Chindia Alert: You’ll be Living in their World Very Soon
aims to alert you to the threats and opportunities that China and India present. China and India require serious attention; case of ‘hidden dragon and crouching tiger’.
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Image copyright PRESS INFORMATION BUREAUImage caption The area has become a hotspot in part because of a road India has built
The armies of the world’s two most populous nations are locked in a tense face-off high in the Himalayas, which has the potential to escalate as they seek to further their strategic goals.
Officials quoted by the Indian media say thousands of Chinese troops have forced their way into the Galwan valley in Ladakh, in the disputed Kashmir region.
Indian leaders and military strategists have clearly been left stunned.
The reports say that in early May, Chinese forces put up tents, dug trenches and moved heavy equipment several kilometres inside what had been regarded by India as its territory. The move came after India built a road several hundred kilometres long connecting to a high-altitude forward air base which it reactivated in 2008.
The message from China appears clear to observers in Delhi – this is not a routine incursion.
“The situation is serious. The Chinese have come into territory which they themselves accepted as part of India. It has completely changed the status quo,” says Ajai Shukla, an Indian military expert who served as a colonel in the army.
China takes a different view, saying it’s India which has changed facts on the ground.
Reports in the Indian media said soldiers from the two sides clashed on at least two occasions in Ladakh. Stand-offs are reported in at least three locations: the Galwan valley; Hot Springs; and Pangong lake to the south.
India and China share a border more than 3,440km (2,100 miles) long and have overlapping territorial claims. Their border patrols often bump into each other, resulting in occasional scuffles but both sides insist no bullet has been fired in four decades.
Their armies – two of the world’s largest – come face to face at many points. The poorly demarcated Line of Actual Control (LAC) separates the two sides. Rivers, lakes and snowcaps mean the line separating soldiers can shift and they often come close to confrontation.
The current military tension is not limited to Ladakh. Soldiers from the two sides are also eyeball-to-eyeball in Naku La, on the border between China and the north-eastern Indian state of Sikkim. Earlier this month they reportedly came to blows.
And there’s a row over a new map put out by Nepal, too, which accuses India of encroaching on its territory by building a road connecting with China.
Why are tensions rising now?
There are several reasons – but competing strategic goals lie at the root, and both sides blame each other.
“The traditionally peaceful Galwan River has now become a hotspot because it is where the LAC is closest to the new road India has built along the Shyok River to Daulet Beg Oldi (DBO) – the most remote and vulnerable area along the LAC in Ladakh,” Mr Shukla says.
India’s decision to ramp up infrastructure seems to have infuriated Beijing.
Image copyright AFPImage caption There have been protests in Nepal against Indi’s new road link
“According to the Chinese military, India is the one which has forced its way into the Galwan valley. So, India is changing the status quo along the LAC – that has angered the Chinese,” says Dr Long Xingchun, president of the Chengdu Institute of World Affairs (CIWA), a think tank.
Michael Kugelman, deputy director of the Asia programme at the Wilson Center, another think tank, says this face-off is not routine. He adds China’s “massive deployment of soldiers is a show of strength”.
The road could boost Delhi’s capability to move men and material rapidly in case of a conflict.
Differences have been growing in the past year over other areas of policy too.
The new federally-administered Ladakh included Aksai Chin, an area India claims but China controls.
Senior leaders of India’s Hindu-nationalist BJP government have also been talking about recapturing Pakistan-administered Kashmir. A strategic road, the Karakoram highway, passes through this area that connects China with its long-term ally Pakistan. Beijing has invested about $60bn (£48bn) in Pakistan’s infrastructure – the so-called China Pakistan Economic corridor (CPEC) – as part of its Belt and Road Initiative and the highway is key to transporting goods to and from the southern Pakistani port of Gwadar. The port gives China a foothold in the Arabian Sea.
In addition, China was unhappy when India initially banned all exports of medical and protective equipment to shore up its stocks soon after the coronavirus pandemic started earlier this year.
How dangerous could this get?
“We routinely see both armies crossing the LAC – it’s fairly common and such incidents are resolved at the local military level. But this time, the build-up is the largest we have ever seen,” says former Indian diplomat P Stobdan, an expert in Ladakh and India-China affairs.
“The stand-off is happening at some strategic areas that are important for India. If Pangong lake is taken, Ladakh can’t be defended. If the Chinese military is allowed to settle in the strategic valley of Shyok, then the Nubra valley and even Siachen can be reached.”
In what seems to be an intelligence failure, India seems to have been caught off guard again. According to Indian media accounts, the country’s soldiers were outnumbered and surrounded when China swiftly diverted men and machines from a military exercise to the border region.
This triggered alarm in Delhi – and India has limited room for manoeuvre. It can either seek to persuade Beijing to withdraw its troops through dialogue or try to remove them by force. Neither is an easy option.
“China is the world’s second-largest military power. Technologically it’s superior to India. Infrastructure on the other side is very advanced. Financially, China can divert its resources to achieve its military goals, whereas the Indian economy has been struggling in recent years, and the coronavirus crisis has worsened the situation,” says Ajai Shukla.
What next?
History holds difficult lessons for India. It suffered a humiliating defeat during the 1962 border conflict with China. India says China occupies 38,000km of its territory. Several rounds of talks in the last three decades have failed to resolve the boundary issues.
China already controls the Aksai Chin area further east of Ladakh and this region, claimed by India, is strategically important for Beijing as it connect its Xinjiang province with western Tibet.
Image copyright GETTY IMAGESImage caption India and China have a long history of border disputes
In 2017 India and China were engaged in a similar stand-off lasting more than two months in Doklam plateau, a tri-junction between India, China and Bhutan.
This time, too, talks are seen as the only way forward – both countries have so much to lose in a military conflict.
“China has no intention to escalate tensions and I think India also doesn’t want a conflict. But the situation depends on both sides. The Indian government should not be guided by the nationalistic media comments,” says Dr Long Xingchun of the CIWA in Chengdu. “Both countries have the ability to solve the dispute through high-level talks.”
Chinese media have given hardly any coverage to the border issue, which is being interpreted as a possible signal that a route to talks will be sought.
Pratyush Rao, associate director for South Asia at Control Risks consultancy, says both sides have “a clear interest in prioritising their economic recovery” and avoiding military escalation.
“It is important to recognise that both sides have a creditable record of maintaining relative peace and stability along their disputed border.”
KOLKATA (Reuters) – Indian and Chinese troops on border patrol duties had a brief skirmish in Sikkim, a northeastern Indian state bordering China, the Indian Defence Ministry said on Sunday, blaming both sides for the incident.
“Aggressive behaviour by the two sides resulted in minor injuries to troops. The two sides disengaged after dialogue and interaction at the local level,” the ministry said in a statement.
The Indian daily Hindustan Times, citing a military source, said four Indian soldiers and seven Chinese troops were injured when some of the soldiers exchanged blows during the confrontation, which it said took place on Saturday and involved some 150 soldiers.
The Defence Ministry said the incident took place in the Nakula area but did not give details of how it started, or what caused the injuries.
China’s Ministry of Defense could not be immediately reached for comment on Sunday.
India and China have often accused each other of intrusions into each other’s territories, but clashes are rare.
There is still deep mistrust between the two countries over their festering border dispute, which triggered a brief war in 1962.
Hundreds of troops from both sides were deployed in 2017 on the Doklam plateau, near the borders of India, Bhutan, and China after India objected to Chinese construction of a road in the Himalayan area, in the most serious standoff in years.
Image copyright GETTY IMAGESImage caption An empty stretch of the road and Delhi Police barricades to screen commuters during lockdown, at Delhi Gate on April 16, 2020 in New Delhi, India.
India has eased some restrictions imposed as part of a nationwide lockdown to curb the spread of the coronavirus.
Most of the new measures are targeted at easing pressure on farming, which employs more than half the nation’s workforce.
Allowing farms to operate again has been seen as essential to avoid food shortages.
But some other measures announced last week, will not be implemented.
This includes the delivery of non-essential items such as mobile phones, computers, and refrigerators by e-commerce firms – the government reversed its decision on that on Sunday.
And none of the restrictions will be lifted in areas that are still considered “hotspots” for the virus – this includes all major Indian cities.
Domestic and international flights and inter-state travel will also remain suspended.
So what restrictions are being eased?
Most of the new measures target agricultural businesses – farming, fisheries and plantations. This will allow crops to be harvested and daily-wagers and others working in these sectors to continue earning.
To restore the supply chain in these industries, cargo trucks will also be allowed to operate across state borders to transport produce from villages to the cities.
Essential public works programmes – such as building roads and water lines in rural areas – will also reopen, but under strict instructions to follow social distancing norms. These are a huge source of employment for hundreds of thousands of daily-wage earners, and farmers looking to supplement their income.
Banks, ATMs, hospitals, clinics, pharmacies and government offices will remain open. And the self-employed – such as plumbers, electricians and carpenters – will also be allowed to work.
Some public and even private workplaces have been permitted to open in areas that are not considered hotspots.
But all businesses and services that reopen are expected to follow social distancing norms.
Who decides what to reopen?
State governments will decide where restrictions can be eased. And several state chief ministers, including Delhi’s Arvind Kejriwal, have said that none of the restrictions will be lifted in their regions.
Mr Kejriwal said the situation in the national capital was still serious and the decision would be reviewed after one week.
India’s most populous state, Uttar Pradesh, will also see all restrictions in place, as will the southern states of Andhra Pradesh, Telangana and Karnataka.
The southern state of Kerala, which has been widely acknowledged for its success in dealing with the virus, has announced a significant easing of the lockdown in areas that it has demarcated as “green” zones.
This includes allowing private vehicular movement and dine-in services at restaurants, with social distancing norms in place. However, it’s implementing what is known as an “odd-even” scheme – private cars with even and odd number plates will be allowed only on alternate days, to limit the number of people on the road.
The Chief Economic Adviser, K Subramanian, disagreed with the idea of industry-specific incentives and argued for structural reforms in land and labour markets. Members of Prime Minister Narendra Modi’s economic advisory council sound inchoate, resorting to social media and opinion editorials to counter one another.
In essence, the quibble among the members of the economic team of Mr Modi and his government is not about whether India is facing an economic slowdown or not, but about how grave the current economic crisis is.
To put all this in context, it was less than just two years ago, in November 2017, that the global ratings agency Moody’s upgraded India’s sovereign ratings – an independent assessment of the creditworthiness of a country – for the first time in 14 years.
Image copyrightGETTY IMAGESImage captionSales of cars and SUVs have slumped to a seven-year low
Justifying the upgrade, Moody’s had then argued that the economy was undergoing dramatic “structural” reforms under Mr Modi.
In the two years since, Moody’s has downgraded its 2019 GDP growth forecast for India thrice – from 7.5% to 7.4% to 6.8% to 6.2%.
The immediate questions that arise now are: is India’s economic condition really that grim and, if yes, how did it deteriorate so rapidly?
To make matters worse, Finance Minister Nirmala Sitharaman presented her first budget recently with some ominous tax proposals that threatened foreign capital flows and dented investor confidence. It sparked criticism and Ms Sitharaman was forced to roll back many of her proposals.
Image copyright GETTY IMAGESImage caption In 2016, India withdrew 85% of all currency notes from the economy
So, it is indeed true that India is facing a sharp economic downturn and severe loss of business confidence.
The alarm over the economic condition is not merely a reflection of a slowdown in GDP growth but also the poor quality of growth.
Private sector investment, the mainstay of sustainable growth in any economy, is at a 15-year low.
In other words, there is almost no investment in new projects by the private sector. The situation is so bad that many Indian industrialists have complained loudly about the state of the economy, the distrust of the government towards businesses and harassment by tax authorities.
But India’s economic slowdown is neither sudden nor a surprise.
Behind the fawning headlines in the press over the past five years about the robustness of India’s growth was a vulnerable economy, straddled with massive bad loans in the financial sector, disguised further by a macroeconomic bonanza from low global oil prices.
India’s largest import is oil and the fortuitous decline in oil prices between 2014 and 2016 added a full percentage point to headline GDP growth, masking the real problems. Confusing luck with skill, the government was callous about fixing the choked financial system.
Media caption What is really happening with India’s economy?
This move destroyed supply chains and impacted agriculture, construction and manufacturing that together account for three-quarters of all employment in the country.
Before the economy could recover from the currency ban shock, the government enacted a transition to a new indirect taxation system of the Goods and Services Tax (GST) in 2017. The GST rollout wasn’t smooth and many small businesses initially struggled to understand it.
Such massive external shocks to the economy, coupled with a reversal in low oil prices, dealt the final blow to the economy. Millions of Indians started to lose their jobs and rural wages remained stagnant. This, in turn, impacted consumption, slowing down the economy sharply.
Not easy
The wobbly state of the economy has also thrown government finances in disarray: tax revenues are much below expectations.
On Monday, the government got a much-needed breather when India’s central bank announced a $24bn (£19bn) one-time payout for the cash-starved government. (This amount is more than the dividend paid by the central bank to the government in all five years of the Congress rule between 2009 and 2014.)
The solutions to the economic crisis are not easy.
Indian industry, fed and fattened with government protection through decades, is once again clamouring for tax cuts and financial incentives.
But it is not clear that such benefits will revive private sector investment and domestic consumption immediately.
For all the hype about the Make in India programme, hailed as the harbinger of the country’s emergence as a manufacturing power, India’s dependence on China for goods has only doubled in the past five years.
India today imports from China the equivalent of 6,000 rupees ($83; £68) worth of goods for every Indian, which has doubled from 3,000 rupees in 2014.
So, India is neither making goods for itself nor for the world.
Image copyright AFPImage caption India’s agrarian crisis is a major stumbling block
Ornamental tax and other fiscal incentives to specific industries are not suddenly going to make Indian manufacturers competitive and stop India’s addiction for affordable Chinese goods. If any, the trade spat between China and the United States only saw countries such as Vietnam and Bangladesh benefit and not India.
More currency or trade tariffs are not the solutions either. The central bank has lowered interest rates and there is some push to lowering the cost of capital for industry. But again, Indian industry will invest more only when demand for goods and services increases. And demand will increase only when wages increase, or there is money in the hands of people.
So, the only immediate solution for India seems to be to boost consumption through a stimulus given directly to people, in the classical Keynesian mould.
Of course, such a stimulus should be combined with reforms to boost business morale and confidence.
In sum, India’s economic picture is not pretty.
It is important for India’s political leadership to see this not-so-pretty picture and not hide behind rose tinted glasses. Prime Minister Modi has a unique electoral mandate to embark on bold moves to truly transform the economy and pull India out of the woods.
Image copyright PRESS INFORMATION BUREAU
Image copyright AFP
Image copyright GETTY IMAGES
CHINDIA ALERT: You'll be living in their world, very soon 
Indian, Chinese border troops in brief skirmish on northeast Indian border, India says
KOLKATA (Reuters) – Indian and Chinese troops on border patrol duties had a brief skirmish in Sikkim, a northeastern Indian state bordering China, the Indian Defence Ministry said on Sunday, blaming both sides for the incident.
“Aggressive behaviour by the two sides resulted in minor injuries to troops. The two sides disengaged after dialogue and interaction at the local level,” the ministry said in a statement.
The Indian daily Hindustan Times, citing a military source, said four Indian soldiers and seven Chinese troops were injured when some of the soldiers exchanged blows during the confrontation, which it said took place on Saturday and involved some 150 soldiers.
The Defence Ministry said the incident took place in the Nakula area but did not give details of how it started, or what caused the injuries.
China’s Ministry of Defense could not be immediately reached for comment on Sunday.
India and China have often accused each other of intrusions into each other’s territories, but clashes are rare.
There is still deep mistrust between the two countries over their festering border dispute, which triggered a brief war in 1962.
Hundreds of troops from both sides were deployed in 2017 on the Doklam plateau, near the borders of India, Bhutan, and China after India objected to Chinese construction of a road in the Himalayan area, in the most serious standoff in years.
Source: Reuters
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