• ‘String of Pearls’ or 'New Silk Road’?

    China’s funding of Sri Lanka's Hambantota port development, and similar projects in other countries, has been interpreted by some Western and Indian analysts as part of a grand geostrategic design.
     
    The ‘string of pearls’ argument, first made by a few US military analysts, has not only become explanation for, but also ‘evidence’ of, China's supposed military ambitions in the Indian Ocean.
     
    This logic, while ignoring important related developments elsewhere, has also prevented serious consideration of alternative explanations.
     
    It cannot, for example, account for China investing seven billion dollars to develop three other ports in … Italy.
     
    Hutchison Whampoa, a Fortune 500 Chinese company, is investing €500-million in developing Italy’s southern port of Taranto, state-owned Cosco is expanding the port of Naples, and HNA, a Hainan-based aviation and logistics group, is in €3bn talks to build a terminal near Civitavecchia, north of Rome, The Guardian and Financial Times reported.
     
    The rationale? According to the FT, veteran China-watchers believe Beijing intends to build a strategic gateway into Europe through Italy, and to a lesser extent Greece.
     
    In other words, old fashioned commercial interests.
     
    As one diplomat put it, the actual “national security concern” driving China’s investment in ports from East Asia to Europe is simple: “an obsession with controlling the whole chain of production.”
     
    That means ensuring raw materials and components can flow in, and finished goods flow out, fuelling China’s spectacular growth.
     
    (See the special issue of Hewlett Packard’s HP Government Journal on supply chains and logistics, especially the article on ‘The Global Government Supply Chain’).
     
    In short, world’s existing ports may in future not be able to meet the Chinese economy’s massive, and growing, logistic needs (both import and export).
     
    For example, this year the Shanghai port overtook Singapore in terms of container throughput, according to Lloyds. However, crucially, whilst Shanghai mainly handled China’s exports from the Yangtze River Delta, Singapore mainly provided transhipment services for cargoes for the countries in southeast Asia.
     
    All but two of the world’s world’s busiest ports in 2009 were in Asia. China is home to nine of the top fifty.
     
    China's exports and imports are almost entirely dependent on sea transport. That means the global highway must expand – for China and its trading partners.
     
    If in the coming decades the smooth flow of future Chinese imports and exports vis-à-vis North American, European and other markets is to be assured, more – and bigger – ports are vital.
     
    And, at the same time, other states' trade with the massive Chinese economy will rely on the same commercial routes.
     
    The Italian ports, for example, will directly benefit Italian and other European firms eager to participate in China's economy. Fiat, for example, is keen to expand not just sales, but manufacturing in China. “Italian oil and green-energy companies would love greater access to China, as would Italy’s surprisingly large banks and insurers.” The Guardian also reported.
     
    The 'string of pearls' argument is both built on the assumption that China wants to 'challenge' other navies in the Indian Ocean and 'dominate' the sea lanes, and at the same time constitutes the supposed 'evidence' for this.
     
    It simply ignores the heavy interdependence of the economies of China and many other large states, both developed and developing. Material may flow along sea lanes, but only because of a thick web of myriad economic interconnections between companies, investors, financiers and states.
     
    Trading flows between China and countries in Asia, the Middle East, Africa and Latin America – i.e. quite apart from those with developed regions – are today credited with holding the world economy together, according to an analysis by Bloomberg.
     
    These ties form what economists at HSBC Holdings Plc and Royal Bank of Scotland Group Plc call the “new Silk Road” - a $2.8-trillion version of the Asian-focused network of trade routes along which commerce prospered starting in about the second century.
  • Arundhati Roy on Kashmir

    “A whole generation of young people who have grown up in a grid of checkpoints, bunkers, army camps and interrogation centers, whose childhood was spent witnessing ‘catch and kill’ operations, whose imaginations are imbued with spies, informers, ‘unidentified gunmen,’ intelligence operatives and rigged elections, has lost its patience as well as its fear.”

    The Indian activist and novelist Arundhati Roy sees firsthand ‘Kashmir’s fruits of discord’ .

  • Japan and Tamil Nadu ink major infrastructure project

    Japan and the Tamil Nadu government have signed a memorandum of understanding to take forward the Chennai-Bangalore industrial corridor project.

    Since 2000, Japanese companies have invested around US$5.3 billion in Tamil Nadu.

    The strategic project envisages building six lane roads, a high speed rail network and industrial estates along the route, IANS reports.

    The agreement would encourage more Japanese companies to invest in Tamil Nadu and also increase networking between the business communities of the south Indian state and the Japanese prefecture of Hiroshima.

    The MoU also includes exchanges between Tamil Nadu and Japanese universities.

    Meanwhile, Japan and India are to undertake a bilateral initiative on rare earth materials, whose production is currently monopolised by China.

  • China telecoms giant to invest US$500m in Tamil Nadu plant

    China’s largest networking and telecommunications equipment supplier is to invest US$500m in Tamil Nadu to set up an equipment manufacturing facility near Chennai.

    Huawei Telecommunications, one of the largest telecom equipment manufacturers in the world, expressed its intent to a delegation of Tamil Nadu officials which visited China last month, rediff reported.

  • Indian universities draw Chinese

    In the past five years, the Sino-India Education and Technology Alliance (Sieta) has worked to place Chinese students into universities in south India, with a special focus on Tamil Nadu’s Vellore Institute of Technology, which admitted at least 360 Chinese students this year alone.

    Seven out of every 10 Chinese students in India come on Chinese government and university scholarships, and most popular areas of study are computer science, e-commerce, finance and English, reports said.

    VIT has gained a good reputation for its facilities and welcoming attitude, allowing it to quickly become a hub for Chinese students, Sieta chairman Sathya Moorthy says. 

    Sieta believes 2,500 Chinese are studying in India. However, this is a fraction of the 9,000 Indian students who are studying medicine or engineering in China.

     

  • India de-facto permanent UNSC member - report
    With the unequivocal backing of the United States for a permanent seat on the UN Security Council, India’s two-year temporary term, due to end in December 2012, will continue well after that, the Hindustan Times reports.
     
    “We have no intention of leaving the Security Council. We are working to dovetail one into the other,” a senior Indian diplomat told the paper, referring to Delhi's present temporary and future permanent seats.
     
    India’s case will be bolstered by additional endorsements in the weeks ahead from both French President Nicolas Sarkozy and Russian President Dmitri Medvedev, the paper said.
     
    Meanwhile, interestingly, US Under-Secretary of State for Political Affairs William Burns wouldn't say if the US backed veto power for India, the Wall Street Journal reported.
     
    The five permanent members of the UNSC - US, UK, France, Russia and China - all have a veto on any resolution. The ten temporary members, who are elected for two-year terms, can block a resolution only if nine or more vote against it.
      
    India has just begun a two-year term, the south Asian giant's second since 1981. Other UNSC aspirants such as South Africa, Germany and Japan have held temporary seats more frequently.
     
    The only permanent member of the UNSC yet to endorse India is China. The Hindustan Times opinioned that even if that does not occur, all indications are that China would not veto a decision of the UN General Assembly to add countries to permanent positions, including India.
      
    Britain has long been supportive of India taking a permanent seat, as former Premiers Tony Blair and Gordon Brown have made clear.
     
    China has in the past also indicated its acceptance of India joining the UNSC. However, Beijing was this week non-commital on the US endorsement, instead calling for "patient consultations" on UNSC reform.
     
    The Wall Street Journal also quoted US Under-Secretary of State Burns as saying that Washington has not laid out any actual plan for a reformed Security Council and that it would take “significant” time to work it out.
     
    However, according to Indian diplomats President Barack Obama’s announcement this week would not only “silence the skeptics” of UNSC reform, it has had an “electrifying effect” with regard to hastening the long moribund process.
     
    President Obama Monday endorsed Delhi’s bid for a permanent seat on the last day of what has become a historic visit to India.
     
    "Indeed the just and sustainable international order that America seeks includes a United Nations that is efficient, effective, credible and legitimate,” Mr. Obama said Monday.
     
    "And that is why I can say today, in the years ahead, I look forward to a reformed United Nations Security Council that includes India as a permanent member."
     
    Earlier in his visit, Mr. Obama paid tribute to India as a world power, saying both countries would work together to promote stability and prosperity, the BBC reported.
     
    "As the world's two largest democracies, as large and growing free market economies, as diverse, multi-ethnic societies with strong traditions of pluralism and tolerance, we have not only an opportunity, but also a responsibility to lead."
     
    Washington and Delhi's relationship will be one of the century's defining partnerships, President Barack Obama and Indian PM Manmohan Singh said earlier this week.
  • China cool on UNSC reform

    China favours “democratic and patient consultations” on the question of reforming the United Nations Security Council, the government said a day after United States President Barack Obama endorsed a permanent seat for India, The Hindu newspaper reported Tuesday.

    While China supported "reasonable and necessary" reforms which “give priority to developing countries”, the Foreign Ministry on Tuesday said it “understood India’s aspirations” to play a greater role in the UN, repeating its earlier position of not directly supporting India's candidature.

    China was “ready to keep contact with India and other states on UNSC reforms”, a spokesman said.

    Indian officials have recently called on China to review its position. External Affairs Minister S.M. Krishna is expected to hold talks with his Chinese counterpart Yang Jiechi on November 14 and 15, along the sidelines of the Russia-India-China trilateral foreign ministers’ meeting in China.

  • Obama: India cannot ignore abusive states

    US President Barack Obama Monday criticised India for shying away from condemning rights abuses in repressive states, saying those states with global aspirations should not remain silent and ignore "gross violations" in other countries.

    "If I can be frank, in international fora, India has often shied away from these issues," Mr. Obama said.

    “Speaking up for those who cannot do so for themselves is not interfering in the affairs of other countries. It is not violating the rights of sovereign nations, it is staying true to our democratic principles."

    Mr. Obama’s comments, made during a key address to the Indian parliament, in which he also made clear the United States’ support for a permanent seat at the United Nations Security Council (UNSC).

    He then went on to say:

    "Now, let me suggest that with increased power comes increased responsibility.  The United Nations exists to fulfill its founding ideals of preserving peace and security, promoting global cooperation, and advancing human rights.  These are the responsibilities of all nations, but especially those that seek to lead in the 21st century."

    "And so we look forward to working with India — and other nations that aspire to Security Council membership — to ensure that the Security Council is effective; that resolutions are implemented, that sanctions are enforced; that we strengthen the international norms which recognize the rights and responsibilities of all nations and all individuals."

    "... When peaceful democratic movements are suppressed, as they have been in Burma (Myanmar), then the democracies of the world cannot remain silent."

    "Faced with such gross violations of human rights, it is the responsibility of the international community, especially leaders like the United States and India, to condemn it," he said.

  • UK war crimes law strains relations with Israel
    Israel has cancelled its special strategic dialogue with London to protest a law that enables Britain to arrest visiting foreign officials for alleged war crimes, press reports in both countries said Wednesday.
     
    This week Israel's deputy prime minister Dan Meridor was forced to cancel a visit to London following warnings he could be arrested for alleged war crimes, the Daily Mail reported.
     
    He did so after Britain’s Foreign Office and Ministry of Justice warned him he could face an arrest warrant from pro-Palestinian activists.
     
    Last year, Ms. Tzipi Livni, who was foreign minister during the war in Gaza in early 2009, cancelled her visit to UK after pro-Palestinian activists persuaded a London judge to issue an arrest warrant for her.
     
    The warrant was withdrawn after she canceled her trip, but the matter strained relations between Britain and Israel. A delegation of senior Israeli military officers were also forced to cancel their own visit to the UK.
     
    Britain is one of the European pioneers of universal jurisdiction, a broad legal concept that empowers judges to issue arrest warrants for nearly any visitor accused of committing war crimes anywhere in the world.
     
    In the wake of the difficulties with Israel, the new UK government is planning to amend the law to require the approval of the Director of Public Prosecutions Keir Starmer before any private prosecution for war crimes could be brought.
     
     
  • Menon: Indo-China ties 'strategic'

    New Delhi has an 'overriding strategic interest' in developing better relations with China, Indian National Security Advisor Shivshankar Menon said this week.

    As we face the big issues, we do this in a cooperative manner so that we can negotiate solutions to the problems. We have an overriding strategic interest in letting relations grow in a healthy manner,” Menon was quoted as saying by IANS.

    He said it was impossible to believe that the two countries were unable to manage their ties, adding, that there is 'no zero sum game' among all major powers.

    Menon's comments follow a statement by senior Communist Party of China (CPC) official Zhou Yongkang that the development of China and India provided opportunities rather than posed challenges to each other, according to a Xinhua report.

  • US mid-terms and foreign policy

    Ahead of Tuesday’s mid-term elections in the United States, the question of what the outcome might mean for US foreign policy seems to have a consensus answer: no change. An analysis in the GlobalPost website says most political analysts believe there will likely be no significant change in the direction of the Obama administration’s foreign policy.

    Indeed, some analysts predict that if the Republicans take control of Congress, President Obama, just as President Clinton did, will place greater emphasis on foreign policy.

    Ms. Anne-Marie Slaughter, the director of policy planning for the US State Department, emphasized to 100 international journalists the key difference between the present administration and the Bush administration: a strong belief in “a just and sustainable international order based on rights and international responsibilities.”

    Meanwhile, another columnist in the GlobalPost noted that the Tea Party movement, the conservative grassroots movement which has led the charge against President Obama's government in the past year, has no foreign policy.

  • Chinese firm wins massive Indian order for electricity generators

    A Chinese company, Shanghai Electric Co Ltd, has secured a $10bn contract to supply coal-fired generators to India’s Reliance Power Ltd, in a deal financed by Chinese banks, business press reports said. 

    Shanghai Electric is China’s biggest power-equipment maker by market value, and Reliance Power’s order may be the world’s largest for generators, Bloomberg reported.

    Shanghai Electric will supply a total of 30,000 megawatts of generation equipment over the next three years, equivalent to about 18 percent of India’s current installed capacity.

    Moreover, to support the deal, Reliance Power signed a $12 billion financing agreement with Export-Import Bank of China and other Chinese commercial banks, the Financial Times reported.

    “This is not just about selling equipment,” the FT quoted Mr. Anil Ambani, the Indian billionaire and chairman of Reliance ADA, as saying. He described the deal as a strategic partnership.

  • China-India trade to top $60 billion
    Trade between China and India is expected to touch $60 billion this year. It has already crossed over $30 billion, with China having a slightly greater than 60% share of the trade. China has promised to increase imports from India in order to address the trade imbalance beteen the two countries, the Press Trust of India reported. Beijing is calling for Indian companies to invest in China and for the two countries to "develop more convergence of interests and mutual trust".
  • China's growth no longer export led - report

    Noting that the question of what is - now - driving China’s seemingly relentless economic growth is one of significance to international policy makers and business executives alike, a leading business journal has conducted new research.  Arguing that conventional wisdom of export-led growth is wrong, the McKinsey Quarterly report says :

     “We found that exports have been a major driver, but not one as dominant as commonly believed. Indeed, there are clear signs that a shift toward domestically driven economic growth is well under way.”

    The picture of the Chinese economy that emerges from this new research has implications for the growth and supply chain strategies of businesses in China and elsewhere, the journal adds.

Subscribe to International Affairs

Business

Music

The website encountered an unexpected error. Try again later.