4 June 2019

Singapore Topples Mauritius In FDI Race In India – Analysis

By Subrata Majumder

Breaking the legacy of Mauritius, Singapore topped in the foreign direct investment (FDI) race in India. In 2018-19, FDI flow from Singapore was US $16,228 million , as compared to US $ 8,084 million from Mauritius. It was third time that Singapore edged out Mauritius in FDI race in India.

Nevertheless, in 2018-19 the significance of Singapore’s outnumbering Mauritius in FDI race was that it was on the binge for a sparkling growth, in contrast to FDI shrinking from Mauritius. In 2013-14 and 2015-16 when Singapore edged out Mauritius, it accounted for 24.6 percent and 34.3 percent share respectively of the total FDI flow in India. In 2018-19, its share went up further high when it accounted for 36 per cent of total FDI flow in the country.

This trend pitches a ground that Singapore is assertive to top FDI in the years to come. Mauritius stint at the top place started shredding since 2018-19. It downsized nearly to half of its flow in 2017-18 – from US $ 15, 941 million in 2017-18 to US$ 8084 million in 2018-19. Correspondingly, FDI from Singapore surged by over 33 percent in 2018-19. The main cause for the downslide was abrogation of capital gain tax benefit under the new Double Taxation India Mauritius Tax Treaty.

In Modi’s second term, China and India can overcome their Himalayan differences to benefit Asia

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Each year, as winter gives way to spring, glacial melt from the Himalayas joins mighty river systems, such as the Ganges, Indus, Yellow and Yangstze rivers, that bring water, nutrients and energy to over a billion people downstream in China, India and other Asian countries. However, scientists now warn that climate change is disrupting the Himalayan water cycle, posing flood and drought risks to communities across South and East Asia.

Historically, the Himalayas have been a conduit for the flow of people, trade and ideas between China and India, but also a barrier that kept them apart. Today, Himalayan geography reflects obstacles that still lie between these two nations, but also their deep ties and shared destiny.

The Sino-Indian bilateral relationship will be one of the most important of this century, with profound implications for regional cooperation and globalisation. Following his recent 
landslide election victory, Indian Prime Minister Narendra Modi’s second term provides a golden window to deepen ties between China and India, building a foundation for an Asian community.

India's BIMSTEC Gambit

By Sudha Ramachandran

By inviting leaders of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) member states for Narendra Modi’s swearing-in ceremony in New Delhi on May 30, India has signaled the priority it plans to accord to this regional grouping in its foreign policy in the coming years.

BIMSTEC comprises seven states; five from South Asia — Bangladesh, Bhutan, India, Nepal and Sri Lanka — and two, Myanmar and Thailand, from Southeast Asia. Five of its member-states are rim countries of the Bay of Bengal and two (Bhutan and Nepal) are landlocked countries, which nevertheless depend on the Bay of Bengal for access to maritime trade. Importantly, with the exception of India and Bhutan, the other BIMSTEC members are participating in China’s Belt and Road Initiative (BRI).

By inviting BIMSTEC leaders to the swearing-in, India has signaled that Modi’s second term as prime minister will see India pivoting from its focus on the South Asian Association for Regional Cooperation (SAARC) to BIMSTEC. Set up in 1997, BIMSTEC has made little progress. It has suffered from neglect and lack of commitment from its members. So why is India eyeing BIMSTEC now?

Modi Formula for New India

Arvind Gupta

In his speeches, given after the election results were out, Prime Minister Modi has dwelt at length on the concept of New India. He said that while 2014-19 was devoted to denting poverty, the second term will address the task of building a ‘New India’ by fulfilling the aspirations of the people. The New India will be an aspirational India. Two key pillars of new India will be removing poverty and raising India’s status in the world. The two together will transform India into Vijayi Bharat or victorious India.

But how will a New India be built? Prime Minister Modi gave some hints of his strategy for building New India. He outlined a vision and showed the way ahead. Essentially, the focus of his government will be to follow inclusive policies.

Driving Change: U.S.-India Subnational E-Mobility Collaboration

Forty-five U.S. states and the District of Columbia and fourteen Indian states along with two of the country’s union territories are charting out visions in support of an electric mobility transition. 

Colorado’s Electric Vehicle Plan aims to increase the number of electric vehicles in the state to 940,000 by 2030 while Gujarat’s draft electric vehicle policy envisions 100,000 electric vehicles in the state by 2023.

A diverse set of stakeholders including auto and electronics manufacturers, transportation service companies, utilities, real estate and urban development agencies, research institutions, and lawmakers must work in concert to usher in the age of the electric vehicle.

As the geography of innovation in this sector expands, sharing best practices between this diverse set of stakeholders and identifying opportunities for collaboration will help implement these states’ electric vehicle policies.

This brief builds on the recently signed energy cooperation agreement between the states of Gujarat and Colorado by comparing the two states’ EV policies and setting the stage for finding partners to help meet their targets.

Under Pressure in the West, Huawei Looks to South Asia

By Sabena Siddiqui

As part of the broader fight over 5G technology, U.S. companies have been banned from doing business with Huawei. Starting with Google, the latest company to break off ties with Huawei is ARM, which is based in England but uses U.S.-origin mobile-chips. Slowly but surely, Huawei is being cut off from its suppliers and its markets. Its expected that Huawei will miss future growth targets as a result.

But even though it is on the backfoot in the West, the Chinese technology giant might survive in another part of the world. While international media explodes with controversies over Huawei, the company has been quietly extending its footprint in South Asia, in particular. Working to avoid any more damage to its bottom-line growth due to the recent loss of sales abroad, Huawei has focused on strengthening its foothold in the massive South Asian market.

Islam And The West To Remain Mired In Sporadic Fights – OpEd

By B.Z. Khasru*

With a string of suicide bombings in Sri Lanka on Easter Sunday, which killed more than 250 people in the island nation in the Indian Ocean, an old question has resurfaced: What motivated the attackers?

Analysis of similar events in Europe, Africa, and Asia reaches contradictory conclusions. A paper on “Radicalisation and al-Shabaab recruitment in Somalia” found that people joined extremists organizations “for economic benefits.” In fact, the authors write, research from “Somalia showed that 27 percent of respondents joined al Shabab for economic reasons, 15 percent mentioned religious reasons, and 13 percent were forced to join.”

Meanwhile, a World Bank study based on leaked Islamic State records indicated no link between poverty or educational levels and radicalization. A joint study by Northwestern University and the Hebrew University concurred. “Poor economic conditions do not drive participation in ISIS,” the authors found. In fact, many of them came from wealthy countries with low inequality. Instead, the study concluded, “the flow of foreign fighters to ISIS is driven not by economic or political conditions but rather by ideology and the difficulty of assimilation into homogeneous Western countries.”
Sri Lanka bombings

Chinese Media Suggest Rare Earth Embargo on US Amid Trade War

By Paul Wiseman, Frank Bajak, and Yanan Wang

Facing new trade sanctions and a U.S. clampdown on its top telecommunications company, China issued a pointed reminder Wednesday that it has yet to unleash all its weapons in its trade war with the Trump administration.

Chinese state media warned that Beijing could cut America off from exotic minerals that are widely used in electric cars and mobile phones. The threat to use China’s rich supply of so-called rare earths as leverage in the conflict has contributed to sharp losses in U.S. stocks and sliding long-term bond yields.

For months, the world’s two biggest economies have been locked in a standoff over allegations that China deploys predatory tactics — including stealing trade secrets and forcing foreign companies to hand over technology — in a drive to supplant U.S. technological dominance.

Why the UK Shouldn’t Follow Washington on China

By Tim Summers

U.S. President Donald Trump looks to have China on the agenda for his forthcoming visit to London. The top priority for Washington – already raised by Secretary of State Mike Pompeo on his visit in May – is to persuade the British government not to allow Chinese company Huawei to be part of the construction of the United Kingdom’s 5G network.

This is a complex technical issue for the U.K. government to consider. The issue is not just 5G, though. Pressure from the United States comes as part of an emerging China policy of intense strategic rivalry on the part of Washington.

But London would do well not to follow Washington’s course on China.

A divergence between the China policies of the two traditional trans-Atlantic allies is not new. From the 1950s, London sought to balance support for the broad Cold War goals of its American ally with its own relations with China, in particular maintaining the stability and prosperity of its colony, Hong Kong.

Russia’s Bulwark on the Afghan Border: Tajikistan

By Catherine Putz

On May 28, Russian Defense Minister Sergei Shoigu paid a visit to Tajikistan. Shoigu’s visit came exactly a week after the head of Russia’s Federal Security Service (FSB), Alexander Bortnikov, trod a similar path to Dushanbe for talks with Tajik leaders. The visits underscore the importance Russia places, in security terms, on Tajikistan.

According to TASS, Shoigu was expected to discuss modernization plans for the Tajik armed forces and Russia’s 201st Military Base. Russia has troops stationed at two facilities in Tajikistan — Dushanbe and Bokhtar (formerly Qurghonteppa) — although they are collectively referred to as Russia’s “base” in the country. In addition, there had been a Russian garrison in Kulyab, about 25 miles from the Afghan border, but the troops there were reportedly relocated in late 2015 to Dushanbe. The 2012 lease agreement under which roughly 7,000 Russian troops are stationed in Tajikistan runs to 2042.

Rossiyana Markovskaya, a spokeswoman for the Russian defense minister, told reporters, “The main topics of the negotiations will be equipping the Russian military base on the country’s territory with new weapons and modernization of the Tajik armed forces.” Shoigu was also set to meet with Tajik President Emomali Rahmon.

Eye for An Eye: China to Establish ‘Unreliable Entity List’

By Charlotte Gao

On May 31, China’s Commerce Ministry announcedthat China will Establish a “Unreliable Entity List” – obvious retaliation against U.S. recent ban on Chinese telecoms giant Huawei Technologies Co. Ltd.

“Those foreign enterprises, organizations and individuals that do not comply with market rules, violate the spirit of contract, block or cut supplies to Chinese firms for non-commercial purposes, and seriously damage the legitimate rights and interests of Chinese enterprises, will be added to the ‘Unreliable Entity List,’” ministry spokesperson Gao Feng said at a special press briefing making the announcement.

In explaining the logic for this decision, Gao claimed that “as unilateralism and trade protectionism are on the rise, the multilateral trading system is facing severe challenges.”

“Some foreign entities have violated normal market rules and the spirit of their contracts for non-commercial purposes, blockading and cutting off supplies and taking other discriminatory actions against Chinese companies,” Gao continued.

China Has a Head Start in the New Space Race

By Namrata Goswami

On January 3, 2019, when China landed the Chang’e 4 probe on the Lunar South Pole, a first for humanity, the discourse on outer space shifted forever. For nearly 50 years, since July 20, 1969, we have lived in the Age of Apollo, which enabled humanity’s first steps on the moon. When dawn broke out on January 3, 2019, we entered the Age of Chang’e, focused on long-term settlement of the lunar poles.

Like NASA’s Apollo missions, named for the Greek god, China’s Lunar Exploration Program (CLEP) is named after a mythical figure: Chang’e, a Chinese moon goddess. Unlike Apollo, however, China’s Chang’e lunar mission is not a “flags and footprints” enterprise. Instead, like its mythical namesake Chang’e, who made the moon her home, the CLEP is aimed at establishing a permanent presence on the lunar surface by 2036, with an aim to utilize lunar resources like titanium and uranium, as well as iron-ore and water ice for rocket construction and propellant. This in-space manufacturing capability is a vital step to achieve China’s plans for deep space exploitation, to include asteroid mining and build solar power stations in geo-synchronous orbit by 2050.

The Lasting Tragedy of Tiananmen Square


WASHINGTON, DC – China’s progress toward an open society ended when the People’s Liberation Army (PLA) slaughtered at least hundreds, if not thousands, of peaceful demonstrators in and around Beijing’s Tiananmen Square on June 3-4, 1989. The crackdown left a lasting stain on the ruling Communist Party of China (CPC), despite the regime’s unrelenting efforts to whitewash history and suppresscollective memory.

Central banks’ forays into quasi-fiscal policymaking have invited unwelcome political attention, particularly from populists. To protect their own independence and ensure ongoing macroeconomic stability, monetary policymakers must reassert their traditional role and develop new instruments to fulfill it.8Add to Bookmarks

Three decades later, the consequences of the CPC’s decision to crush the protest have become even harder to escape. Looking back, it is clear that the tragedy altered the course of Chinese history decisively, foreclosing the possibility of a gradual and peaceful transition to a more liberal and democratic political order.

Chinese AI Talent in Six Charts

Matt Sheehan

Debates over Chinese and American artificial intelligence (AI) capabilities have been long on bombast and short on data.

That’s why at MacroPolo we have created an original dataset based on published papers at what many experts deem the top annual AI conference, NeurIPS 2018, bringing more data to bear on assessing the quantity and quality of AI research talent in China and the United States.

Research talent is often overlooked but is in fact a core building block of any AI ecosystem (see our ChinAI project). Given that leading AI research is relatively open source, talent is one of the most directly quantifiable of those building blocks. Insights gleaned from the data on published research can better inform a well-grounded and data-driven public debate around the state and flow of global AI talent.

The charts below are a first look at the raw data, followed by key takeaways from the data.

US-China Likely To Clash At Shangri La


This weekend’s Shangri La Dialogue looks to be very different from years past, as Acting Defense Secretary Patrick Shanahan is expected to unveil a new American Indo-Pacific Defense Strategy following months of increasingly assertive U.S. statements and actions regarding the People’s Republic of China.

In fact, we could see the most direct U.S. challenge to China since 2005, when Defense Secretary Rumsfeld became the proverbial skunk at the globalist garden party in Singapore by bluntly chastising the Chinese for what was then only the very beginning of their military modernization program.

That new Indo-Pacific strategy is expected to combine traditional themes of commitment and cooperation with a more explicit acknowledgement of the challenge posed by China as a military competitor. There to listen and react is expected to be the Chinese defense minister, appearing at the International Institute for Strategic Studies’ event for the first time in several years.

China’s Tiananmen Reckoning


The 30th anniversary of the Tiananmen Square massacre is a reminder that the free ride China has enjoyed internationally in recent decades is ending. It should also serve as a warning to the Communist Party that its continued reliance on brute power to keep China’s citizens in line could eventually leave it on the ash heap of history.

HONG KONG – The 30th anniversary of the Tiananmen Square massacre of at least 10,000 people is significant for several reasons. For one thing, the deadly assault on student-led demonstrators remains a dark and hidden chapter in China’s communist narrative. For another, the Chinese government’s arbitrary exercise of power against its own citizens has not only continued since the massacre, but has become more methodical, sophisticated, and efficient, with the country’s internal-security budget now officially surpassing its mammoth defense spending. Yet at the same time, this reliance on brute force carries an ominous message for the Communist Party of China (CPC) itself.

Vietnam Is the Chinese Military's Preferred Warm-Up Fight

by Derek Grossman

In mid-April, China conducted a series of fresh military flights through the Bashi Channel and Miyako Strait, on the south and north ends of Taiwan, respectively. As has been the case many times in the past, these new activities were clearly meant to signal Beijing's resolve to resort to force against the island and its U.S. and allied defenders if necessary. But there is another, less often discussed reason for these drills. Repeated transits through the Bashi Channel and Miyako Strait offer the People's Liberation Army (PLA) the opportunity to train over future potential battlefields.

Indeed, practice makes perfect. And this is especially true when the PLA is playing from behind. During his address to the 19th Party Congress in October 2017, Chinese President Xi Jinping called for the PLA “to be fully transformed into world-class forces” by 2050. An apparent reference to reaching on par status with U.S. forces, “world-class forces” would be nearly impossible to achieve without realistic training. According to a recent analysisby long-time PLA watcher Dennis Blasko, the PLA has been highly critical of its warfighting capabilities internally and even, to some extent, publicly. These shortcomings prompted Xi this year to order the PLA to engage in intensive rounds of realistic combat training scenarios.

Chinese military to replace Windows OS amid fears of US hacking

By Catalin Cimpanu

Amidst an escalating trade war and political tensions with the US, Beijing officials have decided to develop a custom operating system that will replace the Windows OS on computers used by the Chinese military.

The decision, while not made official through the government's normal press channels, was reported earlier this month by Canada-based military magazine Kanwa Asian Defence.

Per the magazine, Chinese military officials won't be jumping ship from Windows to Linux but will develop a custom OS.

Thanks to the Snowden, Shadow Brokers, and Vault7 leaks, Beijing officials are well aware of the US' hefty arsenal of hacking tools, available for anything from smart TVs to Linux servers, and from routers to common desktop operating systems, such as Windows and Mac.

Huawei’s ‘Teachable Moment’ on Public Diplomacy

By Naima Green-Riley

Over the past few months, a competition to corner the market on new fifth generation (5G) mobile networks has erupted into a global turf war between the United States and China. Citing national security concerns, Washington has urged its allies and partners around the world to ban the use of equipment manufactured by China’s leading telecommunications company, Huawei, in their 5G infrastructure.

In response to the US government’s actions, Huawei decided to fight back with a tool straight out of the age-old diplomatic playbook: a media campaign directed at American journalists and the US public. This charm offensive could accurately be termed a “public diplomacy” initiative. As defined by diplomatic historian and University of Southern California professor Nick Cull, public diplomacy is “an international actor’s attempt to manage the international environment through engagement with a foreign public.” Huawei’s attempts to woo the US public flopped, but the short episode may still serve as a “teachable moment” for students of public diplomacy and PR.

The Iranian Missile Threat

By Anthony H. Cordesman

There is no doubt that Iran and North Korea present serious security challenges to the U.S. and its strategic partners, and that their missile forces already present a major threat within their respective regions. It is, however, important to put this challenge in context. Both nations have reason to see the U.S. strategic partners as threats, and reasons that go far beyond any strategic ambitions.

Iran is only half this story, but its missile developments show all too clearly why both countries lack the ability to modernize their air forces, which has made them extremely dependent on missiles for both deterrence and war fighting. They also show that the missile threat goes far beyond the delivery of nuclear weapons, and is already becoming far more lethal and effective at a regional level.

Iran's Perceptions of the Threat