Geopolitics with Chinese Characteristics

Geopolitics with Chinese Characteristics

The emergence of a new power has often profoundly shifted the geopolitical landscape and caused considerable discomfort among the established order. China's current economic and political resurgence is doing that, but apart from the inevitable uncertainty and tension associated with any shift in global power, much of the angst in China's case stems from its failure to engage in behavior concomitant with its increased global responsibilities -- or even to acknowledge an obligation to do so.

China's rise may be unique, for it has ascended rapidly onto the global stage by virtue of its total economic might even as it retains characteristics of a developing country by GDP per capita. China seems to want it both ways -- it plays geopolitical power games as a force to be reckoned with among equals, yet declines to shoulder the burdens of a great power, or even demands to be afforded the benefits due to an underdeveloped charity case. In this regard, China's leadership often appears schizophrenic, nursing a profound grievance against "colonialists" and "aggressors" as it expands its direct political and economic influence across the globe. China's rulers show bravado when on the world stage, but seem deeply paranoid that their rule at home could all fall apart at any time.

While China's public pronouncements may at times appear mercurial, they are more likely part of a well-conceived strategy. On one hand, China seeks to leverage benefits consistent with being a developing country, plays upon the west's historical guilt over colonialism, and exploits the west's continued belief that economic development will inexorably lead to pluralism. On the other hand, it does not hesitate to attempt to parlay its growing power into influence whenever and wherever it can. This Janus-like strategy gives China leeway and flexibility in crafting its international political and economic policy.

At home, the Chinese Communist Party (CCP) has established Socialism with Chinese characteristics, or, less euphemistically, state capitalism. State capitalism typically involves state powers using markets to create wealth, while ensuring political survival of the ruling class. As a government that now presides over the third (soon to be second) largest economy in the world -- and one that depends intimately on flows of international goods and capital -- the CCP no longer simply practices state capitalism at home: it applies it globally.

Although the west has long played mercantilist games, it has gradually migrated toward the belief that liberalization of international markets is mutually beneficial for all countries. But China continues to see international economics as a zero-sum game. It finds its developing status a convenient cloak and justification for the application of global state capitalism. It engages in beggar-thy-neighbor policies it deems advantageous, and distorts the world's markets according to the dictates of its political demands, while dismissing criticism of such behavior as unfair to a developing country. Similarly, on political issues, China portrays naked self interest as the reasonable demands of a developing country, and displays this behavior in nearly every arena in which it interacts with the world, from foreign aid and investment to multilateral institutions to international relations.

The undervaluation of the yuan is worth reviewing as a representative case, and points to further distortions of international markets by China's state capitalism. The Peterson Institute for International Economics estimates that the yuan is undervalued by between 20 and 40 percent, amounting to a massive export subsidy. However, the yuan's undervaluation may be the tip of the iceberg. As importantly, Chinese banks receive a hidden subsidy: a wide spread between the rates paid on household deposits and the rates banks charge for loans. Bankers, who are in effect state employees -- given that the banking system is largely government run -- funnel the artificially cheap money to state-owned enterprises (SOEs). Since households have no investment alternative to domestic banks, they in effect provide a huge subsidy to Chinese industry.

The CCP's state capitalism mandates growth and employment through exports and investment at all costs in order to ensure its political supremacy. One price of this systemic export subsidy is the distortion of the domestic economy in favor of export-dependent growth. Another, of course, is the distortion of the global economy resulting from China's $1.4 trillion in estimated exports this year, combined with foreign exchange reserves which will approach $3 trillion this year. Yet China refuses to acknowledge there is a serious problem. Premier Wen Jiabao recently praised the yuan's stability as "an important contribution" to global recovery, and added, "I don't think the yuan is undervalued." Wen then played his rhetorical trump card, alleging that developed countries were seeking to force unfair currency changes "just for the purposes of increasing their own exports." Wen provides insight into China's strategy when it faces legitimate international criticism by first denying that its state capitalism distorts markets (and therefore, that it is playing by different rules of the game than the west), and second, by obfuscating the issue, depicting it as one of developed countries picking on developing countries.

Even as China increases its economic presence through investment and greater influence in multilateral institutions, it continues to reap benefits intended to accrue to the world's truly needy nations. By all rights, China should be a donor nation in multilateral development banks, not a recipient of aid. That China is the Asian Development Bank's largest recipient of Bank funds really is scandalous, and comes at the cost of countries like Bangladesh and Nepal, the poorest of the poor, which truly need the resources. As of 2007, China was ranked in the top 15 of development aid recipients worldwide. But in late April of 2010, China increased its number of voting shares in the World Bank to become the third largest stakeholder, behind the U.S. and Japan. The U.S. and Japan do not receive development assistance from organizations like the World Bank -- at what point does China's absolute strength count for more than its per capita development? And why should donor countries like the U.S. and Japan allow this double standard to occur?

China continues to expand its own program of foreign aid, dubbed official development assistance (ODA), which is closely linked to its outward foreign direct investment (OFDI). Because of the scale of its ODA and OFDI, the two combine as an effective instrument of state policy. This is really no different than how foreign assistance and FDI are deployed by a plethora of other countries - such as Japan - but China's tendency is to 'bulldoze' its way into developing countries, providing cash and assistance in order to secure natural resources. China has closely dovetailed ODA with its OFDI, offering infrastructure projects, soft loans, debt relief, and grants as a package deal to resource rich countries. This projection of Chinese state power, and the frequent result (such as a tendency not to hire locals to complete construction projects and a failure to transfer knowledge from China to the recipient nation) has had negative consequences for recipient nations.

China's OFDI is relatively small, but growing at one of the fastest rates in the world. In 2008, OFDI stock amounted to just 3.5% of GDP. Since officially launching its "go global" program in 2001, China has pushed its OFDI growth rate to 116% annually from 2000-2006, compared to the average global growth rate of 6% over the same period. SOEs dominate OFDI, and more than half operate in the natural resources sector. In 2006, the top three OFDI investors were China Petrochemical Corporation (Sinopec), China National Petroleum Corporation (CNPC), and China National Offshore Oil Corporation (CNOOC). Strategic service sector investments to support export and import activity, such as shipping and insurance, account for the largest portion of OFDI to date. The lion's share of Chinese OFDI represents a strategic investment; acquiring firms and footholds in strategic markets and guaranteeing access to commodities necessary to fuel the country's export-oriented economy being the overriding objectives.

Politically, China is an irredentist power that arguably has done more to advance global nuclear proliferation than any other state save Pakistan, while routinely doing business with some of the world's worst governments. Apart from the issues of Taiwan and the Spratly Islands, China lays claim to much of India's state of Arunachal Pradesh, and caused major jitters in 2009 with incursions into the territory combined with strident rhetoric. It has blocked Asian Development Bank projects approved for India over the issue. It helped Pakistan develop its nuclear arsenal and ballistic missile technology. Currently, the largest recipients of Chinese military aid are India's neighbors, including Burma, Pakistan, Nepal, Bangladesh, and Sri Lanka in addition to Pakistan; India fears that China is engaged in a concerted campaign to undermine and contain it. In addition, China is rapidly developing its "string of pearls" strategy in the Indian Ocean, investing significant resources to develop deep water ports in the Bay of Bengal, the Arabian Sea, Pakistan, Sri Lanka, and the Seychelles. These appear to be a basis for the projection of a powerful naval presence into what India considers its backyard.

Meanwhile, China blocks action against or actively supports a rogue's gallery of nations, among them Iran, North Korea, Sudan, and Zimbabwe. It claims it has no influence over their actions, based on its policy of non-interference, but China's support clearly requires a quid pro quo, be it natural resource wealth, business ties, or a geopolitically strategic use. China has avoided sanctions from the international community, partly due to the image it has cultivated of itself as a non-interfering developing country. While the west has also projected its power and dealt with equally noxious states, domestic political constraints make such "deals with the devil" increasingly difficult to sell to an electorate attuned to human rights, ethics, and governance.

As long as the CCP continues to govern, China will not change. It will continue to comport itself according to its zero sum vision of the world. At best, the west can hope the CCP's interests converge toward those of the larger globalized world. For the moment, even as China speaks of a peaceful rise within the existing international structure, its behavior, which at times may only be described as ruthless, belies the west's faith in its words. Indeed, the west appears to be running out of patience at China's uncompromising approach to the promotion of its own self interest. President Obama has attempted to engage China on a variety of global issues, and for the most part found that his proffered hand was met with a clenched fist. The U.S. may soon discard the illusion that China is gradually transitioning to become a responsible global power and may begin to react to China in a manner consistent with what it really is: an emerging global superpower that will stop at nothing to promote its own interests.

Stephen Goldsmith is an analyst with the International Country Risk Guide. Daniel Wagner is Managing Director of Country Risk Solutions, a Connecticut-based political and economic risk consultancy.

US mum over China's links to Iran

By Peter J Brown

China and the United States have been down a rocky road together over the past two decades with respect to China's missile technology transfers to Iran. Today, China's ongoing contributions to the buildup of Iran's missile forces warrant closer scrutiny.

The opening by Iran of a new missile production plant in March will enable Iran to further quickly expand its supply of Nasr anti-ship missiles. Although no Chinese officials attended the opening ceremony, there are Chinese footprints all around this facility. [1]

In addition, Iran is preparing to launch several satellites. As in the case of North Korea, each of these Iranian satellite launches will generate its own shockwave in the West, and will spark further



debate about the inability of the US and its allies to deal effectively with Iran and its significant technological advances.

In early 2008, Stephanie Lieggi, a research associate at the California-based James Martin Center for Non-proliferation Studies, wrote a white paper entitled "China's Trade with Iran under Western Scrutiny as Beijing Considers Next Move".

She wrote in the report, "Many recent assessments of China's export control system have pointed to positive movement in controlling sensitive dual-use items and a recognition by Chinese authorities of the need to control the transfer of such items to countries like Iran." [2]

At the time Lieggi's paper emerged, the next phase of an already planned expansion of Iran's anti-ship missile production capabilities was already in motion. This new missile plant suggests strongly that perhaps the "positive movement" which Lieggi spoke of earlier has now ceased, but Lieggi disagrees and labels China's efforts to control its companies' activities in Iran as "mixed".

"Chinese export controls have come a long way in the last 10 years, but the major problem with regards to trade with Iran is that China's leadership does not have the political will to stop some deals, especially if there are powerful companies like China Precision Machinery Import and Export Corporation [CPMIEC] involved and if the technologies aren't necessarily on China's control lists ... There is a notable difference with enforcement of export controls when the company involved is not a powerful state-owned enterprise."
China's control lists cover ballistic missile technology, but there is still debate about how far cruise missile technology should be controlled.

According to Jane's Information Group, CPMIEC is state-owned and oversees the production for export of a variety of anti-ship missiles including the HY-1, YJ-1/ C-80, HY-3/C-301 and YJ-2/C-802 medium-range anti-ship missiles, to name just four. [3]

Last year, the New York County District Attorney's Office uncovered a multinational funds transfer apparatus overseen by the Iranians and revealed that a long-running supplier of banned missile components and weapons to Iran. It listed a Chinese company known as LIMMT Economic and Trade Company Ltd, along with various front companies, as providing Iran with many critical materials in great quantity. Iran was close to obtaining sophisticated equipment and tons of additional material for its nuclear and missile programs when investigators put an end to this network. [4]

Keep in mind that we are talking about an enforcement action that took place in 2009, not 1999.

The US Treasury Department was active in this investigation as well.

"Today we are acting under our [United Nations] Security Council and other international obligations to prevent these entities from abusing the financial system to pursue centrifuge and missile technology for Iran," said US Under Secretary for Terrorism and Financial Intelligence Stuart Levey.

A Chinese individual, Li Fangwei (also known as Karl Lee), the commercial manager of LIMMT, "created front companies to access the global financial system. In doing so, LIMMT had to juggle multiple aliases and confronted operational difficulties and customer confusion.

"LIMMT instructed its customer, 'you are kindly required NOT to inform our following previous identifying information to US bank or US Treasury Department ... What you should do is let them know that SINO METALLURGY & MINERALS INDUSTRY CO, LTD is a company who is NOT related to LIMMT company and any other Company on the Specially Designated National (SDN) list of US Department of the Treasury's Office of Foreign Assets Control (OFAC)'", according to the US Treasury Department. [5]

Besides LIMMT and its eight front companies, Khorasan Metallurgy Industries (KMI), Kaveh Cutting Tools Company, the Amin Industrial Complex, Yazd Metallurgy Industries and Shahid Sayyade Shirazi Industries were among the Iranian companies targeted.

Another Iranian company, Niru Battery Manufacturing Company, was found to "be owned or controlled by, or acting or purporting to act for, or on behalf of, directly or indirectly, the Iranian Ministry of Defense and Armed Forces Logistics (MODAFL)".

KMI is a subsidiary of Iran's Ammunition Industries Group which is owned by Iran's Defense Industries Organization (DIO), and has ties to Iran's ballistic missile sector. Niru Battery provides power units for Iranian missile systems.

DIO and Iran's Aerospace Industries Organization which oversees missile-related research and development as well as many ballistic missile entities - perhaps even the new anti-ship missile plant - in Iran are controlled by MODAFL.

Lee, in effect, was just the tip of the iceberg.

Besides this case in the US last year, nuclear-related items are often being brokered by Chinese companies for delivery to Iran via Taiwan in order to avoid the licensing requirements in the Chinese system. The case of Yi-Lan Chen, a Taiwanese businessman arrested in Guam earlier this year, may fit this pattern.

"This is somewhat telling," said Lieggi. "China's nuclear-related controls are more solid than their missile-related controls. And in these cases it appears that China's enforcement efforts were relatively successful, at least in deterring domestic companies from trying to export out of China illegally."

In mid-May, US Deputy Secretary of State James Steinberg gave a speech at the Washington, DC-based Brookings Institution entitled "US-China Cooperation on Global Issues". Steinberg said nothing at all about the new missile plant in Iran or China's contribution to the steady buildup of Iran's missile forces. [6]

"The cat is out of the bag so nothing is being said about the US dropping the ball in general when it comes to China's conventional arms exports to Iran today especially dual-use exports," said John Pike, director of GlobalSecurity.org, a private firm in Virginia which addresses emerging security challenges.

Lieggi was not surprised that the plant was not mentioned "in such a public forum - if for no other reason, there really has not been firm reporting on it". "The issue is important to the US administration [which is] continuing to push the issue of missile-related transfers with Beijing; just not in place of discussing nuclear issues," said Lieggi.

Some say the silence in Washington, DC has been deafening lately.

"President [Barack] Obama's April nuclear summit, ostensibly designed to highlight the threat of nuclear terrorism, failed to produce any mention of China's critical role in creating the necessity for such a summit," said Rick Fisher, senior fellow at



the International Assessment and Strategy Center in Washington, DC.

Does the US seek to avoid irritating China at all costs especially at a time when the imposition of additional sanctions on Iran is so close at hand?

Lieggi disagreed and offered as evidence the lack of more movement by the US on China's application to join the Missile technology Control Regime (MTCR), and on issues regarding high technology trade to China, "which the US administration is still not budging on". It is this ongoing Chinese-Iranian cooperation in the realm of anti-ship and cruise missile development "and the legal ambiguities involved that keep the US from agreeing to allow China to be admitted to the MTCR".

"These are issues that the Chinese continue to raise at bilateral meetings and continue to be a thorn in China's side," said Lieggi. "Some within the Obama administration recognize that China is not a monolithic creature and that some players within the Chinese system can be worked with cooperatively, like on the issue of Iran's nuclear program, even if you do not like the activities of other factions within the same system."

The US has bargained with China before over missile-related transactions and done so with limited success.

"The US pressured the Chinese to stop missile sales to Iran during the [Ronald] Reagan administration, and part of the understanding reached at the time involved Chinese access to the international commercial space launch services market," said Gregory Kulacki, senior analyst and China Project Manager for the Global Security Program at the Massachusetts-based Union of Concerned Scientists. "President George W Bush and the [US president Bill] Clinton administration justified continuing cooperation with China on commercial space launch services, despite the Tiananmen sanctions, on these grounds."

The new missile plant in Iran does not represent the start of a new phase in the Chinese-Iranian joint arms development process, according to Uzi Rubin, chief executive officer of Rubincon Ltd, an Israeli missile defense consultancy.

"Iranian missile production is not undergoing any significant changes in 2010," said Rubin. "The rate of production has been and is still quite high. It stands to reason that the production is dependent on some parts and materials from Chinese sources, but this is not new."

Rubin does not detect any sign that China's missile-related contributions to Iran's missile programs are increasing.

"There is no indication that the Chinese contribution to Iran's missile program is escalating. Nor do any specific trends in Iran's current program seem to bear any relationship to China. It is simply that China is already light years away from where Iran is. The influence seems to come from North Korea and perhaps from Russian entities rather than China," said Rubin.

Iran continues to improve its Noor anti-ship missile as well. This is now described as an upgraded and air-launched version of China's C-802 missile, but with longer-range, over-the-horizon capabilities.
"The Iranians are very clever in exploiting existing designs for uses beyond original specifications. If they found a way to launch the C-802 from an aircraft, I would not be surprised, The Chinese are not necessarily involved in that," said Rubin. "There may have been some Chinese assistance in turning the old Chinese rocket-propelled Styx [Silkworm] into Iran's jet-propelled Raad [a long-range anti-ship missile that Iran deployed along its coast five years ago]. The small jet engine in the Raad could well be Chinese."

According to Pike, when US pressure on China in the past successfully prevented direct transfers to Iran of certain missiles, Iran simply obtained them via Pakistan, and "not directly from China".

In addition to China and Pakistan, countries like Russia, Ukraine and North Korea have played a role in Iran's missile program over the years. According to Dr Geoffrey Forden, senior research associate at the Massachusetts Institute of Technology's Program on Science, Technology and Society, Iran's Safir ballistic missile/satellite launch vehicle (SLV) which was used to launch Omid - Iran's first satellite - shares certain design elements with the North Korean U'nha-2 ballistic missile/SLV, for example.

"The Simorgh SLV - which Iran developed after the Safir - still appears different than the U'nha-2," said Forden. "On the other hand, the Safir's second stage is the same as the U'nha-2's third stage. I don't know if the U'nha-2's first stage is the same as China's DF-3 [missile's] first stage. I suspect not."

According to German space and missile expert Norbert Brugge, the Simorgh uses North Korean Nodong engines whereas the Unha-2 uses Chinese YF-2 engines from the DF-3 missile. [7]

"Judging from the pieces of missile technology that have been seen in the Safir, it appears that they come from Russia as opposed to China," Forden told Asia Times Online in March 2009.
Rubin disagreed at the time with Forden's statement that Russia was the source of the Safir technology.

"It could as well come from China or Ukraine," said Rubin, who added that a seizure in Bahrain of tungsten bars being shipped from China to Iran was firm evidence that, "Chinese entities are still engaged in the proliferation of ballistic missile technology in the Middle East and probably elsewhere, but there is no evidence or hint that the shipment represented official Chinese government policy." [8]

This quick primer is not just an attempt to encapsulate the ongoing debate about how all these missile builders and their components fit together, but it is an indicator of how Iran has reached out to others besides China to achieve its objectives on the launch pad. Yet China's role is central to the intricate problem confronting the US and its allies today.

"Iran, North Korea and Pakistan remain for China valuable nuclear and missile proxies for tying down the Americans, Indians, Japanese and others," said Fisher. "There is one common link: China's nuclear and missile technologies that have been spread directly or indirectly."

As this traffic in missile technology expands - more rapidly than the US might be willing to admit - and while it may no longer emanate from China exclusively, it nevertheless results in the injection of sophisticated tactical strike weapons overtly into theaters where US forces must then adapt and adjust their everyday movements and actions accordingly based on the constant threat posed by the presence of these new weapons.

the dominance of western values in the world will be subverted and face the chanllenge from Chinese values,when China as a old and lively civiliazation is reemerging .

many concepts and values accepted by people here naturally will be questioned, after CHinese economy success is proven and accepted by the world,such as "democracy=good" and "autocracy=bad"

Instead, many west guys will have to pay more attention to what happen in CHina and what CHinese are using and interested in.

for example, west guys might have to study anqitue chinese culture such as confucians ,just as many chinese are studing antque greece culture.
many west guys will get fury that Chinglish will be gradually accepted widely and even replace english as lingua franca some day....

Do you really think "Democracy=Good and autocracy=Bad" is a wrong belief.
btw Democracy is not a western system, it was present in the east as well. The west just perfected an already existing system.

well,one thing can be sured ,that is , China's success is reforging people''s impression on "autocracy" gradually.

If west countries can not prevent the fat cats of Wall street act recklessly,then people's impression on "democracy" will be reforged too.

The Hans are pushing the envelope. As per this map, if the Hans have not been able to subvert the Demography of Inner Mongolia, East turkestan, or tibet in the halycon days of mao when they were a closed society, fat chance they can do it now.

The Great Power 'Great Game' between India and China: 'The Logic of Geography'

Abstract:
The simultaneous rise of China and now India is a fundamental factor for understanding the twenty-first century. In rising as Great Powers, a relative term, they are coming up against each other across Asia and its surrounding waters. Traditional geopolitical models, Mackinder, Spykman and Mahan point to their spatial politics around Central Asia, South Asia, Pacific Asia and the Indian Ocean. Actual spatial settings are combined with perceived spatial outlooks. These powerful neighbouring states seek to continue rising, and constrain the other where necessary through mutual encirclement and alliances/proxies. This type of 'Great Game' is evident in the military-security, diplomatic and economic areas. Globalisation has not replaced regionalism, nor has geoeconomics replaced geopolitics. The stakes are high as is their need for securing access to energy resources for their economics-led rise to Great Power status. Some cooperation is evident, in line with IR liberalism-functionalism. However, geopolitical IR realism and security dilemma perceptions still shape much of their actions.

what a outdated map!

pls brush up your knowledge about 'demography' in China.

Inner Mongolia - for example after hundreds of year and change of scope, has been Han-dominant. Inner Mongolia was expanded after founding of PRC to include many Han/Manchu/Olunchun areas to make it inclusive of 'all' Mongol nomads scattering in that region. As for so-called Turkestan it has never been an 'official' name of Xinjiang. It was used by separatists for their 'cause'. unlike what foreigners imagine, it's never a Uigur dominant area. Don't forget Uzbek, Khazak, Mongol (once rulers of Xinjiang) and Han, Manchu, Xibe. Probably most of time, people heard of Uigur, then got that impression.

How about India, in the long course of history?? A strong ethnic group (Hindi??) assimilated others and expanded, conquered... Or Aryan conquest, or Muslim Sultanese from the north (Central Asia)? The Assam, Sikkim... That's why Indians are so diversified with castes

China was just one that mirrors most of 'Empires' in the world.

Inner mongolia has been a transitional belt between Hans and nomads in Mongolian plateau for thousands of years. Han settled down in Inner Mongolia before Sakyamuni was born.

Han settled down in Xinjiang before Jesus was born.

Somehow disagree with u. Han is an evolving concept. never has it been static. Just think about Xian-Bei, Jin, and Liao (Qidan) and Hun (Xiong Nu) who were merging into Hans. So your 'thousands of years' are for different origins of moder-day Hans.

India-China: Dangerous Hysteria

By B. Raman

A dangerous hysteria has taken hold of India-China relations since the anti-Beijing uprising in Lhasa in March last year. This hysteria is not due to any actions or rhetoric by the two Governments, which have been conducting themselves in a balanced and restrained manner. They have been trying to preserve and expand the gains in bilateral relations since the famous visit of Rajiv Gandhi to China in 1988. They have been sincerely trying to adhere to the bilateral agreement on maintaining peace and tranquility till a final solution is reached to the border dispute between the two countries. This hysteria has been the creation of some sections of the non-governmental strategic communities in the two countries.

2. There are issues on which the two Governments have reasons to be concerned and unhappy with each other. India has reasons to be concerned over past Chinese contacts with the Naga and Mizo insurgents in the North-East and with their present contacts, as suspected, with the United Liberation Front of Assam (ULFA). Similarly, China has reasons to be concerned over the activities of the set-up of His Holiness the Dalai Lama and the Tibetan Youth Congress (TYC) from the Indian territory and over the reported presence in the Indian territory of the National Endowment for Democracy (NED) of the US which they blame for part of their troubles in Xinjiang and Tibet. The two Governments have refrained from publicly articulating these concerns and have taken care to see that these concerns do not come in the way of the further development of the bilateral relations.

3. Even in respect of the bilateral dispute over the border, one has to take note of the fact that there has been no attempt by either Government to change the status quo by setting up an illegal territorial presence in any sector of the border. In respect of the Ladakh sector, India feels that the status quo favours the Chinese because of the Chinese occupation of large parts of our territory in this sector after the People's Republic of China came into existence in 1949. The Chinese have consolidated the status quo, which favours them, by constructing roads, setting up border posts and creating border habitations in areas which used to be unpopulated. India, while not accepting the status quo de jure, has not tried to disturb it de facto.

4. In the Eastern sector (Arunachal Pradesh), the status quo, which we inherited from the British, favours us. The Chinese disturbed it briefly during the Sino-Indian war of 1962 by occupying large parts of it by taking advantage of our weak military and administrative presence in that area, but they unilaterally restored the status quo by withdrawing from the area occupied by them. If they had not withdrawn unilaterally, our Army was not in a position to eject them and we would have been confronted in the Eastern sector with a situation similar to the one in the Western sector---that is, with a new post-1949 status quo set up by the Chinese which we are not in a position to change. The Chinese have been trying to change the status quo in the Eastern sector in their favour not through military means, but by claiming a large part of this territory and insisting on our conceding their demand over some (Tawang) if not all of this territory as part of a border settlement.

5. Unfortunately, we find ourselves in an unequal position with the Chinese. This is because while the Chinese have consolidated the status quo in the Western sector and made sure that India will not be able to change it militarily, we have similarly not consolidated the status quo in the Eastern sector and made sure that the Chinese will not be able to change this militarily. Our long-neglect of the North-East and our failure to consolidate the status quo in Arunachal Pradesh have placed China in a strategically advantageous position in the Eastern sector. Only in the last two or three years have we realised the importance of consolidating the status quo in the Eastern sector by strengthening our military and administrative presence in the area through the construction of roads and inducting fresh military units to protect this area from any adventurist Chinese action.

6. While the Chinese have not sought to change the status quo in the Arunachal Pradesh sector militarily, they have created for themselves a capability for doing so eventually if the border talks fail. They have done this by developing road and rail communications in Tibet and by strengthening military deployments in Tibet. We have only recently realised the importance of giving ourselves a capability in the Arunachal Pradesh sector to thwart any Chinese attempt to change the status quo militarily if the bilateral border talks fail to break the deadlock.

7. The Chinese long-term strategy with regard to India has many facets. The trans-border developments are only one---but the most important--- component of their strategy. There are other components---namely, strengthening their relationship with Pakistan in order to confront India with the danger of a two-front war should it try to change militarily the status quo either in respect of China or in respect of Pakistan with regard to Jammu & Kashmir; giving Pakistan a nuclear and missile capability for threatening India; weakening the Indian influence in the rest of South Asia and strengthening their presence and influence in Bangladesh, Sri Lanka and Nepal; creating a presence for their Navy in the Indian Ocean region and opposing India's attempts to emerge as an Asian power on par with China.

8. Till recently, we had no well thought-out long-term strategy with regard to China----neither in the border region, nor in South Asia nor in the Indian Ocean region. Only recently the initial rudiments of such a strategy have been appearing. Our attempts to strengthen our strategic relationship with the US and Japan is one such building-block of this comprehensive strategy. Our proactive Indian Ocean policy is another building block. But we find ourselves handicapped in further developing such a comprehensive strategy because we have let our influence be weakened in Bangladesh, Sri Lanka and Nepal.

9. The post-March 2008 hysteria in the bilateral relations has not been the creation of the two Governments. It has been the outcome of a new activism with regard to each other in the non-governmental strategic communities of the two countries. Sections of the Indian strategic community saw in the Lhasa uprising an opportunity to change the status quo in Tibet by playing the Tibet card against China through helping the Tibetans in securing their legitimate rights from the Han Chinese. By changing the status quo in Tibet----not militarily which is out of question, but politically by backing the Tibetan people's efforts to change the status quo themselves--- India might be able to change the status quo in the Western sector and preserve the status quo in the Eastern sector. So these analysts believed and started advocating vigorously a policy of playing the Tibet card against China.

10. The activism in the Chinese non-governmental strategic community is partly the result of what they see as the Indian activism on Tibet and partly the result of the Indian activism in Arunachal Pradesh for consolidating the status quo. They want their Government to be more assertive in playing the Arunachal Pradesh card and to take advantage of the difficulties faced by India in the North-East to counter any attempt by India to play the Tibet card. This hysteria has resulted in a campaign of mutual demonisation and mutual sabre-rattling. This sabre-rattling is only at the non-Governmental level. The two Governments have maintained a distance from this hysteria without trying to discourage it.

11. The danger of such hysteria is that it could acquire an uncontrollable momentum and take the two countries towards a precipice from where they may not be able to withdraw. Any confrontation as a result of this hysteria would damage the interests of both the countries. This hysteria has to be defused in time by the top leaderships of the two countries interacting with each other more frequently and more directly than now and taking initiatives to remove wrong perceptions about each other. It is unwise for Indian analysts to talk of the Tibetan card. The international community has recognised Tibet as a part of China. While it will be sympathetic to any Tibetan attempts to free themselves of Chinese control, it will not support any Indian initiative or move in this regard. By frequently talking of the Tibetan card, we will only be adding to the suspicions and concerns in the Chinese mind.

12. It is equally unwise for Chinese analysts to talk of the Arunachal Pradesh (southern Tibet as they call it) or the North-East card. The international community looks upon these areas as a part of India and will not support any Chinese move to change the status quo. Much of this hysteria will die down automatically if the two countries reach a border settlement. The only border settlement, which will be equally advantageous, is for India to accord de jure recognition to the status quo in the Western sector in return for China recognising the status quo in the Eastern sector. The present difficulties in the Eastern sector are apparently due to the fact that China wants a face-saving formula by India handing over at least Tawang to it. India cannot do this because Tawang is a populated area. Its inhabitants are Indian citizens. No India political leader will be able to sell to the people and the parliament any concession, which would involve any population transfer.

13. So, what are the options? Either go on holding one meeting after another without any forward movement or think of some idea which could break the present deadlock. One idea could be to explore the possibility of a 'status quo plus' solution under which China will recognise the status quo in Arunachal Pradesh in return for India accommodating some of the Chinese interests in Tawang.

14. Once the border dispute is solved to our mutual satisfaction, the danger of a military confrontation between the two countries across the Himalayas will lessen considerably. But the competition between the two countries for influence in the region and outside will remain in the near and medium-term future, but this competition need not lead to a military confrontation.

(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. He is also associated with the Chennai Centre For China Studies. E-mail: [email protected])

CHINA'S STRATEGIC INTRUSIONS IN INDIA'S NEIGHBOURHOOD

B.RAMAN

"The Chinese long-term strategy with regard to India has many facets. The trans-border developments are only one---but the most important--- component of their strategy. There are other components---namely, strengthening their relationship with Pakistan in order to confront India with the danger of a two-front war should it try to change militarily the status quo either in respect of China or in respect of Pakistan with regard to Jammu & Kashmir; giving Pakistan a nuclear and missile capability for threatening India; weakening the Indian influence in the rest of South Asia and strengthening their presence and influence in Bangladesh, Sri Lanka and Nepal; creating a presence for their Navy in the Indian Ocean region and opposing India's attempts to emerge as an Asian power on par with China.

Till recently, we had no well thought-out long-term strategy with regard to China----neither in the border region, nor in South Asia nor in the Indian Ocean region. Only recently the initial rudiments of such a strategy have been appearing. Our attempts to strengthen our strategic relationship with the US and Japan is one such building-block of this comprehensive strategy. Our proactive Indian Ocean policy is another building block. But we find ourselves handicapped in further developing such a comprehensive strategy because we have let our influence be weakened in Bangladesh, Sri Lanka and Nepal. "

---From my article of September 8,2009, titled "India-China: Dangerous Hysteria" available at http://www.southasiaanalysis.org/pap...paper3398.html

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Despite all the abusive mails and comments that I have been getting and to which I am used over my article deploring the hysteria that is being created by some of our strategic analysts and the media over the trans-border developments, I am not unduly concerned over the reports of continuing Chinese troop intrusions into Indian territory. These intrusions were initially confined to the Eastern sector and now are being reported from other sectors too.

2. When a border is not demarcated on the ground and when there is no common understanding between the two sides as to what constitutes the line of actual control due to the Chinese reluctance to exchange with us maps indicating their understanding of the LAC, such intrusions are bound to take place from both sides. Such intrusions used to be a recurring feature across the India-Myanmar border before the two countries demarcated the border except in the trijunction areas to the north and the south. Such intrusions were also a normal feature across the Sino-Myanmar border in the Northern Shan State and the Kachin State before the Sino-Myanmar border was demarcated in the 1970s except in the northern trijunction where the borders of India, China and Myanmar meet, which remains undetermined and undemarcated till today.

3.What I would be worried about is any illegal occupation by the Chinese of territory claimed by them either in the Arunachal Pradesh or in the Ladakh sector. The 1962 war occurred not because the Government of India ignored reports of intrusions, which are instances of trespass, but because it ignored and played down intelligence reports of illegal occupation of Indian territory by the Chinese in sectors such as Aksai Chin in Ladakh and their incorporating them into Chinese territory. It is our failure and reluctance to counter such outrageous instances of illegal occupation of Indian territory which inexorably led to 1962.

4.The Chinese used to have the habit of illegally occupying territory claimed by them if they had an opportunity of doing so, They did it in Indian territory before 1962. They did it in Myanmar in the late 1960s.They did it with regard to the Philippines when they quietly occupied in 1995 the South China sea island of Mischief Reef, which the Philippines claimed as its territory. After the furore caused by their illegal occupation of the Mischief Reef, I am not aware of any further instance of illegal occupation of foreign territory by the Chinese. If there is, I would be happy to stand corrected.

5. I have stated this many times before and I state this again that the Chinese would continue to stall the border talks with India by even not exchanging maps on the LAC till the Dalai Lama dies. They are not satisfied that that they have pacified Tibet once and for all. The Lhasa uprising of March 2008 has created fresh doubts in their mind about the prospects for continued political stability in Tibet. They are determined to impose on the Tibetans a successor to His Holiness, when he dies, chosen by the Communist Party of China. They do fear that there will be opposition to their nominee from the Tibetans and that this could lead to disturbances in Tibet, in which the Tibetan Youth Congress (TYC) will play an important part. They want to keep a pressure point which they can use against India in order to make it control the TYC. A continuing dispute with India over Arunachal Pradesh will, in their calculation, help them in dealing with any-post Dalai Lama instability. It has been my assessment that the border talks will show some movement for the better or for the worse only after the death of His Holiness and not before.

6. The question for our policy-makers is whether we facilitate the Chinese game of stalling till His Holiness dies or whether we insist on a settlement here and now and if so, what are the options that could be explored. It was in that context that I suggested that we explore the possibility of a status quo plus solution under which in return for the Chinese accepting the status quo in Arunachal Pradesh, we could consider accommodating some of their interests in Tawang, about which they seem to be doing a song and dance. I was amazed by a flood of mails accusing me of suggesting that we hand over Tawang to the Chinese. Where have I said so?

7. What are the Chinese interests in Tawang? Nobody knows for certain. I have asked many retired military officers whether Tawang would have any military significance for the Chinese. They said no. The Chinese themselves have cited what they consider as the historic and religious links of Tawang with Tibet. They even claim that there are records to show that the residents of Tawang paid their taxes to the set-up of the Dalai Lama in Lhasa and not to the British Government in New Delhi. They have not made a similar claim regarding the rest of Arunachal Pradesh. They have also pointed out that one of the previous Dalai Lamas was born in Tawang. The Singapore Foreign Minister, who had recently visited Lhasa, has been quoted as saying that the Chinese are worried that after the death of His Holiness, his followers might proclaim a child of Tawang as the incarnation of His Holiness. If that is so, they should try to get hold of Tawang before His Holiness dies instead of waiting till his death.

8. I have been suggesting to many think tanks in India that instead of getting hysterical over Tawang, we must do a detailed research, analysis and assessment of the Chinese obsession with Tawang. Nobody has done so till now.

9. In a commentary on the observations of the Singapore Foreign Minister contributed to the South Asia Analysis Group (http://www.southasiaanalysis.org), Brig.Subash Kapila, a fine military intelligence officer with whom I had the pleasure and privilege of being associated, has raised a very important question: the Chinese did not show the same obsession with Tawang in the past as they seem to be doing now. He has pointed out that the Chinese even withdrew from Tawang in 1962 after having occupied it. If Tawang was that important to them, they should not have withdrawn from there. Why did they do so?

10. The answer is simple. Long after they withdrew from Tawang, sections of the US media carried reports, based on interviews with the Tibetan Khampas, that the Khampa revolt in the 1950s against the Chinese occupation of Tibet was orchestrated by the USA's Central Intelligence Agency (CIA) and India's Intelligence Bureau then headed by the legendary B.N.Mullick. One does not know whether these claims or allegations were correct, but the Chinese presumed that they were. The fact that after the failure of the Khampa revolt, His Holiness and his entourage made a dash for Tawang has added to the strength of the Chinese presumption. The Chinese fear that if there is a joint attempt by the Indian and US intelligence to destabilise Tibet after His Holiness, that attempt could be directed from Tawang. .

11. I am not a military expert. But I have spent nearly three decades in the intelligence profession. From whatever little I know of the craft of intelligence, I could say that if there is one place on the Indo-Tibetan border from where a covert action to destabilise Tibet can be mounted with some success that is Tawang. I am, therefore, not surprised that the Indian presence in Tawang gives them the creeps. When I suggested a status quo plus formula what I had in mind was an Indian guarantee that New Delhi would not allow Tawang to be used to destabilise Tibet after the death of His Holiness in return for a Chinese acceptance of the status quo in Arunachal Pradesh, including Tawang. I do not know whether this will work with the Chinese, but it is worth trying.

12. I am not unduly worried over the continuing reports of Chinese troop intrusions. We are fortunate in having a competent, professional army, which is capable of taking care of them. There is no need for a hysteria over the intrusions. I am more worried about the diplomatic,economic and strategic intrusions which the Chinese are quietly making in our neighbourhood and the inability of our diplomacy to counter them. What are those strategic Chinese intrusions around us in our neighbourhood?


- The winning of the contract for the second stage of the Hambantota port development project in Sri Lanka.
- The winning of the contract for the Colombo-Kalutara road in Sri Lanka.
- The winning of the contract for the improvement of the Kyaukpu port on the Arakan coast of Myanmar.
- The winning of the permission from the military junta of Myanmar for the construction of two pipelines---one for gas and the other for oil--- from Kyaukpu to Yunnan.These pipelines will carry not only gas and oil produced locally but also brought by Chinese tankers from West Asia and Africa. We claim to have great influence over the junta in Myanmar.It has reportedly agreed to sell to China gas found by a consortium of which an Indian public sector company was a member. After millions of rupees of Indian investment, gas is struck and the Myanmar junta sells that gas to the Chinese. We watch it sucking our thumbs.
- The reported furtive negotiations with the Government of Bangladesh for a pipeline to carry gas from Bangladesh to Yunnan via the Arakan area of Myanmar.
- The proposal for a railway line from Gwadar on the Mekran coast of Pakistan to Xinjiang for which a feasibility study was ordered by the Pakistan Government two weeks ago.
- Talks with the Pakistani and the Iranian authorities for a gas pipeline to take Iranian gas to Xinjiang.

13. What contracts of strategic significance India has won in our neighbourhood? Zilch.

14. What progress India has made in strengthening its strategic presence in its neighbourhood? Zilch.

15. How effective Indian strategic and economic diplomacy has been in our neighbourhood? Zilch.

16. It is time to be worried and howling over the way China has made strategic inroads in our neighbourhood and over the failure of our diplomacy to counter it.

17. Our Army can take care of China. Can our diplomats take care of China? ( 14-9-09)

Tawang seems a lame excuse. The Dalai Lama can be reincarnated anywhere, apparently precedence was also in Mongolia. And to add to the twist he could be a "she". Here is the ref :

If it is not militarily important, why should China be worried about? Only possibility that remains then is deception. The main point of focus is not Tawang at all. But PRC is building it up to distract from real buildups elsewhere - probably Aksai Chin, and or NA.

'Han is an evolving concept', yeh? 'Hindi' or 'Hindostani' is an evolving concept also. At some point in time, it meant all the lands east of the Indus and south of the Himalayas, all the way up to Burma in the east and the island of Ceylon down south. Does that mean we start claiming lil' ol' Myanmar, Bhutan and Nepal as well? Because we sure as hell are an evolving concept.

Han, as it stands today, is a static idea. It refers to those people that are the descendants of the 'Han' dynasty, excluding those it called its 'protectorates', and specifically to those that populated the Han river basin from Wuhuan in the North, now Hebei, Liaoning, and Shanxi, to Ailao in the South (now Yunnan) and to Qiang in the West- the easternmost tip of the Tibetan plateau. That, at least, is how the world understands it. We can all, everyone of us, choose to define ourselves as we like- to our convenience. The problem is we then become acquainted with irridentism. And rile the stakes of everyone around us.