China Watch [July 5 – July 10] – Indo-China Border Confrontation Persists

Indo-China border dispute in the remote Doklam plateau has persisted without any major breakthrough between the two neighbours. Pakistan’s Attorney Genral (AG) Ashtar Ausaf Ali has proposed a bilateral arbitration system for deciding disputes which may arise during the implementation of the China-Pakistan Economic Corridor (CPEC) projects. Asian Development Bank (ADB) has revealed it plans to grant $6-$7.5 billion loans to complement CPEC and other regional connectivity projects.

Indo-China Border Confrontation Persists:

Indo-China border dispute in the remote Doklam plateau starting last month has persisted without any major breakthrough between the two neighbours. The region lies at trilateral juncture where the borders of China, India and Bhutan adjoin. While the dispute relates to territory claimed by and disputed between both Bhutan and China, India moved its forces to stop Chinese work on construction of a road in that area on the request of its neighbour Bhutan.[i] Indian analysts have argued that China’s construction of road in territory will threaten the strategically important narrow land called “chicken’s neck” which connects central and northeast India.[ii]
China’s envoy to India Lou Zhaohui called the standoff “the most serious confrontation between the two nations in more than 30 years.”[iii] He said that “[T]he Chinese people are very angry as India is occupying Chinese territory. The Chinese government is facing great pressure.” He pointed that Beijing hoped the confrontation could be resolved diplomatically, but comments by Indian officials had left Beijing suspicious. He referred to Indian Chief of Army Staff General Bipin Rawat’s statement that India was ready for the ‘2.5 front war’ and Indian Defence Minister Arun Jaitley’s assertion ‘today’s India is not the India of 1962’.

The tensions have shown no signs of abatement as both the countries have dug in heels. In addition to upping the ante at border with China, India has resorted to heavy shelling of areas in Pakistan-held Kashmir. Concomitantly, India has cozied up to the U.S. which not only signed an important deal of drone sale to India but also called India a “natural partner”[iv] after launching of joint naval exercise (between U.S., India and Japan) in the Indian Ocean a few days ago. Above all, New Delhi has shown reservations about China’s ‘Belt and Road Initiative’ (BRI).

The crisis, though limited in scope, is complicated by a few factors. While India has resolved to confront China’s expansion – in terms of both territorial and regional influence -, China finds India unnecessarily brash and hostile. The stakes for both the countries in this jostling are strategic to a greater extent but also guided by the desire of the two governments to pander to their respective nationalistic tendencies. But if the current crisis spirals into a war, China might suffer on two counts irrespective of its military victory. First, much to the delight of its rivals, its image as an assertive (and somewhat aggressive) power in the region will be given a credence. Second, the regional environment of stability which is vital for the successful implementation of the BRI project will be harmed.

In the long term, China may be pushed back further, and may need to rely on its strategic ally Pakistan to counter and balance India at the regional level.

Bilateral Arbitration System for the CPEC Disputes:

According to daily The Express Tribune, AG Ashtar Ausaf Ali has proposed a bilateral arbitration system for deciding disputes which may arise during the implementation of the CPEC projects.[v] The paper reported that a Chinese team, led by Ambassador Sun Weidong, visited the AG office to discuss the legal hurdles in the implementation of the projects of CPEC. While briefing the media after the meeting with Chinese team, AG said that one of the proposals included that instead of resorting to international forums of arbitration, the two countries should set up a regional arbitration system to decide such issues.

With such a massive level of investment in Pakistan by the Chinese government and firms, disputes and complications are inevitable. So far, the two countries have termed this relationship in highly rosy terms. But the CPEC-related issues will put these narratives to new test of economic interests in which no side will be ready to cede its position and gains easily. Besides, the two countries have very different political and institutional backgrounds. In case of China, political authority and power are largely controlled by the central government which proactively supports the interests of Chinese entities and firms in case of a clash with foreign countries. But Pakistan is a democratic polity with division of power between the centre and provinces, a relatively free media and an elected parliament. Taking these stark institutional differences between the two countries into consideration, formulation of an effective legal platform for the smooth resolution of expected disputes under the CPEC becomes all the more important.

Miscellaneous:

ADB has revealed it plans to grant $6-$7.5 billion loans to complement CPEC and other regional connectivity projects.[vi] China’s Deputy Premier and Minister for Science and Technology Wan Gang has said that beyond the construction of industrial and land communication projects in South Asia, China will also transfer technology to states participating in its BRI project.[vii]

This report is compiled and written by Abdur Rehman Shah, Research Associate at the Centre for Research and Security Studies (CRSS), Islamabad. He tweets @abdur_shah

 

[i] Jain, Smriti. (2017, July 5). India-China standoff over Bhutan Doklam region. Retrieved on July 10, 2017, from http://www.financialexpress.com/india-news/india-china-sikkim-border-standoff-2017-bhutan-doklam-1962-war-chinese-media-defence-experts/750439/?TPSecNotice

[ii] Doshi, Vidhi. (2017, July 6). China pushes hard in dispute with India. Retrieved on July 10, 2017, from https://www.washingtonpost.com/world/asia_pacific/china-pushes-hard-in-border-dispute-with-india/2017/07/06/52adc41e-619b-11e7-80a2-8c226031ac3f_story.html?utm_term=.09f651964956

[iii] Chan, Minnie. (2017, July 5). China calls border row with India ‘the worst in 30 years’ as both sides dig in heels. Retrieved on July 10, 2017, from http://www.scmp.com/news/china/diplomacy-defence/article/2101432/china-calls-border-row-india-worst-30-years

[iv] Iqbal, Anwar. (2017, July 10). US terms India, Japan natural partners as naval exercises begin. Retrieved on July 10, 2017, from https://www.dawn.com/news/1344298/us-terms-india-japan-natural-partners-as-naval-exercises-begin

[v] Malik, Hanaat. (2017, July 6). Pakistan suggests bilateral arbitration system for CPEC dispute. Retrieved on July 10, 2017, from https://tribune.com.pk/story/1451245/cpec-disputes-pakistan-suggests-bilateral-arbitration-system/

[vi] Haider, Mehtab. (2017, July 7). ADB to give $7.5 bn loan to compliment CPEC. Retrieved on July 10, 2017, from https://www.thenews.com.pk/print/215004-ADB-to-give-75-bn-loan-to-complement-CPEC

[vii] Wasif, Sharif. (2017, July 9). Beyond CPEC: China ready to transfer technology to South Asian countries. Retrieved on July 10, 2017, from https://tribune.com.pk/story/1453680/beyond-cpec-china-ready-transfer-technology-south-asian-countries/

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