Such “places not bases” are unlikely to spring from nowhere. Instead, to plot where China’s navy may be heading the IOR, it helps to review where it’s been. That’s because establishing access points tends to be a long-term endeavor, based on enduring fundaments observable from outside. Naval facilities generally require (1) reliable political support in a stable host nation, (2) robust logistics infrastructure, and (3) sufficient draft for all major ships.
We don't have to wait for too long to know whether Beijing got the message or not. The Masood Azhar case comes for review in a month's time before the UNSC 1267 Committee.chetak wrote:HAS IT BEEN INDIA’S SUN TZU MOMENT?Beijing has got the message loud and clear: India can do it again and the next time, with proper ‘conference visas’. Beijing knows this.
China must turn off the taps of credit-driven growth to avoid a financial system crisis in the face of rising bad loans and other risks, the Communist Party's official mouthpiece newspaper said today, citing an unnamed "authoritative" source.
The prominent article, in question-and-answer format, started on the front of the broadsheet paper and took up the entirety of page two.
China's Communist authorities are trying to retool the economy away from the investment- and export-led growth of the past to one more led by consumer demand, and reform lumbering, loss-making state-owned enterprises to make the sector more efficient.
But the transition is proving bumpy, raising fears of a hard landing, and global markets have been alarmed by slowing expansion in the world's second-largest economy.
Attempts to address the slowdown in the first quarter of this year -- when growth slid to 6.7 per cent -- were largely driven by investment, the People's Daily quoted the source as saying, putting more financial pressure on some local governments.
Analysts said the comments could be a signal that Beijing is to rein in monetary stimulus efforts.
"A tree cannot grow in the air," said the source, arguing against raising debt further.
"Further leverage must not be added to push up growth, nor does it need to be," the interviewee added, warning of a possible crisis as high debts "will definitely bring about high risks".
"A system financial crisis could be triggered if no good controls are implemented, leading the economy to contract and even household savings to evaporate."
It is the third time in less than a year that the People's Daily has cited "an authoritative person" to discuss top-level economic policies.
Chinese news portal Sina has previously said that such an "authoritative source" in similar People's Daily articles could be a high-ranking government official, such as the head of the top economic planning agency the National Development and Reform Commission, or a respected scholar who participated in major economic policymaking.
"While the anonymity has been protected, the views expressed in these articles did have a large impact in China," Nomura economists said in a note.
The report implied that future monetary easing "may be more cautious and that the government may try to hasten the pace of reforms", they said, evidence that China's "debt-fuelled rebound in investment growth will be short-lived".
China's growth will continue to slow, the source said, as sluggish demand and overcapacity are "unlikely to turn around fundamentally in several years".
Queen says Chinese officials were 'very rude' during president's state visit
‘Oh, bad luck,’ Queen tells police commander in charge of visit security, in off-guard moment caught on camera at Buckingham Palace garden party
‘Very rude’: Queen’s unguarded comments on Chinese officials during UK visit
Tom Phillips in Beijing
Wednesday 11 May 2016
The “golden era” of UK-China relations appears to have lost some of its glitter after the Queen accused Chinese officials of being “very rude” to the British ambassador during president Xi Jinping’s first state visit to Britain last year.
During a garden party at Buckingham Palace on Tuesday, the Queen’s official cameraman filmed her discussing Xi’s trip with Metropolitan police commander Lucy D’Orsi.
When D’Orsi was introduced as the officer responsible for security during the visit, the Queen was heard to remark: “Oh, bad luck.”
Later, the Queen told her guest: “They were very rude to the ambassador” – referring to Barbara Woodward, Britain’s first female ambassador to China.
D’Orsi complained to the Queen that Xi’s visit had been “quite a testing time for me” and claimed that at one point Chinese officials “walked out” on both her and the British ambassador, telling her “that the trip was off”.
“Extraordinary,” the Queen replied.
“It’s very rude and very undiplomatic, I thought,” the police commander concluded.
Footage of the conversation, which was distributed to the media by Buckingham Palace, is unlikely to help advance the much vaunted “golden age” of UK-China relations that Xi’s state visit was supposed to help launch.
Speaking ahead of Xi’s arrival, Woodward, a China specialist who has worked in the UK foreign office for more than two decades, predicted a bright future for ties between the two nations.
“We are looking forward to a golden visit in a golden year that launches a golden decade,” she told reporters.
Xi toasted the upgraded friendship during a trip to a Buckinghamshire pub with the British prime minister, David Cameron, and said he had been “deeply impressed by the vitality of China-UK relations”.
Xi Jinping and David Cameron drink their pints of beer at a pub in Princess Risborough near Chequers in October 2015.
However, talk of the “golden” era has faded in recent months, amid growing tension between Beijing and London on issues including China’s suspected abduction of a British bookseller from Hong Kong and China’s artificial island-building campaign in the South China Sea.
Last week China’s ambassador in London, Liu Xiaoming, accused the US and UK of “making trouble in the South China Sea” by opposing his country’s activities in the region. “These nations should desist from meddling and muddling,” Liu wrote, according to Xinhua, China’s official news agency.
The Queen’s comments about Xi’s visit are unlikely to go down well in Beijing. But they were less incendiary than those made by her son, Prince Charles, after Hong Kong’s return to Chinese control in 1997.
In a memo about the handover ceremony Prince Charles described the Communist party’s elderly leaders as a “group of appalling old waxworks” and mocked the “awful Soviet-style display” of goose-stepping Chinese soldiers at the event.
The British embassy in Beijing declined to comment on claims the ambassador had been mistreated by Chinese officials or provide details of the circumstances under which they supposedly “walked out” on Woodward.
Britain has made 'visionary' choice to become China's best friend, says Xi
The embassy also declined to comment on the impact the episode might have on the UK-China relationship.
A spokesperson for Buckingham Palace said: “The Chinese state visit was extremely successful and all parties worked closely to ensure it proceeded smoothly.”
Beijing made no immediate comment on the Queen’s claims.
Foreign diplomats who have met Xi Jinping, a man some call China’s most authoritarian leader since Mao Zedong, describe him as a charming and engaging personality.
But China’s diplomats have faced previous accusations of ungraceful behaviour.
In 2014 officials representing prime minister Li Keqiang were accused of threatening to cancel a three-day trip to Britain unless he was granted an audience with the Queen. The meeting was subsequently arranged.
“The Chinese are hard negotiators,” one government source told the Times.
Transcript
Lord Chamberlain: Can I present Commander Lucy D’Orsi, who was gold commander during the Chinese state visit.
Queen: Oh, bad luck.
Lord Chamberlain: And who was seriously, seriously undermined by the Chinese, but she managed to hold her own and remain in command. And her mother, Judith, who’s involved in child protection and social work.
Judith Copson: Yes, I’m very proud of my daughter.
Lord Chamberlain: You must tell your story.
D’Orsi: Yes, I was the gold commander, so I’m not sure whether you knew, but it was quite a testing time for me.
Queen: Yes, I did.
D’Orsi: It was … I think at the point that they walked out of Lancaster house and told me that the trip was off, that I felt …
Queen: They were very rude to the ambassador.
D’Orsi: They were, well, yes she was, Barbara [Woodward] was with me and they walked out on both of us.
Queen: Extraordinary.
Copson: I know, it’s unbelievable.
D’Orsi: It was very rude and very undiplomatic, I thought.
"Big nations should not bully smaller ones," Obama said. "Disputes should be resolved peacefully."
China's Foreign Ministry responded Tuesday to Obama's comments, with spokeswoman Hua Chunyin saying: "The freedom of navigation they are talking about, is it true freedom of navigation enjoyed by every nation under international law, or it is a privileged freedom of navigation for American naval vessels and military aircraft?
Chinese diplomats seem to be pretty hard-nosed. I think all Asian diplomats should learn from Chinese on dealing with the world.Philip wrote:
http://www.theguardian.com/world/2016/m ... tate-visitQueen says Chinese officials were 'very rude' during president's state visit
Chinese diplomats seem to be pretty hard-nosed. I think all Asian diplomats should learn from Chinese on dealing with the world.[/quote]Philip wrote:
http://www.theguardian.com/world/2016/m ... tate-visitQueen says Chinese officials were 'very rude' during president's state visit
It is considered to be one of the best in the world!!Indian foreign Service is almost puny by their standards in number !!
China on Thursday said it will not allow any foreign organisation or individual to interfere in its religious affairs as it defended the crackdown against Islamic militants in Xinjiang province, bordering countries like Pakistan, as a "just act" to safeguard its fundamental interests.
Religious extremists, in the name of religion, spread radical and extremist views and take extremist means to try to establish a theocracy, a Chinese government white paper titled 'Freedom of Religious Belief in Xinjiang' released here [Beijing] said.
Xinjiang enjoys unprecedented religious freedom, the paper said asserting that the freedom of religious belief in the province" cannot be matched by that in any other historical period."
Since the founding of the People's Republic of China (PRC) in 1949, citizens' freedom of religious belief fully respected and believers' normal religious needs effectively met, it said.
In Xinjiang, "the positive role of religious circles in promoting economic development and social stability is well displayed, the government's capability of administrating religious affairs is constantly strengthened, international exchanges in the religious field are being expanded and the proliferation and spread of religious extremism is being effectively contained," it said.
Religious extremism is by nature "anti-human, anti-society, anti-civilisation and anti-religion," it said and defended China's efforts in fighting religious extremism, saying it is a just act to safeguard the fundamental interests of the country and the people.
The paper said the Chinese government resolutely opposes the politicisation of religious matters and any other country's interference in China's internal affairs in the name of religion.
"China...will never allow any foreign organisation or individual to interfere with China's religious affairs," the white paper said.
Xinjiang, which has over 10 million Uyghur Muslims of Turkik origin, is in turmoil for the past few years over Uyghur unrest over the settlements of Hans, the dominant community in China from different provinces settling there.
The province as well as other places in China including Beijing witnessed several terrorist attacks for which Beijing blames the separatist East Turkistan Islamic Movement (ETIM).
Xinjiang shared borders with the Pakistan occupied Kashmir (PoK), Afganistan, Mongolia, Russia, Kazakhstan, Kyrgyzstan and Tajikistan.
The reference to any foreign or individual organisation in the white paper comes in the backdrop of reports that the leader of the Pakistan-based Jamat-ud-Dawa and Lashkar-e-Taiba, Hafiz Saeed has criticised China for the crackdown on Uyghur Islamic militants in Xinjiang.
Saeed said that Chinese leadership was a "challenge to the Islamic way of life" and "hurting" China-Pakistan close relationship and called upon the Pakistan government to "show some courage and direct China to stay away from hurting Islamic sentiments".
Earlier speaking at a conference on religions in April here Chinese President Xi Jinping had asked officials to "resolutely guard against overseas infiltrations" into China in the name of religion and asserted that people of all faiths must adhere to the leadership of atheist ruling Communist Party of China.
The white paper said China holds the principle of independence and self-management in religious undertakings and foreign organisations and individuals must not interfere.
"China's religious undertakings are run by its own religious groups, personnel or citizens" and that the country's religious affairs or organisations are "not subject to any foreign domination", it said.
Foreigners must abide by Chinese laws and regulations when participating in religious activities within Chinese territory and must not interfere in China's religious affairs, state run Xinhua news agency quoted the paper as saying.
"As a provincial-level administrative region of China, Xinjiang sticks to the principle of independence and self-management in terms of its religious affairs," it said.
Affected by international religious extremism, religious extremism has grown and spread in Xinjiang in recent years, it said adding that normal religious activities in Xinjiang are protected by law and religious organisations are responsible for coordinating internal religious affairs and the government should not interfere.
"No Xinjiang citizen has been punished because of his or her rightful religious belief," it said.
The document said those who have violated the legitimate rights and interests of religious organisations, venues for religious activities or clerical personnel or believers will bear due legal responsibilities, and those who have committed crimes will be held criminally responsible.
"Religious extremism betrays and distorts religious doctrines, deludes and deceives the public, particularly young people," it said.
Facts show that religious extremism has become a real danger that undermines national unity and ethnic solidarity, sabotages religious and social harmony, impairs social stability and peace in Xinjiang, and endangers the life and property of people of all ethnic groups, it said.
Religious extremist forces have designed and carried out a series of severe and violent terrorist attacks in China, injuring or killing religious personnel and believers and other innocent people, it said.
The crackdown on terrorism and extremism is in accordance with relevant laws and regulations, such as the Criminal Law and the Counterterrorism Law and is an important part of the battle of the world community against religious extremism, it said.
By whom?NRao wrote:It is considered to be one of the best in the world!!Indian foreign Service is almost puny by their standards in number !!
NRao wrote:Meanwhile, the eyes are everywhere ....................... And, perhaps India can export a few F-16s to Indonesia and others.
How China’s fishermen are fighting a covert war in the South China Sea
TANMEN, China — In the disputed waters of the South China Sea, fishermen are the wild card.
China is using its vast fishing fleet as the advance guard to press its expansive territorial claims in the South China Sea, experts say. That is not only putting Beijing on a collision course with its Asian neighbors, but also introducing a degree of unpredictability that raises the risks of periodic crises.
In the past few weeks, tensions have flared with Indonesia, Malaysia and Vietnam as Chinese fishermen, often backed up by coast guard vessels, have ventured far from their homeland and close to other nations’ coasts. They are just the latest conflicts in China’s long-running battle to expand its fishing grounds and simultaneously exert its maritime dominance.
“The Chinese authorities consider fishermen and fishing vessels important tools in expanding China’s presence and the country’s claims in the disputed waters,” said Zhang Hongzhou, an expert at the S. Rajaratnam School of International Studies at Singapore’s Nanyang Technological University.
“Fishermen are increasingly at the front line of the South China Sea disputes,” Zhang said, “and fishing incidents could trigger even bigger diplomatic and security tensions between China and regional countries.”
A fisherman performs maintenance tasks during a refit of a boat near the port of Tanmen in Hainan Island, China on April 7. (Adam Dean/For The Washington Post)
Here, in the fishing port of Tanmen in the southern island of Hainan, 50-year-old captain Chen Yuguo was in the wheelhouse of his trawler last week, carrying out minor repairs after a six-week fishing trip to the disputed Spratly Islands.
A portrait of “Comrade” Mao Zedong hung in a place of honor behind him, alongside an expensive satellite navigation system supplied by the Chinese government. Chen said catches are much better in the Spratlys than in China’s depleted inshore waters, but the captain said he is also fulfilling his patriotic duty.
“It is our water,” he said, “but if we don’t fish there, how can we claim it is our territory?”
Experts say the battle for fisheries resources, an often overlooked destabilizing influence in the South China Sea, is a source of unpredictability, volatility and risk.
At the end of March, Malaysia’s maritime authorities spotted about 100 Chinese fishing boats, accompanied by a Chinese coast guard vessel, in its waters. They were close to Luconia Shoals, less than 100 nautical miles from Malaysian Borneo but 800 nautical miles from China’s southern island of Hainan.
Early this month, Vietnam seized a Chinese ship that it said was supplying fuel to Chinese fishing boats in its waters.
The biggest flare-up came on March 20, when Indonesian officials boarded a Chinese fishing vessel close to Indonesia’s Natuna Islands . As an Indonesian vessel began towing the boat to shore, a Chinese coast guard ship intervened to ram the fishing boat, pushing it back into the South China Sea — until the Indonesians released the tow line.
Indonesia sets great store in its friendly relations with China, but its government responded angrily, saying it felt that its efforts to maintain peace in the disputed waters had been “sabotaged.” Defense officials vowed to send bigger naval vessels to defend its patrol boats in the region, to consider introducing military conscription to remote islands in the archipelago, and even to deploy U.S.-made F-16 fighter jets to the Natunas to ward off “thieves.”
China claims 90 percent of the South China Sea, drawing a “nine-dash line” around its claims that passes close to the shores of the Philippines, Malaysia, Brunei, Vietnam — and the Natunas.
The fishing vessel, Beijing’s Foreign Ministry said, was operating in China’s “traditional fishing grounds,” though the incident occurred just a few nautical miles from the Natunas and around 900 nautical miles from Hainan.
China’s claim to the South China Sea is based partly on the idea that its fishermen have worked there for centuries. But China is also trying to create facts on the ground by expanding its fishing industry’s zone of operations, experts say.
After the fishing boats clear the way, coast guards are next, often followed by land reclamation on rocks and reefs and finally militarization and control, said Alan Dupont, professor of international security at the University of New South Wales in Sydney.
“I call the strategy ‘fish, protect, occupy and control,’ ” he said.
China blames the United States for militarizing the South China Sea, citing President Obama’s strategic rebalance to Asia, a recent deal to post U.S. conventional forces on five military bases in the Philippines for the first time in decades, and ongoing military exercises between the two countries.
But China, Dupont said, is pursuing its own strategic plan to dominate the Western Pacific and push the United States out, trying to take advantage of an Obama administration it believes to be distracted by other global crises. But Beijing’s “opportunist” policy is already backfiring, he said, uniting many countries in the region against China.
But it is not just about nationalism. Economics is a major driving force for the expansion, Zhang and Dupont say — to satisfy China’s ever-growing appetite for fish and its profitable and rapidly expanding fish export industry, already the world’s largest.
China’s per capita fish consumption was estimated by the Food and Agriculture Organization at nearly 80 pounds in 2010, nearly double the global average, and is growing by roughly 8 percent a year. The fish industry employs nearly 15 million people.
Compared with inshore waters, the Spratlys are much richer grounds, fishermen say, with valuable giant clams, corals and lobsters to be harvested — although competition is growing as more boats arrive.
The government is also pushing the fishermen further from shore. It provides fuel subsidies, with higher rates for bigger boats and journeys to the Spratlys. The Hainan government heavily subsidizes the construction of larger, steel-hulled trawlers, and an expensive satellite system was provided virtually free of charge to about 50,000 vessels.
With it, Chinese fishing crews can send emergency signals to coast guard ships with their exact location if they run into trouble.
Fishermen said the government often organizes trips to the Spratlys, with coast guard vessels in attendance, especially when tensions are high.
“When our country needs us, we will go without a second thought to defend our rights,” Chen said.
Rodger Baker, the lead Asia-Pacific analyst for the global intelligence firm Stratfor, said these maritime “rights protection” voyages are China’s version of the U.S. Navy’s freedom-of-navigation exercises in the South China Sea. They are, he said, designed to underline China’s possession of “its waters.”
Embedded within the fishing communities and often organizing these trips are what China calls its “maritime militia” — civilians trained in small-arms use whose job it is to help defend the country’s maritime claims.
The Tanmen Maritime Militia is the most celebrated of the groups. It was honored with a visit from Chinese President Xi Jinping in April 2013, just after he took office.
Its members played a leading role in encouraging fishermen to travel to the Spratlys as far back as 1985. Their repeated trips to Scarborough Shoal culminated in a standoff with the Philippines in 2012 that ultimately saw China seize control of the submerged coral feature, and they sparred with their Vietnamese counterparts in 2014 when China towed an oil rig into disputed waters.
Their fishing boats also helped deliver construction materials for China’s land reclamation and construction program in the Spratlys. Last October, when the USS Lassen conducted a freedom-of-navigation operation near Subi Reef, the Chinese navy kept a respectful distance, but smaller merchant or fishing vessels came much closer and even crossed the destroyer’s bow, Defense News reported. Experts say those boats were probably manned by militia members.
Andrew S. Erickson, at the U.S. Navy War College’s China Maritime Studies Institute, calls them China’s “little blue men,” comparing them to Russia’s “little green men,” the armed men in unmarked uniforms who played a leading role in the takeover of Crimea from Ukraine.
As well as giving Beijing a degree of deniability, their quasi-civilian status also complicates the rules of engagement for U.S. naval vessels.
But if China is pulling many of the strings through its maritime militia, no country in the region has full control of its fishing fleets, with captains quite capable of exploiting nationalist sentiments to expand their fishing grounds.
“There is a big risk for China in this policy,” Stratfor’s Baker said. “Fishing boats will go where the fish, clams and crabs are.
“As you urge them on with assertions of rights, nationalism and claims, fishing captains know they can take greater risks, because they know they are going to be bailed out. So they know they can push the limits fairly strongly.”
That, he said, means that more crises in the disputed waters are almost inevitable
[OT for this thread]BRHvyas wrote:There was a news article a few months ago detailing the very old-world style of exams that India's administrative services cadres study for;
I couldn't find that thread, and I can't seem to private message or email you. I'll get the hang of it, sooner or later... hah.vayu tuvan wrote:[OT for this thread]BRHvyas wrote:There was a news article a few months ago detailing the very old-world style of exams that India's administrative services cadres study for;
Could you please post a link to that article? Say in Off-topics thread? Thanks.
[/OT]
China appears to be following a dual policy towards India, seeking its cooperation when this suits its interest, and opposing India when its interests are perceived to be under threat.
Given its strategic and economic interest in the revival of the US$ 1.4 billion Colombo Port City project funded by it, China is taking vigorous steps to rope Indian companies into the project. But at the same time, China has come out openly against the Indian project to build the Chabahar port in Iran, which could rival Gwadar port in Pakistan which it is building to be part of its ambitious 21 st. Century Maritime Silk Road project.
Beijing is also dismissive about Indian Prime Minister Narendra Modi’s ambition to make India a US$ 10 trillion economy by 2032 to rival China as the engine of growth in the Asian region.
Colombo Port City
Sri Lanka’s state-owned weekly Sunday Observer had a front page story this week saying that the Sales and Marketing Manager of the Colombo Port City project, Liang Thow Ming, visited India a week ago to get Indian entrepreneurs to invest in the Port City, and had got a good response there.
The weekly quotes unnamed business analysts to say that this is a “masterstroke” on the part of the Chinese to allay Indian fears that the Port City administered by a government-owned Chinese company might pose a threat to India’s security as 70 percent of Colombo Port’s business is accounted for by Indian transshipment.
Indeed, India was worried by the secret docking of a Chinese nuclear submarine at Colombo harbor in 2014, and was concerned about the outright sale of several hundred hectares of land in the proposed Port City to China. But the worry disappeared when the new-elected Sirisena government promised not to compromise India’s security interests and to convert the outright sale of land into a lease.
Indian sources told Express that India has never had any objections to the Port City Project as an economic project, and Indian companies would invest in the Port City, if it showed promise, irrespective of any effort by the Chinese to attract Indian investment.
Chabahar Port
Piqued by the India’s bid to build a port at Chabahar in Iran, Shi Lancha, writing in China’s state-owned Global Times says that through the Chabahar project, India hopes to neutralize Gwadar port in Pakistan being built by the Chinese.
“ India harbors suspicions – and anxieties - that Gwadar provides China a key post to monitor Indian naval activity in the Persian Gulf and a dual-use base for Chinese ships and submarines. For example, there is popular belief that Gwadar is just another unfriendly stronghold along the so-called String of Pearls that China is building to choke India’s activities in the Indian Ocean and beyond. These influences perpetuate a Sino-Indian rivalry and zero-sum game narrative,” the article dated June 5, says.
India may not be able to meet its “generous offers and high-sounding rhetoric” on Chabahar, Shi Lancha warns.
“As the Make in India campaign continues, India’s limited public financial resources are largely prioritized for domestic use. Given India’s perennial financial weakness, it may take New Delhi longer to fulfill these multibillion-dollar overseas commitments.”
“India’s internal incoherence may produce big concerns. Given India’s rather porous track record in delivering promises, internal problems loom large despite a consensus being hammered out with international shareholders. After all, like many other items on New Delhi’s long wish-list of reforms and development, the plan with Iran depends much on Modi’s limited political capital,” the author says.
Further: “Iran may not always align itself with India’s geostrategic goals. China is also crucial to Tehran’s core interests. Iran never publicly articulated its opposition to the Sino-Pakistani project in Gwadar. Instead, it had aided the project by providing fresh water and fuel.”
Dismisses Modi’s Plans
In an article in Global Times dated June 3, Zhang Jingwei says that Indian Prime Minister Modi’s ambition to make India a US$ 10 trillion economy by 2032 with an annual growth of 10 percent, could turn out to be a pipe dream.
The chaos that characterizes India’s democracy and the existence of many unresolved internal conflicts, besides various pulls and pressures, will prevent India from replicating China’s growth model, the writer says.
“India's poor infrastructure, the social restrictions of its caste system, and complicated ethnic and religious conflicts could also weigh on the country's development. Even if these obstacles are cleared, it will at some point be unsustainable for India to simply pursue rapid economic growth without putting more emphasis on quality of growth. India could even suffer negative effects from pushing too hard for rapid growth,”
Is Chabahar India’s Great Game changer?
May 25, 2016
Indranil Banerjie
India has been a bit of a tortoise in the Asian geopolitical game. But the Chabahar deal suggests that it’s very much in the game and tomorrow’s chessboard could well be the cruel deserts of Balochistan.
Balochistan is one of the world’s driest, hottest and most desolate regions, remembered by Alexander the Great’s historians as the cruellest land they ever encountered and which almost destroyed them as they trekked back home from India. Half the Greek army perished during the march across Balochistan’s searing deserts and left Alexander so exhausted that he never made it back to Macedonia.
For more than 2,000 years after Alexander, Balochistan was left largely to itself and the Persians who considered it part of their empire were generally feeble in applying their writ over the region.
The Portuguese seafarers of the 16th century were the first to appreciate the strategic importance of the region and established a number of small forts along the coast and islands in the region. One small fort was established at a nondescript coastal village called Chabahar but their attempts to establish a similar post 72 km to the east at another fishing port called Gwadar failed repeatedly due to resistance from fierce Baloch tribes.
In 1871, the destinies of the two insignificant ports were temporarily cleaved when a British administrator, Maj. Gen. Sir Frederic Goldsmid of the Madras Army decided it was dashed inconvenient to operate in a region with an undemarcated border. He therefore persuaded Calcutta to let him broker a deal to settle the boundary between Balochistan and Persia.
Maj. Gen. Goldsmid, who was appointed chief commissioner of the joint Perso-Baluch Boundary Commission in 1871, divided Balochistan into two parts without taking into consideration history or geography and ignoring the opposition of Baloch chiefs. His decision was to please the Persians in order to keep them away from Tsarist Russia.
Chabahar thus went to the Persians while Gwadar was retained by the Baloch king, the Khan of Kalat.
Some four centuries later, the two ports Gwadar and Chabahar are once again the focus of regional geopolitics, this time involving India, China, Iran, Pakistan and Afghanistan. This time the two ports are in competition and no longer the insignificant fishing villages of the past.
Pakistan, which annexed the independent state of Balochistan after 1947 and which forcibly retains it to this day, has made Gwadar the centre of its strategic vision. In collaboration with its senior partner, the People’s Republic of China, Gwadar is being developed as an economic-cum-military gateway to the Gulf.
Beijing, by financing and building a $46 billion economic corridor from its restive Xinjiang province to Gwadar, seeks to tighten its grip over Islamabad and Pakistan’s economic pulse while at the same time strengthening its overland blockade of India.
Gwadar, once completed, will not only help the transit of container traffic all the way from mainland China but also shelter Chinese nuclear submarines and other naval vessels. The West will find a formidable challenge to its hegemony in Gulf waters, while India is expected to be suitably intimidated. At least that was the thinking.
However, an alternative scenario might well emerge. This was clear when Prime Minister Narendra Modi together with Iran’s President Hassan Rouhani and Afghanistan’s President Ashraf Ghani sat together on Monday to sign a trilateral agreement to develop Chabahar port and turn it into a major transit point for a corridor linking Afghanistan on one side and Central Asia and Russia on another.
For starters, India will invest half a billion dollars to build more berths at Chabahar port and develop related infrastructure. The eventual aim is to build a railway line into Afghanistan and another line to the Caspian Sea, which will form part of an ambitious North-South Corridor connecting the factories of Mumbai and Gujarat to markets in Central Asia, Russia and Eastern Europe.
As a first step, the plan is to upgrade the 650-odd km road from Chabahar to the Iranian city of Zahedan. From here another 200-km highway, which is presently being improved, connects to the Afghan border town of Zaranj, from where the Indian government has already built a 218-km highway to Delaram on the Afghanistan Ring Road or Garland Highway. Once complete, this will allow easy transit of goods from Mumbai to the heart of Afghanistan.
The trilateral agreement signed on Monday, the handshakes and references to age-old “dosti” (friendship) should be cause of deep unease in Islamabad which has consistently sought to prevent New Delhi’s outreach to Afghanistan and beyond. Together with its “all-weather” friend, Beijing, Islamabad has effectively blocked all overland Indian trade and transit to the rest of Asia. India has been forced to use costly and impractical routes to reach the heart of Asia and Asiatic Russia.
Now things will change. Chabahar is not just a matter of developing a port. President Ghani’s statement at the meet may well be prophetic: “Hundred years from now historians will remember this day as the start of regional cooperation. We wanted to prove that geography is not our destiny. With our will we can change geography.”
For Iran too it is a strategic come together. For, as President Rouhani pointed out: “The two countries discussed about political issues as well and how they can cooperate on intelligence-sharing and how they can get closer to each other in the fight against terrorism and extremism and how they can contribute to peace and stability in the whole region.” Mr Modi also specifically commented on the strategic dimension of the deal. “We have also agreed to enhance interaction between our defence and security institutions on regional and maritime security,” he said.
Policymakers in many world capitals would have taken note of Monday’s Tehran meet. Tehran’s E’temad newspaper remarked that the signing of the trilateral agreements “will ring danger bells in Islamabad, China and Riyadh”.
Another Iranian newspaper noted that China is “trying to control the pulse of regional trade by making extensive investments in the Pakistani port of Gwadar”, and commented that India is “now positioned against its strong competitor by investing in the port”.
India has been a bit of a tortoise in the Asian geopolitical game. But the Chabahar deal suggests that it is very much in the game and tomorrow’s chessboard could well be the cruel deserts of Balochistan.
The writer is a defence and security expert
SCRIPTING THE CHABAHAR CHAPTER
Monday, 06 June 2016 | DP Srivastava | in Oped
The Prime Minister’s visit to Tehran imparted enormous momentum to the India-Iran bilateral, which must now be sustained by the timely and focused implementation of the crucial Chabahar project
Prime Minister Narendra Modi’s recent visit to Iran has been historic in many ways. The visit concluded with the signing of a contract on the Chabahar port development and a trilateral transit agreement between India, Afghanistan and Iran.
Ever since the sanctions against Iran were lifted, there has been a flurry of high-level visits to Tehran. However, India’s case is different. We never left Iran. We maintained a spectrum of relations with it. India was the second largest buyer of Iranian crude oil during the sanctions period, even though the volume came down. This required enormous efforts and sacrifices by both sides.
In absence of normal channels, we re-invented banking, insurance and shipping arrangements which were closed due to sanctions. Since then, our crude purchase from Iran has seen a rise. Recovering their market share for crude exports was a priority for the Iranian Government.
Meanwhile, there has been a national consensus on India’s engagement with Iran and its participation in the Chabahar port. This has been followed by successive Governments even when Iran was under sanctions. The Modi Government had approved the investment decision in Chabahar port way back in October 2014, when the fate of Iran’s nuclear deal was by no means certain.
Union Minister for Road Transport & Highways Nitin Gadkari visited Iran to sign the Memorandum of Understanding on India’s participation in the Chabahar port in May 2015. This too was before the nuclear deal was finalised in July 2015. In the run-up to Modi’s visit to Iran, Union Minister for External Affairs and Petroleum Minister Dharmendra Pradhan made trips to Iran.
Noteworthy is the fact that India was offered participation in the Chabahar port during former Prime Minister Atal Bihari Vajpayee’s term when former President of Iran Mohammad Khatami visited India in 2003. But the contract has been signed during Modi’s term which is a major step forward as he has added two new dimensions which will reinforce and strengthen the port project.
Modi has offered finance to the tune of $1.6 billion for the Chabahar-Zahedan railway line which will improve hinterland connectivity to the port. There is also a possibility to invest in Iran’s urea and petrochemical sectors. This will generate traffic for the port and is also in line with the priorities of the Iranian Government as it wants to develop the Chabahar free trade zone as the third largest petrochemical hub in Iran.
In addition, Prime Minister Modi has offered to increase India’s financial commitment for the development of the Chabahar port. This is historic moment for the Indian port sector as this is the first time that major ports in India will invest in a port project overseas.
India relies heavily on overseas imports of several commodities such as urea and petrochemical intermediates due to gaps in domestic demand and production. Chabahar will provide an opportunity to India to develop gas-intensive industries where end products have a strong market. They can be manufactured in Iran and exported easily to India through ports on the west coast, particularly in Gujarat ports.
The expansion of the Chabahar port has to dovetail with the priorities of the Iranian Government. Iran’s President Hassan Rouhani mentioned that the recently signed India-Iran-Afghanistan transit agreement is also open to other countries. Modi mentioned inclusivity, not exclusivity and added that “this will be a corridor of peace and prosperity for our peoples. Motives of economic growth, and empowerment would drive it. It will build our security without making others vulnerable. It would break barriers among our nations and encourage new benchmarks of people-to-people contacts.”
The Chabahar port will not only allow access to Afghanistan, but also to Central Asia and Russia. It is directly south of Turkmenistan. There is already an excellent 1,000km road link connecting Chabahar with Mashhad and Sarakhs on Iran’s tri-junction with Turkmenistan and Afghanistan. Participation in Chabahar can thus provide India vital access to mineral resources in Afghanistan through land route via Iran. It will also be a great opportunity for Indian industries to tap on the domestic demand in Iran and other ports in Central Asia.
A railway line running north from Chabahar can also provide a route for evacuating iron ore from Hajigak mine in Afghanistan. But this will require going beyond the Chabahar-Zahedan sector which was committed during this visit to Mashhad and Sarakhs. This will also provide connectivity to Turkmenistan and CIS countries. There is an existing railway network connecting Turkmenistan to Kazakhstan, Tajikistan and Uzbekistan.
The proposed International North-South Transport Corridor (INSTC) will offer transit to Russia and CIS countries. There already exists a rail line between Bandar Abbas port in the south and Amirabad port on the Caspian and Inchebarun on the Iran Turkmenistan border. The rail link between Kazakhstan-Turkmenistan-Iran was inaugurated by the Presidents of the three countries in December 2014.
Apart from Amirabad, there are two other ports on the Caspian-Bandar Anzali and Astara which are connected by road with Bandar Abbas. There is a north-eastern trunk of this corridor which passes through Sarakhs on Iran’s border with Turkmenistan. While substantial infrastructure exists for transit, Indian trade needs to make more use of it. Even during the sanctions period, INSTC was being used by UAE, CIS countries and China. Recently China has completed a 6,000km railway line from eastern China to Iran.
Chahabar free trade zone offers good opportunity for Indian investment in a urea plant which is a priority in a country where more than 60 per cent of the population works for the agricultural sector. Other energy intensive industries can also be set up in the Chabahar free trade zone. During Modi’s visit, the National Aluminium Company Limited signed an MOU to set up an aluminium plant in Chabahar. If an attractive gas price is offered, this can bring substantial investment in the petrochemical sector. The Iranian side will have to ensure that rich gas is supplied to Chabahar.
Iran offers opportunities for investment in upstream oil and gas exploration. These were discussed during the visit of Pradhan to Tehran in April. Apart from Indian interest in Farzad-B, there would be other oil and gas blocks which may be offered in the next bidding round. We need to clear the oil payments to Iran. A beginning has been made. It is hoped that with more banking channels opening up, dues will be cleared soon.
The situation in Afghanistan-Pakistan region will be in a flux following the expected American withdrawal after 2017. India and Iran will have a major role in stabilising the situation. The port will expand Afghanistan’s options. President Ashraf Ghani’s presence at the signing ceremony for trilateral transport and transit agreement was an endorsement of the importance of Chabahar for the land-locked country, and India’s participation in the expansion of the port. This is also in line with the priorities of the Iranian Government. Rouhani, after assuming office, during his visit to the province of Sistan-Balochistan, had stressed for the need to develop this region.
Moreover, the rise of the Islamic State also points to the need for cooperation amongst the countries in India’s extended neighbourhood. India has an interest in the stability of the region which accounts for 60 per cent of our crude oil imports and a diaspora of more than six million to seven million. India can be a security provider.
India’s bilateral relationship with Iran is not aimed at other countries. The visit has been a game changer. It has imparted enormous momentum which needs to be sustained by timely and focused implementation.
(The writer was India’s Ambassador to Iran from August 2011 to July 2015
India plans expanded missile export drive, with China on its mind
“Policymakers in Delhi were long constrained by the belief that advanced defence cooperation with Washington or Hanoi could provoke aggressive and undesirable responses from Beijing,” said Jeff M. Smith, director of Asian security programmes at the American Foreign Policy Council.
“Prime Minister Modi and his team of advisers have essentially turned that thinking on its head, concluding that stronger defence relationships with the US, Japan, and Vietnam actually put India on stronger footing in its dealings with China.”
New Delhi had been sitting on a 2011 request from Hanoi for the BrahMos for fear of angering China, which sees the weapon, reputed to be the world’s fastest cruise missile with a top speed of up to three times the speed of sound, as destabilising.
Without adopting a confrontational tone, Chinese state media, led by the flagship China Central Television (CCTV), has provided lively coverage of Prime Minister Narendra Modi’s visit to Washington, including New Delhi’s proposed membership to the coveted Nuclear Suppliers Group (NSG).
Ahead of the Prime Minister’s visit, CCTV, in its report, cited two main issues that would engage Mr. Modi during his visit: the military logistics agreement that the two sides had earlier agreed in principle, and New Delhi’s proposed entry to the NSG.
Defence ties
“Indian Prime Minister Narendra Modi comes to the United States expecting to close a deal for deeper defence cooperation begun by his defence chief in April,” said the report. On the NSG, CCTV cited New Delhi’s perception of Washington as a “key ally” that would shepherd India into the NSG. It added that Italy and China had opposed India’s membership, by insisting that like other members, India “must first ratify the nuclear non-proliferation treaty”. {But, Italy has changed now. China is going to be exposed}
The report cited China’s Foreign Ministry spokesman Lu Kang as saying in May: “We have talked about our position many times. The NSG is an important part of the international nuclear non-proliferation regime which is based on the cornerstone of the Treaty on the Non-Proliferation of Nuclear Weapons (NPT).”
However, diplomatic sources say Brazil has set precedence, where, despite not being a NPT signatory, it was admitted to the NSG in 1992, after it signed the Treaty of Tlatelolco, opening the door for Latin American nuclear weapons free zone.
Referring to nuclear commerce, CCTV cited media remarks by India’s Ambassador to the U.S. that negotiations for a deal with Westinghouse for building six nuclear power plants in India were in an advanced stage.
Nuclear liability law
It added that the talks had hinged on New Delhi and Washington developing a new workaround to India’s civil nuclear liability law considered a sizeable hurdle for the country’s nuclear-suitors.
The U.S. Navy’s Chief of Naval Operations, Admiral John Richardson, visited the Nimitz-class nuclear-powered supercarrier, USS John C. Stennis, in the South China Sea over the weekend, a U.S. Navy video reveals
SHANGHAI — Disney had pushed China too hard, putting the company’s plans for a new theme park here in limbo. Now, Robert A. Iger wanted to kick the yearslong negotiations into high gear.
Mr. Iger, Disney’s chief executive, took a corporate jet to Shanghai in February 2008 to meet with the city’s new Communist Party boss, Yu Zhengsheng. Over dinner at a state guesthouse, Mr. Iger offered a more conciliatory approach, setting the tone for the next phase of talks.
After that, Disney substantially dialed back its demands. In addition to handing over a large piece of the profit, the control-obsessed company would give the government a role in running the park. Disney was also prepared to drop its longstanding insistence on a television channel.
For Disney, such moves were once unthinkable. Giving up on the Disney Channel meant abandoning the company’s proven brand-building strategy. “We’re kidding ourselves if we think we’re going to get everything we want,” Mr. Iger recalled saying at the time.
Mr. Iger’s trip and the new attitude in the talks that followed appeased Chinese officials. Before long, they had struck a landmark deal to build the $5.5 billion Shanghai Disney Resort, opening China to a singularly American brand and setting the pace for multinational companies to do business in the country.
The Shanghai park, which opens on Thursday, has become mission critical for Disney as it faces business pressures in other areas like cable. It is designed to be a machine in China for the Disney brand, with a manicured Magic Kingdom-style park, “Toy Story”-themed hotel and Mickey Avenue shopping arcade. More than 330 million people live within a three-hour drive or train ride, and Disney is bent on turning them into lifelong consumers.
But Disney is sharing the keys to the Magic Kingdom with the Communist Party. While that partnership has made it easier to get things done in China, it has also given the government influence over everything from the price of admission to the types of rides at the park.
From the outset, Disney has catered to Chinese officials, who had to approve the park’s roster of rides and who were especially keen to have a large-scale park that would appeal to more than children. The Shanghai resort, which will ultimately be four times as big as Disneyland, has a supersize castle, a longer parade than any of the other five Disney resorts around the world, and a vast central garden aimed at older visitors.
Worried that importing classic rides would reek of cultural imperialism, Disney left out stalwarts such as Space Mountain, the Jungle Cruise and It’s a Small World. Instead, 80 percent of the Shanghai rides, like the “Tron” lightcycle roller coaster, are unique, a move that pleased executives at the company’s Chinese partner, the state-owned Shanghai Shendi Group, who made multiple trips to Disney headquarters to hash out blueprint details.
Disney then ran with the idea, infusing the park with Chinese elements. The Shanghai resort’s signature restaurant, the Wandering Moon Teahouse has rooms designed to represent different areas of the country. The restaurant is billed as honoring the “restless, creative spirit” of Chinese poets.
Such accommodation of the Chinese is becoming increasingly common. A growing number of multinationals have agreed to cooperate with the state through alliances, joint ventures or partnerships, all in the hopes of garnering more favorable treatment and gaining access to the world’s second-largest economy, after the United States.
And they are doing so at a time when the Chinese government is growing more assertive and nationalistic. Emboldened by the size and breadth of its economy, China is stepping up its demands, pressuring companies to lower their prices, hand over proprietary technology and help advance the country’s development goals, even if that means financing the growth of local rivals.
IBM has promised to share technology with China. LinkedIn has agreed to censor content inside the country. Even Google has been scrounging for a way back into China, despite a highly public departure in 2010 after accusations of government censorship and intrusions by state-backed hackers.
“This is part of the China trade-off,” said Aswath Damodaran, a professor of finance at the Stern School of Business at New York University. “If your market is so big, we’ll accept rules and regulations we wouldn’t in other parts of the world.”
For Disney, if all goes as planned, the Shanghai park will create an ecosystem of demand in China for movies, toys, clothes, video games, books and TV programs. Mr. Iger has called Shanghai the “greatest opportunity the company has had since Walt Disney himself bought land in Central Florida” in the 1960s.
That site, of course, became Walt Disney World, a group of four theme parks that attracts roughly 40 million visitors annually. About 11 million visitors are expected next year at the Shanghai park, with annual attendance estimated to reach 20 million within a few years, according to Jessica Reif Cohen, an analyst at Bank of America Merrill Lynch.
If all doesn’t go as planned, Disney will suffer the wrath of Wall Street, which expects the resort to offset slower growth at ESPN, the company’s longtime profit engine, and some of its other theme parks. The last thing Disney wants is another Disneyland Paris, a money pit that suffered cultural miscues and, after 24 years, is still struggling to turn a profit. Hong Kong Disneyland, which is relatively small, has had mixed financial results since opening in 2005.
Mr. Iger has staked his personal legacy on Disney’s partnership with the Chinese government. Last September, he brought a group of Disney board members to Shanghai to show off the park. They took in the world’s largest Disney castle, looking on as 11,000 construction workers raced to finish a “Pirates of the Caribbean”-themed underwater voyage. His signature is quite literally on the place: He autographed the castle’s golden spire before it was attached last year.
While he delegated certain duties to lieutenants, Mr. Iger has been the guiding force. He pre-tasted the food, which will include items like pork knuckles and Donald Duck-shaped waffles, and decided which characters would appear in the parade. He has held face-to-face talks with Chinese presidents, prime ministers and propaganda officials.
Mr. Iger, 65, has sought a personal relationship with China’s paramount leader, President Xi Jinping. After Mr. Iger learned that Mr. Xi’s father, Xi Zhongxun, a revolutionary leader, had visited Disneyland in 1980, he pressed his staff to find a photograph. A color photograph shows the president’s father, who died in 2002, wearing a Mao suit, shaking hands with Mickey Mouse. Mr. Iger presented it to the Chinese leader as a gift and a symbol of their partnership.
When Mr. Xi stopped in Seattle last September, Mr. Iger was among the American executives on hand to welcome him. At the White House state dinner a few days later, Mr. Iger was seated at Mr. Xi’s table. Just last month, Mr. Iger flew to Beijing to meet the president at the Communist Party’s leadership compound.
“It’s good to see the fruits of efforts over the years,” a smiling Mr. Xi told Mr. Iger at a public meeting between the men at the Great Hall of the People in early May. “And I believe the new cooperation will continue to yield new outcomes.”
Mickey in the Land of Mao
It may be all smiles now, but Mickey Mouse knows all too well what can happen when the Middle Kingdom gets mad.
The year was 1997, and Disney had finally found a bit of success in China. “The Dragon Club,” a Disney cartoon series, was popular in Chinese homes, and “The Lion King” had given Disney its first big hit in Chinese cinemas. But then came “Kundun.”
As part of a now-defunct effort to make films for more sophisticated audiences, Disney agreed to back the director Martin Scorsese, who wanted to make “Kundun,” about China’s oppression of the Dalai Lama, the Tibetan spiritual leader. The Chinese government, which considers the Dalai Lama a separatist, denounced the project and pressured Disney to abandon it.
In the end, Disney decided that it could not let an overseas government influence its decision to distribute a movie in the United States. “Kundun” was released, and China retaliated by banning Disney films and pulling “The Dragon Club.”
China Rules
Articles in this series examine how multinational corporations doing business in China must adjust to an increasingly assertive state.
“All of our business in China stopped overnight,” Disney’s chief executive at the time, Michael D. Eisner, recalled.
Although “Snow White and the Seven Dwarfs” was screened in Shanghai in the 1930s, Disney really had no measurable business in China until decades later, when Mr. Eisner secured Sunday evening placement for Mickey Mouse and Donald Duck cartoons on the country’s biggest state-run broadcaster. That led to Mickey’s Corner kiosks that sold consumer goods like Minnie Mouse-branded shampoo, and to more television shows.
By the time of the “Kundun” debacle, the demand was clearly there. Mr. Eisner just needed to undo the damage.
Disney hired former Secretary of State Henry Kissinger and mounted an intense lobbying effort. In October 1998, Mr. Eisner met Zhu Rongji, who had just been named prime minister, at China’s leadership compound in Beijing. Mr. Eisner apologized for “Kundun,” calling it a “stupid mistake,” according to a transcript of the meeting.
“This film was a form of insult to our friends, but other than journalists, very few people in the world ever saw it,” Mr. Eisner said during the meeting. (“Kundun” bombed, taking in just $5.7 million against a production budget of about $30 million.)
Mr. Eisner said the company had learned a lesson. And he introduced Mr. Iger, then Disney’s international president, as the person who would carry on negotiations for a theme park. The Chinese prime minister responded favorably. Land in Shanghai, he said, had already been set aside.
And just like that, the door to China started to reopen.
The negotiations that followed were slow and painful. Disney had to navigate a thicket of agencies, bureaucrats and officials. At one point, Disney essentially had to start over in Shanghai, after a senior Chinese official was abruptly arrested on corruption charges unrelated to the park.
There were sticking points large and small. Who would control the park? What kind of transportation infrastructure would support it? How were Disney’s nightly fireworks shows going to work in smoggy Shanghai? There was also the not-so-minor matter of introducing Disney characters to a country whose icon, since the Communists took power in 1949, was Mao.
“Disney had to educate the Chinese government on how they operate, and the government wanted to persuade Disney that they needed a local partner to make this thing work,” said Tang Jun, one of Mr. Iger’s former lieutenants in China.
By 2009, the Chinese government was finally on board. It took a 57 percent stake in the Shanghai resort, which includes revenue from hotels, restaurants and merchandise sold on the grounds. Disney also gave the government a 30 percent piece of the Disney management company that runs the property.
It was in stark contrast to the deal with Hong Kong. Desperate to end a tourism slump, Hong Kong had given Disney breathtaking terms, including providing a majority of the construction funds. Disney gave up no management control.
At the groundbreaking ceremony for the Shanghai resort in April 2011, Mr. Iger and Thomas O. Staggs, then Disney’s theme park chief, posed for a clichéd photo: Holding shovels, the Disney executives stood alongside two of Shanghai’s most powerful leaders, Han Zheng and Mr. Yu, and ceremoniously scooped up loose dirt from an indoor stage.
Confetti was blasted into the air. A 50-member children’s choir sang as Chinese dancers and drummers paraded onstage. Mickey and Minnie Mouse frolicked in traditional Chinese costumes.
“This is a defining moment in our company’s history,” Mr. Iger said. “Along with our partner, the Shanghai Shendi Group, today I am very proud to announce the official launch of the Shanghai Disney Resort.”
One Bed, Different Dreams
When the Communist Party first invited overseas companies into the country in 1979, global businesses had to team up with the state. It wasn’t pretty.
As commercial interests clashed with socialist principles, there were wage disputes, allegations of intellectual property theft and conflicts over corporate strategy. To put it in the parlance of a Chinese proverb, it was like two people sleeping in the “same bed, dreaming different dreams.”
Pepsi found itself managing a tanning factory, as part of its Chinese partnership. McDonnell Douglas claimed that some machine tools had been diverted to a factory that made missiles, in violation of United States rules. The American and Chinese partners in Beijing Jeep disagreed over quality control.
“I now tell people, ‘If you don’t have to do a joint venture, don’t,’” said Don St. Pierre Sr., an American businessman who worked for Beijing Jeep.
After the blowups, China started to allow some companies to go it alone. But Disney didn’t have a choice. The Communist Party maintains strict control over media companies.
The partnership has significant perks for Disney. State-run construction companies cleared a 1,700-acre tract to build the resort, which will ultimately include two additional Disney theme parks and thousands of Disney hotel rooms, analysts say. Authorities have relocated residents, moved graves and closed more than 150 polluting factories. The government built new infrastructure, including a subway line that goes directly to the park’s front gate.
Officials have also taken unusual steps to protect Disney from piracy in China, a country where copyright infringement is common and the government rarely intervenes. Whether the state can stand by that pledge is uncertain. But early signs are promising. Last November, regulators fined five copycat Disney hotels located near the theme park. Around the same time, nearly 2,000 counterfeit Disney items, including hundreds of Winnie-the-Pooh shirts, were seized in Hangzhou. The government is even sending regulators to Disney for special training to help them better identify counterfeits.
The partnership is “structured so that it will work,” said Mr. Iger. “They have a tremendous amount riding on it.”
But Disney is stepping into a potential minefield. State leaders are growing more confident about exerting influence over multinationals. The government is pushing to upgrade China’s economy, and it wants state-owned companies to learn from partners like Disney while amassing a large share of the profits.
Along with its stake in the park, Shendi stands to make a fortune from a 4,000-acre plot of land that it controls around the resort. In other locales, Disney has typically maintained a firm grip on the immediately adjacent real estate. Shendi wants to use such land for hotels, spas and retail, like its new Shanghai Village, a 590,000-square-foot outlet mall, with luxury shops selling Armani, Kate Spade, Juicy Couture and other brands.
The Shanghai government sees Disney as just one piece of a broader effort to redevelop Pudong, the city’s easternmost region, by creating industrial parks and tourist destinations. Just 30 miles southeast of Disney’s site, the government has promoted Winterland, which bills itself as the world’s largest indoor ski resort and entertainment facility. Nearby, Haichang Polar Ocean World promises “performances” by beluga whales, dolphins, polar bears and arctic wolves.
“China wants Shanghai to be this kind of dragon’s head, a showcase city for all the world to see,” said Robert Lawrence Kuhn, an American businessman who has worked with the Shanghai government. “Disney is part of that grand strategy.”
The partnership structure puts Disney in a complicated spot. Shendi is really a consortium of four powerful government-owned companies: the Shanghai Radio, Film and Television Development Company; Jin Jiang Hotels; Bailian retail shops; and a property developer, the Lujiazui Group. And each of those companies has separate business ties to Disney’s new resort.
The Jin Jiang Group has a contract to provide tourism services for the park. The Lujiazui Group helped develop the world’s largest Disney Store. The Shanghai Media Group, a division of the development company, is positioned to capture a big share of the park’s television and advertising budget, since it controls the city’s biggest television stations, as well as major newspapers, magazines and radio properties.
So Disney will have to deal with a bewildering array of state affiliates acting as partners, suppliers and even competitors, making contract negotiations complex and raising thorny conflict-of-interest issues. Shendi, for instance, has set up its own energy company to supply natural gas to the theme park site. And Shanghai Media Group has formed alliances or made investments with Disney competitors like Sony, Warner Bros. and DreamWorks Animation.
“The more partners you have, the more potential conflicts,” said Oded Shenkar, a professor of business at Ohio State University and an authority on Chinese joint ventures.
“Each of those state companies may come with multiple other affiliations,” he added. A multinational must then “contend with a whole network of relationships and interdependencies they often cannot decipher.”
A Master of Control
When Disney unveiled the website for the Shanghai park in March, the fervor was instantaneous. The site registered five million hits in less than half an hour. Tickets for the first two weeks sold out within hours. Over one weekend in early May, with the opening still a month away, more than 100,000 people visited the resort to peek through the park gates and explore a shopping area that doesn’t require a ticket.
But criticism has begun, too. Disney has been pilloried in local media for its prices ($1 for a single steamed bun, or about five times the street price). Some initial visitors trampled the public gardens. And Disney has had to deploy uniformed security guards to maintain order at popular rides, where lines during the soft opening stretched up to three hours. Shanghai authorities recently published an etiquette guide.
“The frenzy of Mickey Mouse and Donald Duck and the era of blindly following them have passed,” Wang Jianlin, the chairman of Dalian Wanda Group, which operates a chain of Chinese theme parks, said on state television in May.
Mr. Iger brushed off Mr. Wang’s criticism as “patently absurd,” and said media reports about food pricing complaints were overblown. “We made a decision with our quick-service restaurants to go higher-end, and there’s a cost to that,” he said.
Disney needs to avoid getting lost in translation, an especially difficult proposition in China. It is a deeply American brand trying to break into a country where the government wants to suppress Western ideals.
Already, Shanghai Disneyland is triggering concerns about American cultural imperialism. At a gathering of China’s political leaders in Beijing in March, an official called for limiting Disney’s expansion and growth.
“I suggest that we shouldn’t allow too many Disneyland theme parks to be built” in China, said Li Xiusong, the deputy head of culture in the eastern Anhui province. “If children follow Western culture when they are little, they will end up liking Western culture when they grow up and be disinterested in Chinese culture.”
The country’s leaders have also grown more nationalistic in recent years: Everything must serve the state’s interest. The Communist Party is using Disney to bolster the country’s own media and entertainment companies, as well as to improve China’s image abroad. And the Chinese government is a master of control, known for strictly censoring Western media. This spring, with little warning or explanation, Chinese regulators shut down Apple’s digital book service and DisneyLife, a four-month-old subscription-based movie streaming service operated by Alibaba.
Disney is going to extraordinary lengths to prove its commitment to the China and the Communist Party. During a 2010 meeting with China’s propaganda minister, Mr. Iger pledged to use the company’s global platform to “introduce more about China to the world.” And he has done just that.
Disney is working with China’s Ministry of Culture to help develop the country’s animation industry and has agreed to work with Shanghai Media Group to make films for global audiences. Notably, Disney partnered with the state to produce “Born in China,” a film that promises to “showcase to the world the spectacular wildlife and natural beauty of China,” which a trailer depicts as snuggly baby pandas, snow leopards and lavish aerial shots of pristine mountain ranges.
“When global brands ask me what they need to do to improve their chances in China, I often paraphrase John F. Kennedy: Ask not what China can do for your business, but what your business can do for China,” said John A. Quelch, who teaches at Harvard Business School and has extensive experience in China. “They need to demonstrate that they are willing to promote things the government is interested in.”
Mr. Iger is trying especially to give Shanghai Disney some Chinese flair. He instructed park designers to infuse as many Chinese elements as possible.
Builders collected indigenous trees from all around China, including a 59-foot chestnut oak from Zhejiang province, to adorn the grounds. A “Tarzan” show was directed by Li Xining, an acrobatics expert who once worked for the Chengdu Military Area Command under the People’s Liberation Army. The Broadway version of “The Lion King” will be performed entirely in Mandarin — a first.
Mr. Iger even came up with a new slogan for the Shanghai resort, calling it “authentically Disney and distinctly Chinese.” He repeats the phrase constantly when talking about the site, and Disney executives in Shanghai have posted it around their offices. It is supposed to be a sign of respect for China and its people.
“What are we doing here that will make this park successful in China?” Mr. Iger said at an investor event in May. “One of the critical elements was making it distinctly Chinese, making sure that the people who visit this park feel that it’s theirs.”
Sure enough, in typical Chinese/East Asian fashion they became eager to please after being beaten up:An estimated 215 PLA troops reportedly tried to push their way at 'Shakar Tikri' and simultaneously 20 each from 'Thang La' and 'Mera Gap' and another 21 from 'Yanki-I' of Arunachal Pradesh made similar attempts.
During the normal banner drill, the PLA troops striking an aggressive posture tried to attack the Indian Army personnel physically but were overpowered immediately, official sources said today.
Tensions reportedly eased only after four PLA officers accompanied by an interpreter met Commanding Officer of the Indian Army formation in the area and presented him with two packets of chocolates and one gift packet to the in charge of Yanki-I post.
China has accused the Indonesian navy of opening fire on a Chinese fishing boat in disputed fishing grounds.
China's foreign ministry said on Sunday that one fisherman was injured and several detained.
The incident happened on Friday near the Natuna islands, off the coast of Borneo in the South China Sea.
