DPG China Monitor

Vol. V, Issue 4

Date: May 02, 2022
As the India-China border standoff in Eastern Ladakh continues, the Indian Army is working on a long-term infrastructure development plan to connect the Line of Actual Control (LAC), from Eastern Ladakh to the Northeast. This entails connecting existing roads and infrastructure which will in turn facilitate deployment and monitoring of the LAC. Meanwhile, as part of its summer strategy in the face of a continued standoff, the Indian Army is planning on holding existing positions along the LAC, including the location of reserves in the vicinity, to deal with contingency situations.

India rejected Beijing’s proposal on disengagement of troops from Patrolling Point (PP) 15 in the Hot Springs area of Eastern Ladakh around the time of the Chinese Foreign Minister’s visit to New Delhi. The reason for rejection was disagreement between the two sides over their respective understanding of the LAC intersection at PP 15. The Indian position was that the acceptance of the proposal would have pushed back Indian troops several kilometres from the existing alignment of the LAC, in contrast to a minimal withdrawal by the Chinese troops.

In India’s neighbourhood, the political uncertainty in Pakistan, including the change of power and support of the Pakistani military of the US, has raised questions about China-Pakistan relations and the future of the China-Pakistan Economic Corridor (CPEC). Meanwhile, the growing narrative in crisis-hit Sri Lanka holds China responsible for pushing the country into a debt trap. Even as China has refused to restructure existing loans, the Sri Lankan government is discussing the possibility of securing a bridging loan from Beijing for repayment of its outstanding debt.

The US Department of Defence (DoD) in its public version of the National Defence Strategy has described China as its “most consequential strategic competitor”. Reacting sharply, the Chinese Ministry of National Defence (MND) described this characterisation as “inconsistent with President Biden’s statement” at the March 18 Xi-Biden video call in which he had reiterated that the “US does not seek cold war with China; it does not aim to change Chinese system; the revitalisation of NATO alliance is not targeted at China; the US does not support Taiwan independence and Washington has no intention of seeking a conflict with China”.

China’s new security agreement with the Solomon Islands has sharpened US-China rivalry in the Indo-Pacific. Beijing has contended that the agreement is aimed at “promoting social stability and long-term peace” in the region. Washington in turn has warned Honiara that the US would “respond accordingly if steps are taken to establish de-facto permanent [Chinese] military presence, power projection capabilities, or a military installation on the island”.

Meanwhile, the AUKUS security alliance declared plans to cooperate on developing Hypersonic weapons. Reacting to this, the Chinese MFA “urged Australia, UK, and US to abandon their cold war mindset and zero-sum game”. Beijing believes “the ultimate goal of AUKUS is to build a NATO replica in Asia-Pacific serving the US hegemony”.

Amidst the ongoing Russia-Ukraine conflict, NATO Secretary-General Jens Stoltenberg claimed that the allies see it as a “serious challenge” that China has not condemned Russia over its invasion of Ukraine. Importantly, Stoltenberg reiterated NATO’s intent to take into consideration systemic challenges to democracies posed by “China’s growing influence and coercive policies”. The European Union also remains concerned about China’s tacit diplomatic support to Russia in its war in Ukraine. The European Commission’s President, Ursula von der Leyen described EU-China relations as “strategically important” and “challenging”, while stressing that the EU will continue to encourage Beijing to play its part in a peaceful and thriving Indo-Pacific.

The Russia-Ukraine conflict has heightened concerns over the Chinese threat to Taiwan. US Secretary of State, Antony Blinken, during a Senate Foreign Relations Committee hearing, maintained that Washington will support Taiwan’s efforts to build “asymmetric” defence capabilities meant to deter an attack by mainland China.

China’s Gross Domestic Product (GDP) growth slowed to 4.8 percent in the first quarter of 2022 because of the COVID-19 lockdown in financial capital Shanghai, even as more pain for the country’s economy was forecast ahead. The IMF downgraded China’s GDP growth estimate for 2022 from 4.8 to 4.4 percent, citing a “worsening” economic situation.

President Xi Jinping chaired a CPC Political Bureau Meeting on the economy. The CPC’s top leadership vowed to “contain the pandemic [by adhering to zero-covid policy], stabilise the economy, address the concerns of foreign investors, and pursue development while ensuring national security”.