advocate and former Judicial clerk, Supreme Court

Source: AsiaNews

Grave hostilities in Ladakh along the line of actual control (LAC) between India and China and actions on the part of government and business have dominated public discourse. External developments apart from those relating to Pakistan are rarely an issue in the domestic narrative but brewing anti-China sentiment amongst several parts of the populace has positioned our eastern neighbor in the national consciousness. While all eyes are fixated on the game of brinkmanship being played out on the LAC, it is an opportune moment to highlight another important area of contention: China’s management of Tibet’s rivers and the plausible impact on lower – riparian countries like India, this matter has arisen in the past and will certainly arise prominently, in the future.

We need to be better informed about this issue, therefore, it’s important to aggregate the cross-section of experience that exists on the issue from varying fields of business, government, law, climate studies, agriculture and others via analyses and interactions. As a student of China and Sino-Indian ties, one feels there are is a lack of dedicated efforts in the country to understand and prepare for the numerous complexities of our relationship with our eastern neighbor, especially with regard to the issue of management of the waters of Tibet. There is an urgent need to generate greater domain knowledge on this matter.

China in the present situation to deflect from the economic devastation that Covid – 19 has been inflicted on its economy and to divert the anger of its people with genuine grievances from the failures of the CCP, has kindled many of its rivalries. At this critical time, the mandarins of the middle kingdom have thrown caution to the wind and are acting unilaterally, disregarding norms and agreements, both bilateral and multilateral to further their agenda. There is a laundry list of enmities, many of these disputes are territorial and stem from China’s desire to maximize its economic and cultural influence.

It is in this political environment that there is a serious need for India to arouse consciousness nationally and build support at multilateral levels to put checks on China’s uninhibited dam building, water diverting and mining projects along the course of the Brahmaputra River (in China known as Yalung Zangbo). While the Chinese share hydrological data for the Sutlej and Brahmaputra, enabling us to anticipate water levels to prepare in time for flooding, they charge us a fee for that. It is interesting to note that, India does not charge its downstream neighbors- Pakistan and Bangladesh. Further, even though there have been numerous MOUs on sharing hydrological data, the latest being in 2018, they stop sharing data as and when they please, as was seen around the time of the Doklam crisis. There is little cooperation in addition to sharing hydrological data, while India has robust water sharing treaties with Pakistan and Bangladesh. It is estimated by Brahma Chellaney in his book, ‘Water: Asia’s New Battleground’ that until China has achieved its national objectives of power generation and river water diversion to its parched northern lands, it is unlikely to acquiesce to any agreement. India has on numerous occasions suffered from floods due to bursting of dams, polluted waters flowing into Arunachal due to upstream mining and construction activity and various other actions where the doctrine of ‘‘sic utere tuo ut alienum non laedas’’ (To use and exploit one’s sovereign property in such a manner so as to not harm the neighbor’s rights and interests) has not been followed.

China has a dual design on reigning in the Brahmaputra river with the future objective of not only generating power for the relatively underdeveloped region but also to divert waters of the Brahmaputra to their northern parts as the third phase of the South North Water Diversion Project (南水贝雕工程总体规划). The dam site they’ve chosen has been detailed by Chellaney in his book at Metog County, Nyingchi Prefecture, where they aspire to build a 38 GW(Gigawatts) generating facility (a capacity larger than the Three Gorges Dam), in comparison the Bhakra Nangal Dam generates a meagre 1.3 GW. Supporting infrastructure in the form of roads and railroads has already or are in the process of being constructed. This location near the Namche Barwa gorge is ideal for power generation given the steep natural fall that water takes before they enter India. Additionally, the point for the water diversion project is further upstream. This entire region is in the proximate area of Pemako, a region considered very sacred by Tibetan Buddhists – where there is vast virgin forests and varied flora and fauna. Further this region in particular is close to where the Indian and Eurasian plates converge thereby being prone to seismic risks.

It is now settled that China is the upper riparian power and reigns sovereign in these areas, following the NDA Government’s 2003 recognition of the Tibet Autonomous Region as a formal part of China. However, its exploitation of Tibet’s blue gold in the aforementioned megaproject and by way of numerous other projects such as the Zangmu dam (completed in 2014 with installed capacity of 500 MW), certainly affects the interests of lower riparian countries such as India and Bangladesh adversely. The NDA government’s action of course is only a cherry on top of the cake that was India’s concessionary foreign policy in the years post-independence. Other rivers such as the Irrawady, Mekong and Salween that also originate in Tibet have been heavily dammed leading to concerns in the countries of South-East Asia into which they drain. Given that many of China’s neighboring states have high dependency ratios (Food & Agriculture Organization data) relative to China for their water supply, with India (33.4%), Bangladesh (91.3% Including Ganga which originates in India), Laos (42.9%), Thailand (47.1%), Cambodia (74.7%) and Vietnam (58.9%), there is certainly a need for a mechanism to ensure a sustainable integrated river basin management. However, the Chinese style is to only deal bilaterally, if at all, as they have stayed away from any such multilateral arrangements, the Mekong River Commission being one of them. Further, China was one of three countries along with upper riparian Turkey that opposed the UN Convention on Non-Navigational use of International Watercourses in 1997, the resolution carried 103-3 with 27 abstentions.

Any questions pertaining to integrated basin management with China will in turn throw up our policy on Tibet, while as a rule – following country we must abide by past treaties and commitments but should certainly not leave any leverage we may have with regard to the land of the Dalai Lama of the table. The entire world is re-evaluating and taking a hard-look at their respective approaches to China, in the aftermath of the events in the Galwan valley, we must do the same.

The North-East of our country being a riverine civilization will feel the major brunt of China’s unilateral action in Tibet, which it refers to as its water tower. While the seven sisters are undoubtedly far away from New Delhi, and given our food surplus at the moment water security may seem like a distant concern. However if we are to act east, we must ensure our water security, not only for the purposes of agriculture, fisheries and the dependent communities but also to generate our own power.

Originally Published as The Great Sino-Indian Water Conundrum in The Guardian,15 July 2020.

Beijing’s SCS Dilemma: Nan zhongguohai or “Nanhai”

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Hemant Adlakha, Honorary Fellow, ICS and Associate Professor, JNU

Speaking of foreign affairs, in the early days of reform and opening door policy, Deng Xiaoping once said, China must continue to ensure good relations with the US. All other outstanding issues, including Taiwan and the dispute with Japan and ASEAN nations about the Diaoyu Island and South China Sea, Deng was confident that future Chinese leaders “with cleverer minds” would be capable of settling.

Daily Express Photo

 

Recently, the South China Sea has become a flashpoint again. Why? To people who refuse to be labeled as pro-China or pro-US (though there really aren’t many such people around), the reason for waters heating up in the 3.5 million km2 sea is the showdown of strength between China, a continental rising power and the US, the world’s only dominant maritime power ruling the oceans for over a century now. While the mainstream media (MSM) – also the dominant view in the region, blames growing Chinese muscularity in the SCS, the non-MSM perspectives in the region and beyond, attribute further intensifying of the many-fronted aggression against China by the American Empire, especially during the ongoing Covid19 pandemic period, as the main source of the SCS again becoming a potential flashpoint.

As the battle of perceptions weighs heavily against the People’s Republic of China, it is intriguingly puzzling why three important aspects – crucial in the understanding of the prevailing venomous atmosphere in the SCS – remain hidden in the mainstream discourse. They are, namely: Asian nations since at least WWII have territorial disputes in the SCS but long kept them manageable, until America began targeting China as a primary foe and implemented its “Pivot to Asia” policy to contain China in 2011; the current, incendiary sovereignty battle in SCS is the result of four centuries of Western – American and European – colonialism which began with Spain and Portugal dividing the Philippines and Indonesia in 1529 and ended with the US and UK drawing borders separating the Philippines and Malaysia in 1930; finally and more importantly, the US maritime hegemony – an unchallenged Anglo-American sea power for over 200-years ensuring that 90 percent of global trade continues to use oceanic routes – cannot allow any country, especially a continental power like China, to change the international political order designed by the maritime world. 

The Brazilian journalist Pepe Escobar, a regular columnist for Asia Times Online and Sputnik News, has been following developments in the SCS since Hilary Clinton started navigating the US return to “Asian waters” as the 67th US Secretary of State under the Obama Administrationin 2009. In July 2016, when the Permanent Court of Arbitration (PCA) at The Hague decreed in favor of the Philippines and rejected China’s claim of “nine dash line” regarding the disputed Spratlys, Escobar wrote “the SCS is and will continue to be the ultimate geopolitical flashpoint of the young 21st century.” Needless to point out, Escobar’s pronouncement had much to do with China’s instant, disdainful dismissal of The Hague judgment as “null and void.” But in fact, Escobar was reminding us of the future retaliation by the US against the Chinese “saber- rattling.”

Another pertinent argument which generally is missing from the mainstream discourse is that stakes are very high in tension-ridden SCS not only for the future of Asia, but also for the East-West balance of power, as compared with the Middle East or even in Eurasian borderlands. To understand this, one must read Alfred Mahan’s seminal The Influence of Sea Power Upon History, 1660-1783, written over a century and quarter ago. Mahan essentially wrote the roadmap of US ascendancy to become the world’s most powerful maritime power, and therefore the dominant power. His core thesis is, the US should go global in search of new markets, and protect these new trade routes through a network of naval bases. “That is the embryo of the US Empire of Bases – which de facto started after the Spanish-American war, over a century ago, when the US graduated to Pacific power status by annexing the Philippines, Hawaii and Guam,” Mahan had envisioned.

Echoing the above, a recent article in Wn.com/Defensepost on the ongoing eyeball-to-eyeball contestation between the armies of China and India along the Line of Actual Control in India’s eastern Ladakh, draws interesting connection between escalating tensions simultaneously in the SCS and on China’s western border with India, respectively. According to the article’s two authors, current India-China border skirmishes should not be viewed in isolation from Anglo-American geopolitical plans to halt the Chinese from reaching the Arabian Sea through a much shorter route via Pakistan. “US maritime power is asserting its reach and range to let its allies know that the ‘maximum pressure’ game on China is underway. Offensive realism, consisting of assertive containment and deterrence, is America’s new theoretical and military mantra against China,” it said.

When speaking of allies, a former Indian ambassador believes the ASEAN countries – almost all former or current allies of the US, may appear to be bandwagoning with China. In an op ed piece in The Hindu a couple of weeks ago, Ambassador Jayant Prasad opined: “But in spite of their deepening economic ties with China, they (ASEAN countries) are seeking political insurance, strengthening their navies, and deepening their military relationships with the United States.” On the other hand, while sympathizing with Beijing’s “self-defensive” actions, Thomas Hon Wing Polin, Hong Kong-based veteran journalist recently observed, “The SCS is home to the world’s busiest and most important trade lifelines. Some 80% of China’s overall trade including vital oil imports, all pass through its waters. Keeping SCS shipping lanes open is a core interest of China – simply because it is matter of national survival.” Polin also cautioned that the ASEAN nations are fully aware the island disputes is not with China alone, but also between and among several ASEAN members. To the huge discomfiture of the US, not only China knows this, China has been successful in rallying most ASEAN countries round two initiatives Beijing can take credit for: to settle disputes bilaterally and to have a Code of Conduct between China and the ASEAN.

Emerging from the just concluded virtual meeting of the ASEAN+3 Senior Officials Meet (APT SOM) last Monday, the Chinese Vice Foreign Minister Mr. Luo Zhaohui exuded confidence in the solid economic and trade ties between China and ASEAN. In the backdrop of the ongoing pandemic and in the face of escalating tensions in the SCS, the value of China’s exports and imports to ASEAN increased by 5.6 percent in the first half of this year, he said. Luo displayed the same confidence in East Asia to lead the world to recover economy. A statement released by the Foreign Ministry of the P R China (FMPRC) next day claimed: “As epidemic prevention and control becomes a new normal, regional cooperation East Asia has been reinforced. All parties are looking forward to signing the Regional Comprehensive Economic Partnership (RCEP) within this year. East Asia economic integration has bright prospects.”

Now, let us turn to China to see how scholars and experts have been evaluating both the heightened presence of the US marine power in the SCS, especially since early June; and whether the PLA Navy (PLAN) is actually planning to take on the US might, which is literally knocking at China’s doors. The overall consensus in Beijing regarding the presence of USS Ronald Reagan and USS Nimitz in SCS seems to dismiss any real or potential threat of war associated with the US move. Song Zhongping, a well-known military affairs commentator said in a recent interview with the Global Times, “The US move aimed at enhancing its military presence in the West Pacific, is designed to show off that its hegemony in the region is unshakable.” The US is also attempting to deter PLA movements in the SCS and on the Taiwan question, Song said.

Perhaps encouraged by Deng’s confidence in the ability of future Chinese “cleverer” leaders, or an indication that Beijing is moving towards a more hardened stance – in line with its so-called “aggressive” external posturing during the pandemic period, a recent article in the Party-run online current affairs news platform Utopia is worth paying attention. On the one hand, the article disdainfully calls for “reset” in Beijing’s long-held position of defining the SCS as “peaceful sea”; and on the other it makes an appeal to China’s policy makers to have “no more serious engaging with countries in the region with which China has territorial disputes.” Both propositions sound too extreme to seem tenable. Yet the fact that a major “official” media outlet has carried the signed article is enough to raise eyebrows among China watchers and security analysts alike, especially in the Philippines and Indonesia, or even in Malaysia, and raise the question, what is China up to?

Well, many would agree with the title of the op ed piece by the former Indian ambassador: “More saber-rattling, more isolation.”  However, the moot question still remains, the SCS for   Beijing will continue to be China’s South Sea or become “trouble sea” (nanhai). For nan in Mandarin means both “south” and “trouble.”

Incubation Systems for Start-ups in China and India: A comparison of the two ecosystems.

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Hrishikesh Kayshap, Student, IIM Indore & Former Research Intern, ICS

China and India, home to the largest and the 3rd largest number of Unicorn (privately-held start-up valued at over $1 billion) companies globally, present an interesting case-study for a comparative analysis of start-up ecosystems. With 21 unicorns, India is 3rd in the list of countries with the most unicorn companies; China has around 206, which is more than 41% of the global no. of unicorns. As start-ups offer immense opportunities for economic growth and employment generation for almost all economies, it is imperative we study the ecosystems that encourage start-up creation and incubation. Incubation systems refer to business incubators(private) or government incubators(public), companies that help create and grow young businesses by providing them with support in the form of financial, technical and logistical services among others.

Incubation in China as described by the “China Business Incubation Development Report 2019” indicates there are around 11,808 business incubators in the country serving a total of 620,000 startups (206,000 of them were technology-based), employing around 1.514 million people. In 2018, around 62.18% of these incubators were private enterprises with business-oriented operations and around 15.9% of the total incubators were state-owned. This report also states that in 2018, the working income of start-up incubators was around $ 9.43 billion and that in the period 2016-18, China’s incubators achieved profitability for three consecutive years. It is important to note that out of 11808 incubators, 4789 were technology-based, the overall focus being on electronic information, advanced manufacturing, and cultural creativity. Also involved were bio-pharmaceuticals, artificial intelligence, new energy and upcoming industries. The Incubation 2019 report is an integrative report on the huge number of incubators, social enterprises, educational or job training centres and non-governmental organisations (NGOs) etc. As a diverse range of new businesses are now classified as start-ups, the number of Chinese start-ups and incubators seem to be relatively higher than other countries.

Incubation in India is primarily documented through Government of India’s “Start-Up India” programme which has recognised around 32,849 Startups, with 52,326 entities registered in the Start-up India scheme. While incubators under the Start-Up India programme have flourished with several tinkering and innovation labs being established, there are around 200+ business incubators in the country. In addition to them, the central government is establishing 7 new research parks to aid R&D for startups, adding to the existing 11, while twenty-six Atal Incubation Centres (AICs) have also been set-up. The Central Government has also scaled up the existing Established Incubation Centres (EICs), while each state has its own start-up policy and facilitator system, ranked under the “States Startup Ranking 2018” report. Examples of such incubators are T-Hub by the Telangana State Government, incubators in academic institutions like NSRCEL, CIIE, CIE and corporate incubators hosted by NASSCOM and SAP Labs.

IndiaChinaIsrael Singapore JapanUSA
Total no. of startups(approx.)10,00010,0004,752N.A.N.A.83,000
Tech-based startups(2016 figures) 4,3003,4004,000N.A.N.A.48,500
Non-tech based startups(2016 figures) 5,7006,600750N.A.N.A.34,5000
Set up a new business (days) 179122116
Corporate tax rate (2019 figures) 25%(plus surcharge of 7% and 12% if income exceeds INR 10 million and INR 100 million respectively and a cess of 4% in all cases) 25%23%17%(100% tax exemption for startups) 31%27%
Other taxes payable by 10.1%8.0%1.5%1.1%4.1%6.1%
Businesses (% of commercial profits)
No. of Tax Payments by businesses (per annum)1392851411
Bank Lending rate (2018-20199.5%4.3%3.5%5.3%1.0%3.9%
R&D spending as % of GDP0.8%2%4.2%2.2%3.4%2.7%

Source: IMF, World Bank, KPMG, PwC and UNESCO.

Startups in India (upto 7 years since the date of their incorporation) that register with the Startup India Programme can avail benefits like self-certification, no taxation for upto 3 years, fast tracking of patent and IPR protection, exemptions on Earnest Money Deposit (EMD) among other benefits. However, this doesn’t extend to older startups, even though most startups take a considerable amount of time to become viable businesses. Unlike India, China does not have any nodal agency for startup registration or promotion and all companies including startups register with the State Administration of Industry and Commerce (SAIC) equivalent to the Registrar of Companies (ROC) under the Ministry of Corporate Affairs in India. In India, start-ups and business incubators are taxed at the same amount as other companies, translating to 13 number of payments and multiple direct and indirect taxes, and a corporate tax of 25% (plus surcharges amounting to 7% if income exceeds INR 10 million and 12% if income exceeds INR 100 million along with a cess of 4% in all cases). This is in contrast to the number of tax payments by businesses (p.a.) in China (9) and a corporate tax rate of 25% (10% or 20% for small scale enterprises, 15% for new/high technology enterprises), lower bank-lending rates for businesses and the integration and upliftment of business incubators, where private capital has become a major source of investment for entrepreneurs. These favourable conditions are what have resulted in the incubation/start-up boom. Incubators in China grew by an average of 20% annually in 2016-18 and in 2010-2014, new businesses grew by almost 98% in China. 

Entrepreneurship and Incubation have emerged in China prominently along with the internet boom and even traditional manufacturing industries, finance, medical and agriculture sectors are now targeted to be integrated with technology and the internet through policies like ‘Internet Plus’ and ‘Made in China 2025.’ The impetus provided to startups and the incubation system, especially in emerging sectors like Artificial Intelligence, Biotechnology, New materials etc. puts the entire startup ecosystem at an advantageous position, where we can anticipate further growth.

Apart from the few incubators in India supported exclusively by the private sector (Venture capital funds, angel investments, other private companies, etc) a large majority receive some sort of government support but are still mired in strict qualifiers and regulations. A majority of these incubators remain solely tied to government academic institutions and conjoined-research parks, where private capital by citizens and investors from India have not significantly forayed into the incubation space. Chinese provincial governments’ direct investment in resources, capital and land result in partnerships with incubators and new businesses alike, where it is difficult to draw the line between state-owned companies and privately-owned enterprises. In China, there is now a new cultural acceptance of risk-taking owing to local government hand-holding in each step of the way, in what can be termed as provincial push.

Start-up India mimics China in the way Indian states have their own start-up nests. However, the centre’s role vis-à-vis provinces is very different from that of India. Chinese provinces have their own rules for funding, incubation and promotion of start-ups not directed by a central start-up body like in the case of Start-Up India. Examples for this include the city of Chengdu in Sichuan province which launched the Venture Tianfu-Jingronghui Project that aims to attract 100,000 startups by 2020.  Additionally, despite this state-support, there seems to be a healthy influx of private capital fund in China. In the Indian ecosystem, the scarcity of funds, ideas and teams venturing into entrepreneurship, related incubator systems and the overall upliftment of the incubation would only work with a more business-minded approach and an influx of attention, awareness and investments from private bidders and citizens as a whole.

Diluting the One-China Policy: An Intelligence Alliance?

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Samanvya Hooda, Research Assistant, ICS

The Galwan clash can be a watershed moment for engagement with China. It is time for our polity to decide whether simply reacting to provocations will continue to be the state of affairs, or if a proactive approach can be adopted.

A simplistic analysis can attribute clashes along the Line of Actual Control (LAC) to an outstanding border dispute, which if fixed can bring about peace. This is inaccurate; the deaths of twenty Indian soldiers and an unknown number of People’s Liberation Army (PLA) troops are not the result of historical animosity, but the geopolitical currents guiding both countries. As some scholars have remarked, China’s desire to dominate the region means it wants the option to escalate at the LAC, and always will. A country with hegemonic dreams will seize every opportunity to exercise dominance. This is exacerbated by rivals building the capabilities to fight back – India’s border infrastructure was bound to evoke Chinese escalation. If India deescalates unilaterally, we should reconcile with being deferential to China’s expansionist policies for the foreseeable future. While developing collaborative strategies to deter China will prompt further backlash, it will also bolster India’s efforts to ensure its sovereignty. Policymakers worry about ‘strategic autonomy’, but ignore that consistently mollifying China’s concerns because of its hostility makes us even less ‘autonomous’.

Broad areas of collaboration

While groupings like the Quad (Quadrilateral Security Dialogue) and a closer US alliance are viable options to contain China, inherent issues in both might take them longer to operationalise. Many have suggested a relook at the One-China policy and improving our Taiwan ties. Attractive as it may be, India alone recognising the legitimacy of Taiwan would not worry China much, and offer very little by way of material gains. However, there are several options below this threshold that merit serious consideration.

India has conducted joint military exercises with the US, Japan and South Korea, but never with Taiwan. This matters as China reportedly has more than 1,500 missiles aimed at Taiwan. India and China both field Russian-origin equipment like Sukhoi jets and soon, the S-400 air defence system. Although the US provides Taiwan with most of its weaponry, India can offer the opportunity to study platforms that may be used against Taiwanese forces. There is room to work together at sea — on coast guard security and with Taiwan’s fledging submarine programme.

There is also an opportunity in the new frontiers of war. Taiwan government networks are reportedly subject to 15 million attacks a month from China, and India has only recently made fledgling steps in developing cyber capabilities. Taiwan’s limited space programme can be boosted by collaboration with the Indian Space Research Organisation (ISRO), and India can be a huge market for Taiwanese technology investments. These developments engender material gains and posturing benefits, both crucial for standing up to China. However, structural problems will cause them years to materialise fully. While India cannot credibly support Taiwan through a policy of ‘strategic ambiguity’, there are other feasible measures available in the short-term. An intelligence alliance with Taiwan would be relatively easy to achieve, vastly improve intelligence gathering/sharing, constitute unprecedented signalling of resolve, and be a significant step towards mitigating Chinese aggression.

Intelligence alliance

The leading intelligence alliance in the world today is Five Eyes, whose constituent countries – the US, the UK, Australia, Canada and New Zealand — share primarily signals intelligence. Its enduring success lies in the ability to divide limited resources on common areas of concern, while still ensuring complete intelligence coverage. A similar arrangement between India, Taiwan, and perhaps Japan would amplify each country’s intelligence capabilities exponentially.

Some reports indicate Taiwan and India have exchanged intelligence in the past. The covert nature of this cooperation necessitates negligible signalling, with material gains also affected by the lack of official communication channels. Taiwan’s security establishment is almost entirely focussed on the Chinese threat, and can relieve pressure on India’s intelligence network, overextended as it is over two hostile threats on its borders. India’s superior satellite reconnaissance abilities can significantly improve Taiwan’s intelligence network over China, with both countries combining resources in signals intelligence. By combining their intelligence assets and creating channels for a continuous exchange of communications, electronic, geospatial, and human intelligence, the two countries together can achieve better coverage of China than they can individually. By developing the infrastructure to share all China-related intelligence in real-time, a formalised alliance also avoids the bureaucracy and red-tape otherwise accompanying ‘informal’ intelligence sharing.

Japan will certainly be a welcome addition to this alliance, bolstering a united front against China. It would contribute an estimated 19 signals intelligence stations (possibly the third largest in the world) and an extensive underwater surveillance system, among others. India is inducting a variety of electronics intelligence, imaging, and communications satellites for better surveillance. Taiwan is understood to have some of the best human intelligence assets operating against China. While some areas will undoubtedly overlap, constant intelligence sharing between the three countries can result in near-absolute situational awareness of China.

All three countries are on the front line of China’s aggression, and face the brunt of its expansionist policies. Arguably having the most to lose from Chinese hostility, they should be the first to consolidate a containment policy. Why should there be any unwillingness to do so? They have no divergent national interests, or prevailing historical antagonisms. They all face a unifying, substantive threat to their national interests, and all three have a great deal to gain from an intelligence alliance. Other regional countries such as Singapore, Vietnam, and Australia should also be extended invitations in the future. In time, this alliance may even grow to be a third-party grouping to Five Eyes.

A formal and publicised alliance indicates a clear shift away from tip-toeing around policies to deter China. An alliance is more permanent than vague MoUs, and unlike initiatives like joint military exercises cannot wax on and off depending on the polity’s slightest whims (or under threats from China). Presenting a credible, united front also emboldens countries

otherwise struggling to hold China at bay. This trilateral can also be used to posture as a precursor to a possible military alliance, and hence be used to extract concessions from China. By stepping up the escalation ladder and threatening to step further, it would be among the few instances where India, Taiwan, and Japan will own the initiative, rather than only reacting to Chinese actions.

Arresting China’s hostility

Realising that China’s trajectory is inimical to India’s interests allows one to prepare for challenges in the future. Ignoring it and changing nothing may appear a more comfortable option now, but will encourage China to continue its grey zone tactics against India. Efforts such as diluting the One China Policy will undoubtedly draw China’s ire in different ways.India will likely see an escalation in border incidents, Indian Ocean troubles, and Pakistan also joining the fray. But by expanding the scope of possible actions against China, India has more options by which to escalate/de-escalate. This will vastly improve our negotiating position, which is abysmal at the moment. Instituting proactive measures like the intelligence alliance will provide us the tools with which to defend against China, and its constant and inevitable hostility.

Avoiding war while attaining one’s goals is the most desired form of strategy, whether according to Kautilya, Sun Tzu, or Machiavelli. Former National Security Adviser Shivshankar Menon has hinted China might be “flaunting ambition” too early. Time will tell – but we can’t afford to wait and find out.

Originally published as ‘To check China’s hostility, India, Taiwan and Japan need an intelligence-sharing alliance’ in The Print, 26 June 2020

The Case of Rising Divorces in China amid COVID-19 Lockdown

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Bihu Chamadia, Research Intern, ICS

China announced a nationwide lockdown on January 23 to combat the Coronavirus outbreak. As soon as there was a visible decline in the number of reported cases of COVID-19 in China, the rules of lockdown were eased and many government offices started to function normally. While China tries to pull itself out of the pandemic, there has been another outbreak in the country: the rising cases of divorces.

After the government started lifting the lockdown in late February, marriage registration offices of various districts started receiving high number of divorce cases. The offices of many districts in Xi’an city of Shaanxi province received a record number of divorce cases. According to local Chinese sources, the incoming divorce cases in the marriage registration office in Yanta district in the city of Xi’an had surged to the point where the marriage registration office did not have vacancy till 18 March this year. The situation was similar in other parts of China including Beijing, Shanghai, Yunnan and Sichuan.

Even though an increase in divorce cases is a common trend in China after the Spring Break, according to a report in Global Times, compared to the same period last year, there has been a surge in the number of divorce cases this year. In Tongzhou district in Sichuan Province, the Civil Affairs office received 232 cases from late February till end March, while the number of divorce cases registered last year during the same period was 180.

Marriage as a social institution in China has been facing serious challenges since many years. According to the Ministry of Civil Affairs, there has been a significant hike in the rate of divorce since the reform and opening up era. But this trend witnessed a steep rise after the liberalisation of Marriage Law in 2003. Once considered a taboo, even the number of divorce cases doubled in the past one decade. In 2010, the total number of divorces in China stood at 1.96 million which has more than doubled recently. Recent figures mentioned by Ministry of Civil Affairs, shows that it stood at more than 4 million in 2019.

The  closing down of factories during the lockdown which had led to the laying off of workers and a dip in household income, was one of the primary factors that contributed to rising tensions between married couples during this period. Moreover, the gendered nature of household chores, where it was socially accepted that men who worked outside the household did not have time to lend a helping hand for household chores, was effectively busted during the lockdown when work happened from home; household work was still managed by the female partner during the lockdown. Women had to shoulder the entire burden of household duties including grocery-shopping and taking care of children with little to no help from her male counterpart. While these issues existed earlier, the lockdown period witnessed an overlapping of mental pressure along with problems such as inequality, gendering in roles and stereotyping of work which eventually accelerated divorce cases after the lockdown was lifted.

Infidelity was another major reason for divorce among married couples. The changes in the Marriage Law in 2003 allowed wives the right to divorce if the husband was abusive or had an extramarital affair. Many cases of infidelity were uncovered during the lockdown which otherwise would have remained under the veil during normal conditions. According to a 2016 report in Global Times, on an average 75% of the divorce cases filed are due to infidelity. In a speech made of 6 November 2019, Zhou Qiang, the Chief Justice of China’s Supreme People’s Court mentioned 74% of the total divorce filed between 2016-2017, were initiated by women.

While issues such as infidelity, financial issues and non-sharing of household burden have been the most common reasons for divorce in China, the lockdown aggravated these issues and exacerbated tensions between couples, and even led to a spike in cases of domestic violence. Divorce lawyers, in particular, have noted an increase in cases related to divorce and pointed that problems which would  have earlier been a cause of little strife in the household were now leading to divorces due to an increase in interaction between couples during this period.

A combination of better socio-economic status leading to new aspirations, increasing tolerance among the masses towards divorce have influenced this trend. But most importantly, the liberalization of the marriage laws in 2003 played a significant role in the rise in divorce cases in China. Changes in the marriage laws in 1981 and 2001  led to a gradual increase in the number of divorce over the years but it was after the amendments in the Marriage Law in 2003 such as lower cost of filing divorce, faster pace of granting divorce and non-requirement of employer’s approval for filing a divorce which made it easier for women to seek divorce leading to the number of divorce in China rise exponentially after 2003 (see graph below).

Parallel to these developments was the rising average income of the female population in China since the reform and opening up.  As average female income rose, the number of divorces also began rising. Earlier, job stability and owning a house were enough for a woman to ‘settle down’ but as women become increasingly educated and financially independent, their expectations also expanded. They no longer accepted to live in an abusive marriage or marriages where there was no compatibility. Moreover, while in the past, custody of the child was often given to the ex-husband after divorce and the wife was ostracized and faced difficulty finding a job – a major deterrence for women to seek divorce- this has changed today due to change in the level of income of women in China. Therefore, an already rising trend in the number of divorce cases witnessed an acceleration during the lockdown period when couples were forced to live together.

Although revoked, the demographic shifts caused by the One-Child policy is now causing a ripple effect both on China’s economy as well as the society. A rapidly ageing  population and a fall in the average age of workforce have become a major concern for the central government as it grapples with lower birth rates and shortage in cheap labour. In 2019, China’s birth rate fell to its lowest in seven decades causing massive concern of the CCP. China’s population dwindles and the rate of marriage also goes down, the Chinese government fears that the number of workforce, taxpayers and consumers will also witness a steep fall.

The growing concern of the government towards rising divorce cases is reflected in the measures taken to address to issue such as free counselling for couples and the introduction of a “cooling off” period to slow down the divorce rate. While earlier it was adopted only by a few local courts, recently, the 13th National People’s Congress that took place in May 2020, voted in favour of adopting ‘cooling off’ as a part of China’s first ever Civil Code. This has caused a massive outrage  among the Chinese population where the Party has been accused of abandoning progressive ideas of promoting gender equality. On the other hand, family planning policy which, in 2016, was amended to allow married couples to bear two children has been absent from the 2018 Civil Code draft. This has led to speculations of government further easing the restrictions on family planning or scrapping the bar altogether on the number of children a married couple could bear.

Despite government efforts to prevent any fissures in the institution, and its push to preserve “traditional values” for a stable and “harmonious society”, divorce cases in China continue to rise. The Covid pandemic has only acted as a catalyst that has unravelled the pre-existing fractures in the society and economy. Rising costs of social pension and shortage in supply of cheap labour have created a huge burden on the falling GDP of the country. As demographers warn that China’s population will begin to shrink in the next decade derailing China’s economy with far-reaching global impact, the need to preserve the institution of marriage has become even more important. The recent adoption of the Civil Code where marriage takes up considerable space in the text of the Code exhibit the gravity the case of rising divorces pose for Beijing.

Cross-Strait Relations amid COVID-19: Multilateralism with Chinese Characteristics

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Hariharan Chandrashekaran, Research Intern, ICS

COVID-19 has catastrophically emerged as one of the deadliest pandemics of the modern era, reshaping the dynamics of Cross-Strait relations, which has been characterized by limited contact, tensions, and instability. Although China managed to contain the virus, it was accused of a lack of transparency in communication. Meanwhile, Taiwan, with its proximity to China and an ideal destination for mainland tourists, was expected to have the second-highest number of imported cases during the initial stages of the outbreak. However, it was lauded globally for its swift execution of control, propagating the region’s perception in a positive light. Amid all the chaos globally, the World Health Organization (WHO) endured flak from critics for its approach towards the crisis and alleged remarks of being sympathetic towards the Chinese cause.

COVID-19, China, and the WHO.

Not ceding to a “Chernobyl moment”, after a prolonged period China successfully flattened the curve by effectively mobilizing its resources. It has since picked up the mantle to quickly restore its image through soft power measures such as formally dispatching medical equipment, ventilators and face masks to European nations such as Italy, Spain and other crisis-hit countries; now termed as “Mask Diplomacy”. Also, it maintained communication with the WHO,  providing updates of the virus and its transmission, contrary to the criticisms.

With early reactions being mainly positive from resource-strapped countries, including its African allies, a discriminatory racial incident within the Chinese mainland against African ethnicity hindered its progress. Additionally, claims of faulty equipment and its return questioned the candour of such measures.

Nevertheless, at the 2020 World Health Assembly (WHA), China pledged to contribute $2 billion to aid the WHO response towards the pandemic and the socio-economic development of the crisis-hit countries, especially Africa. Additionally, it called for global solidarity and collective mobilization of efforts against the virus by supporting WHO. But, mounting criticism resulted in the parallel emergence of the “Wolf Warrior” diplomacy. 

“Wolf Warrior” diplomacy refers to the growing assertiveness of Chinese foreign policy towards the West. COVID-19 has only amplified direct engagement of China through a battle of narratives against its critics, chiefly the US, condemning it for politicizing the issue. This development marked the Chinese contribution to the gradual shift of discourse from global institutionalism to hypernationalism. This new direction aims to portray China’s story – a country, attempting to “rise to the challenges of global leadership” by striving in a climate of declining multilateralism.

The Taiwan Cause

Harnessing its experience from the SARS outbreak, the Taiwanese government reacted quickly by entering a strict lockdown mode and enforcing stringent policy measures, gaining universal acclaim. Its technological capabilities tracked down the source of the virus within its area; additionally, it developed a range of testing kits to hasten the process of the containment of the virus. Taiwan succeeded in flattening the curve, showcasing a rare, strong well-executed response, even by WHO standards.

Furthermore, Taiwan took a page out of China’s policy of engagement by initiating its version of ‘Mask Diplomacy’. It was achieved by supplying masks (Taiwan is the second-largest producer of masks after China) and providing technological action frameworks to the affected countries, especially Western powers, thereby, emulating its ability to compensate the lack of its economic power. It had significant implications on its bilateral relations through further cooperation such as ongoing Taiwan – Danish cooperation to develop vaccines and the US amending its position by supporting Taiwan’s membership to the WHA, significantly denting the “One China” policy.

However, its achievements were unacknowledged categorically due to the politics of the WHA, which recognizes the region as part of China, leading former’s exclusion from WHO meetings. It resulted in the emergence of pent up anger amongst the nationalist groups who sought to move away from the Chinese identity. However, the government response was limited to castigating WHO by questioning its non-political nature.

Balance of Tide 

It was due to the Taiwanese cause for representation after a prolonged struggle that it finally received the observer status invite to WHA in 2008 Taipei’s observer status at the WHA exemplified a historic shift in Cross-Strait relations. Nevertheless, the Assembly revoked its membership since 2016, owing to the UN Stance on “One China” Policy. Since then, China has actively blocked the prospect, thereby resulting in the reversal of whatsoever gains for positive relations over the years.

In addition to actively blocking Taiwan’s membership bid since 2016, it was also a timeline of heated economic quarrels between the US and China. Also, the Hong Kong protests had a profound impact on Taiwan by significantly affecting the results of the Taiwan presidential and legislative elections in early 2020 favouring the incumbent party and raising its image as a democratic nation. The evolved imagery and the simultaneous allegations on China over lack of transparency immensely accelerated the US legislation of  TAIPEI Act – 2019 to make it US policy to advocate Taiwan’s participation in international organizations. However, it was strongly rebutted by China who described it as an “act of hegemony”.

Nevertheless, the battle of narratives between the US and China resulted in the former halting the financing WHO. Complementing it was the announcement of US terminating its relationship with WHO as an attempt to pacify its populace for its lack of preparedness. Moreover, Australia demanded an independent assessment of the performance of the WHO and China in handling the crisis. Both responses drew sharp criticism and rebuttal from China. Nevertheless, moderates such as Germany and France urged transparency for the global good, resulting in China ceding to the demand for investigations, albeit post-crisis, making WHO a battleground of politics.

Conclusion

In tracing the dynamics of Cross-Strait relations, the ongoing situation not only demonstrates the vulnerability of international institutions’ functionality amidst political crises but also marks a growing shift away from reliance on global institutionalism. However, for Taiwan, this development brought a temporary rejuvenated hope for the government to maintain its independent co-existential nature. In contrast, with China sticking to the “One China” policy, it expects other countries to reciprocate its policy of non-interference[*]. However, the pandemic has catalyzed its assertiveness as evident in the central leadership’s decision to enforce the “New National Security Law” in Hong Kong, creating similar potential implications for Taiwan’s cause foregrounding resistance from the US. To conclude, Beijing has exploited the shift by stressing cooperation over isolation under the umbrella of the WHO by providing a differing perspective of multilateralism with Chinese characteristics that calls for solidarity without interference – a perspective steered by the rising nationalistic Wolf Warrior diplomacy.

[*]This policy of non-interference is in direct contrast to the U.S. foreign policy of selective international engagement that interferes with domestic issues.

China’s Health Diplomacy in Africa during COVID-19: Discerning Prospects and Problems

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Dr. Veda Vaidyanathan, Visiting Research Associate, ICS

LI Nan, a South Africa’s Chinese Embassy representative, left, elbow bumps with Zweli Mkhize, South African Minister of Health, during the handing over for the emergency medical equipment for COVID-19 from China, at OR Tambo Johannesburg, South Africa, Tuesday, April 14, 2020.

Source: AP Photo

At the margins of the third session of the 13th National People’s Congress, as Foreign Minister Wang Yi fielded questions from the press, China’s role helping other countries fight COVID-19 was brought up and China’s assistance to Africa, in particular, found considerable mention. As is usually the case, high doses of morality and altruism accompanied stories of China’s health cooperation in the region. In Wang Yi’s words

“China is always willing and ready to help others. When our friends are in distress, we never sit by and do nothing. A case in point is our assistance to Africa during the Ebola epidemic. While some countries evacuated their personnel from the affected areas, China rushed to Africa’s aid despite risks of infection, sending in medical teams and badly needed supplies and fighting alongside our African brothers and sisters until victory was declared.”

However, this does not take away from China’s multifaceted contribution to the African region in its fight against COVID-19. Actors including the state, provincial governments, companies and entrepreneurs have been contributing to different countries in varied forms. The Chinese government sent medical expert teams to Africa’s 5 sub regions while the resident medical teams based in 45 African countries have also been very active and have held over 400 training sessions for medical workers. On the 18th of March, the first teleconference of experts was held between China and countries in Africa. Over 300 people including representatives from over 23 African countries, the African CDC, officials from the WHO posted in the region attended the meeting with experts from the Chinese Academy of Sciences, the Chinese CDC, the first hospital of Peking University. Since then over 30 video conferences have been held. China has also been upgrading health infrastructure, like a $500,000 donation to the Wilkins Infectious Diseases Hospital, the main Covid-19 centre in Harare, Zimbabwe. Provincial actors like Chongqing municipal government sent supplies along with a delegation to Algeria and a team of 12 medical experts from Hunan province brought medical supplies to Zimbabwe.

Chinese media houses have also been critical to its ‘Corona diplomacy’ in the continent. A website hosted by China Daily called “Fighting COVID-19 the Chinese Way” is used to share facts, updates and stories about managing the virus. Another platform called “COVID-19 Frontline” by CGTN is an online live show for medical workers and officials to share information. One of the shows hosted was titled “Fight as one: Exchange of COVID-19 treatment experiences between China and Zambia” where Doctors from the First Affiliated Hospital of Xi’an Jiaotong University, who served on the frontlines in Wuhan shared their experiences with their Zambian counterparts. Similarly CGTN invited experts from Jiangsu Province who worked in Wuhan to share their experiences with colleagues in Tanzania. Links to such platforms have been advertised in the websites of Chinese missions in various African countries. In addition to the Chinese State, Alibaba’s Jack Ma and the Alibaba foundation have also contributed to the African fight against the pandemic by providing thousands of detection kits, PPEs, face shields, infrared thermometers, extraction kits, surgical masks, swabs and gloves among others. Other Chinese firms active in the region have also been donating to local charities.

However, Chinese assistance during the pandemic has not always been received positively in the region. There is an increase in xenophobia and this has resulted in several unpleasant exchanges. One of first reports that came out in this regard saw several Africans in Guangzhou being discriminated against, evicted from their homes and forced into quarantine. This attracted an unprecedented and strong response from a group of African ambassadors in Beijing who “immediately demanded the cessation of forceful testing, quarantine and other inhuman treatments meted out to Africans”. A few weeks later news broke that three Chinese nationals were murdered in Lusaka. According to the Zambian police, the suspects killed the victims who were working in a Chinese clothing company and set their warehouse on fire. While many commentators have discussed how deep-rooted racism is a longstanding issue in China-Africa relations, officials like Zambia’s ambassador to China doesn’t seem to be too perturbed; stressing that “Sometimes, our people or your people make mistakes out of anxiety. It is not good to amplify these small negative points. We should pursue cooperation under a bigger picture”.

Nonetheless, one of the major expectations from China, beyond knowledge sharing and supply of medical equipment, is to forgive loans and ease debt repayments. As several countries in the continent are struggling with weak health systems, rising domestic dissatisfaction due to unemployment and cessation of economic activity, they are not in a position to make repayments on debt. Considering that China has been the largest trading partner of the region ($208 billion in 2019), one of the largest investors ($110 billion stock) and holds a fifth of Africa’s sovereign debt, this takes centre stage. A case in point is Kenya: by March 2020, Kenya’s total national debt reached an all-time high of Sh6 trillion ($57 billion), very close to its 70 per cent national debt ceiling of Sh9 trillion ($90 billion), of this its debt to China stood at Sh660 billion ($6.6 million). While China has supported the call of the World Bank and IMF and will join the G20 nations to forgo repayments, officials have stated that they will also conduct bilateral meetings to discuss further debt relief. It is very likely that China will forgive significant African debt, not only because there is a precedent, but also due to the fact that in the post pandemic world, where investigations looking into the origins of the virus are underway, African support will be critical to China.

Similarly, Africa could also gain tremendously from China’s close engagement. As global supply chains are hard hit, intra Africa trade could increase, kick starting the African Continental Free Trade Area, and major economies in the region including Kenya, Nigeria and South Africa could start supplying to other countries and Chinese cooperation in this regard would be vital. There have already been several instances of states turning to domestic production to meet demand. The Ugandan President for instance, launched two production lines at a Chinese firm in Uganda, Lida packaging Products Ltd, that employs over 300 people and has the capacity to produce 560,000 masks a day. Similarly, the tech, digital and e-commerce spaces that have been growing rapidly – including coming up with home grown solutions to problems posed by the pandemic – stands to benefit from close cooperation with Chinese actors. Like many other geopolitical equations, China-Africa relations in the ‘new normal’ will also undergo a reset. A narrative is already building around Africa’s unwavering loyalty to China, especially during the pandemic. For instance, the Chinese ambassador to Zambia, Li Jie, stated that when the pandemic broke out in China, Zambia was one of the first countries to call and extend support and therefore Beijing will provide substantial support to Lusaka in this trying time. It would be prudent therefore, that other actors engaged in the region, like India, pay close attention to the myriad forms Chinese assistance to the continent is taking and how they are received, because it will not only influence Africa’s fight against the pandemic but will also help shape a narrative that projects China as a ‘voice of reason and judgement’ in a landscape that is seemingly devoid of global health leadership.

COVID-19: Chinese Dominance over Global Supply Chains under Threat?

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Akshit Goel, Research Intern, ICS

Since the beginning of the COVID-19 pandemic, nations around the world have scurried to contain the spread of the pathogen which has left the global economy in shambles. The physical measures put in place to ‘flatten the curve’ such as travel bans, lockdowns and social distancing norms have revealed the fragility of global economy. The lockdowns have severely affected the economies at home due to loss in production as major industries and factories are shut down. Further, there is also a dent in consumer spending as households are burning through their savings with their incomes impacted. The combination of these factors spell disaster for the world economy as the International Monetary Fund (IMF) predicts the recession due to the pandemic may be worse than the 2009 global recession.

Prospects such as availability of cheap skilled labor and advancements in technology has increasingly moved the production and assembly chains of major corporations from their countries of origin to nations abroad. This trend of overseas production has left the global economy far more integrated and dependent on each other. This model of production outsourcing has been one of the driving forces that has transformed the Chinese economy into one of the manufacturing hubs of the world. China is part of some of the most important supply chains in the global economy. Availability of cheap skilled labor as well as a well-developed supply chain network alongside an integrated infrastructure which cannot be easily replicated elsewhere has helped China solidify its position as a lucrative source of cheap and steady manufacturing for many large firms around the globe. As income of individuals grew due to privatization and rapid economic growth, private household consumption also rose. This led to the creation of large domestic consumer markets in China which further incentivized manufacturers to move production here. Moreover, these supply chains fuel a major portion of the industries in South-east Asian nations such as pharmaceuticals, automobile, garments, and many more by supplying them with machinery and components which are imperative for their sustenance. The electronics industry is one of the most important industries which is dependent on the South-east Asian supply chains. Therefore, with the outbreak of COVID-19, not only is the Chinese economy affected but due to the shutdown of industries, supply chains across the globe have been disrupted.

The epicenter of the corona pandemic, Wuhan is a major manufacturing hub located in Hubei province. According to a report by Dun & Bradstreet, a business think-tank based in US, 51,000 companies have one or more direct suppliers in Wuhan, while 5 million companies have one or more tier-two suppliers in the region. This supply shock is not only going to affect the South-East Asian nations but rather a major chunk of the globe as supply disruption appears more widespread. Moreover, as per a report by Institute for Supply Management, nearly 75 per cent of companies have reported some form of impact on their business due to disruption of global value chains. Further, around 44 per cent lack any contingency plan to combat this sudden drop in supply as lockdowns chokes production. Wuhan is a major supplier of electrical components and assembly of smartphones for some of the biggest firms in the world such as Apple, which were some of the worst impacted by the disruption. Although the company has invested to diversify its assembly chain into Vietnam and India, it is still highly dependent on China in maintaining its inventory.

Moreover, China is highly integrated in the supply chain of auto parts around the world and with the onset of lockdown, the automobile industry around the globe has suffered. Fiat had to temporarily suspend production in its plant located in Serbia. This was due to a shortage in supply of auto parts from China. This was not a unique occurrence as automobile firms around the globe are facing the same issue. In a similar bid, Hyundai, world’s fifth largest automobile company had to halt production in South Korea. Wuhan supplied the world with auto components worth over USD 2 billion in FY 2018-19. India, although self-sufficient in its supply, still imported auto components worth USD 4.5 billion in FY 2018-19 from Wuhan.

This economic disaster revealed how overdependence on China, simply put, having all the eggs in one basket, could pose a problem. There is now a resounding demand in the global economy for the diversification of supply chains to nations other than China. Some of the main contenders, who could fill this supply vacuum left by China are Vietnam, Cambodia and India. The trend to move out of China gained traction just before the outbreak, in the wake of the trade war between US and China. With the imposition of tariffs, many Multi-National Corporations (MNCs) which had relied on China for manufacturing, had already started to look for alternatives to China. Apple had been, for a while, trying to move its assembly to Vietnam and India. But this is easier said than done as most of these nations themselves depend on China to fuel their industries. Vietnamese manufacturing is dependent on China for the supply of heavy machinery, components and electronic equipment that are required in manufacturing industries. Moreover, these nations still lack the skilled manpower which is required to take on any surge in demand from the US which makes them a lesser reliable supplier. Since the beginning of the lockdown in early February, China has got its grip on the spread of the virus. Factories and industries in Wuhan, and rest of China, are back online with production. But as the supply of manufactured goods begins in China, the rest of the world still grapples with the pandemic with the lockdowns in place which in turn led to shortage in demand for the Chinese industries. Although economists around the world were hoping for ‘V- shaped’ recovery, the reality seems far from it as the pandemic continues to unfold and the scope of the economic damage done by it slowly comes to light.

The Malacca Dilemma: No panacea but multiple possibilities

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Sanjana Krishnan, Research Intern, ICS

The death of Mao Zedong in 1976 gave rise to a series of dramatic political changes that led the emergence of Deng Xiaoping as the next leader of the country. Deng led China through a path that has now made the country the industrial giant it is now. This was made possible through Deng’s policy of ‘Reform and Opening Up’ and the “Four Modernisations”. What fuelled this industrial expansion was a heavy dependence on energy giving birth to a new vulnerability to China, namely energy security. While China is still heavily dependent on mostly its own coal reserves and imports of coal for its energy requirements, the reliance on imported crude oil is also increasing.

In 2017, China became the largest importer of crude oil in the world, surpassing the United States and 70% of this was met through oil imports mainly from the West Asian region. In the coming twenty years, these oil imports of China are expected to grow by 10%. Therefore, energy security and oil supply in particular have profound importance for China considering that the huge and powerful economy of China might derail and dwindle if that oil supply diminishes leading to not just an industrial break down but also impact on the China’s overall credibility as a great power in the world which rests, to a great extent, on its economic prowess. The dependence of the Chinese economy on its oil imports is thus an established and critical fact.

The transport of oil through the maritime route from West Asia to China passes through many strategic choke points. One of the most important among these is the Malacca Strait through which 80% of the energy import to China takes place. More than 50,000 merchant ships ply this narrow strait which amounts to 40% of the world trade. China’s economic security is closely tied to maritime trade security as 60% of its trade value travels by sea. Much of the trade between Europe and China enters the South China Sea through the Strait of Malacca. Similar is the case with the trade between China and Africa. Therefore, even for trade, the Malacca Strait holds significance for China.

Lying between the island of Sumatra and the Malay Peninsula, this narrow stretch of water known as the Malacca Strait is the main shipping channel between the Indian Ocean and the Pacific Ocean and is one of the most important shipping channels in the world. However, this strait is not depended upon only by China but other major powers too which has been a concern for the Chinese leadership in the past, fearing that these powers might be trying to control the Strait. A control of the Strait of Malacca by anyone will also mean that they control the oil routes to China and thus the economy too indirectly. This created what is known as ‘The Malacca Dilemma’, a term coined in 2003 by Hu Jintao, the then president of China. When it comes to the Strait of Malacca the fear of other states controlling this strategic transit is greater than the ambition to control the Strait itself.

In 2003-04, here was a threat of piracy in the region which the littoral states, namely Malaysia, Indonesia and Singapore were able to curb to a large extent. This however gave an opportunity to states like US and Japan to try to get more involved in the region in the name of security, which China heavily criticised. The littoral states invited capacity building  and rejected permanent stationing of any outside power. Singapore, which is in the southernmost tip of the Malacca Strait has excellent relations with the U.S. The relations between U.S. and Indonesia are cordial.

ASEAN being the collective voice of the region has a strong say in the functioning of the Strait. Following the threats by piracy and great power involvement, today the countries of the ASEAN have sought to create a Peace and Security Community (APSC) based on three key characteristics: a “rule based community of shared values and norms”; cohesive, peaceful, stable and resilient region with “shared responsibility for comprehensive security”; and a dynamic and outward looking region in an integrated and interdependent world. But the relations between China and many of the ASEAN states have been soured due to differences in territorial claims in the South China Sea. This has added urgency to China’s need to find an alternative to the Malacca Strait. Moreover, in the recent past, India has increased her naval presence in the Andaman Sea from its base in the Great Nicobar Islands largely due to its own perceived threat perceptions emerging from China’s ‘String of Pearls’ that have emerged as a result of the Chinese activities of the past. Given its projection capabilities in the Indian Ocean, the Indian Navy is able to keep a close watch on the PLA Navy in the region.

However, China has a few options in hand which are costly but worth trying. The Kra Isthmus Canal seen to the Asian Panama Canal as well as the Strategic Energy and Land Bridge have both seen a lack of much enthusiasm due the massive cost as well as the lack of trust between China and Thailand. Thailand is considerably powerful and will be hard to press. The Lombok and Makassar Strait are longer routes and would have additional shipping costs which can reach more than $200 billion per year making it a less viable option.

While nothing currently has the capacity to completely replace the Malacca Strait, two options available for China that can completely avoid passing through the Malacca Strait and many of the other strategic choke points is the Gwadar-Xinjiang pipeline and the Myanmar-Yunnan pipeline, although the latter can be affected by Indian presence. These options serve the additional purpose of opening up lesser developed regions of China like Xinjiang and Yunnan. The Gwadar-Xinjiang line will allow the Chinese energy imports to completely circumvent the Malacca Strait. However, the pipeline in Pakistan is faced with major logistic difficulties due to some of the harshest and the most rugged terrains in the world being present there, which can prove technically difficult as well as very expensive to navigate. The region is also ridden with terrorist activities which can potentially disrupt the supply or if the worst materialises, control these and be at an advantageous bargaining point. All these factors stand as difficulties that require investment in the form of infrastructure and security.

The Kyaukpyu Port which is being developed by the Chinese government in Myanmar is another alternative for China. The oil from the west can be docked here and transported to China via the Myanmar-Yunnan pipeline. However, now the pipeline only transports 420,000 barrels per day compared to the 6.5 million barrels per day that pass through the Strait, bound to China. The speeding up of the China sponsored infrastructural development, as a result of the increasing ties between the two countries, which was cemented during the January 2020 visit of Xi Jinping to Myanmar, has the potential to solve this problem to some extent. However, it cannot increase the capacity of this alternative as much as the Malacca Strait. Therefore, comparing the capacities of the various alternatives available to the Malacca Strait, it is evident that there is no single replacement for the latter.  China can rather rely on multiple routes for the transfer of energy sources and trade to sustain the humungous economic machine. It is to be noted that the multiple alternatives, with efficiencies which cannot rank up to the Malacca Strait pose a dilemma in solving the Malacca Dilemma. Thus, the best option that China has in hand is to lower the contestation in the Malacca Strait and to find a peaceful way to work with.

China-Solomon Islands: An overview of a brand new friendship

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Tanishka, Research Intern, ICS

  • China & Pacific Island Countries

The Asian superpower China, second-largest aid provider to the Pacific Island countries established diplomatic relations with the Solomon Islands in 2019. A country of just over half a million people, a low-income economy with more than three-fourth of its population living in small villages, is among the lesser developed countries of the South Pacific region. The Chinese offers of infrastructure projects, concessional loans along with aid-in-kind and Solomon Island’s rich timber, fish, and potential seabed resources facilitated the connection between the two countries. China’s other motive for establishing diplomatic relationships in the Pacific is limiting Taiwan’s international space. Solomon Islands switched allegiance from Taipei to Beijing, terminating its 36-year-old official relationship with Taiwan. Out of the fourteen Pacific Island states, China now has ten partners.

For the Solomon Islands, the decision to switch allegiance, came from the recommendations of a task-force deployed by Prime Minister Sogavare, which indicated the past action to establish ties with Taiwan, which was economically more active than China back then was bought by money power. The report pointed out that presently Taiwan has a limited economic capacity while China’s investments cover the entire globe; the switch thus, brings a large potential donor to Solomons. The report can be characterized as Idealistic towards the People’s Republic of China, it also asked an open-ended question —when was the last time the world saw China invade another country?

China assured funding for 2023 Pacific Games hosted by Solomon Islands in the form of grants and the main stadium would be a gift from Beijing. But, the infrastructure project will not provide local employment, as Chinese companies bring their own construction workers. In the future, maintenance of such infrastructure facilities will be a great challenge for the government of Solomon Islands, as it became for Vanuatu, which had no budget to maintain the Chinese-funded national convention centre.

There is an ongoing assessment by Solomons’  Finance Ministry regarding $US100 million loan offered through a Chinese broker[1]. Matters such as restrictions on the usage of loan money, determination of loan’s interest rate and the duration of loan which could be twenty years or more are not yet settled. Denton Rarawa, the previous governor of the Solomon Islands Central Bank showed displeasure over government proposals, warning this could land Solomon Islands in China’s debt trap. We may also note that the traditional donor, Australia imposes strict supervisions on aid programs and pays attention to economic and political reforms in the Pacific region, Chinese assistance, on the other hand insinuate a “no strings attached” strategy as a bait. Clearly, China seeks supremacy over other donor countries to advance its geostrategic interests.

The Solomon Islands has not yet accepted every Chinese offer on the table. During Prime Minister’s first official visit to China, he met with the leaders of Sam group, a state-connected enterprise, and invited them to the Solomon Islands.  But the Solomons rejected a deal that asked for the lease of Tulagi Island for 75 years. The Island is of strategic importance – it was the Solomons’ capital under British rule for forty-six years, then a Japanese base and an American base in World War II. In 1952, the capital shifted to Honiara. The government called the deal with Sam group illegal due to a lack of vital details and ordered its termination. 

This issue raised concerns over China’s intentions. Perhaps, it wanted to challenge the Western world by installing a military base there. Defence experts raised similar concerns a year ago, with Chinese-funded Vanuatu dockyard, which is too big for commercial use but a perfect location for visiting foreign navy ships –  such as a rapid Chinese move to become two-ocean navy. Located not too far from the Australian coastline, if these military bases come up, it can lead to military tensions in an ocean about which Australia did not have to worry since 1942. TheSolomon Islands showcases a desire to be on the right side of history and normalize relations with the People’s Republic of China. It is not the only Pacific Island country to establish diplomatic relations with China in 2019. Kiribati followed its trail. China’s intensified economic efforts could soon take away the four remaining Taiwan’s Pacific allies: Tuvalu, Nauru, Palau and the Marshall Islands. Taiwan has indicated that China has a desire to make the Pacific Ocean another South China Sea. These actions have been disapproved by the United States who itself switched recognition to China four decades ago. It also recently declined the Prime Minister Sogavare’s request for a meeting with the United States Vice President, and it has begun to reassess the aid it provides the Islands. Although China’s plan to install a military base remains a matter of speculation, its search for new markets and the untapped under-seabed resources remains the prime reason for its pursuits in the Solomon Islands and South Pacific region.

[1] The deal was reported by ABC News. The article mentioned a loan deal of $US100 billion instead of $US100 million. It is important to understand that the Solomon Islands is a small economy with a GDP of $US1.3 billion (ABC News. 2020. ‘Solomon Islands discussed $US100 billion loan from Chinese businessman, according to leaked letters’. February 21).