Eye on China: LAC Transgressions – CPEC Quarrel – Military Education – Risky Banks – Aussie Scandal

Eye on China is a weekly bulletin offering news and analysis related to the Middle Kingdom from an Indian interests perspective. This week we focus on the developments in the Sino-Indian relationship; Xi’s focus on military education; nearly 13% of Chinese banks being highly risky; protests in Hong Kong; new leaks from Xinjiang and much more.

I. Transgressions, Celebrations & Trade

It’s been a relatively quiet week when it comes to the Sino-Indian news cycle. The Indian Ministry of Defence did share data about transgressions along the LAC in Parliament. There were a total of 1025 transgressions by the PLA between 2016-2018. The breakdown for the three years is 273, 426 and 326. Much of this is down to differing perceptions about the LAC. One wonders how informal summitry will help delineate claim lines to reduce these.

But, until that happens, there’s at least clarity that India and China will commemorate the 70th anniversary of the establishment of diplomatic relations next year with 70 celebratory activities, including cultural, religious and trade promotion events besides military exchanges. The Indian embassy in Beijing put out a list of the 70 activities. There’s a whole bunch there, ranging from drug regulation talks, media engagement, trade and investment talks, business delegations, film events and so on. Not all civilisational, cultural and historical bits are uncontroversial. For instance, both sides are reportedly sparing over the legacy of Sowa-Rigpa, which is a traditional Tibetan system of medicine practised in India’s Himalayan belt. India has apparently approached UNESCO seeking enlisting of Sowa Rigpa as its intangible cultural heritage. China has raised objection to it. Here’s how Hu Zhiyong, from the Shanghai Academy of Social Sciences, responded to the controversy in Global Times: “India set the Tibetan medicine institute in Ladakh on purpose, so that India could assimilate the region in order to merge Ladakh into India. India has been hyping its work on Tibetan medicine” as it wants to transfer its people’s attention away from economic decline by worsening China-India relations.

Anyway, some of the activities in the list of 70 that caught my attention are:

  • The Indian side will send its naval ships to visit China.
  • A mid-level tri-service delegation of the Indian armed forces will visit China.
  • The Indian side will organize Tourism Road Shows in China.

Moving further to a list of other noteworthy stories. First, Foreign Minister S Jaishankar spoke to Nikkei Asian Review, discussing the Sino-Indian trade dynamic. He termed the RCEP has “not fair and balanced,” and spoke about the need for China to open up its IT and pharma sector to Indian goods. What’s interesting is that the report argues, “It has been believed that India is keen to protect its domestic industries from a possible influx of cheap Chinese imports that could flood the Indian market if a free trade deal involving both countries is reached. But Jaishankar’s comments seem to suggest that India is growing more interested in expanding its exports to China.” What’s also interesting are a series of reports in the media that suggest that Tokyo wants Delhi in RCEP and is looking to assist in whatever way possible. Bloomberg’s reporting even suggests that Japan may back out of the deal if India isn’t in there.

Second, the Indian government is reportedly considering amending its rules to completely remove the provision under which citizens can receive duty-free ‘gifts and samples’ valued at under Rs 5,000 from overseas, after finding its rampant misuse by Chinese e-commerce vendors. Given this, Chinese e-commerce giant Club Factory has defended its role in India, saying it operates in accordance with Indian laws and based on the “marketplace model.

Third, Sputnik News reports that a Chinese-built bridge on the strategically important Jhelum River was opened on Tuesday. The ‘Hollar Bridge,’ constructed as part of CPEC, connects Rawalpindi with the Pakistan-administered Kotli, which is near Rajouri on the Line of Control. Fourth, China’s Envoy in Bangladesh Li Jiming apparently wants India to help China in dealing with the Rohingya issue between Bangladesh and Myanmar. At a public event in Dhaka this week, he said that “India won in India-Pak war in 1971, which resulted in the birth of a new country ‘Bangladesh’. At that time, India played an important role. It can again play a significant role on Rohingya issue and, therefore, it should come forward in this regard.”

Fifth, Brookings India put out a new report on higher education in India. There’s an interesting comparative statistic in it with regard to the research ecosystem in India and China. Livemint reports that India and China were spending almost similar portion (0.6%) of their GDP on R&D in 1996 but two decades later China’s expenditure on R&D jumped by more than four-fold whereas India’s expenditure remained largely static. The Brookings report found that India has 216.2 researchers per one million inhabitants, against 1,200 in China, 4,300 in the US, and 7,100 in South Korea. India spends less than 1% of its gross domestic product (GDP) on research and development (R&D), while South Korea spends more than 4.23%, and China 2.11%.

Finally, telecom operators and the Indian government appear to be sparring over 5G spectrum, which has implications for Chinese firms like Huawei. The government says that it is unwilling to reduce the price, while the Cellular Operators Association of India has suggested that it will be delaying 5G network deployment “by at least 4 years” owing to “exorbitant base prices, insufficient spectrum, and unavailability of news bands.”

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