Neutering & Defanging Chinese Threat (09-08-2014)

[SSridhar]

‘India, China should fight terror together’ - The Hindu

Ahead of a state visit to China from May 24 to 27, President Pranab Mukherjee has called for an “all out” fight against terrorism, in which both India and China come together.

“India and China, both huge countries —multicultural, multiracial — if they come together in fighting this menace, I am sure it will have its own impact. And India always believes that every country should have a zero tolerance policy towards terrorism and the fight is to be all out,” Mr. Mukherjee told Chinese CCTV channel.

President Mukherjee’s words are significant as they come weeks after China’s decision to block India’s moves to ban Pakistani terrorist Masood Azhar at the U.N. Taliban sanctions committee. The move led to a strain in ties as India expressed its unhappiness over what was seen as an effort to shield Pakistan and Beijing refused to change its stand.

Mr. Mukherjee’s visit marks the first Indian presidential visit to China since 2010 and is being seen as an effort to smooth over some of the issues that have come up in bilateral ties in his talks with President Xi Jinping and Premier Li Keqiang.

Among them, recent comments by the Chinese Ministry of Foreign Affairs refusing to support India’s admission to the Nuclear Suppliers Group(NSG) unless it signs the Non Proliferation Treaty (NPT). In New Delhi on Tuesday, visiting Vice-Minister for Foreign Affairs Liu Zhenmin struck a more conciliatory note, saying that China would work “with Indian colleagues together to find a solution” to the NSG issue.

To meet businessmen

Officials said Mr. Mukherjee’s programme, where he will visit Beijing and the south China industrial hub of Guangzhou, will include a meeting with businessmen at the India-China business forum and address students at Peking University.

On Wednesday, the Chinese Foreign Ministry announced the visit by President Mukherjee which is the first by a Head of State since 2010 and returns the visit by President Xi Jinping to Delhi in September 2014.

Prime Minister Narendra Modi is also expected to travel to Hangzhou for the G-20 summit in September this year, while President Xi will travel to Goa to attend the BRICS summit in October.

(With Inputs from PTI)

[SSridhar]

India may supply two warships to Philippines - The Hindu

In a boost to India’s defence exports in a region of strategic importance, Kolkata-based public sector yard Garden Reach Ship Builders (GRSE) has emerged as the lowest bidder to supply two warships to the Philippines Navy.

Diplomatic sources while confirming the development said that the final decision was expected in a couple of weeks.

“A post qualification inspection was conducted by a team from Manila as per the procedure to check the capability of the shipyard. It is election time in Manila. So a final decision is likely to be taken in a week or two,” sources told The Hindu .

GRSE is competing with five other bidders from South Korea and Spain. While it was widely reported that GRSE has offered the Kamorta class Anti-Submarine Warfare (ASW) ships for the tender, GRSE officials denied it but did not elaborate on the specifics.

‘Act East’ policy

Philippines which has territorial disputes with China over the South China Sea has announced plans to beef up its Navy and issued a tender in December 2013 for two frigates with a budget of Philippine peso 18 billion or about $437 million translating to about $218.5 million per ship with delivery of both ships to be completed in about four years.

India has been actively beefing up relations in the region as part of its ‘Act East’ policy under which maritime security and defence cooperation are assuming a central role. On the other hand India has been attempting to build a domestic defence manufacturing base and increase its defence exports.

India exported its first warship to Mauritius in December 2014, an offshore patrol vessel, CGS Barracuda, built by GRSE at a cost of Rs.350 crore. Since then GRSE has been aggressively scouting for opportunities in the neighbourhood. It is also set to supply four patrol vessels to Vietnam under the $100 million line of credit extended by India in 2014.

[Prem]

https://www.washingtonpost.com/news/wor ... to-africa/
China: No, we are not sending cans of human flesh to Africa

China's ambassador to Zambia released a stern statement on Tuesday, seeking to battle misinformation that he said was harming China's reputation in Africa. "This is completely a malicious slandering and vilification, which is absolutely unacceptable to us," according to Yang Youming's statement, which was widely reported in Chinese state media.The misinformation in question? That China was taking dead bodies, marinating them, putting them in cans and then selling them in African supermarkets.Chinese state media accused tabloids in Zambia of spreading the rumors, stating that "people with ulterior motives were attempting to destroy the long-standing partnership between Zambia and China." A number of blogs and other publications appeared to have picked up the stories from Facebook.Some reports quoted people who allegedly worked in Chinese meat factories as saying that the practice had begun because China had run out of space to bury their dead or that Beijing reserved its good, nonhuman meat for more powerful countrie

[Prem]

https://www.yahoo.com/finance/news/chin ... 21594.html
China: We’re ready if US ‘stirs up any conflict’ in South China Sea

BEIJING — China 's attempts to claim a nearly 1.4-million-square-mile swathe of open ocean are without precedent and probably without legal merit, but Beijing continues to assert its right to the economically critical zone — and increasingly puts its claims in military terms.Speaking to a small group of reporters in Beijing on Thursday, a high-ranking Chinese official made his warning clear: The United States should not provoke China in the South China Sea without expecting retaliation."The Chinese people do not want to have war, so we will be opposed to [the] U.S. if it stirs up any conflict," said Liu Zhenmin, vice minister of the Ministry of Foreign Affairs. "Of course, if the Korean War or Vietnam War are replayed, then we will have to defend ourselves."The so-called "nine-dash line" that China has drawn over most of the South China Sea — a gargantuan territorial claim that stretches about 1,200 miles from its shores — would give Beijing control over a zone that's estimated to handle about half of global merchant shipping, a third of the planet's oil shipping, two-thirds of global liquid natural gas shipments, and more than a 10th of Earth's fish catch. The Obama administration, backed by several Asian governments and entities such as the Brookings Institution, argues that such massive ocean claims at great distance from land are "inconsistent with international law."

Two Chinese fighter jets on Tuesday intercepted and passed within 50 feet of a U.S. military reconnaissance plane."We rely heavily on the South China Sea [for] transportation of resources and energy and the South China Sea is an important trading group for us. We attach great importance to peace and stability in the South China Sea," said Liu, who warned the United States that it "cannot circle China by building military bases — we cannot do so 30 years ago, or even now.""Chinese people and the government feel like we haven't been treated fairly because the U.S. is blaming China for rising tensions in the South China Sea," said Liu, who added that "what matters is that the U.S. government has recognized that times have changed, [and the U.S.] can gain much more through cooperation than going to war."China is party to the U.N. Convention on the Law of the Sea, and that framework provides "no legal basis" for China to claim its "nine-dash" area, said Alessio Patalano, senior lecturer in Naval History and East Asian Security at King's College London.But beyond that, Patalano said, China's actions have no historical precedent."There is not a precedent of this kind, and this is for two reasons," Patalano told CNBC. "First until recently, technology didn't allow nation states to project power over the oceans as it is possible today. Second, today's degree of interdependence has no precedent in history, therefore issues over the ability of shipping to move through this basin has potential impact on the international system in a way that was not possible previously."A tribunal at the Permanent Court of Arbitration in The Hague is expected to rule in the next couple months on China's expansive territorial claims, though China has already rejected those proceedings.

As the dispute festers, experts see a higher chance of an unintended conflict between U.S. and Chinese vessels or aircraft, something that was witnessed in 2001 when a Chinese and a U.S. plane collided . China watchers say if a collision were to happen in 2016, a strong response from both sides could be possible."China attaches far greater importance to peace in the South China Sea — much greater than the U.S. and Japan. No one should doubt our sincerity in this subject," Liu said. "The Chinese government will uphold peace in Southeast Asia even for the sake of our own survival. In this sense we are actively against any moves that will jeopardize peace in the South China Sea."Liu warned that a conflict between China and the United States would have wide repercussions for the global economy."No country would want to see confrontations between [the] U.S. and China," he said, "because [the] Chinese and U.S. economy will be hurt, and impacts will be felt across the world."

[UlanBatori]

So if you read through that whole thing, the last sentence conveys the punch: Back off or we will sell US Treasury bonds. There goes the budget for the F-35 - 3 trillion dollars.

[member_28663]

So if you read through that whole thing, the last sentence conveys the punch: Back off or we will sell US Treasury bonds. There goes the budget for the F-35 - 3 trillion dollars.

I have seen variations of this arguments many times before but I don't think it makes much sense, at least in the current scenario.

1. The total FX reserves of China are supposed to be 3 trillion, but much of that could be in illiquid assets, fwd contracts etc. The actual liquid portion of treasury holdings is probably much smaller.
2. Even if it were the said amount, there is lots of surplus capital in the world, and an acute shortage of high quality assets (see the amount of -ve yielding bonds around the world). Private investors would gladly take the mantle on any spike of yield.
3. Even if private investors do not jump in for some reason (maybe scared off by the deluge), the Fed could step in with a QE4, if it were worried about higher interest rates. As things stand, the Fed is actually raising rates by itself.
4. Finally, what would China do with the proceeds of the sale? it it repatriates it into CNY, it hurts itself by the resulting currency appreciation. Moreover, there are not that many other investment opportunities around the world and even less so in China. The US on the other hand will only benefit if the USD depreciates.

[member_28663]

Lecture by Shri Bilahari Kausikan (veteran Singapore diplomat) on US-China relations:

http://lkyspp.nus.edu.sg/ips/event/2015 ... -relations

Excerpts:

The essential source of American and Chinese nationalism is a sense of exceptionalism; the US and China both consider themselves exceptional countries. But the conclusions they draw are different.

America is an inclusive culture that wants everyone to become like it and believes that the world would be a better place if this were so. … China’s rise has been psychologically unsettling to many in the West because in China, capitalism flourishes without democracy. This is regarded as unnatural and illegitimate because it punctures the western myth of the universality of its political values and of the inevitability of the development of political forms similar to its own. Unlike the former Soviet Union, China cannot be dismissed as an economic failure and thus challenges in a very fundamental way the western sense of self which assumes its political and moral superiority as a key element.

China has an exclusive culture that rejects the notion that anyone could become like China as impossibly pretentious. To China, the best others can do is humbly acknowledge China’s superiority and the sooner we do so the better for everyone. This is a very ancient and deeply ingrained feature of China’s approach to international relations. Throughout its history, China took great pains to preserve the forms of its centrality, at least in its own mind, even when the facts were otherwise. It never lost its sense of superiority even when powerless before the West and Japan. Now that China has re-emerged as a major power, this sense of superiority has become the underlying cause of the difficulties in China’s relations with many countries. The attitude that China is entitled to have its superiority acknowledged and that failure to do so can only be due to recalcitrance or ill-intention, is why I think China will always suffer a deficit in ‘soft power’ and evoke resentment.

The whole series is quite good.

[TSJones]

So if you read through that whole thing, the last sentence conveys the punch: Back off or we will sell US Treasury bonds. There goes the budget for the F-35 - 3 trillion dollars.

I have seen variations of this arguments many times before but I don't think it makes much sense, at least in the current scenario.

1. The total FX reserves of China are supposed to be 3 trillion, but much of that could be in illiquid assets, fwd contracts etc. The actual liquid portion of treasury holdings is probably much smaller.
2. Even if it were the said amount, there is lots of surplus capital in the world, and an acute shortage of high quality assets (see the amount of -ve yielding bonds around the world). Private investors would gladly take the mantle on any spike of yield.
3. Even if private investors do not jump in for some reason (maybe scared off by the deluge), the Fed could step in with a QE4, if it were worried about higher interest rates. As things stand, the Fed is actually raising rates by itself.
4. Finally, what would China do with the proceeds of the sale? it it repatriates it into CNY, it hurts itself by the resulting currency appreciation. Moreover, there are not that many other investment opportunities around the world and even less so in China. The US on the other hand will only benefit if the USD depreciates.

China holds about $1.2T in US treasuries.

most of those treasuries are greater than one year in duration thus not requiring the US treasury to redeem them until the due date,

this means the treasuries would have to be dumped privately on the global trading market.

would the global market collapse with a $1.2T dump? that's a good question.

when the fed res was deep into qe, it was buying $60 -$100 billion per month. nobody batted an eye. so I really don't know what the fed's limits are,

nor do I know what mechanisms China could use to dump $1.2 T in a short amount of time. it's all speculative,

right now at this time, China is using it's reserves to do things like reimbursing its steel mills for the 540% tariff the US just laid on Chinese steel imports,

One way or another we will find ways to keep the Chinese busy covering their bets.

I wish we could put 1040% tariff on iphones.

if the Chinese wants to bet at the casino then the US is the house. it's our market and our consumers. go fish.

[ShauryaT]

So if you read through that whole thing, the last sentence conveys the punch: Back off or we will sell US Treasury bonds. There goes the budget for the F-35 - 3 trillion dollars.

I have seen variations of this arguments many times before but I don't think it makes much sense, at least in the current scenario.

1. The total FX reserves of China are supposed to be 3 trillion, but much of that could be in illiquid assets, fwd contracts etc. The actual liquid portion of treasury holdings is probably much smaller.
2. Even if it were the said amount, there is lots of surplus capital in the world, and an acute shortage of high quality assets (see the amount of -ve yielding bonds around the world). Private investors would gladly take the mantle on any spike of yield.
3. Even if private investors do not jump in for some reason (maybe scared off by the deluge), the Fed could step in with a QE4, if it were worried about higher interest rates. As things stand, the Fed is actually raising rates by itself.
4. Finally, what would China do with the proceeds of the sale? it it repatriates it into CNY, it hurts itself by the resulting currency appreciation. Moreover, there are not that many other investment opportunities around the world and even less so in China. The US on the other hand will only benefit if the USD depreciates.

I agree with this analysis. China making any sudden moves in an attempt to use these reserves as a sword will invite counter moves. The amount of capital is just one answer, trade barriers and disinvestment is another. It will wreak havoc on the Chinese economy. China is dispensable as a producer, the US is not as the consumer and the owner!

[SSridhar]

Benigno Aquino Says U.S. Must Act if China Moves on Reef in South China Sea - JAVIER C. HERNÁNDEZ, NYT

Why Might Vietnam Let U.S. Military Return? China. - JANE PERLEZ, NYT

[SSridhar]

China is currently in a financially perilous state. Its GDP has plummetted and its foreign exchange reserves have fallen significantly. There us a significant flight of capital too. It is going through a transformation in order to revive the economy. The military is undergoing a complete makeover. It is also on a spree in its OBOR initiative which means a lot of CAPEX spending without returns for quite sometime to come. All it could get may be some real-estate, berthing rights for PLAN etc. It has serious issues with all the ASEAN countries plus a few more, barring a couple. It cannot afford to rock the finance boat at this stage.

[TSJones]

concerning Chinese trade, I would note that India is in the same position that the US is. maybe even better.

[Prem]

Goldman Sach etc are the super stealthy weapons of USA to control Chinese huffing and puffing to blow SCS away. The small punch early this year has made PRC lose 20% of their currency reserves and holes are still punched on Dragons' pocket. Uncle will make them poor before pushing them in deep ditch which may take decaded for them to climb out only to be pushed down again. Xinese legendary wisdom have been found missing, a shattered myth now as more and more they look and act like Paki with Pork chops. Judge them by the company PRC keep while keeping hostile attitude toward it's export customers.

[NRao]

I would never suggest, to anyone, to follow this Chinese model. For anything. It has a lot of glitter, makes a lot of noise, but is hollow.

But they being good at mischief, can be a headache and need to be dealt with firmly, without trust.

[SSridhar]

China objects to presence of Indian ships on South China Sea - Dipanjan Roy Chaudhury, ToI

China has upped the ante on its claims in the South China Sea region ahead of President Pranab Mukherjee's four-day trip to the country from May 24, objecting to the presence of Indian Navy ships in the region where it has significantly expanded its presence since 2009 through artificial islands and military presence.

Indian Navy ships taking part in maritime exercise in the South China Sea is "a matter of concern", a senior Chinese official said in Delhi on Thursday night, a day after four naval vessels set sail for participating in Malabar exercise with the United States and Japan.

The Chinese official, who did not want to be identified, alleged that Western powers are using the colonial tactics of "divide and rule".

When there is some trouble in the South China Sea, India is worried. When Indian ships participate in maritime exercises in the South China Sea {but, the Op. Malabar ex is in West Pacific off Okinawa. Since when that too has become South China Sea?}, of course China will show concern," the official told a select group of media persons.

The remarks come ahead of the President's visit to China, where he is expected to raise issues of political, regional and strategic significance including China's efforts to block India's bid at the United Nations to get Jaish-e-Mohammad chief Masood Azhar banned as well as India's entry into the Nuclear Suppliers Group, both ostensibly at the behest of Pakistan .

On May 24 Mukherjee is scheduled to land in Guangzhou, one of China's most prosperous regions, to seek to attract business and investments. He will be in Beijing on May 25-27 for political dialogue and meetings with Peking University.

The Chinese leadership has gone an extra mile for the President, with plans for several official banquets and meetings.

Guided missile stealth frigates INS Satpura and INS Sahyadri; INS Shakti, a sophisticated fleet support ship; and INS Kirch, a guided missile corvette, had set sail on Wednesday on a two-and-a-half month long operational deployment to the South China Sea and North West Pacific.

[SSridhar]

Playing Chicken in the South China Sea - Edit, NYT

By the Pentagon’s account, two Chinese fighter jets performed an “unsafe” maneuver this week by flying within 50 feet of an American surveillance plane over the South China Sea. That’s not much more than a hairbreadth, aeronautically speaking, and a collision could have been catastrophic — to the crews and to the already fragile diplomatic relations between China and its regional neighbors and the United States.

China has been behaving in a bellicose fashion in the South China Sea for some time as part of a sustained and increasingly dangerous effort to assert sovereignty over a vital waterway in which other nations also have claims. In a few weeks, an international arbitration court is expected to rule in a case brought against China by the Philippines. The outcome could have a profound effect on the struggle for control of the sea, which is rich in resources and carries $5 trillion in annual trade.

Many experts expect the court to rule against China. The right response would be for China to accept the court’s decision and work with the Philippines and other neighboring countries that have interests in the region — Vietnam, Malaysia, Brunei and Taiwan — on a mutually acceptable resolution to their rival claims. But whether it will respond that way remains to be seen. So far, Beijing has refused to acknowledge the court’s jurisdiction, even though it ratified the treaty under which the case was brought — the 1982 United Nations Convention on the Law of the Sea, guaranteeing unimpeded passage on the high seas for trade, fishing and oil exploration.

China’s most aggressive and outrageous tactic has been to use tons of dirt and gravel and rocks to transform small reefs and rocks into artificial islands with airstrips and other military structures, including runways capable of handling military aircraft. According to the Pentagon’s annual report on China’s military, over the last two years China added more than 3,200 acres of land to the seven outposts in the Spratly Islands, while other countries that occupy disputed rocks and reefs in the archipelago added about 50 acres. China’s neighbors fear that Beijing intends to use these outposts to interfere with navigation and their rights to fish and drill for oil and gas.

More broadly, the report described an ambitious military buildup aimed at projecting power so that China can “defend itself and its sovereignty claims.” This includes a 2015 defense budget estimated conservatively at $180 billion, up 9.8 percent annually since 2006; the largest navy in Asia, with more than 300 surface ships; plans to have as many as 78 ballistic missile submarines by 2020; and new investments in nuclear and anti-satellite weapons.

These issues are expected to be a major focus of President Obama’s trip to Asia, which is scheduled to begin this weekend with visits to Vietnam and Japan. Many of China’s nervous neighbors have sought closer ties with the United States, which makes no claims to the South China Sea and its land features but has long acted as a guarantor of freedom of the seas and stability in Asia, enabling the region to grow and prosper.

Mr. Obama is under increasing pressure from some regional allies as well as his own military to push back harder against China, and he has begun to do so. A recent example is that a United States destroyer last week sailed near China’s largest man-made island, the third freedom-of-navigation operation in seven months challenging Beijing’s vast claims in the South China Sea.

American officials have long hoped that China would use its position as a rising power to work with the United States to uphold post-World War II international norms, but many officials and experts now see China as determined to write its own rules. How the court ruling is handled will be a critical test both for Mr. Obama and for Xi Jinping, China’s president.

One encouraging note in the Pentagon report is the finding that while China has been willing to tolerate higher levels of tension in pursuit of its maritime claims, it “still seeks to avoid direct and explicit conflict with the United States.” The challenge for all sides is making that aspiration a reality.

[SSridhar]

India wants fair solution to border issue: Pranab - PTI

Ahead of his visit to China, President Pranab Mukherjee said on Friday that India was in favour of a “fair, reasonable” and mutually acceptable settlement of boundary question which will help in achieving the full potential of Sino-India relationship.

To visit China on May 24

Talking to state-run Chinese Central Television (CCTV) and Xinuha news agencies ahead of his first State visit beginning May 24, the President spoke on various issues including India’s concerns on terrorism, bilateral trade and cultural and educational exchanges.

To a question on some “sensitive problems” left over from history between India and China, Mr. Mukherjee said India would like to expand and diversify its engagement with China across various fields while “proactively addressing outstanding issues” including the boundary question.

“We seek a fair, reasonable and mutually acceptable settlement of the boundary question and, pending the boundary settlement, to maintain peace and tranquility in the border areas.

“Both sides should strive to ensure that the outstanding issues are addressed in a manner that demonstrates mutual sensitivity to each other’s concerns and aspiration,” he said. Only then can “we ensure that these differences will not come in the way of continued development of bilateral relations.”

[Cosmo_R]

^^^ Pranab's language makes India's position sound weak. It should have read:

"We seek a mutually acceptable settlement of the boundary issue and, pending the boundary settlement we expect peace and tranquility in the border areas."

[Cosmo_R]

Benigno Aquino Says U.S. Must Act if China Moves on Reef in South China Sea - JAVIER C. HERNÁNDEZ, NYT

Why Might Vietnam Let U.S. Military Return? China. - JANE PERLEZ, NYT

The 'Donald' of the Philippines, Duterte is promising negotiations with the PRC—forgetting that the "what mine is mine and yours is negotiable" strategy employed by the Chinese allows no wiggle room.

[Cosmo_R]

@TSJones ^^^:"nor do I know what mechanisms China could use to dump $1.2 T in a short amount of time. it's all speculative"

They can't do open market. The only way they could do that (and it would be stupid of them) is to sell the debt back to the Fed at a steep discount—perhaps that's what Trump has in mind.

They haven't cornered the US, they have been cornered by the US. Think Hunt Brothers/Silver/1970s/Bache Halsey Stuart

[SSridhar]

China-Taiwan talks ‘could be shelved’ - PTI

China on Saturday threatened to suspend talks with Taiwan if the newly sworn-in Taiwanese President Tsai Ing-wen does not acknowledge the “1992 consensus”, which refers to a purported understanding that they belong to a single sovereign nation. Only by confirming the adherence to the common political foundation of the 1992 Consensus that embodies the ‘one China’ principle can cross-Strait affairs authorities continue with their regular communication, Ma Xiaoguang, spokesman of the country’s Taiwan affairs was quoted as saying by the state-run Xinhua.

[SSridhar]

China instigated Naga outfit: Centre - Vijaita Singh, The Hindu

For the first time, the Centre has admitted officially that the National Socialist Council of Nagaland (Khaplang), named after its Myanmar-based leader S.S. Khaplang, intensified violence in the Northeast in 2015 at the behest of the Chinese.

The admission was made in depositions by the Centre and other States before a tribunal set up early this year to adjudicate the ban on the insurgent outfit under the Unlawful Activities (Prevention) Act (UAPA). The full order of the tribunal, which upheld the decision to ban the outfit for five years, has neither been posted online nor publicised.

The order reveals that Nagaland was the only State which was not in favour of declaring the NSCN-K an unlawful association and sought a “peaceful political solution”. Arunachal Pradesh and Manipur supported the ban.

It was in September 2015, the Centre moved to ban the NSCN-K following which the tribunal under the UAPA, led by Delhi High Court judge Najmi Waziri, was set up.

On February 12, when the tribunal was hearing the case in Gangtok, Sikkim, the Ministry of Home Affairs made a written submission that the NSCN-K “obtained assistance from anti-India forces in other countries to procure arms…in its struggle for the creation of a separate State,” the only direct reference to foreign help to the outfit.

In a background note submitted to the tribunal, the Ministry said: “The government has also been informed that, at the behest of the Chinese, various north-eastern insurgent groups met in April 2015 in Myanmar to form a revolutionary front under the leadership of S.S. Khaplang, self-styled chairman of the NSCN-K, and the outfit smuggled weapons into India and intensified violence in the North-east, particularly targeting security forces.”

The NSCN(K) broke the 14-year ceasefire with the Centre on March 27 last year. Thereafter, the outfit launched a string of attacks, including an ambush that killed 18 soldiers in Manipur on June 9 last.

Given to violence

“According to the Central government, the NSCN-K is professed to violent activities; its violent profile is etched by violent activities after abrogation of the ceasefire, which includes indiscriminate firing upon the personnel of Assam Rifles… The NSCN-K is in the process of mobilising its cadre from the Indo-Myanmar border under the direct supervision of Niki Sumi, its self-styled Lt. General. Suspected cadre of the NSCN-K have launched major offences against security forces, including the assault on the leaders and cadre of rival groups and on business establishments in Kohima, Dimapur and Mokochung,” the tribunal order records.

“According to the government’s intelligence report of April 2015, 130 cadres of NSCN-K were camping across the Myanmar border with the intention to assault Assam Rifles personnel and attacking their outposts at Longwa village in Mon district, while another armed group of 30-40 cadres was found to be proceeding towards Chenmoho in Mon district from its general headquarters at Throillo in Myanmar. It is the government’s view that the NSCN-K has been aiding and sheltering other unlawful groups such as ULFA, NDFB and CorCom, particularly at their bases in Myanmar. According to the background note, the NSCN-K has sizeable detachments in Myanmar at various camps located in Momkho, Khamlao, Lunglawng, Nyanching, Ganyo General area, Lahe, Kachin sub-division, Shagot, Lahbon, Liglimkan, Maimong, Tonnyu and Taga area, where its leaders and cadres are using the camps as a command centre and for training the cadre. The NSCN-K has its cadre strength of around 700-800 militants who bear sophisticated weapons, including rocket launchers. S.S. Khaplang, Niki Sumi and others are stated to be based in Myanmar,” it goes on to state.

[SSridhar]

Just for us to recall in the light of the above:

Though it is well known for a long time about the Chinese support for various insurgent groups operating in the North East, the Chief of the IB, Nehchal Sandhu openly raised the issue in the conference of police chiefs from across the country on September 15, 2011. He accused Beijing of ‘intrusive interest’ in these insurgent groups.In March 2013, the Minister of State for home affairs M Ramachandran said in the Parliament, “. . . there are reports that the insurgent groups operating in the north eastern states of India have been augmenting their armoury by acquiring arms from China and Sino-Myanmar border towns and routing them through Myanmar. The government of India has taken up the matter with the Chinese side through diplomatic channels.” On June 4, 2015, NSCN(Khaplang) militants attacked an army convoy of 6 Dogras in Manipur's Chandel district killing 18 soldiers and injuring 11. Though India retributed the loss through a stunning Special Forces attack on the NSCN(K) insurgent camps well inside Myanmar and killing over 70 of them, Indian media accused that the NSCN(K) was egged on by the PLA to launch the attack on 6 Dogras. The Indian media report had quoted an official claiming that the government had acquired recordings of a phone call in which a PLA official asks the NSCN-K leader about his health and tells him to learn the Chinese language. Rebutting the claim, Wang Dehua, director of the Centre for South Asian Studies at Tongji University said, “The phone intercepts can prove nothing … It is hard to determine the identity of Chinese [officials] just by a phone conversation. It can be easily doctored.” One of India’s most-wanted armed insurgent leaders, Paresh Barua of United Liberation Front of Asom (Independent), has been found to be living in the Chinese town of Ruili in the Yunnan province. On November 7, 2015, the London-based Mukul Hazarika alias Abhijeet Borman alias Abhijeet Asom, Chairman of the ULFA(I) sought the Chinese assistance openly for the liberation of Assam. He told Times of India, “China is our next-door neighbour. Despite Indian occupation of Nan Zang (south Tibet), China is trying to maintain status quo for the sake of peaceful coexistence. At the same time, it remains ambivalent on the plight of indigenous Assam, except occasional voicing by Chinese citizen in support of Assam's legitimate claim in print. But, without taking a first step, there won't be any progress. The watershed moment has arrived for indigenous Assam to prompt us to build that friendship with China with confidence. We sincerely hope that China will put forward the hand of friendship towards Assam without hesitation.” In December 2015, Thailand extradited Wuthikorn Naruenartwanich alias Willy, a Thai arms dealer who was a go-between between the Chinese arms suppliers and the Indian insurgents. The details of Willy’s role emerged after NIA (National Intelligence Agency) arrested senior leader of Naga insurgent group NSCN (IM) Anthony Shimray, a nephew of NSCN founder T. Muivah and IM faction’s chief arms procurer. Shimray was arrested in 2010 in Patna, when he had come to India from Bangkok via Nepal. He startlingly said that the Chinese agents in 2009 had even offered to sell surface-to-air missiles to the Naga rebels for $1 million.

[Anurag]

US lifts Vietnam arms embargo in move to counter China

Something India should have been ahead in terms of arms transfer to Vietnam.

http://www.foxnews.com/politics/2016/05 ... china.html

[DavidD]

China is currently in a financially perilous state. Its GDP has plummetted and its foreign exchange reserves have fallen significantly. There us a significant flight of capital too. It is going through a transformation in order to revive the economy. The military is undergoing a complete makeover. It is also on a spree in its OBOR initiative which means a lot of CAPEX spending without returns for quite sometime to come. All it could get may be some real-estate, berthing rights for PLAN etc. It has serious issues with all the ASEAN countries plus a few more, barring a couple. It cannot afford to rock the finance boat at this stage.

Right, China is in transition right now. Perversely, Ukraine and ISIS have been a godsend for China, keep all the rest of the world powers occupied while it happens. China isn't about to rock the boat, not for a few more years at the very least.

[NRao]

What can a sinking boat rock?

If at all, it will be Goldman Sachs that will.

[SSridhar]

India had to stave China off to sign Chabahar agreement with Iran - Sachin Parashar, ToI

India's commercial contract with Iran for development of Chabahar port has come not a moment too soon for the government. Notwithstanding its presence at Pakistan's Gwadar, where it has developed and acquired operational control of the port, China has also looked to invest in the development of Chabahar port.

Only last month, a Chinese consortium visited the Chabahar free trade zone and expressed interest in developing the port and also building an industrial town there. The head of the Chinese consortium which visited Chabahar was quoted as having said that Chinese companies were eager to invest in the strategically located port.

This followed the visit by Chinese President Xi Jinping to Iran in January this year when the two countries mentioned in their joint statement development of ports as one of the areas where they could have tangible cooperation.

The intergovernmental MoU signed by Union minister Nitin Gadkari last year for developing Chabahar was also seen as India's response to the interest shown in the Iranian port by China Harbour Engineering Company which runs the Gwadar port in Pakistan.

India had to move quickly in the past few months not just to sign the contract between IPGPL (India Ports Global Private Limited) and Iranian firm Arya Banader but also a confirmation statement between EXIM Bank and Central Bank of Iran confirming availability of credit up to Rs 3,000 crore for the import of steel rails and implementation of India's Chabahar port commitment.

According to Indian officials, the contract envisages India's investment and participation in the first phase of Chabahar port which involves development of two terminals and five berths with multi-cargo capacity. The contract also comes with specific timelines for its implementation.

India's desperation to seal the contract, in fact, also stemmed from Iran's own conduct in the past few months with Tehran seemingly playing both ends for a while. Even after India had signed the MoU for developing Chabahar last year, Iran's ambassador to India Gholamreza Ansari had warned that India needed to look at benefiting from business opportunities in Iran, once the international sanctions on Tehran were lifted, and not waste time in "cheap negotiations".

The Sistan and Baluchestan governor, Ali Osat Hashemi, hosted another Chinese delegation at Chabahar in October 2015 and announced that Iran would be glad to work with Beijing and provide it with lucrative business opportunities as it had always stood by Iran. He had said he would discuss investment possibilities in Chabahar with both China and Pakistan.

Any sizeable presence of the Chinese in Chabahar will be resented by India even as Beijing's presence grows elsewhere in Iran.

Unlike India, Iran has welcomed China's Maritime Silk Road initiative and, compared to its annual trade volume of $9 billion with India, Iran's trade with China stands at $52 billion. According to many in the government, Chabahar is also important for India to break free from its strategic encirclement by China, which not only controls the Gwadar port but has also restored its presence in Colombo and Hambantota in Sri Lanka.

It is with Japan that India would like to work with for connectivity in India's neighbourhood and New Delhi will closely look at the outcome of PM Shinzo Abe's visit to Tehran a few months from now. While there is no official confirmation yet, Japan is said to be contemplating developing the port and an industrial complex in the free trade zone.

When asked about the likely involvement of Japan in Chabahar, foreign ministry joint secretary handling Iran, Gopal Baglay, said there could be synergies in promoting regional connectivity. but added that it would depend on how comfortable Iran was with it.

[Prem]

China’s Nuclear Subs Are Ready to Terrorize the Sea
http://www.thedailybeast.com/articles/2 ... e-sea.html

China’s about to join an exclusive club for nuclear powers. After decades of development, 2016 could be the year the Chinese navy finally sends its ballistic-missile submarines—“SSBN” is the Pentagon’s designation—to sea for the first time for operational patrols with live, nuclear-tipped rockets.If indeed the Jin-class subs head to sea this year, China will achieve a level of nuclear strike capability that, at present, just two countries—the United States and Russia—can match or exceed.
“China will probably conduct its first SSBN nuclear deterrence patrol sometime in 2016,” the Pentagon warned in the latest edition of its annual report on the Chinese military, published in mid-May (PDF). Once the Jins set sail, Beijing will command a nuclear “triad” composed of ground-, air-, and sea-launched nuclear weapons.That’s a big deal, according to the dominant theory of nuclear warfare. “The theory is that a diverse array of delivery systems creates survivability by complicating a first strike,” Jeffrey Lewis, an expert on nuclear geopolitics with the James Martin Center for Nonproliferation Studies, told The Daily Beast.The word for that is “deterrence.” And China could be on the verge of gaining a deterrence capability that most countries simply can’t afford. China reportedly possesses several hundred atomic warheads, but no one outside of the Chinese Communist Party leadership and, perhaps, top foreign intelligence agencies, knows the exact number.To be fair, the Chinese vessels are, in a sense, playing catch-up. The Soviet Union and the United States deployed the first nuclear ballistic-missile submarines at the height of the Cold War in the 1960s—and France and the United Kingdom soon followed suit. Today the U.S. Navy’s 14 Ohio-class missile subs take turns quietly sailing deep in the Pacific and Atlantic Oceans, ready to fire their 24 nuclear-tipped rockets on a moment’s notice.
Russia, France, and the U.K. still operate SSBNs, and India is developing one of its own. The Chinese navy began tinkering with missile subs in 1981. The experimental Xia-class vessel and its JL-1 rocket were technological failures and never sailed on an operational mission.Since 2007, the Chinese navy has completed four of the follow-on Jin-class subs and is reportedly planning on building four more. More than 400 feet long, a Jin can carry as many as a dozen JL-2 rockets, each with a range of 4,500 miles. A Jin sailing in the central Pacific Ocean could strike targets anywhere in the United States.If the Jins finally deploy this year, a whopping 35 years will have passed since China first tried to develop a functional SSBN. But developing a missile sub is hard.Expensive, too. China has not disclosed the cost of the Jins, but consider that the U.S. Navy plans to spend $97 billion replacing its 14 Ohios with a dozen new submarines. Missile subs are big and complex—and their rockets are, too. Training reliable crews and designing an effective command-and-control system are equally difficult to do. Chinese subs have been plagued with quality-control problems.“While it is clear that the [Chinese navy] is making strides towards correcting these issues, the capabilities of China’s nuclear-powered submarine fleet remain in a process of maturity,” the Nuclear Threat Initiative, a Washington, D.C.-based advocacy group, explains on its website.To Beijing, achieving a nuclear triad is apparently worth the labor and expense. But Lewis cautions against reading the development of the Chinese atomic triad as the result of some sort of clear, top-down policy.The same internal conflict could be behind the Jins’ development. And whether China’s missile subs set sail for the first time this year could depend as much on politics as on technology and training. “There are a lot of rivalries and intrigues playing out that might result in a triad—or not,” Lewis said.

[RajeshA]

China instigated Naga outfit: Centre - Vijaita Singh, The Hindu

What is needed is to make China bleed profusely in some place. East Turkestan (Xinjiang) and Tibet are the two candidate regions where China can easily bleed.

Another possible place is to turn North Korea, but that is a James Bond operation.

[Prem]

Why OBOR of China is not at all a good idea for India?
http://www.slguardian.org/2016/05/why-o ... for-india/

Growth and modernization are ongoing processes and from that point of view, the MSR initiative will add value to the destination countries in adding to their potential to handle larger volumes of (Chinese?) traffic. China is leaving no stone unturned to convince the global audience that it is a benign scheme that has been conceived to benefit all the nations in the MSR or the land segment of the OBOR. The most recent example is from Hong Kong which sponsored a Belt and Road summit. According to the top Chinese legislator who spoke at the summit, the silk route (and also the spice route which was not mentioned) has existed for over 2000 years enabling trade, cultural and political exchanges. It may be noted that the Chinese official did not mention India even once. While on the face of it the OBOR looks an economic initiative, India has to be watchful of the full import of this initiative from China with a middle kingdom syndrome.As brought out by the Chinese Foreign Minister in Saudi Arabia in an interview to Al Jazeera[ii], a lot of emphasis is being placed on OBOR even in West Asia. Put simply, nations in the past looked for markets far and wide (for silk, spice and gems) and simultaneously evaluated as to what could be brought back from these destinations (horses, gold, technology etc.). It may be noted that not once was India mentioned in the entire interview though Indian Ocean was mentioned many times.In a globally integrated economy, market structures have evolved serving the economic growth of countries. China has become the manufacturing hub of the world and has captured markets across continents. China therefore has to scale up in terms of its reach, connectivity and production to sustain its GDP growth. So the OBOR is essentially a ploy to use its surplus stagnating reserves of about 3.2 trillion US Dollars and also utilize the excess capacity that it has built over the last few decades to achieve the number one position in manufacturing and meeting the needs of the global markets. So as is being made out by China in all forums, OBOR is not a charity initiative and that factor needs to be borne in mind while evaluating this initiative.
From the Indian view point, it is not just the economic leverages that China will obtain by huge investments in India’s neighbourhood but also the strategic dividend for future requirements as China aspires to be a global power. The access to the ports and facilities particularly in the maritime countries in Asia and Africa would be crucial for China’s Indian Ocean ambitions as it seeks to protect its maritime trade and security interests. The assumption that India would be a loser if it does not get onboard the MSR initiative is flawed in any which way for many reasons underlined below:-
•India is a huge growing market and already has a huge trade deficit with China. By facilitating the process of creating more captive ports or other infrastructure with Chinese help, it will provide greater access to emerging markets and only increase the trade deficit beyond unmanageable proportions.
•By heavy investments in the neighbourhood, China would eat in to the market share of India and there is no need press the self-destruct mode as for as India is concerned by getting on board a dubious project that does not benefit India in any manner.
•India with its size, population and form of governance has many other alternatives for moving its own trade and transacting with other economies of the world by working on other sea and land routes and by using the advantage of its location in the Indian Ocean.
•The most recent case of the MoU signed for developing Chabahar in Iran provides wonderful alternatives to the cleverly camouflaged Chinese MSR. It is doubtlessly a game changer provided India knows how to play the game correctly in the coming years and does not lose steam as it did in the past.
•The fear that India would lose out on the inflow from China in terms of FDI in the maritime sector is unfounded as India has many other economies in East Asia and South East Asia including Japan, Vietnam, Indonesia, Malaysia and other developing and developed economies willing to invest in India in mutually beneficial initiatives.
•India which is trying to carve out an independent course cannot be seen as riding piggyback on a Chinese initiative particularly as China has been inimical to all the initiatives of India in the comity of nations.
•The recent example of snubbing India on its entry in to the NSG unless it signs the NPT, Refusal to allow India in to the UNSC, the bailing out of Pakistan on the issue of blocking JeM by misuse of its veto power, the border incursions, presence of nuclear submarines in the Indian Ocean, objecting to India’s off shore explorations with Vietnam in so called disputed EEZ while having no qualms in planning the China Pakistan Economic Corridor through the disputed territory of Pak Occupied Kashmir are all indicative of the mindset of China.
•By all its actions, China has demonstrated that it is not India’s friend and any engagement with China on its terms is fraught with danger for the future.
•India is a large enough economy albeit with its own worries of development with plenty of corrections to be applied. Its own economic growth trajectory has shown good trends that need to be sustained by proactive initiatives and joining MSR is definitely not one of them.
•The engagement with China for most nations in the world has not been a positive one and these nations are looking at opportunities to diversify their investments and move out of China for various reasons.
•Within the South China Sea, the smaller neighbours are very angry with the aggressive behaviour of China. While most of them continue to do business with China, would keep working on alternative engagements with India, Japan, Korea, USA and other European economies. India needs to work with other economies to identify the alternatives for the smaller nations. Surely the nations doing business with China do not want all the eggs in one basket.
•The North South Transport Corridor which uses the ship, rail and road route to connect Asia, Europe, Russia, Iran and Central Asia is again a wonderful counter to the OBOR. Dry runs have already been carried out on this corridor in 2014 and it has been established that there is a saving of about 2500 US Dollars for each 15 tons. By the Chabahar initiative, India has lot more to gain than by the OBOR. Even when there ports built using the funds from China, India will not be denied the use of those ports for any commercial operation as they would be on commercial terms as applicable for international charters.
India also did think of the spice route and the Mausam which has its origins in the ancient trade practices between India, West Asia, Middle East and Europe. However, it has not taken off in the manner expected and has remained a slow starter. This has received a new fillip with the connectivity being established through Chabahar.

Last but the most important issue is about the new plans on the anvil as outlined in the Maritime India Summit that concluded in Mumbai on 16th April 2016[iii]. The ambitious plan to optimize on the potential of the oceans envisages an investment of one lakh crore in the port sector with a target of 3000 million tonnes in the next fifteen years. In the last two years itself, some 56 new projects with an investment of more than 250 billion rupees have been awarded[iv]. The plan caters for addition of five new ports and also fourfold increase of coastal traffic in the corresponding period.

So there are grand plans afoot to realize the full potential of Maritime India without looking at or linking with China’s plans. Seen in the context of the regional integration through Chabahar, the Trilateral transport and transit corridor (TTTC)[v] of peace and prosperity in the words of Modi passing through Iran, Afghanistan and the Central Asian Republic along with the North South corridor India has the potential to work on its own steam while reaching out to the new markets and countries . India has a lot more geographical advantage in terms of its reach and access in comparison with China .It hardly needs the crutches in the form of MSR assistance from China that comes with many strings attached.
China has neither been a friend nor has it been an advocate for a prosperous India that is seeking its own place in the high seat of United Nations. It also continues to support Pakistan to the hilt and has no inhibitions in making things very difficult for India in dealing with matters of security and economy. It continues to nurture its ambitions of being a super power and Indian Ocean is an area of core interest though not so specifically stated.India has enough options available particularly with a proactive government which can actualize its potential. While the recent agreement with Iran for development is a game changer, India has to ensure that there is no time and cost overrun and also builds a port along with the connectivity of the highest standards that will be the talk of the world. India has to learn from its past mistakes and has to ensure that it does not repeat them in any new initiatives whether it is the Maritime India Summit that is grandiose on scale and conceptualization or the new initiative in the region that has the potential to catapult India in to the big league.I By joining it, India is likely to find itself in a bewildering medley of unequal and incompatible partners, distracting it from single-minded attention to its own country-specific development goals. Both Arthashastra and Panchatantra warn against joining alliances which are being sponsored by those whose motives and agenda are not clear and members of which are apt to pull in different directions.”

[Kakkaji]

Subtle IOU message to China - President reminds Beijing about support for WTO entry

The President pressed this personal advantage in Guangdong throughout his visit. At his first engagement in China, a meeting with the Indian community in this part of the country, Mukherjee recalled his determined effort as commerce minister to argue for China's admission to the World Trade Organisation (WTO).

It is something for which the Chinese are clearly grateful to him. China did not have the kind of clout it now has when the General Agreement on Tariffs and Trade (GATT) was metamorphosing into the WTO. And the US and other western countries were opposed to Beijing's admission.

By recalling India's role in the transition from GATT to WTO, Mukherjee was subtly reminding the Chinese that they owe India some repayments. Jawaharlal Nehru had campaigned unceasingly for China's admission to the United Nations by replacing Taiwan, but Nehru never used it as an IOU with Beijing.

Mukherjee's willingness - with Modi's blessings, no doubt - to remind the Chinese about India's effort to get Beijing into the WTO has a big element of pragmatism to policy at a time when diplomacy is increasingly transactional.

At the end of Mukherjee's visit later this week, the Chinese may not overtly soften their position on India's entry into the Nuclear Suppliers Group or on Masood Azhar, the Pakistani terrorist, but he has set in motion a new effort to soften up the Chinese.

It is now up to Modi to follow it up when he meets the Chinese leadership, albeit multilaterally, soon.

[panduranghari]

IMO, OBOR is to supply Europe with Chinese sh*t. The overwhelming superiority of Anglo-Saxons over the sea routes, makes it impossible for China to control the route. SCO and OBOR is perhaps its way to counter it. Recapture of PoK, will be a big spanner in the OBOR wheels.

[SSridhar]

Regional pact: India worried over China’s aggressive demand on tariff elimination

Spelling trouble for India at the on-going negotiations for the Regional Comprehensive Economic Partnership pact, China has demanded that New Delhi eliminate duties on almost all categories of items, including sensitive ones such as steel, electronics and chemicals, despite the initial decision taken by the two countries to keep ambitions low.

In its first round of requests made to India, China’s demands have gone much beyond the understanding reached between the two countries on eliminating tariffs on 42.5 per cent of trade items.

“We have already held bilateral discussions with China on the sidelines of the last RCEP meeting in Australia asking it to be realistic and bring down its demand. But we have not yet received a positive response,” an official said.

New Delhi is worried about China’s aggressive stance as the Indian industry is neither equipped nor willing to face uninhibited competition from its neighbour.

“What has made matters worse for India at the RCEP is the fact that most members want tariffs on goods (the agreed number of items) to be reduced to zero within a ten-year time-frame, in line with the ambitious Trans Pacific Partnership agreement between the 12 Pacific Rim countries led by the US,” the official said.

The RCEP has prescribed a deadline of June 1 for all members to give their first round of requests to other members, based on the initial offers made by each, as efforts are on to wrap up the pact this year. “While there are a number of items including agriculture products, pharmaceuticals, auto components, marine products and metals where our industry has aggressive interests in China, we are apprehensive about asking for too much as it may lead to China justifying its own high demands placed before us,” the official added. In the first round of offers, India agreed to eliminate tariffs on 42.5 per cent of items for China, Australia and New Zealand, 65 per cent for Japan and South Korea and 80 per cent for the ASEAN. It is important for India to be a part of the proposed pact to counter bigger blocs like the TPP and also retain its competitiveness in the region.

At the next round of RCEP in New Zealand next month, India will try to negotiate for a longer implementation time-frame for goods as well as reiterate its demand for a good deal in services, especially related to free movement of workers.

Trade bloc

The RCEP, being negotiated between 16 countries, including the 10-member ASEAN bloc, seeks to create one of the largest free trade blocs in the world, as the countries together account for 45 per cent of the world population and over $21 trillion of gross domestic product.

India’s trade deficit with China has already crossed $52 billion in 2015-16 with its imports increasing 2 per cent to $61.7 billion and exports decreasing 24 per cent to $9 billion. The deficit is rising despite imposition of anti-dumping duties by India on a variety of Chinese products ranging from iron and steel items to telecom equipment.

[SSridhar]

India, China should resolve issues through political acumen: Mukherjee - PTI

India and China should comprehensively resolve challenges including the boundary question through “political acumen” and “civilisational wisdom” so that the coming generations are not “burdened” by unresolved issues, President Pranab Mukherjee said today.

Enunciating “8 steps to a partnership of the people” for India-China relations in his address to Peking University, he noted that there is bipartisan commitment to strengthening the partnership with China, and said political understanding between the two countries is vital for “closer developmental partnership”.

“One of the ways it could be done is through enhanced political communication. In India, we have a bipartisan commitment to strengthening our partnership with China. The frequent contact between our respective leaders bears testimony to this.

“We have broadened the ‘common ground’ and learnt to manage our differences. There are challenges — including the boundary question — that still need to be addressed comprehensively,” he said.

Making his first state visit to China as head of state, Mukherjee said while it was natural for neighbours to have differences of views on certain issues from time to time, “I consider it a test of our political acumen when we are called upon to draw on our civilisational wisdom and resolve these differences to the mutual satisfaction of both sides”.

“Both sides should work with the aim of ensuring that we do not burden our coming generations by leaving our unresolved problems to them. I am confident that by ensuring that these matters are not aggravated and by remaining sensitive to mutual concerns, we can minimise our differences and maximise our convergences,” he said.

[Peregrine]

China may reconsider stand on India's NSG membership

BEIJING: China on Friday sent out signals that it might reconsider its stance on an Indian membership to the Nuclear Suppliers Group after the meeting between President Pranab Mukherjee and Chinese president Xi Jinping in Beijing.

"China and India will support each other on regional and international occasions and jointly utter China's and India's voice together on the international stage," Hua Chunying, Chinese foreign ministry spokesperson said in reply to a question about India's desire to enter the NSG.

Hua's statement shows Beijing wants to be seen on the same page as India in international affairs instead of appearing to be in conflict with it. But China is not yet ready to commit itself to a position the issue of Indian membership, which is coming up for discussion at the next meeting of NSG in June.

"We believe that his visit is very successful and fruitful. The two sides have agreed to carry forward our fine traditions, deepen practical cooperation and alleviate bilateral relations," Hua said about the President's four day visit to China which ended on Friday morning.

She was a little more reticent about India's desire for Chinese support in the United Nations to pass a resolution censuring Pakistan based terrorist, Masood Azhar, who has been held responsible for the Pathankot attack. China has earlier blocked Indian attempt to move the resolution at the UN because it might hurt the image of its all-weather friend, Pakistan.

"Terrorism is our common enemy. We will continue to enhance our counter terrorism efforts under the UN, the BRICS and other frameworks to jointly maintain regional peace and stability," the foreign ministry spokesperson said. This is more or less the stand taken by China and there seems to be no change in it.

She said that the two counties will "expand bilateral cooperation in counter terrorism". The two sides will properly manage and control our disputes, so that these disputes will not stand in the way of practical cooperation, she added.

During his discussions with the Chinese leaders including premier Li Keqiang, Mukherjee said both India and China had the responsibility of reducing carbon footprint by moving to non-coal energy sources like nuclear energy. This is why the two countries should support each other in finding easy access to civilian nuclear technology through the NSG.

China is candid about the fact that it is seeking Indian markets, and this is one of the bargaining chips at the negotiation table between the two countries.

"In practical cooperation we will enhance our cooperation in industrial zones, construction and build more sister cities. The two sides will also enhance cooperation in investment and tourism," Hua said.

Cheers

[DavidD]

What can a sinking boat rock?

If at all, it will be Goldman Sachs that will.

I think China will hit a nadir soon. Manufacturing growth is sluggish, but tertiary sector growth has been very strong. In just the 3 years from 2012 to 2015, manufacturing as a % of GDP dropped a full 5% from 45.3% to 40.3%. In the same time, services grew 6% from 44.6% to 50.5%. At this rate weak manufacturing sector performances will soon be irrelevant as it comprises a smaller and smaller proportion of China's overall GDP.

http://www.statista.com/statistics/2703 ... -in-china/

The key debate in China right now is whether the government should simply ride out the chaos of this transition, or spend a lot of money (debt) to smooth over this transition then have to pay back a LOT more in the future. We can get an inkling of which direction China will go by following its response to the recent steel tariffs. If the first camp wins then China will use the tariffs as an excuse to cut capacity, and then probably blame the job losses on the American tariffs. Retaliation would be mostly symbolic, like protests, cases at the WTO, tariffs/bans on small items, etc. If retaliation is strong, then the second camp probably won, and we'll see more stimulus measures and slower pace of reforms.

[Prem]

Nanjing more worthy of remembrance than Hiroshima: China

BEIJING: The Chinese government suggested on Friday that the atrocities committed by Japan in Nanjing during the World War II were more worthy of remembrance than the atomic bombing of Hiroshima.Chinese Foreign Minister Wang Yi issued an statement in the wake of a historic visit by US President Barack Obama to Hiroshima saying that the massacre of civilians by Japanese troops in the city of Nanjing deserved greater reflection.“Hiroshima is worthy of attention. But even more so Nanjing should not be forgotten,” the ministry’s website cited him as saying.“Victims deserve sympathy, but perpetrators should never shirk their responsibility,” told a huddle of reporters, state broadcaster CCTV showed.China says 300,000 people died in a six-week spree of killing, rape and destruction after the Japanese military entered Nanjing in 1937, although some respected academics put the number lower.China historian Jonathan Spence, for example, estimates that 42,000 soldiers and citizens were killed and 20,000 women raped, many of whom later died.The state-run China Daily newspaper declared in an editorial on Thursday that the “atomic bombings of Japan were of its own making”. It accused present-day Japanese officials of “trying to portray Japan as the victim of World War II rather than one of its major perpetrators”.

[Prem]

http://nationalinterest.org/feature/how ... 400?page=4
Revealed: How the U.S. Navy Would Destroy a Chinese Aircraft Carrier

At present the surface navy’s main antiship armament is the elderly Harpoon cruise missile, a “bird” of 1970s vintage with a range exceeding 60 miles. That pales in comparison with the latest PLA Navy birds—most notably the YJ-18, which boasts a range of 290 nautical miles.Weaponeers are working at helter-skelter speed to remedy the U.S. Navy’s range shortfall. Boeing, the Harpoon’s manufacturer, is doubling the bird’s range. The Pentagon’s Strategic Capabilities Office recently repurposed the SM-6 surface-to-air missile for antiship missions, doubling or tripling the surface fleet’s striking range against carrier or surface-action groups. And on it goes. Last year the navy tested an antiship variant of the Tomahawk cruise missile, reinventing a very—very—long-range capability that existed in the late Cold War. A new long-range antiship missile is undergoing development.
The oceangoing PLA Navy fleet could fare far better in a Western Pacific trial of arms than in the open Pacific, the Indian Ocean, or some other faraway expanse. In short, the PLA Navy is a modern-day fortress fleet. Such a fleet shelters safely within range of shore-based defenses—supplementing its own firepower to make the difference in action against a stronger antagonist.Fortress fleets often meet a grim fate in combat on the open sea, denuded of that protective umbrella. Closer to home—within reach of shore fire support—they can acquit themselves well. China is counting on it.

[Prem]

China is preparing an air defence identification zone (ADIZ) in the South China Sea, two years after it announced a similar one in the East China Sea, according to sources close to the People’s Liberation Army and a defence report.But one source said the timing of any declaration would ­depend on security conditions in the region, particularly the United States’ military presence and diplomatic ties with neighbouring countries.“If the US military keeps making provocative moves to challenge China’s sovereignty in the region, it will give Beijing a good opportunity to declare an ADIZ in the South China Sea,” the source said.The revelation came ahead of the Shangri-La Dialogue in Singapore, a security forum attended by defence officials from various nations, including Admiral Sun ­Jianguo and US Secretary of ­Defence Ash Carter. Disputes in the South China Sea are expected to head the agenda of the three-day event, which starts on Friday.In a written response to the South China Morning Post on the zone, the defence ministry said it was “the right of a sovereign state” to designate an ADIZ.
“Regarding when to declare such a zone, it will depend on whether China is facing security threats from the air, and what the level of the air safety threat is,” the statement said.China set up its first ADIZ in the East China Sea in November 2013 to cover the Diaoyu Islands, which Japan calls the Senkakus. Both countries claim the uninhabited outcrops but Tokyo controls them. The ADIZ triggered a backlash from Japan, South Korea and the US.

Beijing ready to impose air defence identification zone in South China Sea pending US moves

[SSridhar]

China will use the Freedom of Navigation passage by US Navy as an excuse to create the Indo-China Sea ADIZ.

When the East China Sea ADIZ was opened by PRC, we discussed it here and concluded that it was only a matter of time before this one would also come to fruition and not a question of 'if'.