Thursday, 20 October 2016

Pakistan-China Nexus :: The CPEC Conundrum

I. The Rising Powers

There are many who argue that cinema are true reflections of the society that we live in. It shows us a portrait or a snapshot, that helps us acknowledge who we are; making us confront the truths that may be otherwise too difficult to acknowledge. With the advances of science in cinematography, we are able to recreate entire universe altogether on the large screen.

Is it a relevant discussion when we discuss geo-politics?

Well indeed it is – and will cite 2 such examples to buttress my point…
  1. “Gravity” directed by Alfonso CuarĂ³n
  2. “Interstellar” directed by Christopher Nolan
Both of the above movies were made in Hollywood – the holy grail of sci-fi. Both the movies are critically acclaimed. Both have broken multiple barriers and records.

There is a reason, these movies are being referred to. In “Gravity”, Chinese space station Tien-gong plays a very crucial role for the American astronaut [Julia Roberts] to reach back to earth safely. In “Interstellar” Indian Air Force drone was shown at the beginning of the movie [1:35] that was in air, circling the Earth for over a decade [!!!], supposed to explain the robustness of Indian technology and to top it off, the programming language controlling the drone was in Sanskrit [2:00 – 2:07; notice the laptop screen]. Watch the video below.

These are plain imagination. But Hollywood has an uncanny ability to predict future where sci-fi is involved. The movies, which are part of American production houses, have done their due diligence and research, whose directors are critically acclaimed – that ought to say something – India and China are on the rise and will eventually beat America, technologically. That’s what these movies predict. Why not an American space-station or an American drone depicted in these movies? Well, that might be anybody’s guess; but the truth is India and China are too big to ignore today and if one charts their paths, both of these countries are moving precisely in that direction.

India’s stupendous success of Mars Mission that was on a budget cheaper than that of “Gravity” movie was the talk of the town for a long time. Today, China has sent it astronauts on the longest space mission so far on its Tien-gong 2 space station to make it eventually habitable by 2022. Both India and China are on the path to create their own regional GPS – IRNSS and Beidou respectively. While China possesses ASAT [anti-satellite] capabilities, India with its vast knowledge of missiles and satellites can quickly develop ASAT capabilities. India’s Chandrayaan mission has found water – it seems a day before NASA did. Now India is planning for a manned mission to moon that hopes to find resources and give NASA a run for its money. Space is the final frontier.

But there are issues closer to home – the Earth. The duel of China vs. India – the rise of Asian giants in the twenty-first century, wrestling to become the next world power.

II. The Clash of Titans

China clearly is in the lead given its economic clout and military advances. China had an export led growth for over two decades and is now trying hard to maintain it through domestic consumption led growth. India has a considerable catch-up to do. One of these many pawns in the game of geo-strategy is CPEC, China-Pakistan Economic Corridor ['Colonising Pakistan to Enrich China' as Christine Fair calls it] by China.

Pakistan’s [supposedly] all weather friend, China has proposed to invest a mind boggling USD 46 billion in the fledgling state. It is a miniscule drop in the huge forex reserves it has built. How should one look at it? It has thrown open a Pandora’s box of questions that is the current hot-topic on the agenda of geo-strategic analysts in South East Asia.

Is it sheer foolishness to invest in a country that openly courts terrorists and is almost an international pariah, also considering the fact that a major part of the CPEC infrastructure will run through the most hostile regions of Pakistan?
Is it a calculated move?

Is it a gift from a wealthy friend to a less fortunate one?
Is it an extension of Chinese soft power?

Is it solely to bypass the Malacca strait and improve energy security of China?
Is it part of the larger Chinese String of Pearl Strategy?

Is it about making Pakistan a closer ally?
Is it a larger strategy of keeping Pakistan subservient to China’s overall foreign policy to counter India?

Should India be worried? Obviously, given the fact that China has blocked India’s NSG membership fearing India’s rise and doesn’t support declaring Masood Azhar of JeM a terrorist by UN; by no stretch of imagination is China India's friend, even 45 years after Sino-Indian War, doesn't support India in these critical issues.

China exhibits all the traits of a rising hegemonic power in Asia. The following are some examples which are more or less in news at regular intervals:
  • It has already openly threatened to disobey the judgement of the International Tribunal in The Hague regarding the claims of waters of South China Sea.
  • It regularly breaches the territorial waters of its neighbours – Japan, Philippines and Vietnam to name a few.
  • It has established military bases in Paracel Islands, Spratly Islands and Scarborough Shoals that are claimed by other countries in the region – disregarding their claim completely.
  • It has forcibly forced away Vietnam from 2 of its oil drilling operations.
  • It regularly breaches the Indian borders in Kashmir and Arunachal Pradesh which it considers as disputed territories and provides stapled visas to residents of these states visiting China.
  • Also, it has a taken up an aggressive stance against India in the TAR.
  • In recent times, it has been sparring an invisible duel with America – especially in South China Sea, whenever American warships or Maritime Aircraft enters the hotly contested South China Sea.
  • The ability to declare ADIZ [Air Defence Identification Zone] that also includes the Senkaku islands claimed by Japan.
But this is just the tip of the iceberg. One cannot simply be a military might without being an economic powerhouse. This is a basic paradigm since eons – be it Roman Empire or British Empire; Or the American hegemony as of today which is on the wane, economy is the decisive factor that decides the might and standing of a nation in the global arena. A nation that aspires to be a force to reckon with, cannot ignore this simple rule. Take India’s example – the 1962 War with China; a resounding defeat primarily because defence was not a focus area for Indian leadership. ‘Hindi Chini Bhai Bhai’ was the slogan of the day and the Himalayas that was never breached was still expected to stand guardian of the nation despite modern advances in military technology – such was the naivety of the Indian leadership. There were many other issues and lacunae as well that was highlighted by Henderson-Brooks report, but the major cause still remains that defence was neglected due to poor political will despite have the largest military industrial complex amongst newly independent nations! How much one spends on defense depends on how much one can afford to spend and the opportunity cost of not spending it on the social sectors for a country that is still developing.

India spends around USD 50 billion a year [2.3% of GDP] on defense, while China's defense expenditure is in excess of USD 210 billion a year [1.9% of GDP].

III. The Money Plant

China sits on a massive forex reserve of USD 3.5 trillion. The current trade deficit between US and China stands at USD 365 billion. These 2 figures tell us how, financially, US is at the mercy of China – without even facing a single Chinese soldier. If China decides to rock USD, it can simply do so by flooding the market with US dollars and improving the standing of Renminbi. US will be held an economic hostage in such a situation. Already there are tell-tale signs that Renminbi is now considered as a racehorse – by being included in the IMF basket of currencies in IMF’s SDR – in addition to USD, Euro, GBP and Japanese Yen.

There might be a lot of rhetoric about China trying to elbow India out of Indian Ocean region and establish itself as the most credible partner in IOR and other littoral countries. So is China India’s natural enemy? It depends, as there are a lot of issues where India and China has common interests – like controlling Greenhouse emissions or addressing infrastructure bottlenecks. Each nation addresses its concerns as per their perceived strategic interests. So, essentially it makes China look after its strategic interests – and given its size, any direction it moves causes ripples which is aggravated further by its hard bullying stance against smaller nations.

But the simplest explanation of Chinese investment in Pakistan is that China can afford to spend USD 46 billion without batting an eyelid even if it is a sunk cost given the situation in Pakistan.

If CPEC is viewed through this specific lens, it doesn’t look as menacing as it sounds. The entire Malacca strait is bypassed addressing security challenges, routes shortened, jobs created in Kashghar province, bringing Uighur to mainstream economy. It seems to be in India’s interest, as it will bring more stability in the region since CPEC also tries to address the critical power shortage problem that plagues Pakistan – thereby supporting its industries and small scale businesses, providing a necessary economic boost. CPEC will also open up alternate roadways in Balochistan which can lead to new businesses opening up along the highways.

But, CPEC has unnerved India to a huge extent – primarily due to two reasons:
  1. CPEC passes through PoK [which is technically part of India under Pakistan occupation] in Gilgit-Baltistan area. Pakistan has even transferred some areas to Chinese and Chinese soldiers are present in this area. India can only protest.
  2. Gwador – the deep sea port and alternate to Karachi port can be quickly converted into a Chinese naval base if the need arises. That’s is a huge naval threat for the entire Indian Western-Seaboard.
These two points will strengthen Pakistan’s claim of legitimacy in Kashmir, in which case it will become difficult for India to claim and control PoK in future if CPEC becomes operational as it also brings China into the picture; as Chinese will have a valid claim to defend CPEC and its sanctity as part of Chinese National Interest. This poses a huge threat to India. Hence India will also have to deal with China if a possible future war with Pakistan breaks out. India’s cold-start doctrine needs to be revisited in such a situation.

IV. Indian Response

So, which is the greater good – an operational CPEC or poorer unstable Pakistan without CPEC? There is no straight answer to this, but it depends.

Operationalising CPEC is no mean feat. It has to travel through the hostile terrains of Balochistan and FATA where anti-Pakistani interests are in play. There is always a threat to the movement of goods through these regions. Secondly, there is a severe water shortage in Gwador and Balochistan in general that is difficult to address if one wants to improve population density along CPEC routes to create viable businesses and make the routes safer. Thirdly, Balochs are primarily kept outside of CPEC development in Balochistan causing a local resentment. Fourthly, at the northern end of CPEC, it goes through inhospitable Karakoram Range, where laying down navigable roads all year round would be a huge engineering feat. There are many other concerns, but operationalising CPEC is not as easy as it sounds.

Now, India can look at alternate unconventional options to block CPEC, so that the larger Indian claim on PoK isn’t diluted. And the most obvious means to do so is to support the Baloch separatists and their demand of Baloch homeland. It will be a costly proposition for Pakistan and China – one that will not be easy to sort out; exactly in the manner Kashmir issue has been kept alive by Pakistan over the last 70 years. Playing the cards, the way Pakistan does would be the most sustainable means of thwarting CPEC, with limited liability on India along with full plausible deniability clause. For this, there has to be considerable political resolve to see it through. India’s poor political will has often been roadblocks to a standard response in similar situations.

Balochistan is the fulcrum of the entire CPEC, where Gwador is located. Isolating Balochistan is enough for CPEC to fail. Indian government can start granting asylum to Baloch separatists and start citing human rights violation in Balochistan, to expose Pakistan’s duplicity. In the long run, it will also make Pakistan’s Kashmir claim more diluted as Pakistan will be given a dose of its own medicine and will be kept busy containing the unrest. China will be able to help little, except occasionally breaching the MacMahon line causing headaches to Indian establishment – but hopefully that would be well-calibrated and localised in nature like past incursions.

Secondly, there are too many disgruntled neighbours surrounding China. An effective nexus against China will definitely make it think twice before entering into a full blown conflict with India – which seems highly unlikely, even if India intervenes in Balochistan. India has already started creating an informal grouping of such nations through bilateral MoUs and other instruments. For example, providing Vietnam a line of credit to purchase naval vessels. It also has a robust relationship with Japan and Australia along with other SE Asian Countries. In the IOR, it has strengthened ties with Maldives, Mauritius and Seychelles both economically and from maritime security perspective. The recent LEMOA with US was signed also keeping in mind, the US’s strategy of Pivot to Asia that aims to limit China and position almost 60% of American Military hardware in the Pacific theatre to contain China’s meteoric rise.

Thirdly, utilise the issues of common interests as coercive bargaining chips. India needs to swing properly and calibrate its timing well with respect to issues where Chinese need our support – be it WTO issues related to trade and tariff barriers or climate change issues for controlling emission norms. Let’s make it a high cost bargain for China to gain India's support on these critical issues that are of Chinese interest. That way, it ensures that India’s position is not compromised like it happened for NSG membership.

Fourthly, India needs to utilize fully its soft power and 'Mausam' / Spice Route project to counter the overall Chinese One Road-One Belt and Silk Road strategy. India obviously cannot compete with China at the scale they have conceived due to huge investment needed, but nevertheless, most of the countries, especially in IOR are ideologically aligned to India's needs and interests and these projects would be a start to gain a proper foothold.

Lastly, despite covert and diplomatic initiatives, India still has to make use of the international platforms to isolate Pakistan and counter China’s position informally, without irking the neighbour. It is important to keep up the rhetoric, so that Indian position isn’t perceived to be weak; which unfortunately has been the Indian legacy for the better part of last 70 years.

As Sun Tzu says in ‘The Art of War’
The supreme art of war is to subdue the enemy without fighting.

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