As often happens, China is at a significant political turning point: the National People’s Congress, the single House of the Chinese Parliament, made up of approximately 3,000 delegates, has opened.
It has the power to oversee Government’s activities, to legislate and directly appoint some of the most important State’s leaders.
Together with the National Committee of the Chinese People’s Political Consultative Conference of the People, the National People’s Congress is the highest legislative Chinese body.
The Congress is elected every five years and meets every spring for about 12-15 days in a row, usually in the Great Hall of the People in Tiananmen Square.
At the opening of the current Congress on Saturday, March 5, Prime Minister Li Kekiang, also in his capacity as Head of the State Council, reaffirmed that the GDP growth rate set by the government would be 6.5-7%, lower than previously set, but certainly much higher than the GDP growth rate of any Western economy.
According to the data analyzed by Li Kekiang, in the last financial year China’s GDP amounted to 67.7 trillion yuan, with a 6.9% increase as against the previous year.
Agricultural production has also increased for the twelfth time in a row, while consumer prices are growing much more slowly than GDP and agricultural and industrial production.
Last year 13.12 million new jobs were created in urban areas, a figure higher than the previous NPC forecasts.
The service sector accounts for 50.5% of the total GDP, just to dispel the usual, old and taken for granted analysis that sees China growing only in labour-intensive and low technology sectors.
Gone are the days when China was a replacement economy; the country is now a global leader of technological innovation.
Conversely, China will take advantage of the current period of reduced GDP growth – which, however, remains a mirage for us – to invest in high-tech and labour-saving, but high value added, sectors which will compete directly, or better, absorb our high technical and product innovation sectors.
Li Kekiang said that the Internet has now reached all Chinese enterprises, with the number of new businesses which in 2015 grew by 21.6%, equivalent to nearly 12,000 new start-ups a day.
Again according to the Chinese government, the per capita disposable income increased by 7.4% in real terms while, since the end of last year, bank deposits have grown by 8.5% – equivalent, in absolute terms, to four trillion yuan.
For the first time 64.34 million Chinese people living in rural areas have had access to pure and drinking water – a transformation which will lead – in China as in Europe in the past – to the most significant and stable increase of average life expectancy.
Chinese people living below the poverty line have decreased by 14.42 millions. It is a sign that the current transformation of the Chinese economy is not only heading for the expansion of the internal market, but also for fewer social inequalities.
It was the theme of the recent speeches “within” the Party made by Secretary Xi Jinping, that relates the fight against corruption to greater social equality – a theme that has focused again attention on the specific type of Chinese economic development.
It is no longer a simple phase of capitalist accumulation, as described by classic political economy theories (and by Marx), but a socialist system where growth adds to the fight against poverty and the increase in wages and consumption.
China has never been, not even in the early days of the “Four Modernizations”, a socialist economy that adapted itself to an export-led development.
This is the economic and ethical-moral importance of the fight against corruption, which has characterized Xi Jinping’s leadership and direction from the very beginning.
As announced by Xi Jinping in mid-January, the anti-corruption campaign will hit not only the higher ranks of the regime, but also the most modest and peripheral sectors and functions.
Clearly Xi Jinping wants to use the fight against corruption to eliminate its old enemies, those who blocked his rise to the CPC Secretariat for at least two years – but there is more in the new ethics of the Party and its ruling class.
For Xi, the issue lies in using two criteria: the abolition of the informality of procedures, but rather the strengthening of their strict formal legality, and also the restoration of all the ancient cultural and ethical values of tradition and ancient culture within the Chinese society.
It is socialism which favours Confucius, not the other way round.
Hence a new Cultural Revolution to avoid China’s mere adhesion to the mindset, consumption and business style of “Western dogs”, as Europeans were called during the “Boxer rebellion”.
Over a thousand “economic fugitives”, guilty of very severe crimes of corruption and illegal enrichment, coming from the United States, Canada, Australia and New Zealand, have already been brought to Chinese justice.
The “tigers”, namely the corrupt people – just to use the terminology of the Chinese press – have been exposed in the Central Military Commission, in the intelligence services, in the People’s Liberation Army and in many State and Party’s ruling bodies.
For Wang Qishan, the Head of the Central Commission for Discipline Inspection, the main anti-corruption body in the country, during 2016 three types of officials will be scrutinized: those who have continued their corrupt practices after the results of the 18th CPC Congress, in 2012, when Xi rose to power; those who have “serious problems” and have generated a “fierce people’s reaction”, and finally all those who occupy key posts and are waiting for promotion.
Reverting to Li Kekiang’s analysis at the National People’s Congress underway, the CPC and especially Xi Jinping’s “line” want: a) to maintain stable growth, perhaps less rapid than in previous years, thus avoiding risks in the global financial market while making the necessary structural adjustments, which are usually expensive and unpopular.
Furthermore, b) a new proactive fiscal policy has been implemented, which has allowed to reduce some taxes, domestic rates and use local budgets productively.
Another factor, c), are the 3.2 billion yuan in new governments’ and local authorities’ bonds, which have been used to pay off previous debts, with a decrease in debt servicing for peripheral governments equal to approximately 200 million yuan.
Funds have also been created for special operations, especially for water management, for the most deprived urban areas, and for rural residential areas, while d) private spending has been targeted to the sectors which are the most promising for the government and the CPC: travels, on-line shopping, information technology equipment.
In short, the Chinese government’s choice has been to put an end to the generic stimulus policies, which have radial effects on the whole economic system, so as to foster structural reforms.
311 types of products have been liberalized; 123 professions and activities no longer need permits authorizations or government concessions; 85% of the authorizations for new economic activities have been abolished, while only one business license with a unified tax code is now used in China.
Administered prices have fallen by 80% and those regulated by local governments by over 50%.
Hence liberalization has the function of balancing the system, not of generating the old Marxist (and Ricardian) “primitive accumulation”.
Restrictions on Chinese investment abroad have fallen by 50%, while over 90% of Chinese projects funded abroad can be implemented only on the basis of investors’ reports, without further constraints.
The aim is clear: to boost China’s export mix to avoid asymmetric shocks.
In 2015 China also used over 126.3 billion US dollars of foreign investment in its business, with a 5.6% increase, while the non-banking and financial Foreign Direct Investment (FDI) operating in China amounted to 118 billion US dollars, with a 14.7% increase.
Moreover the Asian Infrastructure Investment Bank was inaugurated, involving also Italy, and particularly the Silk Road Fund, while the renminbi has recently been included in the currencies of the International Monetary Fund’s “basket” for its “special drawing rights”, the currency issued by the IMF.
Finally, d) the “Made in China 2025 Initiative” has been launched to update the manufacturing productive systems and, above all, to finance and update the small and medium-sized enterprises’ technologies.
In the best Maoist tradition of the “balance between regions”, this corresponds to the development of the Beijing-Tianjin-Hebei integration and to the expansion of the Yangtze’s Economic Belt.
With a view to rebalancing the masses’ purchasing power and stabilizing society, 7.2 million housing units subsidized by the central government have been built, with a new initiative to build schools in rural areas and make compulsory education universal.
In the current NPC, reference has also been made to rural areas to spread a new political formula, namely the “Three Stricts, Three Honests” internal education campaign, initiated by Xi Jinping in December 2014, which is meant to strengthen public ethics and “political ecology”.
With this campaign, Xi wanted to hit political careerism and the overlap between political elites and economic and business elites.
It is worth recalling that the “Three Honests” are: “be honest in making decisions”, “be honest in forging a career” and “be honest in personal behaviour”.
The Three Stricts are: “be strict in moral conduct”, “be strict in exercising power”, “be strict in disciplining yourself”.
As we can infer from this brief description, Xi Jinping’s (and Li Kekiang’s) theory and slogans are perfectly suited to the current economic policy, not only with regard to corruption, but also to everything relating to the expansion and stabilization of economic development in a context of democratization of income and support for the old and new Chinese poor walks of society.
Hence, for Xi and Li Kekiang, the political and economic project is now clear: to preserve a high rate of economic development, despite the external conditions and asymmetric shocks coming from countries in crisis (and from the United States), and then to perfect the structural adjustments, which have a clear significance.
Their significance is the urbanization of China’s people, 50% of whom lives in cities; the reduction of private energy consumption, which fell by 18.2%, with a pollution rate which decreased by 12%; the growth of transport infrastructure, with 121,000 km of railway lines, 19,000 of which are high-speed; finally, the promotion of scientific and technological innovation.
This is the reason why the economy of the service sector, adequately backed by the Chinese government, will anyway support growth, while the structural undervaluation of renmbimbi, the axis of the financial protection of Chinese assets, will continue to play its role as a de facto subsidy to Chinese exports.
The Chinese economy learns from its mistakes very quickly, also thanks to its centralization, and the share of GDP generated by services will optimally support the Chinese expansion in an international market where the share of manufacturing and old technologies is shrinking.
The China Syndrome: The Rising And The Existing Power
China is a large country. It has a large population, a productive population. It has the largest Gross Domestic Product of any country in the world including the US on a purchasing power parity (PPP) basis. It was $27.307 trillion. A nominal GDP basis does not reflect the actual buying power of the currency. China’s nominal GDP of $14,140 trillion is much less than the US, which is $21.44 trillion, both nominal and PPP as the dollar is the benchmark. Since 1871, the US has been the world’s largest economy without question. Now there is a question although the real question might be, so what?
Britain used to be the world’s foremost power. No longer, yet Britain remains wealthy and will continue to be so in the foreseeable future, as will Europe and North America. A couple of hundred years earlier to that the great powers were: China, India, Persia and the Ottoman Empire. The world changes.
Among the problems President Trump has with China is its friendship with Iran. Why that is a problem with Donald Trump is not some nefarious plan Iran has concocted to harm the US but the impression he has generated of he himself being a wholly-owned subsidiary of Benjamin Netanyahu and his LIkud party.
Thus Mr. Trump’s dead-on-arrival peace plan, to all appearances, had its birth on the drawing boards of the LIkud. Iran happens to be Netanyahu’s nemesis and surprise surprise is also Trump’s. A perfectly reasonable nuclear agreement bearing the imprimatur of the UN and the major European powers has been jettisoned by Trump in favor of saber rattling. Europe is not cheeringly on board in this solo venture.
Meanwhile, Netanyahu feels free to start annexing the West Bank — at least the choice parts — and using it to shore up political support while he goes on trial for corruption. He is the first sitting Israeli prime minister to be so besmirched in the country’s history.
The implacable Xi Jinping and the stubborn Donald Trump happen both to be making their respective countries great again. Donald Trump claims he has succeeded using a metric known to him alone: China’s effort is more prosaic. Between 2014 and 2018 it put to sea more ships for its navy than the British, German, Spanish and Indian navies combined. And it has embarked on a campaign for tighter control of its coastal waters. The ship-building program betrays a clear intent to project power beyond coastal waters to the open seas in a challenge to the U.S., the present policeman maintaining open sea lanes. China prefers complete independence.
Then there is China’s bid to be a prominent player in the world of high-tech industry, a role that can influence future economic power. Huawei and its 5G capability is one example. But the Trump Commerce Department has issued new rules designed to choke off Huawei’s access to chips and semi-conductors that it needs to manufacture 5G cellphones and infrastructure. These are made made mostly in Taiwan and South Korea, and the new export rules issued May 19, 2020 forbid chipmakers from using US machines and software to make and sell chips to Huawei. It closes a loophole allowing such sales as long as the manufacture was outside US territory. While Huawei plans alternatives, its customers in Europe and globally are likely to be affected by higher prices and delays.
The cold battle goes on.
From Patriotism to Humanity: China Leading the Fight of the COVID-19
The outbreak of the novel coronavirus has not only impacted human and social life in terms of disease and infection but also created a controversy in the international media and social network to the point that some western media fell into the trap of racism and xenophobia showing an unusual and an inhuman reactions, instead of solidarity and unity exhibition.
Since China is the first country infected with this virus, so it has already started its fight, the government as a leader has put a clear and effective strategy with successful measures of treatment, protection and prevention. In order to maintain the situation the government dedicated all kind of resources and today’s statics shows an increasing of the confirmed infections and death cases and a considered decrease of healed people’s number.
As a matter of fact, the World Health Organization’ Chief TedrosAdhanomGhebreyesus has defended his earlier praise of China’s response to the outbreak and mentioned that all the member of the WHO has praised China for what it did by taking action in the epicenter, helped to prevent cases of being exported to other provinces in china and the rest of the world. This formal statement just confirmed the truth to the world about China’s reliability and the sacrifices made to safeguard the world.
All Chinese government’s management and measures wouldn’t be successful without the great response of the society. As a matter of fact we need to acknowledge the high level of patriotism of the Chinese citizens. No matter their social status;the military, police, engineers, workers, doctors and nurses, business and company owners, celebrities, civilians and ordinary people, students and volunteers, young-middle-old generations, all this people responded to the call of duty applied and followed meticulously all the recommended measures by the government, indeed by their own free will, they sacrificed wealth, made many donations, provided help and assistance donated free masks , free supplies, goods, food and even provided free services, and differently some people made a priceless contribution such the doctors, fully dedicated, working on clock on the front line risking and even sacrificing their lives to save other people’s lives.
Meantime, in the other side of the globe the coronavirus kept spreading, the virus is traveling the world it has no boundaries and it’s affecting the economy, the social life and the public health, it becomes a public enemy, presenting a threat especially for the African communities, in fact many of them they do not have neither the financial means nor a good health security. But since the outbreak of COVID-19, the Africa CDC (Center for Disease Control and Prevention) took many actions and followed the Chinese in term of union and solidarity.
Indeed Africa CDC collaborated with the World Health Organization to train in-coming analysts in event-based surveillance. Also The Africa CDC has been working with member states to build infection prevention and control capacities in healthcare facilities and with the airline sector to support screening of travelers.
These prevention measures may help control the COVID-19, but African leaders still need to pay attention and follow suit to avoid an outbreak and not reproduce the Italian or Iranian scenarios. Recently, World Health Organization chief TedrosAdhanomGhebreyesus warned about the efficiency of the prevention measures and said mediocre preparations could have fatal consequences. He also said the real struggle lies in management of the situation in case of an outbreak.
Generally, Africa doesn’t have a high level of public health. Many diseases and viruses have appeared on the continent, such as HIV, Ebola and tuberculosis. In order to fight and eliminate this threat, a number of African governments have increased expenditures allocated to health and started cooperation for health development with the Chinese government.
China promised to continue to scale up assistance to African countries by creating a health care intuitive allowing the African countries to achieve independent and sustainable development. The plan also contain a long-term strategy of health development, exchange of scientists and new research and technical support for strengthening health-related capacities under the International Health Regulations. China aim to improve African medical and health service and hospital management to provide a better services to the African people by training medical staff, public health workers and administrative personnel. Besides China promised to upgrade its medical and health aid programs for Africa, particularly flagship projects such as the headquarters of the African Center for Disease Control and Prevention.
The cooperation’s plan shows the Chinese-African comity, the friendship and the mutual respect and we can clearly see that China is determined to the contribution in the development of the African nations. The actual epidemic situation of the COVID19 in Africa needs more attention and prevention, the collaboration precisely with china will be a wise action considering the Chinese experience of management, logistics, and organization to maintain the situation in case of outbreak and bringing out the best of the Sino-African alliance.
Despite that China is still fighting this epidemic in its own territory, the government express his readiness to help the other infected countries, recently the Chinese Foreign Ministry expresses sincere thanks for the support and assistance provided by many countries such South Korea and Japan, adding that China is ready to improve and strengthen the mechanism of responding to health and epidemic emergencies and promote the exchange of epidemiological information, exchange of experiences, prevention and control, to implement cooperation In the areas of diagnosis, treatment, research programs, and the development of medicines and vaccines.
China is acting heroically; in the middle of its own fight against the virus the PRC still showing gratitude and good will to help others countries. Till now Africa still has the chance to prevent and learn the Chinese experience, sadly some Africans countries still didn’t take serious prevention measures but China can provide the help and the assistance.
During the outbreak of the COVID-19 we all have seen the Chinese citizen showing patriotism and helping to maintain the situation, meanwhile the Chinese government have shown the same to the world, the lockdown was a strategy to stop the virus from spreading globally, if the Chinese government didn’t take the decision to lockdown cities and stop flights and traffics, experts confirmed that the COVID-19 could infect much more of global population, in fact it was a noble and human act, full of altruism and unselfish, all the matter was the human life.
Now China jumps to the next step which is helping the affected countries and proposing ways of preventions, sharing the genetic code for the virus with researchers around the world and providing medical trials information, treatment, and research programs for the development of medicines.
It’s time for solidarity and support and to have hope. This is a matter of life or death, and China can fight against the outbreak with the rest of the world to the safety…. to restore faith in humanity.
Predicting the course of US-China relations in the post Covid-19 era
Authors: Ayush Banerjee and Dhritiman Banerjee*
The coronavirus pandemic is a natural threat to the geopolitical order. And it is needless to state that this majorly affects the currently international paradigm in a manner that the world has not seen before. Although there have been a few instances where pandemics have shaken the mortality rates, no pandemic has spread this amount of sheer panic among the public at large. This is largely due to the growing interconnectedness and the advent of the cyberspace. Just as the internet has influenced the lives of the most privileged public, data has been influential in academics and politics alike. However, this argument has its own set of problems that continue to affect public-politic relations in ways more than one.
In the same regard, one of the most strained and keenly debated relations in international politics is that between the United States of America and the People’s Republic of China. In the context of the virus itself, the virus originated in Wuhan, a province in China while the most number of fatalities have resulted in the United States of America. This idea fuelled with the new world media at the public level created an atmosphere of tension on such platforms. On Twitter notably, there were several instances of a tweet naming Covid-19 as ‘Chinese Virus’ spread like wildfire. This sparked a major controversy even at the diplomatic level. Even Donald Trump momentarily subscribed to the idea and deliberately worded his speech to use the phrase ‘Chinese/China virus’ to refer to Covid-19 at least 20 times between March 16th and March 30th 2020. The US Secretary of State- Mike Pompeo went on to accuse China of its lack of transparency, even scrapping a joint G7 statement after its members refused to refer to the virus as the ‘Wuhan virus.’ China has remained apologetic ever since. Hence, it can be rightly inferred that the relationship shared between China and USA have strained ever since the Covid-19 outbreak.
However to predict how the outbreak might jeopardise the current paradigm of world politics we must look no further than the Phase One Trade deal signed between the two countries. This deal previously ended an 18-month long trade war between USA and China. Through this deal, China committed to purchasing $200 billion additional foreign goods and services in the sectors of agriculture, energy and manufacturing. However, it is evident that in the post-Covid19 era, it will be rather implausible for China to adhere to the terms of the deal due to reasons more than one. The IMF estimated the reality of an unprecedented economic slowdown in which China is expected to grow at only 1.2% this year. Several reports suggest that investors are planning to pull out their investments from Chinese industries to fit in with the Western bandwagon.
The outbreak turned pandemic coupled with the authoritarian nature of China’s response to the entire situation has had a detrimental effect on their domestic economy creating various tremors in the anticipation of demand for various products and services. For instance, the 12 most Covid-19 affected countries account for over 40% of the Chinese exports. Nations like India and Italy that also make that list of twelve may voluntarily pull out of importing to China as they are set to gain from deferring of investments. These nations are also top suppliers of intermediate goods for the Chinese economy. The Chinese economy is quite dependent on external demand stimuli from the US and most western European states such as the United Kingdom. Therefore, until the point in time the US and EU economies completely recover from this pandemic, Chinese policymakers are bound to hold back domestic stimulus efforts as it will only have little effect if the global economy is in shambles.
The Chinese economy has crippled down considerably due to the ongoing trade war that has led to a disproportionate ratio of debt to the annual Gross Domestic Product. This ratio reached an overwhelming 248.8% by the end of March 2019 and it has only increased ever since. China has also been forced to restructure the debts of the Belt and Road initiative (erstwhile OBOR). This restructuring meant that the capital owed to China as loans by the contributing states have been readjusted to affect the projected collection considerably. As Covid-19 nearly decimates the economy of most developing nations, it is becoming increasingly difficult for these states to pay their loan back to China within the stipulated timeframes. Thus adding to the stress on the Chinese economy at large.
There has already begun a region-specific boycott of Chinese goods and industries, especially in conservative parts of USA, among the southern districts. Instances of racial abuse against ethnic Chinese communities have been on an unfortunate rise. These are all deterministic factors of public consciousness, if not, public opinion for the future that lies ahead of us. This reaction has already seen international spillovers and investors have become more anxious about investing in Chinese companies.
According to Deepanshu Mohan, the world may experience radical shifts in the global political economy post-Covid19 based on two factors namely, the relative degree of economic recovery in the affected nations and the existing domestic political scenarios in such nations. He further states that in the post-Covid19 era, protectionist trade policies are likely to increase in the developed nations who in the name of ‘supply security’ may disentangle trade relations with China which will inversely affect the current geopolitical world order. Donald Trump could also make the pandemic a focal point in the 2020 election campaign and therefore aim to capitalise on the anti-China fervour in the US and thus strain relations even further. There lies evidence for this as well. Trump recently presented his anguish towards China being categorised as a ‘developing’ state under the World Trade Organisation list and due to the low contributions of China to the World Health Organisation. Although this may seemingly appear appropriate accusations, this is far from the whole truth. The USA, themselves have cut major proportions of its funding capacity towards the United Nations especially concerning peacekeeping and security operations.
Minxin Pei, on the other hand, stated that the Covid-19 outbreak has led the average American to view the Chinese political system with chronic scepticism as Americans blamed the repressive Chinese political system for the pandemic with the Harris poll indicating widespread American dissatisfaction with the alleged Chinese cover-up of the virus. This poll also showed overwhelming support for US punitive measures on China and the removal of US investments and businesses from China. These developments could lock the two countries into a cycle of escalation that could trigger another potential international diplomatic conflict leading to numerous security issues and economic degradation. USA and China remain the two largest economies in the world. Hence, it can be inferred that this fallout of diplomatic and economic ties between the two states might amount to significant damage in the entire global political order and the globalised system of economies and markets. In the US itself, the number of jobs created since the recession in 2008 has been washed away in two weeks.
The trade war between the two economic giants had already shaken the world before the outbreak. And the prevalent fault lines will only widen in the post-Covid19 era just as a global economic slowdown is expected. Thus, it is imperative for the world economy that this US-China relation remains amicable and stable. However, the available narratives indicate a significant detour from the ideal stability that USA and China should normatively maintain to protect the global economy from crumbling down like biscuits. The USA has resorted to legislations that are actively anti-China in terms of financial relations and international trade while China has strengthened its protectionist response system both politically and economically during this outbreak.
The Covid-19 outbreak has not acted as an impediment to Chinese aggression in the South China Sea region either. China has recently renamed 44 features in the disputed region, a decision that is considered illegal under international law. This has been time and again criticised by the US Secretary of State Mike Pompeo. With increasing US-China missile competition a reality in the region post the abrogation of the INF treaty, the post-Covid19 era will likely see more prominent conflicts in the South and the East China Sea regions which is a strategically important waterway for both the countries alongside other nations such as Japan, Vietnam, Philippines and India.
*Dhritiman Banerjee is an undergraduate student at the Department of International Relations at Jadavpur University, Kolkata, India. He has recently published for the Millenniumpost, a Kolkata based newspaper as well as contributed to publications like the Geopolitics and South Asia Monitor. His interests lie in International Relations in general and Strategic Studies in particular.
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