Manoj Kewalramani
I. Ladakh, Indo-Pacific, & Quad = Containment?
The boundary issue and the Indo-Pacific returned to prominence in official and media discourse this week. Let’s begin with the report by The Hindu’s Vijaita Singh about a “minor face-off” in the Galwan Valley in early May. Citing an unidentified “senior government official,” she wrote that “no clash occurred and the two sides disengaged quickly.”
This is what the unidentified official is quoted as saying: “After the no-patrolling zones were created last year, the two sides occasionally conduct reconnaissance to see if the other side has crossed the line. The patrols are sent at different times. On the particular day, the Indian and Chinese patrols reached the area at the same time, a minor face-off happened but they returned quickly.” The official also talks about no troop reduction being carried out by either side.
The Indian army was quick to push back. In a series of tweets, it said that “NO such minor face-off has taken place” and that the “article seems to be inspired by sources who may be trying to derail the ongoing process for early resolution of issues in Eastern Ladakh.” Good on The Hindu to update Singh’s piece with these comments.
Anyway, Army chief MM Naravane spoke to PTI this week, emphasising that China had “unilaterally breached” border agreements, leading to the current situation. He added that while India was “open to initiating confidence-building measures, we remain prepared for all contingencies.” He also said that the next round of talks would focus on restoring the status quo ante of April 2020. But this remark is not a direct quote in the story. Here’s the related quote: “Indian Army is very clear that no loss of territory or unilateral change in status quo will be permitted. We are dealing with the Chinese in a firm and non-escalatory way, ensuring the sanctity of our claims in eastern Ladakh.”
Another interesting quote in his interview is this one: the “PLA escalated the situation by utilisation of unorthodox weapons and amassing a large number of troops.” Here’s more that’s useful to note: “Asked about the possibility of any escalation of tension in the region, Gen Naravane said there has been no infringement by the Chinese side following the agreement on the disengagement in the Pangong lake area and that chances of any untoward incident is low. He also said the strength of troops on both sides at present are more or less what it was last year and that the Indian Army was aware of what is happening in the region, adding ‘you cannot be complacent’.”
While we are discussing the situation along the LAC, this piece by Dr. Rajeswari Pillai Rajagopalan in The Diplomat is a useful reminder of the PLA’s effort to build capacity in the Xinjiang Military Command. She discusses reports of new weapons systems and vehicles being deployed in the region along with the drills that have been carried out. I am not detailing the different systems she’s discussed, but the broad point is that whatever Beijing’s concerns with regard to its Eastern shores, there is much more focus now on the West.
My two cents on this is that New Delhi should no longer assume that China’s primary threat perception or theatre of interest lies along the waters in the East and South. In fact, I would argue that Beijing feels fairly confident of its position in those areas. There’s lots more to do, but it enjoys a far better balance of power in the waters of the East and South China Sea than it has ever since the formation of the PRC. Augmenting capabilities along the Western theatre, on the other hand, will not just be a matter of addressing continental threats but also the maritime challenge in the Indian Ocean.
On the Indian side, Manjeet Negi reports for India Today that Indian forces will be receiving advanced Heron drones from Israel soon to be used at the border. The “anti-jamming capability of the advanced drone is much better than their previous versions” the report says.
Moving on to Washington, where foreign minister S. Jaishankar has been meeting with the new US leadership. Let’s look at some of the comments/statements around these meetings. The MEA’s website so far does not have statements for these discussions. So we have US statements and Jaishankar’s tweets. First, Jaishankar said that the meeting with US NSA Jake Sullivan led to discussions on Covid-19, vaccines, the “Indo-Pacific and Afghanistan.” Meeting with USTR Katherine Tai, the Indian FM “welcomed her positive stance on IPR issues & support for efficient and robust supply chains.” He added that “trade, technology and business cooperation are at the core of our strategic partnership.” No official statement yet by the USTR. We then have Jaishankar meeting US DNI Avril Haines. Jaishankar tweeted about “working closely together to address contemporary security challenges and advance our strategic partnership.” Some context to why this meeting was significant in the tweet below by Brookings’ Tanvi Madan.
Next we had meetings with US Secretary of Defense Lloyd J. Austin III and Secretary of State Antony Blinken. The US DoD’s readout said that they discussed “shared priorities in the U.S.-India strategic partnership” and exchanged “views on a range of regional security challenges.” These include a “free and open Indo-Pacific region and strengthening the U.S.-India Major Defense Partnership.” The State Department said that they talked about “COVID-19 relief, efforts to strengthen Indo-Pacific cooperation through the Quad, and a shared commitment to combating the climate crisis and enhancing multilateral cooperation, including at the UN Security Council...regional developments, the coup in Burma, and continuing support for Afghanistan.” Of course, there’s a strong China component to much of this. But the only direct reference to China came in a tweet by Blinken and remarks of Dean Thompson, the Acting Assistant Secretary, Bureau of South and Central Asian Affairs. Blinken tweeted that the “India-China border situation” was part of the conversations.
Anyway, Jaishankar later spoke to PTI about the Quad. He did not mention China, and actually sought to pushback against the Cold-War, containment narrative. Here’s what the PTI report says:
“‘Quad used to (and) still does discuss maritime security and connectivity, in recent years. It has started to discuss technology issues, supply chain issues and vaccine production. There are marine, sort of safety quality issues. So, there are a whole set of issues,’ the minister noted. Without naming any country, Jaishankar said there are ‘many, many concerns’ which have to be addressed by somebody. ‘Big countries can do a large portion of it. Big relationships can add to it. But at the end of the day, most things work better if a group of countries sit together and say, okay, we all have similar positions and similar interests, and why don’t we all sit and address those sets of issues. So that is how we see Quad. Quad is an expression of the convergence of interests of many countries. It is in many ways a reflection of the contemporary nature of the world, where it is not a set of, you know…, at some stage, we have to put the Cold War behind us. It is only those who are stuck in the Cold War who cannot understand Quad’.”
Alas, the foreign minister doesn’t seem to have convinced Beijing. Earlier in the week, the Chinese Defense Ministry’s monthly press briefing had Senior Colonel Tan Kefei criticising strategies that “instigate countries to establish selective and exclusive military alliances, to gang up or to create the ‘New Cold War’ featuring bloc confrontation, and the zero-sum game.” These comments were not directly related to Jaishankar’s visit, however. They are essentially about the US’ approach to China, and similar criticism about US policy has increasingly become common in the Chinese foreign ministry’s daily briefings.
However,, China’s Consul General in Mumbai Tang Guocai’s comments cannot be seen as simply about US policy. Speaking at an event this week, he also took some shots at the India-US dynamic, arguing that “a close neighbor is dearer than a distant relative.” On India’s economic policy shift, he said that “it is self-contradictory for some Indian media and think tanks to ask China to keep the supply chain open on the one hand, and threaten decoupling with China on the other. Such opportunistic and protective ideas will only add up to the problem.” He added:
“the group of four (Quad) advocates so-called democratic alliance, and targets certain specific country in an attempt for containment.” And then he also engaged in some good, old-fashioned, East against the West narrative talking about how “only through common development by India and China, the rise of Asia and the return of civilization will truly be achieved.”
Meanwhile, ahead of Jaishankar’s travels Qian Feng, from the National Strategy Institute at Tsinghua University, argued in the Global Times that “India's policy toward China and the US follow two strategic lines. India will not change its policy toward China just because the US requires it. This demonstrates that India sees itself as a great power with diplomatic independence.” His essential argument is that US Covid support to India is going to be conditional on India’s China policy. Of course, such binaries are meaningless.
Finally, two more stories that will have an impact on the bilateral relationship going forward. First, India’s MEA backed “follow up of the WHO report and further studies” into the origin of COVID-19, saying that this “deserve(s) the understanding and cooperation of all.” This is as mildly as one can make a point given what’s been going on over the past week with regard to the lab-leak theory once again gaining prominence. India has been on the WHO’s Executive Board for a year now. Indian health minister Dr. Harsh Vardhan is the chair of the board. I am not sure, however, what India has done during its tenure with regard to this issue. Second, Penpa Tsering, new ‘Sikyong’ of Tibetan govt-in-exile, spoke to ThePrint’s Nayanima Basu. Here’s an excerpt:
“The Indian government and Indian people have been very, very generous in terms of extending humanitarian support for the Tibetans, but not so much in the political sense. Now, I sense this renewed urgency within the Indian leadership and also in the intelligentsia or the academicians that the policy they have adopted towards Tibet or towards China has not been adequate; there needs to be a proper review… Also because of what happened in Doklam, in Galwan...Of course (border) incursions have been going on for many years, but what has been going on now is more like a war-like situation that is being imposed by the Chinese government on the Indian military. So that, I think, kind of puts a reset button on how India should approach the Tibetan issue.”
II. Xi’s Big Tech Speech
On Friday, Xi Jinping addressed a meeting that brought together the general assemblies of the members of the Chinese Academy of Sciences and the Chinese Academy of Engineering (CAE), and the national congress of the China Association for Science and Technology (CAST). The full speech was published in Saturday’s People’s Daily.
Xi began by saying that “during the various historical periods of revolution, construction and reform, our party attached great importance to scientific and technological undertakings.” Of course, this glossed over the anti-intellectualism of the Cultural Revolution. But he quickly gets to the period following the 19th Party Congress. He talked about the features of the Party’s approach to science and technology since then:
putting technological innovation at the core of the overall development of the country
adhering to Party overall leadership over scientific and technological undertakings
pursuing the “strategic goal” of becoming a global science and technology power, “with a sense of mission, responsibility and urgency…”
“strive to make new breakthroughs in original innovation, achieve leap-forward development in important scientific and technological fields, promote the independent control of key core technologies, and strengthen the integration of industrial chains in innovation chain
reforming the national innovation system
“implementing the strategy of strengthening the country with talents;” this entails “creating a good environment for talent innovation” and “bringing together talents from all over the world”
expanding openness and proactively integrating into the global science and technology innovation network
He then said that “China’s scientific and technological strength is moving from quantitative accumulation to qualitative leap” with “systemic enhancements” taking place. He then lists out a bunch of recent developments to make this point. Xinhua English’s report does a good job of summarising these, although it is worth noting that in a number of areas that Xi mentioned, there are serious challenges too. An example is the C919 jet.
“Major progress has been made in basic research and original innovation, including quantum information, stem cells, and brain science. The Chang’e-5 probe has brought back the country’s first samples collected from the moon. China’s first Mars rover started exploring the red planet. China’s high-end industries, including large passenger aircraft and magnetic-levitation train industries, saw fast development. Industries related to artificial intelligence, digital economy, 5G, and electric vehicles are thriving. Science and technology have provided firm support for the country's response to COVID-19. China succeeded in isolating the world's first novel coronavirus strain and also developed various medicines and vaccines. Xi urged China's sci-tech professionals to assume the responsibilities of the times and strive for sci-tech self-reliance and self-strengthening at higher levels.”
There’s a brief paragraph among all of these accomplishments that he lists, which talks about national defense innovation. In it, Xi highlights the J-20 jet entering service, the DF-17 ballistic missile’s development and says that China “is at the forefront of hypersonic weapons.” He then spoke about the changes that are taking place in the world. Xi said that:
“Scientific and technological innovation has become the main battlefield of the international strategic game, and the competition around the commanding heights of science and technology has never been as fierce.” 科技创新成为国际战略博弈的主要战场，围绕科技制高点的竞争空前激烈.
He then talked about the expanding breadth, depth and speed of scientific inquiry and advancement.
“At present, the new round of scientific and technological revolution and industrial transformation are advancing by leaps and bounds; the paradigm of scientific research is undergoing profound changes; interdisciplinary integration is developing continuously; and the integration of science and technology and economic and social development are accelerating…”当前，新一轮科技革命和产业变革突飞猛进，科学研究范式正在发生深刻变革，学科交叉融合不断发展，科学技术和经济社会发展加速渗透融合.
In terms of breadth and depth, he said that at one level, there is exploration of celestial bodies, the galaxy and the origins of the universe, while at another, scientists are exploring gene editing, particle structure and quantum control. He also argued that “deep space exploration has become the commanding height of scientific and technological competition” and “deep sea and deep earth exploration has continuously expanded new horizons for human understanding of nature. 科技创新广度显著加大，宏观世界大至天体运行、星系演化、宇宙起源，微观世界小至基因编辑、粒子结构、量子调控，都是当今世界科技发展的最前沿. 科技创新深度显著加深，深空探测成为科技竞争的制高点，深海、深地探测为人类认识自然不断拓展新的视野。
“Human beings are entering an era of intelligent interconnection of all things with the integration of ‘man-machine-object’…Basic research and applied research in biological sciences have developed rapidly...from understanding life, transforming life to synthesizing life and designing life, which not only brings benefits to human beings, but also presents new challenges in terms of bioethics.” 人类正在进入一个“人机物”三元融合的万物智能互联时代. 生物科学基础研究和应用研究快速发展…从认识生命、改造生命走向合成生命、设计生命，在给人类带来福祉的同时，也带来生命伦理的挑战.
He then spoke about China’s improving technological development capacity before sounding a note of caution and perhaps realism.
“We should also see that China’s original innovation ability is not strong, the overall efficiency of innovation system is not high, the integration of scientific and technological innovation resources is not enough, the layout of scientific and technological innovation forces needs to be optimised, the efficiency of scientific and technological input and output is low, the structure of scientific and technological talents needs to be optimised, the scientific and technological evaluation system does not meet the requirements of scientific and technological development, and the scientific and technological ecology needs to be further improved.” 同时，也要看到，我国原始创新能力还不强，创新体系整体效能还不高，科技创新资源整合还不够，科技创新力量布局有待优化，科技投入产出效益较低，科技人才队伍结构有待优化，科技评价体系还不适应科技发展要求，科技生态需要进一步完善。
These he said are long-standing problems that need to be addressed. And to do this, here’s his prescription.
Focus on core technologies, basic research and build self-reliance. This effort needs to feed economic development and address chokepoint technologies.
This effort to advance basic research and technology should prioritise urgent and long-term needs of the country.” He identified some of these as “core technologies in oil and gas, basic raw materials, high-end chips, industrial software, crop seeds, instruments and equipment for scientific experiments, chemical agents…medicines, medical devices, medical equipment, vaccines, etc.”
In addition, he called for targeting “frontier fields” that are important for national security and development, such as “artificial intelligence, quantum information, integrated circuits, advanced manufacturing, life and health, brain science, bio-breeding, aerospace science and technology, deep seas, and make forward-looking arrangements for a number of strategic and reserve technology research and development projects, aiming at the commanding heights of future science and technology and industrial development. 要在事关发展全局和国家安全的基础核心领域，瞄准人工智能、量子信息、集成电路、先进制造、生命健康、脑科学、生物育种、空天科技、深地深海等前沿领域，前瞻部署一批战略性、储备性技术研发项目，瞄准未来科技和产业发展的制高点.
Also, there needs to be greater efficacy of the national innovation system, with national laboratories, national scientific research institutions, high-caliber research-oriented universities and leading sci-tech enterprises shouldering their responsibilities.
He then went into some detail with regard to the national laboratory system, which he said “should be guided by national strategic needs, focus on solving major scientific and technological problems that affect the overall development and long-term interests of the country, accelerate the construction of original innovation sources, and accelerate breakthroughs in key core technologies.”
He then talked about the importance of the “socialist market system” with the state “as the organiser” in the process of scientific advancements and developments. At the same time, it is important to “twist the forces of government, market and society into one rope to form the overall advantages in the future.” 抓系统布局、系统组织、跨界集成，把政府、市场、社会等各方面力量拧成一股绳，形成未来的整体优势. In saying this, however, he also spoke about the need to give greater autonomy to scientists and institutions on funding decisions and decision-making and freeing them from “cumbersome and unnecessary institutional constraints.”
Xi then discussed China’s engagement in global sci-tech governance with a focus on issues such as climate change and human health. At this point, he also talked about being aware of social, regulatory and ethical challenges and risks associated with technology development.
The final point was about nurturing talents at home and attracting talents from around the world.
III. Carbon Peak, MSEs, Political Loyalty & Xiplomacy
First, PSC member Han Zheng spoke at the first plenary meeting (English report) of the Leading Group for Carbon Peak and Carbon Neutrality. He said that:
The decision “to achieve carbon peaks by 2030 and carbon neutrality by 2060 are a major strategic decision made by the Party Central Committee with Comrade Xi Jinping at the core after careful consideration. Achieving carbon peak and carbon neutrality are the inherent requirements for China to achieve sustainable and high-quality development, and it is also an inevitable choice to promote the building of a community with a shared future for mankind.”
He said that there was a need to “strengthen the top-level design, guide and supervise the scientific setting of targets and formulate action plans for localities and key areas, industries, and enterprises.” He also spoke about the need to publicize China’s “determination, goals, measures, and results in tackling climate change.”
The immediate tasks at hand for Han are:
“At present, we should focus on promoting the optimization of industrial structure, promoting the adjustment of energy structure, supporting the research and development of green and low-carbon technologies, improving the green and low-carbon policy system, and perfecting the laws, regulations and standards system.” 当前要围绕推动产业结构优化、推进能源结构调整、支持绿色低碳技术研发推广、完善绿色低碳政策体系、健全法律法规和标准体系等，研究提出有针对性和可操作性的政策举措.
Next Li Keqiang chaired the weekly State Council meeting on Wednesday (English report). This one ended with a decision on supporting micro and small enterprises along with self-employed people. The report tells us that as of April, China has over 44 million MSEs and more than 95 million self-employed individuals. So what’s going to be done?
First, continue to implement policies related to the six stabilities and six guarantees.
Second, expand “inclusive finance” by encouraging “credit loans, first-time loans, medium- and long-term loans and loan renewals without principal repayment, and to promote the pay-as-you-go lending model.”
Third, ensure price and supply stability when it comes to raw materials; so this talks about cracking down on hoarding and price-gouging -
Fourth, get sub-national governments to extend job retention subsidies, and encourage Internet platforms to lower excessive charges and commissions.
Fifth, efforts will be made to cover self-employed individuals and flexibly employed people with social insurance schemes, and household registration restrictions will be lifted to allow workers to enrol in these schemes where they work.
Also note: “The meeting urged stronger law enforcement against monopoly and unfair competition. Malicious subsidies and below-cost dumping by advantageously-positioned companies to seize more market share will be investigated and tackled under the law. Arbitrary charges and unwarranted fines will be overhauled.”
In the PD report, we also have a paragraph on education. It talks about efforts to improve the provision of compulsory education in rural areas. The focus is on improving training for teachers and providing them income support. Along with this, it talks about the need to improve school infrastructure and the central government’s pledged allocation of 30 billion yuan of subsidies for support in this regard.
Guo Shengkun, chief of the Central Political and Legal Affairs Commission, was quoted this week as saying in Shandong: “it is necessary (for the political and legal forces) to focus on the primary task of building political loyalty, deepen ideological understanding through continuous learning and education, persist in seeking truth from facts, highlight problem orientation and quality and efficiency standards, accurately grasp policies and strategies, and solve problems with real difficulties to ensure that they do not go through the motions.” 要聚焦筑牢政治忠诚这一首要任务，以持续学习教育深化思想认识，坚持实事求是，突出问题导向和质效标准，准确把握政策策略，动真碰硬解决问题，确保不走过场.
Also Zhao Kezhi, Minister of Public Security, said in Guangxi that:“We should persist in studying history and enhancing trust, educate and guide the police to strengthen their faith in Marxism and communism, their faith in socialism with Chinese characteristics and their confidence in realizing the great rejuvenation of the Chinese nation, and resolutely be loyal to, support, follow and defend the core, and be determined to be the builders and defenders of the cause of socialism with Chinese characteristics.” 要坚持学史增信，教育引导广大民警增强对马克思主义、共产主义的信仰，对中国特色社会主义的信念，对实现中华民族伟大复兴的信心，坚决做到忠诚核心、拥护核心、跟随核心、捍卫核心，矢志不渝做中国特色社会主义事业建设者捍卫者.
Finally, there were a bunch of world leaders that Xi called this week. He spoke to Nepal’s President Bidhya Devi Bhandari, Montenegrin President Milo Djukanovic, Spanish Prime Minister Pedro Sanchez, Vietnamese President Nguyen Xuan and Iran’s Hassan Rouhani. You can find my coverage of these calls here and here as part of my weekday People’s Daily Tracker. I’m, however, sharing below the details of the chat with (English version) with Rouhani, which I thought was particularly interesting.
Xi said that “the two countries firmly support each other on issues involving their respective core interests and major concerns, and have greatly consolidated their strategic mutual trust and resolutely defended international equity and justice.” Interesting language this. Perhaps, a sense of confidence in China’s diplomacy on the nuclear issue, particularly since the US put itself in a difficult spot withdrawing from the JCPOA and now being engaged in talks in Vienna again under Biden. Xi also added that “China supports Iran’s reasonable demands” concerning the JCPOA and nuclear issue. Interesting phrasing here; a timely reminder against maximalist positions, particularly given that we are going to see elections in Iran next month.
Xi also said that “China will continue to firmly support Iran in safeguarding national sovereignty and dignity, and is willing to provide as much assistance as possible for Iran's fight against the pandemic and help the Iranian people prevail over the virus.” He also spoke about China’s diplomacy with regard to the Palestinian issue. Rouhani said that Iran was “genuinely grateful” for China’s pandemic support. Pledged support to the one-China policy and to work on Belt and Road cooperation. He also appreciated Beijing’s policies with regard to the JCPOA and Palestine and committed to working together to “oppose unilateralism and hegemonism.”
IV. Guangzhou Outbreak, Power Cuts & Data Centers
Let’s begin with reports about the COVID-19 cluster in Guangzhou. NYT’s Chris Buckley reports that “officials in the southern Chinese city of Guangzhou ordered a neighborhood to lock down over the weekend, closing schools and banning dining in restaurants while they try to contain a cluster of coronavirus cases that appeared to have spread from a dim sum restaurant. Investigators have so far traced the burst of cases in the city, the capital of Guangdong Province, to a 75-year-old woman who began experiencing a fever and other symptoms more than 10 days ago and was confirmed to be infected with the virus. She had dined at a dim sum restaurant in the Liwan District, where she lives, and medical tracking uncovered two other people at the restaurant who were infected and appear to have spread the virus to a dozen others, the China Youth Daily reported. On Saturday, the Guangzhou Health Commission ordered residents in five streets of the Liwan District to mostly stay at home. Households can send one member out each day to buy necessities, and students will study remotely, with some exceptions where boarding at school is possible.”
Despite this, rapid vaccination continues to take place across China. Around 100 million doses were administered over the past week, taking the total number of shots administered to 600 million. Zhong Nanshan said on Friday that China needs to inoculate 80 percent of its residents in order to develop herd immunity; he added that vaccine coverage will reach 40 percent of the population by early July, hitting 80 percent by the end of this year. In addition, the Chinese CDC on Friday released fresh data on its vaccines. It said that said that among the 265 million doses given between mid-December and the end of April, there were 31,500 cases of adverse events. That was equivalent to around 12 cases for every 100,000 doses. SCMP reports that “the CDC said mild reactions were the most common type reported, accounting for more than 80 per cent of the total. These included a temperature of over 38.6 Celsius and swelling. The rest of the cases were ‘unusual reactions’, including allergic rash, deep facial swelling, and severe allergic reactions.”
Next, we have reports of power rationing in southern China. Caixin repots that since mid-May, 17 cities including Guangzhou, Zhuhai and Dongguan have imposed limits on power usage. A subdistrict office in Dongguan, home to thousands of factories manufacturing products from diapers to clothing to cell phone parts, said off-peak power consumption measures will last till the end of this year. The report adds that Guangxi and Yunnan provinces also face power shortages. Between May 25 and 30, Guangxi province is expected to have maximum power demand of 27 million kilowatts, 11% more than supply capacity, according to a power supply plan issued by the industrial department. Yunnan, a big supplier of hydroelectricity, imposed limits on power supply since May 10, according to the energy bureau. Some electrolytic aluminum factories have faced production declines.
Well, that just won’t do if China’s going to harness its data potential. The NDRC this week put out information of a national data center network that it is envisioning. This Caixin reports will result in the establishment of major clusters in the three relatively wealthy regions of the Beijing-Tianjin-Hebei metropolitan region, Yangtze River Delta, and Guangdong-Hong Kong-Macao Greater Bay Area. The document says that data hubs will also be constructed in four western areas, including Guizhou and Xinjiang. Already as HT reports, there are concerns about the growing energy demand of China’s data centres and rapidly expanding 5G stations, which estimates say could end up using four times more electricity by 2035. This is as per a new Greenpeace report, which says that,
the combined electricity consumption by data centres and 5G base stations in China stood at more than 200 billion kilowatt-hours (kWh) in 2020. If current trends continue, this is expected to rise to 782 billion kWh by 2035, the group said, which means the sector will be one of the fastest growing sources of climate-warming carbon dioxide emissions.
V. Region Watch
China announced last week that it would provide 1 million vaccine doses to Nepal under grant assistance. The announcement raised hopes as the vaccine supply to Nepal from India has come to a complete halt while the COVID19 cases in the Himalayan state continue to rise. The next day, however, it was found that vaccine manufacturer Sinopharm had placed the Nepalese government officials in a bind. Dipendra Raman Singh, director general at the Department of Health Services, told the Kathmandu Post that they have received a proposal for a non-disclosure agreement from Sinopharm. A Health Ministry official revealed to the Post that the proposed non-disclosure deal contains over a dozen issues, including the price and specifications.
“The company will notify us about the quantity, price and delivery schedule only after signing a non-disclosure agreement,” said the official.
Insistence on a non-disclosure agreement could further impede Nepal’s plan to purchase the vaccine, which is the only way to manage the spread of the virus. Neighbouring Bangladesh and Sri Lanka have approved and received batches of the Sinopharm vaccine.
In the same week, Nepal opened a consulate general in Chengdu.It is the fifth Nepalese diplomatic mission in China and is being called the latest symbol of Kathmandu’s close ties with Beijing. Nepal is the only one to have a consulate general in Lhasa and is now among the handful to have a diplomatic mission in the city of Chengdu.
“...China is fulfilling our needs.”
Pakistan's foreign minister, Shah Mahmood Qureshi said in an interview. Nikkei Asia spoke to the diplomat in New York, where he was to attend a special session of the U.N. General Assembly on Israel and Palestine. The question that prompted this response was whether Pakistan, which had for long straddled between the United States and China, was now entirely in the China camp. The Foreign Minister went on to say the United States’ transactional relationship with Pakistan ‘won’t work’ any longer, adding that it is in the best interest of the US to remain engaged with Pakistan. Contrary to this, Ayesha Siddiqa believes that Pakistan’s dependence on the US will continue as its security establishment, “...wants two friends instead of just one, which means that it earnestly wants to hold on to the US that seems to be disengaging strategically.” A key point that Siddiqa makes is that Islamabad desperately needs to make its economy vibrant and attractive to the world. There is no denying that the China-Pakistan Economic Corridor (CPEC) is the nucleus of most of Pakistan’s economic planning. Prime Minister Imran Khan said at the launch of the Rashakai special economic zone (SEZ) under the CPEC in the Khyber Pakhtunkhwa (KP) province, that the SEZs under the CPEC will attract foreign and local investors thereby kicking off the export-oriented industrialization process in Pakistan.
“The development of the Rashakai SEZ is timely and a step in the right direction, because at this point of time, Pakistan direly needs new economic activities which can help the country to revive its economy amid multiple financial challenges including paying back loans taken from international financial institutions,”
Shakeel Ahmad Ramay, director of the China Study Center at the Sustainable Development Policy Institute in Pakistan, told Xinhua.
VI. China-US Ties
Some really interesting developments in terms of the US-China dynamic this week. First, let’s begin with the recent reports with regard to the lab-leak theory as the origin of the COVID-19 pandemic. We’ve seen a bunch of reports and source-based reporting based on US intelligence. So WSJ reported that “three researchers from China’s Wuhan Institute of Virology became sick enough in November 2019 that they sought hospital care, according to a previously undisclosed U.S. intelligence report.” The Chinese foreign ministry termed the report “completely untrue.”
Then there was this story about the disused Mojiang copper mine, where WSJ reports that “in April 2012, six miners here fell sick with a mysterious illness after entering the mine to clear bat guano. Three of them died. Chinese scientists from the Wuhan Institute of Virology were called in to investigate and, after taking samples from bats in the mine, identified several new coronaviruses. Now, unanswered questions about the miners’ illness, the viruses found at the site and the research done with them have elevated into the mainstream an idea once dismissed as a conspiracy theory: that SARS-CoV-2, the virus that causes Covid-19, might have leaked from a lab in Wuhan, the city where the first cases were found in December 2019.” This is a really good report. I highly recommend reading it.
Of course, it isn’t just WSJ reporting but also scientists and others calling for re-examination of the lab-leak hypothesis; and all of this lead this week to Biden announcing the need for a new report on COVID-19’s origin within 90 days. He said that:
“As of today, the U.S. Intelligence Community has ‘coalesced around two likely scenarios’ but has not reached a definitive conclusion on this question. Here is their current position: ‘while two elements in the IC leans toward the former scenario (human contact with an infected animal) and one leans more toward the latter (laboratory accident) – each with low or moderate confidence – the majority of elements do not believe there is sufficient information to assess one to be more likely than the other.’ I have now asked the Intelligence Community to redouble their efforts to collect and analyze information that could bring us closer to a definitive conclusion, and to report back to me in 90 days.”
This bit from NYT’s report on the issue is worth noting: “Some intelligence officials say it is scientists, not spies or analysts, who are likely to draw definitive conclusions on the origins of the virus. Collecting information from China and working with intelligence partners could help that scientific effort, but it is unlikely to uncover some sort of smoking gun. So far, according to three officials, there has been no intercepted Chinese communications that provide any strong evidence of a lab leak. Collecting so-called signals intelligence — electronic communications or phone calls — is notoriously difficult in China.”
Anyway, Beijing’s clearly not thrilled about this. China’s Foreign Ministry’s Zhao Lijian kept hitting the key points of the Chinese narrative around this, criticising the West for “politicising” origin-tracing, spreading “conspiracy theories and disinformation,” attacking it for its poor handling of the pandemic, talking about China’s transparency and of course pointing to US labs. A day after Biden announced this 90-day deadline, Zhao said:
“The motive and purpose of the US-driven ‘investigation’ relying on its intelligence apparatus is crystal clear. In fact, US intelligence has a notorious track record, as the world has learned a long time ago. Its masterpieces include the test tube of laundry powder cited as evidence for Iraq’s possession of weapons of mass destruction and the staged ‘White Helmets’ video cited as evidence for chemical weapon attack in Syria. Former US Secretary of State Mike Pompeo even boasted, ‘I was the CIA director, we lied, we cheated, we stole. We had entire training courses. It reminds you of the glory of the American experiment.’ How can anyone trust the findings from an ‘investigation’ conducted by such an intelligence organ with no credibility to speak of?”
Anyway, moving away from all this, Kurt Campbell, the U.S. coordinator for Indo-Pacific affairs on the National Security Council, had some rather fascinating comments about the US-China relationship this week. To begin with, he said something that’s now well understood, i.e., “The period that was broadly described as engagement has come to an end,”…U.S. policy toward China will now operate under a “new set of strategic parameters”…“the dominant paradigm is going to be competition.”
More interesting, however, were his remarks on Yang Jiechi and Wang Yi; these leading Chinese diplomats, he said, were “nowhere near, within a hundred miles” of Xi Jinping’s inner circle. In fact, Campbell sees Xi as “deeply ideological, but also quite unsentimental” and “not terribly interested in economics.” He also added that “for the first time, really, we are now shifting our strategic focus, our economic interests, our military might more to the Indo-Pacific.” China’s foreign ministry wasn’t too thrilled about the use of the term competition. Zhao Lijian said “China firmly rejects US moves to exclude and contain China in the name of competition.”
Third, and this links to Campbell’s comments on Xi’s inner circle; the Global Times reported this week that “China sent a friendly signal for talks between Chinese and US defense ministers when US Defense Secretary Lloyd Austin took up his post on January 22, but this was never met with a response, and Austin later requested to meet with another leader in the Central Military Commission, which is an unprofessional and unfriendly act of disregarding diplomatic protocol and international common practice.” This, of course, comes amid the Financial Times’ reporting about Austin repeatedly trying to reach out to set up a conversation with the CMC Vice Chair Xu Qiliang, while Beijing is insisting the Austin engage with Defense Minister Wei Fenghe. I see where the Biden administration’s coming from. Let’s see if this approach works.
At least two American and Chinese officials who did speak this week were Vice Premier Liu He and USTR Katherine Tai. The Chinese side said that the two sides held “candid, practical and constructive exchanges in the spirit of equality and mutual respect.” They “believe that the development of bilateral trade is very important, and they exchanged views on issues of mutual concern and agreed to continue to communicate.”
USTR’s statement said that “during their candid exchange, Ambassador Tai discussed the guiding principles of the Biden-Harris administration’s worker-centered trade policy and her ongoing review of the U.S.-China trade relationship, while also raising issues of concern.” Tai also told Reuters that “the overall challenges that we have with China are also still there and they are very large.” She said the Phase 1 trade deal should be seen in the context of “the overall U.S.-China trade, and economic relationship which is very, very challenging. And requires our attention all across the board.”
Do note this from WSJ’s coverage of the call.
“In advance of Wednesday’s virtual meeting, officials with the U.S. Trade Representative’s office held a call with their Chinese counterparts Tuesday night, according to people with knowledge of the situation. During that conversation, the Chinese officials called on the U.S. to roll back remaining tariffs on Chinese products, the people said. The tariffs have led to a decline in Chinese imports to the U.S. U.S. importers, which must pay the levies on imported Chinese goods, have also pressed the administration to lift the tariffs imposed by former President Donald Trump. Beijing also wants Washington to relax sanctions against Chinese companies, especially telecommunications giant Huawei Technologies Co., Chinese officials say.”
Also check out this excellent graphic and assessment on the Phase-1 deal by PIIE’s Chad P. Bown.
Finally, European External Action Service Secretary General, Stefano Sannino, and US Deputy Secretary of State, Wendy Sherman, met in Brussels this week to talk about a whole range of issues, including China. A joint statement issued after the talks said that “the two sides underscored the shared EU-US interest in strengthening the rules-based international order and pledged further close cooperation in support of democratic values, global and regional stability, and universal human rights.”
On China specifically, it said that they,
“held the first high-level meeting of the EU-US dialogue on China. The two sides reiterated that the EU’s and the United States’ relations with China are multifaceted and comprise elements of cooperation, competition, and systemic rivalry. They highlighted issues of shared concern, including ongoing human rights violations in Xinjiang and Tibet, the erosion of autonomy and democratic processes in Hong Kong, economic coercion, disinformation campaigns, and regional security issues, in particular the situation in the South China Sea. They discussed the importance of Taiwan’s meaningful participation in the work of international organisations, including World Health Organization forums and the World Health Assembly. They also discussed pursuing constructive engagement with China on issues such as climate change and non-proliferation, and on certain regional issues.”
Finally, the Zhong Sheng series of commentaries on US democracy continued in PD this week.
VII. Long & Short of It…
A. Hustle, Loyalty & Apology: So, two of my worlds of interest seemingly collided this week, as former wrestler and star of the Fast and Furious franchise John Cena found himself in the midst of a controversy around Taiwan. In a nutshell, Cena had ended up referring to Taiwan as a country in an interview with TVBS, a Taiwanese cable channel. That led to an uproar in China, and Cena eventually put out a video apology on Weibo. Journalist Tony Lin has helpfully subtitled the entire apology video, for anyone who would like to see:
The Global Times was thrilled with Cena’s apology. It said in an editorial that:
“Cena's timely apology reveals his willingness to uphold the values of China and actually sets a good example for all Westerners to follow when it comes to respecting and learning more about China's national situation, especially its inviolable territorial integrity. Cena made a mistake, but his attitude in correcting this mistake is something other Westerners, especially Hollywood stars, should learn from and follow.”
While on the issue of Taiwan, and this is much more important than the Cena stuff, Japan’s reportedly in talks with British drug maker AstraZeneca to send surplus COVID-19 vaccines to Taiwan. There is a no-transfer clause in the vaccine contract that Tokyo wants to alter so it can help Taiwan, according to a Nikkei Asia report. This comes as Taiwan is battling a surge in local coronavirus cases.
B. HK Election System: Changes to Hong Kong’s election system were approved by the the city’s Legislative Council this week SCMP reports that the bill in LegCo was passed with 40 pro-establishment lawmakers voting “yes”, while two independent opposition members – Cheng Chung-tai and Dr Pierre Chan – remained against it. It adds that in Beijing, the State Council’s Hong Kong and Macau Affairs Office, a cabinet-level agency overseeing the city’s affairs, welcomed it as a significant achievement in “rectifying the wrongs”, while ushering in a “new chapter” of good governance. Other government departments in Beijing would offer support to the city in promoting the new electoral arrangement, the office said.
Beijing’s liaison office in the city said in a separate statement that the reform would uphold Hong Kong’s constitutional order – as set out in the national constitution – and the city’s mini-constitution, the Basic Law . The overhaul would also “allow the implementation of the principles of Hong Kong people administering Hong Kong, with patriots forming the mainstay.” SCMP also reports that HKMAO will be expanded to create two new departments covering national security and propaganda, a move some observers say signals the central government’s determination to win the “ideological battle” in the city.
Finally two more reports worth noting in Hong Kong. First, Apple Daily’s Jimmy Lai has been handed a new prison sentence of 14 months over his role in an unauthorised assembly on Oct. 1, 2019. Lai is already serving sentences adding up to 14 months for participating in similar demonstrations on Aug. 18 and Aug. 31, 2019. He has been in jail since December after being denied bail in a separate national security trial. He faces three charges under the national security law. Also, the Appeal Board on Public Meetings and Processions in Hong Kong has upheld the police’s view on the June 4 vigil in the city. Taking part in, advertising or publicising the meeting will be seen as a violation of law.
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