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Will the China-India Trade Potential Bridge the Political Gap?

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China-India trade has come out unaffected by the political tension between the two countries. Since its relationship with the US under pressure, improved China-India trade is crucial for the Dragon. China-India trade is showing a 26% increase on a year on year basis in the first 2 months of 2018 from 20.3% year on year increase in 2017.

On Saturday, 24th March 2018, 101 China-India trade agreements, of about $2.37 billion in value, were signed by the two countries. Sectors like Black Tea, peppermint oil, castor oil and coco fibre, where India has an advantage, are a part of these agreements.

Read on EurAsian Times – US-China Trade War Rattles Global Economies

There is a growing interest within Chinese companies regarding investment in the Indian Market. According to a report by Financial Express, a seminar on opportunities to invest in the electronics sector in India, held in Shenzhen of South China’s Guangdong Province saw an attendance of about 350 corporations.

Improving China-India trade is the first of many steps for China

This comes after US president, Donald Trump, signed a memorandum which adversely affects China’s trade with the country, by imposing $60 billion on imports from China and also put stringent restrictions on investments from China. China is now trying to offset any potential negative effects of such US policies by improving its trade relations with Asian countries.

Also Read: India China Comparison: How Can India Be Compared with China in Growth and Development?

China is still hoping to reconnect the broken ties with the USA, as the President Trump’s policies on imposing these tariffs are not yet final and leeway and negotiations are still possible.

Border and political tension between China and India have been rising for decades, even resulting in a war in 1962. Good and smooth China-India trade relations are not only beneficial for the economies of the two countries but may also help in mending the other differences between the two countries and improving the political environment in this part of Asia.

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India refuses to review RCEP decision over China’s border hostility – Reports

Last year, India backed out of the RCEP agreement citing its negative effects on “farmers, MSMEs and dairy sector”. “The present form of the RCEP Agreement does not fully reflect the basic spirit and the agreed guiding principles of RCEP.

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India is firm on the decision to not become a member of the RCEP (Regional Comprehensive Economic Partnership). The Modi government is reportedly “not reviewing” its decision on RCEP due to the presence of China as a member.

According to the sources, India has decided it won’t join any trade agreement including RCEP where China is a member as matters have turned worse for India, especially after the border stand-off with China.

Last year, India backed out of the RCEP agreement citing its negative effects on “farmers, MSMEs and dairy sector”. “The present form of the RCEP Agreement does not fully reflect the basic spirit and the agreed guiding principles of RCEP.

It also does not address satisfactorily India’s outstanding issues and concerns. In such a situation, it is not possible for India to join the RCEP Agreement,” PM Modi had stated at RCEP summit in Bangkok. The summit included China, Japan, Australia, New Zealand, South Korea, and the 10-nation ASEAN grouping.

“There is no question to join the pact now that the prime minister has given a clarion call to a self-reliant or ‘atmanirbhar’ (self-reliant) India,” said an official who refused to be identified. The comments came after Thailand said all member countries have decided to sign the trade pact by the end of 2020 without India, and the deal may come into force by the middle of next year.

According to Chinese state mouthpiece, Global Times (GT), this is a method of venting of irrational emotions after a recent deadly border conflict in the Galwan Valley.

“India’s years of hesitation toward the RCEP are essentially due to the country’s weak manufacturing sector,” it said. “After the deadly border conflict in June, India’s diplomacy has entered an irrational state of anger.

It is expanding its emotional approach to many other aspects of relations. Using border tensions with China as an excuse for its latest RCEP rejection is just another example. If India continues this irrational approach, it would not only harm regional interests but would not benefit India’s own long-term interests,” it added.

It further criticised the Indian media for calling RCEP as “Chinese-dominated” and “Chinese-backed” trade deal.

Despite China’s belligerence, no other country has shown any hesitation for signing the RCEP agreement. “For countries such as Australia, South Korea, Japan and New Zealand it will be difficult to have inner coherence between geopolitics and trade,” said Rajiv Bhatia, a veteran diplomat.

Vietnam, which is now the ASEAN chair has said that it will continue to urge India to join the RCEP “whenever it feels comfortable”.

Amid soaring tensions in the South China Sea when the Chinese ship attacked and sank a Vietnamese boat near the Paracel Islands, it is still going to go ahead with the RCEP deal. Similarly, Australia, which has blamed China for the origins of Covid-19 and its growing military aggression, also seems clear about joining the RCEP.

China’s advice to India is that while facing a “more powerful neighbour”, it is imperative for India to properly assess its situation and rationally reduce its rivalry toward China to develop favourable economic and diplomatic strategies, rather than “irrationally heating up nationalism and blaming China when it encounters unsatisfactory situations”.

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India can ‘no longer’ choke China at the Strait Of Malacca as Beijing finds solution

The Strait of Malacca is a strategic waterway between Indonesia and Malaysia through which the majority of Chinese imports pass. The narrow waterway also makes the perfect chokepoint from the perspective of India, and should tension between Beijing and New Delhi rise, the Malacca Strait can be blocked easily by India. 

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Could the advantage that India enjoys over China due to the Strait of Malacca be coming to an end? Does China have a way to tackle the Indian plans of chocking Beijing at the Malacca Straits – the strategic waterway, in case of a war?

Instigated by China, Sri Lanka could end port deal with India?

India’s position at the mouth of the Malacca Strait has created panic amongst Chinese officials as they try to find an alternative route, writes the Forbes.

The Strait of Malacca is a strategic waterway between Indonesia and Malaysia through which the majority of Chinese imports pass. The narrow waterway also makes the perfect chokepoint from the perspective of India, and should tension between Beijing and New Delhi rise, the Malacca Strait can be blocked easily by India.

India’s natural position in the Indian Ocean, with basing capabilities in the Andaman and Nicobar Islands at the mouth of the strait, would allow its navy to cut it off in the event of a crisis or war with China.

Keeping in mind the recent flare-up between India and China, Larry Bond, renowned naval author and creator of the Harpoon war game series, says that if India wanted to block trade with China, all it has to do is its park ships at the mouth of the Malacca Strait.

The vast majority of China’s oil imports, from the Persian Gulf, Venezuela and Angola, pass by this route. Due to the strategic importance of the waterway, there is fear amongst Chinese officials that India could block the Malacca Strait in case of war.

Experts at EurAsian Times believe that the strategic importance of the Malacca Strait and the advantage it gives to India will likely reduce over time as Beijing find alternative routes.

Bypassing the Malacca Strait

The fact India enjoys a strategic advantage over China because of the Malacca Strait has forced Beijing to explore other options and find ways around the waterway.

One such option is Gwadar Port in Pakistan. As part of the China Pakistan Economic Corridor (CPEC), Beijing has developed the port in Gwadar so that goods unloaded there will be shipped overland to China.

On June 8 the Pakistani government approved a $7.2bn upgrade to a railway which will connect Gwadar to Kashgar, China. The port is not yet operating at capacity, but the direction seems clear.

While Gwadar is still susceptible to an attack by the Indian Air Force (IAF), it adds political and military risks as it is in a third country’s territory. The Indian Navy could try and block this port but it would require ships to move away from the Malacca Strait.

The other option Beijing is exploring is Northern Sea Route in the Arctic which could create a ‘Polar Silk Road.’ The importance of this is underlined by China’s 2018 Arctic policy. It asserts, “Geographically, China is a “Near-Arctic State”, one of the continental States that are closest to the Arctic Circle.”

The policy statement goes on to say, “China hopes to work with all parties to build a “Polar Silk Road” through developing the Arctic shipping routes.”

Due to accelerated global warming, ice sheets are receding, thus making it possible for ships to travel via this route. Having sent its first ship through the region in 2013, Beijing is now investing in port infrastructure in the Arctic which connects to Europe.

China is also investing in designing ice breakers, vessels that would ease navigation through the Arctic. With help from Finnish Aker Arctic, China launched its first locally built ice breaker the Xue Long 2 in 2018.

Apart from exploring new waterways and developing strategic ports, Beijing is developing a land route directly to Europe, as part of the Belt and Road Initiative (BRI), mainly as a way to export goods.

Thousands of trains are transversing across Asia in recent times, the modern-day version of the ancient Silk Road. Land routes are one way China can reduce the criticality of Chinese sea routes.

The strategic importance of the Strait of Malacca to China will lessen over a period of time. India will still be in a position to throttle Chinese supply lines there, but it will not have the same impact that it once had.

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Chinese Ambassador ‘Honey-Trapped’ Nepal PM KP Sharma Oli – Indian Reports

On Thursday, displeased with Indian reports, Nepal government spokesman Yubaraj Khatiwada announced that some Indian media outlets made baseless and shameful allegations against PM Oli and  Kathmandu will take legal and political action against the Indian media.

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Nepal recently banned all India media channel except Doordarshan over what experts called ‘fictitious claims and concerted stories’ aimed to derail Nepal-China ties and see the ouster of PM KP Sharma Oli.

Instigated by China, Sri Lanka could end port deal with India?

The Indian media is taking a keen interest in the ongoing uprising within Nepal Communist Party against PM KP Sharma Oli. The way in which the entire matter has been covered in the Indian media, there is a massive outrage within the ruling communist part of Nepal.

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A story was run on a Hindi news channel in India about China’s Ambassador to Nepal Hou Yanqi and PM KP Sharma Oli hinting at ‘honey-trapping’ attempts by Beijing. Nepal’s government says that sensational claims that were made about a foreign diplomat and PM Oli has no connection with the reality.

On Thursday, displeased with Indian reports, Nepal government spokesman Yubaraj Khatiwada announced that some Indian media outlets made baseless and shameful allegations against PM Oli and  Kathmandu will take legal and political action against the Indian media.

Indian Rafale Jets Would Have Been Useless Against Chinese Airforce – Russia Experts

He said, “The government has every right to take action against the Indian media who are trying to hurt Nepal’s image, national sovereignty and the dignity of Nepalis.” We have asked to stop such broadcasting. ”

The ruling party, PM Oli’s advisor and the Federation of Nepalese Journalists have also expressed concern about this. The Nepalese government said that its embassy in New Delhi has raised strong objections to unruly coverage in India’s print and electronic media.

Nepal’s Ambassador to New Delhi Nilambar Acharya told the Kathmandu Post that some media houses of India are determined to derail the Nepal-India ties. Acharya said that such report is sad and objectionable.

Indian Para SF vs Pakistani SSG Commandos – Whom Would You Bet-On In A Rescue Operation?

Surya Thapa, the press advisor to Prime Minister Oli, said that the PM himself has taken notice on this matter. Thapa also said that the cable operators will stop broadcasting the Indian news channel as their responsibility towards the country. Nepal TV Association has confirmed that some Indian news channels have been banned.

According to Article 9 of Nepal’s National Broadcasting Rules 1995, the government can ban such broadcasts which hurts the security, peace, dignity and morality of Nepal.

In this interview, the anchor asked Upendra Yadav – the former deputy prime minister of Nepal that PM Oli is being accused of being ‘Honey Trapped’. Do you agree with this? On this, Yadav said that this cannot be denied and it needs to be analyzed. However, later Upendra Yadav told Nepali media that his interview could have tampered.

However, questions were also raised in Nepal about why the Chinese ambassador is taking so much interest in Nepal’s domestic politics? According to Nepali media, this interview of Upendra Yadav was aired when the Chinese Ambassador was meeting several leaders of the ruling party and PM Oli.

CPEC Project A ‘Trillion-Dollar Blunder’, Pakistan Calls It ‘Outstanding Initiative’

The Kathmandu Post commented on this matter and wrote  –  Ever since Nepal updated its political map, new stories are being created in the Indian media about ties between PM Oli and China. Every day new propaganda appears in the Indian media. Journalists sitting in Delhi and Mumbai tell the date and time of Oli’s resignation. Some people have even started demanding his resignation. Oli has become a means of collecting TRPs for the Indian media. ”

Former Deputy Prime Minister of Nepal – Kamal Thapa tweeted a cartoon of Times of India and wrote – We have serious differences with PM Oil on many issues, including his conduct of international relations. But deliberate/sustained campaign of mudslinging against PM Oli by some Indian media cannot be acceptable. That doesn’t do Nepal-India relations any good.

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