On the Verge of a US-China Trade War

The world is teetering on the brink of a trade war between China and the US.

US President Donald Trump fired a new shot in the trade war on Thursday (April 5) when he said he had directed the United States Trade Representative (USTR) to consider an additional $100 billion tariff following China’s decision to retaliate against an earlier $50 billion worth of proposed tariffs.

For the record, Trump tweeted on April 4, the day the USTR listed the new tariffs on a slew of Chinese goods, “We are not in a trade war with China, because that was lost many years ago…”

An earlier round of tariffs saw the US announce 30% tariffs on imported solar panels and washing machines in January. This was followed by 25% tariff on steel and 10% on aluminium on the grounds of national security, though Mexico and Canada were exempted.

On March 22, Trump announced that the US would impose tariffs on $50 billion worth of goods. The US targeted industries like aerospace, information and communications technology, robotics and machinery. On the same day, the USTR issued a lengthy report detailing the manner in which China forced American companies to transfer key technology and trade secrets and Chinese proclivity for stealing data through hacking.

On April 2, China announced tariffs on US goods worth $3 billion on some 130 American products like fruits, nuts, wine and steel pipes, as well as pork and recycled aluminium. On April 4, following the publication of the list of items that the US would target, China listed products worth $50 billion imported from the US which would now be subject to 25% tariffs, these included soya beans, automobiles and chemicals.

The US imported $505.6 billion worth of goods from China in 2017, of which the largest category were computers and computer accessories ($77.1 billion), mobile phones ($70.3 billion), telecom equipment ($33.5 billion) and toys, games and sports goods ($26.7 billion). The current USTR lists avoid many of these items so as to spare the ordinary consumer the pain of price hikes.

The USTR action, which would cover several thousand separate tariff lines, will be reviewed further after the public notice and comment process, including hearing. It is only after all this happens that the agency will issue a final determination on the list of products that will be subject to the additional tariffs, which could now approximate $150 billion worth of Chinese imports.

There is considerable worry about where this escalation cycle can land up. There are many complexities that escape Trump’s simplistic understanding of the trade deficit issue. Actually, the issue is not just between China and the US. A “Chinese” product comprises elements from other countries.

The logo on the iPhone notes, “Designed in California, assembled in China”. The iPhone costs Apple $220. It is assembled in China for $6.50, but the rest of the cost is for its sophisticated components made in Germany, South Korea, Japan and the US. In other words, any “trade war” between these two giants will have consequences for many other smaller countries – there will be collateral damage.

The Economist says that 30% of the value of goods that China exports to the US is added elsewhere – Taiwan, Malaysia, Singapore and so on. If the situation worsens, “countries entwined in Chinese supply chains will suffer” and in its estimation, Japanese suppliers could be the worst hit in absolute terms.

As this analysis points out, Chinese value addition has the lowest value addition in the high tech sector. In the case of computers and electronics, “less than half the value added in Chinese exports come from China”. It notes that even while Chinese industrial policies are charged with trying to build up its state-owned enterprises, they account for an increasingly declining share of exports. Anyway, the big worry now is that China’s retaliation could be escalated to cover major firms like GM or Apple, even if Chinese workers are affected by it.

President Xi Jinping is expected to address the Boao Forum next week. In keeping with the Chinese posture, he will put across the country as a victim of American capriciousness and as one which is willing to play by the rules. It is also initiating a complaint in the WTO that the US was in serious violation of global trading rules by targeting Chinese goods for tariffs.

China has already signalled that it is willing to make concessions, such as those related to the opening up of the finance sector. When Trump visited China in November 2017, Beijing offered concessions like raising caps on the foreign ownership of banks and securities firms. Global firms have been cautious here because they would have to use Chinese telecom equipment for their operations and store data there as part of its laws. Chinese vice finance minister Zhu Guangyao had said that the country would allow foreign investors to own 51% of Chinese securities firms, fund managers and futures companies and allow them to own 100% three years later. The current limit on foreign ownership is 25% for large publicly traded securities firms and 49% for most other businesses. He also promised that China would raise the allowed foreign investment in insurance companies which was 50% for most companies to 51% in three years and 100% in five years.

But given the USTR focus, it seems unlikely that they will be willing to accommodate American demands which are increasingly focusing on their industrial policy that comes under the rubric of “Made in China 2025”.

This policy is key in order to modernise the country’s economy, move up the innovation chain and avoid the middle-income trap, which is something most Western economists have been telling China it must do. The Communist Party of China is fully aware of the fact that its power rests on its ability to ensure China’s positive economic trajectory. So it is unlikely to be deterred from its task by the steps taken by the Trump administration at this time.

It is not surprising that the latest round of Trump tariffs got a tough response from Beijing. Chinese authorities declared that they would fight back against US plans at any cost. Official spokespersons of the Ministry of Commerce and Foreign Affairs said that while China did not want a trade war “we are not afraid of it”.

The Wire April 6, 2018

Over to Maldives

The visit of Pakistan Army Chief Qamar Javed Bajwa to the Maldives could not have been particularly comfortable for India. Bajwa became the first foreign dignitary to visit Maldives following the imposition of the 45-day Emergency which was lifted 22 March. The statements attributed to General Bajwa and President Abdulla Yameen were not out of the ordinary, what is significant, however, is the visit itself. It is a sign of closer coordination between Chinese and Pakistani policy in South-west Asia and the western Indian Ocean region.

It may be recalled that in December 2017, President Yameen visited China shortly after the Parliament approved an FTA with Beijing. Maldives became the second South Asian nation after Pakistan to have one with China. He committed his country to take an active part in the Belt and Road Initiative.  

Even so, India has broadly signalled that it will not intervene in the Maldives for the present.  A report by Jyoti Malhotra in The Indian Express says  that New Delhi has told Beijing that it will not intervene in Maldives and that it expected the latter to reciprocate this gesture of “strategic trust” and not do anything which would negatively impact on the country’s security. The unnamed official told Malhotra that “The days when India believed that South Asia was its primary sphere of influence… are long gone.”

Taken together with a recent observation by the Indian ambassador to China  Gautam Bambawale that China needed to be sensitive to Indian concerns in Doklam, this move signals an effort by New Delhi to work out a modus vivendi with China in the South Asian and Indian Ocean Region.

 It would be tempting to see it as a sign of weakness, however it is actually a measure of Indian self-confidence. In the past few years, Indian policy may have had its hits and misses in countries like  Nepal, Sri Lanka and Bhutan (Doklam) but it has shown that it will not hesitate to react to any move that impinges on Indian security. At the same time, however, it will not get neurotic about every move by external powers to interact with India’s neighbours..

 There can be little doubt that Maldives occupies a hugely important location with regard to India. It lies a little south of the sea lanes that connect eastern and western India, and it also sits at the head of international sea lanes that take traffic from the Suez Canal and the Straits of Hormuz to eastern India, South-east Asia and East Asia.

 Over the years, and after many interventions, New Delhi has learnt that it is easy to intervene in a neighbouring country, but that managing the consequences of an intervention can be complicated. Smaller countries in the neighbourhood are naturally inclined to play off bigger powers to expand their own leverage, but a self confident policy rooted in a mature understanding of national interest can prevent needless heartburn and cost.

In the past couple of years, Maldives has steadily sought to move away from India. It began with the cancellation of a contract to an Indian company for an airport project in 2012. Subsequently a Chinese company was given the contract. Chinese President Xi Jinping visited Maldives in September 2014. He got the support of the strategic maritime nation for his BRI. China has taken up several projects in the island, including a road bridge between Male and Hulhule airport.

 In 2015, Maldives passed a new law allowing foreigners to own land on the Maldives if they invested more than $ 1 billion and more than 70 per cent of the land was reclaimed from the sea. Given China’s expertise in reclamation, this looked like a measure tailor made for Beijing. As part of this the Maldivian government has leased  the Feydhoo Finolhu island to a Chinese company for a period of 50 years.

The big Indian concern is of Chinese maritime activities in the Maldives. There have been periodic reports about the sale of the Gadhoo island in the southern part of the country. The report that China and Maldives are planning to build a Joint Ocean Observation Station in its western most atoll of Makunudhoo could not be too comforting. The Maldivians claim that this is a meteorological station, but it could well be the thin edge of the wedge of a facility for monitoring maritime traffic since it is perhaps the closest to India.  As such till now Maldives has had close relations with India on the security front. Given its proximity, Indian security can be affected by developments in the island-nation.

As of now, India is likely to wait till  September when the Maldivian general elections are due. Indian policy is largely aligned with that of Europe and the US and should there be indicators that Yameen does not plan to go ahead with the elections, there could be consequences.

Though China has directed a huge volume of tourist traffic to the island helping it to keep its key earning sector going. The biggest source of tourists to Maldives is still Western Europe. Whether Male likes it or not, India’s proximity is a fact. It may be seen as a disadvantage by Yameen, but in the past, it has been useful such as in 1987 when India prevented a coup on the island, or in December 2014 when it rushed water supplies to the island when Male’s water treatment plant broke down.

 Greater Kashmir April 2, 2018

India and China in rapprochement mode after Doklam crisis

Indian Defense Minister Nirmala Sitharaman’s visit to China this month will take place amid a climate of improved relations between the two countries. It will come in the wake of an important interview to the South China Morning Post last month by India’s ambassador to China, Gautam Bambawale.

The ambassador put forward a defense of India’s June 2016 intervention in the Doklam region at the India-Bhutan-China tri-junction. The area is disputed between Bhutan and China and is the subject of long-running negotiations between them.

In intervening to block the Chinese from building a small road to a ridge that overlooks the narrow Siliguri Corridor connecting  India’s northeast to the rest of the country, New Delhi had said in a press note dated June 30 that it had acted in coordination with the Royal Government of Bhutan, but that the issue was not just about Bhutanese interests but the fact that the Chinese action “would represent a significant change of status quo with security implications for India.”

In his interview, Bambawale repeatedly said India had acted in reaction to “the change of status quo by the Chinese military.” He sidestepped the uncomfortable reality that India itself has no legal claims on that area. But he repeated that in order to maintain peace and tranquility, “there are certain areas, certain sectors which are very sensitive, where we must not change the status quo.”

But his observation – and this is what makes the upcoming Sitharaman visit important – that the two sides had a deficit of strategic communication at a higher military level is significant. Sitharaman will, no doubt, meet her counterpart, the newly appointed minister of defense, General Wei Fenghe, who has been a long-standing member of the top decision-making body of the military in China, the Central Military Commission.

Bambawale’s remarks indicate that what India is seeking is a modus vivendi over the Doklam issue. Given the way Chinese policy on the border is made, it is seeking to target the decision-making authorities in the People’s Liberation Army, rather than the Ministry of Foreign Affairs. Not surprisingly, for example, the Border Defense Cooperation Agreement, the last major pact signed by the two sides on building border confidence, was made between PLA Lieutenant-General Sun Jianguo and India’s defense secretary at the time, R K Mathur.

What India is looking for is some understanding on the part of the PLA not to press on with its Doklam project, which in essence seems to involve developing a permanent position on the Jampheri ridge that overlooks the strategic Siliguri Corridor.

The Chinese had built a road in the early 2000s to a point 100 meters or so below the Doka La Pass, where there is a strong Indian military post. They would park their vehicles and walk up and chat with Indian soldiers in Doka La and then  patrol the last 4-5 kilometers to the ridge on foot. The Indian side would like the PLA to revert to this pattern because it does not essentially question the Chinese claim on Doklam, but at the same time does not immediately pose a danger to Indian security.

The Sitharaman visit could provide a larger opening for a greater thaw in the Sino-Indian relationship that could see confirmation through a visit by Prime Minister Narendra Modi to China. He is scheduled to attend the Shanghai Cooperation Organization (SCO) summit in Qingdao in June, but there could be an official visit either earlier or linked to the summit where issues that have been clouding the relationship between the two countries could be thrashed out.

Economic ties between the two countries are already doing well. Trade was at a historic high of US$84.4 billion in 2017, despite the Doklam standoff. Chinese foreign direct investment into India is growing by leaps and bounds, though it is still small compared with Chinese investments elsewhere. India welcomes  this because it also helps address the problem of the $52 billion trade deficit that India has with China.

With the return of the diplomatic discourse, the two sides could quietly work out their other issues, such as India’s membership in the Nuclear Suppliers Group (NSG) or the proscription of Masood Azhar. India has already taken steps to address Beijing’s sensitivities with regard to the Dalai Lama, but it could go further and soften its stand on the Belt and Road Initiative. Perhaps the first move could be to press on with the Bangladesh-China-India-Myanmar (BCIM) Corridor that India has already signed up to.

If India had the gumption, it could actually join the CPEC (China-Pakistan Economic Corridor) initiative and demand road access from the Indian side to Pakistan-administered Kashmir or, for that matter, to Pakistan proper, Afghanistan and Iran. Beyond that, there is a larger agenda of cross-border trade, in itself not important, but something that could  signal  a changed relationship.

With a trade war looming between the US and China, Beijing would be interested in ensuring that New Delhi does not throw all its weight behind Washington at this juncture. The Donald Trump administration’s National Security Strategy has designated China as a rival of sorts and embraced the categorization of the Asia-Pacific and the Indian Ocean as a single “Indo-Pacific” strategic region. The first meeting of a naval quadrilateral that includes India has also taken place, in 2017, a prospect that would be discomfiting for China.

Asia Times April 2, 2018

The Bolton effect

Though he has often been made out to be a cartoonish figure, John Bolton who has been appointed National Security Adviser by US President Donald J Trump, is a dangerous and clever man. He will have an immediate impact on two key areas of US foreign policy—Iran and North Korea.

Bolton was the US ambassador to the United Nations under George W Bush and has been known to have hawkish positions on most areas of foreign policy—Iran, North Korea, the UN, European Union and international agreements. The title of his 2007 memoir “Surrender is not an Option” speaks for itself. He has an abrasive personality and is known to be a bureaucratic infighter and for that reason the US Senate did not confirm him in 2002, Bush kept him in the post through a loophole process called the recess appointment. This time around, he does not need Senate clearance, though he will supervise a national security team of several hundred.

Given his reputation, it is not surprising that there is worry in South Korea that he could  be the bull in the china shop and destroy all possibilities of a negotiation settlement with Kim Jong Un over the North Korea nuclear programme. The situation is delicately poised right now with both sides agreeing that dialogue is a good idea. South Korea has enormous stakes in the process for obvious reasons. But Bolton’s record on North Korea suggests that the only way out is to use military force.

The second area where the Bolton effect could strike is in relation to the Iran nuclear deal. The deal comes up for Presidential certification on  May 12 and by then, Bolton would have had a month in office. Expectations are that Trump will follow his instincts to terminate the deal and Bolton will work out his rationale. The result will be a return of heavy sanctions on Teheran and will put the US against China and Russia, as well as Europe.

So far, Trump has been willing to fix the deal, which, in his view, should not be confined only to nuclear issues.  The deal should include Iranian action on the non-nuclear areas such as its missile programme and its activities in Syria and Lebanon. However, with Bolton there, the American policy could be one of outright scuttling of the deal.ast week, a former chief of the Israeli Defence Forces, Shaul Mofaz told a conference that Bolton tried to convince him of the need for Israel to attack Iran. Mofaz, along with three other IDF chiefs, Benny Gantz, Dan Halutz and Modhe Ya’alon are against the cancelling of the deal.  Mofaz served as chief till 2002 and was thereafter appointed Defence Minister by Prime Minister Ariel Sharon. However, the current Prime Minister Benjamin Netanyahu has for long advocated military action against Iran. 

All this comes at a time when Trump has begun to move in his long-awaited trade sanctions against China. He has announced tariffs on $ 60 billion worth of Chinese goods, but this could be just the first part of his moves. A detailed list of goods will now be released, followed by a 30-day period for comments in which lobbyists for specific industries will have a field day. In the main, the tariffs are targeting those sectors that the Chinese are promoting for their Made in China 2025 policy, strategic areas which it wants to fill out in its bid to emerge as the leading nation of the world.

The US could also announce restrictions on Chinese investment in the US and visa restrictions for Chinese citizens, especially those who want to study in the fields of science and technology.

There  is still time for the US and China to work out a deal on tariffs. Earlier this month, China’s top economic policy maker, Liu He, recently appointed Vice-President of the country, was in Washington and no doubt sought to engage the US in discussions to forestall a trade war. China has hinted at reciprocal tariffs that could hit US agri-exports which could hurt Trump’s political base.

With the US declaring that the policy of engagement with China will  now be replaced by one of competition, and the Chinese saying they have entered a New Era under Xi Jinping, we can expect greater friction between the world’s two premier powers.

A dangerous side-show here could be a changed US policy towards Taiwan. Beijing has made it clear that it will view any separatism on the part of the island republic as tantamount to treason and Xi has virtually promised reunification, by force or otherwise in his term. On the other hand, Bolton and the incoming Secretary of State Mike Pompeo are said to be very supportive of Taiwan. 

We stand, therefore at the cusp of three wars, one between the US and China on trade with the Taiwan issue that could well make it a shooting war, the possibilities of war with Iran and North Korea. Since World War II the US has not really won any war,  barring the one against Grenada in 1983. But it remains  the foremost military power in the world, capable of bringing down great, if not total destruction on its adversaries.

It is always easy to start a war,  but very difficult to know how it will end. Take the US which began a war with Iraq in 1991, invaded it again in  2003. It cost the US a staggering $ 3 trillion plus  and nearly 5,000 soldiers, it cost Iraq much, much more. It has seen devastation of their nation, the rise of the Islamic State and the collateral destruction of Syria as well. It has deepened the faultlines between the Shias and Sunnis into which the US now risks falling into. 

Greater Kashmir March 26, 2018

Why Modi has chosen not to side with the Indian military

When Narendra Modi became Prime Minister, there were expectations that the country’s military profile would increase sharply. The government went out of its way to valourise the soldiers and wrap the tricolour around itself.

But as a recent report of the Parliamentary Standing Committee of the ministry of defence has revealed, when it came to putting out money to fund India’s military, the government seems less than patriotic.

The clearest signal comes from the numbers. Defence budgets used to average roughly two per cent of the GDP, but in the last two years, that figure has come down to 1.56 and 1.49 respectively

Obsolete equipment

The committee, which is headed by a senior BJP MP, Maj Gen (retd) BC Khanduri, came to the conclusion that 68 per cent of the Army equipment was obsolete. Just 24 per cent was of the current category and 8 per cent state of the art.

Army vice-chief Lt Gen Sarath Chand explained to the committee that “allocation of insufficient funds to meet liabilities of routine maintenance, making up deficiencies, emergency procurements… will definitely have a negative effect. This shall also affect the serviceability of the equipment we are holding besides leading to legal issues of not making payments on time.” One area directly affected is the security of military facilities that has become so important after the attacks on Uri, Nagrota and Sunjuwan.

You would be mislead if you went just by the fact that the allocation for defence is a massive Rs 2,79,305crore in the coming financial year, along with an additional Rs 1,08,853crore for pensions. This is because we have one of the largest militaries in the world and a great deal of the money is spent on pay and allowances of the personnel and maintaining the existing equipment and infrastructure.

The real story comes from the fact that where the three Services projected Rs 1,72, 203 for capital expenditure for the purchase of new equipment, they were only allotted Rs 93, 982crore. This is not even sufficient to meet the “committed liabilities”, viz the payment installments for the equipment already purchased, estimated to be of the order of Rs 1,10,043crore. In other words, leave alone new equipment, the services are not even in a position to meet the payment obligations of the equipment on order.

Only Rs 3,600 cr allotted

The one area that the Army has been desperately trying to make up is that of immediate stocks of ammunition and spares to fight a 40-day war, which could see 10 days of intense fighting. The government permitted the Army to acquire the materials and contracts worth Rs 2,246crore and further agreements worth Rs 9,980crore have been negotiated. To make up for the shortfall the Army would require Rs 6,380crore, but they have been allotted only Rs 3,600crore. This means that the country cannot fight even a short war at present.

At the larger level another pernicious consequence of our dysfunctional defence system is that it is dependent on imports to sustain itself. The latest report of the Stockholm Peace Research Institute (SIPRI) shows that India has been the largest importer of major arms in the world in the 2013-2017 period; it accounted for 12 per cent of the global total and its imports increased 24 per cent between 2008-2012 to 2013-2017.

No country can become a significant military power unless it designs, develops and manufactures its own weapons. The reason is that the equipment is often tailored to the specific requirement of the manufacturer, and buying it off the shelf makes its sub-optimal in another setting.

Remarkably all this is despite the fact that the current operational directive to the armed forces from its defence minister is that they must be prepared for a collusive threat from China and Pakistan. To go by the Parliamentary Committee report, the three Services are clearly unprepared for a conflict with Pakistan, leave alone China.

Reforms required

The solutions to the problems that our armed forces face are obvious to everyone. First and foremost, they require deep reform in their higher management to ensure that the ministry of defence and the higher headquarters of the three Services work as one team.

To deal with the problems of defence organisation and policy, the political heads, viz the ministers and the Cabinet Committee on security require two streams of advice – from the uniformed personnel and from the civil service.

Unfortunately, while expert military advice is available, all they get from the non-expert civilian bureaucracy is red tape. Unable to come up with expertise, the civilians instead take recourse to procedural obstacles to establish their supremacy over the three Services. This has made the procurement policy non-functional, leaving all three Services behind in their modernisation plans by at least a decade and a half.

Mail Today March 26, 2018

After Doklam, military postures continue to escalate in India, China

In  January, we had occasion to refer to an article in the South China Morning Post by Senior Colonel Zhou Bo, an influential officer of the PLA Academy of Military Science, who often comments on international issues.

He warned that the Doklam incident in 2017 in the India-China-Bhutan tri-junction area could be a turning point on the issue of peace and stability along the Line of Actual Control (LAC) between India and China.

He added that it had already “provided China with a lesson on reconsidering its security concerns.” And as a result, “China will most probably enhance its infrastructure construction along the border.” India would respond, but given its robust economy, it would not be able to match the “speed and scale” of the Chinese actions, the Senior Colonel noted.

That future seems to have already arrived. Reports from Doklam suggest that not only is the People’s Liberation Army firmly entrenched in the area where the standoff occurred, within territory that India and Bhutan believe belongs to the latter, but it is now building a road to bypass the point of last year’s blockade, which was just 100 meters or so from the Indian post at Doka La.

The new road, 5-6 kilometers to the east and deeper in the Doklam region, would not be amenable to the type of blockade India placed last year. It would require a full-fledged Indian military operation to disrupt the road construction, something that is obviously a fraught prospect, not only because Indian forces can only legitimately intervene there at the invitation of Bhutan. There is nothing to indicate that such an invitation would be forthcoming.

A Chinese road, and the possible occupation of all of the Doklam Plateau including the Jampheri ridge, will give the PLA an overview of India’s strategic Siliguri Corridor. The Indian Army, which is strongly entrenched in the corridor and in Sikkim, views such an occupation as a dangerous development.

But Doklam is not the only region where the Chinese have stepped up their activity. India is now detecting an enhanced interest by the Chinese in developing their Tibetan infrastructure.

Readiness in Himalaya region

In the past two decades, Beijing had strengthened its communication network, focusing on rail lines and roads and barracks and settlements along them. The Chinese deployment in Tibet has been quite light, and its emphasis has been on the ability to pump forces in rapidly, in the event of conflict. Now, however, they seem to have concluded, in common with India, that the kind of politico-military crises that occur in the Himalayas may require the presence of significant forces on hand. So now there is a distinct uptick in the construction of residential and other infrastructure along the length of the LAC as well.

The most recent developments seem to be the improvement in the infrastructure to support the PLA Air Force for both fighter and helicopter operations, as well as an emphasis on training the forces to operate at high altitudes. The PLAAF has routinely rotated fighters through Tibet and Xinjiang in the past and has actually based some of its J-11 and J-10 fighters in the area. It also routinely uses its airlift capability based on its Il-76, Yun-20 and Y-9 aircraft. In addition, it deploys helicopters such as the Mi-17 and Mi-171 Hip for transportation and for combatThe Doklam standoff has seen the numbers and quality of aircraft increase. In January, there were reports that the Chinese had sent their advanced fifth-generation stealth fighter, the J-20, for a training exercise in Tibet. We may soon see other signs of a stronger military presence such as air defense systems and a further upgrading of the airfields across Tibet.

Indian buildup

But Doklam is only part of the reason for the current developments. The Chinese actions preceded that event and were actually a response to an Indian buildup.

An analysis of satellite imagery of the Lhasa Gonggar, the PLAAF’s main base in Tibet, has shown that here there were four or five J-10s or J-11s since 2010, they had gone up to eight by the end of 2014, and during the Doklam standoff there were 16 J-11s on the airfield.

Another major airbase is at Hotan in Xinjiang, proximate to the disputed Aksai Chin area. Here too the PLAAF rotates anywhere between eight to 16 aircraft every year, and the base here has seen surges involving the J-11 and the Q-5 ground attack fighters.

In the period after 2008, with its economy doing well, India began an extensive strengthening of its defenses on the border with China. This included an acceleration of the road-building program, reactivating seven advanced landing grounds in Arunachal Pradesh state, and deploying the advanced Sukhoi Su-30MKI to bases in Assam. In addition, two new divisions, two armored brigades and a Mountain Strike Corps were raised or authorized.

In Ladakh, authorization was given to establish a full-fledged fighter base at Nyoma in its southeastern corner and road construction began to link to Daulat Beg Oldi. Beijing’s response was to propose a freeze in construction on both sides of the LAC, something that New Delhi rejected outright considering the disadvantaged position that Indian forces were in the region in comparison with the PLA.

No doubt the Indian military is closely monitoring the developments in Tibet, and we are likely to see a further strengthening of the Indian posture facing the Himalaya. Recently there were reports that India had also moved some Su-30MKI aircraft to Hashimara air base, which is close to the Doklam area.

On the other hand, both sides are moving politically to defuse the situation. In February, Indian Foreign Secretary Vijay Gokhale, who was earlier ambassador to China, carried out a low-key visit to Beijing and held talks with his Chinese counterparts. Subsequently, India has pointedly avoided using the Dalai Lama card and it canceled a major conference relating to China being hosted by the Ministry of Defense’s think-tank.

The new Chinese State Councilor Wang Yi noted at a recent interaction that the two sides must manage their differences and called for removing mistrust between the two sides. He added colorfully, ”The Chinese dragon and the Indian elephant must not fight each other but dance with each other.”

Asia Times March 23, 2018