5 February 2019

China Is Taking Over India's Tech Space. Should We Worry?

Ananth Krishnan

India is not unique in the wave of Chinese tech acquisitions, but the absence of any robust debate on the implications is rather curious.

For years, India’s relationship with its biggest trading partner, China, has been defined by a one-sided kind of “buy-buy” – Indian hunger for Chinese machinery and equipment. In return, India exported low-grade ores to China. A trade surplus in China’s favour has now crossed $50 billionout of two-way trade of around $85 billion.

While the focus of India’s current trade strategy with China is to bridge the gap, chiefly by increasing exports of agricultural commodities hit by the China-US trade war, Beijing’s priorities have shifted elsewhere.

Since 2015, around $7 billion in Chinese funding has poured into the Indian tech sector. A dizzying range of acquisitions has now left Chinese companies as major shareholders of some of India’s biggest tech companies.

Taliban, Afghan leaders to discuss peace, future set-up at Moscow moot

Tahir Khan

Though Afghan Taliban rule out any negotiations with President Ashraf Ghani-led government, they will be meeting Afghan political leaders in Moscow, the capital of Russia, on Feb 5-6 to discuss the peace process.

The High Peace Council (HPC), mandated to pursue peace negotiations with the armed opponents, has also been invited to the Russian capital but its secretary Umer Daudzai told BBC Pashto radio that the HPC may not send representatives as they have not been given enough time to discuss whether or not their participation in the process will be useful.

HPC members had attended a conference of regional countries and other stakeholders in Russia in November last year.

Taliban political spokesman Suhail Shaheen has confirmed that the Taliban political envoys will participate in the meeting. Speaking to Daily Times from Qatar, where the Taliban have political headquarters, Shaheen described the Moscow meeting as an ‘intra-Afghan dialogue’. “I think it is intra-Afghan dialogue to see how to cope with current situation and pave the way for sustainable peace after foreign troops’ withdrawal,” he said.

It’s time to end the war that can never be won in Afghanistan

By Jacob Heilbrunn

Already, hawks in Washington are decrying the prospect that President Trump will withdraw the remaining 14,000 American troops from Afghanistanand are likening it to the pullout in 1973 from Vietnam.

“If we withdraw as we’re talking about in an 18-month timeline,” Ryan Crocker, the former US ambassador to Afghanistan told Foreign Policy magazine Monday, “you will simply see the Taliban move in and retake the country.”

But in looking to withdraw from Afghanistan, Trump is bowing to the inevitable. The surprising thing isn’t that Trump is exiting. It’s that he’s taken this long.

Just as American technocrats and military might failed to bring democracy to the Mekong Delta, as President Lyndon B. Johnson had promised, so America has been mired in Afghanistan for almost two decades with no signs of success. Afghanistan, like Vietnam, has become an unwinnable war that no amount of American firepower can transform into victory.

EVALUATING INDIA AND PAKISTAN’S STRATEGIC NARRATIVES

David Smith

In a recent series for South Asian Voices, two scholars each from India and Pakistan shared their thoughts on India and Pakistan’s military doctrines, postures, and strategies in a series titled “Post-26/11: Strategic Direction or Drift?” One scholar from each country took on the nuclear doctrine and posture side of the topic and the other discussed conventional doctrine and posture. Not surprisingly, they differed widely in their analysis, the Indian scholars seeing their country in the “drift” mode and the Pakistani scholars seeing their country moving in a positive “strategic direction.”

Who talks with Afghanistan?

by Tanya Goudsouzian

The media fanfare surrounding the close of the latest round of talks between the US and the Taliban in Qatar belies the fact that the entire process has been shrouded in mystery and there appears to be no sign of any agreement over the contentious issues.

The Taliban spokesman said the talks ‘saw progress’, and the US Special Representative for Afghanistan Reconciliation, Zalmay Khalilzad, said they were ‘a moment of opportunity’. But by most accounts, no consensus has been reached on the main sticking points: no ceasefire, no date for the departure of foreign forces and no willingness on the part of the Taliban to speak to the Afghan government.

Talks will resume at the end of February, although whether the two sides make any headway toward a lasting peace agreement remains to be seen. It is worth taking a look at why these talks have stirred controversy and are viewed with scepticism among those who have the most to lose, and are absent from the talks — the Afghans.

HOW JAPAN IS APPLYING ITS KNOWLEDGE AND EXPERIENCE TO ENSURE HEALTH AND WELL-BEING FOR ALL


Technological innovation and globalization have opened up seemingly limitless economic opportunity in every corner of the world. Yet the unprecedented pace of change has also created serious challenges, including environmental degradation, economic marginalization and the rise of extremism. In today’s integrated world, these issues need to be addressed by all nations, developed and developing, with all of society’s stakeholders shaping the solutions. Members of the United Nations demonstrated the international community’s resolve to address such challenges by adopting the Sustainable Development Goals (SDGs) in 2015.

Despite recent breakthroughs in medicine and public health, the world continues to face various challenges, including reducing maternal and newborn mortality rates; ending the epidemics of AIDS, tuberculosis and malaria; lowering the number of deaths from noncommunicable illnesses like diabetes and cardiac disease; and growing the health care workforce in developing countries. To support these global health goals, Japan is taking full advantage of its experience and knowledge: The country has the longest life expectancy in the world, as well as the longest healthy life expectancy.

Is Huawei a friend or foe in the battle for 5G dominance?

Jamie Doward
 
If, according to an ancient Chinese proverb, “a crisis is an opportunity riding the dangerous wind”, then Huawei is barrelling in on a storm force 12. Where the hurricane takes it, though, may be out of the telecoms giant’s control.

A slew of bombshell allegations have raised troubling questions about the telecoms company’s probity and revived long-held concerns about its relationship with China’s intelligence services. The UK, in need of friends as Brexit looms, is struggling to negotiate the fallout. To ignore the mounting brouhaha risks alienating its closest ally, the United States, currently locked in a bitter trade war with China which has become synonymous with Huawei. But the UK needs Chinese technology to keep pace with the 21st century.

“The UK, like much of the west, struggles to know whether to see China as threat or opportunity,” said Robert Hannigan, former director of the British intelligence centre’s GCHQ and now European chairman of the cybersecurity company BlueVoyant. “It’s a difficult balance. My view is that we want the benefits of Chinese technology and inward investment and we should find ways of managing the risks, pushing back where necessary.”

Will the China-Japan Reset Continue in 2019?

By Leo Lin

Both sides are sending positive signals, but the thaw seems increasingly like the calm before the storm.

Japanese Prime Minister Shinzo Abe’s visit to China on October 26 broke new ground for Sino-Japanese relations. While the visit could be noted as a success in terms of resetting the previously frozen relationship, under the surface diplomatic relations between China and Japan remain largely unchanged.

Abe’s visit to China raised new speculation on where Sino-Japanese relations will be headed in 2019. Despite the obvious warming of Sino-Japanese relations, Abe still hasn’t returned the relationship to its pre-2012 state. Nor returning the relationship to the pre-2012 high likely, given Japan’s recent announcement that it would improve its maritime defense capabilities by transforming its Izumo class into aircraft carriers, and Japan’s decision shutting out Chinese-made devices from government procurement. Sino-Japanese relations are poised for turbulence in 2019.

China’s Dour Economic Data

By Uday Khanapurkar

China’s economic growth prospects for 2019 appear to have received a rude setback right at the outset. Data recently released by its National Bureau of Statistics (NBS) for the last quarter of 2018 report that economic growth, at 6.4 percent year-on-year, has reached a 28-year low. With this, growth for 2018 amounts to 6.6 percent, barely scraping by the politically mandated minimum of 6.5 percent. Moreover, scrutiny of the December data and China’s available policy responses reveal troubling portents for its economy in 2019.

Retail sales, for instance, made only a feeble recovery in December 2018, rising to 8.2 percent year-on-year, from 8.1 percent in November 2018. More importantly, growth in retail sales has been slowing fairly consistently over the last two years. With final consumption expenditure said to have accounted for 76.2 percent of China’s GDP growth in 2018, the effects of a protracted slowdown in retail sales in 2019 would discernibly stifle economic growth. Meanwhile, demographic pressures are adding to China’s consumption woes — births fell by a sizeable 2 million in 2018, reaching the lowest level since the years of the Great Leap Forward.

Made in China 2025, Explained

By Elsa B. Kania

As trade talks continue with no end in sight, this “new era” of U.S.-China relations features frictions over technology and manufacturing ever more prominently. In particular, “Made in China 2025” continues to command headlines. Since its launch in 2015, this initiative has been the subject of intense concern and recurrent controversy, resulting in a level of prominence that is quite singular for a rather abstruse matter of industrial policy. Made in China 2025 is but one key piece of a complex architecture of plans and policies aimed at generating “innovation-driven development,” an agenda that has emerged as a clear priority under Xi Jinping’s leadership.

In many respects, the launch of this initiative reflected a response to the weakness of Chinese manufacturing capabilities relative to global leaders, while also seeking to take advantage of a perceived opportunity to achieve a new source of growth. Increasingly, Made in China 2025 has come to be emblematic of these ambitions, rightly provoking intense U.S. anxieties over China’s emergence as a technological powerhouse that rivals American leadership. The core objective of advancing “indigenous innovation” to enable China’s “national rejuvenation” has been highly consistent across recent generations of Chinese Communist Party (CCP) leaders. In this regard, the technological dimension of China’s rise is integral to its future trajectory as a rising power with global ambitions.

QUAD: AN INVESTMENT COUNTERWEIGHT TO CHINA?

Joy Mitra

New Delhi’s role in the “Quad” grouping, made up of the United States, Japan, and Australia besides India, has been the subject of myriad debates recently. In a piece titled “Seven Myths are Keeping India and the United States from Pursuing Closer Ties,” Jeff M. Smith outlines several Indian misperceptions about the Indo-U.S. strategic relationship—and by extension with the Quad—that keep it from attaining its full potential to the benefit of both states. Smith views India’s engagement with the United States as that of a reluctant actor with an inertia-ridden foreign policy hesitating to take part in the extension of mutual security guarantees, which he regards as a key deliverable for the Quad. Dhruva Jaishankar, on the other hand, contends that the military component of the Quad exists in the mish-mash of trilateral and bilateral relationships that India and other countries in the grouping have cultivated.

China-US Contention Has Opened Up Space for Other Powers, Including India

Shivshankar Menon

Whether China succeeds in her internal reordering and her external quest for primacy depends to a considerable extent on how the US and China handle their relationship.

This is the first article in a two-part series on the rise of China and its impact on world order, and India. Read the second part here.

We live in an amazing, paradoxical age – an age of contrasts, an age of extremes, and an age of rapid change. Never before in history has such a large proportion of humanity lived longer, healthier, more prosperous or more comfortable lives.

And yet, we have probably never had a stronger sense of standing on the brink of a precipice, of possible extinction and of the fragility of human life — by climate change or nuclear war or other violence. Global battle deaths are back up to the highest levels since the Cold War and the 68.5 million displaced persons around the globe in 2017 are at the levels of 1945-46 (after World War II and during the Chinese civil war).

U.S., China: Trade Talks End on an Up Note


What Happened

With U.S. President Donald Trump hinting that there is a "good chance" of a trade deal with China, two days of negotiations involving senior officials ended on a high note this week. China's chief negotiator Liu He made a surprise offer to purchase 5 million tons of U.S soybeans when he met with Trump in the White House on Jan. 31. Meanwhile, officials from the U.S. Chamber of Commerce said progress had been made on greater market access and on enforcement of intellectual property rights — two core U.S. concerns. But it wasn't revealed how much overall progress was made or what divisions remain. The details on some core issues — such as China's forced technology transfer and subsidies to strategic industries — were far from clear. Ahead of the talks, China reportedly offered to increase U.S. imports from $155 billion in 2018 to $200 billion in 2019 and to even eliminate its trade surplus with the United States by 2024. And China has taken steps to fast-track domestic legislation that would prohibit forced transfers of technology and open the country's markets more, though implementation will take years and thus fall short of U.S. demands in the short term.

Iran's multi-front approach in the war against Israel

Yochanan Visser,

The threat Iran poses to Israel is well known and is taken seriously by everyone in the Jewish state, first and foremost by Prime Minister Binyamin Netanyahu.

This threat is not limited to the so-called Iranian proxies, the terrorist organizations in Lebanon, Gaza and the territories under the control of the Palestinian Authority, or the Iranian activities in Syria, but also appears in other areas.

First, there is the Iranian nuclear threat which allegedly has decreased since the so-called JCPOA, the nuclear agreement between Iran and six world powers, was negotiated.

Officially, Iran fulfills its obligations under the agreement which was implemented in the first months of 2016. The latest report from the International Atomic Energy Agency (IAEA) indicates the Islamic Republic adheres to the terms of the agreement.

Russia’s Eye on Syrian Reconstruction

SAMUEL RAMANI

Russia is primed to benefit economically from an influx of foreign investment in Syria, but an emerging rivalry with China and Iran for contracts could erode its long-term leverage.

During a December 28 press conference with his Jordanian counterpart, Russian Foreign Minister Sergey Lavrov assertedthat Russia’s contributions to Syrian reconstruction were helping to improve the humanitarian crisis and urged Western countries to invest in the reconstruction. Lavrov’s comments revealed Russia’s growing focus on Syria’s economic reconstruction, even as civil war continues to simmer in Idlib and prospects of a short-term peace settlement appear remote.

Russia’s rapidly growing interest in the Syrian reconstruction process highlights two main strategic objectives. First, Russia wants to reconnect Syria to global financial markets so Bashar al-Assad can consolidate his hold on power and begin accruing the $400 billion he believes is necessary for rebuilding Syria. Second, Russia wants to benefit from its gradual positioning as the main actor in the Syrian reconstruction process, as a foreign capital influx into the Syrian economy could provide vital hard currency for Russian businesses. These aspirations will likely drive Russia’s policy towards the Syrian reconstruction process for the foreseeable future, even though Russia’s limited material resources and desire to avoid tensions with Iran could undermine the success of this agenda.

Venezuela’s Oil Industry Decline by the Numbers

The United States is the biggest importer of Venezuelan crude oil, and its sanctions will likely hit the industry hard. 

This week, the United States imposed sanctions on Venezuelan oil firm PDVSA in an attempt to force President Nicolas Maduro to relinquish power to opposition leader and self-declared interim president Juan Guaido. Maduro responded by calling the sanctions criminal and vowed not to allow ships with crude oil destined for the U.S. to leave Venezuela without being prepaid.

The move is the latest setback for Venezuela’s oil industry. Years of underinvestment and government mismanagement, including siphoning off profits to pay for social programs, have taken a heavy toll. Production has fallen from roughly 3 million barrels per day in the late 1990s to 1.3 million barrels per day in 2018. Changes made under the Maduro government and that of his predecessor, Hugo Chavez, have led to a decline in foreign investment and a spike in debt. The country’s oil sector is estimated to owe creditors some $100 billion. Whatever the cost of the latest U.S. sanctions, the industry’s downward spiral has no end in sight. 

Foresight Africa: Top priorities for the continent in 2019


In this year’s Foresight Africa, AGI scholars and invited experts illuminate the priorities of the continent in 2019, delving into six overarching themes with recommendations for tackling the challenges that lie ahead. This unprecedented dynamism of the continent is creating opportunities for trade and investment and is drawing interest from an increasingly diverse group of external partners. Democracy is consolidating, although the prevalence of tensions and, in some countries, violence during elections point to areas for improvement. The demographic tidal wave looms closer, and job creation has not yet been able to catch up. Despite continued progress on governance, more efforts are needed to eradicate corruption and to elevate the voice of women and young people in the decisionmaking.

Africa is brimming with promise and, in some places, peril. With its array of contributions, this year’s edition reflects both the diversity of the continent and the common threads that bind it together. With that aim, we hope to promote and inform a dialogue that will generate sound practical strategies for achieving shared prosperity across the continent.

The U.S. Is Fighting a 21st Century Trade Battle Armed With a 1930s Mindset


The United States may score some successes in persuading its trade partners to reduce their tariffs, but its current strategy fails to address the fact that tariffs are not the biggest limiters of U.S. exports. 

Ultimately, nontariff barriers such as health and safety regulations and intellectual property rights present greater obstacles to trade in the contemporary world than tariffs do. 

With the United States focused on tariffs, its exporters could soon face greater difficulties as competitors in Canada, the European Union, Asia and elsewhere gain access to more markets thanks to comprehensive free trade deals that eliminate more important nontariff barriers. 

America Has a Commitment Problem

BY STEPHEN M. WALT

Do Americans agree about anything anymore? Well, yes. Apart from a handful of unrepentant neoconservatives and reflexive warmongers (including, alas, the present national security advisor), I think there’s a growing consensus that the United States is overextended. We’re still fighting at least two wars (while conducting a whole bunch of more-or-less clandestine operations against various extremists in various places), and we are formally committed by treaty to defending more countries than at any time in U.S. history. There is little or no consensus on how to deal with this situation, but even those who think U.S. global leadership is the only thing preserving the world from barbarism might concede the need for a bit of readjustment these days.

Which raises an interesting question: How did this happen? How do states get overextended? If the world is highly competitive and it’s important to set priorities and focus on the big challenges, then why would any country take on commitments that were of secondary importance or beyond its means? And if it did, why would it hang onto them after it was clear that the costs far outweighed the benefits?

The U.S. Has Wasted Billions of Dollars on Failed Arab Armies

BY KENNETH M. POLLACK

The United States has spent 70 years and tens of billions of dollars training Arab militaries—with almost nothing to show for all the effort.

Time and again, America’s Arab allies have failed to live up to martial expectations. The U.S.-trained Egyptian Armed Forces performed miserably in 1991 during Operation Desert Storm. If anything, they did somewhat better under Soviet tutelage in the 1973 October War. The U.S.-trained Iraqi Army collapsed when attacked by a couple thousand Islamic State zealots in 2014. The U.S.-trained Saudi military fell flat on its face when it intervened in Yemen in 2015, and it has become badly stuck there.

If the United States is going to stay involved in the Middle East, it has to rethink the way it engages with Arab militaries. Ambitious dreams of engaged, modernized militaries must be replaced with more realistic plans that build on the real strengths of allies, instead of forcing soldiers into a mold that their societies and culture have left them grossly unsuited for. Otherwise Washington will keep pouring money down the drain—and its Arab allies will keep failing.