A Chinese village in Arunachal, India-China trade in 2020, and a Xinhua send-off for Trump
Welcome to today's The India China Newsletter. It’s a hastily written newsletter at the end of a busy Monday so please ignore typos.
Today's big story is an exclusive report from Vishnu Som at NDTV, who reports China has built a village 4.5 km into what India sees as its border, in Arunachal Pradesh. (This is in the eastern sector of the India-China border, and not near the current focus of tensions in Ladakh in the western sector.)
The report is worth reading in full, and publishes new satellite images.
It was only in November that another Chinese border village built on disputed land with Bhutan made the headlines.
This is the response from India's Ministry of External Affairs (via Sidhant Sibal)
Why This Matters
This presents a headache for Delhi which has already faced questions over whether there were intelligence lapses (or a misreading of intelligence) before last year's transgressions in May in Ladakh. Incidentally, India's foreign minister met with the parliamentary consultative committee on foreign affairs for three hours last Friday and took questions on the border crisis last year and India’s response. The Times of India reports he told the committee he believed China's actions were a reaction to India's upgrading of border infrastructure.
Note that the MEA hasn't denied the story for now. "Along the border areas" is a key phrase in its response. I would probably expect people to play down the story by pointing out that China's construction is within what China sees as its territory and on land that it has probably controlled for years (which Vishnu's report notes too, including with a military presence there.)
I still see this as a significant development, because along with last year's crisis, it suggests to me that is China no longer recognising differences in perception of the LAC (which was something that has been written into previous border agreements) and believes it has the right to exercise its control in overlapping areas. If you recall, China's official recounting of last year's crisis which began in the Galwan Valley also suggested it was responding to India's construction activity in one of those areas on what it saw as its perceived side. Considering there are some 23 such spots in all sectors, this is neither going to be the last such incident nor does it bode well for the future of managing the border.
China's economy grew 2.3 per cent last year. This is the slowest since 1976, which would ordinarily be bad news, but also means China will be the only major economy to grow in 2020. The South China Morning Post has an explainer making sense of today's data dump with all the numbers you need to know.
Here are two great threads with two contrasting perspectives on today's data from who are, in my book, two of the sharpest observers of China's economy:
Michael Pettis
And The Economist’s Simon Rabinovitch
India's trade with China fell (unsurprisingly) in 2020 but exports reached a record high (surprisingly) bringing the deficit to a five year low. I looked at the data for The Hindu and what it says about the trade relationship.
On India-China trade relations, the Global Times has a piece saying it may be too soon to be a turning point.
Nayanima Basu writes in the Print with a reality check for India's trade ambitions after the EU-China deal:
It seems that China is able to impose itself as a critical business partner even at a time when countries have been grouping up against its increasing belligerence under the Xi Jinping administration. India has been a rare exception in maintaining a consistent stance against China in terms of trade, blocking Chinese investment in April last year and walking out of the RCEP in November 2019. This stance has been bolstered by the Ladakh standoff.
What it means is that while leading countries that are part of the large-scale and complex global value chains and supply networks have begun to find ways to do business with China, India will be the only country to be left out of all such trade and economic blocs or groupings.
This statistic on China’s shipbuilding blew my mind:
China's shipbuilding industry saw increased output in 2020 while maintaining the world-leading position in terms of completion volume and new and holding orders, according to the Ministry of Industry and Information Technology (MIIT).
China's completion volume of ships rose by 4.9 percent year on year to 38.53 million deadweight tonnes (dwt) last year, accounting for 43.1 percent of the world's total, MIIT data showed.
And finally...
A quite extraordinary send-off for Trump from Xinhua:
No matter what other absurd measures Washington will introduce in the coming days to tarnish China-U.S. relations, they will not change the course of China's development and the course of China-U.S. relations. In other words, the anti-China policy of the current U.S. administration will only end in failure. China will maintain strong unity, conduct its own activities effectively and set its own calendar for doing so.
Certain U.S. politicians have left a reputation of destroyers of the international order, world peace and stability, and human rights in the world. Time is short for them to wake up to this reality and cure their madness, which is a stain in world history of development.
On a final note: good riddance to the current U.S. administration and its final madness.
Thank you for reading!