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Shastri Ramachandaran: Any Conflict Between China and US Would Destabilize the Global Economy (EXCLUSIVE)

"Armedia" IAA presents an exclusive interview with Shastri Ramachandaran, independent journalist, writer, editor, columnist, publication consultant, who worked with leading publications in India, China, Europe, writes on regional and global affairs.

Senior consultant and editor of “China and India Dialogue” magazine brought out by China International Publishing Group in Beijing (2015-2016). Earlier worked with China Daily and Global Times newspapers in Beijing.

Senior Editor for newspapers Times of India, The Tribune, columnist for The Citizen and Daily News & Analysis.


Would you, please, summarize the foreign politics of China in 2017? What main developments would you indicate? 

- I think this was an eventful year for China. China is India’s big neighbor. On the foreign policy front there have been developments which I can divide into two parts: 1) developments between India and China; 2) China and the world.

Only a few months ago we had a very controversial situation on the border, where India, Bhutan and China meet. This place is called Doklam, where the troops of these countries were facing each other. Of course, there are contradicting versions from India and China of what the situation was. But some facts are clear: China was in Bhutanese territory and India was also in Bhutanese territory. The thing is that the line of actual control between the two countries is not yet clear in many parts, and China was trying to build a road from there, which would have allowed them access, perhaps in future days, to the North-East part of India. That was the reason that India couldn’t allow that the Chinese troops come any further: South or East towards the Indian territory in the North-East.

Fortunately the issue was resolved diplomatically. When two sides met in Astana conference they agreed that they’ll not allow differences to become disputes. So the positive outcome of the whole, what looked like a confrontation, was that it did not become a confrontation. This is one. Second, it was resolved diplomatically. And third, there has been no further negative developments after that.

The second important development is the talks between India and China by their special representatives, and now both countries are looking forward to restoring the trust deficit between them, and they can go forward with economic cooperation which has been the bright side of China-India relations because trade and investments are very good between both countries.

Another situation where China and India are involved on the international stage was, what they call, the Russia-India-China trilateral conference. The three countries had a similarity of views, especially on the hot spots of the world, like the Middle East, Syria, Yemen and North Korea. Which means these three countries will work together for peace and stability in the region and keep down the levels of conflict in other countries.

How would you describe China-USA relations during this year?

- I think the most important development was the US President Donald Trump’s visit to China. The Chinese not only rolled out the red carpet but they pulled out all the stops. He was invited to a banquet in the Palace in the Forbidden City, which is an exceptional privilege and very great honour. I suppose China was reciprocating what Trump has done for President Xi Jinping. Both China and US are the world’s most important economic partners. Any conflict between China and US could destabilize the global economy, and they know that. So as expected, China’s President Xi and US President Trump concentrated on how to improve economic and strategic cooperation, so that there is no conflict, and trade and investment can flow both ways. Of course, the US has a policy of “America First” under Donald Trump. but I think this will be a challenge to China. Chinese investments are also being scaled up in the US so that it can create more jobs in the US and both countries can benefit from further investment and mutual economic cooperation.

How was  the yuan and dollar controversy resolved?

- Trump had accused China of currency manipulation but that was when he was during the election campaign. Now he is no longer a candidate. And as President, Trump is not rushing into a conflict, where he can negotiate and shake hands and win friends. There was also the East-Asia Summit in the Philippines, then ASEAN Summit, and US and China were there. And in all these places they both were working hand in hand.


What about China-Russia relations ?

-  China and Russia are working in tandem. It’s a very powerful force in military, strategic and economic terms because both are members of the UN Security Council. They can be a counterbalance to the US in hot spots like the Middle East, especially on the issue of Palestine and Israel, in Syria when we are speaking of international engagement of China. That is one.

The second aspect is in the Asian continent where we have a highly tensed situation of North Korea. This is the first country now to have missile systems which can reach entire US.

But it is perceived that China has a great influence on North Korea.

- Yes, it is perceived, and there is an enormous pressure from the US to restrain North Korea or to help with sanctions against it by cutting off oil supplies, etc. so that Pyongyang is tamed into behaving as the international community want. So far China-Russia-US-Korea have been more or less on the same wavelength in how to deal with North Korea, that they are not pulling in different directions. They have agreed that North Korea can’t get away with its missiles. There is a warlike situation but there is no situation of war.

In your opinion, is China backing North Korea in threatening the US?

-  I don’t think China is backing North Korea to threaten the US but China definitely doesn’t want the US to exploit what North Korea is doing to increase Chinese military presence in Asia. Because if South Korea and Japan buy more military equipment from the US and they install missiles on their territory, it is as much a threat to China’s military dominance of Asia. So they wouldn’t like to have it in the name of North Korea.

How China is involved in the Middle East affairs, although we don’t hear its name much?

- China is very much involved in the Middle East. It was last year that Chinese President Xi went to the Middle East and spoke to the Arab leaders. It was the first time a global leader was speaking to them about the dialogue between civilizations and cultures. And he was speaking to them not in confrontational, challenging tone like Western leaders do. I think the Chinese have just begun to enter that region. They don’t want to become very visible with what they are doing. They are supporting Russia. Russia and US are very visible there. The Chinese are with Russia. They have also sent some military divisions from the Chinese army to get combat experience in Syria and that is the Russians who made it possible. The fact that China is supporting Russia has made the Russian intervention more effective, more powerful and more conclusive.

But now Putin is withdrawing troops…

-  He has to withdraw because they can’t be there as occupation troops because there are so many kind of dialogue places on Syria: Moscow format, UN Peace Process, Oslo Process, Turkey is taking its own initiative, Iran is also involved, then axis between Saudi Arabia and Israel, and then the situation has been further complicated with Trump recognizing Jerusalem as the capital of Israel.

These are not going to solve problem, they also create problem. And here China would like to resolve the situation and not to raise it at a level of conflict.

That is China’s policy – to calm down any conflict.

-  Yes, you are right, because China is the biggest beneficiary of globalization. It has expanded, it is doing business with all over the world. It is a member of WTO. So any kind of slowdown in globalization will affect China. So it doesn’t want conflicts because it gains economically, politically and of course militarily if there is no conflict.

-  But what is going on inside China? Now hundreds of ghost-cities appeared in China. And specialists don’t come to any common opinion – why China is building cities where nobody lives? What do you think about this?

- Technically speaking these are assets. They increase the GDP but they don’t actually increase the per capita income of the people or improve their life in any way. They are doing this because their exports have fallen, there is no off-take, no market for many of their capital goods like cement, steel, iron and so on. So they build at home, otherwise they’ll be just lying. They are also building metro, infrastructures in places where there is no adequate market or traffic for it. So they have built ghost-cities, hundreds and thousands houses and people are not occupying them. And it’s not only inside China. For example, China built Hambantota Port in Sri Lanka and an airport which is the emptiest airport in the world. And their kind of aggressive pursuit of “One Belt, One Road” initiative is also for this reason. They want to utilize the accumulated capital goods.

There is still extreme poverty there. Now China is trying very hard to fight what you call the trap of becoming a middle income country because if you stay in the middle income trap, then it’s very difficult to get out of that. So they are working towards models of prosperity in another three years.

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