China Ascendant: Its Rise and Implications

Contents

Introduction: The China Challenge

HARSH V. PANT

PART 1: CHINA’S STRATEGIC POSTURE

1. In Search of China’s Grand Strategy

ABHIJNAN REJ

2. China’s Military Modernization and Its Implications

MANOJ JOSHI

3. Can India Counter Emerging Chinese Capabilities Like Stealth Aircraft?

PUSHAN DAS

4. Sea Drones: Implications of the Great Underwater Wall of China

SYLVIA MISHRA

5. The Dragon Challenge: The Necessity for an Indian Space Deterrent Posture

KARTIK BOMMAKANTI

6. Should BRICS Rally Around China’s Call for Cyber Sovereignty?

MADHULIKA SRIKUMAR

7. Strategic Technology Might Disrupt India–China Status Quo

ARUN MOHAN SUKUMAR

8. China: A Threat to the Liberal Democratic Order?

NIRANJAN SAHOO

9. China’s Naval Power and National Prestige

TUNEER MUKHERJEE

10 From Silk Threads to Fiber Optics: The Rise of China’s Digital Silk Road

KESHAV KELKAR

PART 2: CHINA IN SOUTH ASIA

1. India, China and the BRI

ASHOK MALIK

2. Friends with (Risky) Benefits

KRITI M. SHAH

3. China’s Surreptitious Advance in Afghanistan: A Multidimensional Move

SHUBHANGI PANDEY

4. Decoding the China–Bangladesh Relationship

JOYEETA BHATTACHARJEE

5. India Faces the China Wall in Its NSG Drive

ARKA BISWAS

6. Doklam Impasse: Why Confrontation with the PRC Matters

KARTIK BOMMAKANTI

7. The Sobering Arithmetic of a Two-Front War

ABHIJNAN REJ

8. The Future Trajectory of Sino–Indian Water Relations

SONALI MITTRA

9. ‘Weather War’: The Latest Addition to the Sino–India Conundrum?

APARNA ROY

10. Indian Media and China: Changing Discourse

RAKHAHARI CHATTERJI, ANASUA BASU RAY CHAUDHURY

PART 3: CHINA AND THE WORLD

1. The State of Play in Sino–Japanese Relations

K.V. KESAVAN

2. Europe and China: Dependent but Ungrateful?

BRITTA PETERSEN

3. China’s Rapid Growth in Africa: Lessons For India

MALANCHA CHAKRAVARTY

4. Taiwan Faces PRC’s Increased Pressure Tactics, More Countries Cut Ties with the Island

H.H.S. VISWANATHAN

5. Great Power Politics and the Tragedy of OBOR

GAYATHRI IYER

6. One Belt, One Road, and Now One Circle

RITIKA PASSI

7. What to Expect from China’s New Development Cooperation Agency

SEBASTIAN PAULO

8. China Courts Latin America with Unrelenting Soft Power

KETAN MEHTA

9. Indonesia’s ‘Soft Balancing’ Against China

PREMESHA SAHA

10. Rogue Nations: Assessing the China–Russia Relationship

KANAK GOKARN

11. Contesting the Dragon: India and ASEAN Converge

MAYA MIRCHANDANI

12. The BRI and Myanmar’s China Debate

K. YHOME

13. Engaging Africa through Summits: The Chinese Experience

ABHISHEK MISHRA

14. Charting China’s Approach to International Law

AARSHI TIRKEY

15. The Politics of the Redback: Chinese Economic Statecraft and Global Finance

TUNEER MUKHERJEE

PART 4: CHINA’S ECONOMY, SOCIETY AND CULTURE

1. The People’s Republic: A Flawed Champion for Globalization?

MIHIR SWARUP SHARMA

2. China’s Protectionist Tendencies Will Continue

PREETY BHOGAL

3. Pollution-Free Progress? Ambient Air Quality in India and China

SHALINI RUDRA, PRIYANKA SHAH

4. China’s Innovation Boom: Lessons for India

MEGHNA BAL

5. Transition to a Low-Carbon Economy: China’s Influence on Outcomes

LYDIA POWELL

6. China as India’s Main Bulk Drugs Supplier: Helplessness or Cautious Evolution?

OOMMEN C. KURIAN

7. Harmonizing Ayush and Modern Medicine: Can India Learn from China?

OOMMEN C. KURIAN

8. The Mystery of China’s Shrinking Megacities

SAYLI UDAS-MANKIKAR

9. China Will Have to Hyphenate Itself with the Rule of Law

GAUTAM CHIKERMANE

10. India, China and the Ironies of Maoism

NIRANJAN SAHOO

11. Decoding China’s New Threat from Isis

KABIR TANEJA

12. China’s Dark Secret Is Out, but the World Is Silent

KHALID SHAH

13. China’s Strategy for the International Satcom Market

VIDYA SAGAR REDDY

14. Academia: A New Frontier in China’s Foreign Policy

HARSH V. PANT, AKSHAY RANADE

Notes

Index

A Note on the Contributors

Acknowledgements

About the Book

About the Author

Copyright

Introduction

The China Challenge

HARSH V. PANT

China’s rise is debated extensively these days and its causes and consequences are dissected and analysed in great detail. For some, China is an emerging global superpower. For others, it has already arrived. But few can deny the impact that China is having on the international order. China is everywhere nowadays, simultaneously challenging and trying to be the guarantor of the global economic order in the age of Donald Trump.

With a population of 1.3 billion and prevailing as the world’s second largest economy, China seems ready to play an even more influential role internationally. Since the global financial crisis of 2008, China’s political leadership has been more vocal than ever about its key role in world affairs.

China faces a range of challenges: from its per capita income still being a fraction of that of the developed world to its rising inequality, to its environmental degradation and an ageing population. Most significantly, it has an archaic political system that wants to bring in economic development in a controlled manner and the very survival of that political system seems to be dependent on continuing economic growth.

The Xi Era

These challenges are not precluding Chinese political leadership from proclaiming an ambitious global agenda. Whereas previous Chinese leaders would prefer to talk of their nation as ‘developing’ or ‘poor’, President Xi Jinping is unabashed in declaring China a ‘great power’.¹ Xi Jinping is now officially the most powerful Chinese leader since Mao Zedong, who died more than forty years ago, after the National People’s Congress voted overwhelmingly in favour of a constitutional amendment (to remove a constitutional clause limiting presidential service to just two terms in office) – giving Xi the right to remain in office indefinitely. Not that there was any doubt about it, but when it finally happened it seemed to mark another red line in China’s evolution as a pre-eminent global power of our times. This has been one of the most significant developments in global politics, given China’s growing heft in the current global order.

Xi began his second term as head of the party and military in October 2016 at the end of a once-every-five-years’ party congress. His real source of authority emanates from him being the Communist Party of China (CPC) general secretary – a post that has no term limit – as well as being the head of the powerful Central Military Commission (CMC). His political doctrine, ‘Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era’, is now part of the amended constitution.² This takes China back to the good old days of Mao, when he was the supreme leader deciding the fate of millions based on his whims and fancies. Recognizing the dangers of one-man rule, Deng Xiaoping got the limit of two five-year presidential terms written into China’s constitution in 1982, six years after Mao’s death.

Xi’s rise has challenged most of the assumptions about China. He wants to make China the pre-eminent global power and he is convinced of his own destined role in making that a reality. He has already removed most of his political opponents through an aggressive anti-corruption drive and has sought a fuller control of the military. For the rest of the world and India, a more aggressive China is now a given. Beijing under Xi has moved with greater confidence towards asserting its interests. He has pursued an ambitious foreign policy agenda – active militarization of islands in the South China Sea and the setting up of China’s first overseas military base in Djibouti to his ambitious Belt and Road Initiative (BRI).

There have been some isolated critical voices in China, mostly on social media, who have compared their changing political system to that of North Korea or underlined the dangers of a Mao-type cult personality. But mostly there has been support for the move in the name of protecting the country’s long-term stability. Some have argued that since Xi’s anti-graft movement and his key BRI are still in their infancy, such a stratagem was necessary. But let there be no doubt that this is all about Xi’s ambition.

In his marathon address to the nineteenth party congress in October 2017, Xi had unveiled his vision of China’s future of achieving ‘moderate’ prosperity in the next four years, and emerging as an advanced socialist nation by 2050.³ Underlining that China would pursue its own path of developing ‘socialism with Chinese characteristics’ and inviting ‘peoples of all countries to join China’s effort to build a common destiny for mankind and enduring peace and stability’,⁴ he was building a case for the ‘Beijing Consensus’ as an alternative to the so-called Washington Consensus. Xi’s address was one of the most resounding of Chinese articulations about its growing weight in global politics and its intent of acquiring a central position therein, after years of keeping a low profile.

At a time when the US under the Trump administration is looking more and more inwards, Xi has tried to position China as a defender of the extant global order. In his address to the World Economic Forum in 2017, Xi delivered a strong defence of globalization, underlining Beijing’s credentials to usurp America’s traditional role as the champion of free trade and open markets. But it should have been clear to anyone who has observed China closely that its credentials as an exemplar of market economy remain very weak for a nation that has benefitted enormously from the American-led international economic system. China’s history of currency manipulation, closed capital markets, and subtle non-tariff barriers leading to trade imbalances weaken it as an economic leader.

Nevertheless, the world was willing to buy this with a certain degree of credulity because of the attractiveness of a rising power. It wanted to believe in China’s rhetoric because it was very reassuring, leaving all the difficult questions for another day. It wanted to believe that as long as China is rising it needs the rest of the world, and therefore it would like to preserve the extant order.

India’s China Conundrum

Indian policymakers have also been part of this vacuous thinking for the past two decades. They got carried away by the propaganda that often managed to put China and India in the same league, assuming that being peers would somehow preclude any overt hostility. They also got carried away when their Chinese interlocutors assured them of their benign intentions and how there was enough space for both China and India to rise. Then came the biggest charade of all – BRICS, an association of five major emerging national economies: Brazil, Russia, India, China, South Africa. From an investment banker’s catchy acronym phrase for his clients, it was converted into a geopolitical grouping. New Delhi entered it with its eyes closed, only to be bamboozled by the Chinese attempt to convert the grouping into an extension of its own economic superiority.

Chinese power has grown over the last two decades. Concomitantly, its interests have continued to expand. As it ventured into South Asia and the larger Indian Ocean region, India looked on without any sense of purpose. Reassured by our Sinologists that the Chinese have no expansionist designs, we continued to neglect our military and logistical preparedness, not even bothering about our border infrastructure. After all, if the Chinese don’t intend to encroach into our terrain, what would be the point in building up our defences?

As China continued to move towards the Indian doorstep, Indian policymakers were only focused on assuaging Chinese sensitivities. We would not meet the Dalai Lama publicly for fear of offending Beijing. We would not have joint exercises with like-minded countries in the region lest China think ill of us. We would not sign foundational agreements with the US as this would make us America’s followers – never mind if that hampers our ability to track Chinese submarines in the Indian Ocean. And, of course, we would keep talking of non-alignment because that’s the best way to guarantee our interests in a world shaped by Chinese power.

However, China’s increasing assertiveness has been a function of its power and emphasis on its own interests. It has very little to do with India’s behaviour. We have misunderstood China in the past and there is a danger that we will continue to misunderstand China in the future if we don’t comprehend the underpinnings of Chinese behaviour today.

Power, by its very nature, is expansionist. China’s growing economic and diplomatic footprint around the world is now being followed by its military footprint. That’s the reality of great power politics. Understanding that is not being belligerent but preparing oneself adequately. This was the lesson from the Doklam crisis in 2017.

The Doklam Lesson

On 28 August 2017, disengagement started at the Doklam plateau on the Sikkim border where Indian and Chinese forces have been at a standoff since June 2017. According to a statement issued by the Ministry of External Affairs (MEA), ‘expeditious disengagement of border personnel at the face-off site at Doklam has been agreed to and is on-going’.⁵ The Chinese foreign ministry, for its part, suggested that ‘Indian forces have already withdrawn to the Indian side of the border’ and that ‘Chinese forces will continue to patrol in Doklam region’. It has also said that its forces ‘will remain in the region’ and continue to exercise their ‘sovereignty over the region’.⁶ The fact that China was trying to put a spin on the issue to suggest the outcome was border patrolling by them was never really an issue.

The standoff had begun immediately after the Chinese troops began constructing a concrete road in Doklam inside Bhutanese territory. The Indian troops promptly halted the construction work, forming a human chain, calling it a change in ‘status quo’ with serious security implications for India – as the Doklam plateau overlooks the strategic Chumbi Valley.

For more than two months, Beijing continued to harangue and wage its psychological warfare, sometimes by reminding India of 1962 and sometimes by suggesting that countermeasures from Beijing would be unavoidable if the Narendra Modi-led Indian government continues to ignore Chinese warnings. China also provoked India by asking what New Delhi would do if it ‘enters’ the Kalapani region in Uttarakhand or Kashmir. This was the first time that the issue of Kashmir was raked up by China at the official level.

Indian diplomacy, by contrast, was mature and the government did not lose its nerve. Sushma Swaraj, the minister of external affairs, asserted in Parliament that war was not a solution and that India would resolve the border standoff with China through dialogue. But she also made it clear that India’s reasonableness should not be mistaken for weakness. ‘Just because we want to have friendly relations with our neighbours, they shouldn’t cross the line. India always wanted smooth relations with China. But the alignment of boundaries involving India, China and Bhutan has to always be finalised in consultation with all three countries,’⁷ Swaraj said, underscoring New Delhi’s resolve not to be cowed down by Beijing’s relentless high-pitched campaign.

This crisis between China and India was different from other such episodes in the past but what made it unique in recent memory was New Delhi’s determination not to concede the standoff on China’s terms. Beijing tried everything: it used its media to bully India; it threatened India officially; it used colonial era records selectively; it tried to rally global public opinion; it even tried to childishly ridicule India, with its media using racist videos. Beijing also tried to corner India in other parts of the border with Chinese troops entering the Indian border near Pangong lake in Ladakh on 15 August 2017 and pelting stones at Indian soldiers. But India did not budge.

And that, in essence, foreshadows the future of the global order. Underlying all this petulance about boundaries and territories, behind all this façade of sovereignty, the Sino–India standoff in Doklam has been about whether the future of Asia will be one where China will be the dominant actor and dictate the terms of behaviour to other nations or whether the future of Asia will be a multipolar one in the real sense of the term. India decided to stand its ground because there was far too much at stake if it did not respond to Chinese bullying.

China talks of a multipolar world order but, in reality, it wants a unipolar Asia. Its assertiveness in staking maritime territorial claims in recent years might have convinced it that there is no real opposition in this region and beyond. The West is too preoccupied with its own internal challenges to pose any serious problems in China’s way and the regional states are too weak to do anything about Chinese belligerence. The Association of Southeast Asian Nations (ASEAN) has turned out to be a paper tiger when it came to the crunch. China’s divide-and-rule policy has fractured any sense of unity in Southeast Asia. A rather weak and ineffective negotiating framework for a code of conduct in the South China Sea has been adopted by the ASEAN under Chinese pressure, reflecting the challenges being faced by the Indo-Pacific nations at a time when the US remains distracted and lacks a clear Asia policy under Donald Trump.

Thus, India remains the last nation standing, a stumbling block in China’s drive for domination of the Indo-Pacific. Already, the ambitious BRI has made China central to the evolving global economic structure. Even when nations realize the folly of their joining this mega connectivity initiative, they see no real alternative. New Delhi is the sole major power that has decided to publicly oppose Xi Jinping’s vanity project. The other major power centres remain constrained in their policy responses to China. Japan has domestic, political and legal constraints despite Prime Minister Shinzo Abe’s proactive foreign policy. Australia’s economic future is so deeply intertwined with China’s that its elites are today having to debate the choice between the US and China.

The Narendra Modi government, in contrast, has been robust in its response to China’s rise. When it came into power, it quickly realized that China remains determined to pursue a unilateral foreign policy and Indian interests will suffer if India does not make a change in its foreign policy behaviour. While a section of Indian elites continues to believe that India can shape Chinese behaviour by its policies, policymakers have been confronting the consequences of China’s growing capabilities in multiple ways. Although a tad late, New Delhi has been focusing on building its border infrastructure while trying to reach out to other like-minded powers such as Japan, Australia, Indonesia and Vietnam to shape a favourable balance of power in the region.

Ahead of the BRICS Summit in China and the nineteenth congress of the CPC, the standoff with India could have been really damaging for the Chinese president, who stood to lose the most if a quick resolution to the crisis was not found. But the Doklam episode marks an inflection point in India’s relations with China. India seems to have recognized that standing up to China to protect its core interests is its only available option. Otherwise, it will have to acquiesce in shaping a China-centric Indo-Pacific – and for most Indians that option is clearly not even worth considering. Despite the informal Wuhan Summit between the Indian prime minister and the Chinese president in May 2018, the structural factors shaping the Sino–Indian divergence remain far too powerful in the trajectory of this bilateral relationship.

Understanding China

Despite China being the most important factor in shaping our foreign policy imperatives, our understanding of the country remains sketchy at best. At Observer Research Foundation (ORF), we have devoted considerable attention to the implications of China’s rise for India in various domains, from foreign and security policies to economic, social and environmental policies. Based on the research conducted by ORF researchers over the last few years, this collection of essays, written from early 2017 to the end of 2018, is intended to generate a healthy debate in India on China’s rise and its consequences for India. Only if we understand China better can we have a foreign policy discourse in India which does justice to the nation’s rising global aspirations. We present these essays hoping to engender a more fruitful and productive conversation not only about China but also about evolving Indian foreign policy priorities.

PART 1

China’s Strategic Posture

1

In Search of China’s Grand Strategy

ABHIJNAN REJ

No other country in recent history has so systematically pursued its national objectives as China. Its single-minded pursuit of grand strategic objectives invokes respect even among analysts not usually predisposed to optimism about China’s strategic intent. In particular, Deng Xiaoping’s public call in 1984 to quadruple Chinese gross domestic product (GDP) by the end of the twentieth century – and meeting the target ahead of time – is often taken to be a leading exhibit of the single-minded devotion of national resources to meet Chinese core objectives.¹ Similarly, today when Xi Jinping talks about his vision of China’s ‘Two Centenaries’ – 1921–2021, the centenary of the establishment of the Communist Party of China, and 1949–2049, the centenary of the creation of the People’s Republic of China – analysts read Chinese resoluteness.

But grand strategy is more than just setting national goals and meeting them by deploying adequate resources. It is, as diplomatic historian Hal Brands states in the book What Good Is Grand Strategy?, an act of matching power and purpose. Grand strategy is, Brands writes, ‘the intellectual architecture that gives form and structure to foreign policy’.² It is in this sense that detailed analyses of China’s grand strategy by Chinese authorities in English (as opposed to Western experts) are hard to come by. Two works stand out in being exceptions to this rule. The first one is a 2003 book by Peking University professor Ye Zicheng, translated to English in 2011. The second is a 2011 article by another professor from the same university, Wang Jisi. Both works are remarkably candid about China’s vision of its role in the world.

Ye Zicheng describes China’s core grand-strategic goal as becoming a ‘world power’ through ‘peaceful development’.³ Economic development will be, for Ye, what makes China a world power. On the face of it, this is innocuous enough. After all, almost every emerging state would aspire to be a world power, preferably through non-conflicting means of strengthening its economy. But the interesting thing about Ye’s characterization is that, in his schema, there are two other kinds of powers: a ‘global superpower’ and a ‘super power’. An international system with a ‘global superpower’ would be, by definition, unipolar; a world of ‘super powers’ multipolar. Ye therefore makes China’s preference for a multipolar world of ‘world powers’ known. He writes (of the Russia–China relationship): ‘The rise of only China or only Russia would not lead to a stable multipolar world [emphasis mine].’⁴ Indeed for Ye, the mutual quest for multipolarity is what results in both Russia and China pursuing cooperation over competition. Ye also states that China and India need to manage their differences to establish a ‘multipolar world’.⁵

Ye points to a pervasive theme in the writings of other Chinese experts – within the People’s Liberation Army (PLA) and elsewhere – that ‘China pursue a national defence policy that calls for the construction of national defence to serve overall economic development’.⁶ This is consistent with the Chinese pursuit of dual-use technology and the possibility of military Keynesianism adopted to Chinese needs.⁷ But there is another subtle point in Ye’s argument. If China were to arm itself to the point that the hegemon is worried, that may imperil China’s sustained economic growth through the possibility of war – a security dilemma. By emphasizing economic development priorities over national defence ones, China is willing to seek ‘relative’ as opposed to ‘absolute’ security, Ye contends.⁸

But Ye is no dove, seeking the cause of world peace alone. The most striking parts of his book are his descriptions of the vulnerabilities of the United States even in the face of ‘their overwhelming power [that] enables them to pursue and achieve absolute security’.⁹ Ye reminds the readers of the story of David and Goliath and notes: ‘The United States is so strong that none of its enemies will confront it directly. Rather, they will adopt asymmetrical methods to oppose it [emphasis mine].’ In a way that should give pause to American policymakers, Ye lists, ‘nuclear power plants, electronic communications centres, and hydroelectric power plants’, as additional examples of American vulnerabilities.¹⁰ In fact, in 1999, two PLA colonels had written a book on what they termed ‘unrestricted warfare’ – a menu of asymmetric means, including terrorist attacks, to defeat the United States in the event of a conflict.¹¹

The David-versus-Goliath story also finds a re-expression in the works of another PLA colonel and National Defence University scholar, Liu Mingfu, who wrote a book called The China Dream in 2009. Liu described the competition between the US and China as a marathon of endurance – sustained by dollops of cunning – in contrast to a duel or boxing match between equals.¹² And Liu is not on the fringe. For example, many analysts (most notably, former American intelligence official, Michael Pillsbury) have speculated that when Xi Jinping talks about the ‘Chinese Dream’,¹³ he is taking a cue from Liu. But the crucial difference between Liu and Ye is that Liu’s grand strategic goal is China emerging as a worldwide hegemon by 2049 (the end of the ‘Hundred-Year Marathon’) after