Category Archives: China-India

An Awkward Catch

China’s fishermen are venturing further afield in search of their catch, and getting in trouble further from home. Following the detention last month of 36 Chinese fishermen by the Russians for illegal fishing for squid, two trawlers have been arrested by the Sri Lankan navy and the 37 Chinese crew on board accused of fishing without authority in Sri Lankan waters.

Unlike in the South China Sea there is no question of disputed waters. Yet the incident is tricky for both governments. Relations between the two have been getting closer in what is becoming another proxy diplomatic war for regional influence between Beijing and New Delhi. The island is strategically located in the Indian Ocean on the trade routes between East and Southeast Asia and Africa and the Gulf. Chinese built and financed roads, railways, airports, ports and power plants are already to be found in Sri Lanka. New Delhi and Washington fret that a military base may be next as Beijing looks to add to its so-called string of pearls, the modern-day equivalent of coaling stations for its growing blue-water navy. Illegal fishing is an awkward diversion.

Update:  Peace has broken out. Sri Lanka’s navy says the fishermen have been handed over to Chinese diplomats. “The fault is not with the [Chinese] crew. The case is against the [Sri Lankan] owner [of the trawlers] now,” navy spokesman Kosala Warnakulasuriya tells the Reuters news agency.

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Carrier Chess

A passing symmetry to Russian president Vladimir Putin’s visit to China that caught this Bystander’s eye: his country has sold unwanted aircraft carriers to both Beijing and New Delhi. India’s INS Vikramaditya, the former Admiral Gorshkov, started sea trials this week while China’s Varyag completed its seventh sea trial last month. China’s is of more recent vintage, but India’s is likely to be able to deploy more advanced fighters and helicopters at sea. For both countries, though, it is all about a symmetrical projection of power at sea.

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Another Indian Trader Feared Abducted In Yiwu

Indian press are reporting that an Indian trader from Mumbai has gone missing in Yiwu. The city in Zhejiang southwest of Shanghai is an import-export trade hub for small manufacturers of electronics components, and is where the bizarre abduction in January of two Indian businessmen with allegedly unpaid bills caused a diplomatic rumpus between New Delhi and Beijing.

There are few details of the latest incident. The Times of India says the Mumbai trader, whose name is being withheld by Indian diplomats, was seized at a local restaurant on the night of May 19. Two days later the Indian embassy in Beijing issued a warning to Indian businessmen to be careful in their dealings in Yiwu as their “freedom of movement could be curtailed” if they got embroiled in legal disputes with local traders. The advisory prompted a retort from the foreign ministry saying that it would affect “bilateral economic exchanges between the two countries”.

The Hindu newspaper says that “dozens” of foreign businessmen have been held captive by Yiwu traders after business deals encountered problems. They are usually released, the paper says, after outstanding debts are settled. The cases usually aren’t made public. This latest one, if indeed it turns out to be in the same vein, again casts a harsh light on the realities of conducting commerce in China, especially away from the big international cities with their sharp-suited lawyers and their contracts.

Footnote: Forty-five Chinese have been arrested in Nigeria on charges of illegally selling textiles in a Kano market.

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An Odd Legal Dispute Takes A Bizzare Turn

The strange case of Shyamsunder Agrawal and Deepak Raheja, the two Indian businessman who have caused a rumpus between Beijing and New Delhi, has taken another odd turn. We wrote about the confused details in January, and have become none the clearer about the truth since, but in short, the two were facing some rough local justice in Yiwu, the electronics components trading town, in connection with some unpaid bills before Indian consulate staff intervened to have them removed to Shanghai, where the case could be sorted out in the courts.

The two have since had their passports returned but are barred from leaving the country until the outstanding debt of $1.6 million is cleared. (They claim it is their employer, who has reportedly absconded to his native Yemen, who is responsible.) The Indian diplomatic service has said it can no longer afford to pay for the hotel. Indian press reports say the pair have been thrown out on the street and have gone on hunger strike, demanding to be repatriated. One report says they have threatened suicide if their demand is not met within a week. Chinese officials are insisting they can’t leave the country until the debt is cleared one way or another, as the Shanghai court has ordered though it has yet to make its final ruling.

There may be no greater import to this case than it shows how the civil legal system, for all its recent improvement, remains ill-equipped to handle a case as messy as this. It also throws a light on the realities of conducting commerce in China, especially away from the bright lights of the big international cities and sharp suits of the lawyers and their contracts. This Bystander would wager, with low knowledge but high confidence, that there wasn’t much paperwork around the original transactions. What has been produced in court, the pair say, they signed later and under duress.


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The Puzzling Case Of Shyamsunder Agrawal And Deepak Raheja

This Bystander doesn’t quite know what to make of the strange case of Shyamsunder Agrawal and Deepak Raheja, but the two Indian businessman have caused a rumpus between Beijing and New Delhi.

Agrawal and Raheja were doing business in Yiwu, a city in Zhejiang southwest of Shanghai which is a big import-export trade hub for small manufactures. As best as we can tell they were attempting to leave town last month with unpaid debts running in to the millions of yuan. Whether the debts were theirs or those of their employer, as they claim, is unclear. But they were seized by local traders — they say kidnapped — and physically mistreated — they say tortured. An Indian consular official who had gone to Yiwu to sort the matter out was roughed up and fainted in a local court, allegedly after being denied medicine to treat his diabetes (an allegation denied by the foreign ministry in a legalistic statement that said China strictly abided by the Vienna Convention on the treatment of consular officials). Higher authorities eventually intervened, put the Indians up in a local hotel and then moved them to Shanghai to recover from their injuries after a large crowd surrounded the hotel. Five of the traders involved are to be prosecuted.

All, seemingly, an unfortunate if ugly incident, peculiar to itself and handled–or mishandled–as the circumstances warranted. Yet it produced an official and public lambasting of Indian traders operating in China and an equally forthright repost from India denigrating China’s legal system and advising its nationals to boycott Yiwu.

The spat has risen to a level where foreign ministry spokesman Hong Lei was moved to say this week, “China hopes that the Indian side can positively educate and guide the country’s people doing business in China to abide by Chinese laws and regulations, practise honesty and trustworthiness and operate legally.” India’s retort: “Based on experience, there is no guarantee that legal remedies will be readily available. In case of disputes arising, experience suggests that there is inadequate protection for safety of persons.”

We know nothing of the original circumstances of this case beyond what we have read in press reports. This may all blow over, but, rightly or wrongly, it will confirm a lot of popular conceptions around the world about how much of China still works away from the big, international cities. Our man in Delhi tells us this case has touched a popular anti-Chinese nerve in India and triggered calls for a boycott of Chinese imports–though we imagine that if the businessmen and diplomat had been American, European or Australian there would have been much the same popular outrage in their respective countries. It also shows how much work Beijing still has to do in projecting China’s soft power.

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Dai The Diplomat

China’s top diplomat, Dai Bingguo, has been busy in troublesome places for China’s foreign policy just beyond the country’s outer marches, first visiting Myanmar, now Pakistan: two outlets for China’s overland energy routes to the oil of the Middle East, and forming a pincer around India.

The two countries provide mirror image challenges for Beijing’s foreign policy. In Myanmar’s case, a fast ally turning towards Washington; in Pakistan’s case, an ally of Washington, if never a fast one, falling out with its erstwhile friend and turning toward Beijing. In both places, there is unrest: ethnic minorities fighting for autonomy in northern Myanmar along the border with Yunnan; the overspill of the Afghanistan conflict in the other, along the border with Xinjiang, Beijing also believes that its own rebellious Uighurs take shelter in exile in northwestern Pakistan.

Beijing’s interest lies neither in turning allies nor picking sides, however. It is in stability, so it’s strategic commercial interests, such as CNPC’s new oil exploration deal in Afghanistan, can thrive and its hydropower stations, oil terminals, pipelines, and the coaling stations for its blue water fleet — its string of pearls around the Indian Ocean — can be constructed without disruption.

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Seychelles Latest Addition To China’s String Of Pearls?

The so-called string of pearls—a series of naval bases in South and Southeast Asia intended to secure Chinese sea lines of communication across the Indian Ocean–looks to be adding another gem. Beijing has indicated that it will start using the Seychelles to resupply its naval fleet, initially PLA-Navy vessels on anti-piracy patrols, but also prompting speculation that this is a prelude to establishing a naval base there. Defense Minister Liang Guanglie was in the Seychelles earlier this month to boost bilateral ties. Seychelles President James Alix Michel visited Beijing in October. The two countries have had a military cooperation agreement since 2004 that provides for Seychelles soldiers to be trained in China.

Pearls already in the string include Marao in the Maldives, Gwadar in Pakistan, Chittagong in Bangladesh, Sittwe in Burma, Lamu in Kenya and Hambantota in Sri Lanka. China also has resupply agreements with Oman and Yemen, similar to the one being initially proposed with the Seychelles. The U.S. has a drone base in the Seychelles, but the arrival of the Chinese fleet in such a strategically important part of the Indian Ocean would give rise to most concern in New Delhi.

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India Trumps China At UN

Our man in New York sends word of a little noticed election at the United Nations in which the dragon has suffered a reverse at the hands of the elephant. For the past 10 years, Beijing has occupied a seat on the UN’s Joint Inspection Unit, the UN system’s independent external oversight body. But it has been ousted with A. Gopinathan’s 106-77 defeat of Zhang Yan for a five-year term starting in 2013. Gopinathan is India’s permanent representative to the UN in Geneva; Zhang is Beijing’s well-regarded but somewhat controversial ambassador to New Delhi.

This was a rare head-to-head confrontation of Asia’s two regional powers, and while the post is of greater importance within the UN than without, it serves as a reminder that Beijing’s sway is not omnipotent, regardless of the fact that China has a permanent seat on the UN’s Security Council, whereas India has only a rotating one. We also understand that New Delhi only decided to fight for the post after Beijing asked it not to field a candidate for Asia’s second seat at the unit. Japan holds the other one.

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An Unintended Indian Consequence Of China’s Tainted Food

China’s problems with adulterated foods and medicines have shown up in India in an unlikely if sensational way. Our man in Delhi sends word that India’s sporting world has been consumed not for once with cricket but with eight of its top athletes failing drugs doping tests. These include three of the women’s 4×400 meters relay team that won the gold medal at the Asian Games held in Guangzhou earlier this year and at the Commonwealth Games in Delhi. They are currently competing in the Asian Athletics Championships in Japan but the failed tests followed a domestic meeting in Bangalore.

All eight–six female 400 meters runners, a female shotputter and a male long-jumper–tested positive for banned steroids. It is considered India’s worst doping scandal and the story has moved off the sports page onto the front and editorial pages of India’s newspapers as it involves star names such as Ashwini Akkunji, who as well as winning Asian Games gold with the relay team won the women’s 400 meters hurdles event. Turns out, though, that the source of the banned substance was kianpi ginseng supplements the coach of the runners, a now sacked Ukranian, bought or told his runners to buy during the Guangzhou competition. He wanted the women to take the supplement to aid with protein recovery after training.

Kianpi ginseng, an enhanced version of the plant, is reputed to be especially potent. Bodybuilders often use it to put on muscle. Previously the Indian women athletes had taken regular ginseng supplements but which were sourced from the U.K. and they had never had problems with doping tests. The first ones they took since starting to consume the Chinese ginseng they failed.

The clue to the source of the steroids apparently was that the one 400 meters runner who didn’t fail her drugs test didn’t take the Chinese ginseng as she gets hers from Amway. How the kianpi ginseng got adulterated and whether steroids are a regular part of the concoction that goes into a kianpi ginseng supplement pill or whether they were a spiked batch, intentionally or not, is unclear.

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More Celebration Than Substance To Pakistan PM’s Visit

There is a whiff of opportunism to the four-day visit of Pakistan’s prime minister Yousaf Raza Gilani, coming as it does when Pakistanis are turning even more angry at America in the wake of Osama bin Laden’s killing and Americans are turning even more angry at Pakistan for mirror-image reasons.

This year marks the 60th anniversary of diplomatic relations between China and Pakistan. Pakistan certainly wants to boost its bilateral ties with China and Beijing is unlikely to do anything to cloud Islamabad’s view of it as as an “all-weather friend”. China is already helping Pakistan develop its nuclear energy program and communications infrastructure. It is also selling Pakistan arms and military equipment.

However, none of that is sufficient to let Pakistan ditch its economic and military reliance on the U.S. ($3 billion in 2012). Nor would Beijing necessarily want that. Pakistan is not sufficient a prize to compensate for the damage that would do to China’s more important relations with the U.S. and India.

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