Eye on China is a weekly bulletin offering news and analysis related to the Middle Kingdom from an Indian interests perspective.
I. India-China Ties
The eighth round of commander-level talks on the boundary issue was held on Friday. The talks apparently lasted from 9.30 am and ended at about 7 pm. There’s really little that’s come out of it – at least what is publicly known. The joint statement issued on Sunday says that the two sides had a “candid, in-depth and constructive exchange of views on disengagement along the Line of Actual Control in the Western Sector of India-China border areas.” It adds that both sides agree to implement the “consensus reached by the leaders of the two countries, ensure their frontline troops to exercise restraint and avoid misunderstanding and miscalculation.” And they commit to another round of talks. I guess hopes of any forward movement on disengagement are now pinned on a Modi-Xi engagement. The two leaders have multiple opportunities to engage online over the next two weeks. There’s the SCO summit on November 10. That’s followed by the ASEAN meeting and the BRICS leaders’ summit. There’s also a G20 meeting after all this. While engagement at the highest level will help, let’s see how much of this can take place online in a multilateral forum. Also, for all the optics of the informal summits, it’s noteworthy that Modi and Xi have not spoken to each other since the pandemic began. All that’s happened is an exchange of letters in early February and then messages of greetings marking the 70th anniversary of ties in April. The folks at Global Times also point this out. This piece says that “the upcoming SCO summit provides a good opportunity for India to show good will and repair the bilateral ties with China and improve economic cooperation. Once China and India reverse the downward spiraling of bilateral relationships, economic cooperation will pick up from its current low point.” To me, this is where such commentaries reflect a lack of understanding of the sentiment in India. Economic carrots are useful but cannot fix this. Beijing’s politics has to change.
India’s Chief of Defense Staff Bipin Rawat spoke this week about the LAC situation. Indian Express reports him saying: “The situation along the LAC in eastern Ladakh remains tense amidst transgressions and belligerent actions by the Chinese,” he said, and added that the People’s Liberation Army “is facing unanticipated consequences of its misadventure in Ladakh because of Indian Army’s firm and strong response…Our posturing is unambiguous, status quo has to be restored and we will not accept any shifting of the LAC.” Also note these comments: “The economic slowdown due to the pandemic has made China repressive at home but aggressive abroad as is evident through its posturing in South China Sea, East China Sea and the Taiwan Straits. For India, the challenges have manifested with military flare-ups along the LAC. In the coming years we are likely to witness aggressive pursuit of hegemonic interests by China manifesting through economic exploitation of weaker nations, military modernization and increased contestation with the West.” Rawat was clearly much more direct and Defense Minister Rajnath Singh, who spoke at the National Defence College this week.
Bloomberg reported this week, citing unidentified Indian officials, “a summer of fighting saw India lose control over about 300 square kilometers (115 square miles) of land along the disputed mountainous terrain.” The report also quotes Chen Jinying, a professor at the School of International Relations and Public Affairs at Shanghai International Studies University, saying: India “has been on a building spree under Modi’s watch, which is a red flag for China as it changes the status quo…Both sides appear to be very determined and neither side is willing to show any signs of weakness or gesture to back down.” When asked about these reports about loss of control over territory by Melissa Chan for Deutsche Welle, Indian Foreign Secretary Harsh Vardhan Shringla acknowledged that China had taken the “unusual step” of trying to “unilaterally alter the status quo.” He said that this had contributed to deterioration of ties. He added that “you have to keep in mind that there is no common perception of the border” but if one seeks to “change the current line where the troops are, then of course, it does impact on the larger relationship.” When pressed on the issue of the loss of control over territory, he refused to confirm or deny. Also interesting, he refused to comment on the issue of Hong Kong, saying that “we don’t comment on internal affairs of states.”
Moving on to other stories. First, India’s Union Home Secretary Ajay Kumar Bhalla on Friday said the government has not taken any call on allowing Chinese telecom companies to enter into the 5G trials in India but acknowledged that the penetration of the neighbouring country into the existing network is too extensive. Here’s an interesting quote: “Unless we have a substitute available, we just can’t switch off and say that this will not be allowed. But the government can definitely make special safeguards and ensure the safety and security of the system of communication of the country. That we are having and we are developing and we will definitely be able to deal with that.” Deeksha Bhardwaj reports for HT that a joint parliamentary committee on personal data protection has sought details from Reliance Jio, Ola and Uber about whether they use equipment sourced from China. The report says last week, Patym and Google were asked similar questions. Second, Bloomberg reports that Gland Pharma and its shareholders are looking to raise as much as $871 million in what would be India’s biggest pharma IPO. Shanghai Fosun Pharmaceutical (Group) Co. is Gland Pharma’s biggest shareholder, having acquired 74% stake for about $1.1 billion in 2017. The report says that it is planning to divest as many as 19.4 million shares in the IPO. Third, there’s a controversy over the stoppage of Vande Bharat flights to the mainland. This came after 19 Indian passengers tested positive for COVID-19 in the VBM flight from Delhi to Wuhan on October 30. Following this, Beijing placed an interim suspension of flights from India. So Indians who hold Chinese visas or residence permits would not be able to travel to China. India is one of several countries from where travel is being barred. Third, TOI reports that the Japanese government is apparently incentivising two companies, Toyota-Tsusho and Sumida — to diversify their manufacturing base from China to India. Finally, the Global Times once again showed that soft power is not its thing. Discussing reports of Indians boycotting China-made products during Diwali, it says: “Some may be willing to buy Indian-made products at a much higher price to show their support to their country’s manufacturing sector, while others who cannot afford too much on the festival are expected to have a bad consumer experience with some stinky lights. For instance, an organization announced to produce 330 million earthen lamps made from cow dung for the Diwali festival to counter Chinese lights. The consumer experience of the primitive diyas may be just one of the costs of Indians’ boycott of modern products from China.”