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” →

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” →

The China Factor in Russia–US Equation

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Dr. Atul Bhardwaj, Adjunct Fellow, Institute of Chinese Studies

Trump is no admirer of the post-war liberal international order. He is neither keen to invest to save NATO nor is he interested in subsidizing the United Nations. He wants to stop splurging and rely more on allies’ money and material to maintain American hegemony.

Besides saving precious dollars, Russia is the other crucial element in Trump’s strategy to halt the impressive march of China, its peer competitor. In his endeavour to get Russia back into the US camp, Trump has the full support of Henry Kissinger, the former secretary of state and national-security adviser under Presidents Nixon and Ford. Kissinger, a typical offensive realist is well- versed in the technique of balancing realism with restraint. He feels that in the best interest of realpolitik, America should be more restrained vis-a-vis Russia. Kissinger feels that Putin is not “a character like Hitler, He comes out of Dostoyevsky.”  Continue reading “The China Factor in Russia–US Equation” →

CFIUS 2.0: An Instrument of American Economic Statecraft Targeting China

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Uday Khanapurkar, Research Intern, Institute of Chinese Studies

Trade tensions notwithstanding, with the strengthening of the Committee on Foreign Investment in the United States (CFIUS)1, little doubt remains that contemporary Sino-American relations are characterised by an “admixture of the methods of commerce with the logic of conflict” (Luttwak, 1990, p.19). ‘CFIUS 2.0’ is slated to exhibit an unprecedented quantum of oversight and finesse in conducting American economic statecraft with its sights fixed largely on China.

With the American foreign policy focus, having pivoted from counter-terrorism to strategic competition with a rising China, the recent iteration of CFIUS reforms2 takes due stock of the USA’s changing priorities. Interestingly, nine out of the 11 takeover bids killed or abandoned at CFIUS’ suggestion under the Trump administration originated in China.

The renewed CFIUS process is now geared toward preventing Chinese appropriation, through equity investments, of American technologies that underpin American competitiveness or which the DoD considers sensitive to military superiority. With respect to critical technologies and infrastructure 3, CFIUS is now enabled to review investments by foreign persons irrespective of whether the stake obtained is controlling (upward of 50 per cent) or not. In doing so, FIRRMA aims to safeguard even Continue reading “CFIUS 2.0: An Instrument of American Economic Statecraft Targeting China” →

Building New Capital Cities: Amaravati and Xiong’an

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Ms. Ramya Kannan, Research Intern, Institute of Chinese Studies

A look into the development of major cities in India and China would yield very different results. While the former has for the most part seen organic growth of urban centres based on opportunities for differentiated labour, the latter is known for its unique model of planned expansion (Euromonitor Research 2013). In keeping with its ‘urbanization with Chinese characteristics’, Xi Jinping administration announced the building of a subsidiary capital in the Beijing-Tianjin-Hebei economic triangle last year, called Xiong’an New Area (雄安新区 Xióng’ān Xīnqū). The development of a city from scratch is not new in China, where the government has often allocated resources to specific city-building projects (Gere 2017). What is interesting is that the state government of Andhra Pradesh (AP) in India committed itself to a similar project in 2015 with the announcement of a new capital city in Amaravati. While Xiong’an signifies an attempt to downsize an overpopulated city with too many functions, Amaravati seeks to expand the very notion of a capital city in India. Nevertheless, strong political motives, new policy measures and large investments underlie these capitals in the making.

Amaravati was envisioned as a world-class metropolis modeled on various cities, including Singapore and Shenzhen, which would redefine urbanization in India and establish AP as an important region. Continue reading “Building New Capital Cities: Amaravati and Xiong’an” →