(This is a reprint from NewsBred).
I have long been suspicious of edits which are passionately pushed in the best of English. Much like that bank clerk who is pushing a scheme when you enter the branch. Those pesky calls for your car insurance, those greetings on WhatsApp from land sharks who have the best view in town just for you. The best of them are those who sell their cause to you as if it was your own.
So it is with RCEP (Regional Comprehensive Economic Partnership). I have been noticing in Times of India and Indian Express—Left-Liberals of varying shades—how India’s policy-makers are being lampooned for not signing on. I looked at Mint where economists snack. No different.
The readers are told that India itself flagged off the race nine years ago and has now stopped just short of the finishing line. That how dumb of Modi’s India to cite custom duties on manufacturing when it could benefit from the emerging global supply chain in the times of Coronavirus. That its fears on agriculture and dairy sectors are unfounded since those have been factored in for next 20 years.
And then look at India’s manners. The RCEP nations in a separate document are almost begging us to join the bloc. That China has pledged to import $22 trillion of goods and services over the next decade for its 1.4 billion people. Imagine the market it would offer us. Even China’s “enemies” like Japan and Australia are part of the deal. Is India so dumb it can’t see that RCEP is 30 per cent of global economy and a world population of 2.2 billion people? It is also implicit that India would stay out of Trans Pacific Partnership (TPP) which is sure to be revived by the US president-elect Joe Biden. Is this “Atmanirbhar Bharat”?
Economists call it protectionism. World is “free and fair”. India is insular. All Modi seeks is win in elections on the turbo-engine of “self-reliant nationalism.” And to hell with how our beloved PV Narasimha Rao and the John Stuart Mill by his side, called Manmohan Singh, took us out of choppy waters of 90s.
Why India is being so stupid? Because it has found out that all those free trades were no help all these years. And how it could be when your manufacturing base is so abysmal? How did those imports help our employment? And how we are supposed to compete when our hands are tied, legs shackled by the mantra of “free trade” even as somebody like China could abnormally subsidize its products and industries?
How come these grave economists never mention that 66 per cent of India’s GDP results from the services sector and the RCEP is heavily loaded against it in favour of merchandizing trade? What significant stuff are we supposed to sell? Are we wrong to assume that it’s a “trojan horse” set up by a Chinese club called RCEP? And that all it would bring is increased import bill and a few million more added to our unemployed?
I would let somebody as erudite as our foreign minister S Jaishankar hold the stage at this moment. Over to him:
“Those calling for increased openness and efficiency are not presenting the full picture (sic). That it’s equally a world of non-tariff barriers of subsidies and state capitalism (reference to China).
“In the name of openness, we allowed subsidized products and unfair advantages from abroad to prevail. And all this while this was justified by the mantra of an open and globalized economy.
“It was quite extraordinary that an economy as attractive as India was allowed the framework to be set by others.
“Past agreements resulted in de-industrialization of some sectors…the choice (for us) was to double down on an approach whose damaging consequences were apparent or to have the courage to think through the problem for ourselves. We chose the latter.
“It will decide if we become an industrial power with what we decide today.
“It is far from turning our back to the world. In fact, it is to enter the global arena with cards to play—not just to provide a market for others.”
Messrs economists, any rejoinder? Silence. Any thoughts why those nations calling for “free and fair trade”, having fattened themselves on protectionism are denying the same diet to India? That others probably want India as a counterweight to China? Silence.
So anyone for Atmanirbhar Bharat? Hands down.
(This is a reprint from NewsBred).
We could all look at clues emanating from a two-hour meeting between India’s foreign minister S. Jaishankar with Wang Yi, his Chinese counterpart, in Moscow on Thursday. Or trust the redoubtable Russian foreign minister Sergey Lavrov to have hefted his weight in making them shake hands. But frankly, it’s in China’s interests to keep India in good humour.
As the two troops square up within a punch’s distance in Ladakh, where even a guttural breath could spark off World War III, analysts have a meltdown that India could be facing a multi-pronged war on its borders, none more so than on its eastern, northern and western ones from two heavily nuclear-armed enemies—China and Pakistan. Most are failing to connect the dots that it’s China which presently is more encircled and it’s India which is the centrepiece in the coordinated move.
Agreed, India hosting the QUAD (Quadrilateral Security Dialogue) later this year doesn’t sound menacing at first glance. But the enormity of the moment won’t be lost on pros who know that India now has military logistical agreement with all three other members of the grouping: the United States, Australia and Japan. The one with the US (LEMOA) has been operational since 2016. The one with Australia was signed in June. Now, on Thursday, India and Japan, riding on the visible warmth between Indian prime minister Narendra Modi and his outgoing Japanese counterpart Shinzo Abe, have inked a similar military logistical deal. Who said nothing moved during the Corona?
Even as I write this, French defence minister Florence Parly would’ve left Indian shores after overseeing the official induction of 5 Rafale jets in the Indian Air Force in Ambala on Thursday. Don’t go by the innocent press releases marking the moment. In geopolitical and military sense, it carried a grave message for Beijing.
Quietly in the background, India and France have grown akin to blood brothers. It hasn’t happened overnight. As soon as the Cold War ended last century, India and France had signed a “strategic partnership.” Everyone talks of 36 Rafale jets but it isn’t much in public domain that Indian navy has already commissioned 2 of 6 Scorpene submarines being build in our own Malegaon dockyards. The third one is undergoing sea trials. India had signed a military logistics pact with France in 2018 itself. France was one of the few countries which had backed India’s decision to nuclear-test in 1998.
And this is all because like other members of QUAD, France too needs India badly for its considerable stakes in the Indian Ocean. The two countries could sign a secure communications agreement too which would allow the two navies to share maritime domain awareness. Even before Parly arrived in India, the two countries, along with Australia, had held their a trilateral foreign-secretary level dialogue on Wednesday. Surely, India-France are welcoming the likeminded in fold.
The domino effect of this all must not be lost on observers. LEMOA with the US has extended Indian navy’s reach in southwestern Indian Ocean due to French bases in Reunion island near Madagascar and Djibouti on the Horn of Africa. The logistical arrangement with Australia has bolstered Indian warships in southern Indian Ocean and the western Pacific.
There are two other logistical pacts—besides the US, Australia, Japan and France—which India has firmly secured under its belt. One is with South Korea, the other one is with Singapore. Now Indian officials are openly touting two more in near future—with the UK and Russia, the latter one possibly by the end of this year itself. Yes, Russia—you have heard it right.
And now comes something which completely has rattled the command of the Chinese Communist Party (CCP). India, Japan and Australia have launched a “Resilient Supply Chain Initiative” amongst themselves. In simpler terms, it means the three countries are looking for alternatives to China in terms of relocating industries and supply chains in Indo-Pacific.
Japan, which has considerable industrial presence in China, unlike India or Australia, is even incentivizing its companies to relocate to, say India and Bangladesh. It has taken badly the recent moves by China to intensify dispute in East China Sea. Australia is badly stung by the trade spats with China. The repatriation of Australian journalists by Beijing hasn’t helped matters. India of course has a war at door.
In essence, there is an attempt to disengage supply chains in strategic areas such as telecommunications, pharmaceuticals, automobiles, semiconductors etc from China. This has potential to fundamentally alter the geographical shape of cross-border industrial network in the region. It would hurt China where it hurts most.
India and China could point fingers at each other, and not just Finger 3 or 4, for the downturn of ties between two of world’s most populous nations. China could claim that it has had enough of India’s “running with the hare and hunting with the hound” attitude. India could do likewise. After all, China backs Pakistan both on its terrorism and hostility in Kashmir. But these are no better than academic discourse. The truth is India has moved firmly on its Act East Policy. And China has to look after its back. Like Doklam, this face-off ftoo is likely to end with a loss of face for the Dragon.
(This is a reprint from the NewsBred).
Why is China so reckless, why it doesn’t mind that the world is beginning to array itself against Beijing politically, economically and militarily?
It has pushed India to a point where India is doing navy drills with the United States in Andaman and Nicobar, right at the mouth of Malacca Strait which, if it was to be blocked, would finish China. Eighty-percent of China’s energy and trade is conducted through these waters. This is the strait which joins Indian Ocean with Pacific Ocean.
China has torched the informal summits between its leader Xi Jinping and Narendra Modi, all those moments at swing in Ahmedabad, those hugs at BRICS and SCOs, after it killed 20 Indian soldiers and buried billions of Chinese investments now, and for decades, in India. It has created an enemy in India when an enduring friendship was in the front lawns.
It has angered the United States, The European Union and a host of other democratic nations with its revamped security laws on Hong Kong to the extent that Washington would offload its officials at airports; England is offering citizenship to Hong Kong residents, tearing the extradition treaty and EU is vowing to stand by the “citizens of Hong Kong.”
It has annoyed most of its neighbours in Indo-Pacific–Vietnam, Malaysia, Indonesia, Philippines, Japan etc—with its aggressive claims on reefs and islands; patrolling and sinking their assets with impunity. Most of them it shares seats with in ASEAN and RCEP. Besides, nations such as Vietnam, Japan and Indonesia—and many others—are de facto NATO bases which could cripple the supply lines of China.
It has spat on one of its largest partners, Australia, by raising a prohibitive 80% tariffs on exports by Canberra. All this for Australia voicing their concern on Hong Kong.
Leave aside Tibet or Taiwan, China is also making partners such as Kazakhstan fume with claims on its sovereignty. They recently had a report in its servile media where Kazakhstan was said to belong to China since ages and that Kazakhs would have no problem if they were to merge with China.
Isn’t China mindful that Hong Kong, as a global financial hub, is their interface with the capitalist world?
This is a country which has a debt that is 300 percent of its GDP. Its Belt and Road Initiative (BRI) is staring at a financial catastrophe in the Covid-19 world. It has lent $1.5 trillion to more than 150 countries. Several of these countries would soon be defaulting on loans.
Most of us know that China is world’s largest exporter. Very few realize that it’s also world’s second largest importer. It imports minerals and oil to run its industries which feed its exports. Why is it endangering these imports?
It’s telecom giant Huawei, with over $100 billion of revenue every year, has gone on a “survival mode” as said by its own president, Guo Ping since US has shut its door. So would do India, England and the Western world.
Isn’t China mindful that the world is seething in anger against them? That actions against Beijing are already shifting gears? Why is it shooting itself in the foot? Why is it willing to lose in seconds all that it had gained in decades?
An incident during the lockdown perhaps holds an answer to China’s present recklessness. People of Hubei and Ziangxi clashed with the police as they were refrained from crossing the bridge over the Yangtze River. All they wanted was to get back to work. China’s big firms, which engage 30 crore migrants, were opening up. Millions today need work to survive.
It’s all about population
China has always worried about its population. Even way back in 1820, every third person in the world was Chinese. It could feed its people due to its fertile floodlands around two major rivers: the Yellow river and Yangtze River. That of course was the agricultural era. But food is food in any era. That was the reason it annexed Tibet since both these rivers originated there. What if India, a neighbour, poisons those rivers? What if a puny like Tibet, without any army, could choke it to its death? China thus staked its claim on Tibet and cooked up historical evidence when Tibetans are no Han Chinese.
It’s thus inevitable that people’s anger would burst forth if world begins to pull out its manufacturing units out of mainland. The population is already ageing, Covid-19 hasn’t been a help in an already falling birth rate. What happens if “Tiananmen Square” erupts in every province?
This is the reason why China is taking on the world. It wants to stoke the feeling of nationalism in its 1.40 billion population. It has insurmountable problems since the world is hostile and views them as villain of this Coronavirus catastrophe. Their best bet is to tell its people that they need to get behind since Capitalist forces of the world want to break them up like they did during the Opium Wars of the 19th century.
It would give Communist Party of China (CCP) the handle to retain its control over the people and even over its own comrades. It could further tighten its surveillance over its own citizens in the name of national security. In China, a mobile SIM subscription links a person to his health, finances and recognition details. In the name of controlling health, Beijing is making it mandatory for all its citizens to register to its Apps now.
There is no getting away that more its “sheep”—a term for its citizens—try to breakaway from the fold, more are the chances that China would indulge in some reckless political or military gamble. It explains why the Dragon is more like a mad elephant gone berserk these days.
(This is a reprint from NewsBred).
India is decoupling itself from China, and not just from Line of Actual Control (LAC) in Ladakh.
India has banned 59 Chinese Apps used by tens of millions of its citizens and I would be surprised if the Prime Minister Narendra Modi doesn’t warn us of its fallout in his afternoon broadcast to the nation on Tuesday.
China would retaliate by pulling out its investments and factories and looking to cripple our telecom and pharmaceutical industry due to our over-reliance on its equipment and ingredients. Their smartphones have 72% of our market. Half of our electronic imports and two-thirds of our drugs depend on China. Why, even our bulletproof vests are made with material from China.
The investment and jobs we were looking in infrastructure (Tsingshan, steel) and automobiles (SAIC), not to speak of the names which are household such as Big Basket, Byju’s, Flipkart, MakeMyTrip, PayTm, Swiggy, Zomato etc could all take a massive hit. It could grow into a trade war and we the citizens of this country would have rising costs, lost jobs and hardships coming our way.
How do you think our cash-strapped telecom companies could cope? Or how diminishing incomes would react to rising costs? And not just demand, would the supply side be able to stay on its feet if walls go up?
Yet India must decouple itself from China. A nation which depends on enemy for its food, goods and materials don’t last. Germany lost to Britain because of the latter’s blockade in World War I. Ancient Athens fell to Sparta who won’t allow supply of grains through the Black Sea. Why, Australia today is tabulating the cost of a diplomatic spat with China on its crop exports.
The free-trade advocates might whisper into your ears that its’ protectionism, that we are going to pre-liberalization era of 1991 but don’t pay heed. Instead ask: What kind of open trade China is if its subsidizing land, material and tax-cuts for its manufacturers, brutalizing its labour, just to make sure your manufacturing remains buried forever? It’s nothing but a return to colonial era when we exported raw material and imported finished products.
Time is ripe for India to actively intervene in markets. Put spine in India’s manufacturers. Write-off investments in machinery if required. Revamp land, labour and tax structures. Incentivize them to the extent they reinvest profits in men and material. We could then hope for our future generations to look after their parents. Our disabled soldiers to return to the care of their able sons and daughters
If nothing, listen to what Chinese said a few years ago in their economic White Paper of the 21st century:
“Manufacturing is the main pillar…the foundation of the country. Since the beginning of industrial civilization in the middle of the 18th century, it has been proven repeatedly by the rise and fall of world powers that without strong manufacturing, there is no national prosperity.”
India already has the assurance of US State Department which announced last year that Australia, New Zealand, Japan, South Korea and of course India would take care of its supply chains in a rewired world. The critical industries outlined are pharmaceuticals, medical equipment, semi-conductors, automotive, aerospace, textile and chemicals among others.
Many countries are already opting for China Plus One manufacturing strategy. Taiwan is now actively promoting “non-Red supply chain”; Japan has put $220 billion on the line for its companies to shift production back home from China. South Korea is doing likewise with easy regulations, financial aid and tax incentives to those who could “return” home. Italy has announced an emergency decree which empowers it to veto foreign investment in electricity, water, health, media, aerospace, banks, insurance, robotics etc.
Prime Minister Modi seems to have opted for the brave course of short-time pain to long-term suicide. He has put his political career on line. He had no business to walk down this road which could put India in some serious woes. It might make us a little poorer, our goods more expensive but it would secure our borders, our future. China’s cheap exports are a gift which we would pay with ocean of tears in future. Let’s do our bit for our motherland.
(This is reprint from NewsBred).
Behind their pandemic-induced masks, Indians have a floating question on their lips: What if China was to pour into India and spank us like it did in 1962.
Columns on military match-ups are box-office hits. In today’s Mint, weighing scales have measured India and China on nuclear, submarines, armoured vehicles, boots-on-the- ground, everything. It assures readers we are better in inhospitable terrains, fighter jets and in shape thanks to our periodic pounding of Pakistan. It doesn’t look at the weight Pakistan could bring into equation but that’s okay. Indian soldiers are world’s envy for over a century for a reason.
Indians are also hopeful on the United States. That Trump and Modi would look after each other’s backs. This lack-in-self isn’t mindful that India’s nuclear arsenal is deterrent enough. We won’t be rolled over in a conventional war too. Besides, still don’t have a formal military pact with the United States.
Sure, in last decade and a half, the US administration across presidents, and Indians between their Manmohan and Modi, have resembled two lost brothers who couldn’t have enough of each other. It began with access to military sheets (GSOMIA) but ramped up startingly under the Modi regime. An important threshold crossed was reciprocal logistical support (LEMOA) in 2016; and greater Indian access to US military technology (COMCASA) in 2018. The next stage is a deal for 2021 when US could share advanced satellite, intelligence and topographical information (BECA) with India. It would be huge, but not now.
The United States, as it is, has more military pacts than one could count. In the Indo-Pacific waters itself, it’s committed to come to aid of Japan, South Korea, Philippines, Australia and, a little beyond, New Zealand. Western Europe of course is a Biblical commitment in the form of NATO (North Atlantic Treaty Organization). It’s extremely possessive about Central and Latin America and if in doubt, ask a Cuban. In the Middle East, Israel and Saudi Arabia have the blank cheque of security. Since the Second World War, the United States has committed itself to defend a quarter of the world’s population. All are not cut-and-dried military pacts. But de facto, some 69 countries which is worth 75 per cent of world’s economic output, could claim a security umbrella festooned by Washington D.C.
Formal military pacts are dying trends. It forces counter alliances and the world is lit up in smoke as it happened during the First World War. Germany and the Austro-Hungarian Empire were committed to each other against France and Russia and Great Britain was forging secret alliances of its own in a skullduggery which remarkably has been kept hidden by the historians of Oxford who make up the history narrative of English-speaking schools.
So, sorry folks, a military pact between India and the United States isn’t happening all too soon. If the United States enters the Indian Ocean, be sure that China and Russia would commit themselves in equal measure. The US would have its military cooperation, sea drills and logistical shares with India. It designated India as a major defense partner in 2016 itself. The satellite and intelligence sharing under BECA (Basic Exchange and Cooperation Agreement) would be big on its own. It would be a game-changer in communications, navigational and threat assessment. India’s defence exports from the United States are second only to Russia. But don’t mistake it for a joint resistancce against an invader.
We’re in a fluid state. We are not at war with China. Hotheads could spin it out of control for both, and Pakistan. Looking for the United States or Russia isn’t on the charts spread at military commands of the two Asian giants. Treat the two Cold War antagonists as proteins or steroids in a gym. The heavy-lifting is still left to us. Hopefully the worst is behind us. For the time being.
The lessons for India though are unmistakable. China doesn’t have our good in mind. We would know of the United States too if Russia holds firm and delivers us S400 missile system in 2021. Closer home, we need to free up our armed forces from stifling civil bureaucracy. If they want Rafale, that’s what they get. We have a huge lag and delay is not an option.