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Full Text of Theme Address delivered by Ambassador M. Ganapathi IFS (Retd.) at Two Day International

Article No. 042/2018

The following is the full text of the Theme Address delivered by Ambassador M. Ganapathi, Former Secretary, Ministry Of External Affairs; and Member, C3S, at the International Seminar on ‘Trends & Transformations in China’s Geopolitics, Strategy, Society & Business’ jointly organized by Chennai Centre For China Studies (C3S); and National Maritime Foundation -Tamil Nadu (NMF-TN), on 8th & 9th June 2018 at Savera Hotel, Chennai. The seminar marked the 10th anniversary commemoration of C3S. 

Respected Nirmala Sitharaman Ji, Hon’ble Raksha Mantri of India,

Shri B.S. Raghavan, Patron, Chennai Centre for China Studies,

Professor V. Suryanarayan, President, Chennai Centre for China Studies,

Cmde. R.S. Vasan, Director, Chennai Centre for China Studies,

Vice Presidents and Members of the Centre,

Members of the Consular Corps based in Chennai,

Distinguished Guests from overseas and from India,

Well-wishers and friends of the Centre,

Friends from the media,

Friends, ladies and gentlemen,

May I commence my address by thanking the Hon’ble Raksha Mantri for being with us today on this very important occasion in the history of the Chennai Centre for China Studies – Thank you Madame Minister!

I consider it an honour to be asked to deliver the Theme Address on the occasion of the Tenth Anniversary of the Chennai Centre for China Studies. I congratulate the Centre for completing an eventful ten years – it has been a successful and result-oriented innings.  I should recognise the signal contribution of the founders of the Centre, Mr. B.S. Raman and the immediate past Director Mr. D.S. Rajan.  Their legacy was always difficult to emulate; but has been ably carried forward by the current Director Cmde. R.S. Vasan and his competent team. The Patron, Mr. B.S. Raghavan and President Prof V. Suryanarayan’s guidance and advice has been helpful in steering the programme and affairs of the Centre. And the other members of the Centre also deserve congratulations and gratitude!  The young minds are a value addition. The support and guidance of the Ministry of External Affairs towards the Centre’s activities has been helpful. On the eve of the Centre’s Tenth Anniversary, the Centre was ranked 48th in the Global Independent Think Tank Index.

The Decennial Anniversary of the C3S comes at a significant period in time.  The Cold War came to an end nearly three decades ago. The post-Cold War era has seen the development of a new strategic canvas.  Alliances have changed and shifted, countries have unified or dissolved, new challenges and dangers have come to the fore and new power centres have emerged. The international focus of attention has shifted eastwards from the Atlantic towards what was initially called as the region of the Asia-Pacific to what is today termed as the Indo-Pacific.

Besides traditional issues, new, complex and non-traditional threats have emerged, posing greater challenges to international peace and security.  Terrorism, organised crime, cyber crimes, proliferation of weapons of mass destruction, drugs and arms running, environmental degradation including water availability and air pollution, social stability are some areas of considerable interest and concern to the international community.  And the Cold War has given way to the Trade Wars.  Mismatch between expectations and deliverance will have its own repercussions.

With the diminishing authority of the erstwhile powers, China felt that its rightful place had arrived to occupy centre stage in the power equation. A self-assured China has started to assert itself among the comity of nations. In his broadcast to the BBC in October 1939, Winston Churchill had seen Russia as a riddle wrapped in a mystery inside an enigma adding that perhaps there was a key – this being Russian national interest. Would this be applicable to China today; which is transparent to a few but opaque to many but which sees national interest premised on correcting perceived injustices of the past.  The Chinese believe that history does not forgive those who forget it. This reflects in the evolving developments not only within China but also from a global point of view.

With the Indo-Pacific gaining prominence in the geopolitical and geostrategic landscape, India’s role also becomes redefined. This will have its own resonance on the bilateral between India and China.

The theme of the two-day Seminar titled “Trends & Transformations In China’s Geo-Politics & Strategy, Society & Business” is appropriate.  It would cover nearly every aspect of China’s internal and external situation.  And for India, China as a neighbour ranks high in terms of national interest and national security.

The take off point in analysing developments relating to China, as it moves ahead in the 21st Century, is the 19th Congress of the Communist Party of China, which took place in October 2017.  The Congress anointed Xi Jinping as the uncontested leader of China with powers never before given to any of his predecessors.  Xi, a fifth generation leader, is the first leader of the Communist Party of China born after the coming into power of the People’s Republic of China.

Xi Jinping has consolidated his hold over all institutions of State and governance in China.  He is the General Secretary of the Communist Party of China, the President of the People’s Republic of China, the Chairman of the Central Military Commission, and heads groups dealing with national security, internet security, economic reform, among others. Xi was anointed as the core leader in 2017; lingxiu, a wise and great leader in 2018; and the National People’s Congress removed term limits on the office of the President. Xi’s power and authority is today unrivalled in China.

The 19th Party Congress enshrined Xi’s vision for China’s future, the “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era” in the Constitution of the Party.  This compares him with Mao Zedong and Deng Xiaoping in having his eponymous ideological contribution reflected in the Party Constitution.  Xi’s predecessors Jiang Zemin and Hu Jintao had only their ideas codified.

Xi’s men will man the Secretariat of the Party, the ultimate power centre.  He got the Politburo and the seven-man Politburo Standing Committee that he wanted, with a bit of balancing in the latter.

As China moves towards celebrating the Double Hundred – the 100th Anniversary of the Party in 2021 and the 100th Anniversary of the People’s Republic in 2049, Xi has sought that China be a “moderately prosperous society” by 2020, a “modern socialist country” and a top innovative nation by 2035 and a powerful and leading global power by 2050, with a “world class military”. He has linked these goals to the “Chinese Dream of the rejuvenation of the Chinese nation”.

In his speech at the Congress, Xi Jinping emphasised “The Party exercises leadership over all areas of endeavour in every part of the country”. The former anti-corruption Chief Wang Qishan meant this to literally translate into “Party, government, military, society and education, east, west, south, north, the Party leads everything” arguing the “indiscriminate” separation of party and government affairs had led to the weakening of the party’s leading role – an indirect criticism of Deng Xiaoping.

Xi noted in his speech that as socialism with Chinese characteristics has entered a new era, the principal contradiction facing Chinese society has evolved. He saw the more prominent problem as development being unbalanced and inadequate to become the main constraining factor in meeting the people’s increasing needs for a better life. At the same time he emphasised that the market will continue to play an important role in the economy, but that the party and key state-owned enterprises will remain supreme.  The anti-corruption campaign will continue.

China’s GDP at current prices in 2017 is supposed to have reached $12.26 trillion and projected to reach $17.76 trillion by 2021.  The GDP per capita is supposed to have reached $8,833.28 in 2017 with a projected figure of $12,542.59 in 2021.  However, to achieve the targets, China has to maintain a compound annualised growth rate of 6-7 percent. With increasing debt levels, and de-leveraging possibly following, the National Bank Chairman Zhou Xiaochuan warned of the risk of a “Minsky moment”. Other problems confronting China include demographic and labour issues and difficulties in the property and automobile sectors.  Global market fluctuations and market access issues could have their own repercussions. Xi has noted the need for upgrading of skills as a way out with China linking development with scientific and information technology research, talent training and innovation. The Yuan will become the currency of choice for some of the countries with some of them walking into a debt trap.

National security has been a major point of debate in China.  The four regions of Tibet, Xinjiang, Inner Mongolia and Taiwan assume significance.  Xi Jinping has unambiguously ruled out any compromise on this front. China would brook no move towards a breakaway by Taiwan or countenance disorder in the other provinces.

As Chairman of the Central Military Commission, President Xi has given considerable attention to “reform national defence and modernise the armed forces” with equal attention being paid to all the Services – the Navy and the Air Force besides the Rocket Forces gain equal prominence with the Army. The Chinese Dream includes a major powerful Chinese military by 2050.

On the foreign policy front, Xi’s speech notes China’s pursuit of an independent foreign policy of peace; endeavouring to uphold international fairness and justice and opposing acts “that impose one’s will on others or interfere in the internal affairs of others as well as the practice of the strong bullying the weak.” Xi also said that “China will never pursue development at the expense of others’ interests nor will China ever give up its legitimate rights and interests. No one should expect us to swallow anything that undermines our interests. China pursues a national defence policy that is in nature defensive. No matter what stage of development it reaches, China will never seek hegemony or engage in expansion.”  The policy is premised on China securing greater respect among its international partners.  An analyst termed it “alternative diplomacy”.

Chinese foreign policy will include inducements or threats or both to ensure full respect for China’s interests.  Xi’s proposal of the Belt and Road Initiative, included in the Party’s Constitution, is seen to actively promote international cooperation with “the hope to achieve policy, infrastructure, trade, financial, and people-to-people connectivity and thus build a new platform for international cooperation to create new drivers of shared development.”

China counts the response of many of its neighbours and the USA on its claims in the East and South China Sea as militating against its “core national interests”. Its response to the ITLOS decision should be seen in this context, however much it might have weakened China’s own position for a rule based order in international relations.

As a member of the UN Security Council with power and pelf, China’s international outreach is strong and wide.

China will closely watch the outcome of the June 12, 2018 Sentosa Summit and would like to be associated in any future deliberations and decisions determining the future of North Korea and the Korean Peninsula. The influence of President Xi on Chairman Kim should not be discounted. It would like to be associated in any future deliberations and decisions determining the future of North Korea and the Korean Peninsula.  After all it sees its relations with North Korea as a “teeth and lips relationship”.

China’s energy requirements will continue to increase considerably. It has struck exceptional deals for exploration, exploitation and trade of oil and natural gas with the Russian Federation, Iran, Saudi Arabia, Angola and Venezuela besides other countries in the Gulf, West Asia and Africa.

With relations between the Russian Federation and the West going from bad to worse, Russia has been pushed to firmly embrace China, despite Russian reservations on China’s dominance on the global economic and political fronts.   Similarly China has closely cultivated Iran. China has been proactive in the Gulf, West and North Africa regions.

China’s relations with the USA have been seen in the form of a sine curve, up one day and down the other.  The mood and moment in Washington sets off an appropriate reaction in Beijing, be it on the situation in the South China Sea or trade and tariff related issues or on other subjects.

While relations between China and Japan had been cold, recent indications suggest a thaw in relations.  The Chinese Foreign Minister Wang Yi knows Japan and its leaders well. China’s interaction with ASEAN has been significant. The developments in the South China Sea could have its impact on these relations.

China has assiduously cultivated South Asian countries.  Sri Lanka, Nepal, Maldives, Pakistan, Bangladesh have been overexposed to Chinese financial inducements and the long-term repercussions could affect many of them. Nearly all of them have literally moved them into China’s debt trap.  Already some discordant voices in these countries and in some other countries in Africa and Latin America on China’s aid and assistance have come to be heard with increasing frequency. One analyst wondered whether this was a “Till debt do us part” syndrome!

China sees soft power as a powerful diplomatic tool to spread its influence internationally through the establishment of Confucius Institutes. Unlike the Indian Diaspora, the response of the Chinese Diaspora towards China has been limited.  This seems to be changing with President Xi at the helm.

Doklam upset the calculus of bilateral relations between China and India.  China overplayed its hand; India firmly stood its ground.  The Xiamen meeting between Prime Minister Narendra Modi and President Xi Jinping on the margins of the 9th BRICS Summit and later Ministerial understandings were a precursor to the “Informal Summit” at Wuhan on April 27, 2018.  The two leaders will have another opportunity for an exchange of views during the Shanghai Cooperation Organisation meeting in Qingdao on June 9-10, 2018 and at the 10th BRICS Summit in Johannesburg on July 25-27.

Wuhan was an innovative mechanism to allow the leaders of India and China to have “a direct, free and candid exchange of views” on issues of bilateral and global importance. Of significance was their agreement on the need to strengthen strategic communication through greater consultation on all matters of common interest. This will ensure that differences do not become disputes.

There was uninformed criticism of the Wuhan Summit.  However, it should be underlined that besides formal protoculatory interactions, informal or working visits are a norm in international relations where leaders are able to discuss issues without paraphernalia or protocol constraints.

Prime Minister Modi succinctly analysed India-China relations in his Shangri La Dialogue address in Singapore earlier this month.    He noted that no other relationship of India had as many layers as India’s relations with China. He said that the leaders displayed maturity and wisdom in managing issues and ensuring a peaceful border.  He underlined that Asia and the world will have a better future when India and China worked together in trust and confidence, sensitive to each other’s interests.

The Special Representatives on the India China Boundary Question will intensify their efforts “to seek a fair, reasonable and mutually acceptable settlement.” Their next 21st Meeting should take place in the not too distant future.  China has a new Special Representative in State Counsellor and Foreign Minister Wang Yi.

While underlining the importance of maintaining peace and tranquillity in all areas of the India-China border region, the leaders decided to provide “strategic guidance” to their respective militaries to keep peace along the border. This would involve enhanced official level meetings to build trust and understanding and the implementation of the existing confidence building agreements and institutional mechanisms to resolve problems in the border areas.

China has not been overly enthusiastic in supporting India’s permanent membership of the UN Security Council even though Wuhan underscored the importance of reform of multilateral financial and political institutions to make them representative and responsive to the needs of developing countries.

The Wuhan Summit noted that future direction of India-China relations would be built upon mutual respect for each other’s developmental aspirations and prudent management of differences with mutual sensitivity.  Trust is a word which needs emphasis but with the caveat of the Russian proverb; Доверяй, но проверяй (doveryai, no proveryai) – Trust, but verify.

An area of concern in relations has been imbalance in trade.  Bilateral trade between India and China in 2017-18 was $89.61 billion ($71.45 billion in 2016-17) with India’s exports at $13.33 billion ($10.17 billion) and imports at $76.27 billion ($61.28 billion). The trade balance is heavily in China’s favour at around $62.94.

India has reiterated the importance of balance in trade.  Pending issues also include greater access for Indian exports from the agricultural and pharmaceutical sectors as also in the services sector, including IT and ITeS services, tourism and healthcare. The Chinese Commerce Minister Zhong Shan agreed at 11th Meeting of the Joint Ministerial Commission in New Delhi in March 2018 to seriously look at these issues.

India has serious reservations on China’s Belt and Road Initiative (BRI).  India sees it as a unilateral initiative, lacking in transparency from a financial and project proposal perspective.  India is equally concerned over the sovereignty issue. The inclusion of the China Pakistan Economic Corridor (CPEC) in the BRI is without doubt unacceptable.

India has worked closely with ASEAN countries towards respect of freedom of navigation and overflight in the international waters. This was also reflected in the Shared Vision of India-Indonesia Maritime Cooperation in the Indo-Pacific announced recently during Prime Minister Modi’s visit to Jakarta.  China’s overreach in the Indian Ocean Region would need constant monitoring.

India and China recognise the common threat posed by terrorism in all its forms and manifestations and have strongly condemned it. However, China’s opposition to designate Masood Azhar in the 1267 Sanctions Committee of the United Nations and avowed support to Pakistan on the subject has been an irritant. One will have to wait and watch whether China’s going with the consensus on the issue of bringing Pakistan under the grey list of the Financial Action Task Force denotes the beginning of something more positive.

In conclusion, one would like to reiterate that under President Xi Jinping, China would continue to be a dominant and powerful country seeking greater respect and recognition from its international partners. From a bilateral perspective, China would be reluctant to see India as an equal. We would have to cooperate where our interests converge and manage differences. Conflict could be avoided with a policy of competition, coordination and cooperation.  India should work towards a balance of power on the border region. India should also work towards mutually reinforcing partnerships with other countries. The impact of China’s relationship with some of our close partners will have to be constantly monitored.  At the same time, China is aware that India is too big a country with developed power structures to be contained.

The programme of the two-day Seminar is comprehensive in content and extensive in scope.  I have not covered all the subjects reflected in the programme.  Your deliberations should be wide ranging covering all aspects of China’s internal and external developments.  I wish it all success.

Before I close, my congratulations once again to C3S and its members as they celebrate the tenth anniversary of the Centre!

Thank you for your attention!

Jai Hind!

[Ambassador M. Ganapathi IFS (Retd.) is Former Secretary, Ministry of External Affairs, Government of India.  He completed M.Sc. (Chemistry) from Presidency College, University of Madras in 1974. Amb. Ganapathi joined the Indian Foreign Service (IFS) in 1975. He was Consul General of India, Sydney 2001-2005; Ambassador of India, Kuwait 2005-2008; and High Commissioner of India, Mauritius 2008-2011. From 2011 to 2012, he was Secretary (West), Ministry of External Affairs, New Delhi overseeing India’s relations with countries in Europe, Africa and Latin America besides Canada. The views expressed are the speaker’s own.]

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