ISIS is not finished. Why South East Asia is now under a greater threat

The ISIS may have been defeated in Syria and in retreat elsewhere, but there is serious danger that it could expand its activities in South East Asia. The region is home to 40 per cent of the Muslims in the world, with majorities in Indonesia, Malaysia and Brunei, and significant pockets in Thailand, Myanmar and the Philippines and there are hundreds of erstwhile IS fighters who have returned to the region after the outfit’s defeat in Syria.

A part of a bullet-riddled mosque is seen in the Islamic city of Marawi, southern Philippines on April 19, 2018 (Reuters)

Past record

South East Asia was once known for its moderate brand of Islam and its secularist politics. But this is now under severe stress.

Most western analysts think that the IS is essentially finished.

But security forces in South East Asia feel that they may have entered into a new phase of expansion in their region which has had pockets of Islamic extremism going back decades.

There have been a slew of terrorist incidents across the region for the past two decades, but the most serious incident since the Bali bombing of 2002 was the occupation of Marawi city in Mindanao island of the Philippines in May 2017 by three jihadist groups that included the IS.

The ensuing battle lasting five months led to the town being razed and the deaths of a thousand people.

People attend a candlelight ceremony in the memories of the victims in the recent attacks at police stations and churches in Jakarta and Surabaya (Reuters)

More recently, in May 2018, three churches were bombed in Surabaya, Indonesia’s second largest city.

The fourth bombing happened when the terrorists accidentally detonated bombs in their own apartment killing three of them and the fifth happened outside the police headquarters when the bombers were being searched at its entrance.

These attacks have been attributed to the Jamaah Andharut Daulah (JAD), a local affiliate of the IS, and has featured the use of difficult-to-detect family cells.

In June this year, a five-judge bench sentenced radical cleric Aman Abdurraham to death for his role in inciting terrorist attacks in Indonesia. He is considered to be the leader of the JAD and has been operating from jail since 2010 when he was imprisoned for running a paramilitary training camp in Aceh for the Jemaah Islamiah terrorist network. The JI was the one behind the Bali bombing that killed 202 people.

Since then, he had inspired several attacks especially those targeting Christians.

On Friday, Philippine defense secretary Delfin Lorenzana said that a Moroccon terrorist allied to the Abu Sayyaf group, linked to the IS, was most likely behind a suicide bomb attack that killed 11 persons, including five militiamen at a military checkpoint.

Pandering to Islamists

Governments of the region, especially in Malaysia and Indonesia, have been trying to ride the Islamist tiger by pandering to the orthodox Islamic parties. In Malaysia, the Parti Islam Se Malaysia is the main Islamist party and the Barisan Nasional coalition, that ruled Malaysia for over six decades till its shock defeat in May, believes they would have fared much better, had they collaborated with the PIS. In Indonesia, the main Islamist political formation is the Prosperous Justice Party, though it is the Front Pembela Islam, a vigilante group that is responsible for the violent promotion of Islamic causes.

Indonesian president Joko Widodo (L) and his running mate for the 2019 presidential elections, Islamic cleric Ma'ruf Amin (Reuters)

Last week, as a matter of abundant caution, Indonesia’s president, Joko Widodo, who again confronts the establishment candidate Subianto Prabowo, has decided to draft Maruf Amin, the 75-year-old head of the Majlis Ulema Indonesia (MUI or Indonesian Ulema Council) as his running mate.

In 2016, the orthodoxy demonstrated its strength in Indonesia when it targeted Basuki Tjahaja Purnama, the then governor of Jakarta who went by the nickname Ahok. A Christian of Chinese origin, he was accused of blasphemy and is currently serving a two-year sentence in jail after being convicted on that charge.

Need of the hour

In Indonesia, Islamist parties like PJP and the FPI target Christians, Chinese and other minorities and the attack on Ahok who was an ally of Joko Widodo was a manifestation of a trend.

The success of this attack was a signal to the Opposition to hop on to the Islamic bandwagon, and to prevent being outflanked, Widodo has taken the step of allying himself with the custodian of the orthodoxy — the MUI.

India is more familiar with the Rohingya issue, which arises out of the crisis created in Myanmar when Muslim militants attacked Buddhist communities and triggered a backlash that has seen hundreds of thousands of Rohingyas expelled from the Rakhine province on Myanmar to Bangladesh.

The plight of the Rohingyas has led to groups like the al Qaeda and the IS and other jihadist groups to call for attacks on Myanmar and its leaders.

Preventing further spread of violent religious extremism is the most important task before the governments of the region.

But as the siege of Marawi indicated, the challenge is not merely one of prevention, but of an active counter-terrorism policy to eradicate the threat of jihadism to the region.

Mail Today August 13, 2018

Imran Khan has talked about fixing India-Pakistan ties. The first step should be a reality check

There is little need for deep analysis as to why Imran Khan’s Pakistan Tehreek-e-Insaf, commonly known as PTI, has emerged victorious in the Pakistan National Assembly elections. 
The leader of the main political party, the Pakistan Muslim League (Nawaz) and his heir-apparent were in jail at the time of the elections, and the party had been discredited in the past five years through a systematic campaign of violence and protest. In other words, the pitch was carefully prepared to favour Imran’s bowling.

The result of the elections may not be entirely fair, but it would be wrong to say that they don’t reflect the will of the Pakistani people. If indeed the results are rigged, they show that the riggers have a certain sophistication in:

1. Ensuring that Imran Khan’s party is short of a majority (and will not get too big for its boots) 
2. Allowing Nawaz Sharif’s party to win a significant number of seats in its Punjab stronghold to enable it to remain a coherent entity, regardless of who eventually goes on to form a government there.
3. Ensuring that not one out of the 460 odd jihadist candidates won.
4. Showing the jihadi extremists their place by allowing them to contest polls and then crash to utter defeat.

The results in the five provinces and the performance of the four principal parties, including Pakistan People’s Party and Baloch Action Party, make this a perfect outcome that ensures no one party develops any conceit about its standing.

Indian expectations

The election does not give us any reason to believe that we will witness some change in Pakistan’s foreign policy hereafter. The Pakistan Army is not about to give up its right to shape Pakistan’s foreign policy just because someone it favoured has come to power. The country has been at that place before and the Army usually found the civilians wanting, so this time around, there will probably not even be a pretence of providing any autonomy to the man in power in Islamabad. And this time around, not only is the man an untested politician, but the office of the prime minister has been so badly battered that it retains little credibility.

This broadly answers whether Imran Khan’s prime ministership will make any difference to the troubled India-Pakistan relationship. Even so, there are expectations. He is one of the few Pakistanis who knows India and Indians well, having travelled here in his cricketing days, and after as a regular in various media conclaves and events.

In his speech claiming victory on Thursday, Imran declared “I really want to fix our ties, you take one step forward, we will take two.” He also spoke of the Kashmir dispute and the need to talk about Kashmir where “we are still on square one.”

There was not a word or understanding that it was Pakistan that needed to take step one, before anyone could contemplate taking steps two and three. For India the watershed has been the Mumbai attack of 2008, whose perpetrators run freely in Pakistan and were even allowed to participate in the elections.

Civilians vs military leaders

In the post-Zia period, India has been more comfortable in dealing with civilian leaders – Benazir Bhutto, Nawaz Sharif, and later Asif Ali Zardari – who were leaders of major political parties, not cardboard prime ministers like Shahid Khaqan Abbasi or Raja Pervaiz Ashraf and Yousaf Raza Gilani. But we all know that the key near-breakthrough in relations between the two countries came at a time when Pervez Musharraf, the commander-in-chief of the Pakistan Army was also the president. There is a message there too obvious to miss.

Yet, India does not have the option of waiting infinitely for the emergence of a Pakistan government that actually controls all the levers of power in the country. Pakistan may have had a successful election, but its chronic problems will not retreat on that account. New Delhi cannot afford to turn its back on Pakistan. Responsible politics would require India to continue a policy of engagement supplemented by back-channel links. Further, India needs to build a coalition of partners who can participate in the effort to bring Pakistan around towards becoming what could be called a “normal” state.

Domestic challenges

Actually, if his hands are tied in foreign and security policy, Imran Khan should not worry. Pakistan has a huge domestic agenda that demands his attention. Indeed, if he can fix some of the issues, it may create the conditions in which the Army may be compelled to loosen its vice-like grip on the polity. There are issues relating to the economy, jobs, infrastructure, water stress, healthcare and so onAs he takes office, Imran Khan’s first priority will be to tackle the yawning current account deficit and it is estimated that Pakistan needs some $ 10 billion to tackle the immediate problem. Though he has criticised China-Pakistan Economic Corridor, Imran Khan is unlikely to cross the Chinese on the issue. Beijing’s political and economic importance has become even more salient for Pakistan following its tensions with the United States, which has frozen $1.3 billion military aid because of Pakistan’s half-hearted approach to combatting terrorism. Then, there is the entire agenda of de-radicalising the polity which has now reached a dangerous point.

The fact that the jihadists fared badly in the polls can be a useful means of containing them because the extremist mullahs often assert their claims in the name of the people. But this would be possible only if the political centre of the country, which has been fractured by the elections, can come together and, more importantly, get the support of the Army. Only then can the push back work.

Observers point to Imran Khan’s incorruptibility and the positive record of his party in governing Khyber Pakhtunkhwa province, which returned the favour by returning the Tehreek-e-Insaf to the provincial government leadership once again this time. Imran Khan’s 22-year odyssey as a politician suggests that it is driven by deep personal beliefs and convictions. Those are the things that he will need in the coming days, if he is indeed to make a difference. This time around, he may find that the pitch is not entirely in his favour.

The Scroll July 27, 2018

Why attending BRICS 2018 was so significant for PM Narendra Modi

The recently concluded 10th BRICS summit has taken place at an important conjuncture in history. Donald Trump has just shaken the Atlantic alliance that has been the pivot of its global hegemony. It has happened at a time when the American President, defying his administration, is reaching out to President Vladimir Putin of Russia.

More important, the deepening US-China trade conflict is now morphing to an all-out war by the US to foil China’s attempts to become a major industrial power through its “Made in China 2025” strategy. The Johannesburg Declaration of the BRICS was along the standard lines. China may have wanted a stronger statement against the US, but it is currently keeping its head low. India would have liked to build on the BRICS Xiamen declaration where Pakistani outfits like Jaish-e-Muhammad and Lashkar-e-Tayyeba were named in the joint declaration. But this time they were not, though the statement itself is quite strong against terrorism.

New Delhi has taken bilateral steps to shore up its position. (Reuters)

Support for Iran

The BRICS have extended support to the Joint Comprehensive Plan of Action (JCPOA) to deal with the Iran nuclear issue and in that sense backed Iran, over the US which has walked out of the deal. Likewise, it has reiterated the importance of the global trading order with WTO as its cornerstone. Over the years, the importance of BRICS as a representative of the leading emerging economies has only grown.

In 2014, in a signal of its seriousness in promoting the emerging country development agenda, the BRICS created the New Development or BRICS Bank patterned on the development banks like the World Bank and the Asian Development Bank.

In 2015, they created the BRICS Contingent Reserve Arrangement which is patterned on the International Monetary Fund.

There is no intention of challenging the World Bank, ADB or IMF, but the BRICS has signaled that it is not entirely satisfied with the way these American and Japanese dominated bodies function and is thus supplementing them.

In that sense, there is no intention to give the call for a new world order; merely an effort to extract the best terms from the existing one. India has been pressing for the setting up of a BRICS rating agency for some time because it believes that the methodologies of the existing western ones are flawed.

An expert group report on the issue submitted a report to the BRICS Business Council which, in turn, commended the issue to the BRICS Summit in its annual report.

In the current situation, the imperative for states like India is to be able to take advantage of the opportunities that open up and ensure that it does not become collateral casualty in the clash between big powers.

Modi’s participation at the summit in Johannesburg has taken place in the context of the theme of the summit which relates to Africa ( Reuters photo: South African Foreign Minister Lindiwe Sisulu assists Indian Prime Minister Narendra Modi to leave a handprint in clay )

Multilateral steps

Strengthening the network of tier-2 powers through BRICS is an important step in anchoring its foreign policy.

In his remarks in the closed-door meeting of the leaders, Modi reaffirmed India’s commitment to multilateralism, international trade and a rule-based world. He also strongly pressed member-nations to move along what is called the Fourth Industrial Revolution (4IR) and called for an exchange of best practices in the area.

He said that the future would see a radical change in industrial production which would require high skills, but provide temporary employment.

New Delhi has taken bilateral steps as well to shore up its position. It has reached out to China in Wuhan and tamped down the needless tension that it had itself provoked in the years leading up to the Doklam crisis. It has also taken care to repair its fraying ties with Russia through the Sochi summit and its firm commitment not to be bullied by the Americans into breaking its time-tested arms transfer ties with Moscow. It is also making sure to keep its ties with the US on an even keel, as indicated by the coming ‘2+2’ talks scheduled in September.

Wooing Africa

For this reason, an important aspect of the Johannesburg summit were the bilateral meetings Modi had, especially the one with Chinese leader Xi Jinping and Russian Prime Minister Vladimir Putin. For Prime Minister Modi, going into elections next year, the focus has been to put across India as a major global economy which believes in win-win outcomes in the geopolitical conflict that is taking place between the US, China and Russia.

Modi’s participation at the summit in Johannesburg has taken place in the context of the theme of the summit which relates to Africa. Both India and China are wooing African nations and while Modi’s tour has taken him to Uganda and Rwanda, Xi Jinping visited Senegal, Rwanda, and Mauritius as well. China is Africa’s biggest trading partner and is making an additional push to enhance its relations.

Mail Today July 30, 2018

Crown of thorns for Imran Khan

Former cricketer Imran Khan has said all the right things a Pakistani prime minister-elect should have said. He spoke of establishing good relations with India and resolving the Kashmir issue. However, in the real world he would have to live in, such a goal would be outside his area of responsibility.

There are democracies and there are democracies. Even those with a great conceit, such as the US, have deep flaws, as is apparent with the Trump presidency. Democracy works in different ways in various countries. And we in India know well that having people elect their leaders is just the most basic attribute of what a democracy should be.

Pakistani democracy, therefore, must be treated as sui generis and its outcome must be respected because it reflects the will of the people, at least up to a point. Imran Khan of Pakistan Tehreek-e-Insaf is not like Narendra Modi’s recent host Paul Kagame, the President of Rwanda, who won 99% of the votes. Nor is he like Saddam Hussein who secured 100% of the votes in 2002, or even Hosni Mubarak who secured 88.6 % of the votes in 2005.

The hallmark really is whether the election leaves a significant Opposition around, never mind the percentage of the vote they command. That is why it is still possible to count Russia, Turkey or Iran in the list of democracies.

The election was systematically tilted against the Pakistan Muslim League (Nawaz), by the shadowy Deep State (read: the Pakistan Army). With its leader and heir apparent in jail on charges of corruption, candidates and voters of the party came under direct pressure to abandon them.

Elections in India in the 1980s saw ballots being rigged, especially in rural areas where foreign election observers could not reach. Dalit villages would be warned to stay away from polling booths on election day. Most millennials wouldn’t know what the phrase ‘booth capturing’ stood for.

That is the reason why elections in India today are conducted under extreme security. The country mobilises its paramilitary, deploys them in great density and conducts polling in phases. The 2014 General Election in India took place in nine phases.

Now, of course, the mighty Pakistan Army was providing election security. But in a single phase, it could simply have not done justice in a country that is, at least, as sprawling and violent as India. The Pakistani jawan may not have taken sides, but the army’s Inter-Services Intelligence Directorate (ISI) most certainly was ‘interested’ in ensuring the defeat of the PML(N). This, especially since Nawaz boldly made his final challenge by breaking the rule of the Pakistani elites and offering himself for arrest instead of accepting exile.

Right now we do not know the contours of the outcome. It would be useful to know how many of the 500-odd candidates fronting for jihadist outfits like the Lashkar-e-Taiba fared. Equally, it would be interesting to see the final outcome in the provincial assemblies. The message is clear the PML(N) has paid for its apostasy of challenging the army.

So, the simplest way to deal with the Pakistan elections is to accept the outcome as being fair, even when we know that they were not entirely so. The PML(N) had failed to cut much ice with the electorate in the last five years. Sharif did manage to stabilise the currency, rebuild foreign exchange reserves and cut inflation, but he could not meet expectations of the people for jobs, cheaper housing and food, electricity and so on.

All through, he had to cope with the Pakistan Army that was never happy with his efforts to mend fences with India. There were successive rounds of demonstrations in 2014 and 2016, paralysing the government. In 2017, he was finally removed by the Supreme Court without the benefit of any trial.

Now, Imran Khan must wear that crown of thorns at a time when the country’s import bill is zooming and the economy has a huge debt overhang that may need an IMF bailout. If history is anything to go by, Imran’s future is not too good.

No matter how the Pakistan Army games it, it has never gotten the puppet PM of its desires. Dictator Zia-ul-Haq’s chosen Prime Minister, Muhammad Khan Junejo, was appointed in 1985 and dismissed in 1988, Nawaz Sharif, selected by the army in 1990 to replace Benazir Bhutto, fell afoul of the army in 1993, and then again in 1999. Another army product, Zafarullah Khan Jamali, was put up as PM by the dictator Pervez Musharraf in 2002 and forced to resign two years later.

The Economic Times  July 26, 2018

Why US-China trade war won’t work

 The China-US trade war is now in full flow. Last week on July 10, the US stepped up its pressure by announcing that it would hike by 10 per cent the tariffs of another $200 billion worth of goods imported from China, ranging from auto parts to food ingredients and construction material. 

Earlier on July 6 the White House had imposed a 25 per cent tariff on $34 billion worth of goods, especially manufacturing components. At the time, Beijing had issued its retaliatory tariffs of its own.

How it began

The war began on March 23 when the US imposed tariffs on steel and aluminium which affected a number of countries including US allies, as well as China. Beijing retaliated with new tariffs on 128 categories of products including pork, fruit, steel pipes and ethanol. On April 3, the US announced a new list of Chinese products worth $46 billion that could face tariffs up to 25 per cent. These included motor vehicles, machine tools, electric motors, machinery, electrical motors, instruments, chemicals, batteries, aircraft parts, nuclear reactors, aero-engines, and so on.

The very next day, April 4, China set out a list of $50 billion worth of products for possible retaliation. These included key US exports like bourbon, beef, soya beans and cars. This announcement enraged US President Donald Trump who said that in view of this “unfair retaliation”, he had asked the US Trade Representative to consider another $100 billion worth of goods for which additional tariffs could be effected.

Photo: Indiatoday.in

So, on June 15, the US imposed tariffs on $50 billion worth of imports from China. This, the Americans said, they were doing not only because of the trade deficit, but because Beijing’s theft of American intellectual property. The first lot of tariffs on $34 billion worth of goods would be implemented on July 6 and those for the remaining $16 billion thereafter.

Sure enough, on June 16, Beijing announced it would retaliate with its own 25 per cent tariffs on $34 billion worth of American goods. The list included the products that had been announced in April. And said there could be additional tariffs of $16 billion on US energy exports such as crude oil and coal. On July 6, both sides announced the imposition of this first round of tariffs, covering roughly $34 billion worth of goods.

This was the point on which Trump threatened to impose a 10 per cent tariff on $200 billion worth of Chinese imports and that the amount could be hiked further. On July 10, the US released the list of the products covered by this. The new list included industries related to auto parts, food processing and construction. The Administration said it would now enter a consultation process on this list which would go on till the end of the next month. In September when this list could be finalised, the US would have begun its election campaign season for the off-year elections.

Global primacy

At this point, Beijing had little to say since it simply lacks the sufficient value of imports to match Washington’s tariffs. The US exports only $130 billion or so of goods to China, while its imports exceed $500 billion. It is increasingly becoming clear that the battle is less about the trade deficit and more about America’s intention of preserving its global primacy. Sober US analysts agree that the rhetoric on the China challenge is somewhat overblown. There are substantial constraints on Chinese power and influence.

Not only is China heavily interdependent on the global economy, especially on the US itself, it also has political difficulties with regional states like Vietnam, India and Japan. The US remains a formidable military and economic power which has close relations with many of the states with whom China has difficulties.

But what has caused alarm has been China’s drive to achieve technological dominance? Ascendancy in key areas of technology could well lead to a shift of regional equations in its favour. Many feel that it may already be too late to do anything about this. China has already created an ecosystem of R&D facilities, industries and ancillaries to push for its dream of becoming the global leader in AI, robotics, biopharma, electrical vehicles and so on. The US may be able to delay the Chinese in a range of areas, but not entirely stop them.

Chinese whispers

As of now, many of the analyses are based on interpretations of Chinese actions, not any comprehensive understanding of them. Chinese purchase of Western technology, their acquisition of European and American companies, the role of the state in promoting this process, have all engendered legitimate suspicion as to Beijing’s motives. But seeking to turn the clock back by blowing up the global trading system, restricting investments by Chinese companies or blocking Chinese nationals from the US educational system could well be the equivalent of cutting your nose to spite the face.

Mail Today July 16  2018

Global Economy Will Pay the Price of Escalating US-China Trade War

The trade war has begun. The US began implementing 25% tariffs on $34 billion worth of goods from the morning of July 6. US tariffs on Chinese imports include semi-conductor chips assembled in China, plastics, dairy equipment, motor vehicles, electrical  equipment, oil and gas drilling platform parts, chemicals and lubricants. Earlier, it had put tariffs on washing machines, solar panels, steel and aluminum.

In retaliation, Beijing has hit the US with retaliatory tariffs on 545 products, targeting goods produced in states that voted for Donald Trump in 2016 – products like soybean, beef, fish, fruits, vegetables, dairy products, bourbon, cotton, tobacco and motor vehicles.

This is said to be the biggest tariff application by the US since the Smoot-Hawley tariffs which deepened the Great Depression and led to a collapse of world trade, which declined by 66% between 1929 and 1934.

The immediate situation is not alarming. But the tit-for-tat tariffs could get out of hand. The US is also involved in a tariff war with the European Union. In June, the EU put $3.2 billion tariff on US goods in retaliation for the Trump administration’s steel and aluminum tariffs that came into effect on June 1, targeting products like bourbon, orange juice and motor cycles. India, which is also affected, says it will  increased tariffs on 29 US products, including walnuts, chickpeas and almonds from August on. Canada and Mexico have slapped retaliatory tariffs on US exports as well.

Shipping containers being loaded onto Xin Da Yang Zhou ship from Shanghai, China, at Pier J at the Port of Long Beach, California, US, April 4, 2018. Credit: Reuters/Bob Riha Jr./File Photo

Now, the US plans to hike tariffs on another $16 billion worth of Chinese goods. After that, the sky is the limit. Trump has threatened that he could impose  tariffs on all Chinese imports into the US totalling more than $500 billion. Beijing does not export that much to retaliate in kind, but respond it will.

The fallout

According to analysts, the direct impact of the tariffs, even if 25% were to be imposed on everything the US imports from China, will only reduce Chinese growth by 0.5%. But the warfare could spread to other countries and to areas beyond trade. Already in June, the Trump administration had curbed visas for Chinese students and the administration and Congress are making plans to restrict Chinese investments and technology exports to China. As the ZTE instance revealed, this could be devastating for some of the Chinese giants.

However, the Chinese have sought to calm fears among US businesses that they would take recourse to unnecessary inspections, product quarantines, administrative punishments and regulatory delays to harass them. But there is no saying what direction the future could take. The “qualitative” measures that the Chinese threatened to take would not be easy to pin down.

Chinese vulnerabilities are manifest. These became evident when the US shut down ZTE in April, an act that brought the telecom giant to the brink of collapse because it cut off the supply of micro-chips needed for its products which are imported from the US. Essentially, while China may make phones, telecom equipment, computers which account for  a third of its exports, it requires to import chips from abroad.

Aware of this vulnerability, Beijing is trying to develop a chip industry by hook or by crook. It has invested $150 billion to build the industry through its Made in China programmes. As a part of this, it has been seeking to buy established manufacturers abroad, as well as putting in a great deal of R&D effort at home.

The US is well positioned in its offensive. Its economy had grown at a brisk pace and the jobless rate has declined even further and wages and incomes are on the rise. So, for the present, the Trump administration does not have to worry too much. In this perspective, it could prove to be an electorally useful tool. This means that from the US point of view, it can stretch its fight to the coming year. On the other hand, China has been in the midst of trying to reduce the debt levels of its economy, leading to a slowdown of growth.

The rest of the world and India should not be particularly happy at the turn of events. A prolonged conflict and the disruption of global supply chains can have a ripple effect on the global economy. Many of the products facing American tariffs have components and assemblies that are made in third countries which would be affected as well. Indeed, given the way supply chains work, the US consumer could well end up paying higher costs for consumer products. An all-out trade war could lead to a collapse of global trade and shove the world economy towards a recession.

US President Donald Trump holds a signed memorandum on intellectual property tariffs on high-tech goods from China, at the White House in Washington on March 22, 2018. Credit: Reuters/Jonathan Ernst/Files

The bigger picture

There is no doubt that the two principals see the issues as going beyond just trade and tariffs.

A strong section of the Trump administration sees the struggle as one of primacy where China is seeking to craft a new industrial policy under the rubric of Made in China, to become the number one country in the area of artificial intelligence, robotics, aerospace applications, electrical vehicles and biotechnology. They have made no bones about their desire to promote their companies in these areas. The Made in China programme was outlined in a public document by China’s Cabinet, the State Council. Equally, the Trump administration now says that China has all along been cheating the US by illegally acquiring technology worth hundreds of billions of dollars and tilting the playing field against foreign companies in China.

A larger struggle that has been unleashed ever since the US came up with its new National Security Strategy document that has depicted China, along with Russia, as strategic competitors. For decades, western countries believed that China would eventually become a market economy, but what China has been saying and doing is to make it clear that while the market is used to allocate some resources, the state led by the Communist Party of China runs the economy.

Despite everything, the Chinese still see this era as one of strategic opportunity. In his address to the important Central Conference on Work Relating to foreign Affairs that was held in June Xi noted that the world was “undergoing the most profound and unprecedented changes in a century” but that the period between now and the next Party Congress in 2022 was “a historical juncture for realising the two centenary goals of China”.

Whether all this presages a new Cold War only the future will tell. But many specialists are arguing that this need not be seen in apocalyptic terms. Given the scale of their engagement and their global footprint, engagement between China and the US remains important for the world. There are many steps that can be taken before a total breakdown. The US could, for example, enhance its scrutiny of China’s investments. Beijing, for its part needs to do much more to provide a level playing field for foreign investors. It has already signalled its desire to open up important sectors of its economy. However, China is unlikely to abandon its Made in China plans which can be slowed by the new US policy, but cannot be stopped.

The Wire July 10, 2018