Published Twice a Month
March 28, 2018 - April 10, 2018
Centre on Asia and Globalisation
Lee Kuan Yew School of Public Policy
India and China in Afghanistan
By Tilak Jha
Both China and India are now parties to nearly all major peace talks and regional groupings that focus on enhancing stability in Afghanistan. The most recent was the first Tashkent Conference on Afghanistan where India and China were involved as well. In his address during the conference on 27 March 2018, Uzbekistan's President Shavkat Mirziyoyev underlined the importance of developing trans-Afghan transport and communication projects linking the region with China, on the one hand, and securing a "firm consensus" of support from countries such as India, Pakistan, Russia and Iran on the other, to stabilise Afghanistan.
Mirziyoyev’s biggest concern however, was terrorism – an issue on which India and China have increasingly found common ground when it comes to Afghanistan – particularly after the Taliban seems to have rejected an arguably "bold" offer for direct peace talks by Afghan President Ashraf Ghani at another crucial meeting, the second Kabul Process for Peace and Security Cooperation conference, on 28 February 2018.
China has been enhancing its engagement with Kabul in recent years. It hosted the first China-Afghanistan-Pakistan Foreign Minister's Dialogue in Beijing on 26 December 2017. It has been suggested that the event reflected China’s unease "about the potential for militant activity in Afghanistan and elsewhere in Central Asia to spill across the border into China's Muslim northwest."
Chinese Foreign Minister Wang Yi said at the conference that along with Pakistan, China will consider including Afghanistan in the China-Pakistan Economic Corridor (CPEC). In a signed article for China's ruling communist party's theoretical periodical Qiushi on 31 December 2017, Wang, without using the word ‘terrorism’, wrote that Beijing had ‘urged’ (推动) Afghanistan and Pakistan to improve ties and set up a bilateral mechanism.
India, on the other hand, has invested significant political and financial capital in Afghanistan since 2001. It has pledged USD 3.1 billion and has been one of the biggest donors to Kabul. This was reflected in the speech by Afghan President Ashraf Ghani at the 28 February Kabul conference. In his speech, Ghani referred to India at least five times, compared to only once for China. With its multi-billion dollar commitment to rebuilding efforts in Afghanistan, India has become not just a source of monetary aid but also institution building for the country’s fledgling democracy.
Concerns have been expressed in Chinese media about India’s objectives in Afghanistan. The People’s Liberation Army-affiliated China Military Online published an article on 13 February 2018 suggesting that Afghanistan was part of India’s plan to use South Asian countries to limit "China's influence". However, China does realise the importance of India in Afghanistan as reflected in a joint statement issued after the 15th trilateral meeting with Russia and India in New Delhi on 11 December, days before the Beijing meeting with Pakistan and Afghanistan. The statement emphasized the importance of all three nations working towards combating the common challenges of terrorism, drugs, and other problems.
The interests of both Asian giants in Afghanistan are expanding beyond terrorism as evident from their growing trade relations with the country. Afghanistan's trade with Pakistan is half of what it used to be just two years ago, due to rising competition from India and China. A Chinese copper company has also pledged to invest USD 3.5 billion in Afghanistan - the biggest investment so far for the country.
Despite India's significant, consistent and multiplying engagements with Afghanistan since the turn of this century, China enjoys certain crucial advantages over others. First, it shares a dispute-free border with Afghanistan allowing it to have direct overland access to the country unlike India or the United States. Second, Beijing enjoys strong relations with Pakistan without which there can be little stability in Afghanistan. Beijing also has excellent ties with the Pakistani army which wields the real power behind Islamabad’s Afghanistan policy. Third, China's heft in building infrastructure particularly its global development strategy - the ‘Belt and Road Initiative’ (BRI) - is seen as a game changer with the potential to do a ‘Marshal Plan’ in the entire region. India in contrast has yet to build a similar reputation. Unsurprisingly, Kabul has been more than eager to engage China - as evident from the construction of a Chinese-aided military base in Afghanistan's north-eastern province of Badakhshan reportedly to curb the spread of Islamic terrorism into its restive Xinjiang region. Unlike the US, China also has not yet bloodied its hands with Afghan blood.
Afghanistan as a bridge
Due to all the above reasons, Afghanistan has been willing to embrace China, a development which ironically could effectively go against the Pakistani military's decades-long policy of using this land-locked nation to nourish a "deep state" to destabilise and weaken Indian interests in the region. While the Pakistan factor in India-China ties pushed New Delhi to become the lone dissenter to Beijing’s flagship BRI project, a US factor has also been emerging - especially since New Delhi signed the Logistics Exchange Memorandum of Agreement (LEMOA) with Washington on 29 August 2016. China fears India could end up being a US ally and a willing partner in trying to contain China. US President Donald Trump’s invitation to India to play a more proactive role in Afghanistan sparked outrage in Rawalpindi and Islamabad but China would have been no less concerned. Unsurprisingly, China is in favour of bringing Pakistan and the Taliban on board with Kabul.
India and China have also shown remarkable resolve in not letting their other disagreements escalate - such as the Doklam standoff between June and August 2017 which ended peacefully. Of late, both are also attempting a ‘reset’ of their bilateral ties and being more ‘sensitive’ to each other’s concerns be it relating to the grey-listing of Pakistan on the global anti-money laundering body to curb terror financing or India’s treatment of Tibetans in exile. As Pakistani columnist Khurram Husain put recently:
China and India don’t have a history the way China and Japan do, or even China and Korea. So, whatever is pulling them apart is nowhere near as powerful as what is bringing them together: the growing ties of trade and investment. It is a matter of time before pragmatism prevails … the pragmatic moment may well open up in 2018.
It would not be surprising if, in future, Afghanistan becomes what Tibet could not be - the common meeting point for India's and China's strategic concerns around terrorism, connectivity and regional interests. Indeed, before such a thing could even be imagined, a lot of give-and-take must occur, for a 'package understanding' to be the strategic new deal between India and China.
Tilak Jha is a PhD researcher on China and Chinese media at the Centre for East Asian Studies, School of International Studies, Jawaharlal Nehru University, New Delhi. Earlier, Mr. Jha was a Bai Xian Scholar at the Zhejiang University, Hangzhou, China on the generously funded Asian Future Leaders Scholarship from 2014 to 2016. Tilak has several publications in books, journals and newspapers of global repute – all on China. His most recent publication is a chapter on India' Act East policy in a volume published by Routledge in 2018.
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.
China objects to India's 'transgression' in Arunachal; India rejects protest
The Times of India, April 8
The Chinese military last month strongly protested against what it called the Indian Army's transgressions into the strategically sensitive Asaphila area along the border in Arunachal Pradesh, but the Indian side roundly dismissed the complaint, official sources said. They said the Chinese side raised the issue at a 'Border Personnel Meeting' (BPM) on March 15 here but the Indian Army rejected it, saying that the area in the upper Subansiri region of Arunachal Pradesh belongs to India and it has regularly been carrying out patrols there.
India managing complexities in relationship with China: Nirmala Sitharaman
The Economic Times, April 4
India is managing the complexities in its relationship with China even as it seeks to make progress within the framework of a broader developmental partnership, Defence Minister Nirmala Sitharaman said today (April 4). Addressing the Seventh Moscow Conference on International Security here, Sitharaman also expressed concern over the resurgence of territorial disputes in the maritime domain in the region.
India increases troops along China border in Arunachal
Livemint, March 31
India has deployed more troops and significantly increased patrolling in the mountainous terrains of Dibang, Dau-Delai and Lohit valleys along the China border in the Tibetan region of Arunachal Pradesh sector following the Doklam standoff. Military officials said India is also strengthening its surveillance mechanism to keep an eye on Chinese activities along the borders in the strategically sensitive Tibetan region and has even been regularly deploying choppers to carry out recce.
China says ties with India developing with 'sound momentum'
The Quint, March 29
China on Thursday (March 29) said its ties with India have been on an upswing recently and both sides have seen new achievements in political cooperation and various other fields. Beijing said it wants to work with New Delhi to sort out their disputes to keep the bilateral ties on the right track. "Recently, thanks to the concerted efforts from the two sides, China-India relations have been developing with a sound momentum. We have seen new achievements in political cooperation and various fields," Chinese Foreign Ministry spokesperson Lu Kang said.
China and India in the Regions
Narendra Modi vows to connect Kathmandu to Indian rail network to pursue ‘common destiny’
South China Morning Post, April 8
Speaking at a joint press conference with visiting Nepali counterpart Khadga Prasad Sharma Oli at Hyderabad House in New Delhi, Modi said Kathmandu would be linked by railway to India’s Raxaul city bordering Birgunj, Nepal’s biggest trading point with its larger southern neighbour. The deal includes connecting Nepal and China by railway, roads, and power grids, apart from allowing Nepal access to Chinese seaports for trade with third countries.
Not just in Pakistan, China is extending CPEC to Afghanistan: Asian Competitiveness Annual Report 2018
Financial Express, April 8
The controversial China-Pakistan Economic Corridor – the flagship project of China’s ambitious Belt and Road Initiative (BRI) – is being extended to Afghanistan, a study report said today. The BRI has injected “fresh vitality” to Asia’s economic cooperation and helped the continent to reshape its international relations, said the Asian Competitiveness Annual Report 2018 released here on the sidelines of China’s Boao Forum for Asia (BFA) annual conference.
Fears rise in India as China pushes plan for canal to reshape Indian Ocean
Business Standard, April 6
Faced with a new push to build a 100-km canal cutting Thailand in two, and slashing 1,200 km off the route Chinese warships take to reach South Asian ports, Indian naval planners have begun warning the government that the proposed Kra Canal will dramatically enhance Beijing’s ability to intervene in the region.
India-US-Japan discuss South China Sea tensions; Indo-Pacific region
The Economic Times, April 4
India, Japan and the United States on Wednesday (April 4) held their 9th Trilateral Meeting here to give momentum to the Indo-Pacific construct through partnership with like-minded countries in the region including ASEAN amid rising tensions in the South China Sea region and Beijing’s growing expansionist ambitions.
Japan pours on loans to India for infrastructure projects
Nikkei Asian Review, March 30
Japan will lend India up to 149.2 billion yen ($1.4 billion) for projects such as a subway in Mumbai, further boosting its aid for economic development in the South Asian country. Foreign Minister Taro Kono and his Indian counterpart, Sushma Swaraj, reached the funding agreement Thursday (March 29) during talks here.
Sri Lanka Premier Wants India and Japan Cash to Balance China
Bloomberg, March 27
Prime Minister Ranil Wickremesinghe said Sri Lanka is seeking foreign investment from India, Japan and others amid criticism over his country’s reliance on Chinese loans for infrastructure projects. In an interview, Wickremesinghe defended a deal last year that gave a joint venture led by state-owned China Merchants Port Holdings Co Ltd. a 99-year lease to the southern port of Hambantota.
Trade and Economy
US-China tariff war may be a boon for India, say experts
The Economic Times, April 5
With the US and China reducing their engagement in the area of trade, India could seize the opportunity to increase its presence in the two markets, say trade experts. “Because of their growing disengagement as they slap tariffs on one another, it gives India a platform to engage more with both the countries and increase presence,” said a Delhi-based trade analyst.
Tariffs on U.S. may help India treble cotton exports to China
Reuters, April 5
India, the world’s second-biggest cotton exporter, is hoping to treble shipments of the fibre to China next year as Beijing seeks to replenish stockpiles and imposes a 25 percent import tax on cargoes from the United States. Despite India’s efforts to grab a bigger piece of the Chinese market, cotton from the United States, the world’s biggest exporter, has held sway for the past few years. But China’s announcement on Wednesday that it will impose tariffs on 106 U.S. commodities, including cotton, could now tilt the balance in India’s favour.
Sensex dives 352 pts over US-China trade war
The Times of India, April 5
The escalating tariff war between US and China, with the Asian giant announcing retaliatory trade measures on Wednesday (April 4), shaved 352 points off the sensex which closed at 33,019. The index bgan trading in the green in the early part of Wednesday's session but after China announced a tit-for-tat measure against the US, the sensex lost nearly 400 points in a little over an hour and closed near the day's low of 32,973. Of the 30 sensex stocks, 25 closed in the red.
China to take concrete steps to bridge trade gap, set up industry park: Suresh Prabhu
The Economic Times, March 28
China has agreed to take concrete steps such as giving more market access to Indian products and services, and setting up industrial parks here to narrow the widening trade deficit, Commerce and Industry Minister Suresh Prabhu said. India has raised the concerns of ballooning trade deficit and the growing difference between imports and exports, at a meeting with his Chinese counterpart Zhong Shan, he said.
Energy and Environment
SoftBank, China's GCL team up for $930 million Indian solar venture
Reuters, April 2
SoftBank Group Corp has agreed to launch a $930 million Indian joint solar energy venture with Chinese firm GCL System Integration Technology Co Ltd as part of its ambitious India solar investment roadmap. The venture will work on photovoltaic technology, which is used in solar panels. GCL will provide technology and SoftBank will assist is obtaining land and regulatory approvals, GCL said in a filing to the Shenzhen stock exchange dated Friday (March 30).
China no threat to India's overseas energy interests: Dharmendra Pradhan
The Times of India, March 29
India does not feel threatened by China over sourcing oil and gas from around the world and has its own strategy based on the strength of its "huge credibility factor" and the weight of its rapidly expanding energy market, oil minister Dharmendra Pradhan said on Thursday (March 29).
China agrees to share Brahmaputra river data with India
The Economic Times, March 28
China on Wednesday said it has agreed to share the Brahmaputra river water data with India, which it had withheld last year after the Doklam military stand-off. The announcement by the Chinese Foreign Ministry came a day after India and China held talks over the trans-border rivers in the eastern Chinese city of Hangzhou.
The friend of my enemy
The Indian Express, April 5
By Christophe Jaffrelot - Senior Research Fellow, CERI-Sciences Po/CNRS, Paris and Professor, Indian Politics and Sociology, King’s India Institute, London.
Iranians are well-known for their sense of diplomacy and professional diplomats are even, at times, experts at confusing their interlocutors. On March 13, Iran’s minister of foreign affairs, Javad Zarif, paid an official visit to Islamabad in order to pacify the Pakistanis after Hassan Rouhani’s three-day trip to India the month before — the first Iranian presidential visit since 2003.
India and China in rapprochement mode after Doklam crisis
Asia Times, April 2
By Manoj Joshi - Distinguished Fellow, Observer Research Foundation
Indian Defense Minister Nirmala Sitharaman’s visit to China this month will take place amid a climate of improved relations between the two countries. It will come in the wake of an important interview to the South China Morning Post last month by India’s ambassador to China, Gautam Bambawale, who put forward a defense of India’s June 2016 intervention in the Doklam region at the India-Bhutan-China tri-junction.
Across the Aisle: One-man band cannot make music
The Indian Express, April 1
By Palaniappan Chidambaram - Member of Parliament, Rajya Sabha
There is a new Cold War in the world. It is not between the United States and Russia; that is a diplomatic war between a presumptuous ‘sole super power’ and a chastened but proud country that has lost its pole position. It is not between the United States and China; that is a trade war that will be resolved in due course according to the rules of world trade.
Why India is walking away from its tit-for-tat China policy
South China Morning Post, March 30
By Prateek Joshi - Research Associate, Vivekananda International Foundation India
New Delhi’s China policy has taken a sharp turn this year, in what could be interpreted as a reversal of its previous stance. In recent months, India has not only supported China’s vice-presidency in the Financial Action Task Force, an intergovernmental agency combating money laundering, but Delhi also withdrew its support from a commemorative event marking the 59th anniversary of the Tibetan uprising.
Rebuilding China-India ties prudently
China Daily, March 29
By Lan Jianxue - Associate Research Fellow, China Institute of International Studies
India seems to have softened its stance toward China since the BRICS Summit in Xiamen, Fujian province, in September last year. Some high-ranking Indian officials, including Modi and Defense Minister Nirmala Sitharaman are scheduled to visit China within the next three months. And the Modi government has asked officials not to participate in Dalai Lama's programs. These are welcome signs for China.
Books and Journals
China’s Maritime Silk Road: Strategic and Economic Implications for the Indo-Pacific Region
Center for Strategic & International Studies, March 2018
Edited by Nicholas Szechenyi - Senior Fellow and Deputy Director of the Japan Chair, CSIS
Contributing authors for this report include Zack Cooper, Matthew Funaiole, Jesse Barker Gale, Jonathan Hillman, Gurmeet Kanwal, Harsh V. Pant, Gregory B. Poling and Andrew Shearer.
China unveiled the concept for the Twenty First Century Maritime Silk Road (MSR) in 2013 as a development strategy to boost infrastructure connectivity throughout Southeast Asia, Oceania, the Indian Ocean, and East Africa. The MSR is the maritime complement to the Silk Road Economic Belt, which focuses on infrastructure development across Central Asia. Together these initiatives form the One Belt One Road (OBOR) initiative designed to enhance China’s influence across Asia.
There is a shortage of infrastructure investment to meet the needs of developing nations across the Indo-Asia-Pacific region and most nations have welcomed the opportunity to bid for Chinese funding. At the same time, there are growing questions about the economic viability and the geopolitical intentions behind China’s proposals. Thus far MSR initiatives have mainly been concentrated in the littoral states of the Indo-Pacific region, especially port development projects, which is raising questions about whether these investments are economic or military in nature. These large-scale investments are also structured in ways that invite questions about the potential for China to exert undo leverage over the domestic and foreign policies of heavily indebted recipient countries.
To shed light on some of these themes, CSIS has commissioned this study to unpack the economic and geostrategic implications of China’s infrastructure development across the Indo-Pacific region under the MSR.
Compiled and sent to you by Centre on Asia and Globalisation and
the Lee Kuan Yew School of Public Policy, National University of Singapore