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
Let’s begin this week of the India-China dynamic with news about Quad members. First, India’s defense ministry announced on Monday that Australia would join the Malabar 2020 naval exercise to be held next month. This came after years of agonising over whether Australia should be a part of the drills. Beijing’s official reaction to this development was rather measured. MoFA spokesperson Zhao Lijian said: “We noticed this development. China believes that military cooperation between countries should be conducive to regional peace and stability.” There was, however, a lot of fulmination in Global Times. Here’s Liu Zongyi saying that the announcement “is not only a reaction to the escalating tensions between China and India with regards to the border issues but also the scheduled itinerary to promote the QUAD.” He also says that “this is an obvious step toward the establishment of a mini-version of NATO in Asia.” But then later in the same piece says that “such military cooperation is far from becoming the new NATO.” Here’s a GT editorial on this: “So far, the QUAD mechanism is primitive. The four countries’ geopolitical ties and contradictions with China are quite different. And they have different demands and expectations of the QUAD mechanism. Although they are cooperating more frequently, the factors in the Asia-Pacific region preventing the four countries from forming an anti-China alliance are far greater than those which unite them.” CICIR’s Wang Shida writes that recent developments show that “US-India defense cooperation is about to reach the level of a de facto ally…It is true that in future India’s US policy will also face many constraints, such as the attitude of its traditional partner Russia, and China’s countermeasures in specific areas, but in any case, ‘non-alignment’ is no longer an insurmountable obstacle to the approach of the US-India strategy.” Ling Shengli of the China Foreign Affairs University argues that “it is difficult for the members of the Five Eyes Alliance or the Quad countries to form a unified consensus on security threats. Moreover, these countries have very close economic cooperation with China, which also means that they cannot move towards full confrontation with China. Faced with the increasing number of global problems, it is more necessary for countries to work together. Win-win cooperation rather than differentiation and confrontation is the correct way for countries to get along.” (Suffice to say that the Asian NATO arguments are tremendously overblown. But there’s obviously a concern in Beijing about horizontal escalation against it. The important bit is whether this will result in changed behaviour. At present, nothing says that this will be the case.) Nevertheless, these concerns in China will only grow as India and the US prepare for its next 2+2 dialogue in the coming week. Ahead of that, Indian Express quoted an unidentified senior US official as saying that Washington was monitoring the India-China boundary situation and didn’t want it to escalate. The official added that the US was having an ongoing dialogue with India about increased cooperation in Southeast Asia. “We encourage their involvement. That cuts across development investments, it cuts across security cooperation, and then it also involves presence. So, we welcome greater Indian participation in Southeast Asia across all three of those areas.”
Moving to the boundary issue, there’s another round of talks scheduled for next week. The Indian army this week handed over a PLA soldier who had reportedly strayed across the LAC near Demochok on October 18. The Chinese side said that the soldier had gone missing “while helping a herdsman looking for lost yaks.” Shishir Gupta reports for HT, “neither side is impatient over resolution at the friction points in Ladakh, but have decided to keep the dialogue channels open at both the military commander level and diplomatic levels, senior officials said. The talks are also aimed at preventing any vertical escalation at the friction points either because of an accident or the aggressiveness of an individual commander. While the People’s Liberation Army (PLA) has proposed that both sides withdraw armoured and artillery units as part of de-escalation first and then go for disengagement of the infantry, the Indian side is very clear that armoured units cannot be withdrawn because it will give an advantage to the adversary due to terrain and capability.” The Indian MEA underscored this saying on Thursday that the “immediate task is to ensure a comprehensive disengagement of troops in all the friction areas.” Another report says that the PLA is constructing new structures and relocating troops and equipment to occupied Aksai Chin in Tibet as well as Xinjiang with no intention of backing off. The report says: “Senior military officials said they had noticed the construction of a huge structure spread across 3 lakh square feet – almost the size of four football fields – has been noticed around 10 kilometres from the LAC in occupied Aksai Chin across Gogra-Hot Springs area. According to a retired army chief, the humongous facility could be used for housing troops, artillery, rocket regiments, and tanks as the barrels of tanks and guns are known to freeze and go brittle in sub-polar conditions. Given that the structure is very close to the LAC, it could also be used for setting up hospital facilities to treat PLA troops suffering from acute mountain sickness and high-altitude pulmonary edema.”
It adds: “Some 60 km from the LAC in Arunachal Pradesh, people familiar with the matter said, counter-space jammers had been deployed to ensure that PLA activity is not picked up by an adversary through satellites. It is understood that PLA has deployed Russian S-400 missile systems in-depth areas around Nyingchi city across Arunachal Pradesh to cater to any aerial threat.” Amid all this, Union Minister of State for Home G Kishan Reddy said this week that the government has ordered the setting up of 47 Border Outposts along the India-China border. Defence Minister Rajnath Singh also spoke about the situation at the border while performing “shastra puja” in Sikkim. “India’s brave soldiers have sacrificed their lives. India wants that the Indo-China border tension should end and peace should be preserved. But unpleasant incidents keep happening. However, I am confident that our soldiers will not let anyone take even an inch of our land,” he said. He is there with Indian Army chief General Manoj Naravane to assess preparedness.
There have been some talk, smoke, and mirrors I guess, in India about a trade deal with Taiwan. India and Taiwan in 2018 signed an updated bilateral investment agreement. Trade between them grew 18% to $7.2 billion in 2019. Of course, a state can diplomatically recognise the PRC while having a trade deal with Taiwan. Singapore, for instance, recognises the PRC but signed an FTA with Taiwan in 2013. But I guess the space for such balance is diminishing from Beijing’s perspective. Bloomberg reports that support is growing within the Indian government for such talks. But Dipanjan Roy Chaudhury reports for ET that the Indian government is not currently considering any proposal for a trade deal with Taiwan. His report says: “Reports regarding Delhi launching trade talks with Taipei at this moment is speculative and baseless, highly placed sources told ET. ‘In fact, there is no such proposal on the table,’ a source quipped.” Beijing has clearly been displeased about the growing reportage in India about ties with Taiwan. Here’s what MoFA’s Zhao said about the issue: “China is firmly opposed to any official exchanges of any form and the signing of any agreement of official nature between Taiwan and any country having diplomatic relations with China. The Indian side should earnestly abide by the one-China principle and handle the Taiwan question prudently and properly.” It’s great to see more discussion on this in India, but mainstream TV media’s understanding of issues is abysmal, to be honest. In GT, Long Xingchun argues that while the Indian government has so far stuck to the one-China principle, it’s the “non-governmental elites,” “including research fellows at think tanks, media staff, and retired officials, are advocating a tough stance toward China, including playing the ‘Taiwan card’.” And I guess he then has some advice for all of us non-governmental elites. “These so-called elites are supposed to be playing a constructive, not destructive, role in China-India relations. But they simply blame China in a bid to cater to the anti-China sentiment in Indian society. But they do not see India’s own diplomatic woes and can easily be misled by external forces. Since they are not in an official position, they don’t shoulder any responsibility should tie with China sour. The Taiwan question will exert a much more detrimental impact on China-India relations than current border spats.”
A few other stories to note. First, India’s Research and Analysis Wing (R&AW) chief Samant Kumar Goel met with Nepal’s Prime Minister K P Sharma Oli. Interesting that this became public. But the visit provoked sharp reactions across the political spectrum in Nepal. At the same time, TOI reports that Indian intelligence agencies are saying that China has occupied Nepalese territory across seven bordering districts. Amid this, the CCP ILD chief Song Tao led the first meeting of the China-Nepal party-to-party consultation mechanism. So far, the CCP has set up such mechanisms with a number of countries, including Sri Lanka, the Philippines, Pakistan, and Indonesia. These are important platforms that can allow Beijing to cultivate elites and adapt to electoral shocks and popular resentment.
Second, amid calls of a boycott by the Confederation of All India Traders, Chinese companies exporting goods to India may suffer Rs 40,000 crore business loss this Diwali season. Meanwhile, a double-digit jump in India’s exports to China, coupled with a sharp contraction in imports, has nearly halved the trade gap between the two trading partners in the first five months of the current fiscal year (2020-21) year-on-year. The trade deficit was $12.6 billion between April and August of FY21, down from $22.6 billion a year ago.