Taiwan

Modi puts his foot on the tail of the Dragon; and hopes the nation is with him

(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.

 

A muscular India gives its army a “free hand” to knock sense in China

(This is a reprint from NewsBred).

It would be a grave misjudgement to believe that China has walked over India in a physical showdown in Galwan Valley in eastern Ladakh on Monday.

If nothing, ask the Chinese who made moves in lockstep over the last few weeks to test India’s nerves and found a nation mature in diplomacy and dare in equal measure.

India has used velvet gloves against a petulant Nepal which thumbed its nose on borders but didn’t elicit a raging anger from New Delhi that would’ve played into the hands of its puppeteer, China. India knows, as does Nepal, that the latter can’t survive without India’s open borders. Simply, the land-locked nation would run out of essential supplies. A manufactured border dispute has no future but for headlines and talk shows.

China meanwhile had crossed the Line of Actual Control (LAC) at four different points in Ladakh, agreed for de-escalation but then stayed put when the two armies were to pull themselves back by a few kilometres. India would have none of an enemy’s forward-post left standing inside the Galwan Valley which belongs to India. It didn’t backdown from a physical combat either since arms and ammunitions are avoided by the two neighbours in sensitive stretches of border running into thousands of kilometres.

Now has come the news that Indian Army has been empowered to act as per the ground situation without looking for directions from New Delhi. In other words, the Indian Army has been freed from political constraints. It’s an unambiguous message to Beijing that they are now in the wilds. That your superior nuclear stockpiles, defence spending or armaments wouldn’t be of much aid if it’s bare knuckle fight. So, if it’s to fists, stones and clubs now, may the best man win. There is no referee.

Indian Express has quoted an army source thus: “Army has been given emergency powers for deployment there as per needs and new situations without looking towards Delhi…We have to demonstrate our strength on the ground…there is no need to show aggression, only our strength.”

This would put China in a spot. Either they shove the conventions and turn it into an armed combat. Or they pull themselves back as they did in Doklam in 2017. Or they escalate which wouldn’t go unnoticed to a concerned world. It’s a massive show of intent from Modi’s India which is largely consistent in its zero-tolerance approach on nation’s sovereignty and integrity.

It’s not like South China Sea where the Middle Kingdom has usurped islands, sea tolls, reefs and banks overriding neighbours protests. China could not only carry through the bluff but were assured of its efficacy by the mumbled response of the affected. India seems determined to call out the bully. It’s not the semi-autonomous Hong Kong, a cowering Taiwan or a Vietnamese fishing boat you could sink to the floor of the South China Sea.

China clearly is upset at India’s assertions in recent months. India has signed a pact with Australia in the middle of the pandemic which would give teeth to QUAD (Quadrilateral Security Dialogue) between four democracies of Indo-Pacific: the United States, Japan, Australia and India itself. It has openly given a call to multinationals to shift their operations to India, a blow to China where it hurts the most. It has decided to screen the foreign investments beyond the FDI regulations. It now heads World Health Organization (WHO) which is to take call if China was complicit in hiding the truth on Corona Virus pandemic. It hasn’t helped the matter that Taiwan, which Beijing is paranoid about, could have “observer” status at WHO on pandemic deliberations. Then we have an expanded G-7 group of nations where India is to be included but no invitation has gone out to China

India has an uncontested control of Galwan Valley, between Ladakh and Chinese-occupied Aksai Chin, since 1962. It suffers from poor infrastructure in a hilly terrain unlike China which makes use of the flat Tibetan plateau to carry its road and highway network unhindered. India in contrast has to cross several mountains to access the LAC. It’s only natural that India wants to secure its borders. China would either have to give up the encroachments or face consequences, no less economic. There is a groundswell of consensus to boycott Chinese goods. The little matter of Huawei 5G also hangs in the balance.

There is little doubt China faces uncommon heat across continents. Pushback against its over-arching reach has already begun in Africa and Southeast Asia. Unemployment is unprecedented. Economic woes are spiralling. The world is a hostile theatre after China’s machinations on pandemic which has set the world back by a generation in economic terms. Its present misadventure in Ladakh is an undisguised diversionary tactics.

There is little doubt Indo-China relations would freeze in near future. It would bring Pakistan in closer ambit of China. India, on its part, would have the United States in its drawing room. Distrust between the two main powers of Asia would now run deep. Russia is a common friend which could find its loyalty divided.

Who is Donald Trump fooling on Iran?

(This is a reprint from NewsBred).

I am not a stockbroker but if I was I would bet big against Donald Trump unleashing a war against Iran.

I mean he heads a country which needed half a million of its servicemen to tame a small Kuwait and prepared six months to arrange for its logistics. How would do you do against a large territory like Iran?

His country United States can’t fight two medium-sized wars and can it really afford to free up Far East and China who would strangulate Taiwan the moment it’s off-radar?

And please don’t give me this Nuclear-muscle nonsense. It works best before you use it.  You can nuke a Hiroshima or Nagasaki but you can’t nuke the whole of Iran.

It’s also as if Trump doesn’t know that Pentagon would give a damn to his command for war. US can only declare war if its army wants so—as was the case with Vietnam and Iraq. The military generals of the US have already rejected the notion of abiding with the President’s order for an illegal war.

We know the US, the adolescent that it is of only 200-odd years, makes some silly mistakes (Remember the hostage crisis of the 70s: Jimmy Carter’s helicopters couldn’t fly over Iran at a low height because its filters got clogged with sand). But a war with Iran would be worth an Oscar of the Absurd.

For one, if you don’t allow oil out of Iran to the world; Iran would stop any oil to go out of the Middle East (see picture). Shias are everywhere:  60% of Iraq is Shia; 80% of Bahrain is Shia; the majority in Kuwait is Shia; the oil in Saudi Arabia is controlled by Shia. Iran would damage tankers and make sure the blame doesn’t come its’ way. In the last one month itself, four tankers anchored near Fujairah in UAE were damaged. Two tankers with petrochemical products were attacked in Gulf of Oman this week. No traces were left. It would become a routine. Saudi refineries could go up in smoke. Iran has strategic partners in Syria, Iraq, Lebanon, Yemen and even Afghanistan.

We also know that the US’ Iran policy is based on a single agenda: Change of Islamic revolutionary regime in Iran. This agenda is unfulfilled even after 40 years. This is a country which unlike a France or England could survive on half a bread. Threat of a war, doesn’t open up the factional feuds in the country. Instead it draws them together—as Western-oriented parties and hardliners are hugging each other at the moment.

It’s also as if the US doesn’t know that its’ tough stance would probably make Iran a nuclear-powered regime in six months. Iran announced on June 17 that it would start withdrawing from compliance with the 2015 nuclear agreement. But if the US pulls out of the deal unilaterally and the other signatories of the pact—China, Russia, France, Britain and Germany—hold their silence, what options Iran is really left with but to press on the raw nerve which inked the pact in the first place?

In this week itself, Iran would exceed the limit on enriched uranium which the 2015 deal had stipulated—only 300kg of uranium hexafluoride enriched to 3.67 per cent, or it’s equivalent, for 15 years.  If Iran adds a few thousand extras of centrifuges, it would reduce the time Iran needs to arm itself with a nuclear weapon.

And how do you think Iran’s opponents would face up to the Persians? Saudi Arabia is so pathetic it can’t even bring tiny Yemen to submission. They can’t do anything to Houthi. A war would only make Turkey stronger. Iran is already being wooed by Russia and China. A common bank is being set up by Syria, Iraq and Iran to facilitate trade between these countries.

If anything a war would break up the United States. By mid-2020, oil prices would hit the roof. Insurance premiums on tankers would be prohibitive. Consumer prices of oil products would multiply. If oil prices exceed $100 per barrel, it would hit China, Europe and the US. If the oil prices are doubled, the US would be in ruins. It is the biggest consumer of electric power.  It doesn’t matter where it gets its energy from, be it Texas, Siberia or Saudi Arabia: if it’s 150% per barrel, US is destroyed.

Then why the hell is the US tightening its screws on Iran? And Donald Trump is increasingly sounding like John Wayne with holster unbuckled?

The short and sweet answer is: Trump wants to stoke up fears in the Middle East so that it could sell its military hardware to Iran’s opponents and fatten up its GDP. It never wanted a war, it never would. If the US wanted a war, it wouldn’t be looking the other way as Iran continues to sell 300 million cubic feet of gas to Iraq. Iran’s sale of oil in the region could go up to two million barrels of oil daily.  

The trouble is, Iran knows the game and is upping the ante: It has given an ultimatum to remaining signatories of the 2015 Pact either fall in line by July 7 and help preserve the nuclear deal or face the music. It’s a classic case of the hunter becoming the hunted. Trump has climbed up a tree but doesn’t know how to get down.

Fun, I say.