China-India Brief #81

Guest Column

The Geopolitics of Chinese Maritime Silk Diplomacy

by Rajeev Ranjan Chaturvedy

An article published in the Global Times (the state-run Chinese daily) was titled “India’s political goals hinder cooperation with China on ‘Belt, Road’”. The article claims that former Indian Prime Minister Dr Manmohan Singh and his National Security Advisor Shivshankar Menon “expressed support and interest” in Chinese proposal of the 21^st century Maritime Silk Road (MSR), but current Prime Minister Narendra Modi “changed India’s attitude” toward the initiative and India has adopted “opposing, delaying and hedging measures toward different parts of the MSR”. While claims made in that article are debatable, it is pertinent to ask: what is the geopolitics of Chinese maritime silk diplomacy?

The current Chinese leadership seems fairly optimistic in its effort to reshape the country’s global profile in a bold and creative way – a key element of which is to build up an economic system with China at the centre of it. China is taking decisive steps to improve its overall geopolitical position by securing natural resources and developing extensive transport networks, including roads, railways, ports and energy corridors. Beijing is also increasing its influence through a series of international investments. Undoubtedly, the proposal of reviving the ancient Maritime Silk Road demonstrates this innovative approach.

The MSR, together with the Silk Road Economic Belt, has emerged as a signature foreign policy initiative and is the first global strategy for enhancing trade and “fostering peace” proposed by the Chinese President Xi Jinping. This initiative has a clear strategic purpose and it is a helpful channel for the Chinese grand strategy. The MSR aims to seize the opportunity of transforming Asia and to create strategic space for China. The success of the MSR initiative will be extremely consequential to regional stability and global peace. Today, China is in the process of remaking history at sea, and some scholars view it as “China’s maritime renaissance”. China’s growing merchant marine, expansion of its global shipbuilding market, increasing reach in building and managing off-shore ports and port facilities, and efforts to develop a modern blue-water navy are evidence of China’s growing ambitions. China is influencing perceptions, relationships and organisations all over the world.

The Chinese leadership has promised to transform China through a national rejuvenation in order to realise the “China Dream”. Beijing is also responding to the region’s need for investment and development and aims to unlock a massive trade potential and bolster economic development through this initiative. It has become a defining strategy for economic outreach to China’s partners. The MSR initiative, in fact, is an attempt to create a favourable international environment conducive to China’s continuing development, and thus it has to be seen as an important element of Chinese grand strategy. This ambitious initiative will receive funding from seven capital pools, among which the Silk Road Fund, AIIB, the BRICS Bank, and the SCO Development Bank are likely to play major roles. With full political and financial support from the Chinese government, the MSR strategy has become one of the key tasks in China’s diplomacy.

Several Chinese scholars claim that the initiative is also part of the new round of China’s “opening up” strategy. China is facing challenges of overproduction and overcapacity, particularly in the steel and construction material sectors. This initiative aims to create more overseas demand, and thus could help in addressing China’s domestic economic problems. There is now a growing need for China to invest more in foreign countries. The labour market is becoming more competitive and costs are increasing. So, through this initiative China could aim for an economic restructuring. Moreover, the initiative is expected to drum up development initiatives in the less developed regions of China to narrow income gaps between regions. Also, the initiative could be an excellent overseas investment opportunity for the Chinese private sector.

More importantly, the MSR aspires to improve China’s geo-strategic position in the world. The Chinese Navy (PLAN) is “at a critical stage of a thorough transformation, extending its operations from coastal defence to far-seas power projection” and the MSR has “set an enlarged scope for the PLAN’s expansion into the Indo-Pacific region”. You Ji, an expert on Chinese military transformation, writes that “the MSR expresses a Chinese Indo-Pacific strategy with clear military relevance” and this initiative has “renewed discussion among PLA about the necessity of erecting a ‘chain of pearls’ towards the Indian Ocean”. The MSR initiative is an incremental strategy and “Xi’s call is being structured into the navy’s two-ocean strategy”. While, Chinese government officials have denied a geostrategic notion of the MSR, a common view is affirmative about its strategic and geopolitical aspects. Indeed, China’s Indo-Pacific ambition takes place in phases – economics complemented by strategic access.

Therefore, the salient points of Chinese maritime silk diplomacy can be summarised as follows. First, this strategy reflects a shift from China’s low-profile international strategy to a more pro-active international strategy to help shape a new international and regional order. Indeed, the control of the sea lanes and points of strategic egress has become increasingly indispensable to China’s strategic designs in the Indo-Pacific region. Second, China seeks to reap the benefits of its growing economic power and expanding influence across the globe. The MSR aspires to secure global access to natural resources, raw materials and overseas markets for sustaining China’s economic expansion. Third, the initiative reflects China’s growing confidence and also a response to American ‘pivot’ strategy. Finally, the initiative is comprehensive, focussed and President Xi Jinping’s pet project. Through this grand vision, the ambition of China’s new leader is to significantly upgrade China’s status in the world.

Over past few decades, China has emerged as a major maritime power and offering maritime infrastructure development to friendly countries. Chinese maritime silk diplomacy offers new opportunities to cooperate in many sectors including trade, infrastructure and cultural exchange, etc. The MSR could spur economic development, promote people-to-people contact and enhance understanding. However, there is cautious optimism among major Asian countries. Also, there is a widespread perception among several Asian countries that “mutually beneficial” development projects often benefit China more than the host country. Indeed, there is a view that the Chinese MSR initiative is more about deepening ties with regional governments and providing work for Chinese industrial companies. Substantial investment in port facilities and related infrastructure in various locations – including in Pakistan, Sri Lanka, Bangladesh, Indonesia, Myanmar and Malaysia – is planned or under way. It is believed that new, expanded or more advanced capacity will improve connections between the sea and land legs of trade movements, raising overall transport efficiency and reducing costs. Enthusiasm for the MSR initiative has been quite limited thus far in South Asia and Southeast Asia, except in Pakistan, and the economic logic of the initiative still seems questionable. As a result, there is a worry that the geopolitical aspects of the MSR may dominate. In the long run the PLAN “will acquire overseas supply points for its naval expeditionary fleets to get to the Indian Ocean and the South Pacific” and “Pakistan has already made the port of Gwadar available for Chinese to use as a naval logistical base”. With the MSR in action, it is only a matter of time before the PLAN will turn Gwadar into “a foothold in the Indian Ocean”. ⁱ

Further, China’s more assertive policies, such as in the South China Sea enhance uncertainty and anxiety within the Indo-Pacific region. Given China’s growing assertiveness, it is difficult for the region’s smaller states to avoid a feeling of doubt about the MSR China perhaps forgets that, because of its size, any move it makes could have large implications for its smaller neighbours. Hence, China needs to address the trust deficit that exists with some of its neighbours while undertaking such initiatives.

The MSR initiative could be very helpful in reinforcing cooperation and raising it to a new level of maritime partnership. China has yet to cultivate the much-needed political and strategic trust. Transparency and objectivity will help Chinese maritime silk diplomacy to gain greater traction and wider support, including from India.

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ⁱ You Ji, China’s Military Transformation: Politics and War Preparation, Cambridge: Polity Press, 2016, pp.186-189.

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Rajeev Ranjan Chaturvedy is Research Associate at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore. He can be contacted at decb64_aXNhc3JyY0BudXMuZWR1LnNn_decb64. Opinions expressed in this paper do not necessarily reflect the views of ISAS.

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Guest Column

Security Discussions between China and India: A Two-level Logic

by David Scott

Between April and September 2016 China and India engaged in a variety of security discussions involving their special representatives, national security advisors, defence ministers, foreign ministers and heads of government. These discussions show a two-level logic of some global agreement, but more evident regional disagreements.

Special Representatives

From 20-21 April, the 19th Special Representatives’ Meeting on the India-China Boundary Question, a mechanism running since 2003, brought India’s National Security Advisor Ajit to China for discussions with his Chinese counterpart Yang Jiechi. Chinese Foreign Ministry comments were positive, that “the two sides enhanced mutual trust and expanded consensus through this meeting which is of great significance in promoting settlement of the boundary question, maintaining peace and tranquillity of the border areas and securing sound and stable development of bilateral relations”. However, vagueness surrounded what was actually discussed and agreed/disagreed since barring the opening remarks, officials on both sides maintained total secrecy on the proceedings and Doval himself declined to speak to the media. Chinese comments that “extensive, in-depth and candid exchange of views on the boundary question, bilateral relations, and regional and international issues” were opaque, candid being often a euphemism for blunt private disagreement. No progress was evident on incoming Indian border and regional concerns, though cooperation against terrorism was reaffirmed, including intelligence-sharing.

From 30-31 August, at the 9^th meeting of the Working Mechanism for Consultation and Coordination on China-India Border Affairs, Ouyang Yujing, China’s Director-General of the Department of Boundary and Ocean Affairs of the Foreign Ministry, had discussions in New Delhi with Pradeep Rawat, the Joint Secretary of the East Asia Division of the Ministry of External Affairs. A peaceful border was trumpeted despite heated Indian media comments the previous month about Chinese land “incursions” and airspace “violations” in the Chamoli district of Uttarakhand. Chinese rhetoric was positive in terms of the Working Mechanism being “to create favourable conditions for boundary talks … at the next stage”; but again this represents border management rather than border resolution since sovereignty dealing boundary talks remained unstarted.

National Security representatives

China and India share common global-level concerns on counter-terrorism. This was evident on 15 September, at the Meeting of the BRICS High Representatives Responsible for National Security, which brought together China’s State Councillor Yang Jiechi with India’s National Security Adviser Ajit Doval, with a newly-established BRICS Working Group on Counter Terrorism meeting the day before.

Foreign Ministers

On 17 April, China’s Foreign Minister Wang Yi and India’s Minister for External Affairs Sushma Swaraj met in Moscow for the Russia-India-China (RIC) Foreign Ministers meeting in which the RIC Joint Statement expressed common ground on pushing for a “multi-polar international system”. With regard to regional affairs, the three RIC Foreign Ministers also agreed to establish a new trilateral Russia-India-China Consultation on Asia Pacific Affairs that would meet in late-2016

Although Wang Yi was keen to stress that for the future “China and India should work together through the alignment of each other’s development strategies, in order to facilitate the earlier realization of the Asian century”, current friction over South Asia was apparent in further bilateral discussions between Swaraj and Wang, where Swaraj raised the issue of China’s blocking on 31 March of Indian attempts at the United Nations to add Masood Azhar, the leader of the terrorist group Jaish-e-Mohammed linked to the attack on Pathankot airbase in January 2016, to the list of banned persons under UN Security Council resolution 1267. China’s reasons for blocking India’s UN move were linked to its support for Pakistan, an ongoing security issue for India.

In late August, Wang Yi visited India to hold bilateral talks with Sushma Swaraj. The Chinese Foreign Ministry’s sense of the significance of Wang’s trip was that China-India cooperation was “facilitating multi-polarization progress” which was a pointer to constraining any US unipolar order. The ongoing border issue was joined on the agenda list by apparently candid but unreleased discussions over China blocking India’s bid to join the Nuclear Suppliers Group (NSG), over the China-Pakistan Economic Corridor (CPEC), and over New Delhi’s move to bring about a UN ban on Masood Azhar. Indian sources claimed this was “an occasion to start a conversation with Beijing”, but it was difficult to see any tangible movement on specific security issues. A two-level logic was suggested by official Chinese comments that the two countries would “never allow specific differences to affect the overall bilateral friendship and not let individual [border and regional] problems hold back the steps of bilateral [economic] cooperation”. It seemed an exchange of (divergent regional) views alongside some common global points of agreement on anti-terrorism and anti-piracy security issues. On the institutional front, one further development of Wang’s visit in August was the announcement of a new Foreign Secretaries Mechanism, to be led by the India’s Foreign Secretary and China’s Vice Foreign Minister.

Defence Ministers

On 16 April India’s Defence Minister Manohar Parrikar flew into China for a 5-day visit. The context, of concern to China, was the visit to India the preceding week by US Secretary for Defence Ash Carter, in which Parrikar had signed an “in-principle” acceptance of a logistics support agreement with the United States, which was widely interpreted in India as China-related, and which was fully signed on 30 August. Parrikar raised various friction points with China; namely the Masood Azhar issue, China’s inability or reluctance to provide LoC (Line of Control) delineation maps along their disputed borders, and the Chinese presence in Pakistan-controlled Kashmir – on all of which China gave little ground. Admittedly, a couple of Confidence Building Measures (CBMs) were agreed in principle, including establishing a hotline between the defence ministries and increasing local border meeting points. However, again this represented border management rather than border resolution. Parrikar’s own trip to the US in August 2016 brought further security strengthening and announcement of tacit China-centric balancing measures between India, the US and Japan in the shape of regular MALABAR naval exercises.

Heads of Government

Modi had discussions with Xi at the SCO Summit in July and the G20 summit being hosted by China in September 2016. China-India cooperation to defeat “the scourge of terrorism“ was agreed in their bilateral meeting in September, having been a similar shared concern at their SCO discussions. With regard to the G20 meeting, Indian sources argued that “India is expected to go along with China on several [global-level] trade and climate change issues during the discussions at G20, which opens on Sunday. But the devil is in bilateral meetings, and it is here that geopolitical issues would crop up”. The geopolitical issues are precisely those border and regional issues where the two countries remain locked in acute security competition.

End-2016

Global-level agreement, on issues like multipolarity, anti-terrorism and common economic development, is likely between China and India at the BRICS summit due to be held in India on 15 October. However, undercurrents of their regional friction are likely to be present at the RIC Consultation on Asia Pacific Affairs and their bilateral Maritime Affairs Dialogue scheduled for late-2016; where it will be revealing if the South China Sea is discussed or more likely brushed under the carpet. A similar two-level logic is also likely for the Foreign Secretaries Mechanism when it meets.

David Scott is a consultant and prolific writer on India and China foreign policy; having retired from teaching at Brunel University in 2015, but continuing to present at the NATO Defence College in Rome. He can be contacted at decb64_ZGF2aWRzY290dDM2NkBvdXRsb29rLmNvbQ==_decb64.

The views expressed in these articles are solely those of the author and do not necessarily reflect the position or policy of the Lee Kuan Yew School of Public Policy or the National University of Singapore.

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News Reports

Bilateral relations

India, China discuss nuke club membership
Global Times, September 14
India said it had held "substantive" talks with China on Tuesday regarding New Delhi's bid to become a fully-fledged member of the Nuclear Suppliers Group (NSG), a club of nations that trades in civil nuclear technology. Indian Prime Minister Narendra Modi is ­campaigning to join the NSG in order to back a ­multibillion dollar drive to build nuclear power plants in partnership with Russia, the US and France to reduce India's reliance on ­polluting ­fossil fuels. Yet Modi's bid to join the 48-member group, founded in response to India's first atomic weapons test in 1974, has so far failed to succeed.

China willing to enhance cooperation with India’s State of Maharashtra: Chinese state councillor
Xinhua, September 17
China is ready to further enhance cooperation with India's State of Maharashtra to achieve mutual beneficial and win-win results, Chinese State Councilor Yang Jiechi said. Yang made the remarks when he met with Governor of Maharashtra State Chennamaneni Vidyasagar Rao in Mumbai. China and India are working to build a closer development partnership, Yang said, noting that exchanges and cooperation in various fields between the two countries are expanding. At the same time, the cooperation between China and India's State of Maharashtra is in an active momentum, with cooperation carried out in various fields with high quality, said Yang. He said China is willing to boost cooperation with the state in such fields as technology, information industry and climate change, among others.

China, India agree to step up counterterror cooperation
Global Times, September 27
China and India on Tuesday held their first dialogue on counter terrorism and security. The two sides exchanged opinions on the international and regional security situation and their respective anti-terrorism systems, mechanisms and legislation. They also reached consensus on measures to strengthen cooperation and to jointly deal with security threats, according to a document issued after the meeting. The dialogue was jointly chaired by Wang Yong, secretary-general of the Commission for Political and Legal Affairs of the Communist Party of China Central Committee, and R.N. Ravi, chairman of Joint Intelligence Committee of India. In his talks with Ravi, Meng Jianzhu, head of the Commission for Political and Legal Affairs of the CPC Central Committee, commended stable progress in Sino-Indian ties.

Chinese troops violate border in Arunachal
The Hindu, September 27
After the Ladakh sector, Chinese troops came 45 km inside Indian territory in a remote area of Arunachal Pradesh earlier this month and built shelters to claim that the territory belonged to them, according to reports from the area. Initial reports from Anjaw district said more than 40 Chinese soldiers set up a temporary shelter at ‘Plum post’, an area 45 km inside the Line of Actual Control (LAC) in the district. Official sources said on Monday that the incursion was, however, detected by a joint patrol of the ITBP and Army on September nine after which a required banner drill was conducted. However, the Chinese troops were reluctant to leave the place and claimed that the territory belonged to them, the sources said.

Indian PM greets China on its 67^th National Day
Global Times, October 2
Indian Prime Minister Narendra Modi Saturday greeted people of China on occasion of 67th anniversary of the founding of the People's Republic of China. Modi posted his greetings on Chinese micro-blogging site Weibo. "Our relations date back to centuries, encompassing spiritualism, learning, art, trade and respect for each other's civilization and shared prosperity," an official statement quoted Modi as having written on Weibo. The Indian Prime Minister highlighted strategic relationship between the two Asian states. "At a time when the world looks towards Asia, the progress and prosperity of China and India, and our close cooperation, have the potential to shape a peaceful and stable future for Asia," Modi said.

News Reports

China and India in the Regions

China, India vow to advance cooperation among BRICS nations
Xinhua, September 15
China and India pledged on Thursday to further promote cooperation among the BRICS nations, and discussed issues such as cyber security, energy security and anti-terrorism. When attending the 6th meeting of BRICS senior representatives on security issues, Chinese State Councilor Yang Jiechi said that leaders of BRICS nations reached consensus on furthering BRICS cooperation when they met on the sidelines of the G20 summit in China's eastern city of Hangzhou earlier this month. China is ready to make joint efforts with other BRICS nations to make the upcoming BRICS summit in India's Goa a success and inject new dynamism into the BRICS cooperation, he added.

China says will continue to support Pakistan, doesn’t mention Kashmir
The Indian Express, September 22
References to Kashmir and tensions arising out of Uri terror attack were conspicuously absent in Chinese official media coverage of the meeting between China Premier Li Keqiang and his Pakistani counterpart Nawaz Sharif in New York. As all-weather strategic partners of cooperation, China and Pakistan have always firmly supported each other and their friendship is unbreakable, state-run Xinhua news agency quoted Li as saying while meeting Sharif on the sidelines of UN General Assembly session. China stands ready to deepen all-round practical cooperation with Pakistan and is willing to make joint efforts with Islamabad in injecting new impetus into the development of bilateral relations, Li said. While noting that practical cooperation focussing on the China-Pakistan Economic Corridor (CPEC) has made positive progress, Li urged the two sides to carry out the planned construction of the corridor, accelerate the building of the Gwadar Port as well as its supporting facility, and bring more companies into industrial parks, the report said.

Our stance on Kashmir unchanged, says China
The Hindu, September 27
China on Monday said it was not aware of the remarks in the Pakistani media, attributed to its Consul General in Lahore that Beijing will support Islamabad in case of “any foreign aggression.” “I am not aware of the situation you mentioned,” said Chinese foreign ministry spokesman Geng Shuang, when asked to comment on the reported remarks. In Pakistan, a statement from the Punjab Chief Minister’s office quoted Yu Boren, China’s top diplomat in Lahore, as saying,“In case of any [foreign] aggression our country will extend its full support to Pakistan.”

Pakistan sends envoys to China, post surgical strikes by India
The Economic Times, October 1
Pakistan has rushed envoys to its all-weather friend China hours after surgical strikes across LoC by the Indian Army hoping to enlist Beijing’s support in its confrontation with Delhi. Pakistan Prime Minister Nawaz Sharif ’s special envoys Makhdum Khusro Bakhtyar and Alam Dad Laleka, both MPs arrived in Beijing on Thursday. “They are visiting China on the instructions of the Prime Minister to apprise the Chinese government of the deteriorating situation in Jammu and Kashmir. They met Liu Zhenmin, vice-minister of Foreign Affairs. They also held a meeting with Cai Wu, Vice Chairman of the Foreign Affairs Committee of the Chinese Communist Party,” according to a released issued today by the Pakistan government.

Trade and Economy

China should reduce production costs for manufacturers as competition with India grows
Global Times, September 20
The competitive pressure on China's manufacturing sector from India is perhaps much bigger than China imagined. China's actual salary has grown 10.6 percent since 2008, while India has seen a salary growth of just 0.2 percent during the same period, the Times of India reported recently, citing a report from the Hay Group. The report comes after the news that some Chinese smartphone vendors, Huawei Technologies Co included, would soon start manufacturing handsets in the South Asian country and as India's low labor cost advantage forces China to make more efforts to maintain its competitive edge in the global manufacturing landscape. As China commits itself to developing its service and high-tech sectors, such as the nuclear power industry, the nation certainly will not give up developing its manufacturing sector, which plays a particularly important role in creating jobs.

India eyes Chinese MNCs
The Hindu, September 24
India will host a delegation of over 200 Chinese government officials and businessmen at the India-China Strategic Economic Dialogue next month with an aim to showcase investment opportunities in the country. The delegation, led by National Development and Reform Commission (NDRC) Chairman Xu Shaoshi, will participate in the two-day Dialogue on October 6-7, 2016, NITI Aayog Vice-Chairman Arvind Panagariya said. Mr. Panagariya said Chinese multinationals are shifting their base from China to other countries in order be more cost effective in view of high labour costs. He added that the annual minimum manufacturing wage cost per head in China was around Rs.5 lakh.

ADB upbeat on developing economies in Asia
The Japan Times, September 27
Developing economies in Asia are holding steady and will grow at the earlier forecast rate of 5.7 percent this year and next, buoyed by resilience in the region’s two largest economies, China and India, the Asian Development Bank said Tuesday. The region’s developing economies grew 5.9 percent in 2015, and the bank was retaining its March forecasts, an ADB report said. China’s economy — the second largest in the world — is forecast to grow by 6.6 percent in 2016 and 6.4 percent in 2017, or 0.1 percentage point more than was forecast in March, due to strong fiscal and monetary stimulus to boost domestic demand while external demand remains tepid. Steady progress on reforms is helping India realize its growth targets, the report said, with earlier forecasts of 7.4 percent growth in 2016 and 7.8 percent in 2017 unchanged.

Ulfa warns Hindu group against calling for boycott of Chinese goods
Hindustan Times, September 27
The outlawed United Liberation Front of Asom-Independent (Ulfa-I) has asked a Hindu youth group to stop its campaign for boycotting Chinese goods. In an emailed statement on Monday, the outfit’s publicity secretary Arunodoy Asom said consumers in Assam have the right to procure goods at the cheapest rate that Beijing offers. “Besides, neighbour China has had age-old friendly relations with Assam and provides a sustainable alternative to Indian traders who have only profit in mind,” the statement said. The outfit’s mail was in response to a call by Hindu Yuba Chhatra Parishad’s Assam unit leaders Bolin Baishya and Dipankar Gohain to refrain from buying Chinese goods. This, they said, would hit Beijing where it hurts most.

Energy and Environment

India and China concerned about degradation of Himalayas: Anil Dave
The Hindu, September 16
Stating that the rapid melting of glaciers in the Himalayan range is a major issue, Union Minister for Environment and Forests (Independent Charge) Anil M. Dave on Friday said that India and China were both “concerned” about the degradation of the world’s highest mountain range. Mr. Dave said that now everybody has developed an understanding that there is something wrong going on because of a larger issue of climate change. He was briefing presspersons on Friday at the two-day discussions on global climate change and other environmental issues at a meeting of the Environment Ministers of the BRICS countries at a South Goa resort. He said that the Environment Ministers of BRICS countries agreed on a Memorandum of Understanding and announced setting up of a joint working group institutionalising their mutual cooperation on diverse environment-related issues.

Experts hail Chinese premier’s speech about sustainable development at UN
Xinhua, September 22
Chinese Premier Li Keqiang on Wednesday expounded China's proposals to promote global development, which were warmly welcomed by experts. Speaking at the annual high-level debate at the UN General Assembly, Li reiterated China's commitment to sustainable development and its international obligations. China attaches great importance to the implementation of the UN's 2030 Agenda for Sustainable Development and will push forward the action plan authored by G20 leaders earlier this month, said Li. "The conceptualization of 2030 Sustainable Development Agenda is a Chinese contribution which was articulated at G20 Summit in Hangzhou," said Dolla Varaprasad, a professor with Jawaharlal Nhru University in New Delhi, India.

India to ratify Paris Agreement on climate change
The New York Times, September 25
India's prime minister said Sunday that his country will ratify the Paris Agreement on climate change early next month. Prime Minister Narendra Modi said his government will ratify the agreement Oct. 2, coinciding with the birth anniversary of India's independence leader Mohandas Gandhi, who believed in a minimum carbon footprint. Modi made the announcement at a meeting of his Bharatiya Janata Party's leaders in the southern Indian town of Kozhikode. India accounts for around 4.5 percent of global greenhouse gas emissions. U.N. Secretary General Ban Ki-moon said this month that 60 countries accounting for about 48 percent of emissions had already joined the agreement.

China welcomes India’s decision to ratify Paris climate agreement
The Indian Express, September 26
China Monday welcomed India’s decision to ratify the Paris climate agreement, saying the move will be a driving force for the enforcement of the landmark deal. “Climate change is a challenge faced by human society. No country would be immune from that so we should work together against climate change,” Chinese Foreign Ministry spokesman Geng Shuang told a media briefing. “Chinese side welcomes India’s ratification of the agreement which will be another driving force for the enforcement of the Paris agreement,” he said. “The Chinese side will work with all relevant parties including India to press ahead with the implementation of the Paris agreement and strive for sustainable and low carbon growth of world economy,” he said. Prime Minister Narendra Modi yesterday announced in Kerala that India will ratify the Paris climate deal made in Paris last year on October 2, the birth anniversary of Mahatma Gandhi.

As India mulls scrapping of Indus Water Treaty with Pakistan, China blocks tributary of Brahmaputra in Tibet to build dam
The Times of India, October 1
China has blocked a tributary of the Brahmaputra river in Tibet as part of the construction of its "most expensive" hydro project , which could cause concern in India as it may impact water flows into the lower riparian countries. The Lalho project on the Xiabuqu river+ , a tributary of the Yarlung Zangbo (the Tibetan name for Brahmaputra), in Xigaze in Tibet involves an investment of 4.95 billion yuan ($740 million), Zhang Yunbao, head of the project's administration bureau was quoted as saying by Chinese state-run Xinhua news agency on Saturday. Xigaze also known as Shigatse is closely located to Sikkim. From Xigaze, the Brahmaputra flows into Arunachal Pradesh. Terming it as the "most expensive project", the report said the project, whose construction began in June 2014, was scheduled to be completed in 2019.

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Analyses and Commentaries

Good ties with China, India in Nepal’s best interest
Global Times, September 19
"We talked with open heart and both countries found new ground to move forward." This is how Nepalese Prime Minister Pushpa Kamal Dahal, also known as Prachanda, described his just concluded four-day visit to India, his first overseas visit after assuming office. Ironically, it is reported that while Prachanda aimed at rebuilding Kathmandu's ties with New Delhi, which have experienced a chill over the past years, India was seeking to "claw back ground from China," which does not sound like a meeting with fully open mind. During the tenure of Prachanda's predecessor Khadga Prasad Oli, the India-Nepal relationship witnessed deterioration due to a series of issues including New Delhi's interference in Nepal's constitutional amendment and stricter border checks on Nepal's trucks, which offered Kathmandu a good reason to strengthen ties with Beijing.

Political mistrust between China and India threatens booming business ties
Global Times, September 19
Business ties between China and India are booming, but uncertainty over India's future policies and India's resistance to China's sweeping initiative to create the infrastructure for a pan-Asian trade bloc poses risks to the profitable alliance. Following Prime Minister Narendra Modi's "Make in India" initiative, a great number of Chinese ventures began to break into the South Asian nation's mammoth market, with a six-fold increase in investment between 2014 and 2015. Beijing-based phone makers Xiaomi, Huawei and e-commerce giant Alibaba all paved lucrative roads to India, whose manufacturing potential is still an open canvas. However, booming cooperation in business is at risk, due to the restless territorial tensions in Kashimir with Pakistan, and India's reluctance to embrace China's One Belt and One Road initiative, said Hu Shisheng, the director of the Institute of South and Southeast Asian and Oceania Studies, during a panel discussion held by think tank Pangoal in Beijing.

Why China is caught in India-Pakistan crossfire
South China Morning Post, September 24
India and Pakistan are back to their default setting of trading charges and fire, only this time dragging one of China’s key infrastructure projects in the region into the line of fire. According to Shashi Tharoor, an opposition lawmaker and former minister of state for external affairs, “Isolation is a challenge since various countries have bilateral reasons not to isolate Pakistan. The US needs Pakistan because of Afghanistan, and China has major strategic interests there, especially the US$46 billion China Pakistan Economic Corridor (CPEC) that is China’s single biggest overseas development project. As long as major powers choose to stay engaged with Pakistan, overlooking its misbehaviour, diplomatic isolation will have its limitations as a policy.” The CPEC links the Pakistani port of Gwadar on the Arabian Sea with Xinjiang (新疆), providing western China easy access to fuel imports from the Middle East and Africa while creating an export route for its landlocked western states.

China’s firms must understand Indian laws
Global Times, September 26
India's relatively stable political environment, sustained economic growth momentum, huge population dividend and cheap labor costs have attracted numerous international investors. A survey by the Japan Bank for International Cooperation (JBIC) of 1,000 Japanese manufacturers in July 2014 found that India ranked the most preferred destination for future investment, followed by Indonesia (No.2) and China (No.3). Data from the US Department of the Treasury showed that India held 1.8 percent of US foreign equity holdings as of the end of 2015, compared with China's 1.6 percent of holdings. In 2015, China's direct investment to India soared to $870 million, six times than in 2014 and double the accumulative investment to India in the past 15 years. However, India was not among the 13 countries which received direct investment from China exceeding $1 billion in 2015 and China's investment in India only accounted for 2.2 percent of the total $39.3 billion foreign direct investment received by India in 2015. This year, Chinese firms are keen on cracking the Indian market, a trend that is expected to gain traction.

Obama’s foreign policy a wide failure
Global Times, September 27
The foreign policy legacy of US President Barack Obama is one of failure. His failure is not entirely personal because it is also the failure of the US foreign policy elites that guided him. An overall judgment of failure may seem harsh, but look at the consequences of US policy. The Middle East is in chaos, Europe is destabilized by the chaos in Ukraine, and Asia is impacted by tensions. It is no wonder that the international situation is in a state of transition. But it is not the transition Washington wanted to maintain its global dominance.

Kathmandu can serve as a bridge between China and South Asia
Global Times, September 29
Newly elected Nepalese Prime Minister Pushpa Kamal Dahal, also known as Prachanda, made India his first port of call earlier this month. The four-day trip was his first since taking office. This visit was a point of discussion among the world's media, with some being surprised that Prachanda chose India. He made his first foreign trip to China in 2008, after being elected as prime minister for the first time. Some observers believe Prachanda is attempting to strike a delicate balancing act between India and China. Certain scholars say the visit is proof of New Delhi's influences on Kathmandu. They think that agreements inked between China and Nepal's former prime minister, Khadga Prasad Oli, will be affected. Meanwhile, others say Prachanda is practicing political opportunism in an attempt to maximize Kathmandu's interests by exploiting the rivalry between China and India.

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Books and Journals

States and Development: Early Modern India, China, and the Great Divergence
In Economic History of Warfare and State Formation, September 2016
Can differences in state capacity explain the Great Divergence between Asia and Europe? Evidence from India and China suggests that customary property rights provided de facto rights to land and community ties substituted for de jure property rights in mercantile activities. Economic activity did not face an undue risk of expropriation. China and India generated lower fiscal revenue per capita compared to Europe. This chapter, by Bishnupriya Gupta, Debin Ma and Tirthankar Roy, explain the big difference in revenue per capita between the two Asian countries and England in the early modern period. In terms of the differences in the threat of internal and external conflicts. The large empires in Asia faced a disproportionate threat of internal rebellions and traded off fiscal capacity for appeasement of local ruling groups and their military support in external conflicts.

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