Asean, according to some accounts, came very
close to rupture last month. During the summit, the Philippines and Vietnam
were denied the opportunity to voice their concerns about China’s increasing military
assertiveness in the South China Sea —including the seizure of a new shoal of
reefs. Cambodia had earlier conveyed to both countries that it did not want the
issue brought up, while those countries contended it was their right to do so
and Asean had always had a tradition of supporting their own — even if only
perfunctorily — against outsiders. Nobody in Asean, however, had expected
Cambodia to go as far as it did — turning off Philippine Foreign Minister
Albert De Rosario’s microphone the moment he touched on the subject (blamed
conveniently, of course, on a ‘technical glitch’).
Leave aside the rupture and the
frenzied media speculation, what happened last month was typical Chinese
diplomacy at work — clunky, clumsy and crude. The one seeming flaw with China
(and not just Chinese diplomats) is that they take grave offence at words. In
essence, much of the Chinese diplomacy consists of being polite and assuming
that being polite somehow translates into problem- solving. Contrast this with
the US’s method which accepts harsh verbal criticism in public and fiery
exchanges in private, aimed specifically at thrashing out issues. This is a
narrative that seems common to most diplomats:
the Indian, the American or any other that, when confronted with a situation
— say, “You chaps transferred nuclear bomb technology to Pakistan” — the
standard response is denial. And, when the denial is refuted it is treated as a
sign of bad manners. Such behaviour is hard to translate culturally, but at
some level combines the culture of speech restrictions in China with that
age-old Asian tradition of ‘saving face’. Of course, the Chinese also tend to
have completely bizarre public temper tantrums, most famously referring to
former Hong Kong Governor Chris Patten as a “prostitute”, and far worse
adjectives for the Dalai Lama.
True, in the Asean summit China
has scored a temporary victory but at what cost? First the Chinese machinations
are out in the open — essentially buying Cambodia (and to some extent Laos as
well) by massive investment and infrastructure projects, in a way that only
China is capable of. But this has been an expensive manipulation that has cost
billions of dollars in infrastructural investment to score a mere censorship
victory. Contrary to the Confucian dictum, “Give a man a fish and he lives for
a day, but teach a man to fish and he and his family live to a ripe old age”,
the Chinese aid is fundamentally bribery. If China says it will construct a
bridge, it does so — but all the raw material machinery and labour force come
from China. It also does not promote any local economies or skill sets. In a
sense, it was this approach to aid, as a subset of Chinese economic
colonialism,s that scared Burma to such a point that the generals were willing
to give up visible power to get rid of what they perceived to be a Chinese
takeover by other means. In effect, China scared Burma into doing what it did
more than Indian engagement and Western sanctions ever managed to achieve.
Cambodia, of course, still hasn’t felt this, but it is well on its way to
learning the cost of Chinese assistance.
In India, most of China’s
infrastructure project proposals have been blocked on security grounds and most
Chinese products sold in India could well constitute ‘dumping’ — giving China
very little by way of ‘leverage’. Given this, Beijing played a seemingly
innocuous card a few months back — when China National Petroleum Corporation
signed what could be a far reaching agreement envisaging cooperation across the
entire gamut of activities from exploration to point of sale. On the face of
it, this seems to enable India to acquire Iranian hydrocarbons, while
maintaining a straight face to US diplomats and deny sanctions-busting of any
kind. From the Chinese point of view this is an insurance policy against their
emerging naval containment — a containment in which India plays a big role.
Given that the Oil and Natural Gas Commission is the weaker partner in the
deal, China gains significantly from this partnership. As energy security seems
to be India’s foremost priority, China will attempt to leverage ties with the
US against viable energy security guarantees inherent in this deal. This gives
India a fundamental interest in preventing any escalation vis-à-vis China. A
lot of this has to do with India’s emerging naval game plan — in effect
creating the capability to choke off the Moluccas Straits and starving China of
energy shipments, while the US and allied Navies tie down China’s power
projection capabilities in the South China Sea. China can attempt a continental
balancing against India but the logistics of the Tibet plateau make such a
proposition ruinous, though the threat can always be held out.
China, therefore, has just
incentivised India to tone down. The possibly linked precursor to the deal saw
India withdrawing from its allotted exploration blocks in the South China Sea —
widely seen as capitulating to Chinese pressure. Several Vietnamese in private
conversations admitted that they felt let down and blindsided by India, and
while accepting ONGC’s feasibility assessment, hoped the MEA would have been
more sensitive with the timing and tenor of the announcement.
The downside to the Chinese
calculus is that the CNPC, having much deeper pockets, greater expertise and a
much better portfolio, holds the swing power in the ONGC-CNPC construct. Should
the containment of China gain momentum, India’s negotiating position within
that construction increases significantly — benefitting from Pax Americana’s
assurance of freedom of navigation, and access to markets denied to Chinese
investments. This mirrors how India’s bargaining position vis-a-vis Iran
improves significantly post-sanctions. India, therefore, also has an inherent
interest in intensifying the naval containment of China — to balance off its
weak negotiating position on the energy front.
This definitely is a very subtle
and nuanced game that involves greater cooperation with China, while also
encouraging others to be increasingly antagonistic towards it. Withdrawing from
Vietnamese oil concessions is not the way forward. Far from it, the Philippines
and Vietnam need all the help they can to stand up to and hopefully provoke
ever clumsier responses from China. For that, Indian policy planners need to
get rid of their almost paralytic fear of China which results in ad hoc and
ill-considered tactical moves by these countries.
Abhijit Iyer-Mitra
Business & Investment Opportunities
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