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China’s Neo Mercantilism and Sino-Pak Strategic Relations

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The economic reforms of 1978 in China brought about an increase in its Foreign Direct Investment (FDI). Following the neo mercantilist policies it has encouraged the free trade wherein the Chinese firms introduced themselves and opened up to the international markets. Although the central government gave some relaxation on some of the industrial products but there are still state owned enterprises in large numbers. Better educational plans, export/import controlled regimes, and Chinese engagement in FTA with different South Asian countries including Pakistan are the contributing factors in the Chinese economic strides. Today China’s top trade commodities are textile, technological equipments and machinery, organic chemicals, iron, steel and other products. According to an estimate China earned $10.36 trillion GDP growth in the fiscal year 2014.In the mid of year 2015 China’s trade surplus was worth $59.49 billion achieving favorable amount of 70.9 hundred million as balance of trade.

It is to be understood that the Chinese neo mercantilism in not harmful for the developing countries and under developed regions of the world although there is a lot of criticism on China’s economic policies. It is one of the core assumptions of neo mercantilism, which addresses that along with the economic development of a state it emphasizes on the world economic development. Neo mercantilism promotes the regional organizations and markets. It’s a broader platform. Hence in the light of that it can be assumed that the Chinese investment projects are going to be beneficial for Pakistan as well as for China. China receives a positive response that encourages it for investment abroad because most of the investment is done for providing better conditions of infrastructure, roads, bridges, energy sector, railway projects etc. It not only benefits China by providing Chinese contractors business, but it is also helpful for creating job opportunities in Pakistan and for its economic growth .The purpose behind neo mercantilist policies of China is that China itself is running through the process of development. So it encourages doing business in different parts of the world because overseas economic relations are mutually beneficial for China’s home markets and other countries.

Similarly, China’s neo mercantilist approach should not be seen as harmful for Pakistan’s strategic relations specifically within the context of Sino-Pak strategic partnership .Both countries are enjoying trustworthy strategic relations whereas for past one decade there has been a lot of improvement in the economic relations as well. China believes in regionalization through promoting regional trade and interaction with business community. China’s active role in regional organizations like SARRC, ASEAN, and SCO is meant as part of its efforts to bring economic stability for the whole South Asian region.

Another aspect of neo mercantilism is that it puts emphasis on increasing the exports and decreasing the imports.  According to the estimates collected from the UN Comtrade Database and United Nations Comtrade Statistics and International Trade Centre (2016) by 2013 the trade volume between China and Pakistan increased over $12 billion. In 2000 Pakistan’s exports to China were $244.65 million and in 2004 and 2005 it reached $300.53 and $435.68 million respectively. While Pakistan’s imports to China in 2000, 2004 and 2005 were $550.11, $1488.7 and $2349.3 respectively. The overall volume of Pakistan’s imports and China’s exports is more than Pakistan’s exports and China’s imports. It might appear that China through its mercantilist policies is only increasing the level of exports but the reality is that it is simultaneously providing business to Pakistan. As per the official records, in 2006, the percentage of Pakistan’s export to China after free trade agreements was $506.64 million i.e. around 6% of what?.And Pakistan’s share of total import to the world was 7%. Similarly in 2012 exports to China were 30% and percentage of share to world was 27%. While Pakistan’s imports in 2006, and 2012 were 9% and 20% whereas total share to the world was 11% and 18% respectively. It shows that Pakistan is doing most of its trade with China, and Chinese companies are providing Pakistan a good business. Hence it surely is proving beneficial for Pakistan. The amount of this trade balance increased after Pakistan’s FTA with China. At the same time Chinese neo mercantilist policies are bringing developments for Pakistan’s as well as for its own trade enlargement.

There is no denying the fact that China is one of the world’s largest economies and it is hoped that Pak-China economic collaboration will bring economic stability in South Asia and will make Pakistan a regional hub of trade activities. Currently China has started about 22 projects in Pakistan including reconstruction of Karakorum highway, heavy machinery complex, tank and aircraft building, and the mega project of Gwadar Seaport under the umbrella of CPEC (China Pakistan Economic Corridor).  CPEC being a flagship project of China’s BRI strategy  includes Chinese investment of about $52 billion from deep seaport Gwadar to civil energy agreements, infrastructure and road projects. This will enhance trade and commercial opportunities for Pakistan. Moreover about 10,000 MW of electricity will be generated when it is completed by the end of 2018.

Eventually China’s neo mercantilist policies are a source of regional economic integration and the BRI will bring the countries economically more close to each other in a network of interdependence. The CPEC will be especially a major project of China’s Vision of BRI and will make Pakistan a boon for economy and a source for FDI. Already according to Board of Investment, Pakistan’s expected net foreign direct investment (FDI) has had a jump of about 60 percent in 2017/2018. Hence it can easily be interpreted as a project of mutual interests and collective benefits and by no means the CPEC should be viewed as  another East India Company.

Qura tul ain Hafeez has done M Phil in international relations from Quaid-I Azam University Islamabad. She is currently working as a Research Associate at Strategic Vision Institute Islamabad. She can be reached at Quraathashmi[at]gmail.com

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Politicizing the COVID-19 pandemic and Xi Jinping’s vision to reshape the new world order

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First: The internal and external strategic objectives of Comrade Chinese President “Xi Jinping“, in parallel with the international partnerships and relations of the Communist Party of China “CPC” around the world

Second: The recognition of Chinese Comrade President “Xi Jinping” before the leaders and youth of the Central School of the Communist Party “CPC” of the profound global changes post (Covid-19) world

Third: The relationship between the global achievements of the Communist Party of China, and the Chinese President, Comrade “Xi Jinping” call for establishing an international multipolar world, and the politicization of the “Covid-19” pandemic in the USA and the West

Fourth: The relationship between the outbreak of the Coronavirus pandemic and the test the (new global governing systems and global governance) from the Chinese perspective

   The Egyptian researcher was invited as an expert in Chinese and Asian political affairs, by the “Friends of the International Chinese Belt and Road Initiative Forum” in the Pakistani capital “Islamabad”, on Friday, September 10, 2021, to talk about:

  “Politicizing the origin of the COVID-19 pandemic and linking it to China, and the reasons behind this matter“, in a meeting that was intensively covered by the international media, in several international, Chinese and Asian websites, newspapers and news agencies, in reference to the importance of this event for Beijing.

   In fact, it is not possible in any way to separate the attempts of the United States of America and the West to distract China towards achieving its primary goal of (building a multipolar, multilateral world and international poles), and the vision of Comrade Chinese President “Xi Jinping” on (reshaping the world order and makes it more compatible with Chinese interests and values).

   Where China’s leaders see that the liberal international system reflects the (global vision of the white colonial powers victorious in the Second World War), which it created to serve their interests at the headquarters of the United Nations “UN”.  Accordingly, Comrade “Xi Jinping” has formulated a strategy for China consisting of (two points), as follows:

  1. China is increasing its power, personnel, and financial influence within existing global governing institutions.
  • At a time when China’s leaders, on the other hand, must work on (building new institutions centered around China), such as:

(Belt and Road Initiative, Asian Infrastructure Investment Bank, Silk Road Fund) … besides, some other relevant Chinese international institutions.

– Hence, the Egyptian researcher sought to draw attention to the “real reasons behind the principle of politicization of the origin of the “COVID-19″ pandemic, and its relationship to China’s international achievements”, through the following division:

– First: The internal and external strategic objectives of Comrade Chinese President “Xi Jinping”, in parallel with the international partnerships and relationships of the Communist Party of China “CPC” around the world

  China has developed a comprehensive plan that the United States of America and the West tried to obstruct, in order to prevent China from internationally rising. The most important successes of China internationally are represented, by:

1) The ruling Communist Party of China has sought to establish international partnerships and party relations under the supervision of the senior and central leaders of the party, which is known as, the strategy of the (relationship between the Communist Party of China “CPC” and the other international parties), as an important part of the Chinese long-term strategy.

2) The Communist Party of China has internally developed a plan adopted by itself, represented in the (realization of the original goal of seeking the happiness of the Chinese people and the renaissance of the Chinese nation, as well as the unity of the world).

3) The Communist Party of China, in cooperation with the international parties with the same ideological thought and even intellectually opposite with it, seeking to the (commitment of achieving consensus and mobilizing the international forces to build a new China).

4) The Chinese President, Comrade “Xi Jinping“, raised an important international Chinese slogan with many connotations, represented in:

“The world is common to all, and we are a nation with one common destination for humanity”

5) In order to achieve these Chinese priorities externally, the Communist Party “CPC” and its Committee on Foreign Communications and external Relations of the “CPC” worked in parallel and in line with the “Chinese Ministry of Foreign Affairs”, as an official institution together, through the (strategy of the Communist Party of China to deepen exchanges and cooperation with international political parties, and give full play to the for the advantages of contacts between the various political parties with the Communist Party in Beijing), in response to the call of the times to build a community of a shared future between China and the world, especially African, poor and developing countries.

6) Chinese President “Xi Jinping” was keen to (confronting international hegemony and unilateralism by Washington), and President “Xi Jinping” in his capacity as “General Secretary of the Communist Party of China”, stressed that “the fate of the world should be controlled by all countries on an equal footing, as international rules should jointly be formulated by all countries, and all countries of the world together manage the various affairs of the world”

7) Indeed, the senior communist leaders in Beijing have succeeded in transforming this global economic strategy into a (trustworthy support for the votes of the members of the Group of 77 in its favor in various forums, and at all known international parties).

8) To achieve the previous priorities, President Comrade “Xi Jinping” personally supervised the (transformation of the People’s Liberation Army from an institution based on the Continental Defense Army into a force to project power and influence beyond China’s borders), through the expansion of (navy, air, cyberspace capabilities and satellites). Here, Comrade Xi’s stated mission is to “build a world-class military institution to fight and win wars” in the post (Covid-19) world.

9) We also find the continuation of Chinese national efforts aimed at transforming China into a (technological superpower), imposing its global power and technical progress on (fifth generation networks of communications, semiconductors, supercomputing, and artificial intelligence).

10) The Chinese President, Comrade “Xi Jinping“, and the leaders of the Communist Party of China, supported what is known as the “sovereignty of the Chinese people”, as the (first priority). The Communist Party “CPC” officials and Comrade “Xi”, in their political speeches, considered that:

“The position of the Chinese people is the basic political position of the Communist Party, making sincerely serving the Chinese people the basic objective of the Party, realizing the people’s aspirations for a better life, due to their constant pursuit and struggle, and promoting reform and development to achieve greater benefit and better well-off of living for all”

 Thus, the Communist Party “CPC” has always and along the way won the support and support of the masses of the Chinese people.

11) Many Western researchers, experts and academics themselves confirmed that the goals and endeavors of the Communist Party of China at every stage are very clear, and it adjusts its policies, according to the changing domestic and external situations in order to meet the needs of the Chinese people, and here, we can indicate out to a (research report issued by Kennedy College of Government at Harvard University) in 2020, which showed that:

“The Chinese government, led by the Communist Party of China, enjoys more than 93% of support and satisfaction among the Chinese people”, as another survey conducted by (York University in Canada), which is showed that:

“The Chinese people trust their government by up to 98%, and that trust has increased, especially after the emergence of Covid-19”

12) The Chinese President, Comrade “Xi Jinping”, and the Central Committee of the ruling Communist Party were also keen on deepening (belonging and unity) among the Chinese people, with Comrade “Xi’s affirmation” that:

“History’s journey has no end, but the future has already begun”

13) The “anti-corruption campaign” led by Comrade “Xi Jinping” in the Chinese interior, which was dubbed “Tigers and Flies“, included more than one million senior and junior officials of the Communist Party of China.

14) In order to achieve China’s goals internationally, the Chinese leader “Xi Jinping” presented his vision of the (future of China), which he called as the “Chinese Dream“, within the framework of a project entitled: “Rebirth of the Chinese Nation“, and succeeded in carrying out economic reforms that contributed to reducing the decline in economic growth, limiting state ownership of industry, combating pollution, and most importantly implementing the giant land transport project, known as the “Silk Road Initiative”

   Hence, China’s global achievements and its call for a multipolar international world made it as a primary target for attempts to obstruct it by the United States of America and its allies in the West.

Second: The recognition of Chinese Comrade President “Xi Jinping” before the leaders and youth of the Central School of the Communist Party “CPC” of the profound global changes post (Covid-19) world

   President “Xi Jinping’s realization” of the importance of (political education for Chinese youth) in the post (Covid-19 world), came as Comrade “Xi” affirmed to the youth and leaders of the Communist Party, that the most important reason for China’s success and steadfastness now is to work together on the necessity of mobilizing leaders and the youth of the Communist Party of China and its president with the (Network of Friends around the World), because of those current profound international changes that the world is going through now, through the following affirmations:

1) President “Xi Jinping” believes that there is a “politicized war” against China, as a result of the changes that the world is currently witnessing, by saying:

“The world is currently undergoing profound changes that have not been seen in a century and is rapidly evolving after the Coronavirus pandemic”

2) Comrade “Xi Jinping’s affirmation” of the profound indications for the global changes came in his speech before the (Central Institute of the Communist Party), which is an educational institute of the Central Committee of the ruling Communist Party, as a signal from him to keep pace with the Communist Party of China with current international events.

3) In the same context, the Chinese President, Comrade “Xi Jinping”, confessed that:

“China is bothering with its international stances”

4) The most dangerous message of the Chinese President was what came from Comrade “Xi’s affirmation” before the leaders and youth of the Central School of the ruling Communist Party, about:

“China must not budge one iota on matters of principle, and adhere to China’s sovereignty, security and development interests with unprecedented firmness”

5) In the context of “Xi Jinping’s keenness” to pay attention to the Chinese youth to lead the Chinese nation, Comrade “Xi”, called:

“Young officials should uphold their ideals, adhere to the party’s loyalty, seek truthfulness from reality and facts, shoulder responsibilities, and strive to become the backbone of a society in which the Party and the people will trust together”

6) In the context of Chinese President “Xi Jinping’s assertion” that: “China strongly confronts any attempts against it”, emphasizing “China’s military and economic renaissance, as matters, according to Comrade “Xi Jinping” that are “irreversible”, and stressed out these points in his international speech, which was globally highlighted, on the occasion of the centenary of the founding of the Communist Party of China on July 9, 2021.

7) Believing in the role of the “Chinese people” in the struggle against Washington and the West and their attempts to distort China’s international image, President “Xi Jinping” addressed in front of crowds of Chinese audiences in the “Tiananmen” famous Square, location in the center of the Chinese capital, “Beijing”, with the affirmation led by “Xi” in his speech to the Chinese masses, by confirming that:

“China does not oppress other countries”

8) Chinese President “Xi” also warned that “no one should try to “persecute China”, saying:

“They beat their heads against a steel fence”

9) What stopped the Egyptian researcher most during Comrade “Xi Jinping’s discourse” to the Chinese masses on the occasion of the centenary of the Communist Party of China, while the Comrade “Xi’s affirmation” of his rejection of foreign attempts to distort the image of the Communist Party of China.

10) Today, Comrade “Xi Jinping” is keenly to internationally talk about the (role of the Communist Party in the modern history of China), by saying:

“The Communist Party of China has an essential part to the growth of the Chinese state, and attempts to separate it from the people will fail”

11) We find Comrade “Xi’s affirmation” of the necessity of (unification and the unity), as the only way that can (save China), and is capable of achieving the “development in China” in both of the internal and external side.

12) In the context of attempts to politicize the “Covid-19” pandemic, and stigmatize China with it, Comrade “Xi Jinping” confirmed that:

“We will never in China allow anyone to bully, oppress or subjugate China”

13) In a reference by “Xi Jinping” to the strength of the Chinese people in defending of their ruling Communist Party, his assertion came that:

“Anyone who dares to threaten China, its leaders and its ruling Communist Party, hits their head at the mighty steel wall represented by more than 1.4 billion Chinese citizens”

   Thus, we can understand the overall current international situation, that the increase in the intensity, strength and fierceness of the American-Western competition, in the face of China and the attempt to mobilize certain regional and international parties against each other, especially after the outbreak of “Covid-19“, which has contributed to the deepening of the global differences and the intensification of conflicts. So, China has repeatedly accused unfair forces of trying to curb its growth, and these statements were taken as an explicit and clear Chinese signal to Washington in the first place.

Third: The relationship between the global achievements of the Communist Party of China, and the Chinese President, Comrade “Xi Jinping” call for establishing an international multipolar world, and the politicization of the “Covid-19” pandemic in the USA and the West

  Chinese President Comrade “Xi Jinping” has repeatedly warned against “politicizing the issue of the COVID-19 virus” or stigmatizing it as the Chinese virus. In his international political discourses, he has explicitly pointed out that:

1) Refusing to marginalize or exclude others or certain countries from working with the international community, by the call of Comrade “Xi” in his speeches on:

“We must reject the attempts to build blocs to exclude others and oppose the zero-sum approach. We must view each other as members of the same large family, continue to win-win cooperation, transcend those ideological differences and not fall into the trap of clash of civilizations”

2) Comrade “Xi Jinping” linked as well the relationship between the Coronavirus pandemic and the current international concepts, by emphasizing in his political discourses, about:

“The COVID-19 pandemic reminds the world that we are living in a global village that is interconnected and has a common interest, in which all countries are closely linked and share a common future”

3) In an important speech by President “Xi” at the (Annual Boao Forum for Asia) in April 2021, Comrade “Xi Jinping” criticized the efforts of countries that aimed at “building barriers” or “separating countries from others and dividing the world into warring or conflicting fronts”. Here, Comrade “Xi Jinping” has asserted on:

“Dividing the world into many competitors and building barriers between nations without working together or adopting the principle of common destiny of humanity will inevitably harm others and completely will not benefit anyone”

4) President “Xi Jinping’s long-standing call” for “reform of global governance” came to better reflect a broader and more diverse range of visions and values ​​from the international community, including their own, rather than those of a few major countries. This was as expected has rejected by Washington that has deeply warned of achieving the Chinese objectives, and the American officials have been claiming that:

“USA is a leader of the libral democratic values ​​in the world, and is globally leading the paths of defending human rights”

5) Comrade “Xi Jinping’s statements” at the “Boao Forum for Asia“, in April 2021, confirmed the purpose of his calls for a (new world order), because:

“The world wants justice, not hegemony”

6) Here, Comrade “Xi”, along with the leaders of the Central Committee of the Communist Party of China, are keen, in all international events, to emphasize that:

“The big country must appear with an international appearance worthy of it, with its ability to assume more international responsibilities”

   We can understand and conclude from this above understanding that the Chinese President, Comrade “Xi Jinping” was keenly to referring to the concepts of “hegemony, unilateralism and isolationism”, besides the other related terms, but Comrade “Xi” didn’t mention or refer to a specific country in his statements or all of his political speeches, but the Chinese officials have recently explicitly referring to the American “hegemony”, in a public criticism of Washington’s imposition of its power and influence in trade and geopolitics in an unfair manner that harms the interests of other countries.

Fourth: The relationship between the outbreak of the Coronavirus pandemic and the test the (new global governing systems and global governance) from the Chinese perspective

   The Chinese President, Comrade “Xi Jinping“, has called in all his current political discourses on the need to work to establish “international economic blocs” that work for the benefit of developing countries, a multipolar system and a multilateral international world, which is directly and reflected largely in the “increased American competition in the face of  China, and the attempt by Washington and its allies in the West to politicize the origin of the Coronavirus, by calling for its stigmatization and appending it to China“.

  Washington’s attempt to turn the world against China by causing the spread and outbreak of the Coronavirus pandemic, which was documented by Chinese President “Xi Jinping” in his political speeches, through the following points:

1) President “Xi’s admission” that the world’s ruling systems are the main criterion for their success in combating the global epidemic, certainly came in an international speech to him, by stressing out:

“The spread and spill over of “Covid-19″ is a major test of the ability of countries’ governance systems to withstand or decline, and a test of the global system of governance”

2) Comrade “Xi” goes extremely beyond, by calling for a “global governance system”. China developed its philosophy and features, through “Xi’s emphasis”, on:

“The global governance system must adapt to evolving global political and economic dynamics, as an attempt to face the global challenges and adopt the fundamental direction of peace, development and win-win cooperation”

3) Comrade “Xi” was also keen to set clear moral standards that guide China’s relationship with the world, and the world’s relations with each other, by calling:

“Countries must not violate ethical standards and comply with international standards, provide the global public good, bear due responsibilities and be in the good faith of their citizens”

4) In the talk of Comrade “Xi Jinping” about the (relationship between the current global economic system and the Corona pandemic), Comrade “Xi Jinping”, indicated that:

“The spread of COVID-19 reminds the world that economic globalization is an indisputable fact and a historical trend”

5) In order to achieve the success of any governmental system or political system, President “Xi” has stressed the need to adhere to the following criteria, as:

“We must strike an appropriate balance between government and market, equity and efficiency, growth and income distribution, technology and unemployment, to ensure full and balanced development that benefits people of all countries, sectors and backgrounds in an equitable manner”

6) Here, we find that what was and still angers the United States of America and the West the most against Comrade “Xi Jinping” is his call that:

“We must continue open and inclusive development, commit to building an open world economy, and support the multilateral trading system with the “World Trade Organization” “WTO” as the cornerstone”

7) Here, we find that China’s attempt to create and strengthen regional and international ties, by strengthening its relations with countries within (collective frameworks), each of which is specialized in a specific region, such as: (ASEAN Organization, Shanghai Cooperation Organization), and others. In the sense that these institutions are working to create (parallel frameworks) for those on which the current international system is based, which is dominated by the United States of America with the help of its allies, which has provoked the United States of America with the continuation of Chinese calls and efforts to have a “central leadership role in a new pluralistic international system”, in order to globally extend its influence.

8) With the increasing calls of Comrade “Xi Jinping” for Chinese involvement in the international multilateral issues, from here, China found it in its interest to call for new global regimes, in order to enhance its international standing, thus China contributed to reaching a “climate agreement“, and increased its efforts in confronting the multiple international issues, such as: (confronting poverty, the spread of epidemics, all global and development efforts), and other related mechanisms, which aroused the ire of the United States of America by inviting China to lead the international efforts in the field of global governance systems and to develop a preliminary vision for the shape of new systems of governing institutions and Governance, which are mainly for (labor and management), additionally the peacekeeping efforts are under the direct supervision of the United Nations “UN”.

9) In an understanding from China of the reality of the current international situation in the post (Covid-19) world, the Chinese comrade “Xi Jinping”, has confirmed by saying:

“China’s situations may have been negatively affected by the global ordeal of the outbreak of “Covid-19″, but China is not in a hurry to transform itself into a great power, but rather announced that it has three decades to reach, and the future is still open for it to achieve this possibility”

10) China is currently working to deepen several other goals, through which it sees that:

“The best way to enhance China’s international standing is to safeguard the interests of the largest number of countries, strengthen the foundations of economic dependability, and stress out on achieving the mutual benefits of relationships among the different nations, not just their own interests”

11) For achieving the above-mentioned objectives, China, through the (International Belt and Road initiative “BRI”), has implemented infrastructure projects in multiple countries, established road and railway networks, and built electricity and water plants, which makes it easier for it to globally promote its call in “multi-polar world“.

   China has focused its efforts to be the “largest trading partner of many Asian and African countries”, facilitating its international efforts to establish a new administrative system, known as: (Global Governance and Managing Political Systems from a mainly Chinese perspective), which greatly angers Washington and its Western allies.

   Through the previous analysis of the Egyptian researcher, we note that “by comparing the American strategic goals with their Chinese counterparts and their development initiatives around the world”, the United States of America shows its achievements by being the (maker of peace through force and not peace), the call for a new Middle East, and a unilateral climate agreement, and others.

   Perhaps this is what was actually put forward by the speech of the former President of the United States of America “Trump” when he spoke about the “achievements of the United States of America internationally in confronting China“, during the (deliberations of the seventy-fifth session of the World General Assembly of the United Nations “UN”), and from here, it becomes clear to us the difference between the Chinese initiatives of development to serve (global development goals), and among those American goals that support the use of force, with their failure to use it effectively, as happened in (Afghanistan and Iraq), and others.

   Hence, the attempts of the United States of America to stigmatize the “pandemic of the Coronavirus” and attach it to China, by confusing the “scientific reasons for the causes of the global outbreak of the pandemic, and those real underlying political, economic and strategic reasons behind the principle of American and Western politicization of Covid-19”, mainly aims to:

“Distracting Chinese attention away from those American international problems and crises by raising the world against China and paying attention to it for causing the spread of the Corona virus, so that the United States of America is unique in leadership on the international scene within the framework of international hegemony and unilateralism”.

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The war and the treaty that proclaimed Japan’s emergence as a world power

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September 5 marks 116 years since the end of the Russo-Japanese War, with the signing of the U.S.-mediated Treaty of Portsmouth. Fought in the beginning of the 20th century, it has a unique place in history, as the warring sides fought over the territory of two neutral states China and Korea and it also saw a European power being defeated by an Asian power for the first time in the modern era.

The Background

1904-05 was a tense period in the history of Asia. The story begins a few decades back when the island nation of Japan emerged from over two-and-a-half century of isolation, following the Meiji Restoration of 1868. In the next three to four decades, the country would undergo a rapid modernisation of its society, army, navy, and industry, with the adoption of Western methods and standards. The Russian Empire which already had control over Siberia was looking to expand further into East Asia, particularly towards the east of River Amur which would give them outlets of warm-water ports in the Sea of Japan, also known as the East Sea, and thereby in the Pacific Ocean. Since the 1850s, Russian urban settlements appeared along the left bank of River Amur, despite protests from a weakening Qing China.

Owing to the domestic turmoil in the backdrop of the struggle against British and French aggression and the Taiping Rebellion, imperial China was not in a position to resist Russian power. Finally, China was forced to cede to Russia all the territory from the mouth of the Amur till the frontiers of the Korean peninsula, including the region where the port of Vladivostok would emerge soon. Russian expansionist policy went unchallenged for the next three decades. In the late 1880s and early 1890s, Russia’s interest in Siberia, Russian Far East and East Asia saw a revival, but this time there it had to confront a newly emerging Asian power – Japan.

The decisive victory of Japan in the Sino-Japanese War of 1894-95, which was fought over the control of Korea, demonstrated Japanese power and the weakness of the Qing Empire. Before the war, Korea had long been a key client state of the Chinese empire, but its strategic location opposite the Japanese archipelago, with all its natural resources like coal and iron, attracted Japanese interest in the peninsula. The war ended in the Treaty of Shimonoseki, signed in 1905. After the war, Korea was removed from the suzerainty of China and was placed under the Japanese sphere of influence. Taiwan and parts of Manchuria also came under Japanese control.

Japanese power emerges from the shadows

In the next ten years, Japan, a collection of islands in the Pacific with a largely rugged terrain, would go into war with a European great power and a bi-continental giant – Russia. With the 1894-95 war with China, Japan now has control over the Korean Peninsula. This signalled Russia that an upcoming face-off with Japan was inevitable due to its own conflicting interest in the region. A slew of diplomatic efforts by Russia followed as a run-up to the war. Tsar Nicholas II of Russia led the efforts along with his cousin, Germany’s Kaiser Wilhelm II, and France, a part of the so-called ‘Triple Intervention’, trying to persuade Japan to give up its territorial demands in Northeast Asia in return for an increased indemnity.

In 1896, Russia even forged an alliance with the Qing Empire to protect the latter’s territorial integrity from foreign aggressions in the future. But, in fact what followed was the scramble for China’s coastal territories among the Russians, Germans, French and the British in the remaining part of the 1890s, which culminated in the rise of resistance movements against the Qing dynasty, including the Boxer Rebellion. In the meantime, Japan was building up its own armed forces by the way of increased conscription that gathered momentum in the late 1890s.

The breakout of war

The Japanese strategy was such that it never intended of attacking Russia directly, but the focus was put on winning an early and decisive victory that would secure their hegemony in Northeast Asia without any rivals. Russian leadership was also ineffective to counter a well-prepared and well-equipped land and naval forces like Japan’s. Realising Japanese strength in the region, Russia’s minister of war, Aleksey Kuropatkin, in fact, recommended the Tsar to abandon his imperial ambitions in Manchuria and the Amur River region.

Even though the Tsar accepted his minster’s proposal, the extremists at the imperial court and other influential commercial interest groups behind the Russia’s expansionist project in East Asia acted as a hindrance for its execution. Meanwhile, the Russian military was left in the lurch to fight the Japanese, who were well-determined to win any battle. In short, Russia heavily underestimated Japan’s military edge. Thus, in February 1904, the Russo-Japanese War broke out with the Battle of Port Arthur, then a naval base and currently in the Liaodong Province of north-eastern China, which was then leased to Russia by the Qing dynasty of China from 1897 onwards. It was a surprise night attack by the Japanese naval forces on the Russian fleet stationed in the port.

The war escalated and went on for the next one-and-a-half years. Russia suffered a number of defeats in the battles that followed, both in land and sea, with some being indecisive. Tsar Nicholas II thought that Russia could win if it continued to fight, and he chose to remain engaged in the war and wait for the outcomes of key naval battles. By May 1905, Russia’s final glimmer of hope for victory faded in sight with its defeat in the Battle of Tsushima, a strait located halfway between the Japanese island of Kyushu and the Korean Peninsula.

Negotiations begin in Portsmouth, the peace treaty is signed

By August 1905, negotiations to end the Russo-Japanese War began when the then American President Theodore Roosevelt invited both nations to conduct direct negotiations at a neutral site of Portsmouth, New Hampshire, in the north-eastern coast of the United States. The Portsmouth Naval Shipyard was specifically selected as the site for the negotiations by President Roosevelt. The final treaty was signed on 5 September 1905, affirming Japanese presence in south Manchuria and Korea. It also ceded the southern half of the island of Sakhalin to Japan. It was the first international treaty to be signed in the U.S. and also with American mediation.

The Treaty of Portsmouth would set the balance of power in East Asia and the Pacific for the next four decades. It effectively ended Russia’s expansionist policies in Northeast Asia. The war and the subsequent treaty announced the emergence of Japan to the status of a world power. American diplomacy, thus, began its journey, which would reach it zenith following the two world wars. U.S. President Theodore Roosevelt was awarded the 1906 Nobel Peace Prize for his efforts to end the Russo-Japanese War. The following four decades would witness Japan going on a rampage across Asia in pursuit of its militaristic ambitions, particularly in China, Korea, and Southeast Asia, before it would savour defeat at the hands of the Americans in 1945.

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East Asia

Russian Far East and Arctic: Emerging Arenas for India-China Competition?

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arctic silk road

In a speech this year in Moscow, Indian Foreign Secretary highlighted the three strategic geographies- Eurasia, Indo-pacific and the Russian Far East (RFE), and the Arctic, which will be the key emerging theatres of geopolitics that upcoming diplomats will be engaged in throughout their careers. He further stressed that not only is Russia crucial to all the three regions, but there is also an inherent need of multi-polarity for the security and prosperity of these regions. Also, a multipolar world and a multipolar Asia is not possible without India and Russia.

Did the Foreign secretary underline the increasing Chinese ambitions in these regions and the need for countering these ambitions by pointing towards the necessity of multipolarity in Asia? Several questions arise when we take in consideration the recent rejuvenation in the relationship between India and Russia, and the narrative that strategic hedging against China is the main motive behind this rejuvenation. 

For answering these, one needs to understand why China is interested in these regions and what has been China doing in these key areas. Further, what are India’s stakes in these regions and whether India can think of competing with China here. Moreover, how Russia looks at the competition if it exists. This piece tries to analyze these questions and highlight the ongoing geopolitical dynamics in the RFE and Arctic and the pertaining Indian and Chinese foreign policies, in their past, present, and future goals.

Importance of RFE and Arctic

Geographically, RFE comprises of the Far Eastern Federal district that is the easternmost territory of Russia sandwiched between eastern Siberia and the Pacific Ocean. The district shares land borders with Mongolia, China, and North Korea to the south and shares maritime borders with Japan to its southeast and with the US to its northeast.

Having never known serfdom, this region has been culturally, religiously and politically different from Moscow and the Russian heartland for a major part of history, by virtue of more entrepreneurism and autonomy. Today there exists an additional dimension to this ‘difference’ between the RFE and the center. In the Soviet period, the region was tied to Europe economically but in past decade it has become increasingly clear that several of the Far Eastern krais and oblasts (units of governance in Russian political system like districts), especially those bordering China are now economically dependent more on Asia than on European region. This situation is compounded by migration related demographic issues. For more than a decade now the region has witnessed exodus of ethnic Russian population and seen a growing influence of Chinese businesses and migrants. The extent of this phenomenon is widely visible as over the years large tracts of land in this region have been leased to Chinese for farming, infrastructure projects and energy exploration, with a low tax regime and a considerable amount of autonomy over the activities. As a result, the region has witnessed  emergence of Chinese run farms which look like fortresses, surrounded by high fences and red flags.

The Arctic is deemed as the northernmost region on Earth. While most part of this region used to remain covered with snow for a major part of the year, this phenomenon has been on a downfall due to changes being purported by climate change. The Arctic region not only contains plethora of mineral resources but is extremely important from strategic point of view. During the cold war era, the Arctic held a prominent place in the political and military standoffs between the two superpowers- US and USSR. The region observed a drop in the geopolitical and geostrategic relevance in the 1990s and remained of ‘low tension’ due to commitments made by the Arctic states to keep the Arctic a zone of peace.

The unfreezing of snow makes way for the possibility of opening of the Northern Sea Route which can provide a cost-effective and shorter duration alternative for global shipping routes. Also, scientific developments taking place in hydrocarbon exploration and exploitation can lead to full-scale utilization of the resource base of the Arctic in near future.

Moscow’s Approach  

Since the rise of Vladimir Putin at the helm of Russian Federation, Moscow’s approach towards development of the RFE has been to inject money into existing industries which according to many analysts of the field has not worked due to the lacunae in addressing the problems of infrastructure and regional integrity. Moscow desires to integrate the region with the broader Asia-Pacific region to solve the problems of development, investment, and connectivity.

 In last few years, Moscow has taken decisions like encouraging the return of Russian ‘compatriots’ from Central Asia to accelerate large scale projects. It has also created Special Economic Zones with low tax regimes, focused on modernizing the ‘Trans-Siberian railway’ network, and emphasized on plans to invite investments in the region from nations like India and Japan, beyond the biggest investor in the region- China.

It has to be noted that any developments in the RFE cannot be in isolation from that in Arctic. With the aim of developing both the regions in concurrence, Moscow created the ‘Ministry of the RFE and the Arctic’ which is now working on creation of a corporation in order to supervise the economy and to assume control over elements like ports and exchanges.  For the Arctic, Russia rolled out its ‘Strategy for Developing the Russian Arctic Zone and Ensuring National Security through 2035’ in October last year, which aims to advance the development of the region’s abundant resources (especially oil and gas), and improve living conditions for the population. As a long-term objective, Russia hopes to establish the Northern Sea route as a new global shipping lane. These aims and policies need to be considered while understanding Chinese and Indian policies and ambitions and the emerging geopolitical triangle between the three countries, resulting in both cooperation and competition.

The India-China Competition

 The perception of China has seen a rise and fall in the last three decades in Russian society. Unlike the 1990s, when there was much skepticism regarding a rise in Chinese immigration, Russia became less wary of engaging with China when relations with the west deteriorated in the aftermath of conflicts in Georgia in 2008 and in Crimea in 2014. Gradually, China became the leading source of foreign direct investment in the region as well as the leading exporter to the districts at the Russia-China border. The extent of asymmetry in terms of trade resulted in a situation where while the exports from this region are diversified among the three northeast Asian states- South Korea, China and Japan, the imports are heavily dominated by China, mainly consisting of machinery, equipment and metals. This imbalance has been further aggravated by factors such as sanctions by the west- leading to declining investment from European nations, and the dramatic rise of China in realm of manufactured goods- which has led to stagnant conditions for the local industries of these regions which are now dependent on export of mainly raw materials and minerals.

As observed by some experts, Beijing’s interest in the region increased after the Global Financial Crisis of 2008 when the Chinese investment was followed by an influx of Chinese migrants in the five districts at Russia-China border, namely- Amur oblast, Jewish autonomous region, Primorsky Krai and Khabarovsk Krai. From amongst these regions, Amur oblast has the largest gold reserves in Russia, while in another near-border district of Oktyabrsky, there are large Uranium deposits. Adjoining Amur is Sakha (or Yakutia), which carries the world’s largest diamond deposits.

 However, mineral resources are not the only source of motivation for Chinese investment in the region. RFE contains huge potential for infrastructure development in realm of power generation (where Chinese electric companies have already shown interest to gain foothold), and upgradation of railway infrastructure which can connect the RFE, Northeast China and Japan with Europe with a land-based network and thus reduce the sea-dependence. Invariably, there has been an increasingly accepted reality that like the Russian Asia-Pacific policy, the policy in RFE too might become lopsided due to the factor of overdependence on China.

 Kremlin on its part remain aware of the increasing dependence on export of raw materials to China. China on the other hand is working actively in diversifying its own energy imports and is now seeking to compete with Russia in realm of exports to traditional Russian markets for weaponry and technology. Ideas like temporary placement of skilled manpower from India in RFE are being explored. Besides this, the pledge by India for a $1 billion Line of Credit for development of the RFE highlights the importance being placed by the two countries to make this region a source of renewed cooperation.  For now, the plans have been in phase of conceptualization and once the implementation stage arrives, China’s stance towards the potential competition here will be interesting to observe.

Unlike the case of RFE, the changing dynamics and increasing Chinese interests in the Arctic region have been debated and speculated much more in the global geopolitical arena. In the last two decades, not only has Beijing accumulated memberships in all Arctic-related regional associations in some form, but Beijing has also made it a surety that China actively participates in all international organizations whose responsibilities cover the Arctic Ocean and laws related to it. To this end in the past decade, Beijing has started projecting its interest and speaking up on issues pertaining to Arctic. The extent of this activism can be verified by the aims and objectives mentioned in the white paper published by China on 26 January 2018, titled ‘China’s Arctic Policy’. This policy paper very explicitly states that China will participate in regulating and managing the affairs and activities relating to the Arctic, and that ‘respect’ is the key basis for China’s participation in Arctic affairs.

Beijing has made it clear that it has formulated policies and have interest in every realm in the Arctic, ranging from development of shipping routes, exploration and exploitation of oil, gas and minerals, conservation and utilization of fisheries, tourism, as well as strengthening her leadership credentials by having a say in Arctic governance. In totality, if RFE is a region for China’s increasing influence in Russia’s domestic landscape, Arctic is much more of an opportunity to put on display the increasing clout and aspirations for being accepted as a ‘great power’ who now has interests in every corner of the world. India, even if starting to present itself as an alternative to China in the RFE, will find it difficult to match the Chinese position in the Arctic.

 In January this year, India rolled out a draft Arctic policy of its own and highlighted that India seeks to play a constructive role in Arctic by leveraging its vast scientific pool and expertise in Himalayan and polar research. India remains aware that Arctic might be becoming an arena of increasing power competition.  But beyond planning, goal setting, and utilizing the existing mechanisms for scientific development, in coming years, the economic base of India will not let New Delhi go all-out for claiming a position on the Arctic high table. This is bound to increase tensions in Moscow who would not want a challenge to its hegemony in the Arctic by an increasingly ambitious China.

Conclusion

 On its part, Moscow has taken several steps to develop the RFE region to reduce its overdependence on China. However, remoteness of the region, outmigration and difficult business environment are some other issues which append the complex dynamic of the region. Beijing is aware of the benefits available due to scarce ethnic Russian labor, lack of investment from other sources for Russia, the geographical difficulties for nations like India for smooth access, and the absence of deep pockets like China for other nations. In case of the Arctic, Beijing is going for proactive diplomacy and wooing the smaller states. Although Beijing would not want to come to blows with Washington or Moscow in any ways, creating a discourse where China starts being seen as a ‘Arctic’ and not just a ‘Near-Arctic’ state will be a big win for China even before any other advantages as mentioned above are realized. India while looking to initiate presence in RFE can be deemed capable to some extent, but the credentials in case of Arctic region seems no match to that of China. Russia on her part, will want India to at least think about trying to punch above its weight and rise to the task of providing Moscow a way for hedging against Chinese hegemonic ambitions. Recently, India has expressed interest in cooperating with other nations like Japan in these key strategic areas. How Moscow responds to these plans by New Delhi will shape the geopolitical dynamics between Moscow, Beijing, and New Delhi in these two emerging regions which look all set to witness a competition in the coming years.  

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