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The Chinese success at the G20 Summit of Hangzhou

Giancarlo Elia Valori

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In a letter written in December 2015, Xi Jinping proposed some national and global objectives for the G20 Summit of September 4-5, 2016. For the CCP Secretary the aim of the G20 system – which he recalls was born at the beginning of the 2008 financial crisis – would be to develop concrete goals leading to a multipolar and shared global economy.

In that letter Xi Jinping said that, if said goals were reached, China would provide its decisive contribution, even partially changing its production system.

The win-win strategy is the declared goal of the Chinese Secretary. Over and above the wording of this concept, this has a very specific meaning.

As shown by statistics, 77% of all the goals set at the previous G20 Summit held in Antalya have been achieved.

Furthermore, considering that data shows that the G20 countries account for approximately 90% of the world GDP, we can realize that, over and above declarations of principle and set phrases, for China the Hangzou Summit was the ideal forum to start redesigning its place in the world.

In his opening speech at the G20 Summit in China, Xi Jinping clarified – in modern terms – a concept of the old Maoist tradition, whereby each country must take its own specific path to development.

In other words, there are no models to be imported in an already globalized world, possibly after a long and ruinous war for “democracy”.

Each country has its own vocation, its system, its shih, namely its natural form, just to use a term of Taoist philosophy.

While recalling the effort – a true “Great Leap Forward”, unlike Mao’s autarkic line of the 1950s – which has led China to be the second largest economy, Xi Jinping clarified – always between the lines – another important point.

According to the CPC Secretary, China will not slow down the pace of its reforms, which means that today it will still tend to strengthen its internal market and its fight against corruption.

According to the latest data, the Party has sanctioned as many has 300,000 officials this year only.

Xi Jinping’s fight against corruption wants to convey the message that the Party is resuming the central role it has always played in Communist China and intends to open itself to foreign markets in the best possible way.

Hence without foreign entrepreneurs’ actions manipulated by the corruption of State’s and Party’s cadres, executives and leaders.

In addition, Xi Jinping wants to change the old equation of China’s development, with a view to increasing competitiveness on an equal footing with the most technologically advanced Western economies.

In other words, so far China has made social and industrial dumping towards the West’s “mature” productions, characterized by low growth rate and average value added.

Thanks to this system, China is overcoming underdevelopment and is “standing up” – to use again Mao Zedong’s terminology.

Currently the strategy is changing: China will play on equal terms in the global technology and capital market.

In that way, over the years, China had become what some US economists called “the global sweatshop”, thus using for the Chinese factories a terminology reminding us of Charles Dickens’ novels.

According to the CPC Secretary, Xi Jinping, now the Chinese capital will be used, on the one hand, to create a supply-side economy within the country and, on the other hand, to enter the new labour-saving technological sectors, which will be the majority in future productive systems.

Hence, with a view to avoiding the huge Chinese population creating problems of internal political stability which could not be solved, even by force, Xi Jinping is enlarging the Chinese domestic market.

This is the reason why, however, he wants the West to keep on contributing to the upgrade of the Chinese economy.

Globalization is still one of China’s primary goals.

Hence the reference made by Xi Jinping to the renewal of the technological drivers of this global production phase is particularly significant.

And this is the reason why China still requires an open and competitive global market.

Instead of absorbing “old” productions, as in the days of the “Four Modernizations”, China wants to participate in the creation of the new technologies – not only the digital ones – which will characterize the economy in the coming years.

Initially Deng Xiaoping wanted to compete with Hong Kong in attracting foreign companies.

Now Xi Jinping will participate, on an equal footing with the West, in the definition of the next economic growth cycle.

A cycle in which, incidentally, Italy will participate only marginally.

Its current leadership has not even the faintest idea of the issues raised by Xi Jinping in his speech delivered to the G20 Summit.

Therefore the Chinese leader’s line is even clearer: in the near future, development will be based on a range of tax, monetary and geopolitical tools, of which Xi Jinping’s China is fully aware.

Hence it will maintain a flexible fiscal policy and it will support some tax cuts. It will also increase government spending, in contrast to the private capital crisis, while it will maintain and increase the yuan-denominated funds deposited abroad.

This project is reminiscent of the Eurasian project to be undertaken jointly with Russia.

The project consists in replacing the US dollar, or at least being side by side with it, as world exchange currency.

Again between the lines Xi Jinping conveys the message that globalization is perfect because it helps us to manage the still substantial Chinese overproduction.

In addition, China needs to cut production costs – and here the Western advanced management counts – as well as   change its costly and unproductive real estate market.

Finally, China must improve the distribution network efficiency and avoid financial asymmetric shocks.

All this can be read between the lines in the speech delivered by Xi Jinping.

And it is also worth recalling the attention paid by the Chinese CPC Secretary to the “green” economy because it improves the whole economic performance and avoids the parallel health and infrastructure costs and even the cost of adapting the Chinese production to the world market.

According to Xi Jinping, who is still a serious expert of Marxism, it is the new climate of global collaboration which generates the new economic growth drivers, not vice versa.

Without a political decision on the new production formula there will be no transformation of the global economy.

Hence the issue lies in enhancing international cooperation and involving also the marginal countries we must rescue from the jihad or from the long fratricidal wars, as well as particularly ensuring a level playing field in the international system.

China has not appreciated the US policies of vast “ocean” alliance for trade globalization – the TTIP for the European Union and the TTP for Asia, namely the strategies put in place by President Obama.

Types of trade policies that – while speaking of the British economic growth – Carl Schmitt called “thalassocratic”.

In fact, China is both land and ocean.

It has not accepted the North American TTP because it suspects there is a US desire of leadership in global trade.

China wants to take advantage of the void of the US global policy – which has been blocked by the EU for the TTIP and has seen only 13 countries advocating the Asian TTP, clearly targeted against China – and fit in it, also to avoid becoming a regular purchaser of US goods and distorting its monetary policy, which is designed to promote the yuan internationalization.

Furthermore, so far neither Hillary Clinton nor Donald Trump have fully clarified their projects towards China.

Using again Taoist concepts, the “emptiness” of US policy must be replaced by the “fullness” of the new Chinese geoeconomy.

Moreover, the current European leaders attended the Huangzou G20 Summit having in mind the next EU Summit of Bratislava, which shall deal with the Brexit issue.

Currently no EU Head of State or Government has the ability, the culture and the strength to evaluate operations longer than six months.

Conversely the British Prime Minister, Theresa May, has already had confidential contacts with Xi Jinping and has spoken of a “golden age” in bilateral relations between Great Britain and China.

At the G20 Summit, Prime Minister May also met five other European countries to negotiate the new trade system after the Brexit.

The British Prime Minister wants to ward off the danger of a new US approach vis-à-vis Great Britain and is opening to China with a view to becoming a global hub, not only at financial but also at productive level.

China is expected to invest approximately 40 billion pounds in Great Britain, not to mention the building of the nuclear power plant Hinkley Point C and later of Sizewell in Sussex.

Great Britain wants to use China with a view to positively stepping up Brexit, thus decreasing its economic risks. Great Britain will replace the tired old Europe, with the rich, powerful and vibrant China.

This means applying to the European economy – that Great Britain is leaving – the “Four Is”, the four key priorities which provided the slogan of the Huangzou G20 Summit, in the most genuine and authentic Chinese tradition.

The future economy shall be “Innovative, Invigorated, Interconnected and Inclusive”.

In other words, China does no longer intend to support global growth only with financial means, as happened during the US-led globalization.

In fact, China founded the Asian Infrastructure Investment Bank (AIIB) in December 2015 and aims at including the nations marginalized from the first wave of globalization. The AIIB has already 57 members.

Indeed China aims at a global economy which will implement new value creation mechanisms, especially manufacturing and non-financial ones.

And here the link between the Russian Federation and China will be strengthened permanently.

The starting point will be the joint initiative for the Russian Far East and the Chinese North-East.

The G20 spoke about the new Russian-Chinese Eurasia and the Chinese leaders said to the leaders gathered for the Summit that this would lead to “big surprises.”

The systems and organizations on the basis of which the Chinese and Russian project will be implemented are the Shanghai Cooperation Organization and ASEAN, through the Eastern Economic Forum.

Hence, in this regard, we can say that, for Xi Jinping, the G20 held in China was a great success.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr. Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “International World Group”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title “Honorable” of the Académie des Sciences de l’Institut de France. “

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East Asia

The Slippery Slope of Sino-US Trade War

Syeda Dhanak Hashmi

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Change is the only constant. After a struggle for supremacy in geopolitical and geo-economical spheres, now technological realms have also been contested among superpowers. The Fourth Industrial Revolution is at the verge of breaking out and it is expected that this stage of modernization will tug the very fabric of society and will alter the way individuals interact with each other and world at large. Ongoing industrial innovation will act as a modus operandi to transform global economies, communities, and politics.

The world is in stern need of a modern global architecture before the fourth industrial revolution starts encroaching on us. That is why a trade tussle emerged on statist lines among all major economic stakeholders of the international economy, especially among those having a larger share in business with the United States. The US President Donald Trump opted a pre-emptive approach and imposed tariffs and nuisance in global economies. Eminent journalist, Bob Woodward highlighted the fact in his book ‘FEAR’ that USA’s protectionist elements are far-greater than ever before and such actions will hinder economic peace with traditional allies or trade partners. Trump’s tariff imposition on China and renegotiation of NAFTA and Free Trade Agreements with EU leaves no doubt about Woodward’s projections. Another famous Nico Colchester prize-winner financial journalist, James Politi of Financial Times referred exchange of tariff brawls between USA and China as “protectionist firepower” by Trump administration aiming against China. To cut short, current trade tariff discourse is in order to contain China in geopolitical, economic and technological leadership.

An ongoing trade war is economic intimidation and coercion by the USA towards China to redevise their trade agreements and get more favorable terms for the country, which will also advance Trump’s populist mantra of America First. Trade tariffs were imposed as a consequence for not responding the sheer allegations on Chinese companies by US administration of unprecedented level of larceny and infringement upon intellectual property rights. US Politicians claim that industrial migration and capital flight from the US to China was the reason of unemployment in the USA, but economists condemned the long-term policies like reliance on imports and not saving much for the future.

China’s rise is perceived as a threat to hegemonic stability, thus an influx of uncertainty is stirring in the realm of international political economies. This rise is analogous to the Thucydides trap and also depict similar characteristics as of power transition theory. But the fault line of this predicament lies in the technological advancement of China by virtue of US private enterprises and regional economic connectivity ventures of the country. In short, it is a feud between the two leading economic powers to overhaul world trading practice (its terms and conditions) coupling with technology and knowledge-based economy with an intent to hedge and wedge each other being the contenders of global hegemony.

Both economic powers, China and USA have been in a state of economic tug of war since June 2018. To resolve his sticky situation, Trump administration imposed 25 percent import tax on $50 billion worth of products of Chinese origin in order to overcome the trade deficit between both economic giants. China countered this move by levying duties on the produce of USA and more than three rounds of tariffs worth $250 billion were exchanged among both parties, in addition, both parties threatened with each other with penalties of $267 billion. However, both countries had annual trade relations of $710.4 billion in 2017 and China is ranked as the third largest export market for the USA.

The Chinese government was alleged for backing their private companies by injecting billions of dollars every year and termed as state-owned private enterprises by several journalists and newspapers. In addition, Chinese companies were suspected to violate patent rights especially the ones related to modern technology and Chinese authorities for restricting foreign companies to access their markets freely. China also announced its strategy named ‘Made in China 2025’ which implies that majority of end-user products will be developed by China in near-term while it is also a challenging situation for the USA for being a techno-center of the world. Vision 2025 asserts that China will be a front-runner in modern technologies like Artificial Intelligence and Biotechnology in the respective year .

While campaigning for elections, Republican President of USA, Donald Trump also proclaimed that Chinese development is equivalent to ‘rape’ and his administration will levy 45 percent tariffs on total imports from China. Formerly China had been under tariff regime of USA on products worth of $50 billion annually and President-Elect also threatened Chinese government to take a radical stance and impose further 25 percent taxes on January 1st, 2019 on products worth $200 billion. Chinese government retaliated this move by imposing tariffs worth $60 billion despite economic coercion from the US government of striking further duties on all products of Chinese origin.

Joseph Stiglitz, an eminent scholar, and Nobel laureate explained stated that:

The United States has a problem, but it’s not with China. Predicament lies in America because they saved too little, and borrowed and imported too much“.

USA and China are heading towards a war which no one wants at this point in time.In this modern era, the US and China must see ahead of time and resolve their bilateral relations which is a cause of disturbance in the international economic order. To do so there is a need to establish new norms of trading and economics which incorporate prevalent treaties and meet the requirement of the 21st century.  To serve the purpose rules should be developed to cater the technology related matters in international trading practices.

Current global situation of power transition and hegemon desiring stability depict the same case as of Thucydides trap which is an outcome of structural pressures spiraling from an emerging power challenge the ruling one. Although this theory is ancient but very relevant to the on-going trade-brawls of China and USA, a case where the leadership of both countries sings hymns of making their country great again. This conflict has no resolution other than either party accepts the dominance of other whereas in this case China is not going to cap and roll their economic endeavors, and the US will also not concur to Chinese supremacy in Pacific, cyberspace and external space. There are certain stern measures which competing economies will have to take in order or else it could be an all-out war.

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Harsh Turkish condemnation of Xinjiang cracks Muslim wall of silence

Dr. James M. Dorsey

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In perhaps the most significant condemnation to date of China’s brutal crackdown on Turkic Muslims in its north-western province of Xinjiang. Turkey’s foreign ministry demanded this weekend that Chinese authorities respect human rights of the Uighurs and close what it termed “concentration camps” in which up to one million people are believed to be imprisoned.

Calling the crackdown an “embarrassment to humanity,” Turkish Foreign Ministry spokesman Hami Aksoy said the death of detained Uighur poet and musician Abdurehim Heyit had prompted the ministry to issue its statement.

Known as the Rooster of Xinjiang, Mr. Heyit symbolized the Uighurs’ cultural links to the Turkic world, according to Adrian Zenz, a European School of Culture and Theology researcher who has done pioneering work on the crackdown.

Turkish media asserted that Mr. Heyit, who was serving an eight-year prison sentence, had been tortured to death.

Mr. Aksoy said Turkey was calling on other countries and United Nations Secretary-General Antonio Guterres to take steps to end the “humanitarian tragedy” in Xinjiang.

The Chinese embassy in Ankara rejected the statement as a “violation of the facts,” insisting that China was fighting seperatism, extremism and terrorism, not seeking to “eliminate” the Uighurs’ ethnic, religious or cultural identity.

Mr. Aksoy’s statement contrastèd starkly with President Recep Tayyip Erdogan’s declaration six months earlier that China was Turkey’s economic partner of the future. At the time, Turkey had just secured a US$3.6 billion loan for its energy and telecommunications sector from the Industrial and Commercial Bank of China (ICBC).

The Turkish statement constitutes the first major crack in the Muslim wall of silence that has enabled the Chinese crackdown, the most frontal assault on Islam in recent memory. The statement’s significance goes beyond developments in Xinjiang.

Like with Muslim condemnation of US President Donald J. Trump’s decision last year to recognize Jerusalem as the capital of Israel, Turkey appears to be wanting to be seen as a spokesman of the Muslim world in its one-upmanship with Saudi Arabia and to a lesser degree Iran.

While neither the kingdom or Iran are likely to follow Turkey’s example any time soon, the statement raises the stakes and puts other contenders for leadership on the defensive.

The bulk of the Muslim world has remained conspicuously silent with only Malaysian leaders willing to speak out and set an example by last year rejecting Chinese demands that a group of Uighur asylum seekers be extradited to China. Malaysia instead allowed the group to go to Turkey.

The Turkish statement came days after four Islamist members of the Kuwaiti parliament organized the Arab world’s first public protest against the crackdown.

By contrast, Pakistani officials backed off initial criticism and protests in countries like Bangladesh and India have been at best sporadic.

Like the Turkish statement, a disagreement between major Indonesian religious leaders and the government on how to respond to the crackdown raises questions about sustainability of the wall of silence.

Rejecting a call on the government to condemn the crackdown by the Indonesian Ulema Council, the country’s top clerical body, Indonesian vice-president Jusuf Kalla insisted that the government would not interfere in the internal affairs of others.

The council was one of the first, if not the first, major Muslim religious body to speak out on the issues of the Uighurs. Its non-active chairman and spiritual leader of Nahdlaltul Ulama, the world’s largest Muslim organization, Ma’ruf Amin, is running as President Joko Widodo’s vice-presidential candiate in elections in April.

The Turkish statement could have its most immediate impact in Central Asia, which like Turkey has close ethnic and cultural ties to Xinjiang, and is struggling to balance relations with China with the need to be seen to be standing up for the rights of its citizens and ethnic kin.

In Kazakhstan, Turkey’s newly found assertiveness towards China could make it more difficult for the government to return to China Sayragul Sautbay, a Chinese national of ethnic Kazakh descent and a former re-education camp employee who fled illegally to Kazakhstan to join her husband and child.

Ms. Sautbay, who stood trial in Kazakhstan last year for illegal entry, is the only camp instructor to have worked in a reeducation camp in Xinjiang teaching inmates Mandarin and Communist Party propaganda and spoken publicly about it.

She has twice been refused asylum in Kazakhstan and is appealing the decision. China is believed to be demanding that she be handed back to the Xinjiang authorities.

Similarly, Turkey’s statement could impact the fate of Qalymbek Shahman, a Chinese businessman of Kazakh descent, who is being held at the airport in the Uzbek capital of Tashkent after being denied entry into Kazakhstan.

“I was born in Emin county in China’s Xinjiang Uyghur Autonomous Region to a farming family. I wanted to go to Kazakhstan, because China’s human rights record was making life intolerable. I would have my ID checked every 50 to 100 meters when I was in Xinjiang, This made me extremely anxious, and I couldn’t stand it anymore,” Mr. Shahman said in a video clip sent to Radio Free Asia from Tashkent airport.

A guide for foreign businessmen, Mr. Shahman said he was put out of business by the continued checks that raised questions in the minds of his clients and persuaded local businessmen not to work with him.

Said Mr. Zenz, the Xinjiang scholar, commenting on the significance of the Turkish statement: “A major outcry among the Muslim world was a key missing piece in the global Xinjiang row. In my view, it seems that China’s actions in Xinjiang are finally crossing a red line among the world’s Muslim communities, at least in Turkey, but quite possibly elsewhere.”

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Heartland Reunion: Geopolitical Chimera or Historical Chance?

Dr. Andrey KORTUNOV

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Anyone who has at least some idea about the theory of international relations should remember the oft-quoted formula put forward by the father of British geopolitics, Halford Mackinder: “Who rules the Heartland commands the World-Island; who rules the World-Island commands the world.” For those who are sceptical about geopolitical constructs and terminology, this logical chain may seem like a meaningless shamanic incantation. Over the course of a century, “Mackinder’s formula” was repeatedly criticized, corrected, repudiated, anathematized, parodied and ridiculed. And yet, strange as it may seem, not only has this formula survived an entire century, but it is also perhaps more relevant today than it was a hundred years ago.

Of course, the question hinges on how we understand the concept of Heartland. Mackinder interpreted it as the geographical centre of Eurasia, or, more precisely, as the massive central and north-eastern part of the Asian continent, which on the whole coincided with the Asian areas ruled by the Russian Empire and the Soviet Union. Today, it seems obvious that the “Eurasian core” must be sought south of the harsh, poorly developed and scarcely populated Siberian plains and barren deserts of Central Asia. Just like in the days of Mackinder, Siberia and Central Asia remain repositories of raw materials and energy resources. Just like before, these lands may be considered the “great natural fortress” of the land peoples, adjusted for the new arsenal of means of projecting military power that appeared in the 20th century. However, these lands did not become a true “axis of history”: contrary to Mackinder’s prophecies, their transport infrastructure remained incomplete and disconnected, while their role in the development of the Eurasian continent over the past 100 years has shrunk rather than grown.

At the risk of incurring the righteous indignation of the current geopolitical orthodox, let us postulate that the Eurasian Heartland of the 21st century is actually what Mackinder saw as the “inner crescent.” Primarily China and India, in relation to which the rest of the Eurasian massif – Russia, Central Asia, Southeast Asia, the Middle East and even the extended European peninsula of the Asian mainland – act as continental limitrophe states. Despite the undeniable significance of these border states to European history, politics, economics and security, the fate of Europe depends primarily on how relations in the new Heartland (that is, between China and India) unfold. And the future of the whole world to a great degree depends on the fate of Eurasia. This is one of Mackinder’s main points, and it is by no means outdated.

The Prerequisites for Consolidation

It would seem that there are no fundamental obstacles to the consolidation of the Heartland: the interests of Beijing and New Delhi coincide on most major international issues. China and India have much in common. Both countries are, in their own way, historically stable and internally cohesive alternatives to Atlantic civilization. China and India are, along with the Arabic East (and to a lesser extent Tropical Africa south of the Sahara), the two most important points of the crystallization of “non-western” ideals. The fact that China and India are growing stronger is the most significant indicator that the “western” stage in the development of the system of international relations has drawn to a close.

As powerful drivers of economic growth both in Eurasia and around the world, both China and India are currently experiencing a stage of long-term economic, cultural and civilizational upheaval. Neither has fully overcome the deep trauma of national consciousness caused by their status as outsiders in global politics in the 19th and 20th century, and this trauma continues to have an impact on the historical narratives that dominate China and India and the foreign policy ambitions that emanate from these narratives. Beijing and New Delhi are “revisionist” players on the global stage in the sense that both China and India are interested in revising the old rules of the game that serve the interests of the “collective West.” China is leading a broad economic and financial offensive – from Central Europe to Latin America. India, lagging behind China in terms of foreign economic expansion, is focusing instead on closing the political gap by laying claim to a permanent seat on the UN Security Council.

The two countries are exposed to all the standard “growing pains” – the negative side effects of rapid economic and social growth. Both China and India suffer from severe environmental problems, a shortage of natural resources, growing social inequality and widespread corruption. In addition to this, there are pockets of separatism and terrorism in both countries. China and India are also witnessing a conflict between modernization and traditionalist forces. The concept of “national sovereignty” is paramount in both states, and any attempt to interfere in their domestic affairs is met with hostility. People in both countries question the stability of the current model of socioeconomic development, and many fear or predict inevitable crises and upheavals in the future.

Historically, relations between India and China have always been less conflict-ridden than, say, the relations between the Islamic and Christian worlds in the west of the Eurasian continent. In a sense, it is fair to speak not only of the economic, cultural and spiritual compatibility of these two ancient civilizations, but also of the fact that these aspects have penetrated the other country and even complement one another. There are numerous examples of this – from the epic history of the Great Silk Road to the equally impressive chronicle of how Buddhism spread across Eastern Asia. In essence, the consolidation of a China–India Heartland would not mean the creation of something fundamentally new, but simply the natural reunification of a torn Eurasia, the restoration of a recently lost continental unity.

Hence, there are objective prerequisites for the consolidation of a new Heartland. It is worth adding here that, while recognizing all the difficulties and tactical losses, such a consolidation would serve the long-term interests of both countries. The implementation of the joint China–India project would contribute to the stabilization of the geopolitical situation in the entire Eurasian space and open up fundamentally new opportunities for transcontinental cooperation in various fields.

It would not be out of place to draw a parallel with post-War Western Europe here, when the reconciliation between France and Germany led to the launch of European integration processes. In turn, it was ultimately France and Germany that benefitted most from this process: the political will and the willingness to compromise demonstrated by the leaders in Paris and Bonn paid off time after time in the following decades.

The numerous benefits of consolidating the Eurasian heartland are too obvious to not be a subject of contemplation on both sides of the Himalayas. Relations between Beijing and New Delhi have, for at least the past six decades, developed more along the lines of a rivalry than cooperation – and this rivalry has on more than one occasion turned into direct confrontation. Why is this the case? Could it be the subjective mistakes of the leadership? Personal ambitions of leadership? The underhand practices of internal forces? The tragic accidents of history? Or perhaps there are some objective “ force majeure circumstances” that stand in the way of a new Heartland coming together?

The Dimensions of the Eurasian Schism

Let us start with what everyone already knows – the two countries represent very different types of government. The differences between China and India today are greater than those between France and Germany 50 years ago. While China is much farther away from Europe than India, it is, on the whole, considerably closer in terms of being a nation state in the European mould. Despite the fact that there are a significant number of national minorities in China and substantial regional differences, ethnic Chinese (Han Chinese) are a single people and make up more than 90 per cent of the country’s population. Of the 34 Chinese provinces, including the autonomous regions and cities of central subordination, only Taiwan falls outside the vertical power system of governance, for obvious reasons.

India does not have a dominant national people. In terms of its ethnocultural and linguistic diversity, the Indian subcontinent does not resemble a separate European state or China, but rather the European Union as a whole. And in terms of religious diversity, the multi-structural nature of the economy and the regional disparities, India goes way beyond the whole of Europe put together. India is made up of 29 states and seven union territories, which exist in a state of complex political interaction. India is essentially a grandiose integration project in South Asia that is primarily turned inwards rather than outwards. If we stretch the analogies somewhat further, we can say that, as a single state, China has the same problems in its dialogue with the eclectic and insulated India that centralized Russia has in its interactions with the amorphous and insulated European Union.

Evidently, the historical trajectories of the two countries have also diverged greatly, especially over the past 250 years. India was a British colony, and the nearly 200 years of British rule left an indelible imprint not only on the country’s political system, but also on its culture. China, on the other hand, has never been colonized by a foreign country. While British democracy was a “system-forming” factor for independent India, communist China regarded the Soviet Union of the 1950s as a model to be emulated. Despite the fact that both countries have moved far from their original models of the mid-20th century, there are no grounds to suggest that their political or economic systems have drawn any closer.

In theory, the China–India partnership could even benefit from the fact that their political systems are so different: China would assume the main role in its interaction with various authoritarian regimes, while India would take the lead when it comes to developing ties with western liberal-democratic regimes. In practice, however, the dissimilarity of the systems hinders cooperation and, more importantly, mutual understanding. In is noteworthy that Beijing has found it far easier to establish relations with Moscow in the 21st century than with New Delhi, although the history of China–Russia relations is far more dramatic and controversial than the history of China–India relations.

Since China and India are the two largest countries in continental Asia, competition for natural resources, foreign markets, control of transport corridors and influence over common neighbours is inevitable. The close proximity of the two major powers gives rise to border disputes: the countries share 4000 km border, and the problem right now is not even about resolving territorial disputes, but merely about preserving the territorial status quo and preventing an escalation. The sides feel tempted to support various instruments of influence in each other’s territories. What is more, the question of what best meets the development needs of other Asian countries – Chinese socialism or Indian democracy – remains open.

Trade between China and India is growing at a rapid pace; however, both India and China are more focused on global markets than they are on each other. And for decades they have been purchasing the main resources needed for modernization – investments and modern technologies – from the West, often competing directly with each other for them. Bilateral trade remains asymmetrical, with Chinese exports to India far outweighing its imports from that country. Moreover, Chinese economic activity in India is far from always seen by the latter in an exclusively positive light.

A stable balance of powers between China and India in Asia is hindered by the fact that, right now, China is stronger than India both economically and militarily, and this asymmetry is likely to persist for the foreseeable future. A consolidated Eurasian Heartland would be less of an equal partnership than that of France and Germany in the second half of the 20th century.

India is still dogged by painful memories of the 1962 Sino–Indian Border Conflict. The model of Asia and a “closed” system is thus advantageous for Beijing, with China’s dominance in this system being in no doubt. For the same reason, New Delhi is interested in an “open” Asia, in which the asymmetry in the balance of powers between China and India could be compensated by introducing external players (who are, of course, on India’s side) into the mix.

The Interests of External Players

The interests of the United States in Asia are obvious and depend very little on the change of administration in the White House, although Donald Trump’s team has articulated these interests more clearly and more gruffly than its predecessors. Washington cannot but fear the consolidation of the European Heartland and will therefore continue to capitalize on the deepening contradictions in China–India relations. Naturally, it is trying to manage this process somehow without steering it towards a large-scale military conflict with unpredictable consequences.

Today we are witnessing an attempt by the United States to replicate the successful approaches of Henry Kissinger taken in the 1970s and to build a Eurasian geopolitical triangle. The difference is that the USSR is replaced by China, and China is replaced by India. This explains the increased attention of the United States to New Delhi and the persistent attempts to involve India in multilateral groupings that include allies of the United States that are located on the island periphery of the Eurasian continent, namely Japan and Australia (the concept of a “democratic Indo-Pacific”). If Washington had succeeded in achieving the sustainable institutionalization of these groupings in the form of a military-technical alliance similar to NATO, this would have created long-term guaranteed preventing the consolidation of the Heartland. However, at this juncture, any format of allied relations with Washington is politically unacceptable for the Indian elite, which is pushing for the preservation of the country’s strategic independence. What is more, India cannot sacrifice its continental Eurasian partners (primarily Moscow and Tehran) – not even for the sake of friendship with Washington.

The European Union is less interested in the preservation, much less the exacerbation, of the confrontation between China and India. Of course, the consolidation of the Heartland would present a serious challenge for Europe too, but one that is more to do with economics than geopolitics. The formation of a single Eurasian economic space would undoubtedly speed up the displacement of Europe as the economic centre of activity in Eurasia to Asia and reduce the role of the European Union in the Eurasian and global economies. On the other hand, China and India are two of the most promising foreign markets for the European Union, and the further development of these markets in line with the strategic interests of Brussels.

As far as the European Union is concerned, the main question is: On what basis can the consolidation of the Eurasian Heartland take place? Of course, Brussels would like to see Eurasian consolidation based on European standards, in compliance with European procedures and in line with European standards. The worst option for Brussels would be the gradual “economic absorption” of India by China and the implementation of the Eurasian integration process based on something that is entirely different from the European vision (for example, on the implementation of the One Road, One Belt initiative).

Russia’s interests in the various development scenarios for China–India relations are the subject of heated debates within the country’s expert community. On the one hand, it is often argued that maintaining tension in relations between Beijing and New Delhi makes Moscow a more valuable partner for both sides. Right now, Russia’s relations with China and India are better than those between China and India, meaning that it occupies the most advantageous position in this triangle. Based on this logic, we can assume that the consolidation of the Eurasian Heartland around the China–India axis would entail a further shift in the Eurasian centre of gravity towards the south of Russia’s borders. This would marginalize Russia even further as a participant in the Eurasian community.

On the other hand, it is safe to predict that attempts to capitalize on the contradictions between China and India will inevitably raise suspicions both in Beijing and in New Delhi, cause them to doubt the sincerity of Russia’s actions, etc. It is easy to imagine a situation in which Moscow will be unable to maintain its neutral position and be forced to choose between its two most important partners in Asia, and whatever choice it makes will inevitably entail major losses. Let us not forget that the escalation of the confrontation between China and India – a factor that stands in the way of the consolidation of the Heartland – would leave the door wide open for the United States, which is not likely to be among Moscow’s friends any time soon. Moreover, such an escalation is fraught with the risk of a major military conflict breaking out on the continent, and this would inevitably affect Russia’s security. To summarize the advantages and disadvantages of consolidation for Russia, the only reasonable conclusion is that the expected benefits of a consolidated Heartland clearly outweigh the potential costs.

Let us make it clear right away – whatever Russia’s role in the consolidation of the Eurasian Heartland, it will by no means be decisive. China–India relations have their own internal logic and their own dynamics that no external player (be it the United States, the European Union or Russia) can change. It would appear that, as the stronger party in these bilateral relations, China should go the extra mile to reduce suspicion and gain New Delhi’s trust. We could argue about what steps need to be taken and in what order, but this, strictly speaking, is not an issue for Russian foreign policy. However, this does not mean that Russia does not have a role in this most important issue.

Prospects

On December 1, 2018, an attempt was made on the side-lines of the G20 Summit in Buenos Aires to step up the activities of the mechanism of tripartite cooperation between Russia, China and India (the RIC countries) and resume the practice of regular high-level meetings after a 12-year hiatus. According to Vladimir Putin, these meetings should focus on various aspects of security and the fight against protectionism and politically motivated restrictions in international trade. Developing these ideas, Prime Minister of India Narendra Modi identified four possible areas for cooperation: regional and global stability, economic prosperity, the exchange of experience in areas of mutual interest, and cooperation on how to respond to emerging challenges. Similar thoughts were expressed by the President of the People’s Republic of China, Xi Jinping, who stressed the special responsibilities of the three powers to support regional and global stability.

In recent years, the RIC format has remained in the shadow of the more representative five-party cooperation structure that includes Brazil and South Africa (together, the five countries make up the BRICS association). Without belittling the significance of the latter two countries, it is worth noting that the geographical expansion of RIC into BRICS entailed certain institutional costs: the two non-Eurasian countries had their own tasks and priorities that differed from the agenda of the original Eurasian members. The fact that the last presidential election was won by Jair Balsonara, a far-right congressman, the so-called “Donald Trump of Brazil” raises a number of questions about the future of the five-party structure. In any case, it would surely be a grave miscalculation for Russian policy to “dissolve” RIC into BRICS completely.

In all likelihood, in the near future, tripartite summits will be held on the side-lines of larger multilateral events (G20 summits, BRICS, the Shanghai Cooperation Organisation, the Asia–Europe Meeting, etc.). However, if everything is limited to brief and infrequent interactions between leaders, statements of coinciding positions or even the signing of general political declarations, then this will do little in terms of the consolidation of the Heartland. It is necessary to articulate, in a frank manner, the existing differences with regard to the most serious problems facing Eurasia. The leaders of the three countries should focus on the problems that are standing in the way of consolidation of the Eurasian space.

At the same time, considering the fact that these trilateral meetings are inevitably short, the issues raised should be studied thoroughly beforehand by experts and the relevant ministries in the track 1.5 and track 2 formats and with a view to developing specific “road maps.” It is precisely the specifics that have traditionally been lacking in joint statements adopted at the end of the annual meetings of RIC foreign ministers. Another urgent task that could help solve the problem of trust between the Chinese and Indian militaries is the creation of a permanent tripartite mechanism for military consultations and the holding of regular military exercises.

A practical political trialogue could begin with an open discussion of such issues as the future of Syria and Afghanistan, which are of great importance for all three participants. Equally significant are the development of individual functional dimensions of the Eurasian Heartland – joint initiatives in the fight against terrorism, managing migration flows, food and energy security, issues of international information exchange and the development of artificial intelligence. It is from the widest possible set of such functional regimes, not from old or new rigid institutional blocs, that the new Eurasian Heartland should be built.

India and China are Arctic Council observer states. As one of the leading members of this organization, Russia could suggest to its partners that they discuss Arctic issues together so that none of them could have any suspicions about Moscow possibly harbouring a position on these issues that could be considered “pro-China” or “pro-India.”

And, of course, more active trilateral interaction on issues that go beyond the geographical boundaries of the Eurasian continent would serve as a powerful incentive for the consolidation of the Heartland. The future of multilateral arms control. The reform of the United Nations, the World Trade Organization and other global organizations. The development of international public law in the 21st century. Climate change and environmental issues. The management of technological progress. If Russia, China and India develop a united position on these and many other issues, it will carry far greater weight on the international arena than the individual opinions of each of these countries.

Ultimately, the Eurasian Heartland of the 21st century is not just a geopolitical, or a geo-economic concept. It represents, to a certain extent, common or similar views of leading Eurasian states on the future of the world order and a strategy for restoring manageability to a world that is coming apart at the seams. It is a joint sense of global stability and a common readiness to look beyond the narrow horizons of immediate national interests. It is only in the presence of such a community that the new Heartland can become the “axis of history” the illustrious father of British geopolitics and member of the Privy Council of the United Kingdom Halford Mackinder wrote about, albeit in an entirely different context and according to a completely different logic.

First published in our partner RIAC

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