India-China Face-off in Doklam: Need for both Resolve and Prudence 

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Shyam Saran, Member, ICS Governing Council and former Indian Foreign Secretary and Prime Minister’s Special Envoy

The latest face-off between the Indian and Chinese security forces in Doklam, where the borders of India, China and Bhutan meet, brings a sense of déjà vu. There was a similar extended face-off in the Depsang area in Ladakh in April 2013. There have been other incidents as well but the mechanisms in place to maintain peace and tranquillity at the border have eventually worked and the issues have been resolved. Both sides have remained committed to preventing escalation. One hopes that the Doklam incident will not be allowed to vitiate the relationship between the two countries, particularly in view of the fact that Prime Minister Modi and Chinese President Xi Jinping reportedly had a friendly meeting on the sidelines of the recent meeting of the Shanghai Cooperation Organisation (SCO) in Almaty. Both leaders made a special effort to put relations back on a positive track after a somewhat prickly interlude, which included India’s refusal to join the Chinese-led One Belt One Road initiative. This turnaround in relations must not suffer a setback as a result of the latest incident. This may impact the prospects of a possible bilateral summit when the leaders attend the forthcoming G-20 summit in Hamburg. Continue reading “India-China Face-off in Doklam: Need for both Resolve and Prudence “ →

Panama Switches Diplomatic Recognition to PRC: Understanding the Chinese Action and Strategy

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Jabin T. Jacob, PhD, Fellow, Institute of Chinese Studies

Taiwan has lost yet another member of the small group of countries that recognize it diplomatically with Panama in Central America making the move to build ties with the PRC instead. The last country to switch ties was São Tomé and Príncipe in December 2016. Before that it was Gambia at the beginning of the previous year. But in between it must also be recalled that there was the move in Nigeria to get the Taiwan representation to move from Abuja, the capital, to Lagos, Nigeria’s commercial center, an attempt to curtail whatever limited diplomatic privileges that the Taiwanese enjoyed in practice there. Taiwan is now down to just 20 countries recognizing it officially.[1]

With the latest action, there can be no doubt that China under Xi Jinping is engaged in a long-term but steady strategy of trying to isolate Taiwan diplomatically and constrain its international space. Beijing is declaring in unequivocal terms that it does not believe that it can reach any form of accommodation with Tsai Ing-wen’s pro-Taiwanese independence Democratic Progressive Party-led government and that its patience to wait for reunification is diminishing. Continue reading “Panama Switches Diplomatic Recognition to PRC: Understanding the Chinese Action and Strategy” →

Artificial Intelligence and China’s Future

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Shruthi Anup Kumar, Research Intern, ICS

The field of artificial intelligence or AI encompasses a number of possibilities. Ranging from autonomous driving systems and language interpretation to facial recognition and military weapons, AI comprises not only the development of a robot that can move, think and talk like a human being but also includes smart programmes that are built to overcome our shortcomings and make the job easier for a human being.

In 2015, China’s central government launched the ‘Made in China 2025’ policy,[1] whereby the shift in focus from mass producing factory goods to developing high tech manufactured products by the year 2025 was announced. The effect of this policy was especially felt in the AI sector which is expected to grow from an industry of 23.9 billion Yuan (as of 2016) to 38 billion Yuan by the year 2018.[2] Continue reading “Artificial Intelligence and China’s Future” →

China’s Technological Success in Manufacturing

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Amitava Banik, BE (E&C), PGDM (Insurance Business)

China has for some time now been holding a position of technological significance in the world. It is a great success story for a country that is still counted among the world’s developing nations. Memories of the time it had been associated with inferior quality products have all but vanished. China has not only been extremely successful in making its products the “new normal” all over the world, but with its investments in cutting edge technologies, infrastructure and skilled manpower, it has started to edge into the hi-tech zone.

It is generally accepted that countries develop in successive stages from an agricultural economy to industrial manufacturing and then to a service-based economy. All major world economies have traversed this path. The transformation in India on the contrary, has been from the agrarian economy to a service economy, virtually jumping over the manufacturing stage. One of the primary reasons put forward by economists for this bypassing of the manufacturing stage in India, is the lack of progress of primary education in the country. Continue reading “China’s Technological Success in Manufacturing” →

Does Chinese Public Opinion on North Korea Affect China’s Foreign Policy?

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Niyati Shetty, Research Intern, ICS & 1st MA International Studies, Christ University, Bangalore

Over the years, Chinese public opinion towards North Korea has shown a downward trend with an increasingly negative opinions gaining ground. There are two aspects to public opinion – popular opinion and elite opinion. Chinese popular opinion about North Korea’s leader Kim Jong-un is reflected in his nickname ‘Kim Fatty III’ (Jīn Sān Pàng), widely used by Chinese netizens[1]. In 2013, after North Korea’s third nuclear test, a web search on ‘North Korea’ showed that the majority of the 41 million mentions were about North Korea being a security threat and urging the government to change its policies towards the country.[2] There have also been various incidents that triggered the Chinese public’s growing resentment against North Korea.[3]

Chinese elites and scholars have also been a part of this negative discourse against North Korea. Continue reading “Does Chinese Public Opinion on North Korea Affect China’s Foreign Policy?” →

Pressing Pause: India’s Absence at China’s Belt and Road Forum

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Shyam Saran, Member, ICS Governing Council and former Indian Foreign Secretary and Prime Minister’s Special Envoy

The successful conclusion of the Belt and Road Forum (BARF) in Beijing, which India chose to stay away from, has led to a chorus of voices warning that in doing so, India has isolated itself both regionally and globally.

With the exception of Bhutan, all the South Asian neighbours of India participated, as did countries India regards as its partners in resisting the Chinese dominance of Asia; these include the US, Japan, Australia and Vietnam. Japan and Vietnam are also countries of South East Asia, which, like India, have territorial disputes with China, but they did not consider those disputes reason enough to stay away. It may also be argued that India itself has not let its territorial disputes with China stand in the way of cooperating with it on matters of mutual interest such as the Asian Infrastructure Investment Bank (AIIB) or the BRICS Development Bank (DB).

India’s membership of the Shanghai Cooperation Organisation (SCO) will also present opportunities for regional cooperation with China and other member countries. These opportunities constituted a rationale for seeking membership in the organisation. So, did India make a wrong call in staying away from the BARF? Continue reading “Pressing Pause: India’s Absence at China’s Belt and Road Forum” →

GST and Doing Business in India

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Sacchidananda Mukherjee, PhD, Associate Professor, National Institute of Public Finance and Policy, New Delhi

A version of this article was originally published in Chinese as ‘商品和服务税对在印经商的影响’ [Shangpin he fuwu shui (GST) dui Yin jingshang de yingxiang], Diyi Caijing, 15 May 2015. This is part of a series by Indian scholars in China’s top business affairs news portal facilitated by the ICS. The English version follows below the Chinese text.

在经历漫长的等待之后，印度终将于2017年7月1日起推出商品和服务税（GST)，实现统一税制。在四项法案（Central GST、Integrated GST、Union Territory GST、GST Compensation to States）通过印度两院批准后，将会形成GST征税行政框架以及执行规则。

预计GST改革委员会将于2017年5月为各商品指定税率。不同社会经济阶层所需承担的不同税负在很大程度上取决于细致划分下不同税率的商品与服务。目前，委员会已确定了四层税率结构（5％、12％、18％和28％），预计委员会还将公布一份简短的，包含了部分基础商品及服务的豁免清单。而对于低质货物（如烟草制品、汽水）及对环境有害的物质（如煤炭），除了征收最高税率外，还有征收额外的GST补偿税。由补偿税组成的税收收入将用于补偿邦政府在新税制实施头5年面临的税收损失。此外，委员会还明确了针对不同类别商品设定的相应的最高GST补偿税率，如对槟榔、豪车分别征收135%、15%的税，对每吨煤征收400卢比。不过具体到各不同商品的GST补偿税尚未明确。因进项税可抵免GST补偿税，因此不会产生针对补偿税的阶梯税率。 Continue reading “GST and Doing Business in India” →

India’s Concerns about China’s Belt and Road Initiative

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Ashok K. Kantha, Director ICS and former Indian ambassador to China

It is one of the most imaginative and ambitious programmes ever to be rolled out by a government. It represents a broad strategy for China’s economic cooperation and expanded presence in Asia, Africa and Europe, and has been presented as a win-win initiative for all participating nations. But for India, the connotations of China’s Belt and Road Initiative” are somewhat different. A flagship programme and the most advanced component of the initiative, the China-Pakistan Economic Corridor (CPEC), passes through Pakistan-occupied Kashmir, a region that belongs to India and is under the control of Pakistan. As a country acutely conscious of its own sovereignty-related claims, China should have no difficulty in appreciating India’s sensitivities in this regard. Continue reading “India’s Concerns about China’s Belt and Road Initiative” →

Economic Ties with China: India Needs to Look Beyond Politics

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Alka Acharya, ICS Honorary Fellow and Professor, Centre for East Asian Studies, School of International Studies, Jawaharlal Nehru University, New Delhi

There appears to be a world of difference between the images presented by India-China economic and commercial ties on the one hand and the politico-strategic on the other. Interactions and exchanges with representatives from both these domains are markedly different in tone and tenor—the former focus on the opportunities, openings, benefits and profits while the latter dwell more on the dangers, threats, challenges and disputes.

Prima facie, they appear to be working at different levels, according to their own—somewhat different—logic and rationale, and it does not look like they will converge any time soon in a more composite picture of this most critical of relationships in the world today. The political understanding at the highest level, which is committed to building a strategic and cooperative—and now more promisingly ‘developmental’—partnership, struggles with deep suspicion that runs through practically our entire strategic discourse. On the other hand, economic engagements have become the most dynamic and transformative aspects of the India-China relationship today. But this has to contend with the structural mismatch between the manufacturing strengths and industrial capacity of the two economies—and therefore, unsurprisingly, perceived by and large as a situation that works only to China’s advantage. The controversial and contentious political issues and the angry exchanges understandably garner greater attention.

Bigger Picture

And yet we must ask ourselves as to whether that is all there is to the overall picture. Continue reading “Economic Ties with China: India Needs to Look Beyond Politics” →

Explaining China’s Belt and Road Initiative

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Ashok K. Kantha, Director, ICS and former Indian ambassador to China

The Silk Road Economic Belt and the 21st Century Maritime Silk Road, launched in late 2013, is the signature project of Chinese President Xi Jinping. Now re-designated as the Belt and Road Initiative (BRI), it is one of the most ambitious programmes ever rolled out by any government. The Belt and Road Forum being held in Beijing on May 14-15 showcases its achievements to 28 foreign heads of state and government, as also delegations from other countries. No official participation from India has been announced so far. Backed by huge resources, BRI has acquired overarching importance in foreign policy and domestic domains of China. As it has Xi’s personal imprimatur, a wide range of ongoing projects and activities have been folded into the grand narrative of the BRI, with its contours still evolving. Continue reading “Explaining China’s Belt and Road Initiative” →