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Published Twice a Month
February 16, 2019 – February 27, 2019

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


Guest Column

India: Integrating with China’s Digital Silk Road?

By Archana Atmakuri and Chan Jia Hao    


CIB132a_1200x800Image from Max Pixel

More often than not, New Delhi and Beijing relations are viewed through a competitive lens. However, a deeper look into the relationship reveals aspects of cooperation, particularly in the area of technology. The year 2018 experienced the rise of artificial intelligence (AI), 5th Generation (5G) mobile technology, and digital infrastructure around the world. However, with the rise of such emerging technologies, governments began to implement greater restraints on their spread, starting with the United States’ (US) proposal to establish sweeping export controls over a range of ‘emerging and foundational technologies’. This was followed by similar proposals in the European Union (EU).

Tensions grew within the international community in December 2018 when the global chief financial officer of Huawei Technologies, Meng Wanzhou, was arrested in Canada at the request of US authorities. While initially accused of violatingsanctions against Iran, scrutiny on Meng’s case intensified when the US accused Huawei of intellectual property theft. A number of countries, including the United Kingdom, Japan, Australia, New Zealand and Canada swiftly ordered reviews of the Shenzhen headquartered company’s 5G technologies in their respective countries, citing national security concerns.

India, however, was the exception.

It placed no ban on Huawei and has continued to expand its technological transfers with China. This is despite the fact that India has been one of the fiercest opponents of China’s cross-regional Belt and Road Initiative (BRI).

China’s aspiration to be a leader in digital technology was reflected first in its Digital Silk Road roadmap in March 2015. This came after the official announcement of the ‘One Belt One Road’ in 2013 - later known as the BRI. An ‘Information Silk Road’ was first introduced as one of the sub-goals of connectivity. The concept further developed in July 2015, at the China-European Union digital cooperation forum, seen as parallel to the BRI. The digital silk road proposed that since China held a competitive advantage over other countries in its 4G and 5G network standards, Chinese companies could expand cooperation with these countries to fully develop their digital economy.

This opens up opportunities for countries like India to catch up with technological advancements. According to a report which quoted experts from the UK speed tester OpenSignal, India’s average download speeds are much slower than that of its neighbours Sri Lanka, Pakistan and even Myanmar, perhaps due to the “rapid growth in mobile penetration and new users connecting to mobile networks.”

While China and the US have been racing towards launching 5G technologies, India has been struggling to stabilize 4G technology. India needs to bridge the financial gap to expedite its technological developments. In April 2018, it was reported that China had invested over $8 billion in India, a large part of  which went into the Information and Communication Technology (ICT) sector. Moreover, the spokesperson for China’s Ministry of Commerce, Gao Feng, remarked how “India has become an important market for infrastructure cooperation among Chinese companies and a major investment destination”.

Indeed, there are many signs of deepening China-India cooperation in digital technology.

First, Indian and Chinese start-ups are taking steps to establish closer linkages for cooperation with officials at ministerial levels. For instance, in 2018, around 20 Indian start-ups and 150 Chinese investors participated in the Indian government’s first start-up event in Beijing, which was jointly organised by the Start-up India Association, Venture Gurukool, and Sino Global Capital.

Second, tech companies in both Asian countries have been building up substantial partnerships. Between 2015 and 2017, Alibaba Group invested at least US$ 620 million collectively inSnapdeal, Big Basket, Ticket New and One 97. Similarly, Tencent has invested over US$1.2 billion in Flipkart, Pepo, Byjiu’s classes, Ibibo Group, Hike andPracto.

At the back of its technology sector value chain, India has also seen an increasing number of Chinese firms establishing themselves in various parts of the country. For instance, China’s Xiaomi Corp’s component supplier, Holitech Technology, is reportedly set toinvest about $200 million over three years to set up a plant in the Indian state of Andhra Pradesh which would create about 50,000 jobs. Similarly, in Greater Noida, Chinese smartphone maker Vivo Mobile’snew plant is expected to create about 5,000 jobs.

Third, Chinese smartphone companies are taking over Indian markets. More than half of the total smartphones sales in India are now dominated by four major Chinese companies - Xiaomi, Oppo, Vivo and Honor. In 2018, India reportedlyspent over Rs 50,000 crore (approximately US $6 billion) on smartphones – almost double compared to the previous financial year. Chinese phones clearly dominated the 4G arena, leaving their Indian competitors behind.

However, the increasing prevalence of Chinese technology has also caused concern among Indian policymakers. In 2013, India’s Department of Telecommunications (DOT) established the testing of spyware and bugging software in telecommunication kits from Huawei and ZTE. In December 2018, India’s Telecom Equipment and Export Promotion Council (TEPC) called on National Security Advisor, Ajit Doval, toban equipment purchases from Chinese companies like Huawei, ZTE and Fiberhome, citing security concerns. These have occurred alongside India’s continued refusal to support China’s BRI on security grounds.

Yet India is unlikely to join the developed countries in their quest to curb Huawei and other Chinese tech companies precisely due to the allure of continued technological transfers benefitting India. Just last month, the Indian Minister of Communications Manoj Sinha said that there has beenno proposal to ban telecom equipment produced by Huawei. The Cellular Operators Association of India (COAI), the telecom industry association, has also urged DOT to allow Huawei to assist local operators to build up the industry’s 5G capabilities so long as they remain fully compliant with government requirements. Despite domestic competition and national security factoring into India’s opposition of China’s BRI, a deeper look into the digital technology sphere reflects a significant level of complexity and nuance in India’s China policy.

India, in an attempt to upgrade its technology, has bolstered its relationship with China, particularly in telecommunications and digital technology. Despite perceptions of competition, China-India synergy in digital technology shows there is great potential for cooperation in their relations. Besides, China’s ‘digital infrastructure deals’ with India are not very different from digital technology projects in other countries. The only distinguishing factor here is the absence of Silk Road connectivity projects. Chinese technological transfers will continue to benefit India alongside the rest of South Asia, and hence digital technology cooperation will remain a persistent feature of cooperation with China


Archana Atmakuri is a Research Analyst at the Institute of South Asian Studies (ISAS), National University of Singapore (NUS). Her research focuses on India-China relations and China’s rise.

Chan Jia Hao is a Research Analyst at the Institute of South Asian Studies (ISAS), National University of Singapore (NUS). In an increasingly digitalised world, Jia Hao’s research focuses on the relevant linkages between technology, governance and economic policy among South and Southeast Asian countries.


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

Veto used to block, kill proposals in UNSC Sanctions Committee: India’s veiled attack on China over Masood Azahar issue
Financial Express, February 26

India said any member of the UN Security Council Sanctions Committee can use the veto to block and kill a proposal for want of unanimity, describing as “complex” and “contentious” the issue of veto which has been repeatedly used by China to block India’s bid to designate Pakistan-based JeM chief Masood Azhar as a global terrorist.

India hopes China will ease Jaish stance as foreign secretary briefs P5 envoys on IAF strike
The Print, February 26

India, a diplomatic source told The Print, is hopeful that China may finally come on board to get Jaish-e-Mohammed (JeM) chief Masood Azhar recognised as a global terrorist at the UN Security Council.

China is keen towards improving its relations with India
The Times of India, February 20

Professor Jio Haitao, Director of the Institute of Chindian Studies at Jinan University, on Tuesday (February 19) said that there is a need to seek improvement in the domain of people to people contact between India and China, through cultural and academic exchanges.

Chinese Army proposes to conduct sports events in China to Indian counterpart
The Economic Times, February 16

The Chinese Army has proposed to conduct sports events at designated military camps inside their territory as part of efforts to develop greater understanding between commanders of the two armies, GOC-in-C, Eastern Command, Lt Gen M M Naravane said Saturday (February 16).
 

News Reports

China and India in the Region

China urges peace and dialogue between India and Pakistan
Global Times, February 26

China urged India and Pakistan to practice good communication and exercise restraint, which will help maintain regional stability, the Chinese foreign ministry spokesperson said after Indian fighter jets crossed into Pakistani territory on Tuesday.

Balakot: Indian air strikes target militants in Pakistan
BBC, February 26

India says it launched air strikes against militants in Pakistani territory, in a major escalation of tensions between the two countries. The government said strikes targeted a training camp of the Jaish-e-Mohammad (JeM) group in Balakot. Pakistan said its jets had forced back the Indian planes and denied there were any casualties.

Russia FM: Russia, China are stabilizers in world affairs
CGTN, February 24

Russian Foreign Minister Sergey Lavrov said in a recent interview that Russia and China are the stabilizers in international affairs, and there is no exaggeration that their ties have reached "the best level in history," as has been repeatedly hailed by the leaders of the two countries.

Pulwama attack: India gets international support, UNSC names JeM's Masood Azhar
Business Today, February 22

In a press statement, the UNSC, which comprises of 15 nations including China, condemned the Pakistan-based terror group headed by Masood Azhar for its “heinous and cowardly” terror attack.

UK's Hammond: talk of warship deployment complicates China ties
Reuters, February 21

Britain’s talk of deploying a warship in the Pacific has complicated its relationship with China, finance minister Philip Hammond said.

China Closes Tibet to Foreigners for Sensitive Anniversaries
Bloomberg, February 20

China is barring foreign travelers from Tibet over a period of several weeks that includes a pair of sensitive political anniversaries questioning the legitimacy of Beijing's rule over the Himalayan region.

China, Iran meet amid efforts to preserve nuclear deal
The Times of India, February 19

The Iranian foreign minister’s passionate defence of his country’s interests at the Munich Security Conference has made him “a famous person” in China, his Chinese counterpart told him on Tuesday (February 19).

News Reports

Trade and Economy

India's private airline 'IndiGo' to soon start services to China
Xinhua, February 25

India's low-fare private airlines "IndiGo" will soon start flights to China, among other countries including Vietnam, Myanmar and Saudi Arabia, a top official of the airline said on Monday (February 25).

5G market in India will be second only to China: Huawei
Livemint, February 24

The market for 5G, the next generation wireless technology, in India will be huge and second only to China from an overall industry perspective in the next 10 years, James Wu, President, South-east Asia, Huawei said on Sunday (February 24).

India can compete with China by harnessing data: Capgemini Chairman Paul Hermelin
The Economic Times, February 23

“China is right in thinking it is successful because data is the key ingredient. Data in China will be like oil in Saudi Arabia,” Hermelin said at the Global Business Summit. “India can compete with China in terms of data as it (India) is a large country with a large population,” Capgemini chairman Paul Hermelin said on Friday (February 22).

RSS wing wants ‘hurdles’ for Chinese firms in country
The Indian Express, February 19

Pointing out that Beijing continues to block New Delhi’s attempts to designate Masood Azhar as a global terrorist, Swadeshi Jagran Manch (SJM), the economic wing of RSS, has urged Prime Minister Narendra Modi to ban Chinese companies in the country to prevent “economic gain of any nation or individual that directly or tacitly supports such terrorists”.

News Reports

Energy and Environment

Chinese geological survey vessel completes first joint expedition with Pakistan
CGTN, February 26

China's marine geological survey vessel Haiyang Dizhi-10 has successfully completed a joint expedition with Pakistani scientists in the Indian Ocean.

Saudi Arabia strikes US$10 billion China deal, talks de-radicalisation with Xi
Channel News Asia, February 22

Saudi Crown Prince Mohammed bin Salman cemented a US$10 billion deal for a refining and petrochemical complex in China on Friday (February 22), meeting Chinese President Xi Jinping who urged joint efforts to counter extremism and terror.

India, China to drive natural gas market until 2040: IEF secretary general
Gulf Times, February 21

India and China will drive the natural gas market until 2040, International Energy Forum (IEF) secretary general Dr Sun Xiansheng said even as he underlined natural gas’s “critical role in achieving sustainable and inclusive growth”.

US, China Largest Emitters, But India's Coal Plants "Unhealthiest": Study
NDTV, February 21

Researchers said reducing the negative health effects of coal power generation should be a global priority. "But further industrialisation, especially in China and India, poses the risk of aggravating the situation instead," they claimed.

January air quality worsens in major Chinese cities
Xinhua, February 17

Major Chinese cities saw worsening air quality in January, according to the Ministry of Ecology and Environment (MEE). The share of average good air quality days for China's 337 cities monitored by the ministry stood at 67.6 percent for the first month of this year, down 3.5 percentage points year on year.

Analyses

India-Pakistan: shadow dancing in the Himalayas
The Interpreter, February 27

By David Brewster, Senior Research Fellow with the National Security College, Australian National University (ANU)

While the ultimate intentions of the terrorists and their handlers in the Pakistan military can only be guessed at, the scale and timing of the attack was presumably intended to force Modi to respond with a substantial attack against Pakistan.

For Pakistan, China is the new America
Observer Research Foundation, February 20

By Sushant Sareen, Senior Fellow at Observer Research Foundation (ORF).

Pakistan is now deeply in hock to China. From weapon systems to economic bailouts, to diplomatic support in various international fora, China is Pakistan’s go-to country.

Pulwama attacks: how India can respond to Pakistan-based terrorists in wake of Kashmir suicide bombing
South China Morning Post, February 20

By Rupakjyoti Borah, Visiting Research Fellow, Institute of South Asian Studies (ISAS), National University of Singapore (NUS)

As tensions run high between India and Pakistan in the wake of a terror attack on Indian paramilitary personnel in the border state of Jammu and Kashmir, Islamabad has written to the United Nations seeking its intervention to “defuse tensions” with New Delhi.

No winner if India and Pakistan go to war
CGTN, February 18

By Cheng Xizhong, Senior Fellow at the Chahar Institute; Visiting Professor at Southwest University of Political Science and Law;  former defense attaché in South Asian countries and a former UN senior military observer.

The best way to effectively deal with the threat of terrorism in South Asia is for India and Pakistan to engage in dialogue, establish anti-terror cooperation mechanisms and jointly fight terrorism.

Terrorist issue could be better addressed by India
Global Times, February 17

By Yu Jincui, Global Times

Instead of simply blaming other countries, especially Pakistan and China, shouldn't the Indian government make more self-introspection on its anti-terrorism policy and dwell more on how to better administer the India-controlled part of Kashmir?

Books and Journals

Asian Security262x370China-India Rivalry at Sea: Capability, trends and challenges
Asian Security 15, no. 1 (2019)

Koh Swee Lean Collin is a Research Fellow with the Maritime Security Programme, at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore (NTU).

The Sino-Indian rivalry features an increasingly prominent maritime dimension amidst the countries’ naval buildups and deployments in the Indian Ocean Region (IOR) and Western Pacific. This study finds that the patterns of naval buildup and nature of the seas as an ambiguous, international medium do not necessarily shape mutual perceptions between China and India as pure security seekers. India’s concerns about China’s IOR forays revolve around its expanding bluewater naval capabilities, especially submarines, and port access. Beijing is wary of New Delhi’s reach into the Western Pacific and role within a perceived US-led containment scheme that allows it to leverage on partners’ bluewater assets. While war remains a remote prospect, this Sino-Indian rivalry at sea – extending from unresolved terrestrial political problems – looks set to persist.


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Compiled and sent to you by Centre on Asia and Globalisation and the Lee Kuan Yew School of Public Policy, National University of Singapore.

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