US President Trump has signed into law a sanctions bill to punish China for the situation in Hong Kong, and an executive order that strips trade privileges from China’s special administrative region in what can be regarded as the start of a “sanctions war” around Hong Kong with unpredictable consequences.
The decree lays out a raft of tough measures, and to put it into effect Trump used the same tactic as the one he applied when preparing his earlier decree on the construction of the wall along the Mexican border: the introduction of a state of emergency. The Hong Kong situation, the decree states, “constitutes an unusual and extraordinary threat, which has its source in substantial part outside the United States, to the national security, foreign policy, and economy of the United States. I hereby declare a national emergency with respect to that threat.”
The decree also says that “it shall be the policy of the United States to suspend or eliminate different and preferential treatment for Hong Kong to the extent permitted by law and in the national security, foreign policy, and economic interest of the United States.”
The sanctions bill is very aggressive as it combines previous and new measures of administrative and economic nature. It eliminates the preference for Hong Kong passport holders as compared to PRC passport holders; revokes license exceptions for exports to and re-exports from Hong Kong that provide differential treatment compared to those license exceptions applicable to exports to China; suspends the agreement between the US government and the government of Hong Kong for the surrender of fugitive offenders and the transfer of sentenced persons; ends the provision of training to members of the Hong Kong police and security services in the United States; terminates the Fulbright exchange program with regard to China and Hong Kong; terminates the agreement for the reciprocal exemption with respect to taxes on income from the international operation of ships.
The decree also provides for the arrest of the property in the United States of persons and organizations, involved in the development and implementation of the Hong Kong Security Act.
Beijing’s response to these measures was predictably tough, with Deputy Foreign Minister Zheng Zeguang summoning US ambassador Terry Branstad to lodge a protest and warning that to protect its legitimate interests China would respond with retaliatory measures, including sanctions against organizations and individual US citizens.
Unfortunately, the bill, inked by Trump, has already had a serious side effect with a number of US firms, including Google, Amazon and Microsoft, now refusing to provide regulators in Hong Kong with access to cloud storage that contains customer financial data. Business is playing it safe, as they say: according to the rules of the Hong Kong regulator, cloud service providers are required to provide access to their customers’ data without prior notice, but formally such data are not part of the Hong Kong Security Law.
China is sure to hit back with counter-sanctions, both symmetrical and asymmetrical. What is most important, however, is just how far these sanctions war will go and how much damage the US sanctions are going to cause. Meanwhile, Washington is mulling the possibility of going overboard in its present conflict with Beijing. Being the third largest dollar market around, Hong Kong has its currency pegged to the greenback. There have been proposals to limit Hong Kong’s access to dollars as a means of destroying its status as an Asian financial center. Unlike the Chinese yuan, the Hong Kong dollar is freely convertible and its exchange rate has been pegged to the American one for almost 40 years now. This makes the autonomy’s financial system attractive to foreigners, who know that they will always get back the money they invest in the local economy, company shares and financial instruments.
However, it should be borne in mind that China is the largest holder of dollars outside the United States. A third of China’s forex reserves, equivalent to over $3 trillion, are held in US dollars, as is a sizeable share of its $2 trillion foreign investments. If Hong Kong feels the need to secure its currency’s peg to the US dollar, then it is Beijing, not the US Federal Reserve that can fully satiate its demand for dollars.
Even though a radical scenario like this has not really been considered so far, even the measures already taken by the Trump administration are able to cause serious damage both to Hong Kong and the People’s Republic as a whole. The impact of the current sanctions war and the future of US-China relations will depend on the nature and scale of China’s response. Meanwhile, the entire world economy eagerly awaits the outcome of this battle of giants…
From our partner International Affairs
Changing equations of US-China relations and Taiwan Factor
The relations among the two permanent members of security council have improved since the Nixon surprise visit to China in 1972 and ending the 22-year long isolation of Mainland China, although the reasons may have been many, the immediate result was consolidating the Sino-Soviet split and weakening the USSR geopolitically as well as strategically. By the next decade, China went through sweeping reforms and under Deng Xiaoping opened-up to the world. The pragmatic Deng Xiaoping’s two statements best encapsulate this period, “Poverty is not socialism, to be rich is glorious” and “Hide your capacities and bide your time”, here we can understand that he was sure that without opening-up economically and becoming an economic powerhouse, the People’s Republic of China will not be able to fulfill its objectives and while in pursuit of it, the best option is to stay humble and keep working. However, since the 2000s the policy shifted towards the peaceful rise of China, and after the 2008 financial crisis which hit western economies disproportionately, provided the opportunity for China to begin creating its sphere of influence. The accession of Premier Xi Jinping brought to fore the ambitions of China and in his inaugural address, he even talked about the China Dream. The Chinese employed the strategy of coercive economic assistance and provided pompous loans to countries in ASEAN, East Asia, South Asia, and even Eastern Europe (the 17+1 dialogue is a good example). The tools for this diplomacy are the Belt & Road Initiative and Debt diplomacy. With governments finding it difficult to get credit lines from the USA backed IMF and World Bank because they are not in a position to comply with the policy decisions which these organizations prescribe, the Chinese provide a solution that is too good to deny. Chinese say we do not care about what type of governments you have and we are ourselves an authoritarian regime, thus, it is not necessary to follow the politico-economic model prescribed by the liberal west to be successful. Although it may be music to the ears of many countries, China asks for something bigger in return; they ask for a great deal of deference and compliance as well as they, in the long run, take control of areas of strategic importance; a good example is Hambantota Port in Sri Lanka.
All the while the USA is continuously ceding space, moving inward, and creating opportunities for China to take advantage, unintentionally of course. Right from the 2008 financial crisis, the USA was embroiled with internal strife & division which culminated in the election of Donald Trump. The Trump slogan of Making America Great Again moved the US towards isolationism & made the Chinese more resolute to implement BRI and practice Debt diplomacy with greater vigor and aggression. However, although China is trying to carve out its sphere of influence (earlier covertly and now more & more overtly), USA will not likely let it happen while trying to contain China and for that, it has been supporting the claims of other party countries in South & East China seas, frequent military drills and exercises with allies, Malabar Exercise with India and Japan in the Indian Ocean, moving military assets in the South China Sea as well as tackling Chinese challenge on trade & technology front.
We know that the conflict between the two countries is on multiple fronts and as China has become more assertive amid the Pandemic, opening up border disputes with Japan in the East China Sea, ASEAN nations in the South China Sea, Taiwan in the straits and India in the Himalayas. This geo-political tango initiated by China can spiral from conflict into a confrontation. And what feeds into it is the absence of any channel of communication except the top between China and USA which if existed could have held track 1.5 or track 2 talks to reach a Modus Vivendi between these two nations. And what feeds into this fire is both the Xi and Trump administrations ceding to a discourse hyper-nationalist, which had led to further depletion for any diplomatic flexibility.
The tit for tat can only go so long without getting out of hand. We can observe, everywhere China is in confrontation, the USA is backing the aggrieved party. However, in the case of Taiwan, we can see direct confrontation among the two powers, China claims Taiwan to be its territory under One China policy and on the other hand, the USA feels it is its responsibility to honor the defense agreement with Taiwan and with the democratization, the two countries have come further close.
Taiwan factor & shrinking space for maneuverability
President of the Republic of China (ROC, Taiwan) Tsai Ing-wen in her inaugural address laid out her articulation of Taiwan’s cross-strait policy – peace, parity, democracy, and dialogue. This policy statement in the wake of Hong-Kong’s new security law, confirms that Taiwan will in no way compromise with its democratic set-up which it had earned after a long 38 years of struggle against the authoritarian state.
The success of Taiwan in dealing with COVID-19 (creating a Taiwan model), its warnings to the World & WHO which were never heard and its philanthropist actions for many countries have earned a lot of goodwill and international praise. The world is now waking up to the fact that being a strait away from PRC and facing the brunt of its coercive tactics to amalgamate Taiwan with PRC, Taiwan is very experienced in the Modus operandi of CCP and can help the like-minded countries deal with the asymmetric warfare which is practiced in real-time via disinformation campaigns on social media. Taiwan can with other like-minded democracies establish a framework to counter cognitive warfare (of which disinformation is a part) by providing a proactive & accurate narrative against influence operations that are attempting to undermine democracy by trying to nudge outcomes that will affect the political process.
The Taiwanese foreign policy revolves around 4 tenants which are, maintaining status-quo with PRC, gaining goodwill among world democracies and likeminded countries, increasing defensive capabilities, and economic strength.
However, managing the four tenants with increasing animosity between China and the USA is a challenge in itself. The current shift in the Trump administration’s approach towards distinguishing the Chinese Communist Party from the Chinese people by remembering the May 4th movement and the roots of democracy, the USA is trying to counter cognitive warfare by delegitimizing CCP on mainland China (as perceived by the CCP ideologues). In addition to this, because of Taiwan, CCP is reconciling with the fact that its approach towards Taiwan has failed, and what once China considered asymmetry of interests for Taiwan to be inclined towards China, has been shifting (with the latest pew polls showing record-low support for increasing ties with CCP). All of this mixed with China’s psych of perpetual vulnerability may soon lead to China trying to alter status-quo militarily.
This tells us that space for Taiwan to maneuver has been shrinking with every passing day. In the context of the greater Indo-pacific geopolitical theatre, Taiwan has a lot to offer be it for the USA or other middle powers who would like to maintain the status quo towards free and open International waters for trade and commerce. The current world order, being unstable and challenged with non-traditional security issues (an example being COVID-19 pandemic) as well as the assertive rise of China with a proportional rise in its vulnerabilities requires a new perspective. Taiwan being a Subject Matter Expert in these issues with a unique perspective that comes from facing vulnerability because of global isolation can become an asset to the USA as well as middle powers in developing stratagem which can be successful in saving the multi-polar world order. Taiwan understands this and should move practically ahead while calculating in real-time the permutations and combinations of possibilities and take every step likewise.
The world ahead & way forward
The whole world is looking at the American elections which are 6 months away, and the policy till then would be to contain Chinese aggression. Even China would take steps calculating the impacts and will focus on the elections. The middle powers (Japan, U.K, France, Germany, India, South Korea, etc.) should work out a strategy (less dependent on the USA) to focus on maintaining the status-quo (multipolarity).
The combination of Chinese overconfidence (overt expression of its vulnerabilities) coupled with its perception of Taiwan’s under importance in the USA’s foreign policy doctrine can lead to serious conflict and which could easily spiral in this season of Nationalism.
The situation between China and the USA will deteriorate, but to which extent and what speed will depend on the shifts in Chinese aggressiveness here onwards and the American elections in November’20. Taiwanese citizens can play an important role and so do the middle-power countries if the people and government cherish and pursue to maintain its vibrant democracy and the middle powers help the Taiwanese people in this pursuit. Hopefully, it may deter the two nations from further escalations and it may very well be the only chance to contain Chinese ambitions with minimizing the Damage to Humankind.
Filing of a petition with ICC: Beginning of Uighurs’ legal battle against China
Uighur Muslims, a minority community in Xinjiang province of the People’s Republic of China (hereinafter China), has been subjected to state sponsored persecution by China for over past six years (It first began in 2014). Since 2017, when the reports of Chinese crackdown on Uighurs first became public; China has been attracting widespread global denunciation for subjecting this minority group to ‘arbitrary detentions, sexual abuse, forced abortions and sterilizations’. In July 2019, a group of 22 countries wrote a letter to the United Nations Human Rights Council (UNHRC) condemning the persecution of Uighurs. In June 2020, USA imposed various sanctions on Chinese officials over Uighur abuses by enacting the Uighur Human Rights Policy Act, 2020.
The most recent attempt to hold China accountable for human rights violations entailed filing of a petition against China with the International Criminal Court (hereinafter ICC). In July 2020, Uighur exile groups ‘The East Turkistan Government in-exile’ and the ‘East Turkistan National Awakening Movement’ filed a petition against China seeking an investigation against around 30 Chinese officials for alleged repression of Uighurs. The country has been accused of committing the crimes of ‘genocide’ and ‘crimes against humanity’. The filing of petition is a first step towards tangible justice for Uighurs. At the same time however, it opens up a pandora’s box of questions: How will ICC assume jurisdiction over China, which is not a member to its Statute? Will China cooperate in the investigation? Why wasn’t the International Court of Justice (hereinafter ICJ) approached?
Building a case for the International Criminal Court to take Jurisdiction:
China is not a signatory to the Rome Statute which governs the functioning of ICC. ICC therefore, does not have a direct Jurisdiction over China and its nationals. However, as alleged by the petitioners, China has been deporting these Muslims from Tajikistan and Cambodia – State parties to the Statute. The petitioners have thus argued that since a part of the crime has been committed on the territory of member states of ICC, it can assume jurisdiction over the case.
Interestingly, a similar set of facts and arguments have faced ICC earlier as well. In 2018, the court was approached to rule upon its jurisdiction over alleged mistreatment of Rohingya Muslims by Myanmar – a non-member state. In the said case too, it was claimed that the Court has Jurisdiction over those who committed crimes against the Rohingyas under article 12(2)(a) of the Statute “because an essential legal element of the crime- crossing an international border- occurred on the territory of a State which is a party to the Rome Statute (Bangladesh)”. ICC’s pre-trial Chamber I ruled that it “has jurisdiction over the alleged deportation of members of the Rohingya people from Myanmar to Bangladesh”. It further added that “If it were established that at least an element of another crime within the jurisdiction of the Court or part of such a crime is committed on the territory of a State Party, the Court might assert jurisdiction pursuant to article 12(2)(a) of the Statute”. Expecting a similar ruling in the Uighurs’ case is thus not an unrealistic dream.
In fact, from the juxtaposition of the facts, crimes and parties involved in the two cases, itcan be safely deduced that there exists a high probability of ICC assuming jurisdiction and initiating investigations into alleged criminal acts concerning Uighurs. On humanitarian grounds, it perhaps will be a step in the right direction. Indubitably, grave crimes like these cannot be avoided or deferred based on mere technicalities. However, it certainly would go against certain long-established principles of International Law.
ICC’s assumption of jurisdiction would, at the very least, be in circumvention of the very spirit of Article 34 of Vienna Convention on the Law of Treaties which states that “A treaty does not create either obligations or rights for a third state without its consent.” Since China is not a signatory to the Rome Statute, it must not be obligatory for it to submit to the jurisdiction of ICC. Another principle of law, which ICC would be going against is ‘Ubilexvoluit, dicit; ubinoluit, tacit’. It means ‘if the law means something, it says; if it does not mean something, it does not say it’. Now, under the Rome Statute, ICC can exercise jurisdiction only under three circumstances– where the alleged perpetrator is a national of a State Party or where the crime was committed in the territory of a State Part (1) , or a State not party to the may decide to accept the jurisdiction of the ICC(2), or the Security Council, acting under Chapter VII of the United Nations Charter, can refer a situation to the Office of the Prosecutor (3). The intention of the draftsmen with regards to Jurisdiction of ICC is thus very clear – ICC shall not exercise jurisdiction over non-member states. The written law does not provide for a jurisdiction over non-member states except by a referral from the UNSC.
It not only would reinforce wrongful persuasion but might also turn out be completely ineffective because International Tribunals do not succeed when the necessary state parties do not submit to their jurisdiction itself. In this regard, ICC itself has noted that, “as a judicial institution, the ICC does not have its own police force or enforcement body; thus, it relies on cooperation with countries worldwide for support.”Non-States parties are not obligated to cooperate with ICC for making arrests, freezing suspects’ assets etc.
It is very unlikely that China will even appear before the International Court. If it does, it surely will contest ICC’s jurisdiction. ICC would thus have to negate each of the above arguments. Given the low probability of China cooperating in an investigation initiated by ICC, Justice to Uighurs will not come easily even after the jurisdiction is taken by ICC.
A Case at the ICJ in the alternative
Chinese atrocities against Uighurs in Xinjiang are also in violation of various provisions of the Convention on the Prevention and Punishment of the Crime of Genocide (“the Genocide Convention”), to which China is a party. ‘Genocide’, under Article II of the Convention, among others includes ‘Causing serious bodily or mental harm to members of the group’ and ‘imposing measures intended to prevent births within the group’.A study undertaken by Human Rights Watch on Chinese repression of Uighurs has reported ‘political indoctrination’, ‘deaths in custody’, ‘torture’ and ‘mistreatment’ of Uighurs. Another report gives a detailed account of forced sterilization and employment of other birth control techniques on Uighur Women to supress Uighur birth rates in the Country. These fiendish acts fall under the crime of ‘Genocide’, punishable under Article IX of the Convention.Article IX prescribes that the disputes “relating to the responsibility of a State for genocide or for any of the other acts enumerated in article III, shall be submitted to the International Court of Justice at the request of any of the parties to the dispute.”
Now, for a dispute to be adjudicated by ICJ, any of three conditions under Article 36 have to be satisfied: (1) If the state has made a declaration under Article 36, paragraph 2 of the ICJ’s statute granting the court compulsory jurisdiction over disputes under international law; or, (2) where a particular treaty provides the ICJ as its dispute resolution mechanism; or, (3) by entering into a special agreement to submit the dispute to the Court. Since China had withdrawn its declaration under Article 36(2) of the ICJ Statute, it is not under compulsory jurisdiction of the ICJ. But China has ratified the Genocide Convention which prescribes ICJ as the dispute resolution body. Therefore, any Contracting Party to the Convention may bring a case against China. It thus follows that ICJ’s jurisdiction in the matter at hand can be founded under Article 36, Paragraph 1 of the ICJ Statute read with Article IX of the Genocide Convention.
Bringing China under the radar of ICJ would have been easier yet less effective. ICJ, under its statute, is not empowered to prosecute individuals. It could, at the most, order China to cease ongoing genocide and to prevent genocide from occurring in the future. Additionally, it can also order equitable remedies like ordering China to enact legislation to criminalize genocide in line with the requirements of the Genocide Convention. On the other hand, ICC’s purpose of establishment itself was prosecution of individuals. It can impose lengthy terms of imprisonment of up to 30 years, order a fine, forfeiture of proceeds, property or assets derived from the committed crime. ICC’s mechanism thus suits the best in the current scenario.
Past precedent on China’s response to international adjudication is not very encouraging. Traditionally it has shunned all international adjudication, preferring to settle all disputes through direct negotiation. The past experiences of Chinese response to international adjudication invited remarks like “Putting ‘China’ and ‘international law’ in the same sentence is an oxymoron.” When China lost to Philippines in the South China Sea Case, a former Chinese diplomat openly said that this judgment was “nothing more than a piece of paper”.
Even if China accede to international adjudication of any sorts, neither ICC nor ICJ has the mandate to enforce their judgments. Adding onto the misery, China being a permanent member of UNSC can veto any resolution pertaining to enforcement of a ruling against itself. Nevertheless, filing of a petition at ICC is itself a step towards justice. It sends an indication to China’s government that the international community will no longer condone its actions. In the long run, attaining justice for Uighurs might take filing of cases at multiple judicial institutions as in the case of ‘mistreatment of Rohingyas’. There is even a possibility that a parallel case may be filed at the ICJ. This is only a first step in the Uighurs’ battle against China.
Will China bubble burst owing to authoritarianism?
In his book The Age of the Economist, Daniel R. Fusfeld tells how economics governs our life today. In today’s market or quasi-market economies, no country can live in economic isolation (sakoku). India, USA and their `satellites’ are trying to isolate China in economic field. Already, they have hung isolationist Financial-Action-Task-Force Sword of Damocles over China’s all-weather ally Pakistan’s head. Through its economic relations and defence purchases, India scuttled Pakistan’s effort to draw world’s attention to Kashmiris in prison. India’s defence ministry approved purchase proposals amounting to an estimated Rs 38,900 crore. Heretofore is a bird’s-eye view of her shopping itinerary. Procurement of 36 Rafales and 12 Su-30 MKI aircraft and 21 MiG-29. Upgrading Indian Air Force’s existing MiG-29 aircraft. The MiG-29 procurement and upgradation from Russia will cost Rs. 7,418 crore. Producing the Su-30 MKI at the Hindustan Aeronautics Limited will cost Rs. 10,730 crores.
In Sri Lanka, india, through its underhand machinations, managed to remove Mahinda Rajapaksa from office 2015. Rajapakse had leased out strategic Hambantota port to China and allowed docking Chinese submarines in in Sri Lanka. Now Sri Lanka has handed over control of Humbantota to India. India gave Sri Lanka $45.27 million aid to develop KKS harbour (Jan 12, 2018).
India extended 2.1-billion Nepalese Rupee (NR) aid to Nepal as reimbursement of the first tranche of housing support to 42,086 governments of India- supported beneficiaries in Nuwakot and Gorkha districts. It pledged Nepal US $1 billion aid and soft loan (25%) for Nepal’s post-earthquake. India bears pension liability of Gorkhas equivalent to Nepal’s annual budge. But, offended at occupation of Kala Pani territory by India, Nepal enacted law to affirm its territorial sovereignty. Nepalese prime minister Oli is tottering because of India’s underhand effort to topple him.
India has no border at Doklam with China.yet it, like a super power jumped in `at Bhutan’s request’ to stop China from constructing a road there. It pledged to contribute Rs 4,500 crore to Bhutan’s twelfth five-year plan (2018 to 2023). It completed Mangdhechu Hydroelectric project and Ground Earth Station for South Asia Satellite and launch of RuPay card in Bhutan. Besides, it committed assistance of Rs 4,500 crore for implementation of development projects and Rs 400 crore for transitional Trade Support Facility during Bhutan’s 12th Five Year Plan (2018 – 2023). Under the 12th 5-Year Plan, 51 large and intermediate projects and 359 Small Development Projects (SDPs)/High Impact Community Development Projects (HICPDs) are being carried out. India’s commitment to the 12th Plan constitutes about 14.5 per cent of the Plan outlay which is around 38.75 per cent of the capital outlay and 71 per cent of the total external assistance.
To Bangladesh, India extended three $8 billion loans. A total of 1.16 Gigawatts of power is now being supplied by India to Bangladesh. The increase, in the reckoning of the Prime Minister, signifies a “quantum jump from megawatts to Gigawatts and is symbolic of a golden era” in bilateral ties. Markedly, Mamata Banerjee has pledged to raise the power supply to Bangladesh to 1,000 MW. Though electricity will not be a substitute for Teesta water, the plan to boost power supply is on anvil.Bangladesh is however annoyed at dillydallying at Teesta Accord, and India’s inability to brief her about Glawan situation (rebutted by India).
Launching the ‘Act Far East’ policy, India’s Prime Minister Narendra Modi announced (September 5, 2019) that India will give a line of credit worth US$ 1 billion to Russia for the development of the Far East.India provided Lines of Credit worth $ 96.54 million to Niger for projects in transport, electrification, solar energy and potable drinking water. It granted $15 million to Niger for organising African Union Summit.
India and Japan have launched their own joint initiative in the shape of Asia-Africa Growth Corridor (AAGC) vis-a-vis China’s Belt-Road Initiative for undertaking development and cooperation projects in the African continent.
India’s knee jerks to Malaysia and Turkey: Malaysian prime minister Mahathir Mohammad had said in September last that India had “invaded and occupied” Kashmir. He was joined by Turkey’s President Recep Tayyip Erdogan, who said that India had virtually imposed “a blockade” on Kashmiris.Their views on Kashmir and the Citizenship (Amendment) Act (CAA) irked India.India punished
Turkey by not allowing it to bid for construction contracts. Import of palm oil from Malaysia was truncated.
Will China’s economic bubble burst for lack of institutions and authoritarianism: The spectacular economic growth in China in the past four decades has inspired a large strand of research to understand China’s unconventional growth path. China is expected to suffer a sudden economic collapse because of lack of inclusive institutions, debt policies, and authoritarianism. Daron Acemoglu and James A. Robinson in their book Why Nations Fail argue that without economic institutions particularly private property , and competition, nations fail to promote economic growth and alleviate poverty. Powerful people should not seek to grab complete control over government undermining broader social progress. It is freedom that makes people rich. Without political change, even sensible economic ideas and policies are doomed to fail.
To strengthen his rule, Xi Jinping has allegedly assumed an absolute control over all the institutions of country in guise of national rejuvenation and reforms.
Norwegian political scientist stein Ringen in his book “The perfect dictatorship: China in the 21st Century calls XI’s rule as “Controlocracy”. Xi chairs, roughly, eight of the leading small groups including national security commission. He also handles internal security directly, thereby reducing any possible chance of mutiny.Tai Ming Cheung a professor at the school of global policy and strategy at UC San Diego alleges “No other Chinese Communist Party leader, not even Mao Zedong, has controlled the military to the same extent as Xi does today. Mao had to share power with powerful revolutionary-era marshals.” To show how “hands-on” he is, Xi has taken the new post of commander-in-chief of the PLA Joint Battle Command.
This view is debatable. Discussion papers are included in in Allen, Franklin & Qian, Jun & Qian, Meijun, 2018. “A Review of China’s Institutions,” CEPR Discussion Papers 13269. Their paper focuses on the recent development of China’s institutions, financial markets, innovations and government-business relations in the context of their roles in supporting China’s growth. Alternative financing channels and governance mechanisms, rather than the markets and banks, continue to promote growth in the most dynamic sectors of the Chinesed economy.
Pro-China view: Tom Orlik, chief economist – Bloomberg Economics and David Dollar, senior Fellow, Foreign Policy, Global Economy and Development, John L. Thornton China Center, do not agree. They trust China would tide over economic crises through out-of-box thinking and ingenuity of mind. Klaus Muhlhahn in aking China Modern: From the Great Qing to Xi jinping highlight role of institutions in China’s rise. During the nineteenth century, China suffered humiliation of defeats in the Opium Wars at the hands of Western imperialists. Like a sphinx, China rose from ashes to baffle the world, we live in, through its flabbergasting if not unprecedented economic growth and participation on the geo-political state as a powerful player.
Charismatic leaders (Sun Yat Sen, Mao to Xi Jinping) did contribute their effort in transforming China. China’s rise, per official line began with Deng Xiaoping’s rule in 1978. But a dispassionate look at history reveals that China’s recovery was in the making for about a century. Historical legacy, cumulative experience a desire to see a better tomorrow and resilience in overcoming adversity contributed to China’s emergence as a conundrum or a miracle during twentieth or twentieth century.
China’s rise is not an overnight exploit or legerdemain of some leaders. Its present status is cumulative product of its institutions in early modernity or late imperial period (mid-seventeenth through eighteenth century). Beginning in 1644 during the Qing dynasty reign, many core institutions were developed and the empire achieved its zenith. The social and cultural institutions of this period account for China’s brilliant trajectory into nineteenth and twentieth century. The institutions of yesteryears, about three centuries , relate to key areas of government economy sovereignty, border security and exploitation of natural resources.
Inference: In cahoots with USA, India wants to get China declared a pariah state. The aim is to impose economic sanctions, or aid or trade embargo on China. The USA uses a flexible format to dub or delete a country as axis of evil, money-laundering conduit, sponsor of terrorism or pariah (Tamil paraiyar, outcastes), or rogue (Iran, Sudan, North Korea, Cuba, Venezuela). Ottoman Empire was persecuted as an outcast by European States since the Treaty of Westphalia in 1648 until the nineteenth century on a religious basis’.
Deon Geldenhuys. points out multifaceted criteria for declaring a state pariah_ having ‘artificial borders’ (Iraq), siege mentality, anti-West sentiments and desire to subvert the international status quo, or not being a considerable `world power’(“Pariah States in the Post-Cold War World: A Conceptual Exploration, March 5, 1997). So far, China has eluded pariah label proving it to be a `world power’.
Why India is hostile to China? Indian prime minister Modi himself told an all-party conference, “Neither have they [Chinese] intruded into our border, nor has any post been taken over by them (China)”. Even former defence minister AK Antony and former foreign secretary Shyam Saran denied China had taken over 640 sq km of Ladakh territory. Even, “The Indian army denied that Ladakh had shrunk. Change in the river course was cited as a reason for the loss of 500-1,500 meters of land annually”. Then, why the storm in a teacup.
Talk of Chinese bubble bursting appears to be a propaganda tip.
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