Month: June 2020

Emperor Xi reinvents Chinese Checkers: Only CPC Wins

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The current violent confrontation between India and China in east Ladakh along the Line of Actual Control should come as a surprise to none. This was inevitable. An inexorable chain of events was set in motion in 2017 when New Delhi rejected Beijing’s imperial invitation to the Belt and Road Initiative (BRI) event presided over by President Xi Jinping. A second rude rebuff followed later in the summer of that year when India stood up to China’s efforts to reorganise  Himalayan political geography on the Doklam plateau. India must be prepared to strongly repel the backlash from Beijing on our mountains, in our waters and through our digital platforms.

The Indian commentariat is needlessly agonising over the drivers of the latest Chinese actions. Let us stop theorising and be bold enough to accept that China is just being itself. India has made decisions like independent nations do as an exercise of their sovereignty. To argue otherwise would be tantamount to ignoring the sum total of Beijing’s behaviour during the ‘Made in China’ pandemic: The acceleration of territorial revisionism in the South China Sea; the subjugation of Hong Kong through the stoutly contested national security law; repeated violations of Taiwanese airspace; heightened naval aggression around Japan’s Senkaku Islands; and its most recent encroachment in Nepal.

There is a pattern to this madness; a reason for this seemingly inexplicable restlessness.

In Jiang Zemin’s 2002 report to the 16th Party Congress, the Communist Party of China (CPC) presciently foresaw a 20-year “period of strategic opportunity” for China – linked to its entry into the WTO and America’s misguided interventions in the Middle East that enabled Beijing to play a deft game of Chinese Checkers — and build national power. Emperor Xi, anointed to office for life with a heavenly mandate, is now exercising that power as a counterpoise to the diminishing clout of American influence, and the weakening resolve of a wavering EU and unsure Europe. This is the moment for the Xi Dynasty (like the Mao Gang in another era) to take charge of the wheel and steer China to its centennial objective of world domination by 2049.

The new version of Chinese exceptionalism shaped and directed under Xi’s tutelage is linked to China’s past identity, largely a product of myth-making. It has willed itself into believing that it does not need to work within the matrix of international laws, rules and norms. It has decided that the time when China would “hide and bide” its motivations and capabilities is past.

The new version of Chinese exceptionalism shaped and directed under Xi’s tutelage is linked to China’s past identity, largely a product of myth-making. It has willed itself into believing that it does not need to work within the matrix of international laws, rules and norms

The CPC is now externalising the authoritarian idiosyncrasies it wields at home. Medievalism is the hallmark of Chinese external assessments. This is evident from its insatiable urge to redraw boundaries as an adventure sport and from its estimation of its population (as well as others) as mere fodder. This behaviour is exemplified in China’s ‘hostage diplomacy’ with Canada. Chen Weihua, the European Union bureau chief of the China Daily, offered an unsympathetic glimpse into how China views the issue: “People often fail to note that Meng is worth 10 Kovrig and Spavor, if not more.”

Supplementing this behaviour are two critical tools: an expansionist military and modern methods of engagement. Xi has overseen what is arguably the most wide-ranging modernisation of the People’s Liberation Army: purging it of corrupt or disloyal officials, ensuring its transition to a capable and expeditionary naval force; undertaking crucial administrative and organisational reforms; and reaffirming its absolute loyalty to the CPC and its ideology. In parallel, Xi has presided over China’s long-term efforts to securitise and weaponise global supply chains, flows of technology, finance and data, and institutions of global governance. The all-pervasive Chinese state is but an instrument for the benefit of the CPC.

Time and again India has confronted these realities at 14,000 feet above sea level and soon it may have to defend its blue waters against the rising crimson tides. At one level, Beijing is merely attempting to ‘remind’ India of Asia’s geopolitical hierarchy—that failure to kow-tow to the Middle Kingdom carries consequences. More worryingly, Beijing may have concluded from India’s history that heightened aggression along the LAC will invariably bring India to the negotiating table—that India will grant China greater political concessions, market access or economic bargains as the price for “peace and tranquillity”. The Indian state will have to dispel and disprove this Chinese assumption.

China is also using this moment to send a message to its other neighbours in the East and South China Sea. While a similar escalation in those waters by China carries the risk of drawing in American military response, the attempt to reorganise boundaries  on the Himalayas conveys the same intent. China is demonstrating to the world the limitations of decaying American power without having to actually confront it. In its neo-Confucian assessment an Indian capitulation may signal the final rites of Pax Americana. Beijing may be in for a surprise on both counts, provided countries are able to correctly assess the deeper import of recent Chinese actions.

China is also using this moment to send a message to its other neighbours in the East and South China Sea. While a similar escalation in those waters by China carries the risk of drawing in American military response, the attempt to reorganise boundaries  on the Himalayas conveys the same intent

India must begin with the daunting acknowledgement that the world’s second largest economy is its primary long-term geopolitical and geoeconomic rival. It must also internalise that it will not be able to negotiate its way into any favourable outcomes with China. While nations must talk and unofficial summits like Wuhan and Mamallapuram are important, India must have the singular purpose of investing in and developing robust political, economic, digital and military tools that should, for the short to medium-term, be able to protect territory and rebuff the northern marauders.

For too long, Delhi has been hesitant to impose costs for China’s military adventurism, preferring instead to settle matters diplomatically. In doing so, India has failed to realise that while Xi’s China is irrational, it is not an entirely unpredictable actor. It sees capitulation and a preference for negotiation as a sign of weakness. Delhi must be creative about how it imposes costs for this behaviour—creating unconventional and asymmetric options that help in ‘area denial’ operations in the Himalayas. Accelerating roads and infrastructure is one part, building emplacements is the second. The politics of ‘sharp’ presence (physical) is the only vocabulary understood in those terrains.

For too long, Delhi has been hesitant to impose costs for China’s military adventurism, preferring instead to settle matters diplomatically. In doing so, India has failed to realise that while Xi’s China is irrational, it is not an entirely unpredictable actor

The adage ‘it is the economy stupid’ has never been more relevant. Obsession with building India’s economic heft must override all other considerations. China’s rise was underwritten by its strategic co-option of globalisation. In an era where global flows of data are outstripping trade in goods, and where technology supply chains are being jealously guarded, India’s goal should be to emerge as one of the centres of the topography of digital globalisation. India did well to reject the BRI; it must now ensure that it rejects BRI’s digital avatar as well.`

The banning of Chinese goods may be important signalling but will have little impact on the northern neighbour due to the asymmetry in trade. Zealous protection of India’s digital backbone and networks (5G) and billion people plus digital platforms from Chinese encroachment and intrusion, either openly or by stealth, must be the clear-eyed strategic objective. But India cannot do this alone. And here is where its own period of strategic opportunity begins. In a powerful dissent against the Xi regime, Tsinghua University professor Xu Zhangrun laments the consequences of Beijing’s global assertiveness: “Instead of embracing a [global] community,” he writes, “China is increasingly isolating itself from it.” The challenge for India is to capture this moment – to shed (self) righteous theories of foreign policy in favour of pragmatic, even cynical, partnerships that bolster its economy, provide it with technology, arm its military and support its global ambitions.

That India is still debating Non-Alignment as a choice is a sad reflection of its inability to grasp the reality that stares it in the face, its failure to read the writing on the wall, its myopic disregard for what the future holds. When Non-Alignment was conceived it was an attempt by the leadership of the day to carve out a space for India in a world dominated by two superpowers. Does its propagation allow similar space to India now? Or does a string of strategic partnerships (not of the variety that exists in the dozens) serve India’s interests better?

That India is still debating Non-Alignment as a choice is a sad reflection of its inability to grasp the reality that stares it in the face, its failure to read the writing on the wall, its myopic disregard for what the future holds

Indeed, the time for hiding behind ‘strategic ambiguity’ is over. This stands true for New Delhi’s involvement with international institutions as well. How will India take advantage of its seat in the UN Security Council, its upcoming presidency of the G-20, its chairmanship of the WHO, its position in the Global AI Alliance, or its leadership of the International Solar Alliance? India now increasingly finds a place on the high table of global governance. Question is, can it make the most of these arenas? Can Delhi marshal its diplomatic resources to convince the international community that events in the Himalayas carry global consequences, and that silence now, only emboldens China’s perverse great power ambitions in other geographies and domains? Will New Delhi develop the appetite to call out China on Taiwan, Tibet, Xinjiang and Hong Kong in international forums? And can it incubate a discursive space that will challenge ‘wolf warrior’ propaganda?

London Conference 2019: Managing Technological Disruptions – Governance and Accountability

 

London Conference 2019: Managing Technological Disruptions – Governance and Accountability

While technological competition is becoming a branch of geopolitics, technology can also help states address common challenges.

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14 June 2019

Speakers

Dr Samir Saran, President, Observer Research Foundation
Terah Lyons, Founding Executive Director, Partnership on AI
Stuart Russell, Professor of Computer Science, University of California, Berkeley
De Kai, Professor of Computer Science & Engineering, Hong Kong University of Science and Technology
Chair: Christine Foster, Managing Director for Innovation, The Alan Turing Institute

The pace of technological change has to date outstripped the capacity of international society to agree common rules for its management and governance.

Part of the challenge lies in its inherently double-edged effects. While technological competition is becoming a branch of geopolitics, technology can also help states address common challenges.

Technology is opening new domains of warfare, but also enhances resilience to natural disasters and cross-border threats. It can threaten democratic processes but also provide the means for transparency and greater accountability.

What does tech governance in a multipolar world look like? How can a regulatory balance be achieved that enables creative aspects of technology to flourish while mitigating the potential for disorder? What are the emerging technologies that demand early regulatory action? What responsibilities should private actors in the tech sector have when they operate across different jurisdictions?

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US-India Partnership for a Green Future

 

Climate Finance,Climate Mitigation,Emission,Green Future,US-India

US-India Partnership for a Green Future

Climate change is one of the most formidable challenges for this young century. As the World Economic Forum’s The Global Risks Report 2020 makes clear, failure to mitigate and adapt to climate change is the single most impactful and second-most likely risk facing the international community over the next 10 years. How effectively governments, businesses and societies can work together to make a tangible impact on this global challenge will determine the future of our planet.

As shown in Figure 1, the United States (US) and India contribute almost 20 percent of global greenhouse gas (GHG) emissions. Although the two countries differ markedly in both per capita emissions and incomes, India and the US must take concrete action according to their capabilities to develop solutions that can boost economic growth and mitigate the catastrophic consequences of climate change. The best way to achieve these twin goals is to invest in infrastructure for a resilient and low-carbon future; cooperate in key areas that produce relevant knowledge; foster innovation exchange; strengthen technical assistance bilaterally and for others; and catalyse capital investments for energy access, energy efficiecy, and renewable technologies.

Source: 2019 Emissions Gap Report, United Nations Environment Programme

Both the US and India have taken important strides together to advance their strategic partnership in the domain of climate action and policy. However, existing efforts continue to rely mainly on an incremental approach to tackling climate change. Such measures are welcome but insufficient. As the world grapples with the COVID-19 pandemic, we are reminded of the human and economic costs associated with weak international cooperation, delayed action, and the lack of investments in important infrastructure and capabilities. Climate-induced disasters may make the current pandemic look meek, and the world could ignore this risk at its own peril. Thus, it is vital for India and the US to double down on efforts to drive structural change, hurdle institutional barriers, and overcome the inertia inhibiting green growth and development.

In line with these goals, the Observer Research Foundation (ORF) and The Asia Group (TAG) convened a joint roundtable in October 2019 to advance recommendations to strengthen the US–India partnership for a green future with a special focus on climate mitigation, renewable energy, and climate financing. Across these topics, it is clear that both countries face a number of complex and overlapping challenges and opportunities. Even as recent policy efforts have strengthened each country’s capacity to tackle these challenges, this report seeks to identify policy recommendations to support this progress.

By the global ball and value chain

While MNCs are choosing well-established regional supply chain in East and Southeast Asia for now, India must look to the future.

 global supply chain, value chain, economic statecraft, downstream suppliers, production-linked incentive, Covid-19, territorial aggression, debt-trap diplomacy, institutional capture, global corporations, new wave of investments, patterns of trade

Of the many ways the post-Covid world will look different, the rapid confluence of trade, technology and national security will rank high among them. The US’s assertion in the 2017 National Security Strategy (NSS) that ‘economic security is national security,’ EU Commission President Ursula von der Leyen’s call this February for ‘tech sovereignty’, and China’s focus on ‘self-reliance’ in strategic technologies portend a new age for geo-economics. All three areas have acquired a sharper edge in the middle of the pandemic.

India must signal to its citizens, businesses and the international community how it plans to respond to this moment being shaped by three developments. First, the weaponisation of economics and trade, a trend prevalent among partners and rivals alike. Second, the measurement of national power will now be based on the ability to control global digital flows comprising technology, information, human capital and finance. Can India be an influential actor?

The decoupling of supply chains due to the sharpening US-China trade war makes this an imperative. GoI seems to have sensed this moment and is attempting to seize it.

And third, old industrial tools like import substitution and market restrictions will need radical repurposing for these times. Can India devise a new mantra compatible with the latest version of globalisation? All of this translates into one layered question: How can India first attract large investments, then grow and develop its technology sector, and finally share and export ‘Digital India’ to other geographies?

This will be based on India’s ability to manufacture for, and service, the growing digital markets, as well as shape the norms, rules, standards and topography of global physical and digital supply chains. The decoupling of supply chains due to the sharpening US-China trade war makes this an imperative. GoI seems to have sensed this moment and is attempting to seize it.

Dislocations in trade and technology are an opportunity to attract global investors. India has done poorly in the past. A September 2019 Nomura report suggested that of the 56 companies relocating out of China, only three have opted for India. Nevertheless, decoupling is a long-term process. While MNCs are choosing well-established regional supply chain in East and Southeast Asia for now, India must look to the future.

Beijing’s economic statecraft underpins its efforts to shape the world in its own image through territorial aggression, debt-trap diplomacy and institutional capture.

In this regard, India’s decision to announce three interrelated schemes on production-linked incentive (PLI) for manufacturing of components and semiconductors, and electronics manufacturing clusters, is important. These replace the earlier ‘merchant export from India’ scheme, and align India’s support for its nascent electronics industry with WTO rules. This new regime for manufacturing and export is designed specifically to draw in large global manufacturers like Apple and Samsung, facilitating the relocation of a part of their production base and downstream suppliers to India.

The ability of just a few global investors to help India integrate into global supply chains (GSCs) should not be underestimated. For example, the market value of the hardware Apple produces in China was nearly $220 billion in FY2019, of which it exported $185 billion, dwarfing India’s total electronics exports of $8.8 billion in the same year. Apple has over 800 production facilities globally, over 300 of which are based in China. Even minor relocations of these value chains to India will be beneficial. The reported relocation of certain processes to India by Apple contractors Wistron and Foxconn, among the largest and most sophisticated Taiwanese electronics manufacturers, will bring with them their own secondary supply chains.

Such opportunities will multiply for India — such as the Britain-proposed ‘D10 alliance’ (a club of 10 democracies) on 5G and emerging technologies — begin to reorganise patterns of trade to favour nations ‘politically trustworthy’. The logic driving disengagement with China on crucial supply chains is obvious. Beijing’s economic statecraft underpins its efforts to shape the world in its own image through territorial aggression, debt-trap diplomacy and institutional capture. Part of India’s response to this reality will be political muscularity along the border and in the oceans. The other, more durable, response will be an obsessive nurturing and growth of the economy.

These ventures are also a litmus test for GoI’s resolve for reform.

This must be dictated by a strategy that enhances India’s ability to integrate into the production and manufacturing of strategic technologies, to secure value from global data flows, and to grow Indian platforms and digital propositions for the world. Growing and new investments from US blue-chip tech giants like Apple and Facebook into India’s manufacturing base and digital platforms augur well.

But these ventures are also a litmus test for GoI’s resolve for reform. In 1982, GoI’s integration of Suzuki into the domestic market for automobiles spawned a new wave of investments into this sector making it one of the world’s most competitive. As the realignment of supply chains accelerates post-Covid-19, investors from around the world will be closely watching the performance of these major global corporations in India before making their own decisions.


This commentary originally appeared in Economic Times.