In the wake of the Pulwama attack in Jammu & Kashmir against Indian paramilitary forces, the Indian government has withdrawn the Most Favoured Nation (MFN) status for Pakistan.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→
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→
Even without their rising world profiles as a starting point, it has long been a common enough exercise to compare and contrast India and China at various stages since the end of the Second World War. While the two nations started out under their new leaderships as developing nations united against colonialism and attempted for a time to work together as beacons for Asian rejuvenation, the realities of geopolitics, differing viewpoints about history and civilization and the remnants of imperial legacies soon resulted in a short border conflict in 1962 that however has cast a long shadow on their relations.
During the Cold War, the contrast between the two countries was also political and ideological and for a time, especially in the wake of revelations about Chinese communist excesses of the Great Leap Forward and the Cultural Revolution, it was assumed that India with its regular elections was doing much better than China was. However, despite its problems, communist China also raised considerably the social and human development indicators of its people while India continued to remain mired in poverty, illiteracy and various forms of social backwardness. There was also the brief interregnum of Emergency, which also tarnished India’s reputation as a paragon of democratic virtues in the developing world.
However, none of these developments and contrasts was nearly as consequential as those that would come following the beginning of China’s economic reforms and opening up in the late 1970s. By the time India started its own economic liberalization programme in 1991, China had started opening up a gap with India on the economic front in addition to the lead in social indicators that it already held. At the turn of the millennium, China could genuinely claim the mantle of a rising world power in both political and economic terms, while India was struggling to shake off the international opprobrium that came in the wake of its 1998 nuclear tests and to get into the same high economic gear as the Chinese had. Both its growing economy and a combination of international circumstances involving worries about China’s perceived challenge to the United States as well as its rapid military modernization combined to make India attractive again to the world at large before the 2008 financial crisis and government paralysis combined to put the brakes on India’s economic growth again, if not quite its political importance. Nevertheless, the India story also now appears to have a momentum of its own with a young demographic, active state governments and an economy unburdened by the shackles of an earlier command economy and free to make the adjustments to domestic and global circumstances as necessary.
The conversion of the ‘Asia-Pacific’ into the ‘Indo-Pacific’ – a construct of fairly recent vintage – is of somewhat varying legitimacy depending on the issues one is dealing with. From an economic perspective, the ‘Indo-Pacific’ makes sense given the long energy supply lines between West Asia and East Asia and also from a goods trade perspective. The ‘Indo-Pacific’ is also increasingly relevant on the basis of various new and specific themes such as climate change, theft of intellectual property, currency manipulation and cyber-security.
However, from a traditional security perspective, the new nomenclature appears rather contrived still even if energy security or nuclear proliferation – that link the Indian and Pacific Oceans – are major issues for the growing powers in Asia. This is so because it is only truly the United States that links the two geographies in terms of credible security capacity. Further, concerns of piracy in the Indian Ocean apart, it is the East Asian half of the Indo-Pacific that is the more critical region from a maritime security perspective given the various maritime disputes involving China and its neighbours, the nuclear crisis on the Korean peninsula and the incipient great power competition between China and the United States. Keeping this context in mind, this essay will examine the role of three major powers in East Asia, namely, Japan, Russia and the United States, and their interactions with China as a way of understanding evolving dynamics in the Indo-Pacific.
As neighbours and sibling civilizations, China and Japan have been structurally oriented towards rivalry. China is unwilling to forgive or forget the humiliation by and depredations of the Japanese during WW II and the Japanese elites that matter are unwilling to fully and genuinely apologize or to let go of the chip on their shoulder from having bested and dominated their larger neighbor for however brief a period. The current Chinese territorial claims over the Senkakus are only a manifestation of this historical reality rather than the main problem. Continue reading Major Powers in the Indo-Pacific→
Originally published under the same title in The Quint, 13 August 2016.
Chinese Foreign Minister Wang Yi comes to New Delhi this week ostensibly in preparation for the G-20 summit in Hangzhou next month for which Prime Minister Narendra Modi will visit China and the BRICS Summit in Goa for which Chinese President Xi Jinping will visit India in October. However, high-level meetings no longer impact matters significantly as they used to. Nor even do they help maintain matters on even keel if the incursions during Li Keqiang’s and Xi’s visits to India in 2013 and 2014 respectively or China’s objection to India’s NSG entry despite Modi’s personal intervention with Xi are anything to go by.
The question therefore, that Wang’s visit and the two forthcoming meetings between Modi and Xi must occasion is simple – what exactly is India’s place in China’s foreign policy calculus?
The original of an interview published in the Maharashtra Times, Pune in Marathi on 31 July 2016.
1. Why is China so aggressive in the South China Sea case? Are there any chances of war between China and other parts of the world?
A: China has a strong sense of having suffered from Western and Japanese colonialism and of being wronged. The so-called ‘century of humiliation’ is something that every Chinese man, woman and child is familiar with and hence, they have a great attachment to territory as a sign of their historical greatness. Right now, Chinese leaders seem their country as being militarily more powerful than their neighbours and so think they can also claim the territory they want in the South China Sea. But this is not simply a case of China versus its ASEAN neighbours. China is in the main trying to keep the United States from exercising power and influence in China’s neighbourhood. Chances of all-out war are low. China is smart enough not to damage its chances of growth and prosperity by going to war.
The Chinese government might not be able to play a prominent role in Nepal for now, given both Indian dominance and sensitivities. However, China appears to be using its provinces such as Tibet, Yunnan and Sichuan to exercise influence in a different, apparently less threatening way.
The major objective of China’s diplomatic strategy in Nepal has been to ensure that Kathmandu blocked the flow of Tibetan refugees into its territory. In November 2014, the frontier police force in Tibet and the armed police and fire department of Nepal conducted a joint exercise and during his visit to Nepal the following month, Chinese foreign minister Wang Yi also laid the foundation stone for a police academy gifted to Nepal to train officers of its Armed Police Force that guards districts bordering Tibet. The number of Tibetans entering Nepal from China, it must be noted, has fallen from about 2,500 in 2008 to just about 200 in 2014.Continue reading Chinese Provinces and Nepal: The Case of Tibet Autonomous Region→
China has a total of 31 administrative units directly below the central government in Beijing – 22 provinces, five autonomous regions and four provincial-level cities – all of equal rank in the administrative hierarchy, if not always in political terms. In addition, Hong Kong and Macao form separate Special Administrative Regions. While Chinese provinces do not have powers that inherently belong to them by law and whatever powers they exercise are delegated from the centre, they constantly lobby the centre for resources and for greater flexibility in formulating and implementing policy. Indeed, flexibility is a hallmark of Chinese political processes and institutions.
The Constitution of China adopted in December 1982 is clear in stating that “[t]he People’s Republic of China is a unitary multi-national state built up jointly by the people of all its nationalities” but China’s history has shown that to ensure a functioning national polity, the province needed to exercise sufficient authority to institutionalize and to oversee local government. While there is a need for strong state capacity it has to exist as much at the local level as at the central level. Provinces are crucial to building up state institutional capacity at the local level. While each new regime in Chinese history tried, on assuming power, to centralize power and limit provincial autonomy, it eventually had to seek the assistance of provincial governments to maintain the credibility of the government at the centre. Centre-province relations, before the communist revolution in China and since, have thus followed a pattern of centralization and decentralization.
Stronger and more autonomous provincial economies have in the reform era, led to increasingly assertive provincial governments but to assume this has come entirely at the expense of the central government is a mistake. Increased provincial assertion could also mean increased inter-provincial competition or intra-provincial competition, necessitating a strong central government that can play the role of arbitrator. Indeed, ties between the centre and the provinces have seen greater institutionalization due to structural changes introduced during the reform era but this does not imply that the central government has become more powerful vis-à-vis the provinces or vice-versa. Meanwhile, there are additional trends in China that have implications for the administrative, economic and political structure of China. These include the rise of trans-provincial economic groupings such as the Yantze River Delta and the Pearl River Delta regions as also the rise of major cities as powerful political and economic actors in their own right. Centre-province relations in China are therefore, headed towards still greater complexity.
Original Article: Jabin T. Jacob, “The Sino-Indian Boundary Dispute: Sub-National Units as Ice-Breakers,” Eurasia Border Review (Hokkaido University, Japan), Vol. 2, No. 1, Summer 2011, pp.35-45.
Abstract: Despite being among the fastest growing world economies, interactions between China and India remain limited owing to their unresolved boundary dispute. Tensions have grown over rapid military and infrastructure development by both countries along the disputed boundary but these developments can also be used as opportunities to encourage development in the relatively poor and underdeveloped provinces and countries along their disputed boundary. In this context, it is important to also understand domestic socioeconomic and political developments taking place in these border provinces how they might shape the future contours of the Sino-Indian boundary dispute and relations.
Given that in both China and India, years of prioritizing national security considerations over political accommodation and economic development in their provinces have not really led to the fulfillment of any national security objectives, the time has come to examine if prioritizing the latter set of considerations to the benefit of their border provinces can ensure peace and stability between China and India. The solution to both the political and economic discontent of Chinese and Indian provinces as well as the unresolved boundary dispute between the two countries could be to allow their provinces greater freedom to interact with each other in terms of people-to-people and economic contacts.