One shouldn’t presume that Beijing and New Delhi have always been on the opposite poles of the spectrum as serious attempts have always been made to facilitate discussion and promote diplomacy in its truest essence. From the Panchseel Agreement of 1945 to the recent Galway valley violence of 2020 – do these countries still believe in dialogue for peace’ as the belief that the Ministry of External Affairs holds or has– Hindi-Chinni Bhai-Bhai period already becoming into Hindi-Chinni bye-bye period.

While promising a stable bilateral relationship it is imperative to note how cross-cutting sensitive issues of the border dispute, country contours, diverging projections of geopolitical interest, security ties with other powers, close affiliations with Pakistan and the United States forces us to look at multiple vantage points in this already complicated affair – thus raising the burning questions whether as INDIA and China both take over the world stage are they willing to ‘confront’ and ‘concile’?

“Today, being the biggest developing countries in the world, China and India are both committed to developing their economy and raising their people’s living standards’’

– Li Peng

INTRODUCTION

The past 60 years of India- China relations have signalled that both countries have been making a concerted effort to embark on seeking mutually acceptable resolutions to the main contention relating to a boundary issue. The major provocations which confront this asymmetrical correspondence been to build mutual trust and confidence. The trust deficit which plagues both sides has decimated the robustness of bilateral relationships where the element of trust is an essential pillar in maintaining a sustained balance. Somehow, the lack of these essential components of confidence-building feigns grounds of hostility towards one – another and gives rise to biases dwelling on power dynamics.

The deepening of relations can be traced to the signing of the Strategic and Cooperative Partnership for Peace and Prosperity in 2005 and A Shared Vision for 21st Century in 2008 which serves as a reminder of our neighbourhood while laying foundations for a future that envisions us growing together; however it’s saddening to see how we are walking on eggshells now as our cordial relations reach a breakthrough.

Undoubtedly, India and China have emerged as the two rapidly growing economies and their bilateral relationship to a greater extent has assumed global and strategic relevance. The objective of this article will be to assess and analyze the broad overview of India-China relations, throwing light on issues that fragment them while we chart our future prospects of convergence. It is of utmost importance to questions what lies the way forward for both the ‘dragon’ and the ‘peacock’ as uncertain times dawn and reciprocal development is the need of the hour.

EVOLUTION OF RELATIONSHIP

Taking a glimpse of the past 70 years gone by, China-India relations have moved ahead despite wind and rain and have followed their own course of growth despite all odds. Since the 1950s, the leaders laid the stone to establish diplomatic relations between China and India, as they Cooperatively championed the ‘Five Principles of Peaceful Coexistence.’

As consensus was maintained in the era of initial cordiality the Panchsheel Agreement was signed which ascribed the ‘guiding principles’ of India-China bilateral relationship as its ideals of ‘non-interference in each other’s internal affairs while respect for territorial unity, integrity and sovereignty’ coursed through both nations.

However, it was Zhou Enlai’s trip to India in June 1954 which was a mark of China’s intent to uphold it promises while also reinstating another historic event where a communist head of government was making a peacetime visit to a non-communist state.

The animosity and hostilities gained momentum during the decade of 1959 – 1976, where this rough patch resulted in the infamous war of 1962. During this period, there was a sharp shift in the perception of China where negative connotations of it being seen as an aggressive neighbour that sought to humiliate a democratic India garnered headlines. A dramatic transference of ideologies as well as values of peaceful and friendly consultation,

established strategic and cooperative partnership for peace and prosperity, while achieving all-round development of bilateral relations marked the much of 1980s.

In the post-1998 scenario after India detonated a nuclear device, China was a staunch critic of this development thus putting a roadblock in their relationship. However, the situation changed after the realisation set in about each other’s contribution to the global economy and to a greater extent started broadening the then-existing bilateral ties. The strain in the relationship was replaced by an era of cooperation in the economic sphere while disagreements on respective political fronts.

While tracing the genealogy of Sino – Indian relations we come across the phase commenced by the Chinese President Xi Jinping and Indian Prime Minister Narendra Modi by initiating the concept of “hometown diplomacy” which ranged from informal summits in Wuhan and Chennai to strategic communication on long-term issues of global and regional importance while agreeing to facilitate development and close partnership

Today’s achievements of China-India relations embody the concise and regular efforts of several generations from whom we need to draw inspiration from the past as experiences of the present tragically make us critical of each other’s intentions.

As we stand on the brink of a new starting point present-day decision-makers should draw wisdom from our thousands of years of civilisations and explore authentic ways to stay true to the essence of ‘ brotherhood’ envisioned years ago as we look forward towards; “enhancing mutual trust, focusing on cooperation, managing differences and seeking common development”.

CHALLENGES TO THE INDIA-CHINA PARTNERSHIP

Indian President Ram Nath Kovind and Prime Minister Narendra Modi often resonate with the philosophy, where the whole world is seen as a family of the whole rather than functioning in splinters, which runs parallel with the Chinese philosophical concept of “universal peace” and “universal love” thus reiterating the belief that the “Dragon-Elephant Tango” does hold the potential to create a new chapter in building a community with a shared future if they agree to make credible and foresighted peaceful endeavours towards the issues of contention like :

• To devise an early settlement of the border problem and to prevent the enduring stalemate from completely undermining the confidence that remains between the two nations
• To reconcile regional strategies in South Asia, Central Asia, ASEAN, and the Indian Ocean;
• To promote confidence-building measures and eliminate misperceptions while avoiding the misreading of each other’s strategic intentions,
• To envisage each other’s core interests and strategic sensitivities
• To reinforce the bolstering effect of vibrant trade, economic links and developmental ties in sustaining a stable bilateral relationship;
• To breathe more substance into the existing framework of the declared Sino-Indian strategic partnership.

THE WAY THAT LIES AHEAD

This journey of facilitating change and strengthening the relationship needs to be steered by mastering the four keys of “leading, transmitting, shaping and integrating” – the basics of enhancing trust and to instil confidence amongst one – another.

“Leading” pertains to reaching consensus and guide the direction of the development of bilateral relations under the guidance of leaders. “Transmitting” means to transmit the leaders’ consensus to all levels as they get translated into tangible cooperation and outcomes. “Shaping” refers to go beyond the mode of managing differences while accumulating the positive momentum of shaping bilateral relations. “Integrating” at the end concerns strengthening exchanges and cooperation while promoting convergence of interests and achieve common development.

There is no doubt in saying that the levels of engagement between India and China have increased certainly but India, at the same time, requires to move forward with a sophisticated approach to deal with the emerging strategic challenges being emanating from China. Power dynamics often remain at the core of weak reciprocal agreements however this holds no vitality in the context here as, despite the fact that China has become increasingly assertive not only at the regional level but also at the global level, India has not shown any displeasure so far in strongest terms.

In the current circumstances, it is obvious that trade has come to be viewed as an increasingly important facilitator of relations especially in the shadow of lingering political mistrust as issues ranging from the long-running protracted border dispute to China’s close affiliations with Pakistan to India’s cordial allegiance with the US defies the purpose of simplifying the conflict.

The signing of an Agreement on “Political Parameters and Guiding Principles for the Settlement of the Border Dispute”, by both India and China is a major stride in moving ahead in terms of reaching a consensus on this major irritant while also joining hands in a promise to maintain peace and tranquillity on the border front. But, at the same, it’s needless to highlight that this requires a careful assessment especially on the intent and declarations of outcomes.

China has always been a hardcore follower of following the tenets of the ‘Monroe Doctrine’. The attempt has always been to deny access to other powers in the region that it perceives as exclusively within its sphere of influence. As the time has come to breathe more substance into the existing framework of strategic partnership it is essential on the part of India to remind Beijing how these stipulated actions have been damaging the interests of other regions especially to the countries in the East and South-East Asia.

In the long term, neither Indian nor Chinese defence strategists can rule out the possibility of a renewed confrontation over the disputed territory (Tibet, Kashmir, Myanmar, or the Indian Ocean ) as China becomes the other alternative unchallenged power and India continues to increase its circumference of influence thus signalling that a Sino-Indian rivalry in southern Asia may well be a dominant feature of future Asian geopolitics of the twenty-first century thus compelling the regional actors to choose sides. The nature of the rivalry will be facilitated by how domestic political and economic developments, as well as internal mechanisms of these two countries, affect their power, their outlooks, and their foreign and security policies on the international platform. On the flip side, it can also be noted that while they are competitors for power and influence in Asia, China and India also share interests in maintaining regional stability as well as exploiting economic opportunities while promoting regional cooperation – all of which could act as indispensable factors in influencing their relationship.

Last but not least, there comes a pressing necessity where one under these idealistic terms of co-operation, unity and oneness must not forget the real question where countries wonder: ‘WHETHER CO-OPERATION AND COMPARATIVE ELEMENTS IN BETWEEN POWERFUL WORLD POWERS COEXIST ?’

BIBLIOGRAPHY

Keshab, Chandra & Ratha, (2014); ‘India-China Bilateral Relations “

Kumar, R. (2007), “Cultural and Economic Relations between India and China”

Nehru, J. (1946), “The Discovery of India”, Oxford University Press; pp 30-42 .

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The South China Sea dispute is based on both maritime as well as territorial claims. The Paracel Islands, the Spratly Islands, Macclesfield Bank and Scarborough Shoal, and the Pratas Islands are the four contested geographic features in the South China Sea, with the Paracel Islands, claimed by China, Taiwan, and Vietnam and the Spratly Islands, claimed in their entirety by China, Taiwan, and Vietnam, and in part by the Philippines, Malaysia, and Brunei being the most hotly contested. This maritime dispute has at its roots in Beijing’s contentious ‘nine-dash line’, that was Beijing’s cartographic assertion submitted to the UN in 2009. The controversial line lays claims on the maritime and territorial features that are in compliance with the United Nations Convention on the Law of the Sea (UNCLOS). However, its bully-like actions have led to discord in the region. There have been overlapping claims in the South China Sea with China seeking to become the hegemon in the disputed regional topography.

The South China Sea Arbitration

There are six nations that contest all or parts of the oil and gas rich South China Sea, which has led to a series of confrontations between the Dragon and others over the competing claims.

The Philippines in January 2013 put forth a case against China’s belligerent activities and expansive claims in the SCS. An arbitral tribunal was constituted for the hearing of the case under the UNCLOS and final decision in 2016 was in Philippines’ favour; the resource rights in the South China Sea had to be clarified. China’s contentious nine-dash line became the subject of disapproval and the tribunal ruled against it, clearly stating that China was claiming historic rights to the resources within the jurisdiction of its aforementioned nine-dash but in actuality, these claims were nullified with China becoming a signatory of the UNCLOS in 1996 due to its discordancy with the Exclusive Economic Zones (EEZs) of other coastal states.

The tribunal also ruled that the 200-nautical-mile EEZ entitlements of the Philippines and, by conclusion, the other coastal states in the region, are unfettered by the nine-dash line or any claimed EEZ in the Spratly Islands.

China denounced the decision as “null and void” having “no binding force,” it largely kept to its letter if not its spirit in the first year after the award. The United States and its allies, members of ASEAN and India directly or indirectly pressured Beijing to accept the ruling and comply with the UNCLOS. Another reason could have been China’s disinterest in direct confrontation in the region.

China’s Outright Claims Over the South China Sea

Beijing’s venture into the disputed South China Sea has been a part and parcel of its long-term strategy to establish its hegemony over the near and far regions and expand and deepen its sphere of influence, both overland and in the seas. Recently, the dragon’s firing of medium-range missiles into the SCS and its ever-increasing military exercises is an avowal in order to show its sovereignty over the disputed waters.

Even though its untoward claims have no legal basis, as pointed out by Hague Tribunal, which is by and large ignored and disobeyed by China, does not stop it from emerging as a formidable trouble-fomenting power in the South China Sea. What started in the guise of a cooperative mechanism for engaging with the countries in the periphery of the disputed SCS has turned into brazen bullying by Beijing.

Historically, post one-year anniversary of the UNCLOS tribunal’s ruling, as international attention faded, China started strengthening its claims and encroaching upon the EEZs of the coastal states; deepening the purview of its maritime claims and increasing its military and naval presence apart from objecting to the presence of US navigation and laws of free movement. It was greatly engaged in consolidating its grand and objectionable territorial claims engaging in reclamation of physical geographical features on which lay its belligerent claims. Its militarisation of the region and installations at Mischief Reef through naval and aerial facilities and setting up of artificial islands has been a well-known factor.

Beijing has been an aggressive bully in the region trying to establish rules and laws that favour its grandiose plans. It has always maintained that it has full control over the region and has stakes and claims, as in the case of its assertion on a recent White Paper – “China exercises its national sovereignty to build infrastructure and deploy necessary defensive capabilities on the islands and reefs in the South China Sea.”

Conclusion

Beijing through its deplorable actions has been able to outrightly build a forceful maritime presence in the South China Sea, strengthening its surveillance and intelligence capabilities; its aerial capabilities have also helped it to gain a strong foothold over the region, thus, bringing it closer to the realisation of its broad strategic goals of hegemony of the region, sans any respect for the laws of the sea or the international rules-based order. The other adversaries have also been subdued by China’s overwhelming presence in the region and even, the US credibility, action and capability has been undermined with Chinese sovereign control over the contested territory being somewhat fait accompli. Chinese downright assertions over the South China Sea have antagonised the neighbouring states with the ASEAN being virtually helpless in the face of adversity that Beijing has thrown on to them. Moreover, in the present scenario in a world ravaged by COVID-19, it is difficult to control the bully and prevent it from infringing on the rights of other rightful contenders of the South China Sea resources.

References:

Council on Foreign Relations. (n.d.). Territorial Disputes in the South China Sea. Council on Foreign Relations.

Kumar, A., & Chari, S. (2020, September 6). China creating a flashpoint in South China Sea. Sunday Guardian Live.

Kuok, L. (2019). How China’s actions in the South China Sea undermine the Rule of Law. Global China.

Tsirbas, M. (2016, June 2). What Does the Nine-Dash Line Actually Mean? The Diplomat.

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Though there has been a lack of political enthusiasm, the common threat of irking China and structural issues that have acted as obstacles for blossoming Indo-Taiwanese relations, Taiwan has engaged silently diplomatically in India. PM Narendra Modi and President Tsai Ing-wen, have engaged in furthering the bilateral relationship.

Contextualising the Indo-Taiwanese Relationship

The Indo-Taiwanese relations were almost non-existent for more than four decades after the People’s Republic of China (PRC) was recognised by India. Marking the beginning of their ‘unofficial’ ties,  in 1992, the Taiwan External Trade Development Council (TAITRA) set up a liaison office in Mumbai and, in 1995, India opened its representative office in Taipei and named it the India-Taipei Association (ITA) for economic engagement. In a month, Taiwan opened its office in New Delhi and called it the Taipei Economic and Cultural Centre (TECC). Now, the TECC offices are operational in Chennai, Kolkata, and Mumbai. Although they were not formal diplomatic missions, they do function as de-facto representatives of their respective governments and carry out activities like issuing of visas, carrying out trade and economic relations and facilitating people-to-people contacts. This was the beginning of bettering bilateral relations between India and Taiwan in the sphere of trade and commerce, development and research, science and technology, education, people-to-people contacts, and other related fields and thus, in the post Cold-War period, this marked an important watershed moment in the history of Indo-Taiwanese relationship. This was a pointer towards India’s ‘Look East Policy’, enunciated by the then Prime Minister, Narasimha Rao and was a marker of Taiwan’s pragmatic diplomacy.

Taiwan’s ‘pragmatic diplomacy’ is also known as ‘flexible diplomacy’ and ‘substantive diplomacy’ and focuses on enhancing its international profile and facilitating its external engagements by using ‘unofficial’ and ‘non-diplomatic’ channels in the broader economic and cultural arenas, without attempting conventional state-to-state diplomacy, so as not to invite ire from the PRC. New Delhi, in this context, has emerged as a significant factor for Taiwan’s substantive diplomatic practices. Given their shared concerns vis-à-vis China and the commonality of their democratic values, especially during the current strategic uncertainty, this seems like the perfect ripe moment to enhance relations between the two.

In 2014, Taiwan’s representative to India had attended PM Modi’s swearing-in ceremony, and in 2016, India carefully well thought-out sending a representative to President Tsai’s inauguration but eventually decided against it. Most countries, including India, have found it challenging to balance the political and strategic implications of fostering closer relations with Taiwan due to the uncertainty of China’s reaction, leading to a complex diplomatic maze. In this context, Taiwan’s New Southbound Policy (NSP) under Tsai Ing-wen seeks to expand links with countries across South and Southeast Asia with a great emphasis on building economic, investment and people-to-people ties, as well as a greater focus on India especially while New Delhi “acts east”. Given the swaying relationship between India and Mainland China, it is practical for India to shift towards greater stress on soft balancing by cultivating a fruitful relationship with Taiwan. The Indian government’s ‘Act East Policy’ provides for greater engagement between India and Southeast Asia, making Taiwan important for India’s future economic growth.

In terms of increasing economic and commercial engagement, the TECC and the ITA formalized an MoU in 2017 on the “Promotion of Industry Collaboration”, preceded by twenty-one MoUs signed earlier that year by Taiwan’s Chinese National Federation of Industries and the Federation of Indian Chambers of Commerce and Industry. In 2018, the first India-Taiwan Trade Forum was convened in Taipei with the Taipei World Trade Center inaugurating its New Delhi office in conjunction with the debut of the Taiwan Expo (a business exposition) in South Asia over the summer of 2018 with New Delhi serving as its inaugural venue. Despite all these developments on the economic front, there have been domestic and structural problems in formalising the relationship, especially due to New Delhi’s position on acknowledging the ‘One-China policy’. New Delhi has overall remained ambiguous on the matter and the investment and trade have remained relatively modest but there have been efforts to increase investment by Taiwanese firms in India and notable joint initiatives and manufacturing clusters have been proposed under the ‘Make in India’ campaign.

Upgrading the Relationship: QUAD Angle

The need of the hour for India is focusing on a practical and long term pragmatic approach for fomenting better ties with Taiwan. We have to strategically balance the ‘One-China policy’ of Mainland China (based on one country, two systems model) and cultivating a beneficial and normal relationship with Taipei. New Delhi should not use Taiwan as a pressure point or Achilles Heel against the PRC as this hampers India’s goals and Taiwan’s development. The focal point for bettering the Indo-Taiwanese relationship should be based on enhancing people-to-people, cultural and business exchanges rather than focusing on the government-to-government gimmicks. Education, tourism and technological innovations can leverage the relationship. India should actively engage with Taiwanese NGOs to create an impact over the coming years and focus on roping in an international networking capacity. Small and medium-sized enterprises too can act as significant job creation initiatives and serve as great vehicles to exchange knowledge and human capital. Taiwan can also help in meeting India’s agricultural modernisation needs and its recent support during the pandemic in healthcare facilities is a pointer in the direction of up-gradation of the relationship in a pragmatic understanding. This soft power diplomacy through developmental assistance, cultural, healthcare, academic and tourist exchanges will surely benefit and give a thrust to long term robust India-Taiwan relations.

There have been under-utilised opportunities in the bilateral relationship. New Delhi needs to engage in proper policy approach to benefit most from a healthy relationship with the core area of the Chinese economy. The reshaping of the relationship with Taiwan has not only been a prerogative of New Delhi, the other three members of the QUAD (Quadrilateral Security Dialogue): USA, Australia and Japan have also upgraded their relations with Taipei.

Taiwan is significant for the QUAD countries as it is the core area that can be used to deter Chinese aggression due to its strategic location and partnership with the QUAD countries would act as a diplomatic weapon for both parties against the belligerent Dragon’s ever-rising provocations. Moreover, it is an important source of information on China, as evidenced in the case of the COVID-19 pandemic. Thus, the QUAD needs to protect Taiwan from diplomatic isolation and help it develop its military and defensive capabilities while also providing it opportunities for investment in a safe and incentive-based environment in the QUAD so that they can safely relocate their economic and investment ventures from Mainland China without incurring losses.

Conclusion

India needs to act in a strategic manner and shed its inhibitions and self-imposed restraint on engaging with Taiwan. The bilateral relationship is extremely rewarding if managed appropriately by both parties. They have to act more decisively and New Delhi has to formally acknowledge Taiwan as a development partner and the role it can play in steering the direction of Indo-Taiwanese relationship. It is an opportune moment, also thus for the QUAD to recognise Taiwan as a reliable partner and counter China’s growing footprint in South Asia that it wants to establish its hegemony over, through its bellicose and pugnacious ways.

References:

Karackattu, J. T. (2019). The Case for a Pragmatic India-Taiwan Partnership. Carnegie India.

Nagao, S. (2020, August 2). The Quad must strengthen and support Taiwan. Sunday Guardian Live.

Singh, D. T. (2019). The New Southbound Policy and India-Taiwan Relations. Vivekananda International Foundation.

Tien-Sze, F. (2014). Taiwan’s Relations with India: Issues and Trends. China Report.

Times Now Digital. (2020, October 10). Quad and beyond: Is it time for India to take a tougher stance on Tibet and Taiwan?

Featured Image Source: Google Images | Image by: Reuters

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Some major updates to cover in today’s Indian Foreign Policy Report are as follow:

Ministerial Meeting of the Group of Friends of Victims of Terrorism

The Republic of India recently participated in the Ministerial meeting of the Group of Friends of Victims of Terrorism. The Indian delegation was led by Smt. Vijay Thakur Singh, Ministry of External Affairs. The virtual meeting began with the Indian Secretary conveying a word of gratitude to the Foreign Ministers of Spain and Afghanistan respectively, Co-Chairs of the group and also to the UN Office of Counter-Terrorism (UNOCT) for organising the meeting. The Secretary then went onto underscore the importance of dealing with terrorism as an international problem rather than an individual domestic one. She also highlighted that even though the world today has been brought to a standstill, terrorism still continues to pose a threat to International Peace and Security. Throughout the meeting, special emphasis was placed on the rights of the victims of terrorism to get justice for the crimes committed against them. Lastly, the secretary called for redressing deficiencies in the international efforts to ensure that perpetrators of terrorism are swiftly brought to justice. During the meeting, gratitude was also expressed towards the United Nations for establishing August 21 as the ‘ ̃International Day of Remembrance of and tribute to the Victims of Terrorism’.

Press Release of Russia-India-China Foreign Ministers

On the 10th of September, India released a joint press statement, along with the Foreign Minister of Russia, Mr Sergey Lavrov and State Councillor/Foreign Minister of China, Mr Wang Yi. The meeting kicked off with the three ministers expressing their resolve to strengthen the Russia-China-India trilateral cooperation and give importance to issues of international and regional importance. The minister laid emphasis on the fact that cooperation among the three countries is conducive and vital in promoting global growth, peace, stability and more importantly creating an environment of inclusive multilateralism and respect for universally recognized principles of international law. In terms of the recent challenges posed by the COVID- 19 world pandemic, the ministers concurred that the three countries, with strong scientific and industrial capacities, could make a significant contribution towards mitigating the impact of the COVID-19 pandemic. The External Affairs Minister of India and the Foreign Minister of China thanked the Foreign Minister of Russia for the chairmanship of RIC and the conferences organized during the past year. The Foreign Minister of Russia officially handed over the chairmanship of RIC to the External Affairs Minister of India.

13th India-Japan Foreign Ministers’ Strategic Dialogue

The 13th India-Japan Foreign Ministerial Strategic Dialogues was recently conducted between the Indian Foreign Minister, S. Jaishankar and his Japanese counterpart, H.E Mr Motegi Toshimitsu. The meeting was initiated with the two representatives reviewing the progress made in India-Japan Special Strategic and Global Partnership and discussing issues of mutual interests, ranging from maritime security to UN reforms. Having experienced the benefits of technology at a time when the world has experienced a veritable seismic shift towards technology, the two Foreign ministers finalised the text of the Cyber Security Agreement. The agreement looks at promoting cooperation in capacity building, research and development, security and resilience in the areas of Critical Information Infrastructure, 5G, Internet of Things (IoT), Artificial Intelligence (AI), among others. Lastly, the two Foreign Ministers turned to the issue of the Indo-Pacific that has the entire world riveted. India has time and again, emphasised its belief in establishing the Indo-Pacific as a free and inclusive region. The meeting also led to further discussions on the Supply Chain Resilience Initiative between India, Japan, Australia and other like-minded countries. Lastly, the Japanese side agreed to be the lead partner in the connectivity pillar of the Indo-Pacific Oceans’ Initiative (IPOI) and jointly take both countries’ respective visions for the Indo-Pacific forward.

Joint Press Release of the 7th Round of India-China Military Commander-Level Meeting

The 7th round of the Senior Commanders Meeting of India and China was held in Chushul. The meeting mainly focused on the disengagement along the Actual Line of Control in the Western Sector of the India-China border areas. After what was described as a positive and constructive meeting, both sides agreed to maintain dialogue and communication through their military as well as diplomatic channels. Lastly, both sides agreed to ensure that disagreements in the future do not turn into disputes, securing peace in the region, by maintaining tranquillity in the border areas.

2nd India-Australia-Japan-USA Ministerial Meeting

The Indian Foreign Minister, S. Jaishankar participated in the Second India-Australia-Japan-USA ministerial meeting in Tokyo. The meeting started with a follow up of the talks held in the previous year in September. The four countries called for a coordinated international response, spearheaded by the four nations. They further discussed the post-pandemic world order. The meeting mainly focused on the need to establish best practices to combat the virus, to increase the resilience of the supply chain and fortify the need to enhance the access to affordable vaccines, and medical equipment. Keeping in mind the emergence of the Quad and the importance of the Indo- Pacific, the Foreign Ministers exchanged views about regional and international issues of importance. The representatives re-emphasised their firm support to working towards realising a shared vision for the Indo-Pacific. Alongside the joint ministerial meetings of all the four nations, S. Jaishankar also met with H. E Micheal Pompeo, Secretary of State for the USA, and in the immediate future, will be meeting with the Foreign Ministers of Australia and Japan.

Appointments

The current Ambassador of India to the Republic of Indonesia, Shri Pradeep Kumar Rawat has been replaced by Shri Manoj Kumar Bharti, who served as the Special Secretary in the Ministry of Foreign Affairs. The following appointment comes as a result of Mr Rawat’s appointment as the next Indian Ambassador to the Kingdom of the Netherlands. Lastly, Shri Rahul Shrivastava, who currently serves as the Indian Ambassador of India to Romania, has been concurrently accredited as the next Ambassador to the Republic of Albania.

Conclusion

The world that we inhabit today is very different from the one that we experienced just over a year ago. Not only have we been dealing with an existential crisis at hand in the form of the COVID 19 pandemic, but as we step into a new decade of the 21st century, we find chaos and confusion governing the four corners of the world, with the coups in countries like Mali and the pitiable state that countries like Nigeria are in. However, the most anticipated event of the year, the US presidential elections are in a fortnight, and it’ll definitely be interesting to see how they shape global politics in the coming years.

Also Read: INDIAN FOREIGN POLICY REPORT — EDITION #6

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While it has been regarded as a continuum of economic and developmental prospects for Pakistan, it has also, significantly, given birth to a series of domestic economic and political issues in Pakistan. It is an instrument whereby China seeks to establish its hegemony through the combined use of hard and soft power, relying greatly on its “debt-trap diplomacy”. The debt outcome of the CPEC project is already about $80 billion, with 90% of it to be paid for by Islamabad in the form of the national debt. Even though Islamabad is still presenting a rosy picture of CPEC and its developmental prospects for Pakistan, it is well known that it will not be able to pay China back and will eventually lose its sovereignty and become another linchpin in the Chinese debt trap strategy. Experts and media reports have already been referring to it as a “Trillion Dollar Blunder”.

This mega billion dollar project has turned out to be more of a Non-Performing Asset (NPA) for China than a boon, especially when the world has been badly hit by the pandemic. The CPEC has proven to be more of a bogus project that hardly offers any profits with lagging industrialisation efforts and only a quarter of the decided projects completed over the last five years. With China facing an economic slowdown and depleting dollar reserves, it is itself in desperate need of the USD and is trying to woo foreign investors to its financial markets. With the trade war with the US and the Chinese export market facing an all-time low due to the diplomatic distancing and the Western countries’ ire over China’s role in the spread of Coronavirus pandemic, a big blow has been landed on to the Belt and Road Initiative, especially the CPEC project that is greatly faltering and has turned out to be China’s biggest NPA. With the global supply chains being badly hit, the OBOR Initiative is no longer a marker of China’s long-term vision and magnanimity; rather it is regarded as an investment blunder of colossal scale. The CPEC, which sowed dreams of a developed Pakistan with the most profitable and developed infrastructure has and the region into a hub of trade and commerce has instead turned it into a centre of gargantuan infrastructure with negative profitability and zero utility. The Chinese banks and financial institutions have been shirking away from funding the CPEC, as it is evidently nil on profit, given Pakistan’s inability to repay the Chinese loans. 

There is a huge gap in the announced projects of 2015 and completed projects of 2020, with only 32 of the 122 announced projects seeing the light of the day. The CPEC project is lagging behind as it has been facing many shortcomings like lack of funds, trade asymmetries, domestic issues, bad loans for China which does not want to fund the CPEC projects and opposition from Baloch rebels and local who will be directly impacted by this rollout. Large energy projects have been shelved as this NPA faces major bottlenecks due to unsustainable debt levels. China is reluctant to provide assistance as the venture does not provide any returns and is a fund drain. Moreover, Pakistan’s long standing challenges have been aggravated by the CPEC; it entails economic, environmental, social and political costs the state which faces an exacerbated energy deficit, creating a greater dependence for fossil fuels that are harming the environment as well. The CPEC was roped in on its premise of turning Pakistan into a higher-value manufacturing hub, however, what is seen at present is that the huge majority of special economic zones (SEZs) are empty, and the information and communication technology (ICT) projects that were to provide the backbone have been halted and limited. 

Conclusion

Thus, the CPEC is a gamble for China and Pakistan, contrary to their narrative of completing the CPEC at all means. It has already increased Pakistan’s current account deficit and China does not want to invest more where there is no way of recouping their investment and the Return of Investment (RoI) rate shows a gloomy picture. For the Dragon, given the calamitous economic situation Pakistan is in, even the chances of recovery of principal amounts spent by the Chinese financial institutions is a far-fetched dream and thus, the “iron-brotherhood” may be in a jeopardy. The Chinese funds kept Pakistan afloat and prevented it from sinking into the economic doom, however with the funds getting halted and dried up, CPEC faces cost escalations being beneficial for none. Rather than an asset, it has become a liability and has been added to the list of China’s NPA.

References: 

Chinese banks’ reluctance towards CPEC hint towards their funding gap. (2020, August 27). Wion .

Afzal, M. (2020). “At all costs”: How Pakistan and China control the narrative on the China-Pakistan Economic Corridor. Brookings.

Business Standard . (2018, April 17). Pak’s current account deficit rises due to CPEC: ADB report. Business Standard.

Hillman, J. E., McCalpin, M., & Brock, K. (2020). The China-Pakistan Economic Corridor at Five. CSIS.

The EurAsian Times. (2020, July 4). CPEC Project A ‘Trillion-Dollar Blunder’, Pakistan Calls It ‘Outstanding Initiative’. The EurAsian Times.

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1998- 2013: Chavez presidency

In 1922, oil was discovered in Maracaibo basin of western Venezuela, considered to be the world’s largest oil reserve. The then dictator allowed more than 100 foreign companies into Venezuela to extract the reserves and by 1928; the country became the world’s second-biggest petroleum exporter. The nation’s economic development was based on rising prices and profits in oil reserves. But in the 1980s, as the world was facing the worst oil crisis, the global oil prices fell and the Venezuelan economy collapsed; the country faced a massive foreign debt of 33 billion dollars. Ultimately, it was forced to accept an International Monetary Fund Bailout and impose austerity measures that resulted in sharp rises in the price of consumer goods and fares for public transport.    

In 1998, Hugo Chavez was elected as the president of the country and he promised to use the country’s oil wealth to improve the lives of the poor. He expanded the social services and spent huge amounts on social programs such as education, health care, food and housing problems, at one point, even provided free heating oil for impoverished Americans.  Though Hugo wanted to diversify the Venezuelan economy, his expensive strategy only increased the dependency upon the exported oil.  As corruption was still rampant, a steady decline in the oil production reduced oil reserves and increased the government debt.  To deal with the dire economy, Hugo introduced a lot of economic reforms such as currency devaluation and price controls but nothing was effective. He also declared an economic war due to the increasing shortages in the country. In 2013, after ruling for 14 years Hugo died of cancer at the age of 58, his chosen successor vice president Nicolas Maduro narrowly won the elections and became the president.

2013- 2020: Maduro presidency

After the demise of Chavez, elections were held and Maduro won the elections with a 1.5% margin. With inflation at more than 50% a year, the national assembly gave Maduro emergency powers for a year. Still, by 2014, the country had entered an economic recession and by 2016, the country had an inflation rate of 800%, the highest in its history. The healthcare system lacked funding, once-eradicated diseases like cholera and malaria returned causing the death of thousands of children due to hunger and malnutrition. The rate of unemployment increased at an alarming rate and the prices of goods rose to an unexpected level causing a situation of hyperinflation in the country.                                              

In 2017, Maduro’s government created a new legislative body, which gave him the right to pass laws and he disavowed the National Assembly in 2017 leading to the 2017 Venezuelan constitutional crisis. Following the constitutional crisis and the push to ban opposition presidential candidate Henrique Capriles from politics for 15 years, protests grew to their most combative since they began in 2014. The government failed to handle the matter in a peaceful manner and started oppressing the mobs by using violence, which led to the death of about 6000 civilians by the special action forces.

With these ongoing social and economic crises, in 2018, Maduro won the presidency again in a low-turnout election that was seen by many countries as fraudulent because of low participation by opposition parties.                                                  

Soon after the elections, to tackle the situation of hyperinflation, the government slashed five zeroes from the face value of its old currency and tied the new “sovereign bolivar” to a cryptocurrency that can’t be traded.  Despite various economic reforms by the government, nothing has helped the country’s economy to recover. Years of this economic and political instability in Venezuela have caused the largest population outflow in Latin America in recent years; about 5 million Venezuelans have left the country seeking food, work, and a better life since 2014.                                                       

In 2019, the opposition leader and head of the National Assembly, Juan Guido declared himself to be interim president according to the constitution. He is recognized as such by the U.S., Canada, and Venezuela’s Latin American neighbours.

In 2020, as the coronavirus pandemic spread in Latin America, border closings and the collapse of global oil prices have made life even harder for the Venezuelans.  Child malnutrition has reached crisis levels in Venezuela, reports the U.N. children’s agency. The country’s GDP (Gross domestic product) has dropped by 25% in 2019 which is the largest since the Libyan Civil War began in 2014. The inflation rate has reached 10,000,000% making it almost impossible for people to afford even the basic services like food for their survival.  The country is facing the worst economic and social crisis of all time with the high level of corruption, increasing poverty, no food and water, no proper healthcare system, increasing mortality rate, massive housing shortage, increasing crimes and illegal detentions, increasing unemployment, increasing hyperinflation and sinking of the oil reserves. 

Conclusion

The country which was once considered as the richest in Latin America, due to the largest oil reserves in the world, is now facing the worst economic crisis in the history of the world. It is marked by hyperinflation, escalating starvation, increasing unemployment and a shortage of a proper healthcare system which has led to increased malnutrition and mortality rate. Due to the declining oil reserves and poor governance along with high corruption the economy of the country collapsed.  The country is in a very dire situation with people lacking even the basic needs for survival.  Various countries such as China and Russia are sending aids for the Venezuelan crisis; Russia sent tons of food and medical supplies in Venezuela in February 2020. The European Commission (EC) is the largest donor to organizations working inside Venezuela in 2018, according to the database. It has been sending humanitarian aid to Venezuela since 2016. The EC focuses on projects to improve access to food and nutrition, water, hygiene and sanitation for people in Venezuela.  The United States and regional partners should also provide humanitarian relief and security assistance and accelerate change to a post-Maduro democracy.  As Venezuela is floundering, these humanitarian aids by countries come as the only hope that the country, which was once considered as one of the richest countries of the world, can still overcome its crisis and improve the economic, political and social situation of the country. 

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CULTURAL, ECONOMIC AND POLITICAL LINKS

As vast the relationship between India and Maldives is, there are a few special characteristics which define the relationship in a summarized sense. First, talking about the cultural relationship, mention has to be made of the immense use of soft power by India to advance its relationship with the Maldives. The cultural development between the two countries has come from various forms of capacity building. India has assured a good relation with Maldivian students and provided them with a high level of skills training and capacity building. Scholarships and easy access for them is a key positive in the relation between the two countries. The Maldives has based its economy highly on tourism and India has not shied away from help. The Indian Cultural Centre was established in July 2011 in Male and it has brought the countries much closer than before. The Indian diaspora in the Maldives forms a crucial part of the population in the Maldives with a population of around 26,000. Around 30% of the doctors and 25% of teachers are of Indian origin.

This sustenance of Indians in the Maldives has increased the spread of their respective cultures. Even though cultural relations have been always on the rise, the economic and political relations are also to be considered. Politically talking, India has always stepped up whenever there is uncertainty within the Maldives. The 1988 Operation Cactus was the biggest example of Indian aid in times of a crisis. Back in 88, 80 armed militias from the PLO of Tamil Eelam had landed in the island country and had been working on taking over the government. India sent troops and was able to eliminate the threat. This brought the two countries closer than ever. After that, in 2014 during the water crisis in Male, India sent its ships to help produce freshwater. The most recent political crisis was back in 2015 when the first democratically elected president of Maldives, Mohammed Nasheed was arrested on terror charges. India along with the US voiced their displeasure on the arrest. The new President Abdulla Yameen had strained the relations with India, claims the current foreign affairs minister of Maldives, Abdulla Shahid. After Yameen’s defeat in 2018, the political relations were again restored. Maldives FM says that he is confident of the positive relations and this restoration was visible during the COVID crisis.

India, at the very start of the crisis, provided 6.2 tonnes of medical-aid to the Maldives, followed by constant medical and pharmaceutical help.  The economic relations are even more in-depth and have been helpful for both countries. The 1981 Comprehensive Trade agreement has helped the Maldives prosper in the years. Annually, bilateral programmes have been agreed upon where development of infrastructure, health, communication and labour has prospered in the Maldives. Coming back to the 1981 agreement, the export of essential commodities, which was initially modest, have now reached new highs. In 2014, trade stood at 677 Cr Indian Rupees and in 2019 India’s export to the Maldives stood at 212 Million dollars, which clearly shows how trade has developed in the past few decades.

COMPLICATIONS WITH THE ENTRY OF CHINA

In the friendly relationship with India, China entered as a wild card, with the exceptional claims of helping the Maldives grow, economically and infrastructure wise. Once, Yameen came into power in 2014, he made sure that there was a lack of cooperation with India and an inclination towards China. The successive government has accepted that Yameen tried to play both India and China but failed spectacularly. This connotation is partly true. Back in 2014, as a part of its Belt and Road Initiative, China offered loans to the Maldives to help them develop infrastructure. The lack of foresight has come back to haunt the Maldives who had created a huge debt. Currently, the government says that they still owe $600M and with an economy highly dependent on tourism, in the time of a pandemic, find it very difficult to pay the debt off. Reaching this position was difficult as well. It was Indian Prime Minister, Narendra Modi who had put his ‘Neighbour First’ policy into good use by providing the Maldives $1.4B in financial assistance. The situation of Maldives can be seen in parallel to that of Sri Lanka. India’s southern neighbour also took a loan from China to increase its infrastructural capabilities but when it was unable to pay back the loan, China got a 99-year lease over a  crucial Lankan port.

One could say that India has saved the Maldives from a similar situation but the future is known to none. The current Maldives Foreign Minister has said that they will be reconsidering their current agreements with China.  Nonetheless, he has also at times stated that Beijing has been very generous in social development projects, mainly in the housing sector. In terms of rethinking, Maldives wants to bring China to the negotiation table to find a way out and pave the way for future partnerships. Keeping in mind the previous agreements playing highly in Chinese favour, such future partnerships do not sit well with the Indian government who has expressed concerns. Nonetheless, the Maldives foreign minister has always claimed that India is the closest friend of Maldives. At this point, it can be inferred that China is a short term partner of Maldives, whereas India has always been considered a long term ally. India cannot throw caution in the wind and start diplomatic cold war with the Maldives to force its way out of Chinese relations. For a country like the Maldives, having strategic partners in the geographical proximity is the way forward. They also claimed that the Maldives will be looking to develop relations not only with India and China but also the USA and UAE. India will need to keep Maldives’ natural growth in mind in its future endeavours with the Maldives.

CONCLUSION

India’s relationship with the Maldives has been a natural one for decades and except for a few hiccups in between, it is widely claimed that India is the most crucial partner of Maldives. India needs to realise this and assure long term stability with them. India also needs to keep in mind that the Maldives will be growing in terms of diplomatic power by trying to increase its bilateral partnerships. At this point, India needs to continue doing what it has been for the past few decades and sustaining a long term partnership won’t be difficult. The Indian government needs to keep in mind what Maldives FM thinks the relationship is based on. He says, “It is not a relationship based on size or economy, but one based on ideas and principles.”

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The US-China Dispute

The Red Dragon and Uncle Sam have a lengthy history of being at loggerheads. The US initially refused to recognise China as a sovereign state and indulged in many ministrations to displace the latter’s communist roots.  It was only in the 1970s that diplomatic relations took flight with the US acceptance of One China Policy. Still, their relations were fraught with friction, especially over human rights. When China entered the world economy and began opening up its economy, its engagement enhanced, with China going on to become America’s largest trading partner. With a few hiccups, the relationship seemed to be aiming for cooperation. However, it all radically changed in 2018 when the Trump government’s tariffs targetted China, setting off a vicious trade war that is still ongoing. What started out as a trade dispute couple of years ago has now turned into a full-blown show of might, branching into other areas as well.

In late 2018, the US signaled its hardline approach towards the eastern giant. The Huawei issue only intensified the same, and the US has done everything in its power to kick the Chinese MNC out of the 5G race on charges of spying. By 2019, the trade war had intensified, with both countries levying hefty tariffs on the other, and placing various other sanctions as well. Early 2020 saw the signing of a trade deal which provided a brief breather for the economic world, but the respite period remained short. The onset of the Covid-19 pandemic sent the global economy tumbling. America faced multi-faceted effects: its capitalist system suffered a downfall and the health system was brought to its knees. This tension had the hegemon accusing China of mismanaging the pandemic and causing harm to the world, eventually pulling out of WHO due to the latter’s support of China. China obviously, did not take the accusations well. But it was the new security law imposed in Hong Kong that proved to be the last nail in the coffin. Trump went on to strip the city of its special status, reducing its credibility as a world economic and financial hub. China accused America of interfering in its domestic affairs, and everything has been downhill since.

The Asian Playground

Due to the deterrence that comes with two giants battling each other, the countries are unlikely to engage in an all-out war, even if relations have diminished to a new low. Their historical animosity played out in the Asian region much like the proxy wars that dominated the global landscape during the Cold War. Both nations have tried to expand the ambit of their influence by espousing Asia-centric policies. Obama’s presidency saw a more active role in the region coupled with an enhanced military presence. China on the other hand relies on its geo-economic power to bind Asia to it. The Belt and Road initiative, the String of Pearls approach, ADB Bank and increasing economic investment promises financial advancement for the region. South Asia in one of the most populous regions in the world, yet intra-regional trade is quite fragmented (just 5%), which reduces the economic benefits it can reap. Thus China’s meteoric economic rise has proved to be a fundamental driver of economic growth. 

US security cover coupled with economic benefits from China has helped in the advancement of many countries, resulting in the expectation that Southeast Asia will become the fourth-largest economy in the world, overtaking the European Union and Japan by 2050. Therefore for Southeast Asian nations, especially the ASEAN market is a key area for both America and China. The US is now frantically looking to shift Asian loyalties to its side as it perceives the rising Chinese aggression and economic strength as a threat.  That is why it has taken a strong position against China’s assertions in the South China Sea and has tried to play on the insecurities of the latter’s neighbours regarding the same. This ‘harbinger of justice’ role has helped the nation gain influence in the region, which was a difficult task because of China’s proximity to it. America is also banking on its military and technological investment to gain the region’s unequivocal support. 

Since the beginning of the Sino-American trade war, Southeast Asia has been an undisputed winner on account of the benefits it is reaping. The high American tariffs on Chinese goods have led to a shift in manufacturing processes to the region. In 2019 Chinese acoustics manufacturer Goertek announced that it will shift its Apple’s Airpods wireless headphones production to Vietnam because of the ongoing trade dispute. Similarly, Cambodia has bagged bicycle production for a high-value US firm, and Thailand has become a hub of vehicle assembly plants. According to Forbes, a survey of U.S. firms manufacturing in China found that 18.5% had either moved production to Southeast Asia or were considering it.

Usually, ASEAN countries have been able to maintain a delicate balance between American geopolitics and Chinese geo-economics. But as both countries increase the heat, it is difficult to predict if the future will force the region to choose sides. For now, Southeast Asia is having a good ride!

The Indian Factor

India has been facing a sudden increase in tensions with China too. The border dispute has led to a fresh impasse, the first one since Doklam. But this time the costs have been higher, with multiple skirmishes and martyred soldiers lining the situation. In response, India, akin to America, has tried to economically isolate China by banning 59 Chinese apps and making calls for being ‘Aatmanirbhar’. But it is easier said than done, for the mammoth amount of trade between the two is skewed in China’s favour. Some would think it is natural for India to lean on the US, especially in view of the latter’s vocal support of India in the afore-mentioned border dispute. It is to an extent true too: India has gained around $755 million in US exports since the trade war disrupted relations. India is also the only country capable of countering China’s influence in a disintegrated Asia. It also has a large youthful population capable of rapid mass production which it could use to its advantage in view of the trade war. 

But the path is not as smooth as it looks. There are multiple factors that weigh India down as compared to Southeast Asia when it comes to being business-savvy. The country has a massive supply of cheap labour but lags glaringly in other areas. Poor infrastructure to accommodate foreign production, inadequate technology, complicated labour laws and red-tapism of a sloth-like bureaucracy have tainted the country’s hopes of attracting foreign investment. That is why despite improving its Ease of Doing Business rankings by 37 places, it still is only the ninth-largest trading partner of the USA. Its tedious land-acquisition laws coupled with hostile neighbourhoods have not done much to attract investors. In addition to this, India’s decision to not be a part of the trade agreement with ASEAN called Regional Comprehensive Economic Partnership (RCEP) has put it on the back foot. It passed up on a chance to economically seal the deal with the fastest growing economic region and its markets.

In view of these shortcomings, Southeast Asia proves to be a better region to direct investments to. In fact, India is not extremely affected by the trade war as it has not gained much from it. 

Conclusion

The United States of America and China are the two hegemons that balance the current multi-polar world. This grandiosity of sorts, coupled with their mutual interdependence in terms of trade and technology makes it difficult for them to inflict real-time damage on each other, or indulge in an all-out confrontation. That being said, the current animosity between the two is different from their usual spats. In this pandemic-riddled world their tensions have been aggravated by blame-game, allegations of spying, erosion of Hong Kong’s democratic rights and of course, the rejuvenated trade-war. Many Asian countries have benefitted from this fallout and gained increased investment from the US and more come-hither offers by China. It is now to see how their balancing act will progress. However, India has a long way to trudge before it can fully reap the benefits of the clash and needs to work on its internal infrastructure and policies to attract any advantages.

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USA and its Historical Ties with the United Nations and its Subsidiaries

Starting from Franklin D Roosevelt in 1954, the USA has shown signs of solidarity with the UN and the United States’ voice in decisions of the UN has always played a pivotal role, especially since it is one of the P5 members. Conjointly, along with its allegiance to the United Nations, the US has been a significant actor in the projects carried out by the WHO. 

For decades the United States has been a committed partner of the World Health Organisation in aiding global health emergencies and has financially supported its prospects. The US was the number one donor for the 2016-2017 programme budget and for many previous years. Both state and individual donations combined, the total donations made to the WHO that rooted from the States has been a total of US$ 945.6 million in WHO for the 2016-2017 period. And the contributions from the United States were made up for over 76% of voluntary funding.

The United Nations was built upon the principle of global syndication and interdependence, however, with the USA’s interventions over the years and its weighty contributions have to some extent eroded the UN’s legitimacy. Although the foundation of the United Nations is that of a liberal idea with the notion of co-dependence and overall prosperity of both big and small state actors, it has been proven time and again that for many states, especially ones that are permanent members, like the US, have used the United Nations as a forum to further their neo-realist agendas wherein non-state actors are only a pathway to increase power and legitimacy and not multilateralism. 

China’s Participation and COVID

Although China’s funding in the United Nations has been increasing each year over the last decade, its contribution to the World Health Organization has especially seen a rise pertaining to the current Coronavirus pandemic which originated in China’s Hubei province. Hence, making China’s say in the matter that of much more significance in comparison to any other state. 

The WHO has appreciated China’s efforts and action towards this pandemic publicly and stated that their response made a major impact on the spread of the virus globally. However, there were many criticisms in regards to the same. Specifically by the US. 

The WHO’s sudden inclination towards China with the arrival of this pandemic was questioned by many and ticked off the US as a result. The role of the World Health Organization is to maintain diplomacy and be an advisory organ for states to act upon at their discretion. This has been the preliminary basis of debate over why the organisation is in the wrong for potentially siding with China and not criticising them for notifying other states much later than the first traces of the virus were found, in December 2019. In addition to this, China’s circulation of faulty safety kits also added to the narrative of China deceiving other nations and not painting a clear enough picture for states to act upon. 

The World Health Organisation’s backing towards China potentially has its roots in the increased funding by China to the UN as a whole. China is now the second-largest contributor to the United Nations funds amongst the G77 countries. This, therefore, makes it a notable member whose presence in the United Nations can not be forgone. 

President Trump’s Response

On the 7th of July, 2020, President Trump announced the USA’s withdrawal from the World Health Organisation. This decision faced a lot of opposition from opponent parties given the WHO’s role in fighting global health emergencies that the world is currently living through and the fact that the United States has one of the highest numbers of cases globally.

Not only will this move have a detrimental impact on the United States status as far as the number of cases goes, but this can also result in a global setback of vaccine development in which the US could have been a major stakeholder and contributor. While the Trump administration has already cut off all funding, the withdrawal process will take approximately a year. However, the 2020 presidential candidate, Joe Biden has vowed to reverse this action and be part of the organisation again. 

This decision further goes on to prove the USA’s intentions with non-state actors and how they are linked to notions of neorealism and are used as a tool to safeguard self-interest rather than build on global interdependence through collaborative measures. 

Furthermore, the decision to pull out of the WHO is also an indication of what US-China relations will be like post-COVID, as prior to this it was still an unclear picture. However, pulling out of the WHO as a result of backing China is a clear enough signal that at least under the Trump Administration these tensions will continue and are not going to change in the foreseeable future. 

Conclusion

Regardless of the gravitas of this situation, this move does not come as a shock after the US pulled out of the Paris Agreement. Inferring from the series of events that have taken place before and after this monumental decision issued by the US government, it is safe to assume that this is in relation to President Trump’s prolonged pattern of claiming that the United States is being taken advantage of by intergovernmental organisations such at WHO and NATO and this action is one of the biggest showcases of it. 

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China is a one-party state with power lying mainly in the hands of the Chinese Communist Party. Moreover, it is one of the five permanent members of the UN’s Security Council and thus possesses tremendous power and reach.

History of China’s Economy

The trade reforms introduced in 1978 have changed the economic position of the country on a gigantic level. 

After the reforms were introduced, the country began to open and its economy has seen tremendous growth. GDP growth averaged over 10% per year, making it one of the world’s fastest-growing-economies.

Recently, however, due to several imbalances, comparatively low growth rate of institutional development and fast pacing economic development, there have been several reform gaps that have kept the GDP growth rate at 6% per year and it has been decreasing continuously. The country has made Innovation its top priority while working on the strategy for the 2020-25 growth model catering to the current scenario.

China’s Strategic Advantage

China is an upper-middle-income country and a major supplier of raw materials to the rest of the world. It observes major investment from MNCs globally. Most of the products that we use in our daily life are labeled as either made in China or assembled in China.

Apple iPhone, which is considered a revolutionary product, gets its product assembling done in China. Low labour costs were considered the main reason initially but there has been a shift in recent years. Since countries like India, Vietnam, etc. can provide even cheaper labour, hence the question arises, what makes China different?

The answer is the quality of labour and the type of skill provided. As said by Tim Cook “You find in China the intersection of craftsman kind of skill, and sophisticated robotics and the computer science world. That intersection, which is very rare to find anywhere, is very important to our business.”

Thus, comparatively low labour costs, highly skilled labour, the ability to produce big consignment daily due to the strong labour force and a large home market make China an ideal country for product assembly. 

Trade Relations with India

Economic relations between India and China date back to ancient times with the Silk Route being the major trade route then. China is a major exporter of raw materials like pharmaceutical ingredients, steel, electronic devices, fertilizers for India, thus making India as China’s biggest trading partner after the US. India too runs a huge trade deficit with China.

The major inability of Indian companies to produce products at low rates arises because of a lack of research and development facilities, poor infrastructure and incompetent labour policies.

In a survey of about 90 people, it was asked: “What is the main reason that encourages you to buy foreign goods?”

The following were the observations:

Due to this Chinese goods gain an edge and find a huge market in India. Moreover, the Indian population forms a large base for many Chinese apps. These do not mainly contribute to revenue but they help in boosting the reach of the product which is even more beneficial for the companies.

However, with the recent clashes and increasing deficits, the Indian government has banned several Chinese applications and has been constantly focusing on promoting the ‘Made in India’ campaign.

Impact of the Current Situation

With the advent of the current pandemic, almost all economies have come to a standstill. While some of the countries have been able to deal with the situation efficiently and have already observed the peaks, others like the US and India are the worst struck and their economies have faced a major shock. 

China has been accused of hiding information about the virus which eventually led to the pandemic. Markets crashed and the price of crude barrels fell to such an extent that they became negative for the first time in history. Many people have been laid off from their jobs, causing them to fall into debt traps.

However, the current border tensions with China have induced an even greater hatred among Indian citizens towards Chinese goods and services. Many Chinese contracts and tenders have been reworked and the suppliers have been changed. These have vastly affected China’s economy.

Nevertheless, the economic interdependence of the two nations is way too important to be ignored. An all-out boycotting of Chinese goods would force people to buy expensive goods in this period of recession. This would just worsen the situation and the governments would have to further moderate the policies to accommodate the situation.

Conclusion

 It can be rightly said that the expansionist and influential regime of the Chinese government is at an all-time high. China might be taking this course of action to drive the attention of the world away from COVID allegations by having disputes with other nations. However, with this course of action, it is losing a huge consumer base in India. Though low priced quality goods might still prevail in the markets as Indians don’t have good homemade alternatives.

India and China have been embroiled in border disputes since 1962 after the Indo-China talks failed. China has always been intruding in the territorial sovereignty of India, this has been very common but the international community never held China liable because of its veto in UN and structural hegemony in international markets but the advent of COVID-19 has led to an international bias against China. The factual matrix has created a situation in which China might be held liable for the very first time for violating the ceasefire agreement on LAC as it has lost support in the international arena and the CCP is facing extreme criticisms for its violations and misuse of authority.

The first step towards the long turn process of improving the efficiency of production in India should be taken immediately. Trade shouldn’t be stopped but the trade deficit needs to be brought to a balance to prevent other nations from exerting dominance in the future.

China needs to take into account the possible isolation by other countries in the long run which might bring down the already decreasing GDP growth and the scenario before 1978 might come into the picture again. China should acknowledge the need of the hour and help its subordinate countries with the current pandemic, help in building their economies to ensure healthy trade relations, the welfare of mankind and stability. History is evident, Wars cease to create any good, rather are a great way to destroy the global economy, loss of life and property and leave the world in a state of regret and despair. 

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