Exclusive Insight: Is it feasible for the United States to contain China through India? What is the likelihood of a major conflict between China and India?
US Now Says No Plan to Lift Sanctions on China Defense Minister; Russian Prime Minister Starts China Visit in Sign of Strong Ties; Australia Tries to Break Its Dependence on China for Lithium Mining
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Exclusive Insight: Is it feasible for the United States to contain China through India? What is the likelihood of a major conflict between China and India?
The controversial decision to host the G20 Tourism Conference in Kashmir has provoked outrage from both China and Pakistan. However, we need not be overly concerned about the potential repercussions.
While the border situation between China and India has been complex, leading to multiple conflicts over the past century, can we genuinely envision a war akin to the recent Russo-Ukrainian conflict occurring between these two major powers today?
China and India together constitute a third of the global population. The former, a cradle of civilization, has a long history of small farming and court governance and is yet to transition fully to democracy and the rule of law. The latter, colonized by the British for an extended period, is already a democratic regime. The economic and educational disparities between these two countries serve as a reminder that we must resist oversimplifying the concepts of democracy and authoritarianism.
Prime Minister Sunak of the UK declared that China has become the greatest global security threat. The G7 Summit contended that the world is under economic duress from China. In contrast, India is deemed more reliable. This perspective is evident in Prime Minister Modi's warm receptions in the US, Europe, and most recently Australia. The Indo-Pacific Strategy established by the US and the Quad meeting held this Sunday were explicit efforts to draw India into the fold.
But can this grand design — to contain China through India — become a reality?
Historically, the Chinese have integrated Indian religions and philosophies into their culture, a truth conveyed through mythology and historic tales. Without Indian scriptures, the analytical thinking of the Chinese might have been somewhat lacking.
However, the world's highest peaks render both these countries with deep historical roots impossible to entirely conquer, which led to a puzzling conflict in the 1960s, executed by the People's Liberation Army. The PLA swiftly entered Indian-claimed sovereign territory, gained nothing, and rapidly withdrew. This resulted in India's effective occupation of the South Tibet region on Chinese maps, a vengeance that India's mountain divisions relish.
During Zhou Enlai's era, the preference was to resolve disputes through negotiation rather than war, a viewpoint embodied by Wang Yi's father-in-law, who was the Chinese representative in the peace talks at that time.
Nowadays, Wang Yi rarely delivers speeches on Sino-Indian conflicts. Military officers rather than diplomats play a more direct role. Sporadic clashes persist but are conducted in primitive ways with stones and clubs, a reflection of the restraint and wisdom of the top leaders of both countries.
Along the over 2000-kilometer border, especially in conflict hotspots, soldiers of both nations are not equipped with modern weapons, despite rumors of advanced military aid offered by the US. They simply don't make it to the battlefield.
Why is that? Is it because Xi Jinping and Modi share a special friendship? Xi Jinping has visited Modi's hometown, and Modi has visited Wuhan, a destination rarely chosen by foreign leaders. This unique form of interaction signifies the near-term worries and long-term vision of both leaders.
On the surface, China and India do not complement each other; rather, their competition is apparent. China's consumer and service sectors are trying to catch up with India, while India's manufacturing sector is attempting to break into the Chinese market.
Nevertheless, both countries face severe internal problems that the West overlooks. Criticisms from the West on human rights, religion, and ethnic issues in China and India only represent a fraction of the problems each country faces. Unknown to the West are even more critical issues that require a significant amount of time to resolve.
In essence, Xi Jinping and Modi are likely to understand each other's predicaments better, leaving them with little energy to undermine each other. Even in their approach to the Russo-Ukrainian conflict, their stances are very similar. Therefore, the Western ambition to foster Indian growth to counterbalance China is but a new pipe dream, let alone the advent of a new major conflict.
(Author: Ho Pin, Analyst for The China Brief)
US Now Says No Plan to Lift Sanctions on China Defense Minister
Bloomberg
The US has backtracked on comments made by President Joe Biden related to the lifting of sanctions on Chinese Defense Minister Li Shangfu, with State Department spokesperson Matthew Miller saying the US government was not considering lifting the sanctions. Speaking in Washington, Miller said Biden “made clear that we are not planning to lift any sanctions on him or on China more broadly” after China rebuffed Defense Secretary Lloyd Austin's request to meet Li next month due to sanctions. However, despite tension between the two nations, the White House has started engaging with China on a range of issues.
Russian Prime Minister Starts China Visit in Sign of Strong Ties
Bloomberg
The Russian Prime Minister, Mikhail Mishustin, is visiting China with a delegation of top Russian businessmen who have all been sanctioned by the US and its allies. Mishustin is expected to attend a Russia-China business forum in Shanghai, whilst also holding talks with Chinese leaders in Beijing. China has seen its exports to Russia substantially increase since Beijing did not join the western-led sanctions followings Russia's annexation of the Crimea.
Australia Tries to Break Its Dependence on China for Lithium Mining
NY Times
The Australian government wants to break the world's dependence on China for processing the minerals driving the green revolution. Australia mines about 53 percent of the world's supply of lithium, and virtually all of it is sold to China. Now, the country is exploring a new model for producing battery chemicals — done closer to where the lithium is mined and sold to allies like the United States and South Korea. Refining lithium would also allow Australia to tap into the Inflation Reduction Act, the Biden administration policy enacted last year. The law aims to cut into China's green energy dominance by offering loans or subsidies to companies in countries, like Australia, that have free trade agreements with the United States. In some cases, top officials have set even loftier goals. Speaking last month, Madeleine King, Australia's resources minister, said the country had an important role to play in pushing back against the "concentration" of critical minerals industries in China, which she said led to "fragility, volatility and unreliability."
The Toronto Star
Interim recommendations into any public inquiry on allegations of foreign interference in Canada’s past two elections are due today from former Canadian governor general David Johnston. The move follows the creation of a post to scrutinise foreign interference earlier this year and demands for an inquiry spurred by media reports on alleged Chinese influence over electoral processes. While the opposition parties and national security experts have called for a full public inquiry, Canadian Prime Minister Justin Trudeau has so far resisted. The recommendations from Johnston are due to be reported back this autumn.
China Blasts Japan Over Export Curbs on Chipmaking Technology
Bloomberg
China has criticised Japan over new export controls on 23 types of chipmaking technology, calling them an "abuse" of export control measures that contravened free and international trade regulations. An unnamed spokesperson for China's Ministry of Commerce said the restrictions represented a "severe" threat to corporate interests, economic cooperation and the global semiconductor industry and warned Beijing would take measures to "firmly defend its lawful rights and interests". The statement follows Beijing's weekend ban on domestic purchase of products from Micron Technology in response to US export controls targeting Chinese enterprise.
The Hiroshima summit will effect global politics for years to come
Japan Times
The recent Hiroshima summit of the Group of Seven (G7) produced results "as substantive, consequential and global in scope" as any gathering in the past 40 years, according to Kuni Miyake, president of the Foreign Policy Institute and research director at Canon Institute for Global Studies. Miyake said that despite criticism by some Japanese media outlets, Prime Minister Fumio Kishida had shown good leadership, "occupying the 'centre of gravity' where all actions and information flows are concentrated" and providing "conclusions and direction." The summit was held at a time of global crises, with China, Russia and North Korea posing challenges to the international order.
G7 says “de-risking”, China hears “containment”
Reuters BreakingViews
The G7's attempt to reduce their dependency on China and isolate Beijing's diplomatically could be seen by the country's government as an escalation rather than diversification, argues Liam Proud in Reuters. The article notes that while wealthy democracies such as Germany have said they will still invest in China, the term "de-risking" is essentially a euphemism for reducing demand for Chinese exports; the fact that the G7 is also planning on increasing infrastructure investment and debt relief in poorer countries, making it more difficult for China to exert its financial influence in places like Africa and Latin America, is also likely to worry China. Furthermore, the military budgets of countries such as Australia, Japan, and the UK are all inflating and hardening their positions on matters such as Taiwan.
TikTok sues Montana over state-wide ban
The Independent
TikTok has filed a lawsuit challenging Montana's recently announced ban of the video-sharing app, arguing that the new law, which is set to come into effect on 1 January next year, is an unconstitutional violation of free speech. The company said that attempts to block users from accessing TikTok is based on "unfounded speculation" that the Chinese government could access their data. Both lawsuits were filed in federal court in Missoula. Montana's new law prohibits downloads of TikTok in the state.
China Faces Decades-Long Growth ‘Plateau,’ Says EU Chamber Head
Bloomberg
China's economy is facing difficult choices and slowdown over the next decade due to deep-rooted problems, according to Joerg Wuttke, the outgoing head of the European Union Chamber of Commerce in China. Although the country is not facing its "peak", Wuttke urged the Chinese government to enact "painful reforms", such as overhauling its education system to adapt to a rapidly changing employment market. Wuttke was concerned that, without significant reforms, China could end up mirroring Japan's economy, which has struggled to maintain productivity and GDP per capita growth.
Malaysia working with global agencies to speed up Jho Low extradition: minister
South China Morning Post
The Malaysian government is reportedly collaborating with international agencies in an effort to expedite the extradition of fugitive businessman Jho Low. The country’s de facto Law Minister, Azalina Othman Said, said efforts included cooperation between Malaysia’s Anti-Corruption Commission and foreign enforcement agencies, diplomatic communication with other countries, and an Interpol Red Notice, which has been in place since 2018. Low, who has been charged in absentia for involvement in the 1Malaysia Development Berhad states fund scandal, has been the subject of reports of possible negotiations between the Malaysian and Chinese governments over his return to Malaysia.
Tesla offers China-made electric vehicles for sale in Canada
Reuters
Tesla has listed its China-made vehicles for sale in Canada with the availability of the Model 3 and Model Y. Although it's not clear how many vehicles have already been sold, this export can bring new markets for Tesla Shanghai and helps the EV maker keep vehicles manufactured in California and Texas for sale in the US. Additionally, it could give Tesla a cost advantage, and these China-made vehicles qualify for Canada's federal incentives of $3,700, which are not linked to the EV's manufacturing location.
Ukraine courts Africa and 'Global South' as peace plans proliferate
Reuters
Ukrainian Foreign Minister Dmytro Kuleba is in Africa pushing President Volodymyr Zelenskiy's peace plan in a bid to break Russia's influence and win a new market for its grain. Ukraine, which is also hosting peace talks with separatists in the east, recognises that other peace proposals, including those from China and from South Africa, could gain traction and has stepped up its relations with Africa in response. Speaking at the G7 over the weekend, Zelenskiy proposed holding a global peace summit in July to promote Ukraine's formula.
G7 unlikely to sway ‘Global South’ to switch camps, ex-U.N. official says
Japan Times
Efforts by the Group of Seven (G7) to contain China's growing influence with emerging economies in Africa, Asia, Latin America and the Pacific are unlikely to alter the Global South's deepening economic ties with Beijing or encourage the nations to switch sides, according to former Singaporean diplomat and ex-UN Security Council President Kishore Mahbubani. Despite US attempts to rally countries to the Americans' cause, economic development is the prime concern for most state and ASEAN governments, driving many of them to seek close ties with both the US and China and discouraging them from taking sides, said Mahbubani, now a distinguished fellow at the National University of Singapore’s Asia Research Institute. Europe will continue its strong trade ties with China; developing nations do not want to choose sides; Russia and China are not yet a bloc; and the consequence of the US-China trade war could be severe for many of these emerging nations, Mahbubani said.
China Buying of Chipmaking Gear From Singapore Hits 8-Month High
Bloomberg
Singapore is seeing an uptick in sales of semiconductor products to China, as the US-China trade tensions prompt tech firms to diversify geographically. Singapore was the only major supplier to China whose chip exports rose in April, climbing 3.5% compared to March, according to Chinese customs data. Singapore is positioning itself to be a key player in semiconductor assembly and integrated circuit design. Japan and Singapore were the two biggest suppliers of chipmaking equipment to China in April, according to the data.
Europe’s hawkishness on China comes into focus
Washington Post
The Group of Seven (G-7) summit in Japan has triggered another round of confrontational statements with China. A G-7 communiqué said that Beijing must do more to stop Russia's invasion of Ukraine, condemned its so-called "malign" trade practices and vowed to "foster resilience to economic coercion" by shielding their economies from having too much exposure to China's thriving market and export industry. However, the communiqué also stated that the group's nations "stand prepared to build constructive and stable relations with China." China summoned the Japanese ambassador for a dressing down over what a Chinese diplomat termed the G-7's "bloc confrontation and Cold War mentality". A Chinese Foreign Ministry statement lambasted the G-7's "bullying". It began: "The era when a few developed countries in the West willfully interfered in the internal affairs of other countries and manipulated global affairs is gone forever." The summit is seen as the latest proof of increasing Western concern over China's influence. Public opinion has been hardened by Beijing's continent-wide, ambitious infrastructure projects, its belligerence over self-ruled Taiwan and its alleged failure to condemn Russia's presence in Ukraine./
Record number of British firms pessimistic about China business - survey
Reuters
British companies are increasingly pessimistic about doing business in China due to strained geopolitical relationships, a slowing global economy, talk of self-sufficiency and shifting investor perceptions, according to a survey by the British Chamber of Commerce in China. The survey reveals a record number of firms are taking a "wait and see approach", with 70% saying it is too early to make long-term commitments to the market. Trade between the UK and China was worth £111bn ($140bn) last year, with China the UK's fourth largest trading partner.
UBS China fund management project stalls after Credit Suisse deal
Nikkei Asia
UBS has "suspended work" on its wholly owned mutual fund company application in China as it attempts to finalise its takeover of Credit Suisse and deal with regulatory issues born from the new partnership. The takeover of Credit Suisse earlier this year has made the expansion of UBS's fund management activities in China a more complex endeavour.
China Buys More Australian Coal as Appetite for Quality Builds
Bloomberg
China’s appetite for Australian high-quality coal has surged after Beijing lifted its ban on coal imports earlier this year, causing the Asian nation’s total coal purchases to rise by 89% year on year, according to Chinese customs data. The Australian share of Chinese coal imports now stands at 10%, almost double that of March, sending domestic prices down as China's rising stockpiles added to seasonally weak demand. Meanwhile, Russian coal exports dropped in April as its crude oil shipments to China also dipped, despite Russian leaders’ visit to Shanghai this week to reaffirm its value as a commodities supplier.
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