China India Brief #112

Published Twice a Month
March 14, 2018 - March 27, 2018

Centre on Asia and Globalisation
Lee Kuan Yew School of Public Policy

Guest Column

India’s “Taiwan card” and China

By David Scott

India’s “Taiwan card” and China

On 3 February 2018, Rudroneel Ghosh’s piece in the Times of India carried a forceful headline entitled “Taiwan Card: Coordinating with Taipei is imperative for creating a multipolar Indo-Pacific”. There are two aspects here that are China-related. Firstly, the People’s Republic of China (PRC) remains concerned that India is playing a “Taiwan Card”. Secondly, there is a fear that balancing is taking place against it across the “Indo-Pacific” on the part of various countries who are worried about the growing assertiveness of the PRC.

India is concerned that China continues to play the so-called “Pakistan Card” on its own flanks, bringing with it a Chinese presence at Gwadar and the consolidation of the China-Pakistan Economic Corridor (CPEC). These misgivings were dismissed as India’s “geopolitical mentality” in the Global Times, which stated that “disappointingly, New Delhi insists on a zero-sum mentality, interpreting any activity by Beijing from a geopolitical perspective”. The background to that criticism was unease in India over the granting of the Hambantota port to the state-owned China Merchants Port Holdings Company (CMPHC) on a 99-year lease.

India’s response to what it has perceived as Chinese encirclement and growing presence in the Indian Ocean has been two-fold. Firstly, India has moved towards a quadrilateral alignment with Australia, Japan and the US, which was resurrected in November 2017. Secondly, India has sought other counterparts to China’s “Pakistan card” on the PRC’s flanks. This search for countervailing cards has already led India to play its own “Vietnam Card”. More recently, the opportunity to play a “Taiwan Card” has also emerged.

This Taiwan Card is presented through Taiwan’s New Southbound Policy, which was announced by President Tsai Ing-wen when her Democratic Progressive Party (DPP) regained power in 2016. The significance of the DPP is that it seeks independence for Taiwan, rather than continuing as the hitherto “Republic of China” (ROC). Conversely, Taiwan remains a “core interest” (hexin liyi) for the PRC.

Beijing has two concerns regarding Tsai’s New Southbound Policy. Firstly, the policy is explicitly designed to reduce Taiwan’s dependency on the mainland market, which was established under the Economic Cooperation Framework Agreement (ECFA) signed in 2010. Beijing welcomes the ECFA as it entwines Taiwan more securely into the mainland and could serve as a gradual path to peaceful re-unification. Any weakening of such economic interlinkages enables Taiwan to pursue a more independent road. India, in this context, represents a particularly large economic alternative for Taiwan.

Secondly, any state-level agreements drawn up between Taipei and other governments implicitly recognise Taiwan’s independent authority to conduct inter-state relations. Thus, such agreements could serve as back-door recognition of the island state’s independence. This is antithetical to Beijing’s continuing claims that Taiwan is part of “One China” (yige zhongguo), awaiting reunification with the mainland. China is thus concerned that the New Southbound Policy is a deliberate push to gain more “international space” (guoji kongjian) with other governments. This was already manifest in  the Global Times running articles like “New Delhi will suffer losses if it plays Taiwan card” during visits from Taiwanese parliamentary groupings to their Indian counterparts.

Various Memorandums of Understanding (MoU) between India and Taiwan were signed between 2016 and 2018. During the signing of the MoU on Industry Collaboration on 14 December 2017, Sridharan Madhusudhanan, director general of the India-Taipei Association (ITA), described the “complementary logic” and “synergy” between India’s Act East Policy and Taiwan’s New Southbound Policy. The event was also attended by state government officials like Guann-Jyh Lee, the Taiwan Deputy Director General of Bureau of Foreign Trade and Vandana Kumar, the Indian Joint Secretary of Ministry of Commerce and Industry. The Chinese state media were quick to denounce these agreements, the Global Times describing them as “an alarming move” and warned that “China [would] not take such situations related to its core interests lightly”.

China’s concern is that India may be playing a Taiwan card against it. Such a Taiwan card was the focus of a further piece in the Global Times entitled “Playing Taiwan card dangerous for New Delhi”, which argued that “New Delhi should abandon geopolitical mentality and view ties with Beijing from a cooperative perspective”. It went on, stating that “New Delhi would be wrong if it believed the Taiwan card [could] be used to pressurize Beijing” and warning that “challenging China's bottom line and the one-China policy [would] bring serious consequences”.

This raises the issue of closer security links between Taiwan and India. Former Taiwanese diplomat Fang Tien-sze  argued that “on the strategic security front, both India and Taiwan have serious and deep concerns about China’s growing assertiveness in the region. The China factor can become a medium to bring the strategic communities in New Delhi and Taipei closer”. This reflects the Indo-Pacific balancing logic noted by Rudroneel Ghosh’s earlier-cited Times of India piece. Fang’s argument was echoed in the Taipei Times, which argued that India-Taiwan strategic convergence was even likelier under the more assertive Modi government. Felix Chang’s analysis of the PRC’s “encirclement concerns”, points to the nightmare of a potential “war on two fronts” with Chinese forces facing India across the Himalayas and Taiwan across the Taiwan Straits. This was also referenced in Frank Chen’s piece “China fears an Indian ‘stab in the back’ if it fights Taiwan”.


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



The views expressed in the article 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.


News Reports

Bilateral relations

Chinese choppers violated Indian airspace four times in a month along LAC: Report
India Today, March 26
In a massive strength build-up, the Chinese Army violated the Indian airspace four times in a month, with People's Liberation Army (PLA) choppers crossing over the LAC (Line of Actual Control) in various parts of Northern India. According to an intelligence report, the Chinese helicopters entered the Indian airspace along the LAC near Uttarakhand's Barahoti, Trig Heights and Depsang valley in Ladakh and Burtse in northern Ladakh.

India and China must be frank with each other to prevent another Doklam, ambassador warns
South China Morning Post, March 24
China and India have to be “frank and candid” to reduce their ongoing tensions, Delhi’s ambassador to Beijing has said ahead of Prime Minister Narendra Modi’s trip to China in June. Gautam Bambawale said political communication between the two nations had resumed after the Doklam crisis last year, when troops from both nations faced off for more than two months over the dispute.

India, China explore CBMs and cooperation among armed forces for stability along border
The Economic Times, March 22
The 11th round of the Working Mechanism on Consultation & Coordination (WMCC) for India-China Border Affairs was held on Thursday (March 22). India and China explored a variety of CBMs as well as the possibility of strengthening cooperation through exchange of visits and institutionalised dialogue mechanisms between the armed forces for peace at the Line of Actual Control (LAC).

Narendra Modi dials Xi Jinping, discusses efforts to enhance India-China ties
Livemint, March 21
Prime Minister Narendra Modi called up Chinese President Xi Jinping on Tuesday (March 20) to congratulate him on his re-election for a second five-year term, the Indian foreign ministry said. The telephone conversation comes as the two countries are looking to mend ties rocked by their 73-day military standoff on the Doklam plateau in Bhutan last year. It also came a day after Modi congratulated Xi on Chinese social media platform Weibo.

Wang Yi likely to be China’s new special representative to lead border talks with India, March 21
Chinese Foreign Minister Wang Yi was appointed the country’s state councillor on Monday (March 19), making him Beijing’s top diplomat. This means Wang, as a special representative, will now lead talks on border disputes with India, PTI reported, quoting unidentified officials.

News Reports

China and India in the Regions

Maldives looks to ‘long lost cousin’ China, despite ‘brother’ India’s concerns
South China Morning Post, March 22
The Maldives will further embrace Chinese investment but is aware it risks getting caught between China and India, the country’s ambassador to China said on Thursday (March 22). He made the remarks after Maldivian President Abdulla Yameen lifted a state of emergency in the troubled South Asian nation after 45 days. The Maldives’ ambassador to China Mohamed Faisal said that the country would push ahead with Chinese projects and seek more investment from the country, regardless of concerns raised by regional power India.

China provides tracking system for Pakistan’s missile programme
South China Morning Post, March 22
China has sold Pakistan a powerful tracking system in an unprecedented deal that could speed up the Pakistani military’s development of multi-warhead missiles.  News of the sale – and evidence that China is supporting Pakistan’s rapidly developing missile programme – comes two months after India tested its most advanced nuclear-ready intercontinental ballistic missile (ICBM) with a range long enough to hit Beijing or Shanghai.

Nepal for 'mutually beneficial' ties with India, China: Foreign minister
The Times of India, March 18
Nepal's Left alliance government will maintain a "mutually beneficial" relationship with India and China to seek economic benefits from both the Asian giants, the country's newly-appointed foreign affairs minister said on Sunday (March 18). Pradeep Gyawali, who was inducted on Friday (March 16), also said that the Nepal government had started preparations as it expects both Prime Minister Narendra Modi and Chinese President Xi Jinping to visit the country this year.

Foreign secretary red flags China’s connectivity push before parliamentary panel
The Times of India, March 17
In remarks to Parliament’s standing committee for external affairs recently, foreign secretary Vijay Gokhale said under Xi Jinping, China is determined to “spread its presence abroad to protect its interests.” This is clear in the establishment of foreign military bases, as in Djibouti, as well as undertaking projects in almost all south Asian countries. While some countries are having second thoughts about China, that is cold comfort for India, and it was imperative that India should speed up its own delivery mechanism.

Iran says it has offered Pak, China participation in India’s Chabahar port project
The Times of India, March 14
Iran created ripples in India’s diplomatic circles with its foreign minister Javad Zarif declaring on Tuesday (March 13) that Tehran had offered Pakistan and China participation in its strategic Chabahar port, which India is developing. As Indian officials have repeatedly said the port is crucial for India as it will allow India to bypass Pakistan in accessing Afghanistan and central Asia.

News Reports

Trade and Economy

Indian shares rebound with Asia amid report of US-China trade talks
Nikkei Asian Review, March 26
Indian shares rose by the most in two weeks on Monday (March 26), as lenders paced a rebound for local stocks amid a broad recovery in Asia. The intraday rebound in Indian markets was similar to that in other major regional markets, and came as U.S. equity index futures climbed after a report by the Wall Street Journal said the U.S. and China are looking at discussing trade policy.

Indian, Chinese companies sign commercial deals worth nearly $2.36 billion
The Economic Times, March 26
Indian and Chinese companies signed commercial deals worth nearly $2.36 billion (Rs 15,389 crore) on Saturday (March 24), ahead of a proposed meeting between commerce minister Suresh Prabhu and his Chinese counterpart Zhong Shan that would seek to stabilise bilateral relations amid talk of a global trade war.

India benefits from AIIB loans despite China tensions
Financial Times, March 18
India has emerged as the biggest beneficiary of the Chinese-led Asian Infrastructure Investment Bank, soaking up a quarter of all its investment commitments to date, despite continuing diplomatic tension between New Delhi and Beijing.

India’s Growth Likely To Touch 7.3% In FY19, 7.5% In FY20, Fitch Says
Bloomberg, March 15
Global ratings agency Fitch today projected India's economic growth to rise to 7.3 percent in the next financial year, and further to 7.5 percent in 2019-20. In its Global Economic Outlook report, the U.S.-based agency forecast Indian economy to clock a growth rate of 6.5 percent in the current financial year, a tad lower than official estimates by the Central Statistics Office of 6.6 percent. The economy grew 7.1 percent in 2016-17.

India should see growth picking up after two transitory shocks: IMF
The Indian Express, March 15
The IMF on Thursday (March 15) said that India should see its growth picking up this year after two “transitory shocks” – the demonetisation and the GST – while China’s growth is likely to fall gradually. In its G-20 Surveillance Note “Global Prospects and Policy Challenges” ahead of the G-20 Finance Ministers meeting in Argentina next week, the International Monetary Fund said that globally growth is expected to revert to a weaker trend.

News Reports

Energy and Environment

Global energy demand rose fastest in five years in 2017; CO2 emissions at historic high: IEA
ET Energyworld, March 22
Global energy demand increased by 2.1 per cent in 2017, growing at twice the rate recorded in the previous five years, International Energy Agency said today (March 22), adding the growth in energy demand led to global CO2 emissions reaching a historic high of 32.5 Gigatonnes (Gt) last year after three years of flat emissions.

Coal-power projects worldwide, including India, see steep drop
The Quint, March 22
In a step towards a cleaner environment, the number of coal-based fired power plants under development have seen a steep decline, especially in India and China, a report said on Thursday (March 22). The report, however, warns that despite a global coal phase-out trend in new coal plants, emissions from operational plants will still keep the 2015 Paris climate agreement goals at bay.

Shell bets on petrol stations as electric revolution looms
The Business Times, March 21
Royal Dutch Shell is placing a big bet on petrol stations and convenience stores in China, India and Mexico as it looks to shore up profits during the electric car revolution. By 2025, the oil and gas giant plans to grow its global network of roadside stations by nearly a quarter to 55,000, targeting 40 million daily customers, Shell said in a statement on Wednesday (March 21).

Speed of India's shift to green energy at par with China, Europe: Report
Business Standard, March 15
India is emerging as a transition force in power generation on par with China and Western Europe. A report by US-based Institute for Energy Economics & Financial Analysis (IEEFA) says the country’s electricity generation market is changing rapidly. The transformation is helped by a sustained deflation in renewable energy tariffs, technology upgrades in wind and solar sectors, availability of cheaper financing, acceleration in wind and solar tender activity and a national political desire to abide by the Paris climate accord.

India Ranks 78th on WEF Energy Transition Index; Lower Than Brazil, China
News 18, March 14
India has been ranked at 78th, lower than its emerging market peers like Brazil and China, among 114 countries on the World Economic Forum's Energy Transition Index that was topped by Sweden. The report titled "Fostering Effective Energy Transition", ranks countries on how well they are able to balance energy security and access with environmental sustainability and affordability.


Raja Mandala: The China reset
The Indian Express, March 20
By C. Raja Mohan – Director, Carnegie India

If the last two years turned to be rather contentious between India and China, Delhi is now trying to reset relations with Beijing. The optics of the reset, however, have generated both disappointment and welcome endorsement. Those who hailed India’s new political will to look China in the eye in 2017 are taken aback by what they see as a return to the perennial temptation to “appease China”.

China's stealth wars in the Himalayas
Nikkei Asian Review, March 20
By Brahma Chellaney - Professor of Strategic Studies, Center for Policy Research

Operating in the threshold between peace and war, China has pushed its borders far out into international waters in the South China Sea in a way no other power has done elsewhere. Less known is that China is using a similar strategy in the Himalayas to alter facts on the ground -- meter by meter -- without firing a single shot.

Emerging powers must be at the global high table
Livemint, March 20
By Shashi Tharoor – Member of Parliament and Chairman of the Parliamentary Standing Committee on External Affairs

As countries acquire economic and military power, they start exercising their geopolitical muscle. The challenge for advocates of world order is to accommodate emerging powers within a framework of universal and stable rules and global structures that ensure everyone a fair deal, appropriate for their size, capabilities, and contributions to the international system.

Will India Turn its back on the Dalai Lama to Appease China?
South China Morning Post, March 17
By Tshering Chonzom Bhutia - Associate Fellow, Institute of Chinese Studies

India seems to be re-evaluating its China policy after the Doklam stand-off, especially after reports in January of a fresh Chinese build-up in the Himalayan area raised fears that an August peace deal may be unravelling, paving the way for an even bigger confrontation. While Delhi has always reiterated its acceptance of the one-China principle, the recent rebuke against Tibetan exiles was out of character for the Modi administration.

India belatedly boosts naval competition with China
Nikkei Asian Review, March 12
By Sreeram Chaulia - Professor and Dean, Jindal School of International Affairs

The signing of a military agreement between India and France granting mutual access to naval bases is a clear indication that India is ramping up its defence diplomacy in response to China's growing presence in the Indian Ocean. It paves the way for Indian armed forces to use France's defence installations in Djibouti, Abu Dhabi and Reunion Island, all pivotal locations in the western Indian Ocean.

Books and Journals

China Steps Out: Beijing's Major Power Engagement with the Developing World|
Routledge, February 2018
Edited by Joshua Eisenman and Eric Heginbotham

Joshua Eisenman, PhD, is Assistant Professor at the LBJ School of Public Affairs at University of Texas at Austin, and Senior Fellow for China Studies at the American Foreign Policy Council. Eric Heginbotham, PhD, is Principal Research Scientist at the Center for International Studies at the Massachusetts Institute of Technology.

What are Beijing’s objectives towards the developing world and how they have evolved and been pursued over time? Featuring contributions by recognized experts, China Steps Out analyses and explains China’s strategies in Southeast Asia, Central Asia, South Asia, Africa, Middle East, and Latin America, and evaluates their effectiveness. This book explains how other countries perceive and respond to China’s growing engagement and influence. Each chapter is informed by the functionally organized academic literature and addresses a uniform set of questions about Beijing’s strategy. Using a regional approach, the authors are able to make comparisons among regions based on their economic, political, military, and social characteristics, and consider the unique features of Chinese engagement in each region and the developing world as a whole. China Steps Out will be of great interest to students and scholars of Chinese foreign policy, comparative political economy, and international relations.


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