CUTS Washington Monthly Brief
#27, June 2020
Time for China to Behave
While the world grapples with the Covid-19 pandemic, tensions in the Himalayas and in the South China Sea are surging. In both cases, rival parties claim it as an attempt by the other for exploiting the pandemic situation. However, popular perception is increasing against China.
In the Himalayas, it is emboldened in view of its brutal skirmish with India in eastern Ladakh of the Line of Actual Control (LAC) on June 15th, 2020 in which 20 Indian soldiers were killed with nail-studded iron rods, batons and other improvised weapons. Such a cold-blooded offensive is symbolic of China’s growing aggression everywhere, but particularly in the Himalayas despite its long-standing understanding with India for resolving differences at the LAC through dialogue. Fact is that the LAC has not been turned into an accepted boundary in spite of several efforts by India. It suits China to allow the flux to continue and use it to make further claims plus keep the low profile conflict simmering.
As it is the Chinese who have claimed Tibet as part of their country when it has always been independent. India made a mistake in the past by recognising China’s suzerainty over Tibet, though tried to correct it by hosting the Tibet government in exile in India. Tibetans don’t love China and its government in exile has also moved the UN Human Rights Council in Geneva recently for violation of human rights by China.
On the other hand, China’s claim over the South China Sea in its entirety is happening with frequent militarisation of the region. Despite objections by other legitimate claimants, China continues to bully them. For instance, in April when many countries in the Indo-Pacific region got increasingly busy with Covid-19 response, China saw it as an opportunity to stake administrative control over the Paracels and Spratly Islands and Macclesfield Bank that have multiple overlapping claims. It also stepped up its presence around the disputed Senkaku Islands annoying Japan. 
As a consequence, China continues to face growing condemnation from rival claimants and even risks confrontation with the United States and the European Union, and its allies: Japan and Australia. On Friday, the 26th of June, 2020, while slamming China’s muscle flexing in the South China Sea, the Association of Southeast Asian Nations (ASEAN) in a Joint Statement, a big trade partner of China, stressed on the importance of non-militarisation and self-restraint in the conduct of activities, among others, particularly in an implied reference to China. The ASEAN leaders urged for peaceful resolution of disputes in accordance with the international law - the United Nations Convention on the Law of the Sea (UNCLOS).
Alas! Despite a possibility to be seen as a responsible power in the fight against the Covid-19, China continues its penchant for taking missteps. It is trying to prove that it is the most powerful country in Asia Pacific and others should kowtow to it.
What China is under estimating is that trade works both ways, i.e. healthy trade relations contribute to peace and prosperity. When countries are faced with such antagonistic acts, they will stop or reduce trade with China which can be quite harmful to its economy, even if it means hurting themselves.
Pradeep S. Mehta

P.S. Whenever a bully is faced resolutely by a weaker person, it retreats. If Vietnam could beat the USA, why does China think it is invincible?

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India plans list of substitute nations for critical imports
The government is working on a list of alternative countries that could be suppliers of critical components that cannot currently be manufactured domestically, officials said. “DPIIT (Department for Promotion of Industry and Internal Trade) is working with the industry to line up a list of low-quality imports from China. The next step is to substitute them, internally or externally,” a government official stated. “The engagement looks to firm up tariff and non-tariff measures to curb imports of raw, intermediary and finished products from China.”
Is the U.S. restriction on immigrants a gain or loss? 
The U.S. President Donald Trump on June 22, 2020 has suspended the H-1B (high skilled workers), H-4 (spouses of H-1Bs), L-1 (intra-company transfers) visas, among others, until December 31, 2020. It has caused a deep sense of anxiety and uncertainty among the best and brightest talent (and their dependents) in and out of the country. In an already worsening political and economic scenario, this action has further added to the enormous pressure on immigrants and the businesses, among others, in the U.S. Even worse, the “proclamation” issued by the White House in this regard describes the best and brightest talent as ''aliens who present a risk to the U.S. labor market following the Coronavirus outbreak''. The first edition of this Occasional News Wrap (ONW), among others, highlights further challenges to the U.S. economy and politics posed by this action and its worldwide impact with particular focus on India.

Having ploughed through the tough terrain of specialty drugs in the US, Indian pharma rethinks route
In the hope of going up the value chain, generics-dependent Indian pharma companies ventured into the specialty-drugs market in the US. Barring Sun Pharma, none of the players has been able to make much headway. A few remain optimistic, while others are tweaking their strategies.

Indian Roots, American Soil: A Survey of Indian Industry’s Business Footprint in the United States
The sixth edition of the Indian Roots, American Soil report continues to examine the contributions of Indian industry in the US via a survey of 155 responding companies spread throughout the 50 US states, as well as the District of Columbia and the territory of Puerto Rico. In addition to listing the top states for investments and job creation, this edition also denotes Indian industry’s contributions to local communities through corporate social responsibility (CSR) programs, their financing of US-based Research and Development (R&D) projects, and their perceptions of states with the most business-friendly environments.


Energy Security Concerns And US Tensions May Boost Demand For High-Polluting Fuel In China
As China tries to rescue its economy from the pandemic crisis, the government is likely to respond with support for more consumption of domestic coal, analysts say. Coal production surged 9.6 percent from a year earlier in March, nearly erasing a 6.3-percent decline in the first two months of the year. Coal output closed the quarter down just 0.5 percent despite nationwide lockdowns, while gross domestic product plunged 6.8 percent.
Lessons from Covid-19: Energy security through indigenous manufacturing
The global economy is witnessing a volatile situation, especially since supply chains across continents were heavily dependent on China. Global manufacturing companies have already started looking for alternative destinations to set up manufacturing facilities to de-risk themselves. Once the world gets past this pandemic, global supply chains are bound to realign.

A new approach to scaling-up renewable power in emerging markets
Nearly 840 million people live without electricity in the world today, and the global demand for energy is only growing. Without more sustained and strengthened action, 650 million people will have no power within the next decade. With the world going through an unprecedented pandemic, providing affordable energy to the unserved population is even more critical for saving lives, powering health facilities and keeping people connected at home in the short term - and also to enable recovery of the markets in the mid-term.
U.S. warns Hitachi not to sell U.K. nuclear project to China
The administration of U.S. President Donald Trump has warned Hitachi Ltd. not to sell its nuclear power project in Britain to China due to security concerns, The Sunday Times has reported. China General Nuclear Power Corp., the country’s largest state-owned nuclear power company, is keen to acquire the project, according to the British newspaper.


Countering China's aggression: US bill seeks to train Indian fighter pilots
The United States will offer fighter jet training to India, Japan and Australia even as it plans multiple initiatives to counter China’s aggression across Asia Pacific including its standoff with India along the Line of Actual Control. The National Defence Authorization Act (NDAA) for the 2021 fiscal year starting October, which the US Senate took up on Thursday, June 25th 2020, seeks fighter jet training detachment for India, Japan and Australia in the US Pacific territory of Guam.
Tanvi Madan on Indo-US relations post-Galwan
’It is worth keeping in mind that it is the vision of India as a strong, prosperous or growing, democratic power that makes it attractive to the US as a counterbalance and a contrast vis-à-vis China—but also more broadly. If India falters over time across those three dimensions, Washington will get disillusioned. As my book shows, that is part of what led to the unraveling of the India-US alignment in the 1960s.” That’s Tanvi Madan, senior fellow at the Brookings Institution and author of the recent book, Fateful Triangle: How China Shaped U.S.-India Relations During the Cold War
Global Governance From The Perspective Of US President Trump
Pursuit of Peace and Development has been cherished both by nations and the international community. The U.S. under the Trump administration, in particular, has made it a specific policy and manifested a synergy of both in the government’s many decisions. The first one has been a very conscious one to take the U.S. out of the wars and conflicts in which the previous governments had embroiled the country, such as in the Middle East and Afghanistan.

The art of war and Sino-Indian business
While soldiers of the world’s two largest armies faced-off along the Sino-Indian border this summer, Chinese firms in India were more preoccupied with paperwork than politics. Several Chinese venture capital funds had just filed their applications to invest in Indian industry and startups.The Narendra Modi government had made clearance for foreign direct investment flowing from China, among others.


Emerging Views and News on China's Role in the COVID-19 Pandemic
With more than 10 million cases and 500,000 deaths, the human and economic cost of the COVID-19 global pandemic continues to haunt the world, despite some experts hope that the worst is over. The geopolitical fallout of the pandemic is even more threatening than the disease. Rise of counter narratives, misinformation and propaganda politics along with rising tensions in the Himalayas and South China Sea of the Indo-Pacific region, among others; continue to imperil the recovery while posing threat to international peace and security. Keeping this and other factors, CUTS WDC released the 4th and 5th editions of this continued Occasional News Wrap (ONW) in June 2020.

Ladakh clash is freezing out China’s Huawei in India
The escalation of India-China tensions and the loss of lives of soldiers appear to have finally pushed India to freeze out Chinese telecom equipment makers from the country, at least on a limited scale. The Department of Telecom will ask state-run telecom companies, BSNL and MTNL, to cancel a tender floated on 4G equipment and to rework it to keep Chinese companies out.
Data localisation: roadblocks and the way forward
Over the last couple of years, data localisation has become a hotly debated issue right from the time the Reserve Bank of India came out with its notification mandating ‘storage of payment system data’ within India. Subsequently, the proposed Personal Data Protection (PDP) Bill, 2019, also envisages a graded localisation regime for different categories of data.

The Art Of The Trilateral Deal? US Nuke Agreement With Russia, China Proving Difficult
While the United States and Russia were satisfied after their jump-started nuclear talks in Vienna on June 22, Washington was clearly disappointed that China rejected its special invitation. “It is regrettable that China stood us up,” Marshall Billingslea, the U.S. special presidential envoy for arms control, said in Brussels on June 25. “They didn’t just stand up the United States and Russia, they stood up the world when they refused to come to Vienna.”