2 May 2014

Revisiting India’s Nuclear Doctrine: Is it necessary?

April 30, 2014

In determining whether or not it is necessary to revisit India’s nuclear doctrine it would be relevant to examine how it evolved, its main features, the reasons behind the calls to revisit it and the factors which militate against so doing.

Evolution of India’s Nuclear Doctrine:

India’s nuclear doctrine was first enunciated following a Cabinet Committee on Security (CCS) meeting in January 2003 – over four and a half years after the May 1998 tests. It contained few surprises being largely built around the pronouncements made by Atal Bihari Vajpayee following the tests to the effect that India’s nuclear weapons were meant only for self defence, that India was not interested in arms racing, and encapsulating concepts such as “no first use” of nuclear weapons and their “non use” against non nuclear weapon states. Apart from these pronouncements, several entities, notably the Armed Forces, the National Security Council Secretariat and the National Security Advisory Board (NSAB), made detailed contributions to the Government, on the nuclear doctrine, through 1999 and 2000, which were considered by it in firming up its views on the subject.

Main Features of India’s Nuclear Doctrine:

The main features of India’s nuclear doctrine were summarized as follows in the CCS press release of January 4th 2003:
  • Building and maintaining a credible minimum deterrent;
  • A “No First Use” posture; nuclear weapons to be used only “in retaliation against a nuclear attack on Indian territory or on Indian forces anywhere”;
  • Nuclear retaliation to a first strike will be “massive” and designed to inflict “unacceptable damage”.
  • Nuclear retaliatory attacks to be authorized only by civilian political leadershipthrough the Nuclear Command Authority.
  • Non use of nuclear weapons against non nuclear weapon states.
  • India to retain option of retaliating with nuclear weapons in the event of a major attack against it with biological or chemical weapons;
  • Continuance of strict controls on export of nuclear and missile related materials and technologies, participation in FMCT negotiations, continued moratorium on testing;
  • Continued commitment to goal of nuclear weapon free world, through global, verifiable and non discriminatory disarmament.
Expose on “Credible Minimum Deterrent”:

The concept of “credible minimum deterrence” is the cornerstone of India’s nuclear doctrine. It, used in conjunction with the concepts of “No First Use” (NFU) and “Non Use” against nuclear weapon states, clearly indicates that India envisages its nuclear weapons as only a deterrent merely for defensive purposes and not as a means to threaten others, that it is not in the business of building up a huge arsenal and that it will not engage in arms racing.

Dealing With Improvised Explosive Devices


The call by Maoists to boycott the national elections has not had the desired impact in their strongholds. For the most part, people in the affected areas came out to vote in large numbers despite death threats issued by the Maoists. The strong presence of security forces was perhaps instrumental in ensuring a largely peaceful poll, though Maoists resorted to the use of improvised explosive devices (IEDs) to cause casualties and create fear and mayhem. In this, they have been largely unsuccessful, despite the fact that over a score of people have been killed and many have been injured in Maoist perpetrated violence during this election season. The Maoists have been active in the Bastar Division of Chhattisgarh, South Western parts of Bihar, some districts in Jharkhand and the Gadchiroli district of Maharashtra. For the most part, they resorted to using IEDs to cause casualties. Their reluctance to engage the security forces in one on one encounters indicates a cautious attitude and a healthy respect for the police forces.

On 11 April, Maoists in Jamui district of Bihar blew up a jeep in which CRPF personnel were travelling killing two and injuring four. Two days earlier, the security forces had successfully recovered eleven bombs planted by Maoists in Gaya and Aurangabad districts of Bihar. A huge haul of explosives was also recovered from the Bastar division of Chhattisgarh. In Gadchiroli, Maoists fired on police parties but no damage was caused. In Jharkhand too, Maoists exploded a series of landmines in the forests of Latehar and exchanged fire with police personnel, but there were no casualties on either side.

Amongst the various attempts by Maoists to disrupt the polls, two incidents stand out and remain a source of concern. On 7 April, three security personnel including a deputy commandant of the CRPF were killed and seven others were injured while attempting to defuse a landmine placed on the Banua-Jharna road near Dhibra in the Aurangabad district of Bihar. The incident took place about 500 yards from the Dhibra police station. Then on 12 April, in two separate incidents in Bastar division, Maoists blew up a bus and an ambulance carrying election security force personnel. In the former blast, seven people died and five were seriously injured. The latter incident resulted in seven fatalities, with four persons suffering serious injuries. An examination of these two incidents is necessary to suggest what needs to be done to minimise casualties to our police personnel.

India-China: A Water War over the Brahmaputra?

Article No. #4415 , 1 May 2014
Roomana Hukil 
Research Officer, IReS, IPCS
Email: Roomana@ipcs.org 

Recently, Claude Arpi, renowned scholar on China wrote about how China’s aspirations to divert the waters of the Brahmaputra River were feeding into mounting disagreements between New Delhi and Beijing. China has consistently been moving ahead with its dam construction projects and India has been pressing for a negotiation with the government of China to look into the proposed reduction in the diversion of the water flow of the Brahmaputra. Is a water conflict over the Brahmaputra River likely in the near future? What measures must the government in India, which will come to power following the conclusion of the ongoing election, adopt in order to resolve the water-sharing tensions between both states?

Water Conflict? No. Inevitable Tensions? Yes

Discourses over the waters of the Brahmaputra River have been doing the rounds ever since China’s announcement about the construction of three dams on the river last year. Despite diplomatic talks, China is keen to divert the waters from the Brahmaputra. In the past, China did not have a strong raison d'être to divert the flow of the river. China’s Vice Minister of Water Resources, Jiao Yong, stated in 2011 that the Chinese government was not planning to conduct any diversion projects along the Brahmaputra River given that there wasn’t a pressing need. 

However, at present, China’s per capita water reserve is approximately 2300 cubic metres – one-fourth of the world’s average. China is, therefore, considered as the 13th most ‘water-poor’ country in the world with 80 per cent of its cities severely water stressed. More so, China’s northern region possesses only 14.5 per cent of the entire country’s water resources. As water supplies tighten, the water quality is degrading, ecology is suffering, and lands are becoming barren. This threatens the country’s economic growth. Thus, the ever-increasing gap in the demand and supply chain in China’s northern region has now pushed the country to move forward with its many dam projects. 

Some thoughts on the State of India’s War on Terror

Paper No. 5693 Dated 30-Apr-2014

By Col R Hariharan

[Some of the points contained in this article were included in a TV interview in Chennai as a part of its coverage of the death of Major Mukund Varadarajan and Sepoy Vikram Singh in an encounter with terrorists in Shopian area (J & K).]

How do you see the death of Major Varadarajan who belonged to Chennai? What does it indicate about our fight against Jihadi terrorists in J and K?

Never before in Chennai had I seen such public participation in a military funeral as that of Major Varadarajan. This should remind all those who talk of Tamil separatism that the spirit of nationalism in Tamil Nadu is stronger now thanks to the martyrdom of young people like Varadarajan. However, regrettably the national TV media had little time for it. It devoted more time to the trivia uttered by Priyanka Gandhi in her electoral skirmish with Narendra Modi.

The death of two soldiers at the prime of their life is stark reminder to the nation that the war on terror in the country particularly in Jammu and Kashmir is far from over. According to the South Asia Terrorism Portal data, in J and K alone over 43,554 lives have been lost from 1988 (when terrorist activity was scaled up) to April 20, 2014. Among those killed were over 14, 676 civilians and 6,104 security forces personnel, the rest being terrorists. This works out to an average of about 145 lives lost every month! And that too in J and K alone!

If we consider the Left Wing Extremism (LWE) – the other major threat to our national security – the picture is even more shocking. In nearly eight and a half years from 2005 to April 2014, we lost a total of 6403 lives – an average of 64 people a month. 

Of course, these casualty figures do include the number of terrorists and extremists killed. But we have to take them into reckoning as they represent the loss of young productive human resource of the nation. The nation simply cannot afford to continue to lose over 200 lives a month due to terrorism and extremism. By very nature in a democracy the war against unconventional threat is prolonged and time consuming. And in a developing nation like ours terrorism cramps governance, stifles development programmes and depletes scarce resources.

Five Pakistani Militants We Should Be Paying More Attention To

May 1, 2014 · in Analysis

When it comes to Pakistan’s bad guys, leaders of the country’s major militant groups—such as Hafiz Saeed of Lashkar-e-Taiba and Mullah Fazlullah of the Pakistani Taliban—tend to hog the headlines.

Many more are less well known—yet still highly consequential. Five in particular are worth singling out—not just because they threaten stability, but because they foreshadow Pakistani militancy’s future trajectory.

The evolution of this trajectory will likely feature five distinct trends: Uncompromisingly violent anti-state militant factions constraining Pakistani government peace efforts; associations with a resilient al-Qaeda that remains fixated on both local and global targets; a re-emergence of India-focused militancy; sectarian extremists with strong political influence and associations with the state attempting to earn legitimacy from an increasingly radicalized society; and state assets violently turning on their patrons at a time when the Pakistani security establishment can ill afford new sources of unrest. The five men described below each exemplify one of these trends.

1. Omar Khalid Khorasani

Khorasani, who heads the Mohmand tribal agency branch of the Pakistani Taliban, may be the most dangerous Taliban leader in the country.

Even by the Pakistani Taliban’s barbaric standards, Khorasani is uncompromisingly brutal. In recent months, while his organization was attempting negotiations with Islamabad, the former journalist was implicated in several high-profile attacks. In February, he ordered the execution of 23 Pakistani paramilitary soldiers held in captivity since 2010. Pakistani officials believe he was also responsible for the bombing of an Islamabad marketplace in April, and suggest he also may have had a hand in an assault on an Islamabad courthouse in March.

Claiming responsibility for that latter attack was Ahrar-ul-Hind, which identifies itself as a splinter group of the Pakistani Taliban opposed to peace talks with the government. Given Khorasani’s recent emphatic rejections of negotiations, there’s reason to believe Ahrar-ul-Hind could simply be a cover for his Mohmand faction of the Pakistani Taliban.

Pakistan: A Different Agenda for Taliban’s Foot Soldiers?

Article No. #4412 , 30 April 2014
Rajeshwari Krishnamurthy 
Research Officer, IReS, IPCS 
Email: rajeshwari@ipcs.org 

Of late, the discourses on terrorism and terrorist cells operating from within and outside Pakistan have seen intensification. What are the motives of the Tehrik-i-Taliban Pakistan (TTP), given how leadership changes in the organisation have resulted in changes in its agendas? Do the foot soldiers and the leadership have varying agendas? If yes, how does the difference not become an operational obstacle?

The Leadership and the Foot Soldiers

The difference in the character of the TTP under the Mehsuds and later under Mullah Fazlullah is stark. Although the primary basis of the TTP’s actions under all the leaderships was that of enforcing Islamic rule, the Mehsuds employed violent strategies and their own interpretations of Islam, despite no formal training in the edicts. In fact, it appears that their primary objective was not the establishment of Sharia, but violence against the Pakistani establishment. Conversely, Mullah Fazlullah is a trained maulvi and comes from a background where establishing Sharia law is the primary objective.

Given how the TTP is not one single body but a consortium of various militias active in different agencies of Pakistan, how comfortable are the foot soldiers of these organisations with the changing nature of the operations? Is there scope for dissension among the ranks of the TTP and its franchisees over the modification of the objectives? What are the primary objectives these foot soldiers sign up to see achieved?

Demand and Supply Chain in Pakistan’s Terrorism Market

As the result of several decades of unrest and instability, most settled areas in Pakistan’s tribal agencies are impoverished lands. While many recruits, several in their early teens, are tapped from the madrasas that dot the Afghanistan-Pakistan border, many of these jihadists are foreign fighters.

In this context, it is important to understand the variations in the motivation of Pakistani and non-Pakistani jihadists to join militant groups. 

While several Pakistani jihadists are a result of years of Wahabi Islamic teachings in these Saudi-funded madrasas, a more important factor is the use of drones by the US. While the US’ drone attacks target militants holed up in the unforgiving terrains of western Pakistan, these attacks often result in several civilian deaths, and are callously termed ‘collateral damage’. Such losses brought upon by faceless predators from the skies in a community whose foundations are based on the idea of avenging injustice, serves as a primary motivator. This, clubbed with heavily radical teachings imparted in the aforementioned madrasas, often lead victims of such losses to join the ranks. Such recruits seek vengeance, and are not bothered much by organisational direction. 

How the U.S. Created, then Lost, the War in Afghanistan

April 30, 2014

It was a typical Kabul morning. Malik Ashgar Square was already bumper-to-bumper with Corolla taxis, green police jeeps, honking minivans, and angry motorcyclists. There were boys selling phone cards and men waving wads of cash for exchange, all weaving their way around the vehicles amid exhaust fumes. At the gate of the Lycée Esteqial, one of the country's most prestigious schools, students were kicking around a soccer ball. At the Ministry of Education, a weathered old Soviet-style building opposite the school, a line of employees spilled out onto the street. I was crossing the square, heading for the ministry, when I saw the suicide attacker.

He had Scandinavian features. Dressed in blue jeans and a white t-shirt, and carrying a large backpack, he began firing indiscriminately at the ministry. From my vantage point, about 50 meters away, I couldn't quite see his expression, but he did not seem hurried or panicked. I took cover behind a parked taxi. It wasn't long before the traffic police had fled and the square had emptied of vehicles.

Twenty-eight people, mostly civilians, died in attacks at the Ministry of Education, the Ministry of Justice, and elsewhere across the city that day in 2009. Afterward, US authorities implicated the Haqqani Network, a shadowy outfit operating from Pakistan that had pioneered the use of multiple suicide bombers in headline-grabbing urban assaults. Unlike other Taliban groups, the Haqqanis' approach to mayhem was worldly and sophisticated: they recruited Arabs, Pakistanis, even Europeans, and they were influenced by the latest in radical Islamist thought. Their leader, the septuagenarian warlord Jalaluddin Haqqani, was something like Osama bin Laden and Al Capone rolled into one, as fiercely ideological as he was ruthlessly pragmatic.

And so many years later, his followers are still fighting. Even with the US withdrawing the bulk of its troops this year, up to 10,000 Special Operations forces, CIA paramilitaries, and their proxies will likely stay behind to battle the Haqqanis, the Taliban, and similar outfits in a war that seemingly has no end. With such entrenched enemies, the conflict today has an air of inevitability-but it could all have gone so differently.

Myanmar: Peace in Kachin State?

Article No. #4414 , 30 April 2014
Aparupa Bhattacherjee 
Research Officer, SEARP, IPCS 
Email: aparupa@ipcs.org 

Ongoing conflicts between the Myanmarese army and the Kachin Independence Army (KIA) since 2011 have questioned all the peace deals signed between these two parties. The Kachin Independence Organisation (KIO), the political wing of the KIA, had signed a ceasefire agreement with the Myanmarese government in 1994. However, the recurrence of war led to the termination of the agreement in 2011. Several dialogues have been initiated since the 2011 clashes, however all them have failed to establish peace in the region. 

What are the obstacles in the path to a successful ceasefire agreement and establishment of peace in the region? 

The Game of Peace Talks

The year 2013 witnessed a series of unsuccessful peace deals that started with two meetings between the two parties in Ruili, China in the months of February and March. These peace talks led to the further signing of a preliminary peace deal agreement in May. However, ceasefire was not achieved. Since April 2013, the situation in Kachin started to worsen. A series of attacks by the Myanmarese army around the town of Mansi made the conflict worse. Amid all this, another peace deal was signed in the month of October. These unsuccessful peace deals questions their seriousness and the dedication of both the parties to peace in the region. There have been continuous attacks between the army and KIA. Self-defence and the curbing of smugglers have been used as a pretext by the army for attacks, whereas the KIA is busy playing the blame game. 

The first obstacle in the path towards peace in the region is the difference in demands; the government demands that the armed groups should give up their armed struggle in order to establish peace in the country. The armed ethnic group’s demands include not only a federal political system but also a federalist nature of the national army. The Myanmarese army primarily consists of people from the Burman ethnic group and a federalist army will ensure representation from all ethnic groups. Thus, the army will never consent to it. Furthermore there is also an increasing demand that the Myanmarese army should have lesser political authority in the government. The reframing of the 2008 constitution is highly expected to fulfil at least some of the demands.

A Long Way to Go

Second, although the government is pursuing a ceasefire agreement with the KIO, they are not clear about the plan of action after the ceasefire. If a ceasefire agreement is signed without the withdrawal of the Myanmarese army from the region and the reallocation of the disbanded KIO army, it will face the same plight as the 1994 ceasefire agreement. The readymade option that government prescribes to all dissolved militias is their recruitment in the border security forces. This idea had been refused by all the ethnic groups including the KIO. 

Economic reform: Can China escape its contradictions?

30 April 2014

China has made progress implementing the reform agenda of last November's Third Plenum. Private and foreign investors, especially those in Hong Kong, find themselves at the crux of Beijing's plans for markets to play a 'decisive' role in its statist economy. Two recent reforms are potentially momentous. First is the 'mixed ownership' model for state-owned enterprises (SOEs). Second is the Rmb550 billion 'through-train' cross-trading facility between the Hong Kong and Shanghai stock exchanges. While seemingly unrelated, these two developments are interwoven into a broader quest to make the economy more flexible, competitive and responsive to market signals.

State capitalism badly underperforms the private sector in China (see graph below). The result is a misallocation of capital on a grand scale, which worsened after the legendary 'command stimulus' of 2009 — headlined at Rmb4 trillion, but in reality perhaps an order of magnitude bigger if you count local government and associated credit spending. Beijing wants to purge these excesses by introducing private sector expertise and discipline.

That's where mixed ownership and the through-train come in. By allowing SOEs to share ownership of certain assets, and by permitting greater capital account exchange with the outside world, China's SOEs can be whipped into shape by sheer force of financial discipline. Actually, there is nothing much novel here. Socialist European nations championed mixed economies decades ago. But China's reforms are significant for their sheer scale, thus the potential upside if they succeed.

The poster-child of SOE reform is Sinopec, one of China's three oil giants. Sinopec is spinning off its retail marketing division, with some 30,000 petrol stations. There is undoubtedly upside to this business and the IPO could value the unit at US$50 billion. Sinopec will raise much-needed cash by bringing in outside stakeholders. But as any businessperson will tell you, majority control (and seats on the board of directors) ultimately counts for everything. Sinopec chairman Fu Chengyu proposes that only 30% be sold, broadly and preferably to domestic investors, who'll figure out among themselves their board representation. Sinopec will duly take note of their advice, no doubt.

Western Pacific Seas: Sounds of Distant War Drums?

Paper No. 5694 Dated 1-May-2014

By Dr. Subhash Kapila

The South China Sea and the East China Sea in the Western Pacific no longer stand confined to China’s maritime territorial sovereignty disputes between China and its neighbours but have emerged as the arena of a major power struggle between China and the United States for the mastery of the Western Pacific and in mid-2014 the sounds of distant war drums are discernible.

China right from the last decade has been boxing much above its true strategic weight by kind courtesy of United States permissiveness and resorted to unrestrained and wanton conflict- escalation in both the South China Sea and the East China Sea against Vietnam, the Philippines and Japan. China not having been checkmated in military occupation of islands belonging to Vietnam and the Philippines upped the ante in the East China Sea against Japan. One had seen this coming and reflected the same in one of my Papers of that time.

Right from early 2000s after the Hainan Island incident in which China had shot down a US plane, one had persistently reflected in my Papers two distinct strategic developments. The first one was that China was intent on initiating a new Cold War in the Pacific with the United States and the second strategic prediction was that armed conflict between China and the United States was inevitable with China intent on prompting an United States exit from the Pacific and the United States determined to stay embedded in the Asia Pacific.

The Cold War between China and the United States is already on undoubtedly despite the rhetoric to the contrary that flows out from Beijing and Washington. The explosive mix of military aggression and conflict escalation that China has inflicted in both the South China Sea and the East China Sea coupled with China’s fast-tracked naval build-up and the United States Strategic Pivot to Asia Pacific in response, are inexorably leading to a situation where one can hear the sounds of distant war drums, however much the United State wishes to avoid a war with China.

China is already in conflict with its neighbours both on its land borders and also on its maritime borders. So far, China too was shying away from any possible conflict with the United States because of its asymmetries of military power in relation to the United States. But lately China has started exhibiting strategic and military arrogance buoyed up by two factors. The first factor relates to its exponential accretion of military power especially naval and air-power which prompts China to perceive that the margins of its asymmetries with the United States stand greatly narrowed and brinkmanship to the extreme can be resorted to. The second factor is a Chinese gross misreading of United States will to use power to tame China in light of United States unremitting appeasement of China emanating not from US fears of taking on China but as a spillover of flawed US policy postulations on Russia.

The Philippines-China-U.S. Triangle: A Precarious Relationship

Published on The National Interest (http://nationalinterest.org)
May 1, 2014

Earlier this year, the Philippines risked permanent estrangement with China by [3]pressing ahead [3] (March 30) with its arbitration case before a United Nations Arbitral Tribunal in The Hague. The move came after a year of futile [4]diplomatic efforts [4] by the Aquino administration to peacefully resolve the territorial disputes. With its latest legal maneuver, the Philippines is trying to place maximum diplomatic pressure on China amid an [5]intensifying territorial dispute [5] in the South China Sea.

China [6]vehemently opposed [6] the arbitration case, and argued against the “internationalization” of what [7]it deems as [7] essentially bilateral territorial disputes to be resolved outside the court of law. [8]Since last year [8], China has repeatedly sought to discourage the Philippines from legally challenging what it considers to be its “indisputable” and “inherent” sovereignty over most features in the South China Sea. It even [8]threatened [8] the Philippines with sanctions and other punitive measures.

Against the backdrop of rising tensions between the Philippines and China, President Obama’s [9]recent trip [9] (April 28-29) to Manila couldn’t be timelier. Bereft of any [10]credible minimum deterrence [10] capability, the Philippines has sought deeper military cooperation with and commitment from its long-time ally, the United States. Shortly before Obama’s arrival, the two countries signed a [11]new security pact [11], the Enhanced Defense Cooperation Agreement (EDCA), which grants American troops rotational access to Philippine bases in Clark and Subic. In exchange, the Philippines will benefit from expanded joint-military exercises and enhanced interoperability with the U.S. military. The new agreement aims to strengthen bilateral defense cooperation in both traditional and nontraditional security realms.

While the latest agreement deepens the United States’ strategic footprint in Asia, adding much-needed momentum to the Obama administration’s [12]“Pivot to Asia” [12] (P2A) policy, the Philippines, in turn, has been slightly alarmed by the [13]lack of explicit American commitment [13] to come to its rescue in the event of a military conflict with China over disputed features of the South China Sea.

China: Ready To Fight Anyone, Anywhere, At Any Time And Win

April 30, 2014: China has been energetically using nationalism and the promise of the restoration of lost imperial territories to distract the population from the corruption and mismanagement of government officials. This is an ancient political technique that depends on near-total control of information available to their populations. The Internet threatens that and this is a new risk for those planning to build and maintain an empire. That’s because empires are costly and inefficient. Britain realized that by the 1940s and this was the main reason they got rid of theirs so quickly after 1945 and why the United States never took advantage of its power to create one. But the allure of empire remains, sort of as the ultimate luxury a state can indulge. Again, the Internet spreads the bad news about the real cause and effect of empire. China tries to cope with this by concentrating on imperial ambitions (natural resource rights from the ownership of uninhabited rocks and reefs in the South China Sea and elsewhere off the coast) that have some practical appeal. However when empires involve conquered peoples the cost goes way up, as the Chinese are rediscovering in their northwest (Turks) and southwest (Tibetans). A growing number of Chinese are aware of these angles and are not happy about it. But China is still police states with state-controlled media. Holding anti-government opinions is dangerous, especially if you express these traitorous thoughts in public. That means even unauthorized protests against pollution can get prosecuted and convicted in China. 

In furtherance of the imperial dreams China announced in late 2012 that beginning in 2013 it would start enforcing new rules that allowed Chinese naval patrols to escort or expel foreign ships from most of the South China Sea unless those ships have Chinese permission to be there. China did not start doing this right away. But over the last few months the Chinese have become more aggressive about enforcing this decree, without resorting to deadly forces. China is not using grey painted navy ships for this but rather white painted coast guard vessels. White paint and diagonal stripes on the hull is an internationally recognized way to identify coast guard ships. This is much less threatening than warships. China also calls in civilian vessels (owners of these privately owned Chinese ships understand that refusing to help is not an option) to get in the way of foreign ships the coast guard wants gone. Thus if foreign warships open fire to try and scare away these harassing vessels they become the bad guys. 

The U.S. has been recently been more active in describing how far it would go in resisting Chinese attempts to take control of the South China Sea. The U.S. recently pointed out that the sanctions being used against Russia could also be used against China. A trade war with the United States is the last thing the Chinese government wants right now, because they are having lots of problems with their economy. But the Chinese have used the South China Sea claims as part of a propaganda campaign to distract Chinese from the looming economic crises at home and backing off is not really a good option either. 

China to overtake US economy; India trumps Japan

By Dhara Ranasinghe | CNBC

China is set to overtake the U.S. as the world's number one economy, while India has jumped into third place ahead of Japan, according to a new study from the world's leading statistical agencies. 

The 2011 International Comparison Program (ICP), which involves the World Bank, assesses economies based on purchasing power parity (PPP), an estimate of the real living costs. The results revealed on Wednesday paint a new and different picture of the global economy compared with the last update in 2005.

The research puts China's GDP (gross domestic product) at 87 percent of the U.S. in 2011 and says the Chinese and Indian economies have more than doubled relative to that of the U.S. In the 2005 study, the ICP believed China's economy was less than half the size of the U.S., at 43 percent. 

"The United States remained the world's largest economy, but it was closely followed by China when measured using PPPs. India was now the world's third largest economy, moving ahead of Japan," the report said. 

It added: "The results indicate that only a small number of economies have the greatest shares of world GDP. However, the shares of large economies such as China and India have more than doubled relative to that of the United States." 

The ICP program is the largest global statistical operation, covering 199 economies from eight regions. It said that changes to its methodology help explain the estimates for the size of China's economy. 

Rapid growth has led many economists to anticipate that China, the world's second biggest economy, would move into the number one position over the next few years. The latest findings from the ICP could fuel a debate on whether that is likely to happen sooner rather than later. 

China Army Targets Students for Officers to Match Weapons

Apr 24, 2014

China’s military has used annual budget increases in excess of 10 percent to buy precision-guided weapons, fighter jets and an aircraft carrier. Now it’s seeking to upgrade its recruits to operate them.

For Wu, a 20-year-old journalism student at a university in Beijing, that means his college fees are paid and he has an extra 3,500 yuan ($561) a year to live on. Wu, who asked to be identified only by his surname because he’s forbidden from speaking publicly, takes extra lessons on war strategy alongside regular classes. He’ll join thePeople’s Liberation Army as a trainee officer when he graduates in 2016.

“In the past our weapons were quite primitive so you didn’t need too much knowledge,” Wu said, sitting in a cafe on a campus in the capital. “You just used a gun and that was OK. Now there’s a need for better quality people.”

China is following the example of the U.S. Reserve Officers’ Training Corps by increasing incentives for bright minds to serve in the armed forces. President Xi Jinping, the head of the Central Military Commission, has made an army that’s better prepared for combat a priority as China becomes more assertive in regional territorial disputes. China plans to fold developers of military hardware into listed state-owned companies, people familiar with the matter said this week, giving them access to capital markets as it prioritizes high-technology defense capability.

Yearning to breathe free

More of the middle classes are leaving, in search of a cleaner, slower life Apr 26th 2014 | SHANGHAI

FOR years Lin Chen resisted his wife’s entreaties to move abroad. Then, when their daughter was born in 2012, he started thinking about her schooling. He realised he wanted a less stressful education than the one he and his wife endured in their climb to the middle classes, and he wanted to leave space for fun. “My wife and I suffered a lot,” he says. “I don’t want my daughter to suffer through all that.”

And so the Lin family will soon be off to Adelaide, Australia, part of the greatest and most consequential wave of emigration in modern Chinese history: middle-class Chinese seeking not better opportunities or political freedoms but a better quality of life. Chinese emigrants are leaving good jobs, cashing out their high-priced homes (or investment properties) and leaving China’s rat race behind. They are unlikely to find better jobs anywhere else, but the air and water are less polluted where they are going, the social safety-net less frayed and the food safer to eat. And there is no one-child policy.

Not everyone who obtains a green card abroad wants to leave China. Some are global travellers who want a more convenient passport for border crossings. Some want an emergency-exit hatch should the Chinese economy get into trouble or the police come knocking. But many others are going for good, and unlike past waves of Chinese emigrants, they include accomplished mid-career professionals who have little to gain financially by leaving.

I’m outta here

The raw numbers, though impressive, are small as a percentage of the Chinese population. But they are big enough to make a splash on arrival abroad (see article). In the past decade 1m Chinese have obtained permanent-resident status in Canada or America, placing Chinese migrants first in Canada and second in America behind Mexicans. And the pace has quickened (see chart). About 80,000 Chinese every year are gaining permanent residency in America, almost five times the rate of the 1980s. Chinese also made up the largest group of immigrants in Australia with 80,000 arriving in the three years to 2012, just ahead of Britons and Indians (though Indians have surged ahead of late).

The Chinese Military Is a Paper Dragon

Corruption, bad neighbors, inflation and a demographic time bomb—these are just a few of Beijing’s woes 
Kyle Mizokami in War is Boring

In appearance it is very powerful, but in reality it is nothing to be afraid of—it is a paper tiger.—Mao Zedong on the United States, 1956

China’s rise over the past 30 years has been nothing short of spectacular.

After decades of double-digit growth, today China is the world’s second largest economy—and possesses an increasingly sophisticated military that’s among the planet’s most powerful. Despite China bordering a number of unstable countries, its borders are secure.


That wasn’t always the case. In 2,000 years, China has suffered invasions,revolutions and humiliations from the outside world—plus its own internal rebellions. It has been brutalized, conquered and colonized.

No longer. China’s defense spending has increased tenfold in 25 years. Beijing is building a powerful blue-water navy, developing stealth fighters and carefully experimenting with peacekeeping and expeditionary operations.

China’s military buildup, along with an aggressive foreign policy, has inspired a fair amount of alarm in the West. Some American policymakers consider Beijing to be Washington’s only “near-peer competitor”—in other words, the only country with the military might to actually beat the U.S. military in certain circumstances.

But they’re wrong. Even after decades of expensive rearmament, China is a paper dragon—a version of what Mao Zedong wrongly claimed the United States was … in 1956.

China’s military budget has grown by double-digits year after year, but inflation has eaten away at the increases. China’s army, navy, air force and missile command are wracked by corruption—and their weapons are, by and large, still greatly inferior to Western equivalents.

Yes, the People’s Liberation Army is slowly becoming more technologically advanced. But that doesn’t mean Beijing can mobilize its armed forces for global missions. Unlike the world’s main expeditionary powers—the United States and the U.K., to name two—China is surrounded by potential enemies.

Russia, Japan and India are all neighbors … and historic adversaries. China’s aggressive foreign policy targeting smaller states isn’t encouraging submission but resistance, as countries such as The Philippines and Vietnam ally with the United States, Japan and India.

China’s other neighbors are weak or failed states, such as Pakistan and North Korea. Their instability—or their outright collapse—could have serious security repercussions for China, and help explain why Beijing lavishes funds on its armed forces.

Order of battle

China has the world’s largest military, with no fewer than 2.3 million men and women in uniform. Another 800,000 people serve in China’s reserves and militias.

The PLA ground forces number 1.25 million men and women divided into 18 group armies, each similar to an American corps. Each army consists of three to five infantry and mechanized divisions—China has only one tank division.

These ground troops are mostly for homeland defense. For power projection outside its borders, China has three airborne divisions, two marine divisions and three marine brigades. Major equipment includes more than 7,000 tanks and 8,000 artillery pieces.


April 30, 2014

The agenda of President Barack Obama’s week in East Asia left little doubt that security was the paramount focus of his excursion. The largely unstated yet obvious object in this regard is China’s increasingly assertive behavior, given the disputes over the Senkaku/Daioyu Islands and the Second Thomas Shoal in the South China Sea. Obama’s cancelled visit to the region last October, combined with U.S. inaction over Russia’s seizure of Crimea, is said to have damaged U.S. credibility in Asia. Obama’s trip, with its focus on security, has repaired some of the damage. The ball is now back in China’s court, with leaders in Beijing now obligated to consider the stiffening resistance forming along the First Island Chain. American military planners, anticipating China’s next moves, are preparing for escalation, and a possible test of U.S. credibility.

Obama began his tour in Japan and immediately signaled the main theme of his week. He explicitly committed the United States to the defense of the disputed Senkaku Islands, whose possession and administration by Japan is challenged by China. Obama further signaled the importance of the U.S.-Japan alliance by agreeing to a formal state visit to Japan, which included a state dinner hosted by Emperor Akihito. In South Korea, Obama’s summit meeting with President Park Geun-hye focused on North Korea’s nuclear program and China’s seeming indifference to North Korea’s bad behavior. In Manila, Obama and Philippine President Benigno Aquino III signed a 10-year defense cooperation agreement that will facilitate an increased presence of U.S. troops, aircraft, and ships in the Philippines for training exercises and operations in and around the South China Sea.

To end the week’s security theme with an exclamation point, U.S. defense officials briefed the Wall Street Journal on beefed-up military options to respond to potential Chinese provocations in the East and South China Seas. These options reportedly include B-2 bomber flights near China and aircraft carrier strike group exercises near China’s coastal waters.

China Could Overtake the U.S. as the World’s No. 1 Economy This Year

A worker walks past a steel factory in Beijing on April 1, 2013Kim Kyung Hoon—Reuters
New data from the World Bank suggests China could surpass the U.S. as the world’s biggest economy as early as this year, a day that was always meant to arrive after China began its quest for wealth in the 1980s, but it will just veil the reality of its economic weaknesses 

China’s economy is catching up to the U.S.’s much more quickly than anticipated. That’s according to a new report from the International Comparison Program of the World Bank. 

The study recalibrates GDP statistics based on updated estimates of “purchasing-power parity” — a measure of what money can actually buy in different economies. In the process, the economy of China comes out far larger than we had previously thought. Its GDP surges to $13.5 trillion in 2011 (the latest year available), compared with the $7.3 trillion calculated using exchange rates. That catapults China’s economy much closer to that of the U.S. — at $15.5 trillion. Forecasting ahead, these figures show that China could overtake America as the world’s largest economy as early as this year

This day, of course, was always going to arrive. The ascent of China to the world’s No. 1 slot has been inevitable ever since the country embarked on its great quest for wealth in the 1980s. With a population heading toward 1.4 billion, the question has been when, not if, China will topple the U.S. from its lofty perch. Still, we can’t ignore the historic significance of that switch. The U.S. has been the globe’s unrivaled economic powerhouse for more than a century. The fact that China will replace the U.S. at the top is yet another signal of how economic and political clout is rapidly shifting to the East from the West. 

That quickly gets everyone’s passions boiling over. To many Chinese, becoming No. 1 is vindication for what they feel has been two centuries of humiliation at the hands of an aggressive West and proof that its authoritarian, state-capitalist economic model is superior to the democratic, free-enterprise systems of the U.S. and Europe. In the U.S., losing the top spot is seen as a symbol of America’s decline on the world stage. 

China May Be Biggest Economy, But Not the Best

7 APR 30, 2014

According to new data from the World Bank, Asia's developing economies appear to be even more powerful than previously thought. As measured by purchasing power parity, China's gross domestic product now seems poised to overtake America's as the world's biggest as soon as this year. India has leapfrogged into third place, while Indonesia rounds out the top 10. Predictably, headlines around the region are crowing about the beginning of the long-awaited Asian Century.

Yet a darker story underlies these giddy new figures. In terms of per capita GDP, India doesn't rank third but 127th. (Indonesia is 107th, and China 99th.) Perhaps more importantly, while growth has mostly thrived over the last 20 years, inequality in Asia has also risen dramatically -- from a reading of 0.33 to 0.46 between 1990 and 2010. Zero means perfect equality; the higher the number, the less egalitarian things are.

Those who lag behind may soon find it harder and harder to catch up. The roughly 1.6 billion people living on less than $2 a day -- a standard measure for global poverty -- are growing more vulnerable, according to the Asian Development Bank. These global poor confront a tsunami of risks from runaway inflation, to the impact of climate change on crops, Federal Reserve tapering, natural disasters, another global financial crisis, you name it.

What gives? While the macroeconomic picture in Asia has evolved in recent decades, barriers to economic mobility at the micro level persist. Thomas Piketty's bestseller "Capital in the Twenty-First Century" has lately drawn much attention to this problem. But in reading the book, I was struck more by its parallels to Joe Studwell's earlier "Asian Godfathers."

I caught up with Studwell in Hong Kong in August 2007, a time of great optimism and, it turns out, hubris, in Asia. It was exactly 10 years after the region's financial crisis, and vibrant growth had returned. GDP rates were booming, equities surging and government debt levels coming under control. But as Studwell predicted during our chat and in his book, the all-too-tight relationships between financial and political elites in Asia virtually ensured that inequality would widen even as GDP expanded. Sadly, he's been proven right.


By Michael Lelyveld

As China struggles to clear its skies of hazardous smog, some experts see signs that it is starting to get coal use under control.

China accounts for half the world’s coal consumption, making the high-polluting fuel a major cause of its air quality woes.

In a decade-long period ending in 2011, China’s coal burning more than doubled, while its share of global coal use soared from 30 percent to nearly 50 percent, the International Energy Agency (IEA) has said.

Last September, China’s government announced an anti-smog plan that would cut the country’s reliance on coal to less than 65 percent of its energy needs by 2017 from 66.8 percent in 2012.

While the national goal may be only a partial down-payment on curbing pollution, some analysts see greater benefits from additional measures that provincial governments are planning to take.

If the new efforts prove successful, they could have a major impact on world emissions of carbon dioxide (CO2) and the pace of climate change, said the environmental group Greenpeace East Asia.

“If achieved, the measures will not only fundamentally shift the coal consumption trajectory of the world’s largest coal consumer, but also significantly re-shape the global CO2 emissions landscape,” said Greenpeace in a report released on April 11.
Provincial plans

Greenpeace cited plans to control coal use in 12 of China’s 34 provincial-level governments that account for 44 percent of the country’s coal consumption.

Six governments have already targeted decreases as part of their anti-smog plans. The list is led by Beijing, which would cut 50 percent of its coal use by the end of 2017 from levels of 2012.

The Greenpeace analysis found that coal use could be trimmed by 350 million metric tons from previous growth forecasts, assuming that all provinces will reduce the rise in consumption by one-third as economic expansion slows.

If the trend continues to 2020, the savings could reach 655 million tons of coal, lowering CO2 emissions by 1.3 billion tons, the group said.
‘Close to’ on track

China’s government rarely reports coal figures, but in January, the China National Coal Association said consumption reached 3.61 billion tons last year, suggesting the estimated reductions by 2017 would be less than 10 percent of annual use.

But the projected savings in emissions would bring China’s releases “close to” the track that the IEA has calculated as necessary to hold the rise in global warming to 2 degrees Celsius (3.6 degrees Fahrenheit), Greenpeace said.


By Richard Kraemer and Maia Otarashvili

With the unfolding of the Ukraine crisis, Russian-American and Russian-EU relations have clearly reached their lowest point since the end of the Cold War. Furthermore, the impact and implications of Russia’s actions extend well beyond Europe and relations with the U.S., starting most notably with the Middle East. Western governments would do well to take account of the Kremlin’s efforts to reassert its influence in these regions and formulate a firm, committed, and unified response in defense of their shared interests.

Russia’s shocking abrogation of Ukraine’s sovereignty with its annexation of Crimea and subsequent incursions into eastern Ukraine have left policymakers around the world reeling. Putin’s unwillingness to comply with Washington’s and Brussels’ demands for Russia to honor Ukraine’s territorial integrity testifies to the death of the attempted “reset” of relations, launched five years ago at the London G20 summit. Since then, aside from a new nuclear arms reduction treaty and occasional bouts of diplomatic cooperation, relations have only deteriorated.

This regression is unsurprising given Russia’s trajectory under president Vladimir Putin. The Russian invasion of Crimea is simply a further – though much larger scale and more dramatic – chapter in a very familiar post-Soviet saga. Russia has repeatedly intervened, at times including military action, in the former USSR republics as a means of weakening or subordinating these neighboring governments and keeping them out of the orbit of the United States and the Western European powers. Moscow’s sponsorship of persisting conflicts in places such as Transdniestria[1], its belligerent invasion of Georgia in 2008 and, most importantly, its recent assault on Ukraine’s sovereignty and territorial integrity are emblematic of Russian designs to reestablish its hegemony on a regional scale.

Significantly, however, Putin’s attempts to reassert Moscow’s power are not limited to the Russian Federation’s “near abroad.” In the Middle East, Russia has doubled down in its support of its decades-long ally, Syria. Moscow also provides Iran effective political cover and technical assistance for its nuclear program; and it endeavors to deepen its relations with Egypt and even with Jordan. The Middle East region’s energy resources, potential industrial and arms markets, and export of radical Islamic ideology make it too important for Putin’s expansionist Russia not to compete actively against the U.S. and its allies.