In the wake of the Pulwama attack in Jammu & Kashmir against Indian paramilitary forces, the Indian government has withdrawn the Most Favoured Nation (MFN) status for Pakistan. This status had been accorded to Pakistan on the basis of India’s obligations under the World Trade Organisation. The former had, however, never reciprocated and it is only now that New Delhi has sought to respond in kind. 
While this is seen as a strong signal of sorts to the Pakistanis, it is unlikely to be so given the abysmally low level of Indo-Pak bilateral trade.
According to the UN Comtrade Database, Indo-Pak trade stood at US$1.992 billion in 2015, just about crossed the US$2 billion threshold in 2016 and in 2017 had not increased by more than a few tens of millions of dollars over the previous year. Pakistani exports to India in this period stayed between US$310 million and US$350 million. By contrast, Sino-Pak trade in 2015 stood at nearly US$13 billion with Pakistan suffering a deficit of some US$11 billion. In 2016, trade went up to US$15.3 billion with not just Pakistani imports rising but its exports to China also falling worsening its deficit. This trend continued even as Sino-Pak trade rose to nearly US$17 billion with Pakistani exports to China constituting just a shade over US$1.5 billion. Continue reading India’s Withdrawal of MFN Status to Pakistan: Ceding More Space to China
Indian analysts and officials frequently differentiate their country from China on the basis of the political systems of the two countries. It is seen as positive that India is a democracy despite the poverty, superstitions and lack of education of a large number of its people. China however is looked down upon despite its many achievements in living standards and social indicators because it is an authoritarian state.
Nevertheless, it is also common to find among sections of Indian elites an admiration for China’s ‘tough’ ways; for the ‘discipline’ of its people. It is often proposed that India, too, needs a tough leader with authority to ensure that corruption and other ills are eliminated and the country reaches the front rank of nations, which it deserves. A question left unaddressed is whether the objective of becoming a world power is an end in itself or designed to help India to the means to improve its domestic conditions. Continue reading On Democratic Space and Aggressive Foreign Policy
The annual Central Economic Work Conference (CEWC) in China that lays down economic policy priorities for the coming year took place from 19-21 December 2018. The effects of the trade war with the US was apparent with Xi Jinping noting that the ‘The achievements we have made have not come easily’ and that ‘the external environment is complicated and severe, and the economy faces downward pressure’. This pessimistic note was in marked contrast to the previous year’s CEWC and when at the beginning of the trade war, Chinese official media claimed that the Chinese economy was ‘resilient enough to cope’.
Continue reading China’s 2018 Central Economic Work Conference
India-China relations went through a year of relative calm in 2018. This was the result of the so-called ‘Wuhan Spirit’ – after Indian Prime Minister Narendra Modi and Chinese President Xi Jinping met in the Chinese city in April to attempt to sort out tensions in the relationship following the several months-long standoff in Doklam (Dolam) in Bhutan middle of last year. However, this respite must be considered unusual for the goal that China under Xi has set itself is of racing to the top of the global hierarchy at the apparent expense of the United States and India certainly is seen only as a bit player in this story. Continue reading 2019: What’s in Store for India-China Relations?
2018 marks 40 years since China launched its economic reforms, and opening up that changed its domestic economic structure as well as set it on course to being the global economic giant it is today. Now, China’s significance in the global economy is not in question whether as an industrial producer, as a consumer of raw materials, or as a pioneer in pushing the frontiers of technology and its applications.
What has also been apparent since at least 2012 when Xi Jinping took over as general secretary of the Communist Party of China (CPC), if not earlier, is that China’s economic power is being put to political uses at both the regional and global levels. Somehow, the west, led by the US, appears not to have anticipated that the ‘rise of China’ would bring with it a challenge to not just western economic domination but also to American military might and perhaps, most importantly, to the very idea of democracy and other largely western political values and ideals.
A dynamic foreign policy Continue reading The Rising Chinese Challenge to Order and Politics Everywhere
A major political crisis is underway in Sri Lanka following President Maithripala Sirisena’s sacking of Prime Minister Ranil Wickremesinghe, replacing him former President Mahinda Rajapaksa and finally the dissolution of parliament. There are now multiple petitions now pending before the country’s Supreme Court challenging the constitutional validity of Sirisena’s actions.
Meanwhile, if general elections were allowed, Rajapaksa’s chances of returning to power look good given that the Sri Lanka Podujana Peramuna party – which he formally joined just a few days ago – came out on top in local elections in February. 
During Rajapaksa’s tenure as President from 2005 to 2015, the Chinese had begun to gradually involve themselves in Sri Lankan politics. Continue reading Political Crisis in Sri Lanka: Little Risk for China
US Vice-President Mike Pence delivered a key speech on his country’s China policy early this month on 4 October 2018. His speech drove home the message of the burgeoning challenge to American interests from China. Using specific examples, he pointed out how the Chinese sought to influence American domestic politics, stole American technology, and undermined other countries through debt-trap infrastructure projects under its Belt and Road Initiative.
Implications for India
Pence’s speech on China has also been read as being politically motivated given the November mid-term elections to the US Congress. While this may be so, it also offers Indians an opportunity to think why their country’s foreign policy challenges from China do not form more of an issue at least during parliamentary elections. Continue reading Raising China as an Issue in Indian Elections
Imran Khan’s taking over as Prime Minister of Pakistan introduces several degrees of uncertainty in the China-Pakistan relationship given his past record of statements on the China-Pakistan Economic Corridor (CPEC).
Khan has previously criticised the CPEC, if not the Chinese themselves, for favouring the bigger Pakistani provinces and ignoring the smaller ones such as Khyber-Pakhtunkhwa where his Pakistan Tehreek-e-Insaaf (PTI) has been in power since 2013. After his July election victory however, Khan spoke specifically about learning from China’s experiences in poverty alleviation and anti-corruption besides stating that CPEC provided an economic opportunity for his country. Of course, Khan was also dealing with the reality of a tougher US mood against Pakistan under the Donald Trump administration, leaving him rather heavily dependent on China and Saudi Arabia to have Pakistan’s back politically and economically.
Pakistan’s Incomplete Reform Agenda Continue reading Economic Complications in the Naya China-Pakistan Relationship
Today, the Chinese portray the 15th century voyages to the Indian Ocean by their admiral, Zheng He, as aimed at promoting diplomacy and trade. But the record shows that these were expeditionary voyages of the Ming dynasty navy that apart from making gifts to local leaders and religious and other institutions along the route also involved itself in local politics. In one case, in Sri Lanka, Zheng even effected a regime change.
History has been repeating itself after a fashion in the modern era with China throwing its support behind then Sri Lankan president Mahinda Rajapaksa’s in his fight against the LTTE, his economic development programmes and then his re-election effort in 2015. Following his loss, however, Beijing slowly made amends with his successor Maithripala Sirisena, and recently announced a ‘gift’ of US$295 million to be utilized for any project of the latter’s wish. Continue reading Beware of China Bearing Gifts