C3S Event Report No: 010/2018
The Chennai Centre for China Studies (C3S) and the National Maritime Foundation -Tamil Nadu (NMF-TN) jointly organized a two-day international seminar on ‘Trends & Transformations in China’s Geopolitics, Strategy, Society & Business’ on 8th & 9th June 2018. The seminar marked the 10th anniversary commemoration of C3S.
Download Event Concept Note and Programme at these links:
Day 1
INAUGURAL SESSION
Welcome Address
The inaugural session commenced with the welcome address delivered by Commodore RS Vasan IN (Retd.), Director of C3S and Regional Director, NMF-TN. He thanked the dignitaries and highlighted that C3S was the only think tank located in the South studying China. He mentioned that the various publications brought out by C3S, the 200 young minds of YMC3S members and the 32 plus interns that C3S has trained only added to the credibility of the organization. He spoke about how the think tank aims to get a deeper understanding of India-China relations and paid tribute to the founders and members of C3S.
This was followed by lighting of the lamp by the Honorable Minister of Defense Smt. Nirmala Sitharaman who was then felicitated.
Inaugural Address
The inaugural address was delivered by Shri. B. S Raghavan IAS (Retd.). He appreciated the guest of Honor Smt. Nirmala Sitharaman for her willingness to listen to new ideas and conduct personal inspections at the borders. He mentioned that her imagination and vision make her one of India’s most sought after political leaders. He then brought to notice the fact that she was the first ever woman Minister of Defence, Government of India. He cited the need for the establishment of a new normal as the old world order would no longer be feasible. He commended the work of C3S and wished the think tank for excellence in the field of China research.
Theme Address
The theme address was delivered by Ambassador M. Ganapathi IFS (Retd.). He brought out the new challenges and non-traditional threats to internal peace and security that govern the world in the post-cold war era. He cited the 19th Congress as a reference point to look at China’s goals and the undisputed power that the Chinese President Xi Jinping enjoys. He threw light on various issues such as China’s demography, inequalities, growth trajectory and internal & external security issues. He believed India and China needed to work together putting differences arising out of the Doklam standoff aside for the benefit of Asia as a whole.
Keynote Address
This was followed by the keynote address by the Honorable Minister of Defence Smt. Nirmala Sitharaman. She highlighted the need to study a country like China that lacked transparency. She informed the gathering that Prime Minister Narendra Modi has been working towards projecting India as global power. She noted the importance of ‘Act East’ policy for India’s future. She highlighted the importance of India’s maritime affairs to ensure balance of power is maintained between the two countries. She referred to the China-Pakistan Economic Corridor (CPEC) as the elephant in the room and categorically stated that India will never compromise on sovereignty. She warned against looking at India’s relationship with China through the China-Pakistan prism and emphasized the need for a fresh perspective.
Book Launch
The Honorable Minister of Defence Smt. Nirmala Sitharaman launched three new C3S publications. These include a monograph titled ‘The Other Great Wall: China’s Urban-Rural Divide ‘ co-authored by Nappinnai Dhamodharan, Kritajnya Raghunathan and Akanksha Soni; a book titled ‘The Pursuit of Prosperity: Exploring China’s Economic Dependence on India as a Deterrent to Conflict’ written by Uday Khanapurkar; and a book titled ‘Changing Asian Landscape; Role of India and China’ edited by Asma Masood. The first copies of the books were presented to the authors and editor by Smt. Nirmala Sitharaman.
Vote of Thanks
The vote of thanks was delivered by Professor V. Suryanarayan, Former Director, Centre for East and East Asian Studies and President of C3S. He thanked the dignitaries for participating and wishing C3S well on its 10th anniversary and briefly highlighted the historical aspects of India-China relations. This marked the end of the inaugural session.
SESSION 1- CHINA’S DOMESTIC POLITICS
The session was moderated by Dr Aravind Yelery, Assistant Director & Associate Fellow, Institute of Chinese Studies (ICS), New Delhi.
Dr Jabin T. Jacob, Former Fellow, Institute of Chinese Studies and a senior Sinologist was the first speaker. His topic was ‘Economic Considerations in Chinese Domestic Politics’. The Chinese dream, he said, was to focus on national rejuvenation and effectively curb some of the issues plaguing the Chinese economy. The major issues he identified were growing domestic debt, the utilisation of high savings, administrative issues, governmental pressure on the private sector and environmental costs. He said that China had to deal with all of them with equal vigour for realising the dream of national rejuvenation. He concluded his presentation by doing a cost-benefit analysis on two major game changers for the Chinese economy. The first is Xi Jinping and the second is technology. He ended with a note that China’s development of reclaimed features in the South China Sea must be closely observed.
The second speaker was Mr Bhim Subba, Research Associate, Institute of Chinese Studies. His topic was ‘Politics in Xi Jinping’s Era: Reforms Under Emerging Authoritarianism’. Mr Bhim began by making a comparison of politics in the Dengist period and the Xi Jinping era. He observed that during Deng Xiaoping’s rule, there was creeping institutionalisation and under the current Xi Jinping’s era there has been a return of yibashou politics (authoritarianism). He concluded his presentation by giving an overview of the new frugality codes which restricts party members from spending CPC money and thereby preventing corruption.
The last speaker of the session was Ms. Ranjani Srinivasan, a student of the Department of Humanities and Social Sciences, IIT Madras. Her presentation was titled ‘Micro Managing the Cyber Space’. Ms. Ranjani began by drawing a comparison of China’s old methods of censorship using tools such as the Great Firewall of China and the Golden Shield in the 1990s versus their modern methods which includes not just banning platforms such as Google and Facebook but also replacing them with Chinese alternatives which allows the government to moderate activities on the internet. She also said that certain news agencies such as China Digital Times are making an effort to be more vocal about their criticisms of the government. Ms. Ranjani concluded her presentation by saying that Chinese citizens are using the internet effectively to change public opinion by using small windows of opportunity strategically.
SESSION 2- CHINA’S GEO-POLITICS I
This session was moderated by Lt. Gen. SL Narasimhan PVSM, AVSM, VSM, Director General, Centre for Contemporary China Studies (CCCS), New Delhi.
The first paper in this session titled ‘India and SCO: Expanding Engagement’ was presented by Dr Meena Singh Roy, Research Fellow, Institute for Defence Studies and Analyses (IDSA), New Delhi. Dr Meena’s paper looked into two questions – what it means for India to be a full member in the SCO?; And what would be the opportunities for cooperation and challenges faced by New Delhi in future?. She said that India is looking forward to expanding its cooperation in connectivity, counter-terrorism, energy and economic arena. However the biggest challenge for India would be to adapt to the new geopolitical reality in the region. These new geopolitical realities are China and Russia rapprochement, Russia’s growing engagement with Pakistan, China’s Belt and Road Initiative (BRI) and its increasing role in Afghanistan to mediate between Pakistan, Afghanistan and Taliban.
The second paper in this session titled ‘China-Iran Ties: Opportunities & Challenges’ was presented by Mr Sundeep Kumar. S, Research Officer, C3S. The speaker highlighted the geographic significance of Iran and the natural resource deposits it has. Mr Sundeep highlighted that China is one of the top investors in Iran and the support extended by China to Iran during the sanction years shows the extent to which China would go to maintain its political and economic relations with Iran. He said that Iran plays a pivotal role in China achieving its BRI objectives and with the U.S pulling out of the Nuclear Deal, China will take the centre stage to ensure that Iran does not suffer due to sanctions which will be re-imposed.
The third paper of this session titled ‘Like a Storyboard: China’s Multifarious Motivations for Engagement in Afghanistan’ was presented by Ms Chayanika Saxena, Student, S.Rajaratnam School of International Studies (RSIS), Singapore. Ms Chayanika said that compared to China’s economic interests in Afghanistan, its political and strategic engagement has been scanty. She noted that the Chinese political outreach in Afghanistan is slow and measured. According to her Afghanistan is not central for China to prove any major point. She says that China is interested in keeping its border with Afghanistan free of political turbulence, but China does not preclude the possibility of buying peace and stability even if it means engaging with extremists. She highlighted that China is simply disinterested in the quality of government in other countries so long as there is governance. Ms Chayanika further evaluated China’s participation in the re-development of Afghanistan post-2001 to map out the factors that have animated its approach.
SESSION 3- CHINA’S GEO-POLITICS II
This session was moderated by Cmde. RS Vasan IN (Retd.)
The first paper of this session titles ‘Cross-Strait Relations Today’ was presented by Dr Alagu Perumal Ramasamy, Associate Professor, LIBA and Member, C3S. The speaker noted that the Taiwanese identity and mainlander identity have become increasingly complex. He says that 20 – 25% of the people in Taiwan favour unification and 23% of people want independence. Others prefer a gradual shift, away from China, into South-East Asia and India. He noted that successive Taiwanese governments have allowed business and investment to be directed into the East Coast of China. In 2017 the government placed a greater emphasis on India and South East Asia as alternatives for investments. He further narrated the applicability of IR theories to the current state of affairs between Taiwan and PRC.
The second paper in this session titled ‘Japan in China’s Strategic Calculation’ was presented by Dr M. S. Prathibha, Associate Fellow, IDSA. The speaker noted that, China’s warming attitude to Japan after 2016 indicates a shift in the strategic dimension of the relationship. Japan’s position on the BRI and concerns about being left out of a political solution to the Korean Peninsula are motivations for Japan to be less confrontational with China. Tokyo would like to highlight and develop specific issues of the relationship that are already well developed and less contentious. Beijing has much to gain from a stable relationship with Japan, who has technology, ideas, investment and markets to offer. However, historical animosity is a sensitive subject in Sino-Japan ties today. ADIZ incursions, the Senkaku islands and anti-Japan protests in China have made these subjects difficult to address.
Day 2
SESSION 4- CHINA’S GEO-STRATEGY
The fourth session on China’s geo-strategy was chaired by Colonel R. Hariharan VSM (Retd.), Retired Officer of Intelligence Corps, Government of India and Member, C3S.
The first presentation in this session was on ‘Consolidation of Military Prowess under Xi for Achieving 2049 Targets’ by Lt. Gen S L Narasimhan PVSM, AVSM, VSM. The speaker laid out some caveats that Xi Jinping is not the architect of modernization and that not everything about Chinese modernization seems right. He pointed out that China’s plan to modernize the military has been given a new deadline of 2035 pointing towards a delay in the modernization process. He pointed out the ship building, aircraft construction work and focus on quantum technology were measures to harness prowess internally. At the external level, he pointed out that China has been attempting to play the role of a negotiator in conflicts around the world like Israel-Palestine, Rohingya crisis or the ongoing dialogue with DPRK. He cited the BRI as another project that would help China position itself as a global leader.
The second presentation was by Prof. S Chandrashekhar, National Institute of Advanced Studies (NIAS), Bangalore, on ‘Space Power and China’s Rise – A Strategic Perspective’. The satellite Yaogan launched by China on 25 January 2018, he claimed was an anomaly in the sense that it had a three satellite configuration which ensured that the emissions could be picked by any of the three satellites. The satellites launched by China would provide complete surveillance capability between 25N and 35S. He brought to light the fact that the satellites were positioned to ensure surveillance over Taiwan and conflict territories. He explained how the 15-18 operational satellites offer global surveillance capability and a check on multiple target zones like, the two Koreas, Japan, Taiwan and East and Northern China. He concluded by pointing out that India lacked a clear integrated system and in a world where deterrence with respect to space power is changing meaning the absence of a clear integrated system could hurt India.
The third presentation by Mr Oliver Nelson Gonsalves, Ph.D candidate from Jawaharlal Nehru University (JNU), New Delhi, was on ‘Positioning Energy Transition in Energy Security: A Study of China’s Energy Demand Management Policies’. Through the course of the presentation he chalked out how China by the year 2009 has overtaken the United States with respect to emissions. The DSM norms were thus developed by China as they looked at controlling domestic energy consumption targets. He spoke about China’s decision to include energy targets in policy making by taking measures like making FDI in renewable energy automatic. He concluded the presentation by calling for an integrated approach wherein renewable energy and efficiency go hand in hand.
SESSION 5 – CHINA’S SOCIETY I
The session was chaired by Dr Jabin T. Jacob.
The first speaker was Dr.Atul Kumar, Adjunct Research Fellow, Griffith Asia Institute, Australia. His topic was ‘Civil-Military Relations in China: Post Xi-Jinping’s Anointment as Life Long Leader’. His presentation focused on the changing relationship between the Peoples Liberation Army (PLA) and the Communist Party of China (CPC). He explained how factionalism has traditionally been important in the PLA. Under Deng Xiaoping’s rule factionalism was slowly removed and there was modernisation of the military and recruitments and promotions were based on merit. The PLA also played a minimum role in local politics. In Xi Jinping’s era however, there has been a deliberate increase in the powers of the PLA. He concluded his presentation by saying that it would be difficult to control the PLA after it has been free of political interference for a long period of time and that it remains to be seen what happens in the future.
The second speaker of the session was Mr Tenzin Tseten, Research Fellow, Tibet Policy Institute, Dharamshala. The topic he presented on was ‘China’s Ethic Policies and Reincarnation as Twin Challenges for the Chinese Government’. Mr. Tenzin explained that Tibetan culture was destroyed in the Cultural Revolution and that Tibetan officers were arrested. Post Mao, the nationality policy was slightly lenient but document 31 which gave Tibet the right to self-rule was not implemented. Mr Tenzin then moved up the timeline to the 2008 protests in Tibet calling for a change in nationality policy. While liberal Chinese thinkers supported their cause, ethnic institutions desired that the status quo remain. Mr Tenzin concluded his presentation with an overview of nationality policy in the Xi Jinping era and that a hybrid policy is expected given Xi’s emphasis on socialism with Chinese characteristics in his 19th Congress speech.
SESSION 6 – CHINA’S SOCIETY II
The session was chaired by Dr Meena Singh Roy
The first paper in this session titled ‘Food Security in China: Lessons for India’ was presented by Dr Prachi Agarwal, Assistant Professor, Sanchi University, Bhopal. The speaker brought out the following observations. The lack of effective steps to ensure food security in both India and China present a huge lacuna in policy making. The major problem in the Indian scenario is the lack of food availability due to drought. In China, major problems include farmers suffering from the brutality enforced by the hukou system, the rising safety concerns with the increased dependence on genetically modified crops and the wastage of food. There is also a need for both the countries to take an active stand against speculative pricing, artificial hoarding and to take an initiative to promote the usage of green technology and bio fuels. China seems to do better in this aspect as they have a higher investment in research and development.
The second paper on ‘Commercialisation and Transformation of Healthcare services in China’ was presented by Dr Madhurima Nundy, Associate Fellow, ICS. Dr Madhurima’s observations were as follows. Since 2002, there was a continued period of negligence in the healthcare sector in China and it became an area of commercial interest to augment revenue. This negligence further widened the inequalities present between the urban and the rural areas. Between 2002 and 2008, with the financial reforms and the initialization of the insurance programs, the costs increased further and China landed itself in a deep crises. But from 2009 onwards it has been steadily rectifying its system with increased primary healthcare services and the integration of preventive and curative practices. The recent trend that China has witnessed from 2013 onwards has been that of tremendous improvement with the number of functioning public and private hospitals on the rise and with the increased investment in deepening the quality of healthcare.
The third paper on ‘China’s Environment Security- Agenda, Strategy & Progress on Sustainable Development Goals (SDG) Implementation’ was presented by Ms Archana Jayaraman, Consultant, United Nations Development Programme. She highlighted that, China by integrating the SDGs in their thirteenth five year plan has shown its intent to secure their internal as well as their external interests. China has modified the SDGs to suit its methods of action by converting them into seven umbrella objectives. In relation to the target of obtaining affordable and clean energy, China has taken measures to establish a carbon credits markets to trade in. With regards to the goal of Climate action and with respect to the Paris Climate Agreement, China has established 10 low carbon areas. China has been taking commendable measures by increasing the number of national parks and protected areas, which are well managed and act as a tourist hotspot. On the whole the initiative to include the SDG goals to the planning system has helped China to successfully invest in soft power.
SESSION 7 – BUSINESS & ECONOMY I
This session was chaired by Mr. Somi Hazari, MD, Shosova Group of Companies.
The first speaker in this session was Dr Vinod Surana, CEO & Managing Partner of Surana & Surana International Attorneys. He spoke on ‘Intellectual Property Rights (IPR) in China’ and its global implications. Dr Surana begun by drawing a contrast between China’s outward looking disposition and India’s inward looking one. China has occupied the second position in the world in terms of patents granted and has successfully emerged as a transformational economy as opposed to a copycat one. The Chinese have increased R&D spending and invested in VR supercomputing and emerging technologies like blockchains. They absorb Western technologies, increase competencies of universities and streamline access to capital for entrepreneurs. Dr Surana calls this modus operandi, a ‘techno-nationalist’ policy.
The second speaker was Mr Vivien Massot, Managing Director, TAC Economics, India. He spoke on ‘Economic Risks, Trends and Outlook in China’. China’s superiority to India across conventional vectors such as enrollment rates and per capita GDP was alluded to. TAC Economics runs sophisticated projections of economic as well as political risk levels of the Chinese economy. As per TAC’s projections, China faces low economic risks in the short run since growth has remained strong despite the slowdown. Political risk, on the other hand looms large over China. GDP is expected to slow down to 5% p.a. on account of these risks. Therefore, while stability is expected in the short and medium runs, massive structural reforms are expected to slow China’s growth down.
The third speaker of the session was Mr T. V. Krishnamurthy, Former Investment Banker and Member C3S. He spoke on ‘Ease of doing Business in China’. He contended that certain industries were more open than others in China. Foreign firms are presented with a number of risks when contemplating investments in China which include a global slowdown, rising labour costs, protectionist tendencies, domestic slowdown and poor management skills. While it is arduous to obtain approvals across the board, provinces fare better than urban centres. Rising costs are a problem and companies outside the Special Economic Zones of China are hard pressed. Mr Krishnamurthy concluded by stating that despite cumbersome procedures China is easier to do business in than India, although India’s credit system is less volatile due to this.
SESSION 7 – BUSINESS & ECONOMY II
This session was chaired by Mr. K. Subramanian, Former Joint Secretary, Ministry of Finance, and Treasurer, C3S.
The session began with a presentation by Dr Aravind Yelery, ICS. Dr Aravind spoke on ‘Overseas Investments of China’s State Owned Enterprises (SOEs)’. His focus was on the industrial SOEs as opposed to banking and media related ones. He underlined that although the market and the private sector have become more prominent in China than they used to be, SOEs are still the main drivers of business in China. The 19th Party Congress of the Chinese Communist Party assigned SOEs a leadership role whereas the 18th Party Congress alluded to them as the Party’s core. Dr Aravind revealed that SOEs adopt strategies ranging from those of establishing a national character, exhibiting orientalism to absorbing technology and moving up the value chain of production so as to increase levels of prosperity domestically. The salient takeaway from Dr Aravind’s talk was that China’s SOEs are primed to import technology intensive commodities for the purpose of value addition and re-exporting.
The second presentation of the session was by Mr Sanjay Pulipaka, Senior Fellow, Nehru Memorial Museum Library (NMML). He spoke on ‘Internationalisation of the Renminbi (RMB)’. He touched on the multifarious reasons that could justify the Chinese currency’s internationalisation. Apart from the plain nationalistic argument, internationalisation would allow China to potentially avert the costs of sanctions, maintain stability of the domestic economy and provide a safety net for a country that relies heavily on external trade for its growth. Mr Pulipaka elucidated on China’s efforts in pushing the Yuan which included currency swaps, the promotion of digital platforms such as Alipay and Wechat Pay and the Belt and Road Initiative. He drew attention to the threat of Chinese sanctions should the Yuan become a truly international currency and warned of a budding China-Iran nexus enabled by Yuan-based economic intercourse. The issue of Yuan internationalisation generated a significant degree of intrigue in the assembly with participants differing over the prospects of an impending internationalisation.
SESSION 7 – PANEL DISCUSSION: INDIA’S RESPONSES
This session was chaired by Vice Admiral B. Kannan IN (Retd.), CEO & MD, L&T Shipbuilding. The panelists included:
Lt. Gen. SL Narasimhan PVSM, AVSM, VSM
Dr Jabin T. Jacob
Dr Meena Singh Roy
Mr Sanjay Pulipaka
The following were the broad suggestions brought out by them:
Lt. Gen. SL Narasimhan PVSM, AVSM, VSM:
The Yuan will become convertible by 2016.
India and China will have to focus on strategic cooperation and communication. Our tactical communication is poor and the military level cooperation should go forward beyond existing levels. This should be scaled up from other sectors.
There is no joint security framework for Asia. Joint working groups on trafficking, arms and terrorism should be initiated.
Solar power is a good way of incentivising other countries to participate on non-military issue to bring all stakeholders into the game.
India also requires genuine investment in manufacturing and not just in assembly. Micro-finance, immunization and universities should be run together. Sports diplomacy is also another option.
Dr Jabin T. Jacob:
China’s grand strategy does not go well with India’s political realities. China’s soft power assimilates and looks to dominate other cultures, groups and literature.
People say there are some areas where China cannot catch up, like currency. But looking at the PLA-N 10 years ago, no one would have believed that China can build up blue water capability.
China’s bureaucracy is larger and will have 15,000 officers by 2020. India has 800. India clearly needs a larger bureaucracy. Also, unlike China India does not have deep pockets. So India must be very careful with its money.
Neighbours will not take India seriously if there aren’t diplomatic initiatives and missions.
India has the late mover advantage and the benefits of reforms and development will accrue later.
Standards and practices are important for India to set.
Dr Meena Singh Roy:
India should focus on Central Asia where there are significant strengths. Bilateral relations with partners will be developed by keeping promises and delivering.
India should use the SCO to make an impact on Central Asia. Track Two diplomacy in West Asia is also important and must be secured through trade, soft power and security relations.
China has looked keen on working with countries there. It is important for India to engage as well.
Mr Sanjay Pulipaka:
A border dispute with two nuclear armed states and one of them being a global power is a situation to be taken seriously.
Dedicated implementation office must be established to follow through with economic investments at bilateral and multilateral level.
Cooperation in trade and technology with China show that they are secretive about these issues. There are also non-tariff barriers on Indian exports.
The country also needs more Chinese language institutions.
Each plenary session was followed by an interactive session with the audience.
The conference ended with Commodore R S Vasan’s summing up of the two day event and the vote of thanks.
(Complied by C3S Interns)
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