SO MUCH SO FOR CHINESE RESTRAINT, INDIA CHINA BORDER STANDOFF SPILLS OVER IN AUSTRALIA

Some days ago, in a boastful article, China’s hawkish state publication Global Times had claimed that “contrary to India’s nationalistic fomenting, Chinese public was largely calm over border tension” between India and China on Doklam Plateau.

What to say then on these vituperative remarks by Chinese people, “Anyone who offends China will be killed no matter how far the target is”, “Borderline is our baseline” and “China: Not even a bit can be left behind”?

And that too, in a faraway land, almost 9000 Kms from Beijing, in Sydney, Australia, so much so for the so-called Chinese restraint.

According to a report in The Australian, these slogans were carried by Chinese people in a rally in Sydney on August 15 to protest the Indian stand in the Doklam standoff. The Chinese used a convoy of luxury cars covered in Chinese flags and anti-India slogans.

Close on the heels of this, another controversy erupted in the University of Sydney where an Indian origin professor Khimji Vaghjiani used a map during the course of one of his lectures that showed India in control of territory on the Indo-China border, especially Aksai Chin.

The Chinese youth, whom the Chinese media portray as uber cool folks who have shown “no extreme reaction directly related to the standoff targeting India”, lost their temper on such a trivial issue even if the professor clarified his situation for using the map.

“Over 18 months ago, I used an out-of-date map, downloaded from the internet, when discussing characteristics of IT entrepreneurs around the world, however I was unaware that the map was inaccurate and out-of-date. This was a genuine mistake and I regret any offence this may have caused”, The Australian quoted him saying.

Now that is what we call a calm attitude and a gentleman’s reaction, unlike Chinese people or Chinese state media or Chinese government, who have been threatening India of war and dire consequences every other day, ever since the Doklam standoff began in June.

The Australian example once again shows how Chinese scramble to catch up every opportunity to target India. The otherwise calm Chinese youngsters posted articles on different platforms demanding removal of an innocuous map that showed India’s claims on its territory in forceful Chinese occupation, Aksai Chin and parts of Ladakh. After all, what else can be expected from them who threaten to kill anyone who offends China.

©SantoshChaubey

WHAT DEFINES INTERNATIONAL RELATIONS: COMMERCIAL INTERESTS OR STRATEGIC CONCERNS?

What matters more in international relations? What shapes the contours of bilateral ties in contemporary times? Certainly trade is an important factor but it is not the most important factor.

It is always about the engagement on strategic levels that defines bilateral relations between countries or the international alliances of groupings of countries, be it US-Israel or US-UK or NATO and other similar ties and alliances. They have been rock solid ties weathering varying seasons with equal fervour because the cornerstone of these relations have been strategic concerns. Historical linkages are an added advantage.

Though NATO has seen some trouble recently with US President Donald Trump raising objections over skewed funding contribution in the world’s most formidable military alliance between countries where the US is the largest contributor, NATO is still sailing smoothly with regular high level US visits to the NATO headquarters at Brussels.

In contrast, trading blocs like WTO, NAFTA, ASEAN, APEC, SCO and so on are basically about commercial engagements and though have increasingly become important in a world globalized by economy, cannot replace the ties built on strategic interests, especially in the times of crisis, like prolonged border standoffs or any aggression inimical to bilateral ties.

Also, when countries are globally important and are slated to become poles in a multi-polar world of future, like India and China are, what is going to define their diplomacy and international politics is how they cultivate their strategic ties.

Because loss of commercial interests can be met with forging other ties and alliances but there is no replacement for a strategic tie that gives a country sense of security or tools to secure its borders and skies.

That is why China doesn’t matter for India in case the ongoing border tension in the Sikkim Sector between two countries escalate to severe levels resulting in localized, limited scale military hostilities (because the two nuclear powered nations cannot afford a full-scale war).

China is basically a country engaged in trade relations with India. Relations have failed to go beyond that. There are no cultural ties and people to people contact. Defence and other strategic elements are non-existent from the table. Coupled it with the non-existent India-China bilateral trade in services. All these factors make India to easily look beyond China when it comes to suspending ties.

The bilateral trade between India and China was around $71 Billion in 2016 with a trade deficit highly skewed in Chinese favour – $47.8 Billion. India basically exports diamonds, cotton, yarn, organic chemicals, iron ore and copper worth $12 Billion (2016). Chinese export to India includes fertilizers, antibiotics, electrical machinery, equipments and organic chemicals and the 2016 worth was $59 Billion.

When we see the items of import and export, especially in the context of the stagnating Chinese economy, it is quite clear that India can easily do away with its miniscule Chinese export. But it will be difficult for China to ignore India, the world’s fastest growing large economy now for many quarters. Add to it India’s projected middle class base of around 450 million people and the country becomes a promising market for any manufacturing hub like China.

The trade deficit with China doesn’t hurt us (and won’t hurt us), at least in the near future, till the country reaches to a stage where unemployment becomes chronic and threatening for the country’s weaving; till the time we have ramped up our infrastructure to be able to make for any future contingency on our manufacturing needs. Till then, it’s like we have outsourced our manufacturing needs to countries like China (and with manufacturing bases in many other countries, we can easily find alternatives).

But China has not this advantage. It is already the manufacturing engine of the world with its majority of population engaged in those small or large factories supplying to the world. They are as dependent on the domestic Chinese consumption as the international demand.

With a slowing down economy, the domestic consumption in China is going to ease and its manufacturing hubs are going to be ever more dependent on big overseas markets and India is a big imperative there. It is important to maintain China’s social fabric with flow of jobs and gains of economy in the society and is going to be must for its behemoth economy that needs global markets to lubricate its tentacles. Just a corollary would suffice to prove the point here. Four Chinese manufactures, Xiaomi, Lenovo, Oppo and Vivo, are in top five of the Indian smartphone market. India can easily find alternative smartphone manufacturers with a strong domestic industry to fill the gaps. But these Chinese manufactures cannot find a market like India that has emerged as the world’s fastest growing smartphone market.

To continue….

©SantoshChaubey

NOW CHINESE STATE MEDIA FINDS INDIA DISSATISFIED AND JEALOUS TOWARDS CHINA

It seems, after successful ICBM and other military hardware test launches, it’s now India’s economic progress that has left the Chinese power elite uncomfortable. After targeting the Indian government’s demonetization move, equating it with terms like ‘gamble with money’ and ‘failure’, it is now about Indian stand on the global credit rating agencies.

While presenting India’s annual Economic Survey on January 31, the Chief Economic Adviser (CEC) Arvind Subramanian had slammed the rating agencies. A PTI report quotes him, “How did the rating agencies behave? They despite all these risky developments they did not downgrade China and our rating was maintained six notches below China. This is a reflection on how these institutions work. You should question them.”

Global Times, China’s official mouthpieces, now has responded to it. An opinion piece by a senior economist writes in Global Times that ‘it is noticeable that S&P has not adjusted India’s rating since 2011, Fitch hasn’t done so since 2006 and Moody’s hasn’t changed since 2004. With its rating left at such a low level for over 10 years, India’s dissatisfaction and jealousy toward China seems understandable’.

Mark the words ‘dissatisfaction and jealousy toward China’ here. They tell the prevailing Chinese mindset. This opinion piece written by an economist has economic jargons and technical details to prove its point that ‘instead of being obsessed with the sovereign credit ratings themselves, India should take a more macro view so as to fundamentally find out the underlying problems and solve them’. Indian economists, too, have successfully used economic parameters and jargons to explain the bias of the rating agencies.

While presenting India’s annual Economic Survey, CEC Subramanian, had come down heavily on the credit rating agencies, accusing them of having a China bias. Questioning rating agencies’ ‘poor methods and inconsistent standards’, Subramanian had said that the sovereign rating agencies had consistently ignored India’s economic reform measures like GST, Aadhaar integration, monetary policy framework agreement and eased FDI regime, coupled with its commendable fiscal discipline and strong growth trajectory.

Subramanian had further said that the rating agencies failed to see that India’s economy was growing at a faster pace while China’s was slowing down, from an average of 10 percent to 6.5 percent now. China’s sovereign ratings, fixed years ago, remained same even if its economy came down. The rating agencies have done the same with India. The contention is the approach here. S&P raised China to AA from A+ in 2010 and it is still at the same level in spite of clear growth pangs in the Chinese economy. It scaled down India from BBB+ to BBB- in 2012 and remains stuck there despite clear signs of growth in the Indian economy that has made it the world’s fastest growing economy.

So, it is not about jealousy and dissatisfaction. It’s about a dignified, rightful treatment.

Unlike other emerging economies, India has an unique position. While others are struggling, fundamentals of India’s economy remain sound. And it is too big to fail or to be taken lightly. India is the world’s third largest economy in terms of purchasing power parity and the only bright spot, by all assessments, to drive the world’s growth in coming years, especially after China is slowing down. So there has to be this inevitable comparison. When it was so in heydays of the Chinese economy, then why not the same yardstick for India. India or Indian media didn’t rush to ridicule or mock or criticise China when the whole world was looking at its miraculous growth.

India’s economic adviser gave expression to some valid concerns, slamming the credit rating agencies with his ‘come back to assess us after half a century’ jibe. India has been raising questions on the rating mechanisms used by the credit rating agencies for quite some time. After Subramanian’s dig at S&P, in another move, questioning the criteria used by the rating agencies, Indian government has now asked Fitch to explain its rating methodology.

©SantoshChaubey