Neutering & Defanging Chinese Threat (15-11-2017)

[pankajs]

India's trade policy wasn't expected to change post Wuhan. Only china was expected to make some concessions, which it did recently. though it is hard to say whether that was because of Wuhan or concessions made to stop other countries from joining in on the trade war. In return, india was expected to lower confrontation which it has.

This is your assumption. Ram Madhav was very clear on Wuhan meet, that is was an opportunity to exchange views on the bilateral as well as global issues. That is also to say that India would have put its area of concerns while having heard out the Chinese concerns. "Improve relationship" sort of wording are just to fill up space and have no actual meaning.

The Chinese concession, the few that they are, are in line with its national interest and driven by the current Trade/Geo-political environment.

[Kashi]

American Airlines- Refused to change
United Airlines- Refused to change

Good on them. Curious to know how many flights they operate to or via PRC.

Cathay Pacific(Hong Kong) - Refused to change

That's ballsy. Cathay must fly a lot to Mainland and risk hurting their business, not to mention inviting the ire of the mainlanders.

Air Asia- Removed all countries, just shows city name
Delta- changed from country to region

Which is basically the same and is absolutely fine by China. Taiwan is usually filed under region (as opposed to Nationality/Country) in many documents (especially those related to residence/work-permits for overseas nationals) in many countries around the world.

[yensoy]

Air Canada, British Airways, Air France, Singapore Airlines etc are calling it Taipei, Taiwan, China. Air India calling it Chinese Taipei (in line with the International Olympic Committee designation) does set it apart.

https://www.google.nl/amp/s/amp.busines ... ina-2018-5
Not all info in the article is correct as of today. Here's a list of airlines who refused to change.

American Airlines- Refused to change
United Airlines- Refused to change
Cathay Pacific(Hong Kong) - Refused to change
Air Asia- Removed all countries, just shows city name
Delta- changed from country to region

Yes we are well aware that Donald has asked his airlines to dig in ("Orwellian nonsense" https://www.youtube.com/watch?v=L51vxD7RwdY). Cathay Pacific is a Hong Kong airline, so if they have referred to Taiwan as a region of China just as Hong Kong is another region of China (and for China itself their website says "Mainland China"). Regardless HK story is irrelevant. Rest of world airlines have complied, Air India has "complied" rather imaginatively, and that is it.

[ArjunPandit]

^^trikaal, what concessions has china made after wuhan? NSG? Pakistan? CPEC? Boundary issue?

[abhik]

^^trikaal, what concessions has china made after wuhan? NSG? Pakistan? CPEC? Boundary issue?

But But But... Eleven has personally wined and dined Modi noo?

They have been constantly fingering us with no punitive action from our side, which is why I call it soft-GUBO

[pankajs]

If that is soft-GUBO then every one does and accepts soft-GUBO and yes that includes Xi/China if anyone has been following the US-China trade spat.

By that definition, Soft-GUBO is a fact of diplomatic life except for the top dog.

[Trikaal]

^^trikaal, what concessions has china made after wuhan? NSG? Pakistan? CPEC? Boundary issue?

This is what I was referring to:
https://www.google.co.in/amp/s/m.econom ... 767620.cms

[pankajs]

^ Quote from above linked article

NEW DELHI: China plans to reduce tariffs on more than 8,500 goods, including chemicals, farm products and metals from India and some other Asian countries in what is seen as a part of its ongoing trade war with the US.

“China will reduce or cancel tariffs on imports of 8,549 types of goods from India, South Korea, Bangladesh, Laos & Sri Lanka,” China's ambassador to India Luo Zhaohui tweeted on Wednesday. “The goods include chemicals, agricultural & medical products, soyabean, clothing, steel & aluminium products. Good news to help reduce trade imbalance.”

Trade experts and negotiators have termed the move a strategic one since most items are those on which Beijing has slapped higher tariffs when they are imported from the US.

Direct result of US/China trade spat. This would have happened with or without Wuhan.

[souravB]

Interesting watch. Has some interesting discussions on this channel

[Trikaal]

Direct result of US/China trade spat. This would have happened with or without Wuhan.

True, but Wuhan provided both sides the opportunity to de-escalate without losing face. It is a starting point. Ofcourse the current geopolitics is also important and without a Trump Trade War, Wuhan might never have happened.

[pankajs]

The proximate reason for Wuhan was the then upcoming SCO meet. They did not want to go into SCO looking like both countries where at each others throats. Bad optics. They decided to change the optics having a meeting before and portraying a semblance of normality.

At least that is my understanding.

[Trikaal]

^That could be one of the reasons. There's hardly ever just one reason behind geopolitical moves. Trade war, need to reduce hostility, upcoming SCO could've all contributed to it.

[pravula]

China’s next box office hit? A dark comedy about smuggling in cancer drugs from India

Cheng’s character is based on the true story of Lu Yong, a textile trader who was diagnosed with leukemia, and spent more than $80,000 (link in Chinese) on Gleevec, a very effective treatment that wasn’t covered at the time under national health insurance. Manufactured by Swiss pharmaceutical firm Novartis, it cost the equivalent of $32 for a single pill. Lu located a generic substitute in India—and then helped get it to at least 1,000 other leukemia sufferers in China.

The unapproved drug was considered counterfeit under Chinese law, and in 2014, Lu was arrested and charged with selling fake drugs. During his more than four months (link in Chinese) in detention, some 300 leukemia patients petitioned for his release. Lu was freed in 2015, with the prosecutor noting that he had never personally profited from the sales. After his story came to light, many drew parallels with Dallas Buyers Club—the 2013 film about a man who sells unregulated AIDS drugs to fellow HIV sufferers.

[SSridhar]

. . . There's hardly ever just one reason behind geopolitical moves. . .

Especially with the Chinese.

[pankajs]

If that is soft-GUBO then every one does and accepts soft-GUBO and yes that includes Xi/China if anyone has been following the US-China trade spat.

By that definition, Soft-GUBO is a fact of diplomatic life except for the top dog. [Addendum: and even the top dog has to eat humble pie once is a while.]

Just poped up in my feed.
https://www.politico.com/story/2018/07/ ... ina-672819
Wall Street titans fail to explain Trump to China

This person added that the Chinese have had a great deal of trouble understanding how Trump operates: “They see this disconnect between Trump building a relationship with [Chinese President] Xi Jinping on North Korea and then all his harsh rhetoric on trade. The Chinese know they will eventually have to make some serious concessions, but they don’t really know what they are and who really speaks for the president.”

Concession and China is the same sentence . I thought such things were reserved for the lowly Indian only.

The Chinese are prepared to assume GUBO position but are just confused about the person in-front of whom they have to drop their <<You imagination will suffice >>.

The Chinese have already made many adjustment to open up their markets AFTER the Trump trade threats. In-fact my last comment was based on the changes already enacted by China to head off a more serious threat from Trump.

[TKiran]

^^^wrong assumptions about Chinese...
Chinese don't gubo. They are confused how to subvert Trump's assault. What has been working all the years since Nixon, has been changed. They used to steal technology, and some of the technology is still to be stolen, suddenly some strategic shift by Trump without giving time is causing a lot of problems. With time passing, they will bridge the gap, as the gap is not as wide as in case of India.

But right now, Trump has made a very bold step.

[pankajs]

Ha ha ... What you call assumption are facts. You are the one that is making assumptions.

The Chinese have ALREADY *opened* up for gubo even BEFORE the tariff went in effect just on the threat of trade war. Your saying the opposite will not change the facts.

And on gubo NOT related to trade, There was this famous case where were the Chinese clown jewels were fully exposed and the whole world saw them "take it" from the Americans. Front page news worldwide in the field of technology.

Again, you must read more and not rely on Chinese whispers.

[kit]

Business tactic : of not showing a obvious target to the competitor .. it will show the card late in the game

[pankajs]

^
That is true but that logic works for all countries.

When faced with a stronger power and unless pushed to a corner all sane countries [Bakistan has to be accounted] try to bargain and/or give a "little or more" to protect *more important* long-term goals. China does it is not in doubt but so does India but one is praised as smart where as another is tarred as having done gubo. If we are going to be fair lets apply the same criteria to all countries and call their actions gubo compliant.

BTW, TKiran saaru .. what too you so long? I was expecting you to jump in long back. Infact I was thinking of writing a post expressing my disappointment not seeing you in action. After all how could someone dare paint China with the same brush as India and that too China/Xi doing GUBO of all things. Blasphemy any times over!

[chetak]

^^^wrong assumptions about Chinese...
Chinese don't gubo. They are confused how to subvert Trump's assault. What has been working all the years since Nixon, has been changed. They used to steal technology, and some of the technology is still to be stolen, suddenly some strategic shift by Trump without giving time is causing a lot of problems. With time passing, they will bridge the gap, as the gap is not as wide as in case of India.

But right now, Trump has made a very bold step.

nixon and his initiatives were tailored for another time and another world. The worm has turned now.

Trump is unpredictable and what will catch his fancy next is not known to anyone, perhaps not even to trump himself. He certainly has put the chinese on notice and literally shoved them way out of their comfort zone.

He has done things to china that no one had dared to so far because they all feared an imagined chinese backlash.

Modi bearded them in doklam and all this has shaken the chinese leadership.

If trump pulls off a good result in NOKO, he would have undercut the bullyboy chinese and their homegrown proxy.

They will retreat, simply by toning down their responses amd not provokoing a full blown trade war, while masking their confusion and hiding behind bombastic articles in the global times.

Trump striking now is not a mere chance, not with so much of internal upheaval happening in china, their exports dwindling and oil prices spiking.

[souravB]

^^^The American deep state used Obama as a carrot and now using Trump as a stick to get out of a few messy situations. It is not luck that Trump won or even ran. They know how to influence Trump and when used right he can do exactly what they need him to do.
Trump's tweets might be a problem but it is factored in on the game plan.
The best way to call Chinese (economic) bluff is by (trade) war, and they knew nobody else other than Trump would go for it cause it will also harm US economy but America needs the war to retain its power.
Trump might be in for a second term depending upon when the trade war ends.

[TKiran]

If trump pulls off a good result in NOKO, he would have undercut the bullyboy chinese and their homegrown proxy.

They will retreat, simply by toning down their responses amd not provokoing a full blown trade war, while masking their confusion and hiding behind bombastic articles in the global times.

Trump striking now is not a mere chance, not with so much of internal upheaval happening in china, their exports dwindling and oil prices spiking.

Chetak sir, Trump is not going to succeed / get any benefit from la'affaire NoKo. NoKo has a long term desire to unite Koreas, may be after 20-30 years when Kim Jong un wants to retire in united Koreas.

Whereas US has 'denuclearization' as the target. NoKo is just using US as an excuse to come out of clutches of China, historically Korea subjugated China, and they hate Han.

There's no benefit for US to unite Koreas. US is not serious about denuclearizing anyone (if they were serious, they would have denuclearized Pakis).

Coming to your second point of trade war, China never expected US to change its policy of support to China in trade and Business. They are yet to formulate a response, but if my prediction is correct, China while playing victim card, would dump their produce in Africa and south America, Australia, India, middle East etc, but behind the scenes, they will put additional efforts to steal trade secrets from US, before US starts really becomes no.2 in the world (they know that US doesn't have anything that Europe doesn't have, already playing divide and rule policy there, they have purchased Volvo and Mercedes Benz). In fact this trade war is likely to accelerate China's​ accension to no. 1 status.

It's not all negative for India in this trade war, if we play the game correct, the correct game for India to play is, to hurt itself by blocking China trade, buy the necessary from US and Europe, and start indigenisation, treat China as enemy both literally and in action visibly.

Coming to your third point, that America indeed wisely woken up (if that was what you meant), I am afraid, it's too little too late. US doesn't matter anymore.

[Trikaal]

Slightly off topic, but can someone please tell me what is the meaning of GUBO? It keeps coming up in the conversation and missing a word sometimes means not understanding the essence of the argument.

[rudradeep]

Slightly off topic, but can someone please tell me what is the meaning of GUBO? It keeps coming up in the conversation and missing a word sometimes means not understanding the essence of the argument.

GUBO - Grease Up and Bend Over - Modus Oprandi of US-Pak and now increasingly China-Pak relationship works...

More for your reading pleasure...https://sites.google.com/site/brfdictionary/glossary

[SSridhar]

China courts Europe to counter U.S. - Atul Aneja, The Hindu

China has sensed a great opportunity to rally a strong opposition to US, to turn the tables on the US for its Indo-Pacific adventures. It is trying to make inroads in the anti or lukewarmly-anti Chinese territories.

China has begun to actively court Europe, as the trade war with Washington intensifies and the hunt for new supply chains and markets outside the U.S. accelerates.

In Berlin, visiting Chinese Prime Minister Li Keqiang said that China and Germany must shift gears not only to consolidate their ties, but also to defend free and open trade. Mr. Li’s remarks followed China’s open criticism of the U.S., which was officially described as a “trade bully”, within hours of Washington targeting Chinese products with an additional 25% duty on Friday.

China sees Germany as its key partner for transitioning its economy towards Internet-based “smart manufacturing”. The Made-in-China 2025 strategy is based on Germany’s Industry 4.0 model.

Safeguarding free trade {Ha..ha. The Chinese version of free trade, that is!}

Mr. Li stressed that Beijing and Berlin should jointly map out their future “all-round cooperation from a new starting point”. This was necessary to safeguard “free trade, multilateralism and a fair and just international order”.

Mr. Li will also hold talks with German Chancellor Angela Merkel, marking their second meeting in three months. Ms. Merkel had visited Beijing and Shenzhen — China’s hi-tech capital — in May. The two leaders will also witness the China-Germany automated driving exhibition and attend an economic and technical forum.

Following Mr. Li’s visit, Beijing will host a summit of EU leaders on July 16-17, apparently, as a stepped up effort to build a coalition to counter U.S. protectionism.

[yensoy]

China courts Europe to counter U.S. - Atul Aneja, The Hindu

China has sensed a great opportunity to rally a strong opposition to US, to turn the tables on the US for its Indo-Pacific adventures. It is trying to make inroads in the anti or lukewarmly-anti Chinese territories.

Despite outwardly appearances, there is not a chance in hell - at least in this decade - that EU will switch their loyalties to China. EU is using China as a means of getting around their own economic mess, whether it is by exporting high value items to China, or tourism/food, education, selling passports (!!) or merely as a conduit for Chinese money. None of this is strategic.

[chetak]

China courts Europe to counter U.S. - Atul Aneja, The Hindu

China has sensed a great opportunity to rally a strong opposition to US, to turn the tables on the US for its Indo-Pacific adventures. It is trying to make inroads in the anti or lukewarmly-anti Chinese territories.

China has begun to actively court Europe, as the trade war with Washington intensifies and the hunt for new supply chains and markets outside the U.S. accelerates.

In Berlin, visiting Chinese Prime Minister Li Keqiang said that China and Germany must shift gears not only to consolidate their ties, but also to defend free and open trade. Mr. Li’s remarks followed China’s open criticism of the U.S., which was officially described as a “trade bully”, within hours of Washington targeting Chinese products with an additional 25% duty on Friday.

China sees Germany as its key partner for transitioning its economy towards Internet-based “smart manufacturing”. The Made-in-China 2025 strategy is based on Germany’s Industry 4.0 model.

Safeguarding free trade {Ha..ha. The Chinese version of free trade, that is!}

Mr. Li stressed that Beijing and Berlin should jointly map out their future “all-round cooperation from a new starting point”. This was necessary to safeguard “free trade, multilateralism and a fair and just international order”.

Mr. Li will also hold talks with German Chancellor Angela Merkel, marking their second meeting in three months. Ms. Merkel had visited Beijing and Shenzhen — China’s hi-tech capital — in May. The two leaders will also witness the China-Germany automated driving exhibition and attend an economic and technical forum.

Following Mr. Li’s visit, Beijing will host a summit of EU leaders on July 16-17, apparently, as a stepped up effort to build a coalition to counter U.S. protectionism.

If the EU were that foolish to support some of these chinese initiatives against the US, the EU will see a very different america. There is absolutely nothing to stop the US from quitting the UN itself and the domino effect of such a "normal" but very disruptive Trump initiative would be unthinkable.

With possible retaliatory and reduced US support to NATO, domestic EU defence outlays will dramatically increase, thus slowing down european social sector spending and one possible fallout may be increased local muslim aggression due to curtailment of "refugee" benefits and entitlements.

If such a situation ever came to pass, Putin will take a lot of interest in such a future US draw down in EU, because it would benefit russia the most of all. Without NATO support, EU would be very hard pressed to handle a resurgent russia under putin.

The chinese are between a rock and a hard place.

[yensoy]

^^^^ US would never retreat from Europe or Nato. That would be suicide. They will just let European discover the velvet hands of the Chinese playing with the lovely economies and stand by while the countries come to their senses, one by one.

[souravB]

^^ Europe is already kind of 'woke' to the Chinese strategies, I daresay maybe more than Unkil in some respect. in case of Germany, it is already taking the cases of IP violations, Chinese state investment in strategic and futuristic technology companies, levies on Chinese products. Europe as a whole do not shout like DT due to the income sources from China like tourism and studies both of which constitute in multi Billions each. there have been a high level EU delegation meeting in China last month discussing these topics.
The first sign of general government view you always get from what kind of content the popular media is running. I have seen many docs and reports on such Chinese encroachments in Germany and other channels from Europe.

[chetak]

^^^^ US would never retreat from Europe or Nato. That would be suicide. They will just let European discover the velvet hands of the Chinese playing with the lovely economies and stand by while the countries come to their senses, one by one.

If push came to shove and EU acted against core US interests, cosying up to the chinese, there is no telling how trump will react.

Never is not a word in the trump dictionary.

The mere thought that the US will carry its "america first" policy that far is enough to dampen EU spirits as well as its confidence.

white and white goes together much better than white and yellow.

After all, the US did drop the bomb on japan and not on germany, no??

[anupmisra]

GUBO - Grease Up and Bend Over - Modus Oprandi of US-Pak and now increasingly China-Pak relationship works...

More for your reading pleasure...https://sites.google.com/site/brfdictionary/glossary

In the case of pakhanistan, the term now applies in the past tense. Greased Up and Bent Over.

[TKiran]

If the EU were that foolish to support some of these chinese initiatives against the US, the EU will see a very different america. There is absolutely nothing to stop the US from quitting the UN itself and the domino effect of such a "normal" but very disruptive Trump initiative would be unthinkable.

With possible retaliatory and reduced US support to NATO, domestic EU defence outlays will dramatically increase, thus slowing down european social sector spending and one possible fallout may be increased local muslim aggression due to curtailment of "refugee" benefits and entitlements.

If such a situation ever came to pass, Putin will take a lot of interest in such a future US draw down in EU, because it would benefit russia the most of all. Without NATO support, EU would be very hard pressed to handle a resurgent russia under putin.

The chinese are between a rock and a hard place.

Though your analysis says, the Chinese strategy of divide and rule is going to work because of unpredictable Trump, your conclusion is pankajsesque

[chetak]

If the EU were that foolish to support some of these chinese initiatives against the US, the EU will see a very different america. There is absolutely nothing to stop the US from quitting the UN itself and the domino effect of such a "normal" but very disruptive Trump initiative would be unthinkable.

With possible retaliatory and reduced US support to NATO, domestic EU defence outlays will dramatically increase, thus slowing down european social sector spending and one possible fallout may be increased local muslim aggression due to curtailment of "refugee" benefits and entitlements.

If such a situation ever came to pass, Putin will take a lot of interest in such a future US draw down in EU, because it would benefit russia the most of all. Without NATO support, EU would be very hard pressed to handle a resurgent russia under putin.

The chinese are between a rock and a hard place.

Though your analysis says, the Chinese strategy of divide and rule is going to work because of unpredictable Trump, your conclusion is pankajseque

maybe that last sentence should have read

The chinese are between a rock and a hard place TODAY.

The chinese will try to coopt EU against the US but it will not work because:

1) The traditional US Europe historical ties of the two great wars. A huge debt is owed the US.

2) The white skin factor.

Trump has pissed off the europeans and maybe rightly so. He wants them to get their hands out of the US purse and pocket and stop freeloading and pull their weight and pay their way. The europeans owe their freedom to the might of the US MIC. If it were not for the US, I reckon that a major part of europe would have been under the russian jackboot.

That does not mean the chinese will not try nor does it mean that they will succeed. The europeans will try to show the US that they have other "options" but they really don't, not if they want to preserve their way of life and comfort.

The entire italian marine fiasco has has opened a racial chasm between the EU and India. A lot of things have been said that India has just not accepted nor digested. It was Modi's magnanimity that diffused the situation. The europeans then compounded their mistakes by assuming that Modi's magnanimity was actually weakness. It was the cunning french that took a different line very early in that game.

Just like japan, the US nuclear umbrella has saved europe hundreds of billions of dollars in defence expenditure, money they have redeployed into building their infrastructure and social sector spending. IMHO, the europeans, especially the cowardly french, have not been sufficiently grateful for the US Marshall Plan. This sticks in the US craw, even today.

In the end, and after all these decades, it finally took a Trump to call them out.

[Kashi]

After all, the US did drop the bomb on japan and not on germany, no??

Off topic but the bomb was actually developed with an intent to be use it against Nazi Germany. It simply wasn't ready by the time Germans had surrendered to the Red Army in Berlin and to allies elsewhere.

Allied bombing of Hamburg, Dresden etc. killed no fewer than those killed in firebombing of Japan.

[SSridhar]

Why both PM Narendra Modi and Xi Jinping are going to east Africa - Sachin Parashar, Economic Times

The BRICS summit in South Africa later this month is likely to see a revving up of India’s rivalry with China for influence in resource-rich Africa. Both PM Narendra Modi and Chinese leader Xi Jinping will visit east Africa ahead of the event.

The government is yet to announce this but official sources say Modi is going to visit Rwanda and neighbour Uganda on his way to South Africa for the BRICS summit from July 25. While Uganda has seen visits by Indian PMs, this is a first for Rwanda. Modi will land in Rwandan capital Kigali a day or two after President Xi. {Very much like the visit to Fiji islands in c. 2014. Then, the order of visit was the reverse.} This will also be the first time that a Chinese president will visit Rwanda.

A top source said that Modi’s visit to Rwanda and Uganda was a sign that Africa remained the focus of India’s outreach to the developing world, and had nothing to do with any “cut-throat competition” with China as often reported in the media. “It’s also significant that both Rwanda and Uganda are members of the Commonwealth where India is an important player,” said an official, adding that the outreach enhances India’s south-south leadership credentials even as it engages with bigger powers.

Modi will hold talks with president Paul Kagame in Rwanda and president Yoweri Museveni in Uganda. Several agreements are expected to be signed with both countries.

It’s significant that both leaders have chosen to visit Rwanda, where China has emerged as an important partner in post-conflict reconstruction work. China’s annual trade volume with Africa and its FDI in the continent are more than double than that of India. However, India in the past has had an edge over China in east Africa mainly because of its cultural and historical links with the region. Geographical proximity has also meant that countries in the east along the Indian Ocean coast account for more than half of India’s exports to Africa.

Both India and China are aware of the strategic significance of east Africa as an emerging market. India though is wary of the inflow of easy Chinese loans in the region, which has embraced Beijing’s Belt and Road Initiative.

In Uganda, Reuters reported recently that China alone had loaned it nearly $3 billion and was in talks for $2.3 billion more as part of BRI.

China operates a naval base in Djibouti on the Horn of Africa, reflecting its growing clout in the region. Its uninhibited smallarms sales to countries in Africa has made it an attractive partner.

[SSridhar]

China pledges $20 billion in loans for Arab states - AFP

China will provide Arab states with $20 billion in loans for economic development, President Xi Jinping told top Arab officials Tuesday, as Beijing seeks to build its influence in the Middle East and Africa.

The money will be earmarked for "projects that will produce good employment opportunities and positive social impact in Arab States that have reconstruction needs," said Xi, without providing further details.

It is part of a special Chinese programme for "economic reconstruction" and "industrial revitalisation," Xi told participants at a China-Arab States forum in Beijing's Great Hall of the People.

Beijing is also prepared to provide another one billion yuan to countries in the region to "build capacity for stability maintenance," Xi said, using a term commonly associated with policing and surveillance.

Since taking office, Xi has overseen a concerted effort to expand Chinese influence in the Middle East and Africa, including the construction of the country's first military base in Arab League state Djibouti.

China has already provided vast sums to Arab countries, with Djibouti alone owing some $1.3 billion, according to estimates from the US-based China Africa Research Initiative.

The financial largesse has raised concerns both at home and abroad over the vulnerability of poor nations to such massive debt.

Last year Sri Lanka was forced to hand over majority control of its Hambantota port to China after being unable to repay its loans.

At the heart of Xi's vision is the "Belt and Road" initiative, a $1-trillion infrastructure programme billed as a modern revival of the ancient Silk Road that once carried fabrics, spices and a wealth of other goods between Asia, Africa, the Middle East and Europe.

The Arab states' position at the centre of the ancient trade route makes them "natural partners" in China's new undertaking, he said, adding he expected the summit would end with an agreement on cooperation on the initiative.

"Chinese and Arab peoples, though far apart in distance, are as close as family," he said, describing a romanticised history of trade along the Silk Road.

The project, which has already financed ports, roads and railways across the globe, has spurred both interest and anxiety in many countries, with some seeing it as an example of Chinese expansionism.

"China welcomes opportunities to participate in the development of ports and the construction of railway networks in Arab states" as part of a "logistics network connecting Central Asia with East Africa and the Indian Ocean with the Mediterranean," said Xi.

[chetak]

Trump to open trip by meeting with nervous NATO leaders

Trump to open trip by meeting with nervous NATO leaders

WASHINGTON, JULY 10,


“Getting ready to leave for Europe. First meeting NATO. The U.S. is spending many times more than any other country in order to protect them,” Mr. Trump tweeted on Tuesday morning.

President Donald Trump’s four-nation European tour has allies fretting over the risk of damage he could do to the decades-old NATO alliance. They’re also worried about his potential embrace of Russia’s Vladimir Putin during a summit in Helsinki.

The trip that begins on Tuesday in Brussels will also take Mr. Trump to London, where Prime Minister Theresa May’s government is in turmoil over her plans for exiting the European Union.

Mr. Trump has been pressing NATO countries to fulfill their goal of spending 2 % of their gross domestic products on defense by 2024. During his presidential campaign, he suggested he might only come to the defense of NATO nations that fulfilled their obligation. He continues to criticize NATO countries for not paying their fair share.

European Council President Donald Tusk said on Tuesday in a message to Mr. Trump that “it is always worth knowing who is your strategic friend and who is your strategic problem.” Mr. Tusk recalled that the Europeans are spending more than Russia and as much as China on defense. NATO estimates that 15 members, or just over half, will meet the benchmark by 2024 based on current trends.

“Getting ready to leave for Europe. First meeting NATO. The U.S. is spending many times more than any other country in order to protect them,” Mr. Trump tweeted on Tuesday morning, adding- “Not fair to the U.S. taxpayer. On top of that we lose $151 Billion on Trade with the European Union. Charge us big Tariffs (& Barriers)!”

On Monday he’d tweeted the situation was “not fair, nor is it acceptable,” and insisted that NATO benefits Europe “far more than it does the U.S.”

Mr. Trump, who has compared the sentiment that underpinned the Brexit vote to leave the EU to his own election, will be making his maiden presidential trip to Britain at a fraught time for Ms. May. Foreign Secretary Boris Johnson and Brexit Secretary David Davis resigned within hours of each other in protest of her plan.

Mr. Trump’s visit is expected to attract large protests in London and elsewhere in Britain.

Mr. Trump’s weeklong trip to Europe will continue with a stop in Scotland before ending with a sit-down in Helsinki with Putin, whose country the U.S. intelligence community has concluded interfered in the 2016 election to help Mr. Trump win.

The meeting will be closely watched to see whether Mr. Trump will rebuke or embrace Mr. Putin, who has repeatedly denied the allegations of election meddling, in spite of evidence to the contrary.

[pankajs]

One must take such Chinese assurances with Indian ocean full of salt.

https://asia.nikkei.com/Spotlight/Asia- ... ina-divide
India's new 'Modi doctrine' straddles the US-China divide

The thaw began in earnest in the morning of April 28. Modi and Chinese President Xi Jinping took a quiet lakeside walk in the Chinese city of Wuhan. " came to know about the PLA's Doklam buildup very late," Xi told Modi, according to sources from both governments. The Chinese military had been constructing a road near the border, which prompted the standoff.

The two leaders agreed that another Doklam-like situation would be "avoided at all costs." They also discussed a sort of nonaggression pact, with Xi quoted as saying, "Indian interests in its neighborhood will not be challenged by China, including [the] Arabian Sea and the Bay of Bengal."

The world began to grasp the significance of the shift on June 1, when the Asia Security Summit rolled around. "Asia and the world will have a better future when India and China work together in trust and confidence, sensitive to each other's interests," Modi said in a keynote speech at the meeting in Singapore, also known as the Shangri-La Dialogue.

Many in the audience were bewildered by what sounded like an abrupt change to India's foreign policy.

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To summarize Modi's audacious balancing act: He is participating in Western efforts to check Chinese power, while agreeing with Xi on the need to avoid stepping on each other's toes. At the same time, he is keen to establish Southeast Asia as a third countervailing force. And he wants to keep India at an equal, close distance from all three camps.

Now I have deliberately posted only a portion when there are other nuggets. Interested folks can read the whole thing.

I can't say I agree with it all. However, it does tell us how the current Modi policy is being viewed from outside the government and not necessarily the views of the government itself.

[SSridhar]

To summarize Modi's audacious balancing act: He is participating in Western efforts to check Chinese power, while agreeing with Xi on the need to avoid stepping on each other's toes. At the same time, he is keen to establish Southeast Asia as a third countervailing force. And he wants to keep India at an equal, close distance from all three camps.

But, that's exactly what Japan is also doing. It has been mending its strained relationship with China lately. It is participating in the Malabar exercise with vigour and also the Quad deliberations. Like all other Asian countries, Japan is also wary of the determination of the US to defend it when it comes to the crunch against China (this is not even a post-Trump development), which is what prompted the wholesale change in its pacifist outlook and is therefore willing to boost military & economic relationship among other Asian countries, especially those surrounding China.

Why does Nikkei Review consider Modi as audacious but not Abe? I am sure that South Korea also has a similar approach. For that matter, even the Philippines. What about China itself?

Or, does this practice realpolitik under Modi come as a surprise to them, used as they are to more placid approaches of the past?

[SSridhar]

China's Silk Road isn't turning out to be smooth - Bloomberg

You may not have noticed, what with the outbreak of trade war with the U.S. and all, but China’s economic diplomacy has had a bad few weeks. The country’s flagship Belt and Road Initiative is dealing with ever-greater resistance, slowing a momentum that once seemed unstoppable. In fact, I’d argue that the BRI is stalled.

The clearest sign of this, perhaps, was the news that Malaysia had halted Chinese projects worth $22 billion, including a controversial rail link along the country’s east coast. The decision looked inevitable after May’s elections. One of the pillars of Prime Minister Mahathir Mohamad’s successful campaign to unseat Najib Razak was the charge that Najib’s close links to China had bred corruption and bad decisions. Mahathir’s associates linked the scandal at the 1MDB development fund to BRI financing, while Najib’s associates doubled down, putting Chinese President Xi Jinping on their party posters. One Malaysian politician complained visitors might’ve thought Xi himself was on the ballot.

Quicktake China’s Silk Road

In many ways, China’s stumbles in Malaysia are exactly what BRI skeptics had always warned would happen in countries across Asia. Projects that might be easy to execute in China would run into delays and cost overruns in less-regimented countries; growth in debt, deficits and Chinese immigration would spark political opposition; and, when a new political leadership cancelled those projects, bilateral and multilateral tensions would spike.

Malaysia is only the most high-profile example. To the north, Myanmar’s Planning and Finance Minister Soe Win told Nikkei this week that his government would demand that a new port on the Bay of Bengal be “slimmed down.” For China, the port is pivotal — the shortest way to get oil from the Indian Ocean to southern China, avoiding a strategic chokepoint at the Straits of Malacca. But Myanmar now owes 40 percent of its external debt to China, which, as Soe Win pointed out with gentle understatement, is “not recommendable.”

Myanmar’s leaders can hardly be blamed for scaling back, especially given “lessons learned from our neighboring countries,” as Soe Win put it. In Sri Lanka, an overindulgence in Chinese finance has already pushed one government out the door and left its successor saddled with expensive white elephants. Interest payments on Chinese loans — about $11 billion a year — would’ve consumed almost all of the island nation’s tax revenue. (Chinese infrastructure finance doesn’t come cheap — Sri Lanka reportedly pays six percent.) That prompted the new government to grant a Chinese company a controlling share of the big, empty port at Hambantota in a debt-for-equity deal, and panicked India enough to explore buying the world’s emptiest airport 20 kilometers away — also Chinese-financed, naturally — just to ensure it stays out of Chinese hands. Negotiators began talks this week on a price.

Even in Pakistan, which had embraced the China-Pakistan Economic Corridor as an effective antidote to dependence on an increasingly unfriendly West, policymakers are having second thoughts. Expensive Chinese machinery imports have pushed the current account deficit — and the rupee — to the wall. Pakistan’s central bank only has enough reserves to cover a couple of months of imports — and that’s after the country borrowed nearly $4 billion from the Chinese last year.

Pakistani officials have reportedly warned the Chinese that they’d better keep lending or Pakistan would turn to the International Monetary Fund, and then “we would have to make full disclosure of the terms on which China has agreed to build the CPEC.” {Let's see with gleeful interest how China tackles the Paki blackmail, after the US & the UK} Pakistan’s voters, going to the polls shortly, should perhaps be asking themselves why a full disclosure of these terms would be so embarrassing. China’s leaders will shortly learn a lesson the U.S. learned ages ago: Pakistan is the only country in the world that negotiates with a gun to its own head. My guess is that China will pay up this time, but that won’t make the CPEC any more sustainable financially.

And while all this was happening, China’s Premier Li Keqiang was in Sofia meeting with the leaders of Central and Eastern Europe for the annual “16+1” forum — a meeting notably lacking in enthusiasm compared to previous such conclaves. The European leaders will have noted that big infrastructure investment hasn’t exactly been turning up on time from China — and, for that matter, where it has, as in Athens’ Piraeus port, it may also have opened the door to criminality and fraud.

When the Belt and Road was first announced, it must have felt like a gift from heaven for embattled governments trying to raise money for the infrastructure their voters wanted. But, the truth is that China’s cash came with onerous conditions — high interest rates, procurement guarantees for Chinese companies, imported workers. Nor was China really prepared for the hurdles faced by big-ticket investments in countries with messy, more accountable politics.

Can the initiative be salvaged? Perhaps. After all, China has a capital surplus that needs to go somewhere. But, if it wants its investments to be sustainable, China will have to behave in these countries a lot more like the Western capital it seeks to displace. That means being cautious, cooperative with local capital and civil society, and respectful of political sentiment, even from dissidents. In other words, the Chinese state would have to behave like the private sector. And we know how tough an ask that is.