The US-China Cold War is now playing out in Pakistan

By Johann Chacko

I’m watching you.

On Sept. 01, days before US secretary of state Mike Pompeo and chairman of the joint chiefs of staff, Gen. Joseph Dunford, were due to arrive in Islamabad, a Pentagon spokesman announced that the department of defense intended to permanently cut $300 million from funds allocated to support Pakistan in the fight against America’s enemies in Afghanistan.

So does this mean America and Pakistan are finally breaking up?
The short answer is no. 

As much as both states are fed up with each other, they remain far too co-dependent to simply walk away.
What we are seeing instead is a tough and protracted re-negotiation over the terms of the relationship. The question of Pakistan’s role in Afghanistan is not necessarily the hardest issue; there might even be convergence given the greater realism in Washington, Rawalpindi, and Islamabad.
The far bigger question hanging over the Pompeo-Dunford visit is what India and Pakistan’s role will be in the emerging cold war between the US and China. 

Despite Pakistani hopes, China is not yet willing or able to spend what it takes to completely replace America as Pakistan’s primary strategic partner. 

US economic and financial cards remain hard to match, and the result, for the time being, is likely to be a series of compromises that are uncomfortable and dissatisfying for all parties.
The US government began paying Pakistan what it calls “Coalition Support Funds” (CSF) back in 2002, shortly after it began military operations against the Taliban. 

In theory, the CSF compensates Pakistan for specific costs incurred in deploying tens of thousands of additional troops to the Afghan border, and for the use of Pakistani airfields, ports, and roads to resupply American forces in Afghanistan.
In reality, the Americans treated the funds as a reward to cement a long-term commitment to its cause from the Pakistan Army in the face of deep and wide popular opposition over the violations of Pakistani national sovereignty and significant civilian casualties.
The Pakistani government became highly reliant on this funding—a congressional research service report in 2015 estimated that the $13 billion in disbursed CSF funds had paid for 20% of Pakistan’s military spending (especially food and ammunition). 

The Americans were willing to overlook what they suspected was creative accounting of the bills as long as Pakistan delivered results.
Over the last decade, the metric for results has shifted as trust in the Pakistan army within the Pentagon, Congress, and three successive White House administrations has plummeted. 

This shift accelerated after the “drawdown” of US forces in Afghanistan in 2014, which led to repeated bloody Taliban and Haqqani offensives, vexing and embarrassing Republicans, Democrats, and non-partisan professionals alike.
The Pentagon, with the support of Congress, retaliated with steep decreases in allocated military aid (at least 73%), as well as the conditional withholding of budgeted CSF “reimbursements” under Obama in 2016. 

In July 2017, under Trump, all CSF payments were frozen, and in January 2018 the allocation was cut by $700 million.
Put another way, the longer Pakistan resists American criticism, not only has it become harder to get those carrots, but the carrots have become much, much smaller.
Pakistan has not yet retaliated by squeezing US supply lines to Afghanistan, but it has not scaled back its covert support to the Haqqanis or the Afghan Taliban either.

However, this cycle of denial and punishment may have an end in sight. 

Caught between converging US and Chinese interest in a peaceful and stable Afghan endgame, the Pakistani military appears to be more open to a settlement that Washington DC could live with.
For that matter, the US has begun quietly negotiating with the Taliban without any of the preconditions it previously held. 

All of this is likely to form a major element of Pompeo’s meetings with the new government of Imran Khan and general Dunford’s discussions with army chief general Qamar Javed Bajwa.
There is no doubt that many in New Delhi are concerned the result might be a settlement that allows the Taliban to retain arms and gain a share of the national government, while still remaining tethered to Rawalpindi. 

This draws attention to the larger truth that US-Pakistan relations (and even US-India relations) are more inextricably impacted by the state of US-China relations than ever before.
Pakistan’s urgent need for up to $12 billion in relief from its looming balance-of-payments crisis dwarfs the question of military aid and constitutes the strongest source of American leverage. 

Given the Trump administration’s determination to use all available means of persuasion, it is particularly significant that the US has not linked the bailout to questions of Afghanistan or terrorism, but instead to China’s role in Pakistan.
Just over a month ago, secretary Pompeo called for the International Monetary Fund (IMF) to reject Pakistan’s bailout request on the grounds that there was no need for American taxpayers to repay Beijing’s predatory lending underwriting the China-Pakistan Economic Corridor (CPEC).
Pompeo’s statements must be understood in the context of the US National Security Survey that last year labeled China a “strategic competitor” engaged in “economic aggression.” 

One result has been the rapidly escalating multi-billion trade war that could damage both countries, the World Trade Organization, and the global economy.
Another result is the pressure on CPEC, the largest single component so far in Xi Jinping’s “Belt and Road Initiative” (BRI) intended to plug Eurasia into the Chinese economy, ensuring it an agenda-setting global role.

Pakistan hopes that China and Saudi Arabia might offer the financial relief that would provide an alternative to the IMF and American pressure. 

Although this is not the kind of role that China wants, an IMF bailout would lead to a disclosure of the highly secretive terms of CPEC deals, leading to renegotiation or even cancellation and undermining Beijing’s geo-economic goals.
This is an important moment for Chinese leadership as it decides what its BRI plans are worth, and what Pakistan is worth to those plans. 

Compromise between the two options is also possible; a limited form of additional Chinese assistance would reduce what was needed from the Saudis and the IMF, reducing American leverage on a range of issues. 

The status quo would limp on, but the result will be even greater Chinese influence in Pakistan.
As the battling winds from both Washington and Beijing pick up in intensity, and observers wonder who will win out, Pakistan’s historical role as the region’s weather-vane seems set to continue.

Chinese Paranoia

China Tries To Encircle India. It Won't Work
By Panos Mourdoukoutas 

China’s efforts to encircle India won’t work. 

That’s the message India and its allies, America and Japan are prepared to send to Beijing in a joint naval exercise.
China has an official and an unofficial agenda for the Indian Ocean.
The official agenda is to foster trade and economic growth for all countries in the region, from Pakistan to Sri Lanka, to India, and Bangladesh.
The unofficial agenda is to encircle India, something investors should keep a close eye on, as it is expected to raise geopolitical risks in the region.
To execute this agenda, China has been pursuing massive infrastructure projects -- like CEPC in Pakistan, and the building and modernizing of ports in both Pakistan and Sri Lanka, something these countries needed very badly.
“China has clearly responded to a strong demand from Indian Ocean countries for better maritime infrastructure and increased connectivity,” says Nilanthi Samaranayake, strategic studies analyst, CNA, a non-profit research organization in the Washington area. 

“Some countries see their ports as being too congested or unable to handle larger container ships, so projects by Chinese companies are seen as helping to build or modernize infrastructure and promote wider national development goals.”
There are clear signs that these projects are beginning to yield results for China's official agenda. 

The China-Pakistan Economic Corridor (CPEC) is changing life in China’s Northwest Xinjiang Uyghur region, bringing something special to the region: seafood from Pakistan.
This little bonus is being shipped by container trucks through the corridor, which currently accounts for 2 percent of the total trade between the two countries; and more goods are expected to come through CPEC from the Middle East and Africa.
“Regarding India, it’s important to note that some of China’s maritime infrastructure developments have facilitated India’s trade, such as through the port of Colombo,” adds Samaranayake.
But China’s enormous investment in CPEC and port infrastructure in the Indian Ocean serves much more than trade. 

It advances Beijing’s “String of Pearls” strategy, as well as its unofficial agenda to encircle India through its arch-rival, Pakistan.
“Besides having investments that have purely commercial goals in Pakistan as they would in any other country, the Chinese have two main goals in investing in that particular country,” explains Dimitrijevic. 

 “First is to continue the “String of Pearls” strategy of developing commercial and military outposts along their main maritime trading route. These include the Strait of Malacca, Sri Lanka, Pakistan, the Maldives, the Strait of Hormuz and Somalia. There is a second reason for the Chinese to invest and that’s to make India feel China’s strong presence, in its neighbor and arch-rival Pakistan.”
That could explain India’s unease with China’s ambitious Indian Ocean agenda. 

“Despite the commercial benefits of this activity, India is concerned about the strategic implications of China’s increasing commercial and military presence in the Indian Ocean,” says Samaranayake. “China continues to deploy naval task forces in support of counterpiracy operations and is building a base in Djibouti. This is a region that India sees as its primary area of interest, so concern about China’s expansion of Indian Ocean activity is understandable.”
Understandable or not, China’s unofficial agenda to encircle India won’t work. 

New Delhi and its allies—the US and Japan—won’t let it happen. 

And they are prepared to send this message to Beijing with a joint naval exercise in the Malabar in the Bay of Bengal this coming July.

Welcome to an emerging Asia: India and China stop feigning friendship while Russia plays all sides

By Harsh V Pant

In a hard place.

After a few timid signs of warming, Sino-Indian relations seem to be headed for the freezer. 

While Beijing refuses to take Indian security concerns seriously, New Delhi may have decided to take the Chinese challenge head-on. 

To complicate matters for India, its erstwhile ally Russia, which has become a close friend of China, is showing interest in establishing closer ties with Pakistan.
The latest move that clenches teeth in India is China refusing to lift a hold on Pakistan-based Jaish-e-Mohammad chief Masood Azhar, accused of plotting multiple acts of terrorism against India, and blocking him in December from being listed as a terrorist by the United Nations. 

Since March, China has blocked India’s attempts to put a ban on Azhar, under the sanctions committee of the UN Security Council, despite support from other members of the 15-nation body. 

In response, India has gone beyond expressing dismay by testing its long-range ballistic missiles—Agni IV and Agni V—in recent weeks. 

Pakistan, aided by China, has also jumped in by testing its first sea cruise missile that could be eventually launched from a Pakistani submarine.
China has upped the ante, indicating a willingness to help Pakistan increase the range of its nuclear missiles. 

China’s official mouthpiece, Global Times, contended in an editorial: “if the Western countries accept India as a nuclear country and are indifferent to the nuclear race between India and Pakistan, China will not stand out and stick rigidly to those nuclear rules as necessary. At this time, Pakistan should have those privileges in nuclear development that India has.”

China’s $46 billion investment in the so-called China-Pakistan Economic Corridor, or CPEC, also troubles India as the land corridor extends through the contested territory in Kashmir which India claims as its own. 

India views CPEC as an insidious attempt by China to create new realities on the ground and a brazen breach of India’s sovereignty and territory. 

The Chinese media have suggested that India should join CPEC to “boost its export and slash its trade deficit with China” and “the northern part of India bordering Pakistan and Jammu & Kashmir will gain more economic growth momentum.”
New Delhi has questioned if China would accept an identical situation in Tibet or Taiwan, or if this is a new phase in Chinese policy with China accepting Pakistan’s claims as opposed to the previous stance of viewing Kashmir as disputed territory.

Faced with an intransigent China, India under the centre-right government led by Narendra Modi is busy reevaluating its China policy. 

Modi’s initial outreach to China soon after coming to office in May 2014 failed to produce any substantive outcome and he has since decided to take a more hard-nosed approach. 

New Delhi has strengthened partnerships with like-minded countries, including the United States, Japan, Australia, and Vietnam. 

India has bolstered its capabilities along the troubled border with China and the Indian military is operationally gearing up for a two-front war. 

India is also ramping up its nuclear and conventional deterrence against China by testing long-range missiles, raising a mountain strike corps for the border with China, enhancing submarine capabilities, and basing its first squadron of French-made Rafale fighter jets near that border.
More interesting is a significant shift in India’s Tibet policy with the Modi government deciding to bring the issue back into the Sino-Indian bilateral equation. 

India will openly welcome the Dalai Lama, Tibet’s spiritual leader who has lived in exile in India since 1959, at an international conference on Buddhism to be held in Rajgir-Nalanda, Bihar, in March. 

And ignoring Beijing’s protests, the Dalai Lama will also visit the Indian state of Arunachal Pradesh which China claims as part of its own territory.
After initially ceding ground to Chinese sensitivities on Tibet and refusing to explicitly acknowledge official interactions with the Dalai Lama, a more public role for the monk is now presented as an essential part of the Indian response to China. 

In the first meeting in decades between a serving Indian head of state and the Dalai Lama, Indian President Pranab Mukherjee hosted the Buddhist leader at the inaugural session of the first Laureates and Leaders for Children Summit, held at the president’s official residence in New Delhi in December.

Pawn for giants: China strives to curb the influence of the Dalai Lama, who lives in India. The religion emerged in India during 5th century BC and has numerous sects.

China has not taken kindly to these moves by India and vehemently opposes any attempt to boost the image or credibility of the Dalai Lama.
China has been relentless in seeking isolation for the Dalai Lama and often succeeds in bullying weaker states to bar the monk. 

After the Dalai Lama’s November visit to the predominantly Buddhist Mongolia, where he is revered as a spiritual leader, the nation incurred China’s wrath and soon apologised, promising that the Dalai Lama would no longer be allowed to enter the country.
But India is not Mongolia. 

There is growing disenchantment with Chinese behaviour in New Delhi. 

Appeasing China by sacrificing the interests of the Tibetan people has not yielded any benefits for India, nor has there been tranquility in the Himalayas in recent decades. 

As China’s aggressiveness has grown, Indian policymakers are no longer content to play by rules set by China. 

Although India has formally acknowledged Tibet as a part of China, there is a new push to support the legitimate rights of the Tibetan people so as to negotiate with China from a position of strength.
This Sino-Indian geopolitical jostling is also being shaped by the broader shift in global and regional strategic equations. 

Delhi long took Russian support for granted. 

Yet, much to India’s discomfiture, China has found a new ally in Russia which is keen to side with it, even as a junior partner, to scuttle western interests. 

Historically sound Indo-Russian ties have become a casualty of this trend and to garner Chinese support for its anti-West posturing, Russia has refrained from supporting Indian positions.
Worried about India’s growing proximity to the United States, Russia is also warming up to Pakistan. 

The two held their first joint military exercise in September and their first bilateral consultation on regional issues in December. 

After officially lifting an arms embargo against Pakistan in 2014, Russia will deliver four Russian-made Mi-35M attack helicopters in 2017 to Pakistan’s military. 

It is also likely that the China-backed CPEC might be merged with the Russia-backed Eurasian Economic Union. 

Jettisoning its traditional antipathy to the Taliban, Russia indicates a readiness to negotiate with the Taliban against the backdrop of the growing threat of the Islamic State in Afghanistan. 

Towards that end, Russia is already working with China and Pakistan, thereby marginalising India in the regional process.
As the Trump administration takes office in Washington on Jan. 20, it will be rushing into headwinds generated by growing Sino-Indian tensions and a budding Sino-Russian entente. 

Trump’s own pro-Russia and anti-China inclinations could further complicate geopolitical alignments in Asia. 

Growing tension in the Indian subcontinent promises to add to the volatility.

China's Strategic Encirclement Of India’s Core Interests

By Bhaskar Roy

Having failed to constrict India within South Asia with its “String of Pearls” Strategy, China has now embarked on a new initiative to trip India’s growing comprehensive national power (CNP) and influence beyond South Asia.
India’s neighbours swam with China periodically, depending on the government in those countries. For example, the Mahinda Rajapksa government in Sri Lanka jumped into China’s lap for their own political reasons. 

The Mathiripala Sirisena government has restored the balance.
The BNP led four party alliance government (2001-2006) in Bangladesh brought relations with India to the lowest ebb. 

The alliance had parties like the Jamaat-e-Islami which were beholden to Pakistan and actively complicit in the savage rape and attempted extermination of the pro-liberation Bengalees in 1971. They were natural allies of not only Pakistan but also China which supported Pakistan. 

The return of the Awami League to power changed this policy drastically. 

The Awami League government, due to practical necessity and real politics, crafted a friendly relationship with China, but not at the expense of their relationship with India. 

China, however, is trying to entice Dhaka, but this does not worry India because India-Bangladesh relationship has more than political market imperatives. 

There is a cultural and historical conjunction.
Nepal has been vacillating between India and China. 

Lodged between the two giant countries, they are trying to get the best out of the two. 

China recognises India’s influence in Nepal, but has been consistently trying to weaken the India-Nepal relationship.
Pakistan has emerged as China’s mainstay in the region and extends to the Gulf, the Central Asian region, and now they are trying to draw in Russia in this ambit. 

Weakening India-Russia relations is one of its aims. 

With its promised 46 billion investment in Pakistan for the China-Pakistan Economic Corridor (CPEC), Control of the Gwadar Port (a military project), primary arms and defence equipment supplier and recent acquisition of 40 percent of the Pakistan stock market by a Chinese conglomerate, Pakistan is fast emerging as a country under Chinese suzerainty. 

Evidence suggests Pakistan may soon become a platform for the projection of both soft and hard power for being along the route envisaged for the “One Belt, One Road” (OBOR) project. 

China is unlikely to declare Pakistan as one of its “core” interests, but it is already acting as such.
Lately, China has been expressing concerns about achieving the full potential of the CPEC. 

In an article in the Communist Party affiliated newspaper Global Times (Dec. 28, 2016), Wang Dehua, Director of the Institute of Southern and Central Asian Studies, Shanghai Municipal Center for Internal Studies, wrote that the CEPC was facing challenges. 

He went on to describe the project as having “significant economic, political and strategic implications for both China and Pakistan”.
Wang wrote this in the context of a spat between the Chinese Chargé d'Affaires in Islamabad Zhao Lijian and a journalist of the Pakistani newspaper Dawn. 

The concerned journalist asked Zhao some uncomfortable questions including use of Chinese prisoners as labour. 

The senior Chinese diplomat lost his cool in a public place, which is very uncharacteristic of the Chinese.
Wang Dehua revealed that Chinese investment was raised to $51 billion from the initial $46 billion. The Chinese party media have extolled the virtue of the CPEC not only for China and Pakistan but other countries of the region including India, Iran, Afghanistan and Russia. 

The emphasis has been more on India, suggesting that India joining the project could help reduce tensions between India and Pakistan. 

Simultaneously, there is a suggestion to link Gwadar and Chabahar ports as sister ports and sister cities.
The CPEC is the flagship project of the larger OBOR strategic conception of extending China’s circulatory system far and wide. 

It has political and strategic penetration as significant benefits. 

Most important is the fact that it is Xi Jinping’s prestige project. It cannot be allowed to fail at any cost. 

It is also part of China’s great power signature.
At the same time, Beijing is ramping up pressure on India in a shower, trying to destabilise India’s emerging foreign policy. 

Beijing’s stand will have serious negative implications especially on the biggest threat to the world at this moment, terrorism. 

In the last week of December, China vetoed India’s move to designate Masood Azhar, head of Pakistan-based terrorist organisation Jaish-e-Mohammad as a “terrorist” at the UN Committee 2167 on terrorism. 

This, when the organisation itself is designated as a terrorist organisation by the same committee.
This one move by China has hit at the very roots of the global movement against extremism and terrorism. 

Read plainly, China will use terrorism as a political weapon against perceived enemies, in this case India.

It also encourages Pakistan to use terrorism with impunity against India, Afghanistan and even, perhaps Bangladesh.
India is determined to continue its efforts to bring other Pakistani-based and backed terrorists in front of the 2167 committee. 

China is the only member of their 15 member committee to oppose the move against Azhar. 

In a manner China stands isolated.
China took umbrage and accused India of interfering in China’s internal affairs after the Indian President met His Holiness the Dalai Lama at a function which was totally non-political. 

Their official media threatened India of retaliation of the kind they subjected the tiny country of Mongolia after Dalai Lama’s visit to Mongolia that was a purely religious one. 

Mongolia is a Buddhist Country, mostly of the Gelugpa sect of Buddhism which the Dalai Lama heads spiritually. 

This is a stupid threat. 

Mongolia a tiny land locked country, with a population of around two million, is dependent on China for outside access. 

Such threats do not impress the Indian government and the Indian people. 

The Chinese threat appears to be an act of frustration.
Nevertheless, Tibet is a declared core interest of China, hence the Dalai Lama. 

The 80 year spiritual leader has withdrawn himself from politics, but his influence and reverence among Tibetans inside China and outside is palpable. 

The Chinese have not been able to come to a firm conclusion whether the living 14th Dalai Lama or deceased 14th Dalai Lama will be to their interest.
The Chinese leadership has tried to denigrate the Dalai Lama in all possible ways, calling him a ‘splittist’ (separatist), ‘devil’, ‘wolf in sheep’s clothing among other things, but these have not impressed anyone. 

Beijing suspects India is using Dalai Lama as a ‘card’ against China.
India has accepted Tibet Autonomous Region as a sovereign part of China (2003). 

The Tibetan refugees in India are not allowed political activities. 

Successive governments in New Delhi have bent over backwards to accommodate China’s concerns. But if China continues to attack India on this issue, India will be forced to fight back: Allow the Dalai Lama and the generally accepted Kargyupa head Ughen Thinley Dorjee freedom to move around India including Tawang and the rest of Arunachal Pradesh.

China is trying to push the OBOR to and through Nepal and Bangladesh. 

They hope that through persuasion from these two countries India may succumb and agree to join the OBOR in the interest of its good neighbourhood policy. 

If India does not relent China may seek alternative policies in India’s neighbourhood to constrict India. 

The Global Times has already hinted at this.
Beijing remains determined to keep India out of the Nuclear Supplies Group (NSG). 

It has now objected to India’s successful testing (Dec. 16, 2016) of the 5000 kms nuclear capable ballistic missile Agni V. 

In a sharply worded statement Chinese foreign ministry spokespersons threatened to take this issue to the UN Security Council resolution 1172 after the 1998 nuclear tests by India and Pakistan. 

The resolution passed at the heat of the moment and engineered by China and the US calling on the two countries to stop further nuclear tests, cap their nuclear weapon programmes, cease all fissile material production, and end development of ballistic missiles capable of carrying nuclear weapons. The resolution, however is non-binding. 

China’s threat falls through the floor.
Since then, India has come a long way on the nuclear issue. 

It issued a moratorium on nuclear testing, announced no first use of nuclear weapons policy and signed the India-US nuclear deal. 

India, however, will have to counter Chinese pressures in several such areas in the future.
The Chinese spokesperson also said that “China maintains that preserving the strategic balance and stability in South Asia is conducive to peace and prosperity of regional countries ‘and beyond’. Basically, the statement implied that India may have disturbed the strategic balance in South Asia and beyond, without counting its own intercontinental nuclear capable ballistic missiles and other weapons. 

As China its military development is defensive and not aimed at any country, so is the official India position.
But things between India and China may get worse if the CPEC and OBOR falter seriously. 

This is closely linked to Xi Jinping’s politics and stature of “core” leader of the Chinese Communist Party. 

The 19th Congress to the party will be held in autumn this year and major leadership changes will take place. 

Xi cannot have any chinks in his armour.