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

[ShauryaT]

Armed Confrontation Between China and India

Recommendations

An armed confrontation between China and India is a low-probability but high-cost contingency that the United States should aim to prevent. If a confrontation does take place, the United States should work to mitigate the crisis in ways that reassure India and clearly demonstrate the U.S. commitment to its partnership with India. Preventive policies should aim to build new channels for diplomacy and to reduce the likelihood of an India-Pakistan standoff, while mitigating policies should prioritize strengthening the U.S. capacity to deter Chinese escalation and enhancing Indian military defenses. To advance these goals, U.S. policymakers should take the following specific steps:

Establish a new trilateral forum. President Obama should invite his Chinese and Indian counterparts to a trilateral summit to set the terms for subsequent working-level trilateral meetings and, if successful, to establish a permanent forum for the world's three most populous states. Even in its early stages, the trilateral forum would improve cooperation in dangerous contingencies. A trilateral institution, especially one with a permanent secretariat, would offer the best technical means for secure communication, intelligence sharing, and sensitive diplomacy. To avoid duplicating other multilateral institutions, upsetting excluded U.S. allies, or raising Chinese and Indian fears of unwelcome coercive diplomacy, the United States should clarify its aim to build confidence and habits of cooperation, promote discussion, and improve coordination without binding deliberation or coercive negotiations, and should promise transparency on all issues that pertain to allied interests.

Condition a portion of U.S. military assistance to Pakistan. Because another India-Pakistan standoff would increase the potential for an armed confrontation between China and India, the United States should better signal its grave concerns about Pakistan's inadequate efforts to clamp down on LeT, its affiliates, and successor organizations. The U.S. Congress can help by inserting waiver-free conditions in at least 25 percent of U.S. military aid, requiring evidence Pakistan is tackling anti-Indian terrorist groups, including through law enforcement and judicial proceedings. Because the United States has other important goals in Pakistan—such as supporting the fight against terrorist groups like the Pakistani Taliban—aid and reimbursements for those activities and for civilian development programs should remain exempt from these conditions.

Maintain and expand the U.S. military presence in the Indo-Pacific. China's ability to make aggressive moves against lesser powers in the Indo-Pacific—potentially including India—is partly a function of its rapidly growing military strength, including its fleet and a supporting array of reconnaissance and strike capabilities. To keep pace with China in the Indo-Pacific, the United States should consider a combination of new strategies and larger naval budgets for weapon systems to maintain presence and reassure allies and partners like India. For example, because China has a vastly expanded arsenal of ballistic and cruise missiles to imperil surface vessels off its shores, the United States should develop and expand its fleet of unmanned underwater vehicles.

Enhance India's defensive security capabilities. U.S. policymakers should expand India's access to U.S. high-tech weapons systems in ways designed to discourage Indian military adventurism that would provoke a hostile Chinese reaction. U.S. arms sales should help India deter Chinese (and Pakistani) provocations, defend India's borders, and clarify the U.S. commitment to long-term strategic partnership. To this end, U.S. officials should consider sales of high-tech components in UAVs, aircraft carriers, and submarines. In the highly unlikely event that a China-India confrontation escalates, the United States should respond favorably to Indian requests for rapid arms shipments, and in a worst case, should even be prepared to move U.S. military forces to signal support to India and bolster its defenses.

[SSridhar]

India and China link Home Ministries to counter terror - Atul Aneja, The Hindu

India and China have decided to establish a ministerial mechanism that would, for the first time, link the two home ministries, filling a vital gap in the overall institutional architecture of the bilateral ties.

The decision was taken following Home Minister Rajnath Singh’s talks with Guo Sheng Kun, China’s Public Security Minister, who is also the State Councillor in the Communist Party of China. Mr. Singh also called upon Prime Minister Li Keqiang, and both leaders agreed that there was a need to “upgrade” the security collaboration between New Delhi and Beijing to the next level.

The two sides also discussed counter-terror collaboration at length, in the backdrop of the Paris attacks, and other events, including the killing of a Chinese hostage in Syria by the Islamic State. Briefing the resident Indian media, in the presence of Mr. Singh, India’s Ambassador to China Ashok Kantha said a decision was taken on “an exchange of information on terrorist activities, terrorist groups and linkages” — widely seen as an agreement on “intelligence sharing” by the security authorities of the two countries. Communication lines between the two establishments would also be opened to ensure information flows on aircraft hijacking and hostage situations.

“We will [also] coordinate our positions in regional and multilateral forums.” {That should not mean India supports Chinese actions against terrorists while China supports terrorism against India through Pakistan and North East. It should be made clear to the Chinese. In fact, after its sustained support for terrorism against India, the ball is in China's court to quickly establish and gain India's confidence first before expecting India to reciprocate. There will be the ticklish question of Tibetan exiles in India also.}

Mr. Kantha later told The Hindu that both sides “agreed that the terrorism had now to be combated at the international level, and both sides would be working in that direction.” At the media conference, he pointed out that a two-tier structure has been established to steer ties between the Home Ministry and the Ministry of Public Security of China.

The two ministers — Mr. Singh and Mr. Guo — will head this mechanism. They will be assisted by a “working-level group”, led by a Joint Secretary from the Ministry of Home Affairs, and an officer of the rank of Director General from the Ministry of Public Security.

The new mechanism will provide an institutional platform that will cover all issues that impact on the “internal security” of the two countries. The topics include law enforcement, cyber crimes, terrorism, trans-border crimes and drug trafficking. The first ministerial meeting of this forum is expected in the first half of 2016, when the State Councillor Guo is expected to visit New Delhi at the invitation of Mr. Singh.

Mr. Singh’s talks on Thursday also yielded consensus on a “framework agreement” as the basis for upgrading security ties.

“We have agreed to work towards a new bilateral agreement which will provide contours of cooperation in counter-terrorism, security, and related trans-border crimes,” Mr. Kantha said.

The tempo on counter-terrorism between the two countries has been growing since the Paris attacks, as the high-level interaction between India and China gets its second wind. At a meeting in New Delhi on Monday between Defence Minister Manohar Parrikar and China’s Vice-Chairman of the powerful Central Military Commission, Fan Changlong, the two sides called “for cooperation in fighting terrorism,” China Military Online, a website run by China’s People’s Liberation Army (PLA) reported, citing the Paris attacks.

Usually, the Chinese are reticent in divulging details and their press statements and utterances are difficult to understand as they are abnormal and convoluted.

[SSridhar]

Rajnath Singh in Beijing: India, China vow to fight terror - PTI

China and India on Friday vowed to deepen cooperation in combating terrorism and fighting transnational crime as home minister Rajnath Singh held talks with a top Communist Party official here.

Singh, who arrived here on Wednesday, held talks with Meng Jianzhu, head of the Commission for Political and Legal Affairs of the Communist Party of China Central Committee, on a wide range of issues.

China and India should enhance cooperation to combat terrorism and fight transnational crime, Meng said during his meeting with Singh.

China and India should also coordinate to improve border entry and exit administration to facilitate people's travel and promote stability in the region {This probably has Tibet connotations}, Meng was quoted by the state-run Xinhua news agency as saying.

Singh said his ministry is willing to deepen cooperation with Chinese law enforcers to strengthen bilateral relations.

Singh is the first Indian home minister to visit China in a decade. Shivraj Patil was the last home minister who had visited China in 2005.

His visit comes in the backdrop of steady improvement of relations between the two countries while streamlining mechanisms to address the vexed border dispute.

Singh would travel to the eastern metropolis of Shanghai tomorrow where he would meet the top CPC and security officials and address a meeting of the Indian Association of Shanghai.

[SSridhar]

China's stand and actions so far vis-a-vis concerns of Indian terrorism.

China has at least on two earlier (2006 & 2008) occasions blocked the UNSC’s Taliban-Al Qaeda group from declaring Jama’at-ud-Dawah and its Emir, Hafeez Saeed from being included in the list of entities and persons proscribed under Resolution 1267. It put a technical hold on all these occasions demanding to see ‘more evidence’. In May 2009, after JuD and Hafeez Saeed were eventually placed on the list in Dec. 2008, China blocked Indian move to place Maulana Masood Azhar of Jaish-e-Mohammed on the same UN 1267 Committee list. Later, when India engaged China in counter-terrorism talks in July, 2011 and presented evidence about JeM and Maulana Masood Azhar, it summarily refused to re-visit that issue. It also rejected Indian requests to place Azzam Cheema and Abdul Rehman Makki of the LeT under the Al-Qaeda and Taliban sanctions list. In the UNSC, China remained the only country not to accede to this Indian request. The usual Chinese excuse has been “there is no single definition of terrorism” and hence China has avoided taking a clarified stand on it.

Because of its close proximity to Pakistan, China has been non-cooperating in counter terrorism issues even though the India-China dialogue on this has been going on annually since c. 2002. It was during the Indian Foreign Minister Ms. Sushma Swaraj’s visit to Beijing in February 2015 that some change was visible in the Chinese stand. A joint statement issued by the three foreign ministers of Russia, India and China (RIC meeting) “underlined the need to bring to justice perpetrators, organizers, financiers and sponsors of terrorist acts. The ministers reiterated that there can be no ideological, religious, political, racial, ethnic, or any other justification for acts of terrorism,”. China and Russia also decided to back India for moving a proposal at the United Nations that essentially goes against Pakistan on the issue of terrorism. The three foreign ministers called for early conclusion of negotiations on the Comprehensive Convention on International Terrorism, a resolution passed by India in 1986 but which has been languishing.

However, the Chinese once again put a ‘technical hold’ in April 2015 on the Indian request to the UNSC’s UN Committee on al-Qaeda and associated entities, (also called the ‘1267 Committee’ ) to list Hizbul Mujahideen chief and head of the ‘United Jihad Council’, Syed Salahuddin. As the UN Sanctions Committee met in June 2015 at India’s request demanding action against the release of the 26/11 Mumbai attack mastermind by the Pakistani courts, China blocked the move by citing insufficient information. The Indian Prime Minister seemed to have spoken to his Chinese counterpart after that and the Indian Foreign Minister, Ms. Sushma Swaraj also took up the matter with her Chinese counterpart, Wang Yi, in the sidelines of the donor conference in Kathmandu where she emphasized that the Chinese action was ‘at variance’ with progress in bilateral ties.

Within a few days, China again stood by Pakistan at the Financial Action Task Force (FATF) meet at Brisbane where New Delhi had strongly raised non-compliance by Islamabad on freezing assets of Lashkar-e-Taiba and its affiliates. China, however, felt that Pakistan was doing all it could and had been submitting reports to the Asia Pacific Group (APG) on Money Laundering that collaborates closely with the FATF. China also objected to India raising the issue at the FATF on the grounds that Pakistan was not member of the grouping.

In Ufa (Russia) where Prime Minister Modi met the Chinese President Xi Jinping on July 8, 2015, he raised the Lakhvi issue and spoke very candidly about India’s concern. Later, the Chinese foreign ministry spokesperson in Beijing said that “As a permanent member of the UN security council China always deals with the 1267 committee matters based on facts and in the spirit of objectiveness and fairness”, thus defending its own position.

On the whole, I am therefore sceptical about China's purported keenness on counter-terrorism collaboration. China has to convince India through its actions in the UNSC first where it has blocked every Indian move so far.

[SSridhar]

Modi in the India-ASEAN Summit Meet, Malaysia - PTI

Referring to the territorial disputes in the South China Sea, he said, "India shares with ASEAN a commitment to freedom of navigation, over flight and unimpeded commerce, in accordance with accepted principles of international law, including the 1982 UN Convention on the Law of the Sea. Territorial disputes must be settled through peaceful means."

Modi said India hopes that all parties to the disputes in the South China Sea will abide by the guidelines on the implementation of the Declaration on the Conduct of Parties in the South China Sea and redouble efforts for early adoption of a Code of Conduct on the basis of consensus.

[SSridhar]

India shouldn't change political path on Tibet: Rijiju - PTI

India should not change its political path when it comes to Tibet keeping in mind the long traditional relationship between the two countries, union minister Kiren Rijiju said on Saturday.

"India has a long tradition of relations with Tibet and its dharma gurus (religious leaders). India should not change its political path. India is the land of Gautam Buddha and the land of Mahatma Gandhi," said Rijiju

The minister of state for home affairs also said it was the Bharatiya Janata Party-led NDA government that decided to declare Buddha Jayanti a national holiday.

Rijiju was addressing the Tibetan community at the Palpung Sherabling Monastery (7 km from Baijnath) on the occasion of Guru Padma Sambhava maha puja on Saturday.


Veteran BJP leader and former chief minister Shanta Kumar was also present on the occasion.

"After we formed the government last year, we declared Buddha Jayanti as a national holiday. Earlier, the day was observed by some institutions and in some pockets. I took up the issue of declaring the day as a holiday with Prime Minister Narendra Modi and he agreed.

"Indians and Tibetans have a spiritual relationship. Guru Padma Sambhava went to Tibet and at a later day, Buddhism returned to India in its purest form," said Rijiju.

"The Dalai Lama said India is the guru and Tibet is the 'chela' (disciple). But it is a very dependable chela."

On the occasion, the head of the monastic seat, the 12th Chamgon Kenting Tai Situpa remembered his arrival in India as a child of five years in 1959.

"The monastery could be set up in India because of the kindness of the people of India and the government of India. I came here as a child when the Dalai Lama came here. We should thank the people of India. Thank you," the Tai Situpa said.

Rijiju further stressed the role of religious leaders in containing the threat of violence faced by society.

"Only the government and the security forces cannot stop violence. We have to depend on the dharma gurus to spread the message of peace," he added.

[SSridhar]

India revives its eastern-most airfield at Teju - Kallol Bhattacharjee, The Hindu

Even as Prime Minister Narendra Modi spoke of better connectivity between India and the Southeast Asian region at the ASEAN summit at Kuala Lumpur,India’s easternmost strategic airfield at Teju has been revived with a new runway. The runway can now host heavy lift aircraft as well as long range bombers which can cross the Greater Himalayan range within minutes .

The airfield, which is the result of slow and hard work over several years, is surrounded by the green and white Himalayan range in the background. Teju is part of the six strategic airfields that were planned for Arunachal Pradesh. But the Teju airfield which will increase air connectivity with the region is unique as it is the easternmost landing strip in the country. However, local sources have told The Hindu that a major strategic airfield is barely months from completion at Walong too.

Once ready, the Walong landing strip along side the Teju airfield will multiply India’s strategic reach into East and Southeast Asia.

This is good news. Teju is apart from the seven ALGs being upgraded to take C-130Js in Arunachal Pradesh. In May 2015, the Arunachal Pradesh Governor and the Chief Minister jointly requested sanctioning of two more ALGs at Koloriang (Kurung Kumey) and Anini (Dibang Valley district). Their fate is not known yet.

[deejay]

India revives its eastern-most airfield at Teju - Kallol Bhattacharjee, The Hindu

Even as Prime Minister Narendra Modi spoke of better connectivity between India and the Southeast Asian region at the ASEAN summit at Kuala Lumpur,India’s easternmost strategic airfield at Teju has been revived with a new runway. The runway can now host heavy lift aircraft as well as long range bombers which can cross the Greater Himalayan range within minutes .

The airfield, which is the result of slow and hard work over several years, is surrounded by the green and white Himalayan range in the background. Teju is part of the six strategic airfields that were planned for Arunachal Pradesh. But the Teju airfield which will increase air connectivity with the region is unique as it is the easternmost landing strip in the country. However, local sources have told The Hindu that a major strategic airfield is barely months from completion at Walong too.

Once ready, the Walong landing strip along side the Teju airfield will multiply India’s strategic reach into East and Southeast Asia.

This is good news. Teju is apart from the seven ALGs being upgraded to take C-130Js in Arunachal Pradesh. In May 2015, the Arunachal Pradesh Governor and the Chief Minister jointly requested sanctioning of two more ALGs at Koloriang (Kurung Kumey) and Anini (Dibang Valley district). Their fate is not known yet.

Excellent news this. As previously reported on BRF, the completion time line for Tezu was Jan 2016. They are before time!

Tezu is in the plains north of Brahmaputra. It had a long black tar landing strip not of standard runway dimensions and poor support infrastructure. The upgrade will mean that the support infrastructure is ready and the runway is now of standard dimensions. The length of the runway (IMO) will make it fit even for C17s and IL76.

Here is link to Google Earth view:
https://www.google.co.in/maps/place/Tez ... !1e1?hl=en

[SSridhar]

Implications of yuan’s rise - CRL Narasimhan, The Hindu

The international Monetary Fund (IMF) is poised to approve the inclusion of China’s renminbi (or yuan as it is called) as a reserve currency later this month. The implications of that would be several. Above all, it is an acknowledgement by the global community of China’s economic prowess. The world’s second largest economy will have to be given its due place in the global financial architecture.

China’s quest for a reserve status for its currency has for long been in the making. Way back in 2009 senior Chinese monetary officials advocated the replacement of the US dollar as the dominant international currency with a group of currencies administered by the IMF. Such an advocacy —tantamount to a drastic overhaul of the global financial order — seemed too premature at that time and in any case was ignored by the US and other developed countries.

The expectation that the yuan or the renminbi will acquire reserve currency status is no longer a pipe dream. What in 2009 appeared to be, at best a vision, is now very much in the realm of possibility. It will certainly mark a big step for the Chinese currency although opinion among experts seems divided on how significant the inclusion of the yuan in the global currency basket will be.

The prospect of the yuan joining currencies such as the dollar, euro, yen and sterling in backing the IMF’s Special Drawing Rights has been variously described as everything from a symbolic move to the dawn of a new era.

SDRs are the IMF’s unit of account restricted to its members. The SDR basket is the basis of IMF’s lending made up of the world’s most liquid currencies and hence suitable for any member country that needs support for its balance of payments.

When the yuan is formally inducted into the SDR portfolio it will be the first new currency to be so honoured since the euro was created. It effectively becomes a reserve currency.

The important advantage accruing to China is the flexibility in settling all its international obligations with its own currency.

This, in technical parlance, is referred to as “exorbitant privilege”. For other countries, the benefit in having another reserve currency is that they can diversify their forex reserve portfolios to include renminbi. That would once again be a recognition of China’s economic strengths.

Holders of foreign currency reserves have nowhere to go and they necessarily have to hold to hold their reserves in one or the other of reserve currency.

SS Tarapore, a former RBI Deputy Governor and now a columnist, has been pointing out — much before the current focus by the IMF — that the yuan is the obvious candidate for inclusion in the list of reserve currencies ( The Hindu Business line May 14, 2015 ).

The IMF, which does a review every five years (the most recent one was in October 2015) is apparently convinced of the Chinese currency’s eligibility. At the previous review of reserve currencies in 2010 it was felt that China’s exports were not high enough and world trade invoiced in the yuan was not adequately high. Since then there has been a dramatic increase in these parameters in favour of the yuan.

India, along with other countries, stands to benefit from the induction of the yuan in the list of reserve currencies. There are seven reserve currencies — apart from the dollar, euro, pound sterling, Japanese yen, Swiss franc, Canadian dollar and the Australian dollar.

But the world financial order is heavily skewed in favour of the dollar. About 62 per cent of international currency assets are held in dollars. The euro accounts for 23 per cent and yen and pound sterling four per cent each. Induction of the yuan is certainly going to help.

As pointed out in one of our previous columns the dollar’s hegemony brings with it a number of disadvantages.

For example, a miniscule rise in the American interest rate or even a talk about it is enough to cause huge upheavals in the markets of developing countries such as India’s. Second, there are limits to the Federal Reserve’s capacity to meet liquidity shortages in the global economy. The American political system is dysfunctional. How long should financial systems of the world be captive to the vagaries of the U.S. domestic politics?

There could be further arguments that China for all its recent strengths still needs to go further in plugging some gaps in order to bid for reserve status. Chiefly its currency is not fully convertible and it lacks bond markets with depth. It is expected that both these anomalies will be corrected. A very recent report from China talks of accelerated financial sector reforms which will interalia, allow the yuan to trade freely by 2020.

Reserve status will increase the demand for renminbi from central banks. A more weighty consequence would to be to integrate China with the global system and commit it to further reform.

It is for these reasons that the imminent inclusion of its currency is considered to be a momentous event on a par with its joining the World Trade Organisation in 2002.

[Prem]

http://indianexpress.com/article/opinio ... silk-road/
Raja-Mandala: Japan’s counter to China’s silk road

For nearly two years, Chinese President Xi Jinping has been dazzling the world with his One Belt, One Road (Obor) initiative. Armed with massive cash reserves and a huge surplus of industrial capacity, Xi has been ready to build roads, airports, power projects, and high-speed railway systems all across Eurasia and the Indo-Pacific.As countries ranging from Britain to Brunei and Tanzania to Tajikistan jumped on Xi’s Silk Road bandwagon, Japan, the other Asian giant and the world’s third-largest economy, watched warily. In a series of speeches, most recently in Kuala Lumpur on the margins of the East Asia Summit, Japanese Prime Minister Shinzo Abe has now laid out a framework for competing with China on the export of mega infrastructure projects.The unfolding economic rivalry between China and Japan is great news for Prime Minister Narendra Modi, who has put building world-class infrastructure at the centre of his domestic agenda. If he can get New Delhi’s domestic act on infrastructure right, Modi will be able to mobilise unprecedented support from China and Japan.Even more important, Japan’s new activism will allow Delhi to mitigate some of the perceived threats from China’s growing economic presence in the subcontinent and beyond. If China is seen as limiting Delhi’s room for manoeuvre in the subcontinent and the Indian Ocean, Japan promises to create new opportunities for leading regional economic integration in its neighbourhood.China’s new infrastructure drive has been backed by the establishment of the $100 billion Asian Infrastructure Investment Bank. Beijing has also earmarked a $40 billion Silk Road infrastructure fund. It has also set up the New Development Bank under the banner of the five-nation forum, BRICS, with an initial capital of $50 billion.
As Xi put his personal and political prestige on the belt and road initiative, India found itself between a rock and a hard place. Given its historical rhetoric against Western financial institutions, Delhi was quick to join the AIIB and helped found the BRICS bank. But when it came to Beijing’s proposals to develop infrastructure linking the subcontinent to China, Delhi was deeply discomfited. It was also reluctant to accept Chinese funding to develop major infrastructure projects in India.Modi has altered some of this by becoming more open to Chinese investments and asking them to undertake a feasibility study on a high-speed train corridor between Chennai and Delhi. If the essence of India’s economic ambivalence towards China endured, Abe might now be able to put Delhi out of its strategic misery.Last May, Abe announced that Tokyo will invest $110 billion to promote “quality infrastructure” in Asia over the next five years. If Japan’s dollar volume matches that of China, note Abe’s attempt to differentiate from China with the emphasis on “high quality”. Japanese officials believe that the quality of Chinese infrastructure is inferior to that in Japan.
They also argue that the hidden costs of Chinese proposals will come to haunt many of the projects being launched under the Obor initiative. Analysts in Tokyo point to the debate in Sri Lanka, where the new government in Colombo has sought to review the terms and conditions of the various mega projects that the Rajapaksa regime had signed with Chinese companies. Addressing this weakness, Abe is highlighting the importance of “sustainable infrastructure development”.In a series of visits to various regions across Asia, Abe has been pitching for Japan’s project exports. While it has lost some big deals to Beijing, Tokyo has begun to edge out Chinese competition elsewhere. In Indonesia, it lost a bid to develop a high-speed rail line between Jakarta and Bandung. In Bangladesh, Japan won a port at the Matarbari island on the southeastern coast.Refusing to join the China-promoted AIIB, Japan is trying to rejuvenate the Asian Development Bank that it has led for many decades. In Kuala Lumpur over the weekend, Abe outlined a plan to liberalise the ADB’s terms of lending.
While China is relatively new to infrastructure development beyond its borders, Japan has been at it for many decades. Japanese technology and finance have been at the forefront of building road and rail corridors and airports, including in China. Japan’s overseas assistance arm, the Japan International Cooperation Agency (Jica), has supported many such projects in India, including the Delhi Metro and the Delhi-Mumbai corridor. While Jica’s activity has been expansive, Tokyo lacked a larger strategic framework to guide its infrastructure promotion. But Japan’s traditional development aid has now acquired a strategic dimension under Abe, as he tries to fend off China’s drive to expand its economic and political influence in Asia.For nearly a decade now, Delhi has wrung its hands as China unveiled a series of spectacular infrastructure projects in and around India. In partnership with Japan now, Delhi can imagine bold new connectivity initiatives within India and beyond, and better negotiate its future participation in Chinese projects in the region

[SSridhar]

Japan's Defense Minister Gen Nakatani supports US in South China Sea - AP

Japanese Defense Minister Gen Nakatani is expressing his support for the U.S. Navy's sailing of a warship close to one of China's artificial islands in the South China Sea.

Nakatani met Pacific Command commander Adm. Harry Harris in Hawaii on Tuesday.

Nakatani told reporters he told Harris that the U.S. military was at the forefront of the international community's efforts to protect open, free and peaceful oceans in the South China Sea.

He told reporters he expressed Japan's support for U.S. actions to Harris.

The U.S. Navy sailed a guided missile destroyer inside what China claims is a 12-mile territorial limit around Subi Reef in the Spratly Islands last month.

The move was a challenge to what the U.S. considers Beijing's ``excessive claim'' of sovereignty in those waters.

[SSridhar]

The Hague court begins hearing into South China Sea row - Straits Times

An international tribunal on Tuesday began hearing a case brought by the Philippines over disputed islands in the South China Sea, in an increasingly bitter row with China.

The Permanent Court of Arbitration "commenced the hearing on the merits and remaining issues of jurisdiction and admissibility," the Hague-based tribunal said in a statement.

Manila has called for the tribunal, which is more than a century old, to rule on the dispute, appealing to the UN Convention on the Law of the Sea.

Beijing claims almost all of the South China Sea, putting it in conflict with several neighbours, and is a party to the Convention but has rejected the court's jurisdiction on the issue.

"Our position is clear: we will not participate to or accept the arbitration," foreign ministry spokesman Hong Lei told a regular briefing earlier on Tuesday.

The hearing, expected to last until Nov 30, is being held behind closed doors. But Australia, Indonesia, Japan, Malaysia, Singapore, Thailand and Vietnam are allowed to have observers present.

Beijing has never precisely defined its claims to the strategic waterway, through which about a third of all the world's traded oil passes.

The waters - claimed in part by Vietnam, Malaysia, the Philippines, Taiwan and Brunei - have become the stage for a tussle for dominance between Beijing and Washington, the world's two largest economic and military powers.

Following a stand-off between Chinese ships and the weak Philippine Navy in 2012, China took control of a rich fishing ground called Scarborough Shoal that is within the Philippines' claimed exclusive economic zone.

Beijing has in recent years rapidly built artificial islands, which neighbours fear will be used as military outposts.

Manila hopes that a ruling in its favour from the court, which was established in 1899, could put pressure on Beijing to rein in its territorial ambitions.

In a July hearing in The Hague, Philippine Foreign Secretary Albert del Rosario warned the very integrity of UN maritime laws was at stake.

China's behaviour had become increasingly "aggressive" and negotiations had proved futile, del Rosario said.

In c. 2014, Hanoi had sent a statement to the Permanent Court of Arbitration (PCA) at The Hague, which is currently examining the Philippines' case against China over the SCS disputes. By doing this, according to experts, Vietnam has made three main claims in opposition to China's stand. Firstly, it recognized the court's jurisdiction over the case submitted by the Philippines, which Beijing does not. Secondly, it requested that the court give "due regard" to Vietnam's own legal rights and interests in the Spratlys, Paracels, and in its exclusive economic zone and continental shelf while deliberating on the case. Thirdly and lastly, it rejected China's infamous nine-dash line - which lays claim to about 90 percent of the SCS - as being "without legal basis."

[member_24684]

Sixth flight of DF-ZF Hypersonic glide vehicle

China carried out a sixth flight test of its new high-speed nuclear attack vehicle on Monday designed to defeat U.S. missile defenses or carry out global strikes.

The ultra-fast maneuvering strike weapon known as the DF-ZF hypersonic glide vehicle was launched atop a ballistic missile fired from the Wuzhai missile test center in central China’s Shanxi Province, according defense officials.

The vehicle separated from its launcher near the edge of the atmosphere and then glided to an impact range several thousand miles away in western China, said officials familiar with details of the test.

The DF-ZF flight was tracked by U.S. intelligence agencies and flew at speeds beyond Mach 5, or five times the speed of sound.

Free Beacon

[SSridhar]

X-Post from China Military Watch thread
Beijing’s plan on Arabian Sea may up Delhi worries - Saibal Dasgupta, ToI

China on Thursday confirmed it was in talks with Djibouti to establish a logistics center in the Arabian Sea's Gulf of Aden.

"The logistics facility will help Chinese vessels better carry out UN operations like escort missions and humanitarian assistance,'' Chinese foreign ministry spokesman Hong Lei said.

Hong underlined the proposed facility would be a "logistics centre" rather than a full-fledged military base.

"Besides, the purpose was to carry out anti-piracy operations,'' he said.

He said since 2008, China has dispatched over 60 vessels in 21 missions to the Gulf of Aden and waters off the Somalia coast to carry out escort missions.

"During these operations, we find they meet difficulties in getting rest and replenishment and supplies, therefore we need to provide better service in this regard.''

He said the facility would be "conducive to the Chinese Navy fulfilling its international obligations and promoting peace and stability of the region".

The confirmation comes after the US Africa command revealed China is building the center to widen its reach in Africa.

Djibouti has emerged as an international anti-piracy center with the US taking advantage of the easy access it can provide to the Gulf of Aden.

Experts say India has reasons to be worried because the new facility would give the Chinese navy a presence on Africa's eastern coast and access to the Indian Ocean.

This will be in addition to Chinese efforts of building and operating ports in the Indian Ocean -- from Gwadar in Pakistan to Hambantota in Sri Lanka.

China has maintained these ventures were purely commercial and emphasized to Indian officials that it has a policy of not operating from foreign bases.

Several Chinese military experts have urged the government to revise its policy of not establishing foreign military bases.

It is not clear if Chinese troops would be permanently stationed in Djibouti.

But observers said China was doing away with the policy and might even consider creating a similar base in Pakistan.

[SSridhar]

Stop seeing China as an adversary: IAF chief Arup Raha - ToI

Calling for mature statesmanship from India and China, chief of the Air staff, Air chief marshal Arup Raha on Saturday said the country should not look at China as an adversary anymore.

"We are in the same region, we have common interests. I don't think that we should look at them as adversaries anymore," Raha told reporters here in Alipurduar district.

"Yes, we had fought a conflict, we have borders to settle. I think its time for mature statesmanship from both the countries to reconcile on many issues ... and cooperate (and) coordinate (for) development in the region," he said when asked about the "threat" from China.

Stating that two rising economic or military powers can co-exist, he said, the adversarial stance should now change into a more friendly stance.

Earlier this month, the IAF chief was reported to have cited China's growing influence in the Indian subcontinent as a major security challenge for India.

China's increasing economic and military ties with Sri Lanka, Bangladesh, Nepal, Bhutan and Myanmar are all strategic moves by China to contain India, he had said.

[Vivek K]

Has the chief lost it?

[panduranghari]

At the end of August I suspected Chinese Yuan will join SDR.

Onshore yuan (CNY) and offshore yuan (CNH) are independent beasts. The turmoil in the shenzen index suggests the PBOC wants to bring them together. This in a way suggests, the IMF has more or less agreed to include Yuan in the SDR basket which they will announce in November as they always do. The idea is not to have a currency fully convertible, but it means its more usable. And the only people who will find yuan usable is those who have a lot of investment in China viz. mainly Americans.

China’s Coming of Age: Yuan To Join SDR Basket As IMF Reserve Curren

Christine Lagarde and the IMF Executive Board recently announced their intention to include the Chinese renminbi (RMB) in the Special Drawing Rights’ (SDR) valuation formula. This would bring the Chinese currency into an exclusive group – alongside the US dollar, the euro, the British pound and the Japanese yen - of 5 global currencies that make up the IMF’s own reserve currency.

So, what will this promotion really mean for the yuan?

In market terms, not a whole lot it would seem.

The inclusion of the RMB in the SDR basket will not significantly increase demand for the currency. It is simply an acknowledgment that the Chinese currency has fulfilled two of the IMF criteria for inclusion; that it was “widely used” and that it was “freely usable”.

[TSJones]

You're Not the Yuan That I Want

http://www.bloombergview.com/articles/2 ... -emergence

In its ongoing quest for glory and global influence, China appears to have won a notable victory. The International Monetary Fund is set to anoint the renminbi -- the "people's currency," also known by the name of its biggest unit, the yuan -- as one of the world's reserve currencies along with the dollar, pound, euro and yen. For those who fear (or hope) that China will eventually transform the postwar economic order, this appears to be the first step toward dethroning the dollar.

The People's Currency

The IMF's decision, however, is mere political theater. The yuan will now be included among the basket of currencies that make up its so-called Special Drawing Rights. As the IMF itself notes, “the SDR is neither a currency, nor a claim on the IMF.” Holders simply have the right to claim the equivalent value in one or more of the SDR’s component currencies. Central banks and investors won't suddenly be required or even explicitly encouraged to use the yuan.

Indeed, all that's changed is that it's now clear that the IMF isn't blocking the yuan from becoming a true global reserve currency: China is.

To the contrary, the IMF appears to be doing everything it can to help China. SDR currencies are meant to be "freely usable," which the IMF defines as “widely used to make payments for international transactions" and "widely traded in the principal exchange markets.” The yuan’s champions note that the currency has grown from being used in less than one percent of international payments in September 2013 to 2.5 percent in October -- among the top five globally.

This simple metric, however, enormously overstates the yuan’s influence. Globally, it’s still barely used more than the Canadian and Australian dollars. No one’s ever suggested including the loonie in the SDR.

True, China is the world’s second-largest economy and its biggest trading nation. Yet at the same time, more than 70 percent of payments made in yuan still go through Hong Kong, primarily due to its strategic location as a shipping and trading hub for the mainland. All but 2 percent of yuan-denominated letters of credit are issued to Hong Kong, Macau, Singapore, and Taiwan to facilitate trade with China. Even in Asia, the yuan isn’t accepted as collateral for derivatives trading and similar financial transactions. Instead it’s used almost exclusively for trade in physical goods where China is one of the counterparties.

Nor is the currency widely traded in financial markets. Hong Kong, the largest center of yuan deposits outside of China, holds less than 900 billion renminbi, or about $140 billion. That’s $40 billion less than Coca-Cola’s market cap (and barely a fifth the value of Apple’s). The entirety of yuan deposits held outside of China still amounts to less than the market capitalization of the Thai stock market.

This isn’t the result of prejudice against China, but deliberate policy. Take the oft-cited statistic that 2 percent of global reserves are already held in renminbi. Virtually all yuan reserves are held under swap agreements with the People’s Bank of China, rather than as physical currency. That means China’s central bank maintains control over the currency and its pricing and can refuse transactions if needed, as it did last week when it ordered banks to halt renminbi lending offshore. While other central banks have significant latitude to engage in onshore renminbi purchases, they face restrictions on using the currency outside China.

Earlier this year, the government allowed clearing banks outside China to engage in repurchase agreements where they provide an asset to the PBOC to borrow yuan. As BNP Paribas has noted, however, offshore renminbi transactions must still go through state-owned Chinese clearing banks, which surrenders “precious data and the control of a transaction.” All this hardly meets the definition of a “freely used” international currency.

Bulls say that including the yuan in the SDR will give a boost to reformers, who will open up the Chinese financial system over time. The problem is that there’s little evidence to support such optimism. Over the past two years, renminbi usage in financial markets outside China has been flat. According to Barclays, the amount of offshore yuan-denominated debt has shrunk since the middle of last year, while deposits in Hong Kong haven't changed much since January 2014.

The irony is that there is, in fact, enormous demand for more yuan among international investors and central banks. Goldman Sachs has estimated that $1 trillion in international reserves would flow into Chinese debt markets if the government truly opened them up.

Yet as economist Barry Eichengreen has noted, when it comes to reserve currencies, investors care most about “size, stability, and liquidity.” China’s firm grip on the yuan undercuts all three: It limits the pool of renminbi available and subjects the currency’s movements to the whim of Chinese policymakers.

Investors everywhere are prepared to tolerate some currency and asset price volatility. What they fear are haphazard policy responses, kneejerk regulation, and opaque institutions -- all of which are hallmarks of Chinese financial regulation. As long as central banks and investors have to worry about whether they can buy and sell renminbi as and when they need, the IMF’s stamp of approval isn’t going to make the currency any more attractive.

[SaiK]

then which $yuan you want?
you had already asked for the $yuan when you exported all skilled jobs to that yu-van commie country.
too late to ask for $an $yuan to protect $you.

[Prem]

At .40, about Chinese Naval capability, especially in field of Submarine.

[panduranghari]

TSJ,
Yuan in SDR give Chinese prestige which they sorely crave from everyone. If you cannot beat them, join them. Japan tried that but it did not work. The Anglosphere dropped an Atom Bomb. The west is not as strong today as it was then, so Chinese are hedging their bets. The hope is the future use of the reserve currency on the international level is given to the Chinese Yuan.

[panduranghari]

WRT Japanese I am not talking about the yen but about joining western cabal.

[member_19686]

Et tu, Jakarta?
By Miles Yu -
Thursday, November 19, 2015

In a rare move to avoid further isolation in a region where it has territorial disputes with nearly all of its maritime neighbors, China made a major concession last week by publicly clarifying and acknowledging Indonesia’s sovereign right to the Natuna Islands in the South China Sea.

The region has been witnessing a dramatic rise of tensions since January, when China began a massive sand-pumping project to greatly expand the tiny isles of Mischief Reef and Subi Island in the Spratly Islands chain in the South China Sea.

The Natuna Islands chain, which sits between the northwestern tip of Indonesia on the island of Borneo and the southern tip of Vietnam, consists of about 270 islands that form part of Indonesia’s Riau Islands Province with some 70,000 residents

On Nov. 12, China shocked the countries in the region by issuing a first-ever public statement on the Natuna Islands. According to Hong Lei, China’s Foreign Ministry spokesman, “The Indonesian side has no territorial claim to China’s [Spratly Islands]. The Chinese side has no objection to Indonesia’s sovereignty over the Natuna Islands.”

This is significant because, although the Natuna Islands are outside of China’s self-designated “Nine-Dash-Line” that lays claim to virtually all of the South China Sea, Natuna’s 200-miles exclusive economic zone (EEZ) protrudes into the area defined by the Nine-Dash-Line. To publicly recognize Indonesia’s sovereign right to the Natunas means China’s acknowledgment of Indonesia’s legitimate claim to an EEZ inside China’s self-claimed Nine-Dash-Line.

And this is not something that China has been willing to do, partly because of the inexact nature of the so-called Nine-Dash-Line and partly because China does not want to show weakness to its smaller neighbors who challenge its maritime claims. Beijing’s failure to clarify with Indonesia the competing claims on the Natuna Islands and the EEZ lies at the root of the angst felt by Jakarta for decades.

Traditionally, Indonesian officials have preferred low-key diplomacy with China on the Natuna situation. And China needs Indonesia, too, as the largest and weightiest country in the ASEAN bloc where four members — the Philippines, Vietnam, Malaysia and Brunei — openly dispute China’s maritime claims.

Several past Indonesian leaders have said they received private assurances from China that, since the two countries do not have an island dispute inside the Nine-Dash-Line, China would not dispute Jakarta’s sovereignty over the Natuna Islands. But Beijing has deliberately avoided public discussion of the EEZ issue, which fueled doubts for many in Jakarta over Beijing’s sincerity in those private assurances. Some argued that China was pursuing a Fabian strategy to wear Indonesia down so that the EEZ issue would eventually evaporate.

But Beijing misread Jakarta, because Indonesia seems to have grown increasingly impatient with Beijing’s strategic ambiguity on the EEZ situation.

To make things worse, China began its massive sand-pumping project to reclaim and augment small islands in the Spratly’s chain, further angering not only Vietnam and the Philippines, but also Japan, Australia, the United States and Indonesia. The maritime waters just north of the Natuna Islands have suddenly become the potential flash point of a general war involving the navies of several of the world’s most powerful nations.

The Philippines has been among the most tenacious challengers to China’s ambitions in the South China Sea, having brought Beijing to an international arbitration court in The Hague, where the ruling in favor of Manila is widely expected.

China has been irate over the lawsuit. The official Chinese media has lambasted Manila and the government has emphatically refused to participate in any legal challenge. Last month, however, the Permanent Court of Arbitration in The Hague ruled against Beijing’s attempt to deny the court’s jurisdiction over the matter.

Frustrated by China’s refusal for a clarification and inspired by the Philippine success in The Hague, Jakarta decided to play hardball with Beijing, too.

Under the newly elected President Joko Widodo, Indonesia has stepped up military fortifications on the Natuna Islands. Weeks ago, he ordered more Su-27, Su-30, and F-16 fighter planes and P3-C maritime surveillance and anti-submarine aircraft to the islands, adding more troops to the military base there to demonstrate Indonesia’s resolve to protect its territory and the EEZ areas around the Natunas.

Then, on Nov. 11, Jakarta dropped a bombshell on Beijing. The Indonesian security chief Luhut Panjaitan told reporters that if dialogue with China on the Natuna islands did not yield any result soon, Indonesia might follow the footsteps of the Philippines and bring China to the international arbitration court for a clarification.

The next day, China’s Foreign Ministry spokesman Mr. Hong made history by finally, and openly, announcing China’s willingness to accept Indonesia’s sovereign claim to the Natuna Islands.

Mr. Hong did not mention anything in his statement about the Nine-Dash-Line or the Natunas’ EEZ. But he did not have to, because as long as China acknowledges Indonesia’s claim, the waters within 200 nautical miles automatically fall into the range, potentially challenging the legitimacy of China’s vague Nine-Dash-Line.

http://m.washingtontimes.com/news/2015/ ... s-to-indo/

[member_19686]

Johannes Nugroho: On Natuna, Beijing Might Just Be Biding Its Time

When China’s Foreign Ministry spokesman Hong Lei announced earlier this month that his government was “willing to accept” Indonesia’s sovereign claim to the Natuna Islands, Jakarta indeed scored an important diplomatic victory over Beijing. But while the Chinese affirmation enhanced understanding between the two countries, there are mitigating factors to suggest that Beijing’s assurances may not be as iron-clad as they seem.

Although China’s public recognition of Indonesian sovereignty over the islands effectively dispels any uncertainty about Beijing’s intent, the fact remains China hasn’t formally abandoned its Nine-Dash Line. Known in Chinese as nánhǎi jiǔduàn xiàn (Nine-segment line of the South Sea), it forms the core for Beijing’s foreign policy doctrine concerning the South China Sea. Even depicted on Chinese passports, the Nine-Dash Line stands unperturbed; and so do China’s claims.

By the same token, China’s “acceptance” may merely amount to a tentative “concession” to Indonesia rather than a permanent act of recognition. As long as the Nine-Dash Line still includes a portion of the 200-mile Exclusive Economic Zone of the Natuna Islands, there’s every danger that a withdrawal of recognition may occur in the future, should relations between the two countries go awry.

It’s noteworthy that China’s determination in translating its South China Sea doctrine into action seems to have ebbed and flowed according to changing circumstances. It’s as if Beijing is perennially testing the waters, literally.

In 2009, for example, it controversially lodged the Nine-Dash Line with the United Nations to highlight its territorial claims in the area. The following year, it reportedly told US officials the disputes in the South China Sea were of the same priority to the Chinese government as Taiwan’s status, only to relent somewhat later. Then China intensified its efforts which led to its naval skirmishes with Vietnamese and Philippine forces in 2014.

The comparison between the Nine-Dash Line and Taiwan illustrates how cunningly flexible the Chinese approach to territorial disputes is. While in principle Beijing claims Taiwan as part of China, it has so far allowed the island nation to maintain a de facto renegade government.

The same flexibility seems to have been at work in the Natuna Islands recognition. The Washington Times reported that just before China's announcement, Coordinating Minister for Political, Legal and Security Affairs Luhut Panjaitan told the media that Indonesia was considering following the Philippines’ lead by taking the matter before an international tribunal. Such a move would have been unwelcome in Beijing, especially when the international Permanent Court of Arbitration in The Hague ruled late last month that it would hear Manila’s grievances against Beijing in the South China Sea disputes.

This legal setback for Beijing came after the destroyer USS Lassen sailed within 12 nautical miles of Subi Reef in the Spratly Islands chain, where China had been turning three reefs into artificial islands. An Indonesian legal challenge would have been another tactical mishap that Beijing clearly couldn’t afford. Refrain has always been considered a Chinese virtue after all, as reflected in the proverb jūnzǐ bàochóu, shí nián wèi wǎn (When a nobleman takes revenge, ten years is not too late).

Perhaps Beijing’s favorable attitude towards Jakarta was to be expected, since Indonesia had recently done it a good turn when choosing a Chinese consortium over a Japanese rival to construct a new Jakarta-Bandung railway.

But the catch is by conceding the Natunas’ sovereignty to Indonesia, China remains true to its salami tactics when dealing with the countries of the Association of Southeast Asian Nations over the ongoing South China Sea disputes, time and again denying them a united front on the issue.

For a moment, it did look like Asean unity against Chinese claims in the area was on the cards. Indonesia’s own stance was hardening towards China mainly because it hadn’t received any satisfactory news about the Natuna Islands. During his Q&A time at the Brookings Institute on his last US visit, President Joko Widodo remarked: “We believe that the sea [is] a public good. We reject any attempt by any state to control and dominate the sea and turn it into an arena for strategy competition.”

It’s possible that by “accepting Indonesia’s claim of sovereignty” over the Natunas, China hopes to dissuade it from playing a more active role in the South China Sea disputes. After all, for decades Jakarta was a mere observer or “mediator” at best while China, Vietnam and the Philippines were maneuvering against one another.

China’s adventures in what it calls the South Sea have been a series of gambits adaptable to circumstances; from one-sided raucous claims of absolute sovereignty to the formation of artificial islands. Some were successful and others foundered, such as when the US recently decided to make its presence felt by sending a warship through the troubled waters.

For now, China may be finding its movement in the South Sea restricted by the renewed US vigor and the Philippine legal challenge. By recognizing Indonesia’s claim to the Natunas, it may have wanted to shepherd Jakarta back from the verge of becoming an interested party in the disputes, hence preserving what it has achieved so far in the disputes, without the complications of meeting a new adversary. But this story isn't over yet.

Johannes Nugroho is a writer from Surabaya. He can be contacted at [email protected] and on Twitter:

http://jakartaglobe.beritasatu.com/opin ... ding-time/

[KrishnaK]

TSJ,
Yuan in SDR give Chinese prestige which they sorely crave from everyone. If you cannot beat them, join them. Japan tried that but it did not work. The Anglosphere dropped an Atom Bomb. The west is not as strong today as it was then, so Chinese are hedging their bets. The hope is the future use of the reserve currency on the international level is given to the Chinese Yuan.

Who's the hoper here ? And who is to give use of the reserve currency to the Chinese Yuan. I guess you mean to say the Chinese hope the world accepts Yuan as an international currency. The chinese are hedging their bets on what ? That the west won't drop the atom bomb ?

WRT Japanese I am not talking about the yen but about joining western cabal.

The Japanese wanted to join the western cabal, by bombing pearl harbour I presume. Post which the western cabal dropping the atom bomb.

As usual, your posts make no sense.

[panduranghari]

Krishna ji,

US dollar is the reserve currency at the moment. It is so because its used the most. Yuan has joined SDR because its being used more than what it was and Chinese have fulfilled all the conditions to ensuring the currency is a part of SDR. What is SDR? It is a alternative currency set up by IMF. Why? When SDR came into being, the forex market was not as well evolved. All currencies were meaured against gold. Gold is not a member of international monetary system any more. Its a part of national reserves. But for US and IMF, gold is not a monetary metal. Its a commodity. TO compensate for the Triffins dilemma the IMF devised SDR. SDR is a basket of currencies.

Every nation who has an account with IMF stores its share in the form of SDR. SDR has the 5 currencies which are all in relative balance. It enables one nation(ie. US or UK or Eurozone or Japan and now also CHina) to not share the benefits of being a currency which is demanded globally. THe other countries who are not in SDR have to work hard to earn their dollars or pounds or euros or yen or yuans. BUt the 5 constituent countries can print their currencies at will. NO hard work needed. CHinese hope the percentage of SDR will rise with time eventually reach more than 60% as its with USD.

While US until 1971 was deriving benefit of this role, the others went along. The mark and franc were part of SDR until Euro was born.

Chinese have a big economy. UK and Japanese economy has shrank but they still constitute SDR. Its not the size of economy which determines the presence or absence of the currency is SDR.

THE CHinese have fulfilled the requirements of any currency to be part of SDR. Thats it. The CHinese feels this is a privilege. It is up to a certain extent. However, IMHO this is not the game chinese are playing. They want Yuan to be the currency that supplants USD.

The Chinese believe they are the next global leaders. The Chinese talk about economic parity with USA by 2021, military parity by 2049. They even have promised CHinese and aspiring chinese- the chinese dream very much like the american dream.

Getting the SDR approval is IMO one step in their goal.

Do you really believe china can supplant USA as it is now? I do not really think its realistic. by 2049? Dont know.

I once read a post on the internet about the bombing of Japan by US. I am unable to locate it. But the underlying message was non Christian Japan meddled with the western game of invading and using Chinese resources to become rich and powerful. They were not invited to the table so they were punished with atom bomb.

The west wont use an atom bomb on china but they will do everything that they can to keep them suppressed. China knows this and hence they keep reminding their people of the 100 year slavery. The chinese needle everyone in the world and then keep complaining that the world does not understand them.

I have said before - its not THE US MILITARY that gives the USA its strength. Its the international usage of US dollar which does. And CHinese want that. They want the yuan to be the international currency of choice. And all their moves are to keep this final goal alive.

Hope this makes sense.

[SSridhar]

South China Sea dispute: New China airstrips a potential headache for neighbours, US

China's campaign of island building in the South China Sea might soon quadruple the number of airstrips available to the People's Liberation Army in the highly contested and strategically vital region.

That could be bad news for other regional contenders, especially the US, the Philippines and Vietnam.

The island construction work that is creating vast amounts of new acreage by piling sand on top of coral reefs is now moving into the construction stage, with buildings, harbours and, most importantly, runways appearing in recent months.

China now operates one airfield at Woody Island in the Paracel island chain, and satellite photos show what appears to be work on two, possibly three, additional airstrips on newly built islands in the Spratly archipelago to the east.

The bases could have a "significant impact on the local balance of power" by helping bolster the forward presence of Chinese coast guard and navy forces, said Euan Graham, director of the International Security Program at the Lowy Institute in Sydney, Australia.

As with most South China Sea developments, China has remained opaque about its plans for the island airstrips.

At a recent monthly briefing, Defense Ministry spokesman Wu Qian declined to say how many China planned to build or what their purpose would be, repeating only that all military infrastructure was "purely for defensive purposes."

While China insists its island building works are justified and don't constitute a threat to stability, further militarisation of the region seems assured given China's increasingly robust assertions of its territorial claims.

Those perceptions were reinforced with the deployment in October of advanced J-11BH/BHS fighters of the navy air force to Woody Island that was revealed online in China in October. China's military has declined to comment on the reports.

The island's 2.4-kilometre long runway will soon be eclipsed by one more than 3 kilometres long on the reclaimed island built atop Fiery Cross Reef in the Spratlys, the satellite photos show. Another runway is being built on Subi Reef, with signs of similar work underway on nearby Mischief Reef.

[SSridhar]

Why including yuan in IMF SDR basket may not be good for the world and Chinese economy - Debasish Roy, Economic Times

The recent inclusion of the Yuan in IMF's SDR basket may not be entirely good news for that country. Further, an imploding China will lead to more pain for emerging markets.

To put it in perspective, Saugata Bhattacharya, Chief Economist, Axis Bank hits the nail on the head when he says: "While a significant step in internationalizing the Yuan, the implications on global foreign exchange rate and the Indian Rupee are likely to be limited in the near term. India should utilize the opportunity to diversify its currency holdings."

Dong Bao of Credit Suisse says: "The IMF's executive board announced it will include CNY (Chinese Yuan Remnibi) into its Special Drawing Rights (SDR) basket. After the inclusion of CNY, the SDR basket will include USD, EUR, CNY, GBP, JPY. CNY will be given 10.92% weights in the SDR basket."

China's economy slows down as we debate its reasons. Diehard fans of the Chinese economy and culture remain steadfast to the view that the slowdown in China's economy is a temporary blip. Others feel it is still not a bad thing as it had grown inordinately in the past few decades. They say, the current slowdown was expected and is in line with China's growth.

Others like Sahil Kapoor, Chief Economic Strategist, Edelweiss Broking believe, "inclusion of Chinese Yuan in the IMF-managed asset called the Special Drawing Right, or SDR, is purely symbolic. SDR's were created in 1969 and include the US dollar, the euro, the British pound, the yen and now the Chinese Yuan. Whatever usage SDR's have is limited to IMF's accounting particularly for reserves held by central banks and governments. The inclusion at best recognizes the growing importance of Chinese economy and the measures it has taken to free its markets over the last few years."

He adds: "Since the SDRs do not have a widespread usage nor the Chinese Yuan Renminbi is going to replace the US Dollar as the reserve currency any time soon. In 2014, the RMB was used by only 38 countries in their international reserves, accounting for 1.1 per cent of total foreign reserves, while the US dollar was used by 127 countries accounting for almost 64 per cent of global reserves. The euro accounted for 21 per cent. Largely the IMF inclusion appears to be symbolic and may not increase Chinese Yuan Renminbi influence any time soon."

THE TURNING POINTS

China witnessed three great milestones in its nose dive towards becoming a sputtering, bleeding third world economy but diehard fans still refuse to accept that China is on its way down and its years of glory were artificially created by the 50 odd central communist command.

For one thing, the creation of ghost cities where the original inhabitants of that land live in slums just around these ghost cities is a glaring anomaly in China's social growth strategy. If growth is not translating into well being for the average citizen then the economy is slowly killing itself by converting itself into a zamindar economy, where 98 per cent of the population works itself to death and the remaining two per cent enjoy a life of luxury.

Creating one or two ghost cities is not an anomaly but when the number climbs to 23, it has crossed the critical level.

Secondly, Chinese contract manufacturing largely fed European and American demand. Both these economies have aging populations and negligible economic growth. Now, China is trying to engage with Indian, African and South American companies for contract manufacturing.

The other demand pockets have long shifted from China. Most Canon cameras and Seagate hard discs are no longer Made in China. They are now from Taiwan, Thailand and Malaysia.

Thirdly, having lost their cement consumption and their manufacturing edge, China tried to push as much money they could in their stock markets. The result was a burn out of people's savings. Now, millions have become penniless after the Shanghai markets bombed. The government held on to fizzling fireworks and is now trying to push local administration funds into the stock markets to keep the financial system running.

OSTRICH SYNDROME

Recently, Wang Xiaoyi, deputy head of the State Administration of Foreign Exchange (SAFE) in China told a news conference that flight of capital from China was under control and there was no need to panic.

Just after that the Chinese currency became a little more convertible by being included in the IMF's SDR basket. According to Reuters, previous to this inclusion, in 2014, the RMB was used by only 38 countries in their international reserves, accounting for 1.1 per cent of total foreign reserves, while the US dollar was used by 127 countries accounting for almost 64 per cent of global reserves.

Now, with increased convertibility the Yuan may be used for two purposes; one, to attract more investment and two to enhance flight of capital to safer and more stable economies. It can also trigger off conversion of hoards of black money to safer havens.

Therefore, inclusion of the Yuan in the IMF's basket of currencies may not be a good thing if things turn bad for China.

Today, China needs stability and along with that stability the trust of the ordinary Chinese citizen in its government. The Chinese citizen needs to understand that his home will not be arbitrarily demolished to create a ghost city or his farms will not be suddenly taken over to create a manufacturing factory.

That trust is still missing in the action by the Chinese government. Further, there is no policy to salvage what has been lost.

OPEN DOOR: INCOMING AND OUTGOING

According to Prashant Jain of IFA Global, "IMF has given 10.92% weight-age to Chinese Yuan in SDRs effective from October 2016. Among other SDR currencies the share of EUR and GBP has reduced the most. Chinese Authorities must see this symbolic inclusion as major a victory for their efforts. SDR inclusion will have the following direct positive impacts:

a). Increase in trade settlement in Chinese Yuan

b). Global Central Bank will increase their exposure in Yuan

c). Reconfirm the importance of Chinese economy in context to world trade

d). Strengthening the political prowess of China on world stage.

Apart from above mentioned benefits there would few challenges for Chinese Authorities namely- pushing the capital reforms in China, Reducing the grip over Chinese Yuan."

However, Economictimes.com maintains that an open door can easily serve both as an inlet and also an outlet for capital.

Analysts are still counting on China continuing as a world power and their faith in China's good fortune is based on the strength of speculation.

Take Dong Bao of Credit Suisse, who says: "We believe the inclusion of the CNY is a symbolically significant development for China. In our assessment, the actual immediate impact on the currency and capital flow may not be as dramatic. We estimate that the inclusion is more likely to bring additional capital inflow around $150bn to 200bn in the next couple of years.

Note that the estimate about the inclusion will lead to more inflow than outflow is based on nothing more than good faith in China's economy. However, the turn of events during the last five years, show otherwise.

We believe China's flight of capital will continue as there is little to hold on to it in mainland China. Anybody with a decent noodle will flee out of this soup, which is gradually getting too thick to swim in.

[TSJones]

things are not so good in China.....

http://www.businessinsider.com/the-pric ... ?r=UK&IR=T

Market prices for diamonds are in a long, slow, five-year decline, and it's causing havoc for diamond producers.

Petra Diamonds reported a 10% sales drop in the first half of the year to $425 million, while the luxury brand De Beers saw a 23% collapse in profits to $360 million last week.

The diamond price is to blame, driven by falling demand in, you guessed it, China. Diamond prices have dropped about 12% over the past five years.

[SSridhar]

South Korean navy fires warning shots at Chinese patrol boat - AFP

The South Korean navy fired warning shots on Tuesday at a Chinese patrol boat that crossed the disputed maritime border between South and North Korea, military officials in Seoul said.

A statement from the Joint Chiefs of Staff said the action was taken after the initially unidentified vessel encroached on South Korean territorial waters.

"It retreated as the warning shots were being fired," the statement said.

The Defence Ministry said the vessel was initially assumed to be North Korean. Naval patrol boats from the North regularly test the boundaries of the Yellow Sea border which has been a military flashpoint between the two Koreas for decades.

"But it actually turned out to be a Chinese patrol boat cracking down on illegal Chinese fishing vessels," a ministry official told AFP.

Seoul has been asking Beijing to take a tougher stand on Chinese vessels that have been entering South Korean waters in increasing numbers to sate growing demand at home for fresh seafood.

Small, wooden Chinese ships were once tolerated in an area where the top priority has always been guarding against potential incursions from North Korea.

But in recent years, the small boats have given way to larger steel trawlers who engage in bottom trawling - dragging a large, weighted net across the sea floor that sweeps up everything in its path.

Around 2,200 Chinese vessels have been stopped and fined by South Korea for illegal fishing in the past four years, and the number of arrested fishermen jumped from two in 2010 to 66 in 2013.

There have been numerous cases of violent clashes between Chinese crews and South Korean coast guard trying to board their boats.

Pyongyang does not recognise the Yellow Sea border that was unilaterally drawn by US-led UN forces at the end of the 1950-53 Korean War.

The boundary was the scene of deadly naval clashes between the two Koreas in 1999, 2002 and 2009.

[SSridhar]

Tensions along South China Sea hastened Su-35 deal - Atul Aneja, The Hindu

Russia’s decision to export is highly capable Su-35 planes is expected to bolter China’s military presence in the South China Sea. It is also set to escalate military technology exchanges that would help Beijing and Moscow develop cutting edge weapons.

After protracted negotiations that lasted several years, Russia finally relented to sell China, 24 Su-35 planes.

In doing so Moscow overrode apprehensions that Beijing’s panache for “reverse engineering” Russian weapons, could hasten its rise as a formidable competitor to Russia, in the global arms market.

The $2 billion deal means that transfer of technology, which Beijing badly requires to develop the next generation of weapons, is part of the contract.

Analysts say that geopolitics has played a major part in cementing the deal. Both Russia and China are now strategically well aligned. Russia saw the toppling of an elected government Ukraine as an attempt by the Atlantic Alliance to dislodge it from Sevastopol, the headquarters of its Black Sea fleet in Crimea.

U.S.'s Asia Pivot

The Chinese are also wary of Washington’s growing presence in the western Pacific, following the “Asia Pivot” doctrine of the Obama administration.

Washington’s doctrinal shift would bolster the Pacific command, which would accumulate nearly 60 per cent of all U.S. forces under the wings. Russian media reports have concluded that growing tensions between China and the U.S. over the South China Sea clinched the S-35 deal, whose negotiations had commenced in 2008. The Chinese felt the urgency of these planes as battle readiness of its home-grown J-20 and J-31 stealth fighters — the eventual replacement for the Su-35 — was still a few years away.

China will benefit from the purchase of the Russian jets in three ways. First, the acquisition of 24 Su-35 planes would greatly extend China’s reach over the South China Sea. Su-35 planes, capable of taking off from short runways, will cover a large footprint if deployed from China’s newly developed artificial islands in the South China Sea. Second, the Russian jets can effectively counter the U.S. F-35 stealth fighters.

Tracking U.S. jets

The Irbis-6 radars on the Su-35 can track the state-of-the art American jets nearly 90 km away. Finally, China can acquire valuable radar and engine technology by inducting the Russian jets. This would plug a major gap in China’s drive for developing homegrown planes. Mil.huanqiu.com, China’s official military forum acknowledges Beijing’s interest in the engine and radar of the SU-35.

The Su-35 deal has also benefited Russia significantly. Cash-strapped Russia has acquired funds which could help alleviate mounting expenses both at home and abroad.

Moscow has already profited from the financial transfers resulting from its previous decision to export its advanced S-400 air defence missile systems to Beijing. Chinese media reports suggest that Beijing is now keen on acquiring technology used in Russia’s Lada class submarines.

This sale was expected. During Xi Jinping’s visit to Russia in March 2013, he was given an unprecedented tour of Russia’s Operational Command Centre, a first for any foreign leader. Xi pointedly told Putin that he expected Russia and China to "resolutely back each other's efforts to protect sovereignty, security and developmental interests." Agreements were signed to sell four Russian Amur-1650 Class Diesel submarines and an unspecified number of Su-35 long-range fighter planes {we now know the number is 24} even though Moscow has, in the past, accused Beijing of violating the patents of Russian-made weapons and charged that China was simply copying Russian technologies and competing with Russia in the international arms market.

[SSridhar]

Thai arms supplier extradited to India - The Hindu

Great news folks. This has huge implications for the Chinese. We must appreciate the Thai judiciary and government. After all, Thailand is quite close to China

A Thai citizen, suspected to be a key intermediary for northeastern rebel groups for arms procurement, has been extradited to India. {This is phenomenal}

The interrogation of 59-year-old Wuthikorn Naruenartwanich alias Willy could throw fresh light on how Chinese arms are finding their way into the hands of insurgents in northeast of India. Indian agencies believe that he could also provide details of the engagement of Chinese agencies with Indian insurgent groups.

Willy “was extradited from Thailand and brought to India in compliance of the extradition order passed by a criminal court in Bangkok Thailand on 31.03.2014,” the National Investigation Agency said in a statement. Willy’s extradition was delayed by his appeal against the extradition order in an appellate court in Bangkok which was rejected on November 4.

Willy is accused in a criminal conspiracy for illegal procurement of sophisticated arms and ammunitions from China, for supply to Indian insurgent groups. The details of Willy’s role emerged after NIA 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.

According to NIA, Shimray had negotiated several times with Willy to fix a deal to the tune of US $1.2 million (approx Rs. 7.8 crore) to procure arms and ammunition for NSCN (IM) and other insurgent groups in the northeast.

“For this deal, US $800,000 was paid by accused Anthony Shimray to co-accused Wuthikorn Naruenartwanich @ Willy. NIA had filed a charge sheet in this case on 26.03.2011 against four accused persons” including Shimray and Willy under sections 120B, 121A, 122 of IPC and 16, 17, 18 and 20 of unlawful activities (prevention) act.

For long there have been Chinese signatures visible in the activities of northeastern insurgent groups. While several of them have regularly been to China, or taken shelter in the communist country, many of the arms and ammunitions used by northeastern groups were also suspected to be from China. In a tight state controlled arms bazaar, it was impossible for individuals to operate without state sanction, Indian agencies always believed.

An NIA report based on Shimray’s interrogation had clearly said the Chinese intelligence agencies are actively engaged with the Indian rebel groups. He purportedly said the Chinese agents in 2009 offered to sell surface-to-air missiles to the Naga rebels for $1 million. The deal fell through as the Naga group could not raise that money.

[SSridhar]

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.” We now have a very solid proof in the form of Willy for the Chinese hand in the NE insurgency. We must ram it down the Chinese throats.

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.”

India must demand answers from the Chinese, not the usual convoluted Chinese answers but straight ones.

[Paul]

X-post from Missile thread

++++++++++++++++++++

It is 1 .5 hr flight for commercial flights from Shanghai to Fukuoka which is the southernmost post in Japan. Add another 1 hr to Tokyo Bay. There is the island Jeju? in between this route which looks to part of SoKo.

As of today, the PLAN is not even in a position to attack Japan let alone Pearl Harbor or the LA/SD/Seattle. They need at least 8 Nimitz class carriers to impose a blockade on Japan. This involved at least 100+ capital sized ships + more Subs to secure the sea lanes to protect the carriers when they cross over to east side of Japan. Eleven has a lot of work to do if they want to get past the first chain of islands. The other nations are like a pack of dogs who will never allow the PLAN to come out unmolested in the Pacific ocean. If this is the state in East China Sea how does the PLAN realistically hope to dominate the IOR where its only noteworthy proxy has less than 10 capital ships. The conclusion I am drawing is that the bogey of PLAN streaming across the Malacca straits into the BoB is a overstated one for the next 2 decades at least.

Shanghai-Tokyo route

Looking at this I am thinking that the primary threat to NE India will be from SE China in Yunnan where PLAAF aircraft can take off with full load and attack bases in Assam and AP. To counter this IAF Sukhois need to be prepared to take off from North A&N Islands to Yunnan (10 hr commercial) or Tezpur to Yunnan. IAF in Assam needs to be prepared for attacks from PLAAF from North (Tibet) as well as East (yunnan). Hence the priority for allocation of resources to counter the Chinese threat has to be cruise missiles, infantry, old fashioned artillery, then fighter aircraft followed by transports and helicopters with the Navy at the fag end of the list.

Tezpur Yunnan

[SSridhar]

Shinzo Abe visit bid to contain Beijing: China daily

Japanese Prime Minister Shinzo Abe touched down here [New Delhi] on Friday on a three-day trip. Welcoming him in a tweet, Modi described Abe as a "great friend and phenomenal leader". Abe's visit will see the two leaders announcing some progress in negotiations between the two countries for a civil nuclear agreement.

Abe's visit also comes soon after his country's warships took part in the annual Indo-US Malabar naval war-games in the Bay of Bengal in October, which riled China. In fact, China's Global Times said in an article on Friday that Abe's visit was part of Japan's attempts to contain China.

[SSridhar]

Voices from the other side - Book Review by N.Sathiya Moorthi, The Hindu

Voices from the Border: Response to Chinese Claims over Arunachal Pradesh

Editors: Gurudas Das, C.Joshua Thomas, Nani Bath
Pentagon Press

A collection of 13 essays, taking off from a 2012 seminar held in Itanagar, Voices from the Border: Response to Chinese Claims Over Arunachal Pradesh, could not have come at a better time for new-generation Indians who want to know the political facts about the run-up to the 1962 war. Though individual authors — starting with former Indian Ambassador to China C.V. Ranganathan — have given their independent views on the subject, the underlining argument could also address anti-China jingoism across India, arising mainly from the humiliating defeat in 1962.

It’s nobody’s case that China was or is right when it continues to claim the north-east Indian State of Arunachal Pradesh as ‘Southern Tibet’. It should be nobody’s case either that India could similarly lay claims to Aksai Chin in the western sector, which is what India did when China had reportedly proposed a swap, aimed at ending bilateral tensions. Neither the McMahon Line in the east nor the Johnson Line in the west has the required sanctity.

No essayist has mentioned it, but it is not easy for India, as an ‘Aksai Chin deal’ would also involve portions of Pakistan-occupied Kashmir (PoK), which Islamabad had gifted away to China. This in turn makes what essentially should be a bilateral engagement into a trilateral one, which India has vehemently opposed, at least since the India-Pakistan Simla Accord (1972).

As some of the essayists have recalled, India’s ‘Forward Policy’ is what had provoked China into the 1962 war. To the extent that one accepts the argument, all contemporary political criticism of the then Prime Minister, Jawaharlal Nehru, should cease. What then should remain is an opening for a new set of negotiations, under a new leadership in the two countries.

The essayists have dealt in great detail with the historicity of the border dispute, while still making it interesting reading for the average reader. Though Indian and other non-Chinese strategic thinkers often accuse China of sticking to history, India too has not done otherwise. It takes the two nations nowhere in the contemporary geostrategic and global economic setting. For China, Arunachal Pradesh is not about hydro-power and mineral resources, as some have argued in the book. The culture-based historicity being attached to the Tawang monastery too may have been over-stated. If there are visible differences in the Chinese claims over a period, there are also unacknowledged contradictions in India’s position. India accepted Tibet as a part of China in the 1950s, but it not only gave humanitarian asylum to the Dalai Lama and his followers, it went on to facilitate the establishment of a ‘Tibetan government-in-exile’ within its territory. {This is too simplistic and not an entirely accurate depiction}

It may all be about Chinese anxieties on what has since evolved into a U.S.-centric, post-Cold War geostrategic axis, at times out-sourced to new-found friends like India too. At the same time, in the existing and emerging geostrategic world order, China too needs to acknowledge that if ‘military might’ and ‘power projections’ were the only criteria for ‘super-power’ status, then the Soviet Union should not have collapsed. India, in its turn, should acknowledge that much of the fiscal benefits from the economic reforms over the past decades might have been expended on large-scale military imports from those FDI-offering nations, to keep China at bay. It should also recognise that geostrategic partnerships of the U.S., Australia and Japanese kind — whether stand-alone or in combination — can only irritate China into increasing border skirmishes on the land and encouraging ‘anti-India’ militancy along the border State, without having to escalate any or all of them into a full-fledged battle. {Again, the book reviewer is economical with truth and is putting the cart before the horse just so as to appear 'neutral and balanced'.}

To the extent that the recent Naga peace accord or the Indian Army’s ‘hot pursuit’ into Myanmarese territory with the host government’s acceptance have shown the way, it is better for the future. Yet, India’s ‘allies’ cannot be expected to fight India’s battles, particularly those on land and over Arunachal Pradesh, if they refuse to let them be escalated into an all-out Indian Ocean war. That would be a different story altogether, which India might win or lose at the same time. {I don't understand this bit. If anybody does, please clarify. TIA}

N. Sathiya Moorthy is director, Observer Research Foundation, Chennai Chapter

[SSridhar]

China upset over India-Japan agreement on South China Sea - Saibal Dasgupta, ToI

China expressed dissatisfaction on Monday over India-Japan agreement concerning the freedom of navigation in South China Sea. The agreement was signed during Japanese Prime Minister Shinzo Abe's recent visit to New Delhi.

Chinese foreign ministry spokesman Hong Lei emphasized that Beijing was justified in carrying out activities in South China Sea because the concerned islands were part of its territory.

"We hope countries outside the region respect the efforts of regional countries in maintaining peace and stability of South China Sea, instead of doing the opposite," Hong said, a statement signifying deep disapproval.

The India-Japan agreement calls on all parties to refrain from unilateral actions that could endanger peace. China has been opposed to India, Japan and the US, which are outside the South China Sea region, voicing their opinion about the island dispute. Hong said Chinese activities were "justified, reasonable and lawful, targeting no country and impeding in no way the freedom of navigation and overflight in South China Sea".

Hong also objected to India's invitation to Japan to participate in the Malabar naval exercises in the Indian Ocean.

"As for Japan's participation in the relevant military exercises, China's position is very clear. Relevant countries should not provoke confrontation and create tension in the region," he said. On India-Japan agreement on Bullet train, Hong said China too is ready to speed up its cooperation with India on high-speed railways.

Asian countries drive national development through infrastructure construction, Hong said, adding, "China and India are also cooperating in the high-speed railway sector. We stand ready to move forward relevant cooperation together with the Indian side."

[SSridhar]

See what the Communist paper The Hindu writes as an editorial on the Shinzo Abe visit. Just pathetic.

Cautious Cooperation with Japan

To be sure, enhanced economic and energy cooperation will benefit both countries. Japan has capital and skill whereas India has huge untapped potential. What they need is a clear road map, which, as the recent official exchanges show, is in the works. But at the same time, India should be wary of the great game going on in Asia. It may not be a coincidence that Japan is shedding its historical pacifist foreign policy, which helped its rise as an economic giant in Asia, at a time when its tensions with China are on the rise and the United States has been “pivoting” towards Asia. The American strategy appears to be to build an alliance in Asia to contain the rise of China. Japan, Washington’s strongest ally in Asia, is obviously one of the pillars of this “pivot” strategy. It is hardly a secret that both the American and Japanese establishments want India to “swing” towards their alliance. Mr. Abe had earlier written about the strategic need to forge a “democratic security diamond” with the U.S., Australia and India. This is the challenge India’s policymakers would face while deepening the country’s partnership with Japan further. New Delhi should get its economic and strategic priorities right and state them clearly. To script its own rise, India should build strong ties with each power, instead of aligning with any particular bloc. The country will gain more from everybody’s rise rather than joining some geopolitical alliance that is not in its primary interest.

The comments thereupon are interesting.

[Philip]

There was a comment somewhere that due to the "inability of the Indian defence industry to deliver weapon systems",we had to rely upon foreign suppliers,were dependent upon foreign def. tech and thus "could not" chart out a completely independent foreign policy,which the Hindu advocates. I really do not know though how we will be able to 'juggle" so many strategic balls in the air!

1.Let's assume that China and Japan have a real spat over their island disputes.Are we going to go to Japan's aid?

2.Japan and Russia also have island/territorial disputes.What will our stance be when they spar with each other?

3.China and the ICS littoral nations like Vietnam,etc. Will we come to their aid?

4.A major spat between the US/allies and China,with China getting non-mil Russian assistance like intel,etc.Will India join the anti-China mil coalition led by the US?

5.The US face off a Sino-Russian alliance.Whom will we stand by?

Our MEA by its track record will take the path of the ostrich!

[SSridhar]

Indo-Japan partnership aimed at counter balancing China: Chinese daily - PTI

The 'Special Strategic Global Partnership' struck by India and Japan during the recent visit of Japanese Prime Minister Shinzo Abe to India is aimed at counter balancing China to emerge as regional powers, a state-run Chinese daily said.

"Behind this special partnership is the ambition of the two countries to become regional powers and even global powers. It also reveals their intention to counterbalance a rising China," an article in the state run Global Times said.

"The Japan-India 'Special Strategic Global Partnership' is becoming a reality. However, such special partnership seems to be fragile, given China's firm economic ties with both, the two's different preferences for strategic security and economic technologies and the gambling mentality of the leaders from both sides," it said.

Tokyo and New Delhi are hoping to impose pressure on China by clinging to the other, but at the same time, both Prime Minister Narendra Modi and Abe are making efforts to improve ties with China.

"Neither wants to be the first one to clash with China, while both are prepared to seek gains from the other side's conflicts with Beijing," it said.

Referring to a number of agreements such as high-speed rail and defence technology and civilian use of nuclear power, it said, "Abe has achieved all his aims from his India visit and described the agreements as heralding a new era of cooperation between the two nations."

"Whether this is a new era for the two is open for discussion. But what's clear for India and Japan watchers is that Abe is pushing forward bilateral ties regardless of the costs," it said in apparent reference highly concessional loans offered by Japan to bag the first high speed rail deal {Isn't that sour grapes?} between Mumbai and Ahmedabad putting pressure on China, which is also trying to bag the bullet train contract in India.

"Knowing Abe's intentions, Modi has made contrived promises to lure Abe making more compromises or even abandoning his principles," it said.

"The cooperation of India and Japan on nuclear power and defence may exert a huge impact on the Asian landscape. The signing of the MoU indicates that Japan has steered away from its persistent principles by cooperating for the first time with a country that has not joined the Non-Proliferation Treaty (NPT). It means Japan admits that a country without joining the NPT can own nuclear weapons.

"This is a turning point in Japan's nuclear policy," it said. {Why cannot Japan have that view when China is already helping Pakistan, another non-NPT state? Isn't China exposin its double standard?}

"In addition, the cooperation with India in defence facilities and technologies is the first time that Japan transfers large-scale military equipment to a foreign country after Japan announced the Three Principles on Transfer of Defensc Equipment and Technology and abandoned its long-held Three Principles on Arms Exports," it said.

"Through the above mentioned cooperation, the Abe administration hopes to draw close security and defense relations with India so as to establish the 'democratic security diamond' that Abe has been relentlessly pursuing since 2007," it said.

"Modi has also given returns. The joint statement with Abe mentioned the South China Sea for the first time to show his support for Abe's involvement in the territorial disputes in the South China Sea."

Back in October when New Delhi invited Tokyo to join the Malabar exercises, India's policy on the security of the Indian Ocean had changed, the paper said.

It also shows the maritime part of Abe's "democratic security diamond" that aims at containing China is almost in place", it said.

"Japan hopes to help India become an economic giant {What is wrong when the same Japan has helped China become an economic giant earlier?} and benefit from the results. It also shows that Japan is determined to compete with China along the route of the 'One Belt, One Road'," it said.

I think that this is the first time China has targetted India & Indian PM in an attack in matters relating to Japan. Earlier, it used to criticize Japan and advised India to be wary etc. But, now, this is a no-holds barred attack with phrases such as 'Modi luring Abe with contrived promises', 'gambling mentality', 'New Delhi imposing pressure on China' etc.