About Chellaney

Professor, strategic thinker, author and commentator

Why a de facto Japan-India alliance can be a game changer

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Indian Prime Minister Narendra Modi, left, meets with Japanese Prime Minister Fumio Kishida in Tokyo on Sept. 27, 2022. © Reuters

The India-Japan relationship is central to Indo-Pacific region’s power equilibrium and stability

Brahma Chellaney, Nikkei Asia

Japanese Prime Minister Fumio Kishida’s trip this coming weekend to New Delhi, close on the heels of Australian counterpart Anthony Albanese’s own India tour, is indicative of growing strategic cooperation among the Indo-Pacific region’s major democracies.

Just as Germany’s rapid rise prior to World War I led to the Triple Entente among France, Britain and Russia, China’s aggressive expansionism has given the key Indo-Pacific democracies strong impetus to work together as a countervailing coalition.

The Quad, though without the form of a formal alliance, represents an emerging entente among the Indo-Pacific region’s four leading democracies: Australia, India, Japan and the U.S.

More fundamentally, the Indo-Pacific power balance will be determined, first and foremost, by events in East Asia and the Indian Ocean. This in turn makes the Japan-India relationship central to the region’s power equilibrium and stability.

Unlike the U.S. and Australia, India and Japan, which share frontiers with China, have seen their security come under direct pressure from Chinese President Xi Jinping’s muscular revisionism.

Kishida has pledged to double defense spending over the next five years following his government’s release of a new National Security Strategy which concluded that the country faces “the most severe and complex security environment since the end of World War II.”

This would potentially give Japan the world’s third-largest military budget, after the U.S. and China.

India, now No. 3 in defense spending, has been locked in a tense, 34-month military standoff with China along their disputed Himalayan border after being taken unawares by stealth incursions into Ladakh, its northernmost territory. India-China relations are at their lowest level in decades as clashes continue to erupt intermittently.

By locking horns with Beijing despite the risk of full-scale war, India may have openly challenged Chinese capability and power in a way no other power has done yet in this century.

Yet there is growing recognition in New Delhi and Tokyo — this year’s Group of 20 and Group of Seven presidents, respectively — that no single democratic power can impose sufficient costs on Xi’s regime for its maritime and territorial revisionism, much less compel Beijing to change course.

In this light, Japan and India, which are China’s main peer rivals in Asia and are strategically located on its opposite flanks, aim to frustrate Beijing’s ambition to achieve hegemony in Asia by forging deepening strategic and economic bonds.

By working together to constrain Chinese behavior without provoking escalation or open conflict, Japan and India can also help stabilize Asian power dynamics.

To be sure, Japanese and Indian defense priorities are not the same.

As an island nation, Japan has traditionally focused on maritime defense, a posture reinforced by the growing frequency of China’s forays into the territorial waters and airspace around the Senkaku Islands, which Beijing calls the Diaoyu.

China’s “gray zone” tactics just below the threshold of armed conflict have been so successful in the South China Sea that it is seeking to replicate them against Japan in the East China Sea.

India, faced with the strengthening China-Pakistan strategic nexus, maintains a land-based defense posture. It is the only Quad member to have gone to war with China in the post-World War II period.

There are important parallels between the way Xi’s regime is pursuing its territorial revisionism against Japan and India, including following a strategy of attrition, friction and containment to weigh them down and strengthen its own claims of sovereignty over disputed areas.

Against this backdrop, Japan and India share common strategic objectives in the Indo-Pacific region. An economically ascendant India and a politically rising Japan are both seeking to uphold the present Asian order. After all, the alternative would be a Sinocentric Asia inimical to their interests.

Unlike China, India and Japan are not seen as hungry for the land and resources of others. Indeed, Japan has not fired a shot in anger since its defeat in World War II, while India’s rise has not been accompanied by greater assertiveness toward its neighbors.

In fact, Japan-India cooperation is driven by complementary interests, the absence of historical baggage or disputes, and a shared vision for a rules-based order free from unilateralism or coercion.

To underpin a liberal and values-based order, the two countries in 2017 created the Asia-Africa Growth Corridor, but it remains much smaller than China’s ambitious Belt and Road Initiative. In India’s politically sensitive northeast region, sandwiched between Chinese-ruled Tibet, Myanmar and Bangladesh, Japan is the only foreign government that New Delhi has allowed to participate in infrastructure projects.

Impediments to speedier development of India-Japan collaboration are essentially bureaucratic and cultural: Ethnically and linguistically diverse India contrasts starkly with comparatively homogenous Japan, some of whose companies struggle to navigate New Delhi’s bureaucracy and regulatory environment.

The stakes could not be higher for India and Japan. Without building a de facto alliance that puts discreet checks on the exercise of Chinese power, the two are likely to bear the brunt of Beijing’s revisionist policies.

Japan and India need to quietly move from emphasizing shared values to jointly advancing shared interests, including thwarting China’s effort to establish itself as the hegemon of an illiberal regional order. Their close strategic collaboration can help lay the foundation for what late Japanese Prime Minister Shinzo Abe called a “democratic security diamond” in the Indo-Pacific region.

Brahma Chellaney is professor of strategic studies at the Center for Policy Research in New Delhi and a former adviser to India’s National Security Council. He is the author of nine books, including “Water: Asia’s New Battleground.”

South Asia’s Looming Water War

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For any treaty to survive, the advantages it confers on all parties must outweigh the duties and responsibilities it imposes. The Indus Waters Treaty – widely considered the world’s most generous water-sharing pact – is nowhere near meeting that standard for India, and it is in Pakistan’s interest to remedy that.

BRAHMA CHELLANEYProject Syndicate

More than six decades ago, the world’s most generous water-sharing pact was concluded. Under the Indus Waters Treaty (IWT), upstream India left the lion’s share of the waters from the subcontinent’s six-river Indus system for downstream Pakistan. But repeated Pakistani efforts to use the treaty to disrupt India’s efforts to safeguard its own water security have driven India to rethink its largesse.

Last month, India issued notice to Pakistan that it intends to negotiate new terms for the IWT. In its current form, the treaty permits the World Bank to refer any India-Pakistan disagreement to either a neutral international expert or a court of arbitration in The Hague. But India contends that Pakistan, with its repeated bids for international intercession to block modestly sized Indian hydropower projects over technical objections, has abused and even breached the IWT’s dispute-settlement provisions.

India’s frustration intensified last October when the World Bank appointed both a neutral expert and a court of arbitration, under two separate processes, to resolve differences with Pakistan over India’s Kishenganga and Ratle hydroelectric projects in Jammu and Kashmir. India claims that the arbitral court proceedings, which began two days after it issued its notice to Pakistan, contravene the IWT, so it is boycotting them. The World Bank, for its part, has acknowledged that “carrying out the two processes concurrently poses practical and legal challenges.”

India’s renegotiation plan – which focuses on barring third parties from intervening in bilateral disputes under the IWT – appears to be a direct response to these developments. But, as India well knows, Pakistan is highly unlikely to agree to negotiations. This suggests that India’s recent notice to Pakistan is just its opening gambit. The next step may well be an attempt to force Pakistan’s hand on its long-term sponsorship of cross-border terrorism.

This has been coming for some time. Six years ago, after an attack by Pakistan-based terrorists on the Indian military in Jammu and Kashmir killed 19 troops, Indian Prime Minister Narendra Modi declared that “blood and water cannot flow together.” In a sense, his statement got to the heart of the IWT, which India pursued precisely to improve relations with Pakistan and avoid bloodshed on the subcontinent.

When the IWT was signed in 1960, Sino-Indian tensions were high, so India effectively attempted to trade water for peace with its other large neighbor, Pakistan. The IWT – under which India keeps less than 20% of the total basin waters – is the only international water agreement embodying the doctrine of restricted sovereignty, with the upstream country agreeing to forego significant use of a river system for the benefit of its downstream counterpart.

But the deal appeared only to whet Pakistan’s appetite for the Indian-administered region of Jammu and Kashmir, through which the largest three rivers of the Indus system flow. Five years later, in 1965, Pakistan launched a surprise war – the second conflict between the two countries over the region’s status.

All the while, the IWT guaranteed to Pakistan a huge share of Jammu and Kashmir’s water – the region’s main natural resource. This hampered economic development, led to chronic electricity shortages, and fueled popular frustration in that territory. And when India attempted to address the region’s energy crunch by building run-of-the-river hydropower plants – which are permitted by the Indus treaty, and would not materially alter transboundary water flows – Pakistan did everything it could to block progress.

Ironically, Pakistani officials and lawmakers have sometimes issued their own calls to renegotiate the IWT, with the Pakistani Senate even passing a 2016 resolution to “revisit” the treaty and “make new provisions” that favored Pakistan. But far from advancing Pakistan’s interests, such actions have merely reminded the Indian public that, at a time of growing water stress, the Indus treaty is an albatross around their country’s neck.

To be sure, Pakistan has plenty of its own water-related problems. A deep divide has emerged between downriver provinces and the upriver Punjab province, which appropriates the bulk of the Indus waters to sustain its profligate agricultural practices. Punjab’s water diversion – aided by large China-backed dams in the Pakistani portion of Kashmir, including the massive Diamer Bhasha Dam – is turning the Indus Delta into a saline marsh, which represents a major ecological disaster.

But none of this is the fault of the IWT, which is clearly in Pakistan’s interest to safeguard. To do that, Pakistan must stop focusing only on its treaty-related rights, while neglecting its responsibilities. This includes rethinking the use of terrorism as an instrument of state policy – a tactic that runs counter to the spirit of the IWT and threatens to drive India unilaterally to withdraw from it.

Such action would not cause river flows to Pakistan suddenly to stop, as India lacks the kind of hydro infrastructure this would require, and has no plans to change that. But it would enable India to pursue reasonable hydro projects without dam reservoirs, regardless of Pakistani objections. More fundamentally, it would sever a crucial diplomatic thread between India and Pakistan.

For any treaty to survive, the advantages it confers on all parties must outweigh the duties and responsibilities it imposes. The IWT is nowhere near meeting that standard for India, which has so far accrued no tangible benefits from it. What has been called the “world’s most successful water treaty” has overwhelmingly benefited Pakistan, which has a powerful incentive to abandon its combative approach and embrace the compromise and cooperation needed to save it.

Brahma Chellaney

Brahma Chellaney, Professor of Strategic Studies at the New Delhi-based Center for Policy Research and Fellow at the Robert Bosch Academy in Berlin, is the author of nine books, including Asian Juggernaut; Water: Asia’s New Battleground; and Water, Peace, and War: Confronting the Global Water Crisis.

© Project Syndicate, 2023.

Russian war sanctions show why U.S. must rethink its strategies

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Trade penalties have tended to benefit China, Washington’s top rival

Brahma Chellaney, Nikkei Asia

Russian President Vladimir Putin holds talks with Chinese leader Xi Jinping via a video link from Moscow on Dec. 30, 2022: The sanctions are bringing America’s two main adversaries closer together. © Sputnik/Kremlin/Reuters

The flight of a Chinese reconnaissance balloon across the continental U.S. for several days before it was shot down has put into stark relief the fact that a rising China, not a declining Russia, poses the biggest threat to America.

Indeed, a number of observers believe that the biggest beneficiary of Western sanctions against Russia over its invasion of Ukraine has been Beijing, not Kyiv. This reminder of sanctions’ side effects should be moving Washington to rethink its approach, rather than relying ever more heavily on trade penalties.

Sanctions have long been a favorite foreign policy tool of the White House and the U.S. Congress, even though they rarely change the behavior of targeted countries. But with the relative decline of American power, the efficacy of sanctions has been noticeably eroding.

The unprecedented American-led sanctions against Moscow have had a global impact without reining in the Kremlin’s war machine or pushing Russian President Vladimir Putin to the negotiating table. At the same time, they are helping China to advance its economic and strategic interests.

“China has emerged, by a wide margin, to be Russia’s most important trade partner. It now receives about 20% of Russia’s total exports and is the source of over 35% of Russia’s total imports,” the Free Russia Foundation, a Washington-based advocacy group, said last month in a study based on 40 million customs records. It called China the “biggest winner” from Western punitive measures.

The sanctions are bringing America’s two main adversaries, China and Russia, closer together, cementing their anti-Western partnership and boosting bilateral trade in military technologies and equipment.

In exchange for greater access to Russian military technology, China has been aiding Moscow’s war in Ukraine by supplying navigation equipment, jamming technology and fighter jet parts to sanctioned entities, according to customs records reviewed by Washington research center C4ADS and The Wall Street Journal.

Russia and China, although natural competitors, have grown closer since the U.S. started to sanction Moscow over its 2014 seizure of Crimea from Ukraine.

But Chinese President Xi Jinping does not need to learn from Russia that aggression works, given his own expansionistic maneuvering from the South China Sea to the Himalayas. Indeed, none of his actions, including redrawing the geopolitical map and his mass incarceration of more than 1 million Muslims in Xinjiang have drawn a sanctions response remotely comparable to that imposed on Russia.

But the largely ineffectual sanctions campaign against Moscow looks likely to embolden Xi’s designs on Taiwan, especially since comparable penalties against Beijing would have even less impact given the much larger size of China’s economy and the countermeasures it has undertaken. Just as Putin was clear about his plans for invading Ukraine, so has Xi been explicit about absorbing Taiwan.

Meanwhile, Europe’s shift from cheap Russian energy to importing costlier supplies from elsewhere has opened the path for China to build a safety net that could withstand Western sanctions and even a blockade in the event of war over Taiwan. China has significantly boosted overland oil and gas flows from Russia at heavily discounted prices, setting up a supply line that would be difficult to interrupt.

U.S.-led sanctions have failed to change the behavior of other targets, too, including North Korea, Myanmar, Iran, Cuba, Syria and Venezuela. In each case, the penalties have only reinforced the regime’s renegade behavior.

Iran and North Korea have made significant advances in their nuclear, missile and drone programs while facing some of the harshest sanctions that the U.S. and its allies have ever imposed. Iranian drones are also playing an important role in Russia’s bombing campaign in Ukraine, while North Korea recently surprised Seoul by flying five drones through South Korean airspace for five hours, with one nearing the president’s office and none being shot down.

China has usually been quick to seize opportunities arising from a sanctions-hit country’s isolation. As a result, U.S. sanctions often help advance Beijing’s commercial and strategic interests.

For example, American trade penalties have pushed resource-rich Myanmar and Iran into China’s arms. China has not only emerged as a top investor in, and security partner of, Iran, but also has almost cornered Tehran’s oil exports at a hefty discount.

Asked about European Union sanctions over human rights violations, Cambodian Prime Minister Hun Sen told attendees at Nikkei’s 2021 Future of Asia conference, “If I don’t rely on China, who will I rely on?”

The fact that sanctions often tend to be a blunt instrument prompted U.S. President Joe Biden’s administration in its early days to order an internal review of American sanctions programs to understand their utility and consequences.

According to a declassified version of the review released in October 2021, the U.S. should assess whether sanctions are “the right tool for the circumstances” before imposing them, and coordinate punitive measures with allies to magnify their impact and achieve clear policy objectives.

The review, however, has done little to moderate the growing U.S. use of sanctions. While the Biden administration often acts in coordination with America’s allies, this support does not guarantee the penalties’ effectiveness as the West is no longer economically dominant.

Washington, instead of developing objective criteria for the circumstances that would justify sanctions, allows moral outrage and narrow geopolitical considerations to drive its sanctions policy. This needs to change, or its overreach could accelerate the relative decline of U.S. wealth and power.

Brahma Chellaney is professor emeritus of strategic studies at the Center for Policy Research in New Delhi and a former adviser to India’s National Security Council. He is the author of nine books, including “Water: Asia’s New Battleground.”

Could the “Chinese Century” Belong to India?

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Project Syndicate

As India considers how to make the most of its demographic dividend, China has reported its first annual population decline since 1961. At the same time, the West is courting India for trade and security partnerships, and attempting to shift its supply chains away from China, in part to limit Chinese technological development. And while analysts predict that India will become the world’s third-largest economy by 2027, many are now questioning China’s ability to overtake the United States as the world’s largest within the next few decades.

In this Big Question, we ask Pranab BardhanBrahma ChellaneyPinelopi Koujianou Goldberg, and Yi Fuxian whether the economic fortunes of India and China will continue to diverge, and what that could mean for the global economy.

BRAHMA CHELLANEY

Chinese President Xi Jinping seems to be in a hurry to achieve what he calls the “Chinese dream” – that is, China’s global preeminence. With a demographic crisis looming, economic growth stalled, and the global environment becoming increasingly unfavorable, Xi seems to have concluded that China has a narrow window of strategic opportunity to shape the international order in its favor. So, his appetite for risk has grown.

But, while China remains a middle-income country, long-term structural constraints – including a shrinking and rapidly aging population, slowing productivity growth, and massive debts – are already beginning to bite. This could severely hamper Xi’s ability to advance his ambitions and even threaten China’s status as the world’s factory.

India, by contrast, has demographics on its side. With a median age of 28.4, India is one of the world’s youngest countries. This large youthful population is propelling rapid economic growth, contributing to a consumption boom, and driving innovation, reflected in the emergence of a world-class information economy. About one-fifth of the world’s working-age population is likely to live in India by 2025.

India has about 600 million more people than all of Europe’s 44 countries combined. Moreover, India is the first developing economy that, from the beginning, has strived to modernize and prosper through a democratic system, despite the challenges posed by its cultural and ethnic diversity. And, unlike China, India is not seen as hungry for the land and resources of others, and its rise has not been accompanied by greater assertiveness.

But for the century to belong to India, the country must make the most of its relatively low labor costs and Western companies’ growing interest in shifting production away from China to become a manufacturing powerhouse. This would not only be good for the global economy; India’s accelerated rise could also help counter Chinese expansionism.

Brahma Chellaney

Brahma Chellaney, Professor of Strategic Studies at the New Delhi-based Center for Policy Research and Fellow at the Robert Bosch Academy in Berlin, is the author of nine books, including Asian Juggernaut; Water: Asia’s New Battleground; and Water, Peace, and War: Confronting the Global Water Crisis.

© Project Syndicate, 2023.

Xi’s India visit unlikely to restore border peace

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How China and India try to leverage Xi’s two likely visits to India this year for the G-20 and SCO summits will be closely watched internationally

Brahma Chellaney, The Times of India

To Prime Minister Narendra Modi’s credit, India has more than matched China’s Himalayan military deployments, refusing to put up with its furtive territorial encroachments of April 2020 in eastern Ladakh. So, why has the robust Indian military response failed to persuade China to defuse the almost 33-month frontier crisis or deter it from opening new fronts, like when it attempted to intrude into Tawang last month?

The answer to this question is in the newly released bilateral trade figures, which show that China’s trade surplus with India has jumped nearly 50% in just one year — from $69.38 billion in 2021 to $101.02 billion in 2022. This means that the Indian trade deficit with just one country, China, now accounts for about 64% of India’s total global trade deficit.

Another paradox is that China’s bilateral trade surplus has been ballooning since it launched its border aggression, surpassing by 2021 India’s total defence budget (the world’s third largest). China’s international trade surplus is now the main engine of its slowing economy, allowing it to finance its aggressive manoeuvres in the Himalayas and other Indo-Pacific theatres. And India last year contributed 11.51% to China’s overall trade surplus of $877.6 billion.

In effect, India is underwriting China’s economic and geopolitical power. This shows how India, instead of establishing disincentives to Chinese military belligerence, has handed Beijing a potent incentive to sustain its aggression.

To emerge as a global power, India must become a manufacturing powerhouse so that factory work helps lift Indian youths out of poverty. But the avalanche of imports from China has already devastated a key job creator — the micro, small and medium enterprises (MSME) industry. Opening the floodgates to “Made in China” is also decimating the “Make in India” initiative.

By refusing to cut even non-essential imports from China, including of cheap, substandard goods, India not only harms its economic interests, but also allows its recalcitrant adversary to have its cake and eat it too.

The Modi government’s reluctance to leverage India’s buying power is just one facet of its increasingly confusing China policy. It has also been loath to impose any diplomatic costs. Indeed, it has scrupulously refrained from naming and shaming China for its expansionist creep, even as Beijing has raked up the Kashmir issue at the UN Security Council.

Importantly, the government still uses euphemisms to describe the military crisis: “unilateral change of status quo” for China’s aggression; “friction points” for captured areas; and “full restoration of peace and tranquillity” for rollback of the Chinese intrusions and military deployments.

Soft-pedalling the aggression, unfortunately, only aids China’s strategy of downplaying the severity of the border crisis so as to shield its booming trade surplus and deflect global attention from its use of force to change the territorial status quo. The Chinese aggression also draws encouragement from India’s disinclination to impose meaningful costs on Beijing, with New Delhi restricting its retaliation to largely symbolic actions, such as banning Chinese mobile phone apps.

Despite tens of thousands of Indian troops in the Himalayas hunkered down for the brutal winter, the government seems keen to host Chinese President Xi Jinping for two separate summits this year — the G-20 Summit and the Shanghai Cooperation Organization Summit. A Xi visit could catalyse efforts to ease the military crisis. But Beijing is likely to leverage the importance of a Xi visit for either summit to mould the terms of any such deal.

This kind of a scenario could compound India’s dual blunder in vacating the strategic Kailash Heights and accepting Chinese-designed “buffer zones” in three separate Ladakh areas. The Galwan, Pangong and Gogra-Hot Springs “buffer zones” have come up largely on lands that were under India’s exclusive patrolling jurisdiction, with Indian forces retreating further back into Indian territory.

China is playing the long game in the Himalayas through its frenzied buildup of warfare infrastructure. Its new security installations, roads, helipads, electronic warfare facilities, dual-use border villages and other assets position it strongly in the long run. Just as China has shown little interest over the decades in settling the border dispute, its frenetic buildup of new border infrastructure suggests that it wants, not peace and tranquillity, but a “hot” frontier to bog India down.

So, no deal linked to a Xi visit is likely to truly restore border peace. In fact, India’s approach of letting China reap rewards of aggression has made restoration of status quo ante in eastern Ladakh illusory, with a Chinese Communist Party mouthpiece dubbing a return to the April 2020 positions as “unrealistic fantasies” in India.

It is not too late for Indian decision-makers to grasp China’s true intentions, and recognize that deterrence can never be effective without a comprehensive approach that extends beyond military-power projection to the use of all available tools, including economic leverage, to impose costs.

Brahma Chellaney is a geostrategist and author.

The Limits of Japan’s Military Awakening

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While Japan’s move toward rearmament is welcome, the embrace of Tomahawk missiles and hypersonic weapons alone will not force China to stop waging hybrid warfare. Japan must also find ways to frustrate China’s furtive efforts to alter the regional status quo while avoiding the risk of open combat.

Brahma Chellaney, Project Syndicate

For decades, Japan has based its international clout on economic competitiveness, not military might. But, with China’s lengthening shadow darkening its doorstep, Japan now seems to be abandoning its pacifist postwar security policy – which capped defense spending at about 1% of GDP and shunned offensive capabilities – in favor of assuming a central role in maintaining security in the Indo-Pacific region.

Last month, Japan unveiled a bold new national-security strategy, which includes a plan to double defense expenditure within five years. That spending – amounting to some $320 billion – will fund Japan’s largest military build-up since World War II, and implies the world’s third-largest defense budget, after the US and China. Importantly, the new strategy includes acquisition of preemptive counterstrike capabilities, such as Tomahawk cruise missiles from the United States, and the development of its own hypersonic weapons.

Japan began laying the groundwork for this shift under former Prime Minister Abe Shinzō, who was assassinated last July. On Abe’s watch, Japan increased defense spending by about 10%, and, more significantly, reinterpreted (with parliament’s approval) the country’s US-imposed “peace constitution” to allow the military to mobilize overseas for the first time since WWII. Abe also sought to amend Article 9 of the constitution, which renounces “the threat or use of force” by Japan, but his efforts were stymied by popular protests.

Prime Minister Fumio Kishida has not run into the same resistance. On the contrary, opinion polls show that a majority of Japanese support the military build-up. A similar shift has taken place in Kishida himself, who was widely considered a dove when he was foreign minister – a label that he publicly embraced.

The impetus for this shift is clear. In 2013, the year Xi Jinping became China’s president, Japan’s national-security strategy called China a strategic partner. According to the updated strategy, by contrast, China represents “an unprecedented and the greatest strategic challenge in ensuring the peace and security of Japan.” China’s incremental but unrelenting expansionism under Xi has rendered Japan’s pacifist stance untenable.

This is more apparent than ever in the wake of Russia’s invasion of Ukraine, which has intensified fears that China could pursue a military option against Taiwan, which is effectively an extension of the Japanese archipelago. Last August, five of the nine missiles China fired during military exercises in the waters around Taiwan landed in Japan’s exclusive economic zone. Japan understandably views Taiwan’s security as vital for its own.

Japan is not the only once-conciliatory power to respond to Xi’s muscular revisionism with a newfound determination to bolster its defenses and forestall the emergence of a Sinocentric Indo-Pacific. Australia and India have embarked on the same path.

Moreover, a similar trend toward militarization has emerged among Japan’s Western allies. Germany, another pacifist country, has pledged to boost its defense spending to 2% of GDP (the same level Kishida is targeting) and accept a military leadership role in Europe. The United Kingdom has already surpassed the 2%-of-GDP level, yet aims to double its defense spending by 2030. The US has just hiked its already-mammoth military spending by 8%. And Sweden and Finland are joining a reinvigorated NATO.

While Japan’s rearmament is more widely accepted than ever – and for good reason – it is unlikely to be enough to deter China’s expansionist creep. After all, despite having the world’s third-largest defense budget, India has been locked in a military standoff with China on the disputed Himalayan border since 2020, when stealth encroachments by the People’s Liberation Army caught it by surprise. Clashes continue to erupt intermittently, including just last month.

Unlike Russia, which launched a full frontal assault on Ukraine, China prefers salami tactics, slicing away other countries’ territories with a combination of stealth, deception, and surprise. The PLA’s so-called “Three Warfares,” which focus on the psychological, public-opinion, and legal aspects of conflict, has enabled China to secure strategic victories in the South China Sea – from seizing the Johnson South Reef in 1988 to occupying the Scarborough Shoal in 2012 – while barely firing a shot.

Because China generally avoids armed conflict, it incurs minimal international costs for its actions, even as it unilaterally redraws the geopolitical map of the South China Sea and nibbles away at Bhutan’s borderlands, one pasture at a time. The government in Beijing managed to decimate Hong Kong’s autonomy without facing significant Western sanctions.

All this impunity has only emboldened Xi, who is now seeking to replicate the South China Sea strategy in the East China Sea by escalating maritime and aerial incursions to strengthen its claims to the Japanese-administered Senkaku Islands. It has even tried to police the waters off the Senkakus.

Japan’s response to China’s provocations has so far remained restrained, to say the least: no Japanese defense minister has so much as conducted an aerial inspection of the Senkakus, lest it anger China. Yet Japan’s embrace of Tomahawk missiles and hypersonic weapons does not necessarily represent an effective means of resisting China’s hybrid warfare, either. For that, Japan must find ways to frustrate China’s furtive efforts to alter the status quo while avoiding the risk of open combat.

Japan’s push to become more self-reliant on defense should be welcomed. Improved defense capabilities will translate into a more confident and secure Japan – and a more stable Indo-Pacific. But if Japan is to “disrupt and defeat” threats, as the national-security strategy puts it, Japanese leaders must move proactively to beat China at its own game.

Brahma Chellaney

Brahma Chellaney, Professor of Strategic Studies at the New Delhi-based Center for Policy Research and Fellow at the Robert Bosch Academy in Berlin, is the author of nine books, including Asian Juggernaut; Water: Asia’s New Battleground; and Water, Peace, and War: Confronting the Global Water Crisis.

© Project Syndicate, 2023.

Will 2023 be a better year for international peace and public health?

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BY BRAHMA CHELLANEY, The Hill

Armed conflict, not peace, defined 2022, thanks to Russia’s invasion of Ukraine and raging wars elsewhere, from Yemen and Syria to Ethiopia. Internal conflict, meanwhile, exacerbated in several countries, from the Pakistan-Afghanistan belt to Myanmar and Nigeria.

But what has stood out is the international fallout from the war in Ukraine, which, by contributing to global energy and food crises, has affected countries across the world.

Will 2023 be a better year for international peace and stability? And is there any prospect of the global energy and food crises easing and the COVID-19 pandemic finally coming under full control?

The disruption in global energy markets, which has led to soaring energy prices, is largely linked to Europe’s rapid shift away from cheap Russian energy, which long powered its growth. Given that the European Union accounts for 11 percent of global energy consumption, its switch to alternative sources at a time when international oil and LNG supplies are already tight is having an adverse global impact.

High energy prices have spurred runaway inflation in many countries. And high inflation, in turn, has triggered a cost-of-living crisis. The specter of a global recession looms large in 2023.

Meanwhile, just when COVID-19 fears are easing and relative normalcy is returning in everyday life, the COVID-19 tsunami in China threatens to spread new strains globally.

Three years ago, Chinese President Xi Jinping’s regime created a global pandemic with its coverup and slow response to the COVID-19 outbreak at home. Now, it has put the world in peril again by abruptly abandoning its unsustainable “zero COVID” policy and easing almost all restrictions in one go, resulting in a huge COVID-19 surge in China that has reignited fears that the country could export new variants.

That probability has been heightened by another factor: China, instead of containing the current COVID spike within its borders, has just lifted all international-travel restrictions for Chinese, leading to a major boom in sales of air tickets out of the country.

This is redolent of how China spawned the pandemic: After COVID originated within its borders, it allowed residents of Wuhan and other virus-battered areas of Hubei province to travel abroad but imposed domestic-travel restrictions on them so that they did not take the coronavirus to Beijing, Shanghai and other Chinese cities. In fact, it was only after COVID cases with Wuhan links were detected in Thailand and South Korea that China belatedly acknowledged its coronavirus outbreak through the party-run People’s Daily on Jan. 21, 2020, including admitting human-to-human spread.

It’s a testament to China’s rising power that, without incurring any international costs, it has effectively stonewalled international investigations into the origins of the COVID-19 virus, including its possible escape from the military-linked Wuhan Institute of Virology.

President Biden’s administration, meanwhile, has effectively let China off the hook, in part because American government agencies – from the National Institutes of Health to USAID – funded dangerous research on bat coronaviruses at this Wuhan lab.

More broadly, although 2022 was not a good year for peace, 2023 may not be much better, given the new cold war.

It is worth remembering that competition and conflict are inherent in a world in which there is no supranational government to enforce international law or protect the weaker states against the more powerful states. This explains why weak, vulnerable states seek protection by aligning themselves with one great power or the other.

The harsh truth about international law is this: International law is powerful against the powerless but powerless against the powerful. Just the history of the past 25 years is replete with examples of big powers invading small, weak nations, including reducing several of them to failed or failing states.

International conflict often arises when major powers attempt to maximize their security, including by asserting spheres of influence or seeking to contain rival or emerging powers. If one great power feels that a nation within its traditional sphere of influence is drifting into the orbit of a rival power, it will use all possible means to try to reverse that direction, as exemplified by Russia’s brutal invasion of Ukraine.

While seeking to consolidate its hold on the nearly one-fifth of Ukrainian territory it occupies, Russia has since October launched volleys of cruise missiles and drones at Ukraine’s critical infrastructure, especially its energy grid, in an apparent strategy of undermining morale by throwing that country into cold and darkness amid freezing winter temperatures. Ukraine, despite a growing arsenal of Western advanced weapons, including air-defense systems, has been unable to stop such debilitating attacks, resulting in widespread power outages becoming common.

In the U.S., meanwhile, the “save Ukraine” narrative has been eclipsed by the “bleed Russia dry” narrative, which is rooted in the belief that the costs to the American taxpayers for providing weapons, battlefield intelligence and other aid to Ukraine are dwarfed by the benefits.

The U.S. directed about $50 billion in assistance to Ukraine in 2022, and its new $1.66-trillion spending plan includes $45 billion in additional aid for that country. The assistance may be massive (it is the largest U.S. aid to any European nation in more than seven decades), yet its proponents contend that, from a bang-per-buck perspective, it is highly cost-effective in helping to degrade an enemy’s military capabilities for a single-digit share of America’s annual defense budget — without the loss of a single American soldier.

In this light, the war is unlikely to end anytime soon, despite its devastating costs for Ukraine and its people.

Eventually, when Russia and the U.S. both realize that they are unlikely to achieve their key objectives in Ukraine, a negotiated settlement to the conflict could emerge.

But with the Ukraine war diverting America’s attention away from the growing strategic challenges in the Indo-Pacific region, the danger is growing that China could move against Taiwan. U.S. intelligence now reportedly believes that Xi could act against Taiwan before the 2024 U.S. presidential election.

A Chinese attack on Taiwan would likely have a greater global impact than the Russian invasion of Ukraine.

America’s role is central to preventing a Chinese takeover of Taiwan, a technological powerhouse with the world’s 22nd-largest economy by gross domestic product. The new $1.66-trillion spending plan, however, provides just $2 billion for Taiwan (and in loans, not grants), prompting the chairman of the Senate Foreign Relations Committee, Sen. Bob Menendez (D-N.J.), to quip, “We say we want to meet the China challenge but then we don’t fund Taiwan in a way that is necessary.”

Against this background, 2023 is likely to prove a challenging year for international peace, especially as the war in Ukraine grinds on and China persists with its expansionism in the Indo-Pacific, including intensifying coercive pressure on Taiwan.

Meanwhile, with politics coming ahead of public health, the threat from the pandemic is far from over. Whether COVID-19 had a natural or human-made origin remains unknown.

As we look ahead, the enduring lesson from the failure to unravel the genesis of a pandemic that has killed some 6.7 million people, including more Americans than did World War II, is that “gain of function” research of the type conducted in Wuhan is the greatest existential threat to humankind ever produced by science — a bigger threat than nuclear weapons.

Such research to enhance the virulence or infectiousness of pathogens by altering their genetic make-up is continuing in some labs in the West, China and Russia. And it needs to stop.

Brahma Chellaney is a geostrategist and the author of nine books, including the award-winning “Water: Asia’s New Battleground” (Georgetown University Press). Follow him on Twitter @Chellaney.

Modi’s silence on China’s land grabs will not be India’s last word

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While downplaying territorial losses, New Delhi is modernizing its military

Tawang, in the northeastern Indian state of Arunachal Pradesh, in October 2006: The latest clashes were sparked by a Chinese attempt to seize mountaintop positions near the town. © AP

Brahma Chellaney, Nikkei Asia

The latest border clash between Chinese and Indian troops on Dec. 9 took place nearly 2,000 kilometers from the sites of previous skirmishes. This underscores the enduring costs of Beijing’s stealthy land grabs along India’s borderlands and how much those encroachments have spurred military buildups and tensions along the two nations’ entire long Himalayan frontier.

When asked to comment on the fighting four days after this month’s clash, a Chinese Foreign Ministry spokesman said: “As far as we know, the China-India border areas are generally stable. The two sides have maintained smooth communication on boundary-related issues through diplomatic and military channels.”

This is in keeping with a strategy described in the U.S. Department of Defense’s annual China military report, which stated that Beijing has “sought to downplay the severity of the crisis … to prevent the standoff from harming other areas of its bilateral relationship with India.”

Through its aggressive revisionism, however, China has set in motion forces that are likely to come back to haunt its own long-term interests.

Its increasingly muscular approach and border provocations are beginning to shake India out of its complacency and trigger much-needed modernizations of the country’s military, including major investments in counterintervention capabilities, greater missile power and formation of additional mountain-warfare forces.

Yet in the short term, China’s efforts to silo the border crisis are showing some signs of success.

For example, China’s large trade surplus with India has continued to surge since the military confrontation began in May 2020 when Indian troops discovered the incursions by the Chinese military.

Indeed, India’s trade deficit with China is now the world’s third-largest such imbalance and has even overtaken New Delhi’s 5.25 trillion rupee ($63.45 billion) defense budget in size. After reaching $77 billion in the Indian financial year that ended in March, the bilateral deficit is projected to cross $88 billion this fiscal year.

In effect, India is underwriting Beijing’s economic and military power even as its forces seek to contain creeping Chinese expansionism.

The latest clashes were sparked by a Chinese attempt to seize mountaintop positions in Tawang, the birthplace of a previous Dalai Lama and a district of the state of Arunachal Pradesh, which Beijing has been calling “South Tibet” since 2006. Tawang controls access to Bhutan’s Sakteng Wildlife Sanctuary, which China has claimed since mid-2020.

By playing down the military confrontation, Beijing has been able to maintain the veneer of stable diplomatic relations with India. This was underscored by smiling pictures of Chinese President Xi Jinping interacting with Prime Minister Narendra Modi during the recent Group of 20 summit in Bali, although the two did not hold a private meeting, as each did with other leaders.

Xi’s larger objective is to avoid driving New Delhi closer to Washington and making a U.S.-India strategic alliance a reality.

Yet Beijing’s aggression has prodded New Delhi into concluding the last of four foundational defense-related agreements that Washington regularly puts in place with military allies and has also breathed new life into the Quad arrangement with Washington, Canberra and Tokyo, with India’s annual Malabar war games now including all three partners.

For New Delhi, soft-pedaling Chinese border aggression is a way to save face. Modi, while openly challenging China’s capability and power by resolutely sustaining the military standoff, does not want to draw public attention to Beijing’s territorial grabs, as they took his government by complete surprise.

Indeed, Modi has made no comment on the land grabs. His government last week thwarted a discussion in parliament on the latest border clash, telling lawmakers to be content with a brief statement from the defense minister.

India failed to foresee the territorial losses largely because Modi had been focused on befriending Beijing to chip away at the China-Pakistan axis. As part of that effort, Modi met with Xi 18 times over the five years before the 2020 encroachments and missed warning signs, including Chinese combat exercises and frenzied military-infrastructure construction along the two nations’ frontier.

As an old adage goes, those who fail to learn from history are doomed to repeat it. The dogged courtship of Mao Zedong by Jawaharlal Nehru, India’s first post-independence prime minister, helped create New Delhi’s China problem. On Nehru’s watch, China annexed buffer state Tibet to impose itself as India’s neighbor and then began encroaching on Indian territories before launching a border war in the Himalayas in 1962.

Mao Zedong and Jawaharlal Nehru talk over a cup of tea in Beijing in October 1954: The dogged courtship of Mao by Nehru helped create New Delhi’s China problem. © Gamma-Rapho/Getty Images

Today, China may have reason to gloat over what it calls “recovery momentum” in ties with India. Far from launching a diplomatic offensive to spotlight Chinese aggression, New Delhi remains reticent about naming and shaming Beijing even as its rival has spotlighted issues involving Kashmir at the U.N. Security Council.

The Modi administration, in fact, still uses euphemisms to describe the Himalayan crisis, or what it calls a “unilateral change of status quo” involving “friction points” that should be resolved by the “full restoration of peace and tranquility.”

New Delhi has also shied away from imposing meaningful costs on Beijing, including by exercising its trade leverage. While New Delhi has banned numerous Chinese mobile phone apps, restricted Chinese companies’ access to Indian government contracts and launched tax and customs probes against Chinese phone makers, this has been no more than an annoyance for Beijing.

Deterrence, to be effective, must extend beyond military strength to the use of all available tools.

More fundamentally, why should salami-slicing be the prerogative of only the Chinese side? Why does India not pay China back in the same coin?

India’s overly defensive, risk-averse approach, including a reluctance to impose costs, is aiding China’s strategy of having its cake and eating it too.

India’s shortcomings, however, cannot obscure China’s glaring shortsightedness. Xi’s aggression against India promises to prove costly for China in the long run.

Xi has picked a border fight with India that China cannot win. While the Chinese military relies heavily on conscripts, India, with an all-volunteer force, has the world’s most-experienced troops for hybrid mountain warfare. A war between these two nuclear-armed giants would likely end in a bloody stalemate.

Worse still, Xi’s strategic miscalculation promises to turn a once-conciliatory neighbor into a long-term foe determined to forestall a Sinocentric Asia.

Brahma Chellaney is professor emeritus of strategic studies at the Center for Policy Research in New Delhi and a former adviser to India’s National Security Council. He is the author of nine books, including “Water: Asia’s New Battleground.”

Europe’s Russia Sanctions Are a Shot to the Foot

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While Russia has suffered as a result of Western sanctions, nearly one-fifth of Ukrainian territory remains under Russian occupation. If the European Union is enduring severe economic pain while Russia’s aggression proceeds apace, sanctions become tantamount to self-flagellation.

With its rapid shift away from Russian energy, Europe has done more damage to its own economy than to Russia’s war effort.

BRAHMA CHELLANEYProject Syndicate

BERLIN: It seems obvious that sanctions – an increasingly important tool of Western foreign policy – should inflict significant pain on the target without exacting unsustainably high costs from the country imposing them. But the European Union’s sanctions on Russia – intended to punish the country for its brutal war of aggression against Ukraine – do not meet this condition.

At the center of the EU’s plan to punish Russia is an effort to eliminate its dependence on the cheap Russian energy that long powered its growth, including by increasing its reliance on liquefied natural gas imported from the United States and elsewhere. But LNG has long been an overpriced (and carbon-intensive) alternative to piped gas: before Russia invaded Ukraine, it was 4-5 times more expensive than natural gas. Now, it is even more exorbitantly priced: since the war began, the cost of LNG has more than doubled.

But with the Kremlin slashing gas flows to Europe, in order to ensure that it – not the EU – dictates the timetable for phasing out Russian supplies, European countries have had little choice but to rely increasingly on LNG imports. This is creating serious challenges for Europe’s manufacturing base, to the point that some European firms are now considering shifting production to the US, which offers not only cheaper fuel, but also massive subsidies and tax credits under its new Inflation Reduction Act (IRA).

Already, Europe’s decision to turn its back on Russian gas has increased the likelihood of a deep recession. Skyrocketing gas prices – which are a staggering 14 times higher than two years ago – have fueled inflation and destabilized eurozone financial markets. So, just when Europe’s economies are on the brink of contraction, the cost of living is spiking – and the threat of rolling power outages looms.

European policymakers’ adoption of desperate measures like price caps and regulated tariffs could well exacerbate the situation. To conserve gas, some European governments have even turned to coal. Moreover, European leaders like French President Emmanuel Macron have pleaded with US President Joe Biden to ease pressure on their economies by adjusting some controversial IRA provisions. Months after an agreement to strengthen and expand NATO, transatlantic relations are beginning to fray.

The one thing the EU appears unwilling to consider is changing course on sanctions. This month alone, it has imposed an embargo on imports of Russian crude and joined its G7 partners in introducing a $60-per-barrel price cap.

Europe’s sanctions recall America’s 1930 Smoot-Hawley Tariff Act, which substantially raised import duties on more than 20,000 goods. Far from protecting US industry, the tariffs prompted other countries to retaliate, deepening the Great Depression and contributing to the rise of political extremism, especially in Europe.

Today, too, many European countries’ politics are lurching rightward. Italy’s current governing party traces its roots to Benito Mussolini’s Fascist movement; likewise, the Sweden Democrats has neo-Nazi roots. In Poland and Hungary, right-wing governments show increasing authoritarian tendencies. If soaring energy prices and runaway inflation worsen economic conditions – a likely scenario in the short term – far-right forces could gain further ground across the continent.

One might be able to argue that the sanctions’ large costs were worth shouldering if they were significantly hampering Russia’s war effort. But while Russia has certainly suffered, and Ukraine has achieved some high-profile military victories, nearly one-fifth of Ukrainian territory remains under Russian occupation. If the EU is enduring so much pain, while Russia’s aggression proceeds apace, sanctions become tantamount to self-flagellation. This is why moral outrage, however justified, should never drive policy.

To be sure, the EU’s international image has long rested on its reputation as a force for democracy, human rights, and a rules-based order, which strengthens the case for a bold, if costly, response to Russian aggression. But, had cooler heads prevailed, it would have been obvious that a rapid transition away from Russian energy supplies would undermine the EU’s global standing by denting its sustainability credentials – the turn to coal is a case in point – and causing a global energy crisis, which is hurting poorer countries.

Given that the EU accounts for 11% of global energy consumption, its quest to secure replacement supplies was bound to disrupt the entire global economy. After all, the alternative supplies the EU secured were not idle. International oil and LNG supplies were already tight, and there was inadequate production capacity to compensate for the loss of Russian supplies.

As a result, when the EU rejected Russian energy, the world suddenly faced energy scarcity, with countries in Asia, Latin America, and elsewhere losing access to some supplies on which they had previously depended. In fact, soaring European gas prices have encouraged some shippers to divert LNG cargoes from Asia to Europe.

For far too long, the EU believed that economic and trade relations could be managed without regard for foreign-policy and security considerations. The Ukraine war made this approach untenable. But this should have prompted a more considered debate about what should come next, rather than an abrupt transition away from Russian energy supplies. This was a huge decision directly bearing on Europe’s socioeconomic security; by making it rashly, the EU committed a major strategic blunder.

Russia’s actions in Ukraine are clearly both unjustified and unconscionable. But it makes little sense for Europe to respond by damaging its own competitiveness and global standing. It will take years for Europe to recover from the unprecedented energy crisis that it has helped to create.

Brahma Chellaney

Brahma Chellaney, Professor of Strategic Studies at the New Delhi-based Center for Policy Research and Fellow at the Robert Bosch Academy in Berlin, is the author of nine books, including Asian Juggernaut; Water: Asia’s New Battleground; and Water, Peace, and War: Confronting the Global Water Crisis.

© Project Syndicate, 2022.

A Spotlight on Chinese Debt Bondage

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The details of China’s loan contracts with developing countries are only beginning to come to light. But it is already clear that China’s creditor imperialism holds far-reaching risks, both for the debtors themselves and for the future of the international order.

BRAHMA CHELLANEY, Project Syndicate

Recently released details of Kenya’s 2014 loan agreement with China to finance a controversial railway project have once again highlighted the predatory nature of Chinese lending in developing countries. The contract not only imposed virtually all risk on the borrower (including requiring binding arbitration in China to settle any dispute), but also raised those risks to unmanageable levels (such as by setting an unusually high interest rate). With terms like that, it is no wonder that multiple countries around the world have become ensnared in sovereignty-eroding Chinese debt traps.

Over the last decade, China has become the world’s largest single creditor, with loans to lower- and middle-income countries tripling in this period, to $170 billion at the end of 2020. Its outstanding foreign loans now exceed 6% of global GDP, making China competitive with the International Monetary Fund as a global creditor. And through loans extended under its $838-billion Belt and Road Initiative (BRI), China has overtaken the World Bank as the world’s largest funder of infrastructure projects.

To be sure, since the start of the made-in-China COVID-19 pandemic, China’s overseas lending for infrastructure projects has been on the decline (until 2019, it was rising sharply). This is partly because the pandemic left partner countries in dire economic straits, though growing international criticism of China’s predatory lending has likely also contributed.

One might hope that this downward trend augurs the end of colonial-style lending by China. But the decline has been offset by an increase in bailout lending, mostly to BRI partner countries – including Kenya – which were already weighed down by debts owed to China.

The scale of the bailout lending is massive. The top three borrowers alone – Argentina, Pakistan, and Sri Lanka – have received $32.8 billion in rescue lending from China since 2017. Pakistan has been the biggest borrower by far, receiving a staggering $21.9 billion in Chinese emergency lending since 2018.

This highlights the self-reinforcing debt spiral into which China thrusts countries. Because China, unlike the IMF, does not attach stringent conditions to its loans, countries simply borrow more to service outstanding debts, thus sinking ever deeper into debt.

Crucially, China’s loan contracts are typically shrouded in secrecy; Kenya’s revelations, for example, were technically in violation of its agreement’s sweeping confidentiality clause. In many cases, the loans are hidden from taxpayers, undermining government accountability. China also increasingly directs its lending not to governments directly, but to state-owned companies, state-owned banks, special purpose vehicles, and private-sector institutions in recipient countries. The result is crushing levels of “hidden debt.”

Consider Laos, where hidden debts to China eclipse official debts. To stave off default following the pandemic shock, the small, landlocked country was forced to hand China majority control of its national electricity grid. And it may find itself with little choice but to barter away land and natural resources.

There is ample precedent for this. Already, several of China’s debtors have been forced to cede strategic assets to their creditor. Tajikistan has surrendered 1,158 square kilometers (447 square miles) of the Pamir mountains to China, granted Chinese companies rights to mine gold, silver, and other mineral ores in its territory, and approved the Chinese-funded construction of a military base near its border with Afghanistan.

Sri Lanka’s debt crisis first attracted international attention in 2017. Unable to repay Chinese loans, the country signed away the Indian Ocean region’s most strategically important port, Hambantota, and more than 6,000 hectares of land around it, by granting a 99-year lease to China. In Sri Lanka, the port transfer was likened to a heavily indebted farmer giving his daughter to an unyielding money lender. Despite this sacrifice, Sri Lanka defaulted on its debts earlier this year.

Similarly, Pakistan has given China exclusive rights to run its strategically located Gwadar port for four decades. During that time, China will pocket a whopping 91% of the port’s revenues. Moreover, the China Overseas Ports Holding Company will enjoy a 23-year tax holiday to facilitate its installation of equipment and machinery at the site.

Near Gwadar, China plans to build an outpost for its navy – a move that follows a well-established pattern. Debt entrapment enabled China to gain its first overseas naval base in Djibouti, strategically situated at the entrance to the Red Sea. China is also now seeking a naval base on the West African coastline, where it has made the most progress in Equatorial Guinea, a heavily indebted low-income country.

This is the result of a lending strategy that is focused squarely on maximizing leverage over borrowers. As one international study showed, “cancellation, acceleration, and stabilization clauses in Chinese contracts potentially allow the lenders to influence debtors’ domestic and foreign policies.” China often exercises this policy leverage by reserving the right to recall loans arbitrarily or demand immediate repayment.

In this way, China can use its overseas lending to advance its economic and diplomatic interests. If China can dim the lights in Laos, for example, it has a certain ally in multilateral forums. If it can drive a country to debt default, it can secure all the trade and construction contracts it wants. And if it can control a country’s ports, it can strengthen its strategic position.

The details of China’s loan contracts with developing countries have not yet come fully to light. But it is already clear that China’s creditor imperialism carries far-reaching risks, both for the debtors themselves and for the future of the international order.

Brahma Chellaney

Brahma Chellaney, Professor of Strategic Studies at the New Delhi-based Center for Policy Research and Fellow at the Robert Bosch Academy in Berlin, is the author of nine books, including Asian Juggernaut; Water: Asia’s New Battleground; and Water, Peace, and War: Confronting the Global Water Crisis.

© Project Syndicate, 2022.