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Ladakh: Uneasy subsurface calm prevails

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On July 9, 2020, Chinese foreign-office  spokesperson Zhao Lijian, at the press conference indicated that disengagement of rival troops was taking place smoothly. He revealed, ` The overall situation at the China-India boundary is stable and ameliorating. The two sides will continue to maintain dialogue and communication through military and diplomatic channels, including holding a new round of commander-level talks and the meeting of the Working Mechanism for Consultation and Coordination on China-India Border Affairs. We hope India will work with China towards the same goal to implement consensus reached between the two sides with concrete actions and jointly de-escalate tensions in the border region’.

But it is significant to note that no joint statement was issued following Wang-Doval telephonic conversation that led to disengagement. The two countries issued separate statements. The Chinese statement omitted the word Line of Actual control. The Hindu  dated July 6, 2020 reported `No mention of LAC: China’s statement did not mention the LAC, let alone respecting it’.  

Be it noted that shortly after peace restoration statements, India’s defence minister announced that the Border Roads Organisation would continue its work unabated, as planned. The gory brawl between rival troops was instigated by the Indian infrastructural works close to overlapping Chinese territory. It appears bone of contention remains intact.

The post-Galwan Indian external-affairs ministry’s statement reflects that LAC and status quo shall be abided by. In the past also similar statements have been made by India. For instance, India’s external-affairs spokesman Anurag Srivastava said at press conference on June 25, 2020 `Respecting and strictly observing the Line of Actual Control is the basis for peace and tranquility in the border areas and explicitly recognized so in the 1993 and subsequent agreements. Indian troops are fully familiar with the alignment of the LAC in all sectors of the India-China border areas and abide scrupulously by it (The Hindu dated June 25, 2020).

China and India have divergent perceptions of the LAC. 

Who violated the LAC? It is India, not China that altered LAC by annexing Ladakh, a part of disputed Jammu and Kashmir State. Flanked by Pakistan’s prime minister, before a meeting at the Great Hall of the People in Beijing, (April 28, 2019), China’s President Xi Jinping had stressed they opposed India’s “unilateral actions” in Kashmir and called for a dialogue (Indian express September 10, 2019).

Where does the LAC lie on India-China border? India-China border is divided into three sectors, where the LAC in the western sector falls in the union territory of Ladakh and is 1597 km long, the middle sector of 545 km length falls in Uttarakhand and Himachal Pradesh, and 1346 km long eastern sector falls in the states of Sikkim and Arunachal Pradesh. The middle sector is the least disputed sector, while the western sector witnesses the highest transgressions between the two sides.

How is the LAC different from the Line of Control with Pakistan? One could peek into Indian mind through books such as Shivshankar Menon’s Choices: Inside the Making of India’s Foreign Policy, Shyam Saran’s How India Sees the World,  and A G Noorani’s India-China Boundary Problem 1846-1947.

It is a common misperception that LAC is more sacrosanct than the LoC. For instance, India’s prestigious Indian Express explained `The LoC emerged from the 1948 ceasefire line negotiated by the UN after the Kashmir War. It was designated as the LoC in 1972, following the Shimla Agreement between the two countries. It is delineated on a map signed by DGMOs of both armies and has the international sanctity of a legal agreement. The LAC, in contrast, is only a concept – it is not agreed upon by the two countries, neither delineated on a map nor demarcated on the ground. 

The newspaper poses question `what was India’s response to China’s designation of the LAC?’. It then explains India rejected the concept of LAC in both 1959 and 1962. Even during the war, Nehru was unequivocal: “There is no sense or meaning in the Chinese offer to withdraw twenty kilometres from what they call ‘line of actual control… In July 1954, Nehru issued a directive that “all our old maps dealing with this frontier should be carefully examined and, where necessary, withdrawn. New maps should be printed showing our Northern and North Eastern frontier without any reference to any ‘line’. The new maps should also be sent to our embassies abroad and should be introduced to the public generally and be used in our schools, colleges, etc”. This map, as is officially used till date, formed the basis of dealings with China, eventually leading to the 1962 War’ (Indian Express, June 6, 2020, Line of Actual Control: Where it is located and where India and China differ).

There are genuine differences on border `perception’ that intermittently lead to face-offs. India considers the LAC to be 3,488 km long, while the Chinese consider it to be only around 2,000 km.

Shyam Saran discloses that the LAC was discussed during Chinese Premier Li Peng’s 1991 visit to India, where PM P V Narasimha Rao and Li reached an understanding to maintain peace and tranquillity at the LAC. India formally accepted the concept of the LAC when Rao paid a return visit to Beijing in 1993 and the two sides signed the Agreement to Maintain Peace and Tranquillity at the LAC.

The reference to the LAC was unqualified to make it clear that it was not referring to the LAC of 1959 or 1962 but to the LAC at the time when the agreement was signed. To reconcile the differences about some areas, the two countries agreed that the Joint Working Group on the border issue would take up the task of clarifying the alignment of the LAC.

Status Quo: Resolution of border disputes with China is intertwined with resolution of the Kashmir dispute. That is why China avoided mentioning the `LAC’. How could China settle boundary dispute with India when Jammu and Kashmir is a disputed state.

One may ask how China settled its boundary dispute with Pakistan. How come Pakistan gifted of part of disputed state’s territory to China (Aksai Chin)?

The factual position is that Pakistan ceded no territory to China. A. G. Noorani points out, `Two myths predominate: India’s two adversaries ganged together to cut a deal on the border and Pakistan gifted China with large chunks of territory. In truth, China was most reluctant to accept Pakistan’s proposal and responded only belatedly. It got no territory. Instead, it was Pakistan which secured from China 750 square miles of administered territory (A. G. Noorani, Facing the truth, JUNE 5, 2020, frontline, Print edition : October 06, 2006).

Aside from India’s atoot ang mantra (integral-part iteration), China and Pakistan regard Ladakh as part of the disputed Jammu and Kashmir State.

India does not respect any LAC/LOC or status quo: At heart, Nehru did not care a fig for the Sino-Indian LAC, India-Pakistan LOC, disputed state’s constituent assembly, UN’s resolutions about plebiscite, or the Indian parliament.

This truth is interspersed in Avtar Singh Bhasin’s 10-volume documentary study (2012) of India-Pakistan Relations 1947-2007.  It contains 3649 official documents, accessed from archives of India’s external-affairs ministry. Despite effort for over a year, Bhasin was denied access to coveted Nehru Papers. But, in 2014, Bhasin was able to get permission from India’s Department of Culture to access them.

These papers gave new perspectives on Nehru’s vacillating state of mind concerning the Kashmir dispute.

In his 2018 book (published after six years of his earlier work), India, Pakistan: Neighbours at Odds (Bloomsbury India, New Delhi, 2018), Bhasin discusses Nehru’s perfidy on Kashmir in Chapter 5 titled Kashmir, India’s Constitution and Nehru’s Vacillation(pages 51-64). The book is based on Selected Works of Jawaharlal Nehru and author’s own compendium of documents on India-Pak relations. Let us lay bare a few of Nehru’s somersaults.

Kashmir assembly’s `accession’ disowned, Security Council owned: Nehru banked on so-called Instrument of Accession and its authentication by `Constituent Assembly’. Nehru unmasked his brazen volte face in a letter dated October 31, 1947, addressed to the disputed state’s prime minister, on the fourth day of `signing’ of the mythical accession instrument by maharajha on October 26, 1947. It was `counter-signed’ by Lord Mountbatten on October 27, 1947.  The letter says `after consideration of the problem, we are inclined to think that it [plebiscite] should be held under United Nations’ auspices (p. 28 ibid.).

He reiterated in New Delhi on November3, 1951 that `we have made it perfectly clear before the Security Council that the Kashmir Constituent Assembly does not [insofar] as we are concerned come in the way of a decision by the Security Council, or the United Nations’(SWJ: Volume 4: page 292, Bhasin p.228). Again, at a press conference on June 11, 1951, he was asked `if the proposed constituent assembly of Kashmir “decides in favour of acceding to Pakistan, what will be the position?”’ he reiterated,  `We have made it perfectly clear that the Constituent Assembly of Kashmir was not meant to decide finally any such question , and it is not in the way of any decision which may ultimate flow from the Security Council proceedings’ (SWJ: Volume 15:, Part II, page 394. Bhasin page 56). He re-emphasised his view once again at a press conference in New Delhi on November 3, 1951. He said `we have made it perfectly clear before the Security Council that the Kashmir Constituent Assembly does not [insofar as] we are concerned come in the way of a decision by the Security Council or the United Nations’.

 Security Council disowned as just a non-binding mediator: Bhasin points out that `there was a perceptible shift in his [Nehru’s] stand on July 24 1952` about the future of the State _ if the decision of the Security Council was at variance with that of the Constituent Assembly’. Nehru said, `Unless the Security Council functioned under some other Sections of the Charter, it cannot take a decision which is binding upon us unless we agree to it. They are functioning as mediators and a mediator means getting people to agree (SWJ, Volume 19, page 241. Bhasin page 56).

Security Council re-owned: Bhasin points out (page 57 op. cit.) `At the same press conference on 24 July, 1952 when asked what the necessity of plebiscite was now that he had got the Constituent Assembly, he replied “Maybe theoretically you may be right. But we have given them an assurance and we stand by it (SWJ: Volume 19, pp. 240-241. Bhasin, p. 57).

If Kashmir is India’s integral part, what is the United Nations’ Military Observers’ Group on India Pakistan doing on LOC since January 24, 1949?  India is wary of their presence. It asked them to vacate their residence at 1/AB, Purana Qila Road, Connaught Place, Delhi – 11000; from where it has been functioning since 1949 (India asks UN team on Kashmir to leave Delhi, Reuters July 9, 2014). It even harassed `Three members of the United Nations Military Observers Mission for India and Pakistan (UNMOGIP) had a close call along the restive Line of Control (LoC) in Azad Jammu and Kashmir after Indian troops shot at and injured two locals who were briefing them on the situation prevailing in the wake of ceasefire violations’ (Indian troops fire across LoC in presence of UN observers, 2 injured, March 14, 2018).

Besides being a geographical dispute, Kashmir dispute has a human rights dimension. Even the Simla accord does not repeal UN resolutions and Kashmiris’ right to self-determination.

Inference: India does not own the LOC or LAC. It shrugs off UN resolutions or Simla Accord. Then will it abide by the LAC or status quo?

Buffer zone is a temporary measure to ward off conflict with China. A permanent solution lies in resolving the Kashmir dispute. Pending a final settlement, softening the borders in accordance with former Indian foreign secretary Jagat S. Mehta’s proposals appears to be need of the hour to mitigate suffering of the Kashmiri (Jagat S. Mehta, ‘Resolving Kashmir in the International Context in the 1990s‘, in Robert G. Wirsing, India, Pakistan and the Kashmir Dispute 1994, St Martin’s Press).

If a dispute re-flares up Aksai Chin, and by corollary status of the disputed J&K state, shall be internationalized.

If a broad solution is not hammered out, then, still, there are two solutions- a nuclear holocaust or, perhaps, divine intervention

Let India know that a state that flouts international treaties is a rogue state: pacta sunt servanda, treaties are to be observed and are binding on parties. Self-determination is not only a political but also a legal right in disputed lands. 

The post-Galwan Indian external-affairs ministry’s statement reflects that LAC and status quo shall be abided by. In the past also similar statements have been made. For instance, India’s external-affairs spokesman Anurag Srivastava said at press conference on June 25 `Respecting and strictly observing the Line of Actual Control is the basis for peace and tranquility in the border areas and explicitly recognized so in the 1993 and subsequent agreements. Indian troops are fully familiar with the alignment of the LAC in all sectors of the India-China border areas and abide scrupulously by it (The Hindu dated June 25, 2020).

China and India have divergent perceptions of the LAC.  The Hindu dated July 6, 2020 reported `No mention of LAC: China’s statement did not mention the LAC, let alone respecting it’.  

It is India, not China that altered LAC by annexing Ladakh, a part of disputed Jammu and Kashmir State. Flanked by Pakistan’s prime minister, before a meeting at the Great Hall of the People in Beijing, (April 28, 2019), China’s President Xi Jinping had stressed they opposed India’s “unilateral actions” in Kashmir and called for a dialogue (Indian express September 10, 2019).

Where does the LAC lie on India-China border? India-China border is divided into three sectors, where the LAC in the western sector falls in the union territory of Ladakh and is 1597 km long, the middle sector of 545 km length falls in Uttarakhand and Himachal Pradesh, and 1346 km long eastern sector falls in the states of Sikkim and Arunachal Pradesh. The middle sector is the least disputed sector, while the western sector witnesses the highest transgressions between the two sides.

How is the LAC different from the Line of Control with Pakistan? One could peek into Indian mind through books such as Shivshankar Menon’s Choices: Inside the Making of India’s Foreign Policy, Shyam Saran’s How India Sees the World,  and A G Noorani’s India-China Boundary Problem 1846-1947.

It is a common misperception that LAC is more sacrosanct than the LoC. For instance, India’s prestigious Indian Express explained `The LoC emerged from the 1948 ceasefire line negotiated by the UN after the Kashmir War. It was designated as the LoC in 1972, following the Shimla Agreement between the two countries. It is delineated on a map signed by DGMOs of both armies and has the international sanctity of a legal agreement. The LAC, in contrast, is only a concept – it is not agreed upon by the two countries, neither delineated on a map nor demarcated on the ground. 

The newspaper poses question `what was India’s response to China’s designation of the LAC?’. It then explains India rejected the concept of LAC in both 1959 and 1962. Even during the war, Nehru was unequivocal: “There is no sense or meaning in the Chinese offer to withdraw twenty kilometres from what they call ‘line of actual control… In July 1954, Nehru issued a directive that “all our old maps dealing with this frontier should be carefully examined and, where necessary, withdrawn. New maps should be printed showing our Northern and North Eastern frontier without any reference to any ‘line’. The new maps should also be sent to our embassies abroad and should be introduced to the public generally and be used in our schools, colleges, etc”. This map, as is officially used till date, formed the basis of dealings with China, eventually leading to the 1962 War’ (Indian Express, June 6, 2020, Line of Actual Control: Where it is located and where India and China differ).

There are genuine differences on border `perception’ that intermittently lead to face-offs. India considers the LAC to be 3,488 km long, while the Chinese consider it to be only around 2,000 km.

Shyam Saran discloses that the LAC was discussed during Chinese Premier Li Peng’s 1991 visit to India, where PM P V Narasimha Rao and Li reached an understanding to maintain peace and tranquillity at the LAC. India formally accepted the concept of the LAC when Rao paid a return visit to Beijing in 1993 and the two sides signed the Agreement to Maintain Peace and Tranquillity at the LAC.

The reference to the LAC was unqualified to make it clear that it was not referring to the LAC of 1959 or 1962 but to the LAC at the time when the agreement was signed. To reconcile the differences about some areas, the two countries agreed that the Joint Working Group on the border issue would take up the task of clarifying the alignment of the LAC.

It appears India is short on fulfilling its promises, be they relate to LOC/LAC or plebiscite.

Status Quo: Resolution of border disputes with China is intertwined with resolution of the Kashmir dispute. Aside from India’s atoot ang mantra (integral-part iteration), China and Pakistan regard Ladakh as part of the disputed Jammu and Kashmir State.

Historical perfidy: at heart, Nehru did not care a fig for the LAC, or for the disputed state’s constituent assembly, Indian parliament or the UN. This truth is interspersed in Avtar Singh Bhasin’s 10-volume documentary study (2012) of India-Pakistan Relations 1947-2007.  It contains 3649 official documents, accessed from archives of India’s external-affairs ministry. Despite effort for over a year, Bhasin was denied access to coveted Nehru Papers. But, in 2014, Bhasin was able to get permission from India’s Department of Culture to access them.

These papers gave new perspectives on Nehru’s vacillating state of mind concerning the Kashmir dispute.

In his 2018 book (published after six years of his earlier work), India, Pakistan: Neighbours at Odds (Bloomsbury India, New Delhi, 2018), Bhasin discusses Nehru’s perfidy on Kashmir in Chapter 5 titled Kashmir, India’s Constitution and Nehru’s Vacillation(pages 51-64). The book is based on Selected Works of Jawaharlal Nehru and author’s own compendium of documents on India-Pak relations. Let us lay bare a few of Nehru’s somersaults.

Kashmir assembly’s `accession’ disowned, Security Council owned: Nehru banked on so-called Instrument of Accession and its authentication by `Constituent Assembly’. Nehru unmasked his brazen volte face in a letter dated October 31, 1947, addressed to the disputed state’s prime minister, on the fourth day of `signing’ of the mythical accession instrument by maharajha on October 26, 1947. It was `counter-signed’ by Lord Mountbatten on October 27, 1947.  The letter says `after consideration of the problem, we are inclined to think that it [plebiscite] should be held under United Nations’ auspices (p. 28 ibid.).

He reiterated in New Delhi on November3, 1951 that `we have made it perfectly clear before the Security Council that the Kashmir Constituent Assembly does not [insofar] as we are concerned come in the way of a decision by the Security Council, or the United Nations’(SWJ: Volume 4: page 292, Bhasin p.228). Again, at a press conference on June 11, 1951, he was asked `if the proposed constituent assembly of Kashmir “decides in favour of acceding to Pakistan, what will be the position?”’ he reiterated,  `We have made it perfectly clear that the Constituent Assembly of Kashmir was not meant to decide finally any such question , and it is not in the way of any decision which may ultimate flow from the Security Council proceedings’ (SWJ: Volume 15:, Part II, page 394. Bhasin page 56). He re-emphasised his view once again at a press conference in New Delhi on November 3, 1951. He said `we have made it perfectly clear before the Security Council that the Kashmir Constituent Assembly does not [insofar as] we are concerned come in the way of a decision by the Security Council or the United Nations’.

 Security Council disowned as just a non-binding mediator: Bhasin points out that `there was a perceptible shift in his [Nehru’s] stand on July 24 1952` about the future of the State _ if the decision of the Security Council was at variance with that of the Constituent Assembly’. Nehru said, `Unless the Security Council functioned under some other Sections of the Charter, it cannot take a decision which is binding upon us unless we agree to it. They are functioning as mediators and a mediator means getting people to agree (SWJ, Volume 19, page 241. Bhasin page 56).

Security Council re-owned: Bhasin points out (page 57 op. cit.) `At the same press conference on 24 July, 1952 when asked what the necessity of plebiscite was now that he had got the Constituent Assembly, he replied “Maybe theoretically you may be right. But we have given them an assurance and we stand by it (SWJ: Volume 19, pp. 240-241. Bhasin, p. 57).

If Kashmir is India’s integral part, what is the United Nations’ Military Observers’ Group on India Pakistan doing on LOC since January 24, 1949?  India is wary of their presence. It asked them to vacate their residence at 1/AB, Purana Qila Road, Connaught Place, Delhi – 11000; from where it has been functioning since 1949 (India asks UN team on Kashmir to leave Delhi, Reuters July 9, 2014). It even harassed `Three members of the United Nations Military Observers Mission for India and Pakistan (UNMOGIP) had a close call along the restive Line of Control (LoC) in Azad Jammu and Kashmir after Indian troops shot at and injured two locals who were briefing them on the situation prevailing in the wake of ceasefire violations’ (Indian troops fire across LoC in presence of UN observers, 2 injured, March 14, 2018).

Besides being a geographical dispute, Kashmir dispute has a human rights dimension. Even the Simla accord does not repeal UN resolutions and Kashmiris’ right to self-determination.

Inference: India does not own the LOC or LAC. It shrugs off UN resolutions or Simla Accord. Then will it abide by the LAC or status quo?

Buffer zone is a temporary measure to ward off conflict with China. A permanent solution lies in resolving the Kashmir dispute. Pending a final settlement, softening the borders a la Mehta appears to be need of the hour to mitigate suffering of the Kashmiri (Jagat S. Mehta was former Indian foreign secretary).

If a dispute re-flares up Aksai Chin, and by corollary status of the disputed J&K state, shall be internationalized. Contrary to common misconception Pakistan has settled its boundary dispute with China. Aksai Chin was already under China’s control. Pakistan did not cede any territory but instead received gift of 750 square kilometers from China (A. G. Noorani, Facing the truth, Frontline October 06, 2006).

If a broad solution is not hammered out, then, still, there are two solutions- a nuclear holocaust or, perhaps, divine intervention

Let India know that a state that flouts international treaties is a rogue state: pacta sunt servanda, treaties are to be observed and are binding on parties. Self-determination is not only a political but also a legal right in disputed lands.

Mr. Amjed Jaaved has been contributing free-lance for over five decades. His contributions stand published in the leading dailies at home and abroad (Nepal. Bangladesh, et. al.). He is author of seven e-books including Terrorism, Jihad, Nukes and other Issues in Focus (ISBN: 9781301505944). He holds degrees in economics, business administration, and law.

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East Asia

A brief history of Sino-Australian political relations from 1949 to 2020

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Former prime minister Malcolm Turnbull and Mr Xi met for a bilateral talk during the G20 Forum in Hangzhou.(Supplied: Twitter)

To understand what is happening now requires an understanding of history. The recent Sino-Australian relations have been like a roller coaster ride, which needs to date back to history at least from 1949.

There are several characteristics worth mentioning in Sino-Australian relations. First, there have been diplomatic ups-and-downs between the two governments due to the divergence of the two countries’ political systems and ideology. Second, by comparison, bilateral ties have generally been improving for decades due to the reciprocal economic complementarities and cooperation despite the recent trade disputes. Third, Sino-Australian relations “has become more unequal with the passage of time” due to China’s rise. Fourth, the influence of the US on the foreign policy of Australia cannot be underestimated. In terms of structure, this part will be divided into four periods, posited on the founding of the People’s Republic of China in 1949, the establishment of diplomatic relations in 1972, the outbreak of Tiananmen Incident in 1989 and the recent decline of bilateral relations starting from 2015 with additional illustration of the influence of the US in Australian foreign policy.

The Pre-recognition politicial relations from 1949 to 1971

Graeme Dobell argues, “China has always loomed in the Australian consciousness”, possibly because Australia is geographically located in the Asia Pacific and surrounded by Asian countries with a significant number of ethnic Chinese. Historically, China was viewed in Australia as a threat, namely, “Yellow Peril”. The notion is a color-metaphor, full of racism. East Asians, especially the ethnic Chinese, are an existential hazard to other countries as immigrants.  Professor Gina Marchetti argues that

the rooted in medieval fears of Genghis Khan and Mongolian invasions of Europe, the yellow peril combines racist terrors of alien cultures, sexual anxieties, and the belief that the West will be overpowered and enveloped by the irresistible, dark, occult forces of the east.

In Australia, as a Western country located away from the West,  its Immigration Restriction Act of 1901, infamous as the White Australia Policy, was designed to prohibit Chinese settlers. “Fear of China and hostility to the Chinese immigrants were factors” that supported the Federation of Australia, and both factors existed for decades. The federating of Australia was the process by which the sixBritish colonies consented to unite and become the Commonwealth of Australia. Liberal Prime Minister Harold Holt formally abolished the White Australia Policy in 1966 with the introduction of the Migration Act 1966. By legislating legal equality among European and non-European migrants, this new Act has opened a new immigration history era. It has been the most crucial step in forminga multicultural society in Australia.

However, Australia’s unique geographic location and huge disparity of population between Australia and China have decided that the natural insecurity of Australia as a nation, for that linguistically, historically and intellectually, Australian ancestry originates from Europe, and its vital economic partner and most crucial military ally is the United States, both far away from Australia. Furthermore, Gyngell argues there is always “fear of abandonment” in Australian foreign policy. Likewise, former Australian Minister for Foreign Affairs Gareth Evans and former Australian diplomat Bruce Grant confirm that

the evolution of Australian foreign policy needs to be assessed against a background in Australian politics of persistent anxiety about a threat from Asia: sometimes vague and undifferentiated, sometimes specific, but always there.

In this period, China was viewed in Australia as a threat, namely, the aforementioned “Yellow Peril” and “Red Menace”. Arguably, the Red Menace has always existed in the Australian society and the government until now,which is a term applied during the Cold War for describing a nation that faces the increasing authoritarian threat of communism. This term was used to refer to the Soviet Union, while nowadays, it has been employed to mean Communist China. Besides, the difference of scare only reflects the extent to which the Australian government fears the Chinese Communist Party. From 1949 to 1972, especially when Australian and Chinese troops participated in the Korean War as rivals and later the Cultural Revolution was launched in China, Sino-Australian relations were hostile to each other due to the fact they were both subordinated to different political and ideological camps: USSR-led communism and the United Stated-led capitalism.

The steady development of Sino-Australian political relations from 1972 to 1989

During this period, Sino-Australian relations encountered the most drastic ups and downs the bilateral ties have ever experienced. In 1972, the Whitlam Labor government’s election marked the most radical turning point in Sino-Australian history by establishing diplomatic relations with China in December of the same year. Despite the endeavor, Whitlam made, this new chapter of the bilateral relations is mainly dependent on the change of  China Policy from the strongest ally of Australia, the United States. More concretely, in the early 1970s, the American army was withdrawn from Vietnam, indirectly ending the military collisions with the People’s Liberation Army.At the beginning of 1972, Nixon has his dramatic visit to Beijing and Shanghai.

From 1972 to 1989, the bilateral relations were at the stage of steady development. Partly, the positive Sino-Australian relations can be attributed to the same view of opposing the Soviet threat, which facilitated the Sino-Australian cooperation. More specifically, in July 1973, the first Sino-Australian trade agreement was signed by the Chinese government and the Whitlam government. The visit of Whitlam to Beijing in late 1973 culminated in a joint communique, concurring with the promotion of views exchanges among the Sino-Australian officials. In 1976, during the period of the Coalition-led Fraser government, “the Australian Parliament even stood in silence in the honor” of Mao Zedong, when Mao passed away. In 1978, the Australia-China Council was built by the Coalition-led Fraser government to facilitate bilateral relations.

Furthermore, in the 1980s, with the economic reform of Deng Xiaoping and the incrementally frequent visits of Sino-Australian senior leaders, the Australian government saw the economic opportunities China may bring, and the Chinese government also realized the Chinese modernization might benefit from the support of Australia. Mackerras argues that “the mid-1980s saw the relationship reach a peak”. In 1984, the ALP-led Hawke government launched the China Action Plan, “an overall economic program towards China”, aiming to deepen bilateral economic cooperation. In 1985, Hawke told the Australian parliament that a ‘special relationship’ between the two countries was forming.

The realistic Sino-Australian political relations from 1990 to 2015

The outbreak of the Tiananmen Incident in 1989 was a devastating turnaround in Sino-Australian relations, bringing the vigorous relations to a sudden stop. To some extent, Deng’s economic reform gave Australia and the Western world an illusion that China tried to become more Western. Contrariwise, the Incident shattered misapprehension of the special relationship between the two countries and has pushed human rights to one of the central issues that needs to be addressed in the bilateral agenda until now. It is noteworthy that the negative influence of the Tiananmen Incident was in all domains. Antagonized by the Australian broadcasting of violence in Beijing, the Australian people, including politicians, business people, scholars and religious figures, unanimously condemned Beijing. All aspects of Sino-Australian relations were affected at varying levels.

Arguably, after the Tiananmen Incident, the attitudes of the Australian government has changed to be more pragmatic and national-interest-driven. Wang argues that  the reassessment of Sino-Australian relations “did not lead to a fundamental policy shift” in Canberra “and human rights were not emphasized to the detriment of Australia’s economic interests”. In 1993, as the first Australian Prime Minister after the Incident, Keating visited China, breaking the diplomatic ice, partly because he needed to push wool exports to China.

Noticeably, from 1989 to 2015, China and the comparison of world powers experienced earthshaking changes. The hazards of the Asian Financial Crisis in 1998 and the Global Financial Crisis in 2008 lead to the economic meltdown of some Southeastern countries and the relative decline of the West. Bearing the two Crises, China has benefited enormously, even the most, from joining the WTO and other regional and global economic organizations as a member of economic globalization. At the end of 2010, China surpassed Japan and has become the second-biggest global economy, indicating that the global economic center has gradually transferred to East Asia. During this period, Hong Kong and Macao were subsequently handed over to China, enhancing China’s confidence. There is no doubt that bilateral relations have been increasingly asymmetrical during this time, leading to the concept of equal partners less possible.

From 1989 to 2015, facing China’s economic rise, on the one hand, the Australian government and business took advantage of the historical opportunities and have been more engaged in the Chinese economy. For instance, the Coalition-led Howard government was a firm“ supporter for China’s accession to the WTO” to share better Chinese economic growth. In 2014, the Coalition-led Abbott government and the Chinese government started to portray the bilateral relations as a “comprehensive strategic partnership” due to the incremental and robust trade relations and more frequent communication between top leaders of the two sides. On the other hand, due to the different political ideologies and systems, and the gradually widening disparity of the two countries, there have been strong concerns in the Australian government that China may leverage trade over Australia. Foot  indicates the sense of uncertainty and insecurity in Canberra that

Has Beijing worked to support the dominant norms of the international order, or has it striven to overturn them? Has it ever deserved to be called “responsible power”, a term defined by the dominant states, or has it acted irresponsibly? To place these questions more explicitly within an international relations framework, has China shown itself since 1949, and more especially during the period of reform and opening since 1979, as capable of be socialized into supporting global norms? Or, as realists would predict, have there been signs that its rising power over the past two decades has generated new tensions in the international system? Looking more to the future, what kind challenge does its enhanced capabilities pose to the status quo?

Despite the dilemma that the Australian government has to face and the political ups and downs between the two countries during this period, “the growing sense of independence in formulating Australia’s policy towards China, as well as the increasing saliency of trade considerations in implementing such policy, has transcended political and inter-administration divides”. Thus, to some extent, although there were still ups and downs during this period from the ALP-led Hawke government to the Coalition-led Abbott government in 2015, the bilateral relations “appears to have become less uncertain” and matured. Arguably, the Australian government started to view China either without unjustified fear as they had before 1972, or super optimism as they had before 1989.

In fact, the differences may only exist in the style of how different administrations approach China. For instance, the first Mandarin-speaking Prime Minister Kevin Rudd introduced a concept called “Zhengyou in Chinese that means to voice different opinions to benefit the Chinese leadership. By comparison, another Prime Minister John Howard preferred to deal with China on more practical issues.

The increasingly strained bilateral political relations from 2016 to 2020

Bilateral relations have deteriorated since the exacerbation of territorial disputes in the South China Sea in 2016. The Australian government criticized China for not abiding by the South China Sea Arbitration, a joint statement with Japan and the US. In response, the Chinese government expressed its strong displeasure through its state-owned media the Global Times, denouncing Australia as a “paper cat”. Currently, the Australian government is concerned that Chinese activity in the South China Sea may threaten Asia pacific security, thus influencing Australian sovereignty and security.

More importantly, Australia’s closest and strongest ally, the US, initiated a trade war with China at the beginning of 2018.  Since Australia often follows American foreign policy, the increasingly intense Sino-American relations have negatively affected Sino-Australian relations. In the same year, Sino-Australian ties soured further when Australia became the first country to officially ban China’s Huawei from its 5G network. A similar prohibition on Huawei was later executed in the US in 2019.

In terms of domestic politics, there are continuously more negative speeches about China.Australian politician Andrew Hastie urges urged the Australian government and public to realistically recognize the unprecedented democratic conviction and security threat from China. He even goes “as far as to compare the Western tolerance of China’s rise with the appeasement of Nazi Germany”. Hamilton argues Chinese infiltration in Australia is a “silent invasion”. The Minister for Home Affairs Peter Dutton, one of most senior officers in the Liberal-Coalition-led Morrison administration, condemned China’s interference and cyber hacks in Australia and claimed that the policies of the CCP are incompatible with Australian values.

2020 may have been the most turbulent year for Sino-Australian relations so far. Facing the once-a-century Covid-19 pandemic, Beijing has taken trade actions against a series of Australian goods such as barley, cattle, wine, cotton and coal after the Morrison administration advocated an independent Covid-19 inquiry without consulting Beijing first.

The tension also extended to people-to-people exchange. Canberra has warned its residents against arbitrary arrest in China. In contrast, Beijing has cautioned against studying and visiting Australia due to purportedly increasing racism and discrimination against people of Chinese and Asian descent. At the end of 2020, Morrison reacted furiously and demanded an apology from Beijing to an image tweeted by a Chinese diplomat showing an Australian soldier holding a knife to an Afghan child’s throat, which has further shadowed current and future relations.

Meanwhile, despite the global pandemic, there is increasing scrutiny in Australian media, including of the Hong Kong anti-extradition bill, the Xinjiang re-education camp, and China’s political donation to Australian political parties, Chinese spy students, the fight between Hong Kong and Chinese students in Australia, the defection of Wang Liqiang, Huawei backdoor suspicion and the detention of Cheng Lei and Yang Hengjun. According to the Lowy Institute poll in 2019, Australians’s trust in China to ‘act responsibly’ has dropped to 32 %, a 20-point decline from 2018. In 2020, trust in China has deteriorated to 23%, the lowest point in the Poll’s history.

Whatever, if any, evidence underpins these narratives or not, they seem to point out one reality: the plummeting state of Sino-Australian relations. Geoff Raby, former Australian Ambassador to China, even argues that Sino-Australian relations are at their lowest ebb since 1972.It may be controversial to argue that the current bilateral relations are worse than the relations in 1989, but it is appropriate to point out the reality that the Sino-Australian relations have been incrementally damaged. The Australian government’s dilemma is the overreliance of the Australian trade upon China and the exacerbated political disagreement. Jonathan Pearlman argues that “security and economics are tugging Canberra in different directions, as are its values and its interests”.

The Influence of the United States in Australian foreign policy

Undoubtedly, the Australian foreign policy has been influenced by the American government, as Australia has been called the “fifty-first state” of the US. Australia and the US have the same language background, similar European ancestry, similar political systems and strong economic ties. More importantly, in 1951, Canberra and Washington agreed on the Australia, New Zealand and United States Security Treaty (ANZUS), regulating that “an attack on either country’s armed forces or territory in the Pacific area” means “common danger” for the three countries. Since the US abolished its responsibilities to New Zealand due to the disputes of nuclear-armed ships, the ANZUS has become a bilateral treaty between Australia and the US and, separately, between Australia and New Zealand.

Given the American economic and military power around the world and the substantial disparity of Australia-American strengths, it is easy to argue that the ANZUS is the cornerstone of Australian security, and the US is the most important ally of Australia. In fact, Australia followed the US’s leadership through the UN, in the Korean War in 1950, the Vietnam War in 1962, the Afghanistan War in 2001 and the Iraq War in 2003 and recognized the PRC after the Nixon government had changed its China policy. To underpin the above view, Tow and Albinski affirm that the “ANZUS alliance remains Australia’s primary security relationship”. The former Australian diplomat Dr.Alison Broinowski argue that

Australia uncritically and voluntarily imitates its major ally (the United States) and its minor ally (the United Kingdom) in most things, yet lacks the capacity to do them well and the independence to do them differently. Having taken the drug of dependence from birth, Australia seems allied and addicted to it.

Thus, it is easy to question how independent Australia’s foreign policy is, especially its China policy, and argue that Australia does generally imitate the US’s foreign policy. As for the recent downturn of bilateral relations, Geoff Raby, an insider of Australia politics, believes that Canberra has developed policies to push back China’s rise in that the US started regarding China as a strategic competitor.

However, there is some policy flexibility in the Australian government, mainly economic-interests-motivated. To cite an instance, despite the opposition of the US, Australia participated in the China-led Asian Infrastructure Investment Bank in 2015 and leased the Port of Darwin to a Chinese company in the same year. Australia took the position as an outsider in terms of the Sino-American trade war, suggesting the two sides to end the fight to avoid the risks of collateral damage to Australia. Even in the 1950s and 1960s, when the Australian government adopted a hostile attitude towards China, the wheat trade between China and Australia“reached a significant level”.

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East Asia

The Economic Revival of Japan

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Photo: Jezael Melgoza/ Unsplash

Amidst the uncertainty weaved by the pandemic, the stock markets around the world have shunned the preconceived notions associated to their functionality over the past year. While some sophisticated economies are suffering turmoil at the ensue of new Covid variants, deviant vaccination drives, and resumption of state-wide lockdowns, some of the countries are outright negating the educated forecasts made by seasoned financial experts all over the globe. China stands as a flag-bearer of such reality-defying markets: bagging GDP growth unlike any in the world whilst simultaneously controlling the virus strain in Beijing. Recent to the tally, however, is the quaint nation of Japan that despite being head-to-head with another gruesome wave of Coronavirus, still manages to consistently outperform the hailed champions of the global financial markets.

The 3rd biggest economy in the world astonished the financial gurus when Nikkei 225, Japan’s core stock market Index, soared up steadily over the last few weeks. With a 1.9% hike at the week’s opening on Monday, 15th February, Nikkei 225 Index surpassed the coveted 30000-point threshold after more than three decades. The economic rebound is associated to the export sector picking up the pace after a sluggish performance last year. The country still wrestles with the throttle of the pandemic; confirming over 1000 Covid-positive patients since November 16th and adding the cumulative death toll of 7056; surpassing the 7000 deaths mark in just under two weeks.

The positive effect, however, dawns since the daily confirmed cases are showing a steady drop; below 1000 daily-confirmed cases in over 4 months. This occurrence is in tandem to the global fall in the Covid cases. Moreover, Japan’s approval of the Covid vaccine produced by Pfizer Inc. is reflecting the recovery in the health condition of the country, especially a lucrative news amidst the second health emergency recently imposed in Tokyo.

Standing at the 30393.13-point mark, Nikkei 225 is expected to follow the bullish trend heavily over the following week as well. According to the measured forecasts, the bourse is optimally headed to strike the 33000-point mark after crossing the milestone of triple decades. This is due to the positive economic outlook in tandem to the rebooting of the global economy which would ultimately enable the export-reliant country. With Japan announcing a 12.7% GDP growth trailing from the recovery of the last quarter of 2020, followed by a hefty government stimulus to prompt domestic consumption, the Japanese bourse is expected to inflate by up to 30% by the end of the first quarter of 2021 in March, presumably speculating a record surge to bypass the highest ever figure of 38915.87-point, posted by Nikkei 225 back in 1989 before being subsequently floored by the notorious price bubble crash.

However, the economic recovery much less a record shattering surge in the market is heavily dependent on some of the core facets. The debacle of the nationalisation of vaccines is evident in Europe and ironically is the crisis posing more of a serious threat than the pandemic itself. Japan’s economic stability would only be possible given the vaccinations are administered effectively and timely with minimal resistance. As Japan still finds it hard to evade the emergency measures introduced in multiple regions, a vaccine crisis could intensify the emergency precautions and lockdowns may even gear into effect. This could seriously undermine the production capabilities of the country which ultimately could carry forward as an element hampering the blooming investor confidence in Japan.

Much to the global conformity of economic peril last year, Japan’s economy also contracted by 4.8% in 2020. The steep contraction, despite being of a greater extent relative to the 3.5% annualised shrinkage in the US economy, was still much controlled than the forecasted 5.3% fall projected by the International Monetary Fund (IMF). However, unlike some of the regional economies, the pandemic-induced decline lasted only for a short span of time before Japan waded through and rallied. Posting a 3% growth in the 4th quarter of 2020, when major economies like Germany and US grappled with recession, Japan steadily made surface.

Now as the pessimism looms in Europe and the political divide worsens in US, Investors are pouring confidence in Japanese equities which provide a solid foundation to the already surging Japanese Indices. This shift in perspective could be gauged by the purview of global stock positions taken by the active equity investors throughout the globe; pouring investments unlike the sceptical position adopted since January. The increasing investor confidence coupled by the improving economic and social health of Japan has proved monumental on the financial charts; despite being in the highs of a heavy stimulus, S&P 500 continues to be outperformed by Nikkei 225, sometimes even falling short by colossal margins to the returns added by the Japanese Index.

Which way the markets would turn and how Japan could sustain the whelming economic recovery depends largely on how Japan deals with Covid and how efficiently it regulates the vaccination drives. Moreover, Japan’s success may be upped the ante by any new misery that might befall on US or Europe that could ultimately drive more confidence and flare to the 3rdlargest economy of the world.

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East Asia

Mongolia-World Bank Group Partnership: Three Decades of Partnering for Prosperity

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It all began exactly thirty years ago. On February 14, 1991, the eve of Tsagaan Sar, Mongolia joined the World Bank Group[1]. This was the period when the country had just gotten on the path of democracy, free market, and openness to the outside world.  Mongolia rightly took pride in this transition but, at the same time, it presented enormous challenges, including a sharp economic contraction. Following the cut of external aid, the hardship was felt by Mongolians every day. Long lines were visible on every street corner for rationed food.

The World Bank’s support was quick to arrive. By the end of 1991, the first project of $30 million was already signed to help rehabilitate production in key sectors such as agriculture, energy and transport. The World Bank also carried out a comprehensive macroeconomic analysis, zooming in on the immediate challenges of runaway inflation and falling output.

Since these early days three decades ago, the World Bank Group (WBG) has accompanied Mongolia’s strong recovery and development, culminating in the country’s graduation from the International Development Association (IDA) – the WBG’s lending window for low income countries – last year. Mongolia’s economy has expanded significantly over this period, with GDP per capita rising more than fourfold from $1,072 in 1991 to $4,339 in 2019. But growth has been volatile. Like many other resource-rich countries in the world, Mongolia experienced persistent boom-and-bust cycles. Economic diversification remains critical to generate productive jobs, especially for the young. People’s living standards have improved, but growth did not not generate shared prosperity for all. Mongolian citizens expect their government to deliver quality education and health services, and provide for a clean and safe living environment. Their aspirations have not yet been fully realized.

Through good and difficult times, the WBG has remained a steadfast partner of Mongolia. Our budget support operations helped Mongolia restore macroeconomic stability and lay the foundations for inclusive growth. Our investments contributed to economic development in both mining and non-mining sectors, improving people’s livelihoods, and addressing environment and climate challenges. A total of $1.28 billion World Bank financing has been committed to Mongolia for these years. The WBG’s private sector arms—the International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA)—have also been active in supporting private investments.

The investments have helped improve people’s livelihoods across the country. In the energy sector, we supported electricity access to over 100,000 rural and herder families providing them with portable solar panels in the 2000s. In the early 2000s, the World Bank telecommunications project helped all 360 soums in Mongolia gain access to modern phone and internet services. To help herders mitigate natural disaster risks, we supported the world’s first index-based livestock insurance system in Mongolia. To improve governance, we helped revamp the statistical system in Mongolia to match international standards to inform decision making, and empowered citizens to make their voice heard on public expenditure allocations at local levels. IFC financed Mongolia’s first utility-scale windfarm for the country and supported reforms to increase access to finance for SMEs through enabling movable collateral.   

Most recently, in the face of the COVID-19 pandemic, the WBG quickly mobilized over $60 million to support the relief and stimulus measures for saving lives, protecting the poor and vulnerable, and ensuring sustainability of businesses and jobs. These resources are being invested for the most essential medical and diagnostic equipment in three tertiary hospitals, nine district hospitals of the capital city and 21 aimags, personal protective equipment for frontline health workers, and training for medical staff. A new project, which would finance the vaccination of about 60 percent of Mongolians has just been approved. The Bank is also financing the temporary relief of social insurance contribution for over 120,000 self-employed workers including 72,000 women and around 150,000 workers employed by 18,000 firms affected by COVID-19. Bank support has also benefited approximately 1.19 million children through the top-up payments to the government’s Child Money Program.

After thirty years of partnership with the World Bank Group, Mongolia has become a lower-middle-income country and its vision is to become by 2050 a high-income country with high levels of human development, better quality of life, a diversified economy, and good governance. This is an aspiration we will continue to support. To turn it into reality will be challenging. The first step will be to gradually phase out short-term relief measures and return to the important agenda of structural reforms which are needed to rekindle growth and make it sustainable and inclusive. Over the medium-term, Mongolia will have to contend with the growing risks associated with climate change, and the challenges this will bring to the structure of its economy. And it will need to offer its youth the perspective of productive, well-paying jobs, to retain the country’s talents at home.

The WBG is honored to have been Mongolia’s trusted partner over the past thirty years. We are confident that our partnership will continue and further strengthen in the decades ahead, rain or shine.

 [1] Mongolia joined the International Bank for Reconstruction and Development (IBRD), International Development Association (IDA), the International Finance Corporation (IFC), and International Centre for Settlement of Investment Disputes (ICSID) in 1991; and Multilateral Investment Guarantee Agency (MIGA) in 1999.  All these organizations together known as the World Bank Group.

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