Monday, February 26, 2024

Claude Arpi | China playing new border games close to Mt Kailash

Zorawar Singh in Western Tibet
My article Claude Arpi | China playing new border games close to Mt Kailash appeared in Asian Age and Deccan Chronicle.

A separate event needs to be noticed: the closure of the Kailash Yatra to Indian pilgrims.

Western Tibet has a rich historical background, particularly in proximity to Mount Kailash, near the trijunction between India, Nepal and Tibet.
It is the case of Purang/Taklakot and a place called Toyo, located a few kilometres away, which have gone down in history for the epic battle between the Dogras of Gen. Zorawar Singh and the Tibetans troops.
In December 1841, the Dogra troops, who had just conquered Western Tibet (known as Ngari), were defeated by the Tibetans -- and also by the winter.
The great Tibetan historian, Tsepon Shakabpa, thus described the battle of Taklakot/Toyo: “The Tibetan government quickly dispatched Ü Dapön [Gen.] Shedra Wangchuk Gyelpo and the Ü Tsang [Central Tibet] militia under the leadership of Cabinet minister Pellhün; when they arrived in Ngari, one regiment of the foreign army [the Dogras] was stationed at Rutok [near Pangong-tso], another was at Trashigang [near Demchok on the Ladakh border], and a third was at Rupshö [in Ladakh]. Secret preparations were made for the Tibetan troops to confront each [Dogra] unit. Zorawar Singh and the most seasoned [Dogra] troops, who were stationed at Taklakhar [Taklakot] Castle [in fact in Toyo] were confronted… In the eleventh month [December 1841], during the coldest weather of the year, the Tibetan troops attacked from all directions simultaneously.”
The fate of Zorawar Singh and his troops were sealed, according to Shakabpa: “Three days after the fighting began, heavy snow fell. Thus, the Sikh troops who were at Taklakot became frozen solid. Trembling under their difficulties, the Sikhs were attacked by the Tibetans in terrible hand-to-hand fighting… While Zorawar Singh was riding his horse, rushing back and forth, he was recognized by a Yasor called Mikmar. He threw a spear and Zorawar Singh fell from his horse. Leaping off of his own horse, Mikmar cut Singh’s head off and carried it into the middle of the Tibetan camp. This was seen by the Sikh [Dogra] soldiers, and they fled in whatever way they could.”
A few months later, Maharaja Gulab Singh smashed the Tibetan forces trying to invade Ladakh. Dapön Zurkhang and Dapön Pelzhi were captured and taken to Leh, where a peace treaty was signed between the Dogras and the Tibetans, confirming once more the traditional border between Ladakh and Tibet. The tomb of Zorawar Singh still exists in Toyo, which has recently come in the news, but for different reasons.
An article in the Chinese media mentions a newly-built village in Toyo: “China continues to promote the improvement of the rural living environment, paying close attention to greening [the area], beautification and [water] purification; the changes in Toyo are a concrete manifestation of the Ngari region’s efforts to build a beautiful and livable countryside.”
During the past three years, in Western Tibet alone, a total of 31 projects have been implemented to build liveable, “industrial” and beautiful villages, a local Communist Party cadre explains; in his jargon that it will be: “in accordance with the principles of beautiful leisure villages, happy and liveable villages, clean and tidy villages.”

But why a new village in Toyo?
Says Newsweek: “China appears to have completed the construction of a new dam in the country’s southwestern border regions, a project that could have far-reaching strategic implications for its southern neighbours India and Nepal.” Built on the Mapcha Tsangpo (or Peacock river, also known as Ghaghara or Saryu in India and Karnali in Nepal), it is a perennial source of fresh water water supply to the downstream populations.

What is strange is that the existence of this hydropower plant, located close to the Indian border, has not appeared in any published Chinese plan earlier.
Though satellite imagery only shows a medium river-of-the-river dam, without a large reservoir, India downstream should be concerned.
But there is more.
A new airport is coming up a couple of kilometres north of the hydropower plant and the “model” village. In June 2018, the Civil Aviation Administration of China had announced that Tibet would soon have three new airports. The Chinese-language press had given some information about the location of these three airports: one was to be located in Lhuntse, north of Arunachal Pradesh, the second was north of a border post with Nepal and the last in Purang.
Chinese website explained: “These three airports can be used for civilian use in peacetime, military aircraft training on the plateau; direct military use in wartime, holding military operations, will be able to play a very important role.”
Though many in India had forgotten about this announcement, the airport is now functional; on November 10, 2023, videos of the newly-built airfield appeared on the Chinese social media.
These three developments (model village, hydropower station and airport) should be seen as one, undoubtedly all are for dual (civil and military) use.
A separate occurrence needs to be noticed: the closure of the Kailash Yatra to Indian pilgrims. The 6,638-metre-tall diamond-shaped mountain is considered to be the abode of Lord Shiva and also one of the most sacred places in the Jain, Buddhist and Bon religions.
For centuries, pilgrims from India have visited the holy site; since the 1990s, they could cross into Tibet via Lipulekh Pass in Pittoragarh district and later enter Tibet via Nathu-la in Sikkim.
After the Doklam incident in 2017, the Indian yatris were not allowed to use these routes anymore.
As Beijing ignored Kathmandu’s request to permit the aerial sightseeing of Mount Kailash, Nepali tour operators decided to offer the yatris an alternative and a large number of devotees started using the Nepal route from Simikot to Purang by chartered helicopters; unfortunately, the scheme was subsequently closed due to the Covid-19 pandemic.
After the scheme reopened for Nepalis in 2022, the Chinese authorities did not allow Indian visitors to fly to Purang, though last year alone, Nepali tour operators received over 50,000 bookings from Indian pilgrims for the sacred pilgrimage.
According to the Kathmandu Post, a new alternative has been found: a flight could remain in Nepalese territory and have a “remote” darshan of the sacred mountain: “Shree Airlines operated a first-of-its-kind aerial pilgrimage tour of the holy places, making the pilgrims’ dream come true without a Chinese visa” -- explained a communiqué last week.
It is clear that China does not want Indians to have a real darshan of the holy mountain, or even come close to the place where Zorawar Singh is buried; and these latest developments in the area explain why.

Tuesday, February 20, 2024

The only question is can Xi Jinping and his advisors be swift and agile enough to change the tide and restore the trust in the ailing Dragon?

My article The only question is can Xi Jinping and his advisors be swift and agile enough to change the tide and restore the trust in the ailing Dragon? appeared in Firstpost

Year of the Dragon: China's economic challenges and surging uncertainty ahead

Here is the link...

We are entering the Year of the Dragon. It is said that the next 12 months will be energetic; the year may give rise to celebrations and grandiose projects and may even be auspicious for marriage, birth and new beginnings, but it may also be a time of surprises when opportunities can be grasped or lost. Natural disturbances can also be expected.
The element presiding over the coming year is Wood which: “gives an animal mobility and vitality, a supple and balanced creative power, and a quality of softness. Wood years are years of transformation," say the astrologists.

What does it mean for the Middle Kingdom?
We shall not go for any predictions but look at some facts. The Dragon Year will certainly see some great surprises and disturbances in the coming year in China and first in the economic domain.

China’s growth
The International Monetary Fund (IMF) recently noted that “uncertainty surrounding the Chinese economy is high. The organization expects the world’s second-biggest economy to grow by 4.6% this year and slow down to 4% in 2025,” adding that “the ongoing housing sector crisis could further dampen private demand and confidence and lead to budget strains.”
Last year, the Chinese economy officially grew by 5.2 per cent, but the figures coming from Beijing are most of the time exaggerated.
The IMF report also warned: “Deeper-than-expected contraction in the property sector could further weigh on private demand and worsen confidence, amplify local government fiscal strains, and result in disinflationary pressures and adverse macro-financial feedback loops. Staff estimate that, in such an adverse scenario which entails a deeper and more prolonged contraction in the property sector, GDP in 2025 could be 1.8% lower compared to the baseline (of 4%).”
The IMF believes that weaker exports and lending could exert greater strain.

Housing is an issue
According to The Nikkei, China is grappling with the aftermath of its bursting housing bubble: “Given weak sales and an inventory build-up in the sector, it is now expected to take more than five years for the country to shed excess stock.”
As China’s housing demand will likely fall further due to a shrinking population and rising living standards, the world is bracing for a surge in exports of cheap building materials from the country.
The Tokyo-based publication explained: “Intense price-cutting competition is underway as the country’s housing market becomes saturated. The level of excess stock, calculated by subtracting all the residential floor space sold from the total area of homes built, reached just under 5 billion sq. meters at the end of 2023. Assuming each home has a floor space of 100 sq. meters and three family members, China now has excess space to house 150 million people, equal to about 50 million homes.”

 Gold purchase
Another sign of the weakening of the economy is that gold purchases have soared 30 per cent, mainly because of the businesses’ anxiety.
In another article, The Nikkei said: “Chinese gold purchases rose 30% in 2023, as the country’s central bank bought the commodity to replace its dollar holdings amid tensions with the US and individual investors sought a haven for their assets as the economy stumbled.”
It quoted data from the World Gold Council’s 2023 Gold Demand Trends report: “The world’s central banks acquired 1,037 tonnes of gold last year on a net basis, the second most in data going back to 1950 behind only the 1,082 tonnes for 2022. The People’s Bank of China’s net purchases totaled 225 tonnes, the highest since 1977, the earliest data available for the country.”
The article cited geopolitical risks such as Russia’s invasion of Ukraine which drove up gold purchases in countries like Poland, which bought 130 tonnes last year, and Libya, which acquired 30 tonnes.
It perhaps explains that gold ingots have become popular even with Chinese individual investors.

Citing the National Bureau of Statistics, Wion News Channel observed that the Consumer Price Index (CPI) experienced a 0.8 per cent year-on-year drop, marking the most significant decline since September 2009, following a 0.3 per cent decrease in December: “China encountered its deepest deflationary threat since 2009 as consumer prices witnessed a severe decline in January, highlighting the persistent challenges for the world’s second-largest economy in its struggle for recovery.” The news channel further commented: “The persistent deflationary pressure depicted in China’s CPI data underscores the urgency for decisive and swift actions by policymakers to prevent the entrenchment of deflationary expectations among consumers.”
There is no doubt that the post-COVID recovery has been lacklustre.

Foreign companies
On 24 January, the German Chamber of Commerce Abroad published a survey which found that 46 per cent of German companies operating in China believed that their Chinese competitors will become leaders in their respective industries within the next 5 years: “About 83% of German companies surveyed believe that China’s economy is declining, though 64% anticipate this downward trend being just a temporary 2-3 year slowdown.”
The next day, Lianhe Zaobao, the largest Singaporean Chinese-language newspaper said that the Germans found that “the number of German companies withdrawing or considering abandoning the Chinese market has doubled in the past four years. The survey’s findings, which come as China’s economy continues to weaken, highlight the challenges facing German companies operating in China. Top concerns cited by German companies include increased competition from local Chinese companies, unfair restrictions on market access, economic headwinds and geopolitical risks.”
The same Singapore publication commented on the vacancies of office place in Beijing; it observed: “Demand for office space in Beijing has fallen as China’s economy weakens and companies are becoming more conservative about expansion.”
Citing the Chinese economic publication, it added that the vacancy rate for Beijing office space has hit a 13-year high of 20.4 per cent, the first time in recent years that the rate has goes over 20%: “The shrinking technology industry in Beijing, coupled with conservative growth strategies and cost-cutting measures adopted by companies facing stiff economic headwinds, have combined to dampen office rental demand.”
The Caixin explained that the trend was attributable to companies relocating their headquarters out of Beijing, downsizing and taking less rental space, and an overall lack of new demand to replace surrendered office space.

Not overtaking the US
In an interview quoted by Reuters, Cornell University professor Eswar Prasad pointed out the fact that China’s economy “faces a variety of fragilities” and the Middle Kingdom’s economy may not overtake the US’ soon. “The likelihood of the prediction that China’s GDP will one day overtake that of the US is declining,” said Eswar Prasad, who served as an IMF official in charge of China.
When asked about his forecast, Prasad answered: “China faces a variety of fragilities, including undesirable demographics, a collapsing real estate market, deteriorating investor sentiment at home and abroad and the lack of clarity over a new growth model. Even a 4 per cent-5 per cent growth rate will be difficult to sustain over the next few years. The likelihood of the prediction that China’s GDP will one day overtake that of the US is declining.”
It is a fact that the Chinese stock market has been continuously declining since mid-2023, reaching new lows as the Shanghai Composite Index fell below 2,700 points on 2 February.

How to vent frustration?

On 3 February, the Epoch Times noted an interesting development; many investors who suffered heavy losses flooded the comments section on the official Weibo account of the US Embassy in China.
As the official propaganda machinery controls the Chinese Net, they found a way to vent their frustration, some even imploring the United States to take over the Chinese stock market.
One Chinese investor commented: “We know they are lying, and they know they are lying. They know we know they are lying, and we know they know we know they are lying. But they still keep lying. Can you tell me which ‘glorious era’ this description refers to?”
Another post by the US embassy about the Third Anniversary of the Military Coup in Myanmar was flooded with messages from Chinese stock investors asking for help from the US: “America, please come and rescue the hundreds of millions of A-share investors in deep trouble,” another wrote “Save the poor Chinese stock investors. I love America,” while someone said: “The official media doesn’t let us speak. I come here to request rescue.”
It is certainly not the US which will save the Chinese investors; the only question is can Xi Jinping and his advisors be swift and agile enough to change the tide and restore the trust in the ailing Dragon? One can seriously doubt it.