Category: Uncategorized

The USMCA, China and the Politicisation of Economic Intercourse

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Uday Khanapurkar, Research Intern, Institute of Chinese Studies

Strategic competition between the USA and China continues apace in the economic domain with tit-for-tat tariffs and strengthened investment regulations. This reassertion of sovereignty has irredeemably politicised economic intercourse. The market share that a state’s productive agents command has, akin to a conventional resource such as oil, emerged as a veritably prominent component of national power, thus bringing the zero-sum character of the international system to the fore. So much so, that the restructured Free Trade Agreement (FTA) between the US, Mexico and Canada, or the USMCA, also reflects the adversarial tenor in US-China relations.

Much attention has duly been afforded to article 32.10 of the USMCA since it quite explicitly targets China. According to this provision, should any signatory to the agreement enter into an FTA with a non-market economy (read China), the other parties reserve the right to dismantle the USMCA following a six-month notice. Continue reading “The USMCA, China and the Politicisation of Economic Intercourse” →

Re-emerging importance of South Pacific Islands

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Ms. Prarthana Basu, Research Assistant, Institute of Chinese Studies

At the Pacific Islands Forum in September this year, Nauru, a ‘small’ island country, accused China of heavy-handed behaviour in its attempts to ‘buy’ its way through the region. This brings into sharp focus the increasing centrality of the South Pacific region in the tumultuous geopolitical landscape of the Indo-Pacific. The South  Pacific islands have come into prominence owing to two main factors: climate change, and several layers of power tussles, the most significant of which is between China and the US.

Climate change has had a devastating impact on several island countries of the region, including but not limited to flooding and tsunamis, which has also fuelled fears about its future consequences. On the strategic tussle front, China has invested heavily in these islands to counter Taiwan’s growing relationships in the region, such as with Nauru, Continue reading “Re-emerging importance of South Pacific Islands” →

Understanding US responses to the South China Sea Dispute

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Saurav Sarkar, Research Assistant, Institute of Chinese Studies

The National Bureau of Asian Research, an American non-profit research institution, recently published a study titled ‘Tenets of a Regional Defense Strategy: Considerations for the Indo-Pacific’. The study comprehensively outlines multiple challenges facing American policymakers in the near future in the Indo-Pacific region – ranging from tensions between India and Pakistan to the militarisation of the South China Sea (SCS).

While the study in itself deserves a read to better understand the present situation and potential crises in the region, there was one particular footnote that demands particular attention. In it, Admiral (Retd) Jonathan Greenert, former Admiral in the United States Navy, talks about his interactions with Admiral (Retd.) Wu Shengli, former Commander of the People’s Liberation Army Navy (PLAN), who made it clear to Greenert that China expected a more ‘forceful’ reaction from the US when it first began building islands in the SCS. The Barack Obama administration’s response, apparently, was not robust enough, which further emboldened China.

On 1 October in New Delhi, a conversation was held between former Australian Prime Minister Kevin Rudd and former Indian Foreign Secretary, Shyam Saran, on ‘Shift in Power Balance – India, US and China’. Continue reading “Understanding US responses to the South China Sea Dispute” →

Rohingya Crisis: an opportunity for China?

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Navreet Kaur Kullar, Research Intern, Institute of Chinese Studies,

The plight of Rohingya Muslims in Myanmar’s Rakhine state has drawn considerable international attention. The attacks carried out by the Arakan Rohingya Salvation Army (ARSA) on the security installations, sparked the Tatmadaw’s crackdown on the ethnic Rohingyas and thousands of them lost their lives and hundreds of thousands more got displaced. The bloodshed has smeared the international standing of Nobel Peace laureate Aung San Suu Kyi, who led National League for Democracy to a victory in historic elections of 2015. Her supporters have realised that she is either unable or unwilling to take on the military, which is still considered to be the most powerful institution in the country, despite the recent democratic reforms. Continue reading “Rohingya Crisis: an opportunity for China?” →

Tightrope walk for incoming Maldivian president

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Gunjan Singh, Research Associate, Institute of Chinese Studies

The results of the recent election in Maldives are an indication that a major challenge to the Chinese Belt and Road Initiative is emerging from the vicissitudes of domestic politics in BRI partner nations.The victory of Ibrahim Mohamed Solih of the Maldivian Democratic Party (MDP) in the island nation’s presidential election reiterates the fact that there is something very wrong with the direction of Chinese investment. In the last few years there has been a rise in sentiment against Chinese investment in the countries where the BRI is in play.

The election also strengthens the impression that in the South Asian region, China will have to work at multiple levels to counter Indian influence. Continue reading “Tightrope walk for incoming Maldivian president” →

China-North Korea Relations under Xi Jinping

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Gunjan Singh, Research Associate, Institute of Chinese Studies

North Korea has regarded China as its most natural ally and supporter since the Korean War. The relationship had begun to show signs of strain after the continued nuclear tests by North Korea and it became increasingly difficult since Xi Jinping came to power. The last Chinese leader to visit North Korea was Hu Jintao in 2005. Even though China is the only country helping North Korea manage its domestic problems and economic difficulties, the relationship has started to show signs of strain. Beijing will not totally abandon Pyongyang or push it towards a total breakup as the influx of refugees is a major concern for China and for its border security and regional peace. However, the last few years have highlighted that China is ready to use its leverage to steer North Korea’s behaviour in a more acceptable direction.

There were reports that Xi Jinping may visit Pyongyang on September 9 for the 70th anniversary of the North Korea’s Foundation Day. Continue reading “China-North Korea Relations under Xi Jinping” →

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” →