6 June 2014

In need of stimulus

Yoginder K Alagh | June 6, 2014

The decline in the investment rate in India started two years ago. (Source: Reuters)

We need to aim to get to a high growth path again. To use an expression made famous by Queen Elizabeth, the last two years were both anni horribili. The average annual growth rate of the economy was 7.49 per cent between 2004 and 2012-13 — the UPA years. But it fell from 7.9 per cent between 2004 and 2008 to 6.8 per cent between 2009 and 2014. The last two years were really bad at 4.65 per cent. The manufacturing sector grew 8.34 per cent annually in the period 2004 to 2012-13, but 9.28 per cent in the period 2004 to 2008. This dropped to 7.18 per cent between 2008-09 and 2012-13. Again, the last two years were terrible at around 4 per cent and then below zero per cent. The official line was that we are now a globalised economy and can’t do much about the rest of the world. But many other countries have done well — not just China but also countries like Indonesia, Turkey and Nigeria. The decline in the investment rate in India started two years ago. Public investment fell first, and as infrastructure spending went down, private investment also fell.

The UPA’s economists kept giving lectures about raising efficiency. They wondered, if the investment rate is 32 per cent, why was the growth rate so low? (C. Rangarajan ). They conjectured that the growth rate would go up next month/ quarter (Montek Singh Ahluwalia). Raghuram Rajan had another tack. According to his economics, the growth rate is given and all that you can do is determine prices by changing the interest rate. Whenever some green shoots of recovery were visible, the monetary policy killed them.

In August last year, China effected a stimulus package by investing in infrastructure. There were howls of protest from international financial institutions. But China politely stuck to its policy and clocked 7 per cent growth. I have been arguing for an investment stimulus along with a resource-raising effort. It would not have determined aggregate demand but would have diverted demand to sectors linked to infrastructure, like capital goods, cement and steel. The private sector would have taken care of consumer demand, thanks to the good crop in the offing. But nothing happened.

The new government must focus on infrastructure investment and give the economy a stimulus. It must simultaneously raise resources and cut government consumption expenditure to finance this stimulus.

What the forces are up against

- Permutations and combinations of militant outfits hamper operations

Tura, June 5: Twenty kilometers off Paikan, the tri-junction where the road forks off to Tura, the army camp on National Highway 51 has an improvised operations room — a sort of a summer house within the compound of Kukurkata police station.

The small board on the wall next to a large operations map provides figures of the Dogra regiment unit stationed there: kills two; one of Ulfa and one of GNLA. Apprehends three of Rabha Viper Army, three of Rabha National Liberation Front, two of United Achik Liberation Army and three Ulfa.

Ask the personnel there what UALA is and pat comes the reply: they are a breakaway faction of the ANVC and are now a combination of Garo and Ulfa militants. These permutation and combinations of militant outfits are what the security forces are up against.

Two kilometres away is Berubari, the Assam-Meghalaya border, Paikan being 140km from Guwahati. Beyond Berubari, the state police, CRPF and BSF patrol Meghalaya, the state’s chief minister Mukul Sangma still quite certain that the army —and by the default the Armed Forces (Special Powers) Act — isn’t still required to contain the insurgency that has come to plague his state.

Eighty kilometres uphill, at Tura, members of the Mothers’ Union have gathered at the deputy commissioner’s office to discuss a protest against the Chokpot incident. They are in agreement with Sangma but reject outright any suggestion that the ‘movement’ led by the Garo National Liberation Army (GNLA) may have any patriotic motives whatsoever. “It is all about money. This is trouble that has been borrowed from militants in neighbouring states. Militants of Ulfa and NSCM (I-M) who for decades used the Garo hills as a corridor have now got Garo boys into this,” says a senior member of the union.


By Mohan Guruswamy

The rise of China as the world’s greatest exporter, as largest manufacturing nation and its great economic appetite poses a new set of challenges. At a meeting of Southeast Asian nations in 2010, China’s then foreign minister Yang Jiechi, facing a barrage of complaints about his country’s behaviour in the region, blurted out the sort of thing polite leaders usually prefer to leave unsaid. “China is a big country,” he pointed out, “and other countries are small countries, and that is just a fact.”

Indeed it is; and China is big not merely in terms of territory and population, but also military might. Its Communist Party is presiding over the world’s largest military build-up. And that is a fact too — one that the rest of the world has to come to terms with.

China’s defence budget has almost certainly experienced double digit growth for two decades. According to Stockholm International Peace Research Institute (SIPRI), Beijing’s annual defence spending rose from over $30 billion in 2000 to over $135 billion in 2014. SIPRI usually adds about 50% to the official figure that China gives for its defence spending, because even basic military items such as research and development are kept off budget. Including those items would imply total military spending in 2014, based on the latest announcement from Beijing, would be around $200 billion.

This is not a sum India can match, and the last thing we need to get caught in is a numbers game. A one-party dictatorship will always be able to outspend us, even if our GDPs get closer.

That said, the threat from China should not be exaggerated. There are three limiting factors. First, unlike the former Soviet Union, China has a vital national interest in the stability of the global economic system. Its military leaders constantly stress that the development of what is still only a middle-income country with a lot of very poor people takes precedence over military ambition.

The increase in its military spending reflects the growth of the economy, rather than an expanding share of national income. For many years China has spent the same proportion of GDP on defence (a bit over 2%, whereas America spends about 4.7%).

The real test of China’s willingness to keep military spending constant will come when its headlong economic growth starts to slow further. But on past form, China’s leaders will continue to worry more about internal threats to their control than external ones. Last year, spending on internal security outstripped military spending for the first time. With a rapidly ageing population, it is also a good bet that meeting the demand for better health care will become a higher priority than maintaining military spending.

India on the other hand will keep growing long after China has stopped growing. Its youthful population and present growth trends indicate the accumulation of the world’s largest middle class in India. This growth is projected to begin in 2015 and continue well past 2050.

In fact so big will this become that India during this period will increasingly power world economic growth, and not China. In 2050, India is projected to have a population of 1.6 billion, and of this 1.3 billion will belong to the middle and upper classes. The lower classes will be constant at around 300 million, as it is now.

India: Recognizing Pakistan’s Paradigm Shift

India’s new government must acknowledge the change in internal Pakistani politics, and be innovative.
By Shairee Malhotra
June 04, 2014

Prime Minister Narendra Modi’s invitation to leaders of South Asian Association for Regional Cooperation countries to attend his swearing-in ceremony has been termed a “foreign policy masterstroke.” The highlight was arguably Pakistani Prime Minister Nawaz Sharif’s attendance, despite a delay in accepting the invitation.

Modi’s BJP party has in the past criticized the ex-UPA government’s Pakistan policy as too soft, and had vowed in the run-up to elections to take a tough stance against Pakistan. However, Indian leaders must recognize the psychological underpinnings of the Pakistani state, which is central to taming the famously fractious relationship.

Pakistan’s military has built the identity of the Pakistani state in opposition to India, and this perpetuation and sustainment of the Indian threat is what has made the Pakistan Army the most powerful and omnipresent institution in its polity. This siege mentality has legitimized its rule in the eyes of ordinary Pakistanis and enabled it to extract the exorbitant funding and revenues that it does, consequently derailing pro-democracy forces and civil society. The military’s unprecedented monopoly over Pakistani politics, and the inflated revenue that the myth of the Indian threat derives explains the lack of incentive for the army to better relations with India.

While a tough line on Pakistan may have been appropriate for New Delhi a few years ago, in recent years the state of affairs seems to have somewhat altered. There is a growing realization in Pakistan that India no longer poses the largest threat to the country, and in this realization lies Pakistan’s greatest hope of becoming a “normal” country, and not the dysfunctional security state that it currently is. The biggest security risks are those stemming from within the country, and not from external sources like India, a realization that frames the military as part of the problem, rather than the solution. Perhaps nothing can better capture Pakistan’s miscalculations and militancy culture than Mohsin Hamid’s catchphrase, “To fight India, we fought ourselves.”

The Army itself is starting to see the light; evident in its new doctrine’s shift in threat assessment, as militant groups they once propelled turn against the state and attack its security apparatuses. According to acclaimed Pakistani author Ahmed Rashid, “The anti-India rhetoric that has been part of Pakistan’s entire make-up for over 50 years has now dramatically altered even within the army, which recognizes that we have to deal with the Taliban threat.” Indeed, even Pakistan’s feared Inter-Services Intelligence has acknowledged that homegrown militants have surpassed India as Pakistan’s greatest threat.


By Subir Bhaumik

Before the 2014 polling, Indian Prime Minister Narendra Modi had predicted “unusually good results” for his party in the northeast. Usually considered a Congress bastion, with some challenge from regional parties, the northeast has been a region where the Bharatiya Janata Party (BJP) had failed to make much of a dent despite their full-throated support to the campaign against illegal immigration that strikes a sympathetic chord with the indigenous populace in the region. But Modi was right in saying it would be different this time.

The BJP won seven of the 14 parliament seats in Assam and one of the two seats in neighbouring Arunachal Pradesh. With their allies winning a seat each in Nagaland and Meghalaya, the tables have been turned well and true. The Congress could hold out only in Manipur and Mizoram and the Communists in Tripura, especially because of strong local leaders.

Modi has already emphasized the importance of India’s ‘Look East’ policy to develop close relations with China and Southeast Asian countries, which he sees as crucial for the country’s economic turnaround. He has also prioritized development of border infrastructure, both for defence and trade-transport connectivity with the immediate neighbourhood.

No wonder, he has put a former army chief, General V.K. Singh, in charge of the ministry for northeast, called Development of North Eastern Region (DONER). The idea is to give a huge push to the development of transport connectivity and infrastructure for trade and defence (both are equally important). Singh’s knowledge of the region as a former Eastern Army commander and of defence issues makes him the right man who can turn the ‘Look East’ into ‘Push East’ for India.

India’s eastward thrust is qualitatively different from Germany’s pre-War Drang Nach Osten (Push East), with emphasis on trade and economy rather than on military conquest for population transfers. But Modi is not wrong to reckon the need for military zeal to take this forward.

Closer economic integration with China and Association of Southeast Asian Nations (ASEAN) would mean the rise of a huge economic block accounting for almost half of the world’s population – something many see as the future hotspot of global economy. But for India, this would also require resolution of the festering border dispute with China and playing an important role in fostering peace between China and ASEAN nations with all the tensions rising in the South China Sea. Military conflicts can derail this process of economic integration.

For close to two decades, India has tried to place its own long troubled northeast at the heart of its ‘Look East’ policy, assuming that would end the region’s isolation and help it develop through trade and investment from the neighbourhood. The tortoise pace of the initiative cannot make someone like Modi happy.

The new prime minister has done well to keep out a ‘local minister’ for DONER, because ministers hailing from a northeastern state may just resort to some tokenism to keep their local constituents happy and also stand accused by other states in the region for being partial their own states. V.K. Singh would surely go about executing Modi’s ‘Look East’ vision and India’s strategic interests in northeast – not limit himself to stunts to please local power-brokers.

But Look East through northeast can only be meaningful if Delhi can resolve – or at least firmly contain – the myriad conflicts that have bedeviled the region for 60 years. How can one foresee a successful Kolkata-Kunming highway through the northeast – let alone a Bangladesh–China–India–Myanmar (BCIM) economic corridor that Chinese Premier Li Keqiang has proposed along the highway – if areas along it are perpetually riddled with local conflicts.

Crisis in Siachen: Two crashes in nine months, army troops face transport crisis


While the Army has been unsuccessfully trying to procure replacement choppers for over five years, an emergency alternative being planned has also not worked out.

Both the crashes involved the indigenous Advanced Light Helicopters (ALH) that had been inducted by Army Aviation to work well beyond their design capacity to supply troops at high altitudes.

The Army is staring at a transport crisis in supplying and maintaining troops at the Siachen Glacier, the world’s highest battlefield, with the main lifeline of soldiers at the extreme heights — light, high-altitude choppers — facing a shortage crisis due to stalled procurement by the last government and two crashes in the last nine months that have raised serious safety questions on the available fleet.

Such is the crisis that the emergency alternative Cheetal choppers — orders for which were placed by both the Army and Air Force — have been tested by manufacturer Hindustan Aeronautical Limited (HAL) in the past month but have failed high-altitude tests in Leh due to a lack of high-performance rotor blades.

The Indian Express spoke to a number of top Army, Air Force and industry officials who acknowledged the seriousness of the situation and expressed helplessness, given that successive crisis management plans were nixed over the past few years.

While the crisis was developing for a while, with the UPA-II government not clearing the Army’s five-year-old proposal to purchase 197 light helicopters at the final stage of procurement due to a CBI inquiry into competitor AgustaWestland that lost during the technical trials, the last nine months have seen at least two “category one” crashes at the glacier that have gone unreported and have raised serious concerns.

Both the crashes involved the indigenous Advanced Light Helicopters (ALH) that had been inducted by Army Aviation to work well beyond their design capacity to supply troops at high altitudes. In August, a chopper crashed while landing close to the Amar helipad on the Siachen Glacier and went down a crevasse. Similarly in March this year, another ALH went down on the northern glacier while landing at a narrow helipad.

“The two accidents occurred at a time when the choppers were taking off or landing at extremely narrow airfields where even a freak wind can cause havoc. Thankfully, in both cases, the pilots managed to jump out in time and only got injured. Both aircraft are damaged beyond repair and one cannot even be recovered,” said an Army official on condition of anonymity.


By D Suba Chandran

A series of attacks by the Taliban in Afghanistan during May 2014 resulted in a few media-persons calling it a Spring Offensive. Is it really a calculated and well planned offensive by the Taliban? Or is it merely the Last Stand of a terrorist organisation arising out of desperation and conceived over a fear of losing relevance in any future Afghan political framework?
Neither Spring, Nor Offensive; Mere Desperation

After failing to disrupt the first round of the successful presidential elections in Afghanistan – that were held all over the country on 5 April – a section reported the Taliban’s plans to launch a massive surge. True, there were few attacks during the last month; for example, according to news reports, 18 people were killed in three attacks in Jalalabad, Ghazni and Helmand provinces. Later, on 23 May, there was a high profile attack on the Indian Consulate in Herat.

Except for those three coordinated assaults in the provinces and the attack on Indian Consulate in Herat, there have been no serious threats from the Taliban that challenge the Afghan security forces. A closer look into those three assaults would even reveal them as regular guerrilla attacks, using the classic sneaking in and opening fire strategy, than an open challenge or a military duel. Many in India suspect that the attack on its Consulate in Herat was in fact carried out by the proxies of Pakistan with an objective to scuttle Nawaz Sharif’s proposed visit to India to partake in the recently-elected Indian Prime Minister Narendra Modi’s swearing-in ceremony.

It is entirely possible that the two sets of attacks in May were carried out by two different factions of the Afghan Taliban for two different objectives – the first set of attacks on the three provinces by the Afghan Taliban led by Mullah Omar to prove their relevance, and the attack on the Indian Consulate in Herat by the Haqqani Network, having been instigated by their masters from elsewhere in Pakistan.

Perhaps, what one sees in Afghanistan is not a surge by the Taliban but a desperate last attempt to make themselves relevant in Afghanistan’s post-election political framework, using violence as a strategy.
Post-election Political Setup: Predicting the Taliban’s Roadmap

Two significant developments might have rubbished the Taliban’s calculations for a role for themselves in the future government in Kabul following the withdrawal of Western troops: the successful elections of 5 April, and the widespread popular participation.

By any standard of evaluation, the election was a huge success and an ultimate insult to the Taliban. Barring few provinces in southern regions of the country, Afghans turned out in substantial numbers, waited patiently in long, serpentine queues and cast their votes despite bad weather and shortage of ballot papers. Never in the history of Afghanistan has there been a political change of regime, supported by its people such as this.


By Dr. S. Chandrasekharan.

There are only three issues that need to be highlighted on the recent developments. The first relates to an over pessimistic assessment of the World Bank on Bhutan’s economy- 2014. The second relates to a very impressive account of Bhutan’s way of life and its cherished goal of Gross National Happiness and the third relates to the refugee issue as one of the expatriates has given a religious twist to the whole refugee issue which in my view is very unfortunate.
The World Bank Report on Economic Developments in Bhutan- 2014.

In what is routinely issued by World Bank on the economic situation in the country, the update on Bhutan’s economy of 2014 appears to be unjustifiably pessimistic though in reality the economy of Bhutan but for the “Rupee crunch” is fairly robust and stable. In my view, with a little tightening in construction sector and judicious use of imports from India and completion of the ongoing Hydro electric projects in time would go a long way in overcoming this problem. The points raised in the World Bank Report and other related issues were:

China’s Air Force Modernization: ‘Unprecedented in History’

The Pentagon’s annual report on China says that the scale of the PLAAF’s modernization is “unprecedented in history.”
June 06, 2014

The People Liberation Army Air Force’s (PLAAF) ongoing modernization is taking place at a rate unprecedented in history, the U.S. Department of Defense said on Thursday.

“The PLAAF is pursuing modernization on a scale unprecedented in its history and is rapidly closing the gap with Western air forces across a broad spectrum of capabilities including aircraft, command and control (C2), jammers, electronic warfare (EW), and data links,” the Pentagon said in its annual report on China’s military modernization, which was released on Thursday. This claim is new this year and was not included in the annual report in 2013.

Indeed, the report’s section on the PLAAF was one of the most expanded parts of the report and seemed to indicate growing concern in Washington over China’s air capabilities. After stating that the PLAAF is the largest Air Force in Asia and third largest in the world, the report noted that it is made up of “approximately 330,000 personnel and more than 2,800 total aircraft, not including unmanned aerial vehicles (UAV).” Of these 2,800 total aircraft, around 1,900 are combat aircraft, 600 of which are modern.

The increasingly modern PLAAF aircraft seemed to be the top concern of the Pentagon in the new report. Last year, for instance, the report noted that, although China is fielding more and more 4th generation aircraft, “the force still consists mostly of older 2nd and 3rd generation aircraft, or upgraded variants of those aircraft.” By contrast, the report this year stated that although the PLAAF continues to operate 2nd and 3rd generation aircraft, it will likely become a majority 4th generation Air Force within the next several years.

The report also noted for the first time China’s efforts to procure Su-35 aircraft from Russia, along with its “advanced IRBIS-E passive electronically scanned array radar system.” If Beijing is successful in purchasing these aircraft, the Pentagon assesses that they will likely enter service between 2016 and 2018. As Peter Woodwrote in The Diplomat back in November, the Su-35 should significantly enhance China’s ability to project air power in the South China Sea.

The section on China’s bomber fleet was also updated this year, although this seemed to reflect Washington having acquired greater information on the H-6 bomber fleet. For instance, last year’s report noted that China continued to upgrade its H-6 bomber fleet, “with a new variant that possesses greater range and will be armed with a long-range cruise missile.”

In South Sudan Conflict, China Tests Its Mediation Skills

Driven by commercial interests, China is taking the unusual step of mediating between rival South Sudanese factions.
June 06, 2014

As mediators try yet again to jumpstart stalled peace talks between warring factions in South Sudan, the world will get to see China playing an unfamiliar role: that of lead mediator in another country’s internal conflict. Usually, China’s insistence on non-interference in others’ affairs prevents it from taking such steps, but China’s unique interests in South Sudan have called for a different tactic.

According to Reuters, Western diplomats have noticed a more “hands-on approach” from China on the South Sudan issue. China has been heavily involved in the peace talks in Addis Ababa, the capital of Ethiopia. Talks began in January 2014, less than a month after the conflict began, and the negotiations have continued on and off ever since (two ceasefire agreements, reached in January and May, both failed to actually halt the violence). Throughout the process, China has been in close contact with both sides, and with Western diplomats and African mediators. It’s a stark difference from China’s usual approach to internal crises; Beijing typically prefers to stay out of the fray and call for a peaceful resolution from afar.

When asked why China was taking “a more proactive role” in the South Sudan crisis, Foreign Ministryspokesman Hong Lei said that China was acting with the goal of “maintaining regional peace and creating enabling conditions for local development.” Of course, this doesn’t answer the fundamental question — there are many other internal crises where Beijing has chosen not to get involved, despite threats to “regional peace” and “local development.”

China’s involvement in South Sudan recognizes the substantial commercial interests Beijing has at stake — most notably in the oil industry. According to Reuters, before the conflict began in December, South Sudan was providing five percent of China’s oil imports. Now, oil production in the country has been slashed by one-third. Chinese workers have also been evacuated from South Sudan due to the threat of violence. Principles aside, China had every reason to push hard for a swift resolution to the crisis.

Perhaps even more importantly, other major world powers, including the U.S., have far less reason to take proactive action in South Sudan. Other countries have fewer interests in the new nation,and were unlikely to get involved to the extent Beijing has. China stepped into the void, taking up a rare role as a mediator. “We have huge interests in South Sudan so we have to make a greater effort to persuade the two sides to stop fighting and agree to a ceasefire,” Ma Qiang, the Chinese ambassador to South Sudan, told Reuters.

What Should the US Do About Closer Sino-Russian Ties?

Why Washington should resist the temptation to overreact to their growing convergence.
By Michael Lumbers
June 06, 2014

The splashy announcement recently of a $400 billion deal that will send Russian natural gas to China has triggered a new wave of speculation over theimplications of strengthened Sino-Russian ties for America’s strategic position. The supply agreement, which will give Beijing a much-needed source of clean energy and Moscow an alternative market as relations with Europe have soured in the wake of the crisis over Ukraine, fleshes out a “strategic partnership” that has flourished over the past 20 years as a result of expanded trade, the final resolution of all border disputes, and a shared interest in impeding U.S. hegemony.

For some alarmed Western observers, seemingly forgetful that not even the bonds of communist ideology could prevent the violent rupture of the Sino-Soviet alliance at the height of the Cold War, this invigorated relationship threatens to consolidate into an anti-American alliance that is headed toward an eventual clash with the U.S. More sober voices stop short of such grim forecasts, but counsel that Washington should devise policies aimed at driving the two powers apart. How, if at all, is the U.S. likely to respond?

Any assessment of U.S. options for responding to growing Sino-Russian convergence needs to begin with an understanding that the post-Cold War reconciliation, burdened by a long history of distrust, has often fallen short of the flowery rhetoric of summit communiques. For both sides, the relationship remains a function of more important dealings with the United States.

While shared antagonism toward America can make for strange bedfellows, neither Moscow nor Beijing is willing to sacrifice its own agenda with Washington for the sake of this liaison. Sharp disagreement over relations with the Americans has historically divided the two powers. The Sino-Soviet schism of the late 1950s resulted in part from Nikita Khrushchev’s fear that Mao Zedong’s adventurism threatened to drag the U.S.S.R. into a major conflict that would derail détente with the U.S., a project that Mao, in turn, believed would come at the expense of China’s own interests.

How Tiananmen Changed China

The regime bought off the protesters with riches and a new nationalism. And it's still working.
June 03, 2014

Student leader Wuer Kaixi was ringed by four concentric circles of “security monitors” in Tiananmen Square when I first met him 25 years ago in a throng of pro-democracy demonstrators. I had to get paper slips bearing the official stamps of protest leaders in order to approach Wuer, who was propped up against a pile of jumbled clothes and bedding and weak from a hunger strike. Known back then to have flashes of arrogance, Wuer gave me an irritated look when I joked, “You guys are as security-conscious as the Politburo.” During those heady days in May 1989, neither of us knew how futile his fresh-faced bodyguards would soon seem, faced with the horrific repression, the gunfire, the screams, the roaring military tanks which took over Beijing’s bloodstained streets on June 4.

We were naïve, confessed Wuer, now a Taiwan-based exile, when I interviewed him last week in a Tokyo coffee shop. “In those days we didn’t even know too much about democracy. Our understanding was superficial. But we knew very well our lack of democracy; we knew very clearly it was something we didn’t have.”

And what they still don’t. After People’s Liberation Army soldiers opened fire on demonstrators that day a quarter century ago, many Westerners predicted the regime would shortly implode. Chinese society was traumatized, the ruling Communist Party nearly split, the international community aghast. In those years democratic movements were percolating up all over the world; the Tiananmen protests seemed part of an irresistible tide of freedom that eventually engulfed the former Soviet Union, the Eastern bloc nations and other autocratic regimes in East Asia, such as Taiwan, Indonesia and Mongolia.

But the Chinese Communist Party, with a combination of military brutality and political savvy, managed to defy that trend—and today remains proud of that achievement. The party isn’t going to be commemorating the 25th anniversary of the crackdown, of course, but it’s hard to believe that some of the communist mandarins in Beijing won’t stop and reflect, with quiet satisfaction, on one of the most enduring successes in the history of oppression. After the regime killed at least 1,000 Tiananmen protesters—no one knows exactly what the death toll was—it effectively co-opted the survivors with an even more powerful weapon than tanks: astonishing economic growth, which continued steadily for the next 25 years. To inspire fresh loyalty to the party, the regime also disseminated a new ideology to replace communism: fervent nationalism.

Indeed, it is possible to draw a direct line between the regime’s successful suppression of the Tiananmen generation then and the assertive China we see today. Thanks in large part to the policies the regime adopted during and after Tiananmen, China is now widely perceived as an aggressive rising power, cracking down on its people while picking maritime fights with its neighbors in the East and South China Seas, even challenging the United States for influence in the Pacific.

China's Budding Ocean Empire **

Beijing's might is growing from the South China Sea to the Indian Ocean. Is a new age of great-power rivaly inevitable?
June 5, 2014
I am flattered by Nilanthi Samaranayake’s lengthy and respectful treatment of my March 2009 Foreign Affairs cover story about the importance of the Indian Ocean, on the article’s fifth anniversary. It is also five years since I published “Pakistan’s Fatal Shore” in The Atlantic (May 2009), an eyewitness account of several thousand words about my visit to the port of Gwadar in Balochistan. Samaranayake writes that Gwadar has not turned out to be the commercial success that my Foreign Affairs article intimated it would be. But in that Atlanticarticle, I provided a deeply reported summary of Gwadar’s very problems: something for which there was simply no space in my wide-ranging Foreign Affairs article, whose job it was to articulate a general theory of a vast region of the globe. In fact, in subsequent works, Monsoon (2010), The Revenge of Geography (2012), and Asia’s Cauldron, published this year, I have had the space for a full-bodied treatment of power rivalries in the Indo-Pacific. It is these works taken together that represent my thinking on the Greater Indian Ocean, which includes the South China Sea as an antechamber.

So let me summarize some principal themes of these works, to go along with Samaranayake’s many good points:

China is starting to build a commercial empire-of-sorts throughout two oceans—the Western Pacific and the Indian.In regards to the Indian Ocean, trade, rather than military expansion, will be at the heart of it. Empire building is often not the stuff of conscious grand strategy. It occurs gradually, over decades, by experimentation. And the end result is never clear at the beginning or even in the middle. To wit, the Venetian empire in the Eastern Mediterranean began as a limited expedition against pirates in the northern Adriatic. The beginnings of the Dutch and British East India companies were similarly circumscribed. China’s attempts at port building and/or financing from Myanmar to Tanzania are very much in this spirit.

Beijing is attempting to do in the East and South China seas in the early twenty-first century what the United States successful accomplished in the Greater Caribbean in the nineteenth and early-twentieth centuries. It has attempted to take effective strategic control of the blue water extension of its own continental land mass. This is China’s path to a significant presence in the Indian Ocean. For just as the Greater Caribbean unlocked dominance of the Western Hemisphere for the United States, the South and East China Seas can unlock a vast naval footprint for China in the navigable, southern Rimland of Eurasia—from the Horn of Africa to the Sea of Japan. This is a drama that could take decades to play out.

Cruise Missiles: China’s Real ‘Carrier Killer’

U.S. military analysts warn of the growing threat Chinese cruise missiles pose to the U.S. in the Asia-Pacific region
June 05, 2014

A new report by U.S. military analysts warns of the growing threat Chinese cruise missiles pose to U.S. and allies in the Asia-Pacific region.

“A key element of the PLA’s investment in antiaccess/area-denial (A2/AD) capabilities is the development and deployment of large numbers of highly accurate antiship cruise missiles (ASCMs) and land-attack cruise missiles (LACMs) on a range of ground, air, and naval platforms. China’s growing arsenal of cruise missiles and the delivery platforms and C4ISR systems necessary to employ them pose new defense and nonproliferation challenges for the United States and its regional partners,” the report states.

The report, entitled A Low-Visibility Force Multiplier: Assessing China’s Cruise Missile Ambitions, was put out by the Center for the Study of Chinese Military Affairs at the Institute for National Strategic Studies. It was written by Dennis M. Gormley, Andrew S. Erickson and Jingdong Yuan.

In the report, the authors warn of a number of advantages that cruise missiles provide the People’s Liberation Army (PLA). For example, they note that cruise missiles can be launched from land, sea or air-based platforms. Furthermore, their compact size and limited support requirements allows them to be highly mobile (and thus highly survivable) when launched from ground-based platforms. The authors also note that cruise missiles have a low infrared signature, allowing them to escape detection from missile defense systems.

“The potentially supersonic speed, small radar signature, and very low altitude flight profile of cruise missiles stress air defense systems and airborne surveillance and tracking radars, increasing the likelihood that they will successfully penetrate defenses.”

Moreover, cruise missiles can be produced cheaply, allowing China to acquire large quantities of them. This is important because it could allow the PLA to exploit simple arithmetic in overcoming U.S. and allied missile defense systems. That is, the PLA could launch enough cruise missiles to simply overwhelm existing missile defense systems. Indeed, the report states Beijing believes that cruise missiles possess a 9:1 cost advantage over defenses against them. Thus, the PLA might exploit a quantity over quality approach, the exact opposite of the kind of force structure the U.S. military has outlined for its future.

China Steps Up Attacks on US Tech Firms

There are increasing signs that China will limit or ban foreign tech firms’ access to Chinese markets.
June 05, 2014

Ever since the U.S. Department of Justice indicted five PLA officers on charges of hacking and economic espionage, China has increased its scrutiny of U.S.-based technology firms. First, there were rumors that China was trying to phase out use of IBM servers, and a pointed attack against Cisco in a Chinese newspaper. This Wednesday, China Daily ran an article attacking the full range of foreign technology companies in an article titled “Foreign tech firms post threat on Internet.”

China Daily interviewed several Chinese security analysts, who all agreed that companies like Google, Apple, Yahoo, Cisco, Microsoft, and Facebook “can become cyber security threats to Chinese users.” The article drew a direct line between foreign tech firms and cyber espionage done by the National Security Agency (NSA). Areport from China’s Internet Media Research Center, issued in late May, reached a similar conclusion.

A microblog post from People’s Daily took the rhetoric even further, according to Financial Times. The post said that China will “resist the naked internet hegemony.” It also promised to “severely punish the pawns of the villain” — a thinly-veiled threat to foreign tech firms seen as cooperating in the NSA’s data-collection efforts.

As Jin Kai wrote earlier for The Diplomat, China is serious about developing and nurturing its own world-class tech firms. Well before the Justice Department indicted the PLA officers, Xi Jinping had already called for China to become a “cyber power,” which meant in part increasing China’s domestic tech industry. As part of this strategy, Beijing seeks to protect up-and-coming domestic tech firms from competition. Previously, this was done by limiting access to China’s markets, such as through the controversial indigenous innovation promotion policy that would force government offices and state-owned enterprises (a sizeable chunk of China’s market) to purchase only domestically developed technology.

Tiananmen Square 25 Years On: Dealing With Discontent

Chinese are certainly richer, but can prosperity alone eradicate the roots of public discontent?
By Tim Robertson
June 04, 2014

There’s a widespread misconception in the West that the 1989 student protests that begun in Beijing and spread to other parts of China can be neatly categorized as a pro-democracy movement. There certainly were calls for democracy and democratic reforms, but these words had, and still have, very different meanings and applications in China than they do in the West. The d-word entered into common parlance in Mao-era China with the notion of New Democracy, which was promoted as the first stage on the road to communism, not to parliamentary democracy.

The demonstrations that eventually led to the June 4 massacre began following the death of the popular reformist politician Hu Yaobang on April 15. Students from Beijing’s universities marched through the streets of the capital calling on the Communist Party (CPC) to lift press censorship, improve personal freedoms, and curb official corruption.

Rather than appease the students, on April 26 the state-run People’s Daily published an editorial condemning the protests and accusing those involved of wanting to overthrow the government. The CPC, however, underestimated the will of the masses and demonstrations continued throughout May, until the People’s Liberation Army moved into the capital for the tragic denouement.

Since that day perhaps no country has seen greater change than China, yet it is hard to say exactly what the protests actually achieved. Whatever relatively trivial improvements there have been in press freedoms since 1989 are hardly cause for celebration. This year Reporters Without Borders ranked China 175th (out of 180) in their world press freedom index. Punitive measures are still regularly dished out to those who break with the party line; journalists regularly have their work censored and some find themselves imprisoned after being convicted in perfunctory show trails.

With China’s growing economic might, Reporters Without Borders suggests that the CPC’s media influence is spreading throughout the region, namely to Hong Kong, Macau and Taiwan. The inference is that the Chinese media machine is more dangerous than ever before.

‘It Will Be Incomparably More Difficult to Rule China’

Times Coverage of Tiananmen Square 25 Years Ago

Pro-democracy demonstrators filled Tiananmen Square on June 2, 1989, despite martial law being declared in Beijing. 

It was 25 years ago Wednesday that Chinese troops conducted a bloody crackdown on thousands of pro-democracy demonstrators in Tiananmen Square. At the time, Nicholas Kristof, The New York Times’s Beijing bureau chief, reported that “by ordering soldiers to fire on the unarmed crowds, the Chinese leadership has created an incident that almost surely will haunt the government for years to come.”

“Looking back at what I wrote 25 years ago, I’d say the tone was right but the timing way too optimistic,” Mr. Kristof said recently in an email. “The Communist party indeed has diminishing control over people’s lives.” But he noted that despite economic and social pluralism, there is “still not a whisker of political pluralism.”Photo
People's Liberation Army tanks blockaded main thoroughfares leading to Tiananmen Square on June 6, 1989, two days after hundreds of protesters were killed in Beijing.CreditManuel Ceneta/Agence France-Presse — Getty Images

“Back then we thought that greater democracy would come in five years, or perhaps a decade, but we would not have expected that 25 years later Liu Xiaobo would be in prison as a Nobel Peace Prize winner,” he said.

Here are select stories from The Times from 1989 — including work by Mr. Kristof and Sheryl WuDunn that won the Pulitzer Prize for international reporting — written just before and just after the violent crackdown in Tiananmen.


Biggest Beijing Crowds So Far Keep Troops From City Center; May 21, 1989, by Nicholas D. Kristof

The Russia-US Melee: Cold War Redux in Space?

Tensions emerging from the Ukraine crisis don’t auger well for future cooperation in space.
By Melissa S. Hersh & Ajey Lele
June 05, 2014

Building on the popularity of the 1975 Hollywood blockbuster and cult classic Jaws, a sequel was put out in 1978. For many the legacy of this eminently forgettable offering lays in its tagline: “Just when you thought it was safe to go back in the water…” Following Russia’s recent expansionist tendencies in Ukraine, the West is left to wonder if it is in for a Cold War redux that captures the tone and tenor of the first go round.

Russian irrendentism has prompted Western sanctions, which in turn have met with a Russian response. And at the forefront of Russia’s sanctions backlash is space cooperation. To what extent this de-orbiting relationship impacts global space safety and security is yet to be seen.

But alas, the pas de deux between Moscow and Washington appears to be coming to an end. Despite NASA’s claim that it still maintains a very good relationship with Roscosmos, the Russian space agency, Moscow has indicated that it will withdraw from the International Space Station (ISS) in 2020. This comes on the coattails of the U.S. announcing its intent to extend operations of the space station, from 2020 to 2024 earlier this year.Russia’s intention to withdraw from the ISS will most probably disrupt the current space commons dynamic; countries will need to scramble for solutions or modify strategic plans based on denied access to critical dependencies. Despite advances, the role for increased private sector participation is fraught with many unknowns: legal and regulatory liability; attribution; manufacturing resilience; intelligence data sharing; project financing; and mission assurance.

Russia is also planning to put the kibosh on selling the Russian-built RD-180 engine. The significance of having a sole supplier to power the first stage of United Launch Alliance’s Atlas 5 rocket – one of two main satellite-launching workhorses for the U.S. military space program – is not just financial in nature, but also strikes a direct blow at Washington’s space leadership aspirations.

Not insignificantly, Russia has also announced a proposal to shut down 10 of the United States’ GPS signal-reception stations located on Russian territory from June 1 (there are 11 “infrastructure stations” for the U.S.-run Global Positioning System in 10 Russian regions). The timing for this proposed directed-denial appears reactionary; however, this threat is rooted in the U.S. thwarting Russia’s introduction of Glonass – the only global competitor to the U.S. satellite navigation system – since the request was made in 2012. While the U.S. and the erstwhile Soviet Union had achieved a degree of cosmic détente with their cooperation on the ISS, this cooperation is rapidly deteriorating, and has geopolitical and geostrategic implications that exceed the two powers alone.

Myanmar in US-China Relations

(Full brief available here)
By Yun Sun,

On January 22, 2013, following the 5th US-China Asia Pacific Consultations in Beijing, the United States and China jointly announced their intention to pursue several areas of practical cooperation. For the first time in the history of their bilateral relations, Myanmar was listed as an area for future cooperation, though the suggested scope for mutual or complementary action is very modest. As stated in the announcement, “US and Chinese experts will meet to coordinate with Myanmar counterparts on an appropriate project(s), such as in the field of health, to work together for Myanmar’s stability and development.

The announcement sent several important messages. Since the beginning of Myanmar’s political reform and improvement of relations with the United States, China has felt aggrieved about the “damage” that has been inflicted on Chinese political, economic and strategic interests inside Myanmar. Many Chinese analysts perceive the “obstacles” that China has encountered in Myanmar to be largely the result of a US premeditated strategy to undermine Sino-Myanmar relations and “contain” China. Against this background, the announcement of US-China cooperation in Myanmar might be seen as an indication that the zero-sum perceptions have moderated.

However, a careful examination of the reality raises more questions and doubts than answers about such cooperation. Although China and the US share common interests in Myanmar’s stability and development, a strong sense of competition has been observed between the two powers for influence in the country, which will inevitably affect their cooperation. Given China’s perception of and grudge against the “containment” nature of US maneuvers in Myanmar, trust will be a major issue that limits the scope and depth of such cooperation. In addition, a key element of any US-China cooperation in Myanmar is the pivotal role Myanmar itself should play in the process. Whether the Myanmar government is willing or capable to play such a role remains unclear.

Key Findings:
1 - The January 2014 US-China Joint Statement on cooperation in Myanmar is an important first step in setting a new tone for how the two countries view each other’s policies and presence in the country.
2 - China has perceived new American interest in engaging Myanmar as a threat to their established role in the country, and has tended to view the dynamic in zero-sum, competitive terms.
3 - The United States, in contrast, has focused its policies in Myanmar primarily on the country’s commitment to internal reforms, and its prospects for democracy and improved human rights. While not directed at China, however, these policy priorities are seen by Beijing as harmful to its interests.
4 - The new declared interest in US-China cooperation in Myanmar does not mean a dramatic change in the near future. The content and depth of such cooperation will be difficult to work out, and some level of friction in US-China relations related to Myanmar is likely to persist.
This is the third of a series of four issue briefs on the changes and challenges that Myanmar faces in its domestic and foreign policies since the beginning of democratization in the nation in 2011. These briefs will explore how external factors and forces influence and shape various aspects of Myanmar’s internal development, including economic growth, ethnic conflict and national reconciliation. Previous issue briefs include “Chinese Investment in Myanmar: What Lies Ahead?” and “China, the United States and the Kachin Conflict.”

For more information about this program, please contact Hana Rudolph at hrudolph@stimson.org.