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Sino-Indian tensions

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China and India- the world’s two most populous nations comprise more than one-third of global humanity. Memories of border battles — the most recent in 1962 — fester, and the 4,000-km frontier, which cuts through disputed territory, remains tense.

They share a border, have fought a bitter war and continue to compete for geopolitical supremacy in the region. Political ambitions and distrust on either side have sometimes been at the cost of better economic sense.

Both have a long and chequered history dating back thousands of years. The two neighbours fought a short border war in 1962 and since then, although much water has flowed down the Yangtze, a sense of mistrust has consistently dogged their bilateral ties. Both are shy of each other.

On the positive side, India has been cooperating with China in many areas. It was one of the first countries to join the China-led Asian Infrastructure Investment Bank. Besides, India and China are part of the BRICS, along with Brazil, Russia and South Africa. They have also teamed up at global forums on climate change to resist demands from developed nations to agree to binding emission cuts. China and India, however, fear that agreeing to binding emission cuts would force them to jettison their ambitious growth targets.

New Delhi is loath to take on Beijing directly. This is seen in the recent case of India cancelling the visa issued earlier to a Uighur activist, Dolkun Isa, the Executive Committee Chairman of the World Uyghur Congress to attend a conference in India. The granting of the visa to the Uighur activist was seen as New Delhi’s riposte to being snubbed by Beijing on the Masood Azhar issue. t has shown that New Delhi is wary of upsetting Beijing, especially given its enormous clout at international forums as a permanent Security Council member and NSG entry- both China has blocked.

India and China jointly occupy parts of Jammu Kashmir along with Pakistan. India now asks Pakistan to vacate and hand over Azad Kashmir to India but it has not asked China also do the same. The reason is obvious. In fact, it was Pakistan which always demanded Kashmir region from Indian occupied Jammu Kashmir while India refused to budge and in order to retain Kashmir India even fought war with Pakistan, leading to the creation of LOC. India first acquired nukes followed later by Pakistan, further complicating the tensed situation in the region and bilateral relations between India and Pakistan.

A UN veto member China is possibly the largest global economy while as largest South Asian regional economy India tries to somehow catch the distance. Between Beijing and New Delhi, nonstop flights only run three times a week. There is not a single direct flight between two of Asia’s financial capitals, Shanghai and Mumbai. In 2013, 175,000 Chinese went on holiday in India. Thailand, meanwhile, attracted 4.6 million Chinese visitors in 2014.

Tensions

The Indian government recently has expelled three journalists of the Chinese official news agency, Xinhua. This is the first time for New Delhi to expel Chinese journalists that could kick off a diplomatic row between China and India.

India’s military buildup near Chinese border also shows that the situation has become a tinderbox. It has been revealed that the Indian Army has moved over 100 Russian tanks T-72 to Ladakh, a disputed border between Indian occupied state of Kashmir and Tibet under Chinese rule. Both countries are preparing for the worst situation they could face in the midst of deteriorating relations. In addition, Indian Navy has sent three warships to the disputed South China Sea to plan training with Malaysian Navy, showing that there’s nothing strange with seeing any military conflicts between the two countries.

India thinks it should be on the UNSC with veto handle to control the world and is annoyed that China has not supported India’s pitch for permanent membership of the UNSC (United Nations Security Council) and is the only one of the P5 members trying to stymie India’s bid. Sparks flew when in the days leading up to India’s second round of nuclear tests in May 1998, the then Indian defence minister George Fernandes, termed Beijing as India’s “potential enemy No 1” worse than Pakistan or USA.

The stumbling blocks between India and China are hard to budge. China’s historic friendship with Pakistan hasn’t helped, nor has India’s decades-long hosting of the Dalai Lama, the exiled Tibetan spiritual leader living in India newly sworn in PM Modi invited to his inauguration in 2014. Then there are other issues too working against any credible ties to which NSG issue has been added last year to sustain the bilateral tensions. India seeks membership of NSG without signing the NPT. USA just pretends as a “terror victim” and strategic partner against terror wars, it promotes Indian interests in nuclear domains.

In recent years there have been attempts to mend and strengthen the relationship through bilateral visits from both heads of state. And while Indian manufacturers, like their counterparts elsewhere, complain about inexpensive Chinese products flooding the market, Indian consumers are lapping up everything from cheap Chinese phones and toys to clothes made in China.

India’s military buildup near Chinese border also shows that the situation has become a tinderbox. It has been revealed that the Indian Army has moved over 100 Russian tanks T-72 to Ladakh, a disputed border between Indian occupied state of Kashmir and Tibet under Chinese rule. Both countries are preparing for the worst situation they could face in the midst of deteriorating relations. In addition, Indian Navy has sent three warships to the disputed South China Sea to plan training with Malaysian Navy, showing that there’s nothing strange with seeing any military conflicts between the two countries.

The Indian government recently has expelled three journalists of the Chinese official news agency, Xinhua. This is the first time for New Delhi to expel Chinese journalists that could kick off a diplomatic row between China and India.

Fruitless effort

Narendra Modi made his first visit to China as Prime Minister of India in May 2014. One of his first stops will be the Wild Goose Pagoda in the central Chinese city of Xi’an, which, legend has it, was originally built to store first Chinese pilgrim to India in 7th Century Xuanzang’s Buddhist treasures from India.

Much before he became India’s prime minister, Narendra Modi was already a self-professed admirer of China. “China and its people have a special place in my heart,” Modi said in 2011 while he was on his fourth visit to the country as the Gujarat chief minister. “I admire their hard working, disciplined and resilient nature and above all, their sense of history.”

So, after he took control of the government in New Delhi last May, Modi wasted little time to try and strengthen ties with Beijing. Within days of taking office, he promptly invited Chinese president Xi Jinping to India. But by the time Xi arrived in September, the tricky nature of the India-China relationship was in full display: The Chinese president conducted a state visit in India while troops from both countries squared off in Ladakh.

Though relations between these two Asian behemoths warmed up in the aftermath of the visit of the Chinese President Xi Jinping to India in September 2014 and the visit of the Indian Prime Minister Narendra Modi to China in May 2015, the relations have once again hurtled downhill as they pursue their respective foreign policy agendas. Mutual trips by Indo-China leaders therefore have not been able to improve the tensed relations.

Through the “Maritime Silk Road” initiative, China has been trying to reach out to countries such as Sri Lanka and Maldives, right in India’s immediate neighborhood. Besides, of late, relations between China and Nepal have warmed up, particularly in the aftermath of the visit to Beijing by the Nepalese Prime Minister Khadga Prasad Sharma Oli. Although China has asked India to be part of the Maritime Silk Road, New Delhi is in two minds over whether to join owing to the suspicion of India and other nations. Moreover, China put a “technical hold” over India’s attempts to designate the Jaish-e-Mohammed chief, Maulana Masood Azhar, as a terrorist since New Delhi views him to be the mastermind behind a host of terror attacks in India, with the most recent being the Pathankot terror attacks in early January this year.

China accused Modi of “playing little tricks” over border disputes and security issues, hoping to boost his domestic prestige while increasing his leverage in negotiations with China and went on to criticize the Indian elites’ blind arrogance and confidence in their corrupt democracy, as well as “the inferiority of India’s ordinary people.”

Political economy

China is India’s largest trading partner and like with many other countries, this relationship too is imbalanced. Trade between the two countries has been expanding annually at 15 percent since 2007. The bilateral trade between the two countries stood at $70.4bn last year with India reeling under a huge trade deficit of $52.67bn. Unfortunately for India, so has its trade deficit with China. In the financial year 2016 that ended March 31, India exported a little over $9 billion worth of goods to China, while it imported goods worth $61.7 billion, taking the trade deficit to a whopping $52.7 billion. Therefore trade experts said India’s dependence on China for export oriented growth is limited.

India mainly exports raw materials to China such as cotton and copper and as the Chinese economy rebalances to become more consumer led, there will be a further fall in exports. This is evident from the 2015-2016 figures that show Indian exports to China fell by over 24 percent.. China is a huge market for Ayurvedic and agro products and IT services India is eager to expand there in a big way.

The bilateral trade hovers around $70 billion, less than half the dollar figure of commercial ties between China and Australia. When President Xi visited India last September, the trip was hailed as groundbreaking — the first time a Chinese President had stepped on Indian soil in eight years. Yet Xi’s visit resulted in an underwhelming $20 billion in promised Chinese investment over a five-year period. By contrast, Xi vowed $46 billion in infrastructure spending for ally Pakistan during a trip there last month. As Xi was in India, the Chinese People’s Liberation Army reportedly dispatched hundreds of soldiers past the Line of Actual Control to a remote section of the India-China frontier.

Over the past 13 years, 142 Chinese companies have invested a total of $27 billion in India in sectors such as automotive parts and consumer electronics, according to CII. Top Chinese companies investing in India include Huawei Telecommunications, ZTE, Alibaba and Xiaomi. During the same period, 139 Indian companies have invested $12 billion in China, largely in the software and Information technology (IT) services sector. Many small manufacturers are sourcing products as diverse as firecrackers and religious idols from China. During Indian PM Narendra Modi’s visit to China, 24 agreements worth $22 billion were signed between Indian and Chinese companies to finance and invest in projects across sectors.

Meanwhile, China’s relations with its “all-weather friend” Pakistan are at an all-time high, with Beijing announcing that it will invest $46bn in the China-Pakistan Economic Corridor, which will connect Kashgar in China’s Xinjiang province with the port of Gwadar in Pakistan.

Large Indian firms have traditionally been more interested in looking for mergers and acquisition in the West rather than investing in China. Dependence on China to fund the budget deficit is far more limited compared to some global peers. India’s total external borrowing as of the end of 2015 stood at $480 billion and the share of sovereign debt was just 19 percent with the rest made up of commercial borrowings and nonresident Indian deposits, according to government data.

Tourism is an area of cooperation and many Buddhists from China come to India while visiting the birthplace in neighboring Nepal of Shakyamuni Buddha, the founder of the religion.

American link

The relations between China and India are worsening rapidly as India supports US pivot in Asia against China. Unless the situation changes dramatically, the two countries could even go through armed conflict against each other. It would be no strange thing if this really happens, because they really went through armed conflict due to Sino-Indian border dispute in the early 1960s.

Part of the reason for the growing bonhomie between India and the USA is China’s growing belligerence. India and the USA say they have a common interest in ensuring the safety and security of the sea lanes of communication in the Indo-Pacific region which was reflected in the joint statement released by the two sides during the visit of the US President Barack Obama to India in January last year.

And under Modi, India has slowly, but surely, moved away from its traditional stance of non-alignment to multi-alignment. He has given a vigorous push to India’s “Act-East Policy” which aims at improving India’s ties with its neighbours in Southeast and East Asia. His first visit outside the Indian subcontinent after taking charge was to Japan, which has seen frayed ties with Beijing, of late.

The US-India Joint Statement notes that they “affirm the importance of safe-guarding maritime security and ensuring freedom of navigation and over flight throughout the region, especially in the South China Sea.”

Chinese leadership advocates free trade, while US President-elect Donald Trump and his team appear committed to carrying out an economic policy based on protectionism. Trump has repeatedly blamed free trade agreements for damaging the US economy. The US president-elect has announced that he will withdraw from the controversial Trans-Pacific Partnership (TPP)

Chinese President Xi Jinping warned Trump and any other country intent on pursuing protectionism against such policies in a speech at the World Economic Forum held in Davos, Switzerland. He compared such efforts to attempts to “divert a river into lakes and creeks” and said that it was not possible.

China will be hit the hardest if countries hide behind trade barriers and if globalization is seen as the root cause of all evil. While the shadow of a credit bubble looms large over its economy, China, driven by a low-wage, enormous workforce, has become the global factory for low-cost products which it badly needs to market. It must have noted Donald Trump’s protectionist rhetoric with horror.

Observation

The reason behind such confrontation between the two countries is not complicated. First, their disputed borders are the major cause of tensions between them. They even had a war against each other 50 years ago, but failed to make any progress on the border dispute. Besides, the gap between the positions of China and India over Tibet is wide. While China sees Tibet as one of its local governments, India sees it as a government in exile.

Other reasons such as China’s expanding footprint in Nepal and its ambition to keep Southeast Asia under its control are also driving the bilateral relationship to the gate of armed conflict. Perhaps, the relations between the two countries should pass the crisis in order to find a string of efforts for normalization.

The bilateral relationship cannot be very good unless the border dispute is solved. Yes, not just that. In order to facilitate the bilateral ties on a large scale, India has to solve the Kashmir issue as Kashmir nation lies between India and China.

China’s has opposed India’s entry into the 48-member grouping, which is one of the irritants in Sino-India ties. China on January 16 warned India’s entry into the Nuclear Suppliers Group (NSG) cannot be a “farewell gift” to the outgoing US President Barack Obama. Beijing’s reaction came after US Assistant Secretary of State for South and Central Asia Nisha Desai Biswal of Indian origin described China as an “outlier” in the process of letting India joining the nuclear trade bloc. “Regarding India’s application to the Nuclear Suppliers Group, regarding non-NPT countries admission to the NSG, we have made our position clear before so I will not repeat it,” Chinese Foreign Ministry spokesperson Hua Chunying said here. “I just want to point out that NSG membership shall not be some kind of farewell gift for countries to give to each other,” Hua said, obliquely referring to Obama who will be succeeded by Donald J. Trump. The US government, under Obama, has strongly backed India’s membership in the NSG, which regulates the global nuclear trade. Beijing objects to New Delhi’s inclusion in the bloc, citing rules that India’s non-signatory status to the nuclear non-proliferation treaty.

While it is unlikely that India will be a part of any Western-led attempts to bandwagon against Beijing any time soon, it also wants to ensure that Beijing does not seize the initiative in India’s backyard.

Of course, China is also preparing for the worst. According to military sources in Beijing, China has deployed more troop along the India border, showing off its will to respond immediately if the worst really happens.

India cannot take the foreign cricketers and badminton or other sports/entertainments coming to play joint sport exercises as a victory for foreign policy, after all, they come to play for money and they are trained to do exactly what the sponsors expect and the mafias want. Don’t the English cricketers now do exactly what Indian sponsors and government agencies want? Governments promote their sportsmen also to be top billionaires by all possible means.

India requires prudence and pragmatism in dealing with countries with different economic and political systems, like China and Pakistan, while core media in the country should shed extra elements of arrogance and over confidence.

East Asia

The nature of contemporary Sino-Pakistani relations

Syeda Dhanak Hashmi

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China has played a crucial role in maintaining regional peace and security by upholding its concept of an inclusive, cooperative and sustainable security. This has clarified the country’s stance on issues of regional concern, contributing to long-term stability and development in Asia, which includes the promotion of common development, building of partnerships, improvement of existing multilateral frameworks, rule-setting, military exchanges and proper settlement of differences.

To ensure long-term stability and prosperity of the Asia-Pacific, China has put forward a number of proposals that have been highly valued by the international community. To ensure common development is the fundamental guarantee of peace and stability, and the ‘master key’ to solving security problems. The China-proposed Belt and Road Initiative is not only a path of development but also a path of peace, as it will not only bring opportunities to the economic development of regional countries, but also provide ideas and solutions for them to solve security problems. The central theme behind the China-Pakistan Economic Corridor (CPEC) is to open new economic and trade avenues that would lead to the overall social and economic prosperity of the region. The fruit of this economic cooperation is a market far larger in scope than the one that exists because of economic conflict in the region. The envisaged economic route from Gwadar to Kashgar can serve as an alternative and economically shorter sea route instead of the far longer straits of Malacca. This has always been the most compelling reason for multilateral and regional cooperation.

Two of the most reputable theories that support the idea of regional stability, regional integration and strategic cooperation can be stated in terms of ‘economic opportunity cost hypotheses and ‘neo-functionalism’. The first theory assumes that trade and economic interdependence increases stakes amongst economically integrated nations and thereby reduces chances of conflicts erupting. Whereas the proponents of neo-functionalism are of the view that cooperation in one area produces cooperation in other areas. CPEC will pass through Gilgit-Baltistan in the north which will connect Kashgar in China’s western province of Xinjiang. Almost 80% of China’s oil is currently transported through the Strait of Malacca to Shanghai. The calculated distance is almost 16,000km and takes two to three months, with Gwadar becoming operational, the distance would be reduced to less than 5,000km. When fully operational Gwadar will promote not only the economic development of Pakistan but also serve as a gateway to the Central Asian countries.

Keeping in view the regional stability, Pakistan and India are both important neighbours for China which wants to promote trade with its neighbours. Pakistan is a victim of terrorism and that all countries were responsible for contributing towards the eradication of terrorism. But the brutalities of the Indian army in Indian-held Kashmir cannot be ignored here.

Pivot to Asia: Status quo or a challengerpower ?

Hence, regional integration is not possible as long as regional trade is sacrificed for so-called security. Pakistan needs to follow the Chinese model whose trade with India had crossed over $100 billion despite serious political issues between them. Some elements also fear that if there is peace in the region, it will challenge their predominance in the business of the state. Furthermore, the dimension of CPEC that is ignored is its potential to defeat terrorism in the region by raising and improving socio-economic conditions of the people. The Sri Lankan polity, at first divided over the role of China in the region, has come to recognize that the Belt Road Initiative approach fits well with Colombo’s goals of rebuilding a war-torn economy through enhanced connectivity. China also calls for improving regional security architecture to lay a solid foundation for enduring peace and stability in the region, and also calls on countries to properly handle differences and disputes to maintain the peaceful and stable environment in the region.

In the context of Pakistan, CPEC is often termed a game changer for the weak economy of Pakistan. The corridor project carries vital significance as it promises to elevate Islamabad’s economic growth. Unlike US aid, the Chinese aid to Pakistan has offered infrastructure and energy projects that would serve as a means to improve Pakistan’s economy. Despite the cheapness of land, Pakistan is lagging behind in connectivity which increases the trade cost. However, under the umbrella of CPEC the cost would be minimised and export incentives increased. Pakistan expects 4% of global trade. The kind of toll tax, rental fees that Pakistan will gain is roughly $6 billion to $8 billion by 2020.

A strategic and economic balance of power in the region would ensure peaceful resolution of conflicts but also enhance strategic stability leading to a win-win situation. Or by words of professor Anis H. Bajrektarevic: “Asia has to answer itself whether the newest concepts – such as the OBOR/CPEC vs. Indo-Pacific oceanic triangling – are complementary to its development or the heartland-rimland sort of dangerous confrontation. Asia needs a true multilateralism, not a hostage situation of getting caught in a cross-fire.”

The CPEC itself with its focus on Gwadar, has also given impetus to maritime cooperation between China and Pakistan, and beyond. Both states wish to enhance bilateral cooperation in the fields of maritime security, search and rescue, and the blue water economy. Thus, it would not be wrong to say that CPEC has the potential of accruing strategic cooperation. This approach serves as strategic enabler in a rapidly transforming world order. It is therefore the need of time to move from archaic geopolitical vendetta of 19th and 20th centuries to interstate strategic play in the 21st century.

The pursuit of a state’s national interest in the international arena constitutes its foreign policy. A successful foreign policy should employ a balance of economic, diplomatic, and military tools. It is the national interest that shapes the possibilities of state to behave collectively. Through a balanced foreign policy approach, the South Asian region can achieve its mega development projects and establish into a peaceful integrated region. Confidence-building measures between regional players is the first step in this direction to uplift the socioeconomic standards of the people of this region.

An early version of this text has been published by the China Daily

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East Asia

Freedom, Sovereign Debt, Generational Accounting and other Myths

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“How to draw the line between the recent and still unsettled EU/EURO crisis and Asia’s success story? Well, it might be easier than it seems: Neither Europe nor Asia has any alternative. The difference is that Europe well knows there is no alternative – and therefore is multilateral. Asia thinks it has an alternative – and therefore is strikingly bilateral, while stubbornly residing enveloped in economic egoisms. No wonder that Europe is/will be able to manage its decline, while Asia is (still) unable to capitalize its successes. Asia clearly does not accept any more the lead of the post-industrial and post-Christian Europe, but is not ready for the post-West world.” – professor Anis H. Bajrektarevic diagnosed in his well-read ‘No Asian century’ policy paper. Sino-Indian rift is not new. It only takes new forms in Asia, which – in absence of a true multilateralism – is entrenched in confrontational competition and amplifying antagonisms.  The following lines are referencing one such a rift.

At the end of 2017, Brahma Chellaney, a professor with the New Delhi-based Center for Policy Research, wrote an article titled “China’s Creditor Imperialism” in which he accused China of creating a “debt trap” from Argentina, to Namibia and Laos, mentioning its acquisition of, or investment in the construction of several port hubs, including Hambantota in Sri Lanka, Piraeus in Greece, Djibouti, and Mombasa in Kenya in recent years.

These countries are forced to avoid default by painfully choosing to let China control their resources and thus have forfeited their sovereignty, he wrote. The article described China as a “new imperial giant” with a velvet glove hiding iron fists with which it was pressing small countries. The Belt and Road Initiative, he concluded, is essentially an ambitious plan to realize “Chinese imperialism”. The article was later widely quoted by newspapers, websites and think tanks around the world.

When then United States Secretary of State Rex Tillerson visited Africa in March, he also said that although Chinese investment may help improve Africa’s infrastructure, it would lead to increased debt on the continent, without creating many jobs.

It is no accident that this idea of China’s creditor imperialism theory originates from India. New Delhi has openly opposed China’s Belt and Road Initiative, especially the China-Pakistan Economic Corridor as it runs through Pakistan-administered Kashmir, which India regards as an integral part of its territory. India is also worried that the construction of China’s Maritime Silk Road will challenge its dominance in South Asia and the Indian Ocean. Based on such a judgment, the Indian government has worked out its own regional cooperation initiatives, and taken moves, such as the declaration of cooperation with Vietnam in oil exploration in the South China Sea and its investment in the renovation of Chabahar port in Iran, as countermeasures against the Chinese initiative.

Since January, India, the United States, Japan and Australia have actively built a “quasi-alliance system” for a “free and open Indo-Pacific order” as an alternative to the Belt and Road Initiative. In April, a senior Indian official attending the fifth China-India Strategic Economic Dialogue reiterated the Indian government’s refusal to participate in the initiative.

The “creditor imperialism” fallacy is in essence a deliberate attempt by India and Western countries to denigrate the Belt and Road Initiative, which exhibits their envy of the initial fruits the initiative has produced. Such an argument stems from their own experiences of colonialism and imperialism. It is exactly the US-led Western countries that attached their political and strategic interests to the debt relationship with debtor countries and forced them to sign unequal treaties. China’s Belt and Road Initiative is proposed and implemented in the context of national equality, globalization and deepening international interdependence, and based on voluntary participation from relevant countries, which is totally different from the mandatory debt relationship of the West’s colonialism.

It is an important “Chinese experience” to use foreign debts to solve its transportation and energy bottlenecks that restrict its economic and social development at the time of its accelerated industrialization and urbanization. By making use of borrowed foreign debts, China once built thousands of large and medium-sized projects, greatly easing the transportation and energy “bottlenecks” that long restrained its social and economic development. Such an experience is of reference significance for other developing countries in their initial stage of industrialization and urbanization along the Belt and Road routes.

In the early stage of China’s reform and opening-up, US dollar-denominated foreign debt accounted for nearly 50 percent of China’s total foreign debts, and Japanese yen close to 30 percent. Why didn’t Western countries think the US and Japan were pushing their “creditor imperialism” on China?

Some foreign media have repeatedly mentioned that Sri Lanka is trapped in a “debt trap” due to its excessive money borrowing from China. But the fact is that there are multiple reasons for Sri Lanka’s heavy foreign debt and its debt predicament should not be attributed to China. For most of the years since 1985, foreign debt has remained above 70 percent of its GDP due to its continuous fiscal deficits caused by low tax revenues and massive welfare spending. As of 2017, Sri Lanka owed China $2.87 billion, accounting for only 10 percent of its total foreign debt, compared with $3.44 billion it owed to Japan, 12 percent of its total foreign debt. Japan has been Sri Lanka’s largest creditor since 2006, but why does no foreign media disseminate the idea of “Japan’s creditor imperialism”?

In response to the accusation that China is pursuing creditor imperialism made by India and some Western countries, even former Sri Lankan president Mahinda Rajapaksa wrote an article in July using data to refute it.

Most of the time, the overseas large-scale infrastructure construction projects related to the Belt and Road Initiative are the ones operated by the Chinese government and Chinese enterprises under the request of the governments of involved countries along the Belt and Road routes or the ones undertaken by Chinese enterprises through bidding.

It is expected that with the construction of large-scale infrastructure projects and industrial parks under the Chinese initiative, which will cause the host country’s self-development and debt repayment ability to constantly increase, the China’s creditor imperialism nonsense will collapse.

An early version of this text appeared in China Daily

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East Asia

Arrogance of force and hostages in US-China trade war

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Even before the ink on the comments made by those who (just like the author of these lines) saw the recent meeting between US President Donald Trump and his Chinese counterpart Xi Jinping in Buenos Aires as a sign of a temporary truce in the trade war between the two countries had time to dry, something like a hostage-taking and the opening of a second front happened. The recent arrest in Canada under US pressure of Meng Wanzhou, the chief financial officer of China’s telecommunications giant Huawei, is unfolding into a full-blown international scandal with far-reaching consequences.

Meng Wanzhou faces extradition to the United States where she is suspected of violating US sanctions against Iran, namely by making payments to Tehran via the UK branch of the US bank HSBC. The question is, however, how come someone is trying to indict a Chinese citizen according to the norms of American law, and not even on US territory to boot?

China’s reaction was extremely tough with Deputy Foreign Minister Le Yucheng summoning the Canadian and US ambassadors in Beijing and demanding the immediate release of the detainee, calling her detention “an extremely bad act.” First of all, because this is yet another arrogant attempt at extraterritorial use of American laws.

Other countries, above all Russia, have already experienced this arrogance more than once; suffice it to mention the cases of Viktor Bout and Konstantin Yaroshenko, or of the alleged “Russian hackers,” who, by hook or crook, were taken out to the United States to face US “justice”.

Enough is enough, as they say. Russia’s Foreign Minister Sergei Lavrov, who is usually careful in his choice of words, said that while Russia is not involved in the US-China trade war, it still regards Meng’s arrest as “another manifestation of the line that inspires a rejection among the overwhelming majority of normal countries, normal people, the line of extraterritorial application of their [US] national laws.”

“This is a very arrogant great-power policy that no one accepts, it already causes rejection even among the closest allies of the US,” Lavrov said. “It is necessary to put an end to it,” he added.

One couldn’t agree with this more. But first, I would like to know who really is behind this provocation, even though China’s reaction would have been much anticipated. The arrest of Meng Wanzhou sent US markets into a tailspin and scared investors, who now expect an escalation of the trade war between the United States and China.

The point here, of course, is Washington’s displeasure about Huawei’s activities, with The Wall Street Journal reporting that the US Justice Department has long been conducting a probe into the Chinese company’s alleged violation of US sanctions against Iran.

There is more to this whole story than just sanctions though. The US accuses Huawei (as it earlier did the Chinese ZTE) of the potential threats the company’s attempts to use tracking devices could pose to the security of America’s telecommunications networks. The United States has demanded that its closest allies (primarily Canada, the UK, Australia and New Zealand, with whom it has set up a system for jointly collecting and using Five Eyes intelligence) exclude 5G Huawei products from their state procurement tenders.

I still believe, however, that the true reason for this is not so much security concerns as it is a desire to beat a competitor. Huawei has become a world-renowned leader in the development and application of 5G communications technology, which looks to the future (“Internet of Things”, “Smart Cities”, unmanned vehicles and much more.)

Since technology and equipment are supplied along with standards for their use, there is a behind-the-scenes struggle going on to phase out the 5G standard developed by Huawei from global markets.

As for the need “to put an end to this,” the big question is how. Formally, detainees are extradited to the United States in line with national legislation, but at Washington’s request (which often comes with boorish and humiliating pressure from the US authorities and is usually never mentioned in public).

Add to this the US Congress’ longstanding practice of changing, unilaterally and at its own discretion, already signed international treaties and agreements as they are being ratified – another example of “arrogance of power” as mentioned before.

The question could well be raised at the UN Security Council, but its discussion is most likely to be blocked by the US representative. However, there is also a moral side to the assessment of any political practice the work on international legal norms usually starts with.

If China and Russia, as well as other countries equally fed up with the “arrogance of power” submit a draft resolution “On the inadmissibility of attempts at extraterritorial use of national legislation by UN member states” to the UN General Assembly, it would most likely enjoy the overwhelming support by most of the countries of the UNGA, maybe save for just a dozen or so of the most diehard advocates of Washington’s policy…

First published in our partner International Affairs

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