Correcting mistakes in Indo-Pacific Region

Pic source: Wiki

An unstructured commentary on developments in the extended neighborhood in Indo-Pacific Region. Let us take a few key countries.

Australia

If you think, India has done well in correcting mistakes of the past with decisive steps with long term strategic goals as pivot. Think again. My impartial view is, Australia is equally better. They've done quite well in a short term & in a structured way.

Would you believe, if I tell you, it is nothing short of miracle, that a country as big as Australia escaped by a whisker from clutches of China. It was a 360° assault on Sovereignty. Now This may sound a hype or even a myth. But, that's what quite happened. Let me give you a few key pointers without going into the details.

China was in the midst of making Australia (!!??) as their vassal - just as they were trying with India. Why would they do that? Very simple answer is, it is always good to have two large democracies as vassal of an authoritarian regime to get all their 'acts' validated in the region. The proverbial, "plausible deniability" would be much easier if you have democracies by their side. China can always make the argument, "Hey, but free and fair democracies in the region support our actions." 

Now that we know the motive, does it end here, what is the ultimate goal? By sending thousands of students every year to Australian universities, China has also tried to influence students from other countries who study in those very universities. Mind you, these other country students include those from India, Singapore & Pacific islands. These students come from either poor or upper-middle class families. Quite humble souls. They're there to just to study & go about their business. By sending in more numbers per university, Chinese students were always more in number & roam around in one pack, than those from free thinking democracies who are tough to gel as one pack. This started something what I call, "the inflicted Stockholm syndrome" artificially. To such an extent that recently, an Indian professor invited severe backlash from Chinese students when he referred to Taiwan. Yes, this happen. Some reports were out on China has been stealing research papers from universities & sending them back to China. I leave it to you to do research on how politicians funded by China have a hold on Australian Universities.

Does it end with colleges? No. This goes to workplace and work environment there too. And then, this extended into precious real-estate & military / strategic interests in Pacific Island family. The scale was enormous and did drag attention after ruffling a few feathers.

I feel, it is in this context that Indo-Pacific was actually born. Mainly to thwart the advancing Chinese wedge. You know, the good thing about the wedge? It has to be driven in a particular angle. Chinese have made a wedge. But they are slapping it against the wood. Which won't break the wood! Similarly, they are aggressive diplomatically. But, no one is sure on military. Here, China's adversaries have already started preparing since 2016. Long before China woke up & was busy regulating tourists to countries basis their 'quota' - from Maldives to Australia to Africa. (Trivia: Yes, tourists spending is part of every deal signed by China with every other country as part of BRI. Open source, you can research. It will require one more post on Chinese tourists.) 

Game began in 2015. World was changing. Japan had Abe entering 3rd term. India had a change of guard with PM Modi at the helm. Scott Morrison as Federal Treasurer was getting strict with Chinese. Cancelling some key deals with Chinese in sight. Two key ones worth mentioning would be: 1) Blocking an Ausgrid project linked to Pine Gap. 2) Blocking sale of S. Kidman and Co. 

A special thanks to ASD / ASIO & FIRB officials for stopping such key asset bids / sale to China. Even PM Turnbull wasn't confident of going forward with the recommendations and feared that there'd be a backlash from China. (Widely covered in media.)

Meanwhile, politics played its part & Treasurer Scott Morrison becomes PM Scott Morrison. Blessing in disguise. All along, security cooperation with countries in the region had started - albeit as a soft-launch with India, US & Japan. Australia is still not part of QUAD - militarily. As much, I'd welcome Australia's participation, the threat of China infested security apparatus is still significant. The cleanup is going to take some time & rightly so. Am sure, with the "2020 Defence Strategic Update" - which is a formal roadmap backed up with funds worth A$270 Bn. That's 40% increase of what the "strategic review 2016" promised A$195Bn.

Few weeks ago, China stopped food imports from Australia. And was hoping someone else could sell it to them. This is no loss for Australia. Any purchase from half-way around the globe would invite serious logistical issue in case of war. What would happen when food is getting choked is anyone's guess.

Fast forward mid-July 2020. With such aggressive Chinese moves and the infamous 'chewing gum' comment by Global Times, the process has only got more momentum and motivation to move away from China.

Needless to say, this opportunity will definitely be used by QUAD. There are unconfirmed reports in Indian media that, India plans to invite Australia to join the annual Malabar naval exercise. Hopefully, this time, it would be for real and complete. For it is Australia which can help us create a 'bridge' with Pacific Islands along with Fiji.

Fiji

Frank Bainimarama, especially is key to the pivot on Pacific Island race that is going on. The race is about how to get more of these island nations on their side of the game. The game is between China and US backed allies. Led by Republic of China (Taiwan) and Australia. With India entering the scene, I think, there's more to this. Indian PM's visit to Fiji in 2014 is a milestone and subsequent changes in polity of Fiji is worth mentioning. Why so? Because, Modi & Bainimarama did something unexpected. Invited Heads of State of all 14 Pacific Island nations, for formation of "Forum for India and Pacific Island Countries (FIPIC)" based on India's Africa engagement success story. Constant followup made further improvements. The 2017 India and Pacific Islands Development Conference, for instance.

Tuvalu, Samoa and few other are flipping more than often between China & Democratic nations. Wrong. They should stand with free world and do the right thing. Rest of the world should do all that is possible to stop these small nations falling into the debt trap of China. Unsustainable amounts of monies to these countries would make them colonies of China once & for all. The line should be drawn to stop China far before it leaves shores of Mainland China.

Philippines

Another key partner in this anti-China coalition that is building up, is Philippines. In 2016, Philippines won the ruling in Permanent Court of Arbitration. Until July 12th 2020, Philippines was seen going slow / soft on the ruling. Which emboldened China in its rogue attitude and honing skills of Wolf-warrior diplomacy. Ultimately leading to a failure today. As Philippines did a U-turn on this issue which could dent China's claims in South China Sea. Manila said today that it is not willing to compromise on 2016 ruling. Few days ago, Manila also made another statement. That, India is interested in navigating South China Sea.

Guam (United States)

In 2018, there were some movement about Indian Armed Forces (Airforce & Navy) in Indo-Pacific region. Especially, expansion of its role in Pacific. It was widely reported too. Then, it went out of news cycle. Probably put into backburner. Thanks to China & its arrogance, this re-appeared in last week of June 2020. Now, news is that US is planning to introduce National Defense Authorization Act for 2021. This would now enable Fighter Jet training in Guam, for detachments from Australia, India & Japan.

Chile

On South Pacific, India is doing something very interesting. It is leveraging age old ties with Chile to help counter China. Chile, in all probabilities would be India's pivot to Latin America. The PM Modi - President Pinera meeting of August 2019 might have played well, I guess. October 2019, Chile Announces Cancellation of 2019 Asia-Pacific Economic Cooperation Summit. (That it was a surprise for US is a different story.) Now, fast-forward to April 2020, after being hit badly with China Virus, Chile & Latin American countries in the larger context are moving away from China. Probably, the meeting of August helped Chile sense what is coming for China even before the pandemic. China's fall was written on the wall. Pandemic, just made it faster.

Some news from Chile, on how Indian Private & State owned Arms Manufacturers are preferring Chile.  Indo-Russian JV Brahmos is also invited, is additional story. That means, a bell must have rung. For us, Chile is a pivot for larger South American continent. Hope to see more joint efforts. Wish the participation of Indian Navy in EXPONAVAL 2020 things would move to next level of cooperation.  Hopefully, expect more developments in this regard.

Thanks to China Virus, Democracies have got a golden opportunity to wake up to crude reality & achieve world peace through non-coercive actions based on logic & justice. I am hoping to see a day when Pacific Island nations, Australia, South Korea & Japan - along with India, be part of an unsinkable coalition across Indo-Pacific region making it unsustainable for China-like countries to even have guts to go against Rules Based Order. Any make any offensive moves & threaten people of free world. If this is dubbed as Cold War 2.0, SO BE IT. An example should be made out of China in the coming months & years. Hope to see CCP Politburo members & PLA Generals in International Criminal Court.

UPDATE: Australia approaches UN over claims over South China Sea. In its petition to the UN, Australia rejects China’s “historical claims” in the SCS since they violate international law & the UN's Law of the Sea Australia is also the first country outside the South China Sea region to approach the UN on China’s claims. Read more here.

Must watch / read references:

1) Stratnewsglobal interview with Amb Navdeep Suri (ex Indian envoy to Australia)

2) Australian PM Scott Morrison announces Strategic Update 2020.

3) Philippines Says No Compromise on 2016 Sea Victory Against China

4) India intersted in navigating in the South China Sea

5) US: NDA act seeks fighter jet training detachment for India, Japan, Australia in Guam

6) India - Chile in South Pacific

7) India's strategic expansion in Southern Pacific Islands

Belt & Road Initiative - a ponzi scheme?

Source: ConsumerAffairs.com

Further to my earlier post on One DEBT, One Road – The Silk Road to Debt Trap, I would here be explaining what is in store for Chinese in the coming months.
Am actually tired of explaining a simple fact that the Chinese economy is unsustainable in long term. Let me try it once more on this.

Some investment gurus and those planning domestic economy at a macro level are still believing in Chinese magic! No worse joke than this! Would like to both pity at them and also give them a tight slap (not literal one!) to wake them up. And make them smell coffee! That 'magic' train has already left. Even some are writing about it these days. Boldly. Been shouting about it for years now. Even my last two blog posts were about that.

I am not going to go into minute details & bore you with numbers. I let you google about it. Let me make this a bit interesting. Let me take you a few centuries back on & off.

Imagine that you are right now in 18th Century. Around the same time, when imperials started to conquer territories. China & India had been dominating majority of world's market with its goods. Silk Roads existed then too. There was neither one belt nor one road. More so, no debt.

What happened now? Why people are against the ponzi scheme?

Because, people are simply realizing this as unsustainable. How? Unqualified / unaffordable loans.

The age old civilization has survived for thousands of years, by living along with the nature and not thereby exploiting it. Today, what is happening is exploiting the resources in a fast pace. But with lots of money! Something people can't even afford. More than money, criminal waste of resources.

It is like this: A countryside town needs a basic bridge that can transport people from one shore of a river to another. But what if Chinese build a tunnel.

Now, a few points:
(a) Though a tunnel serves the purpose, was there a cheaper alternative? Yes, a bridge.
(b) Will the countryside town be ever be able to pay that amount? Highly doubt that.
(c) Is it not like an intern given a credit card by a ponzi bank scheme where in he / she has a credit limit of say, 100K? What will the kids do with it? Investment? Come on!
(d) This much money HAS to be recovered. So, the ponzi bank uses tactics to recover it from you. Suppose you had a family wealth, you would be forced to sell it to the bank at dirt cheap rates.

You think, I am kidding? You know Hambantota? You know what is happening with Railway that Chinese built in Africa? You read about Ghost cities in Nigeria & other places? Well, of late things are beginning to get better. Malaysia, Kenya have been talking about cruel Chinese investments. In Sri Lanka, Chinese investments are seen as a liability clearly.

Malaysia even went & cancelled a few projects officially. Read report here.

Vietnam is in full throttle to go against Chinese in South China Sea. Look at recent interactions of Vietnamese officials / Government with India, Sri Lanka, Bangladesh, Burma & Thailand? The process started few years ago. Last year, this interesting piece spoke of it in detail.

You can't forget how Philippines President Duterte shunned China in South China Sea. He is making right moves & showing signs that will have deep impact for us to see during his tenure. Most importantly, he is linking with Israel to chase jihadis in Southern City of Marawi. But, that is not all! This piece has some more details.

Kenya & Nepal would soon fall prey to Chinese debt. While former for railways (Read here & here)

So, at the the end of the day, what we thought as a debt trap for countries is actually turning to become one of the notorious loan sharks of the world which is funding rogue nations - including Pakistan!

All the money is circling back to China, after making you bankrupt. For them, it is just cash - which they can print anyways. For rest of the world, it is natural resources & wealth. Something that they have lived with & sustained for thousands of years. This should be stopped. It is unviable & unsustainable.

Hope loan shark is isolated sooner than later. Glad that India stayed away & is unmaksing Chinese without even being part of the project to deplete world resources.

China is walking on glass. One that is already beginning to crack. A glass once broken can't be fixed that easily. Am sure, that glass will break fully soon. How?

(i) In due course, when countries start defaulting loans, few companies in China would also go bankrupt.
(ii) Lot of common people who deposited money in these banks would soon realize that their savings was irresponsibly used to fund these projects.
(iii) China would soon realize that it can't reach Indian Ocean easily as it has to cross several Nations before reaching here.
(iv) Clock is ticking. Time is not far, when China's bluff will be called out. Not by any major nations. But, by people & governments of smaller nations.
(v) With Tariff war with US only to get worse for China, around end of the year, things can't be better soon as China may be up for default around January 2019.
(vi) That's not all. The capital flight issue is still not tackled. If not taken seriously, it would be turn to be much worse issue than declining economy itself.
(vii) It only matters until China receives first major default. Thereafter, it is pack of cards. Brace for it. It will be a brutal correction for China.

What worst insult to the nation that aspires to be a super power? You are cheating small nations.

So, in a nutshell, China is undoubtedly a Loan shark running a ponzi credit card scheme of a dubious bank called PRC! That's some dubious reputation. Not sure, if China wants to live with that.


Suggested reads:
(i) China’s Debtbook Diplomacy: How China is Turning Bad Loans into Strategic Investments
(ii) China's debt-trap diplomacy reaches the Philippines, which is likely to accept Chinese loans 1,100% more expensive than other options