• Outbreak of the Corona Virus
• President Xi Jinping visits Myanmar
• India – China Trade down in 2019 as compared with 2018
• China’s Great Wall Motors to buy GM plant
• Huawei permitted to participate in 5G trials in India
• Japan confirms 3 new cases of corona virus
• PM Abe considering Moscow visit in May
• Former Emperor Akihito Collapses and Loses Consciousness
• 10 cases of corona virus in HK
The US – China Trade and Technology War:
• Phase – 1 Deal marks a temporary truce
II Developments in China
Outbreak of the Corona Virus
The big story out of China this month is the outbreak of the corona virus which has just been declared as an international medical emergency by the WHO. The number of confirmed cases in China itself has risen very rapidly over the last couple of weeks and today stands at 9692 with 213 deaths. Cases reported from other countries have also been rising over the last few days. India has confirmed its first case in Kerala, a student who returned from China having tested positive for the virus.
The virus has its origins in Wuhan in central China and the first cases were reported as far back as early December 2019. As is customary, the Chinese authorities did not inform the WHO about this outbreak until it became too large and widespread to hide. There are also murmurs that the virus originated in a secretive, biological weapons lab the Chinese run in Wuhan but this is unconfirmed. Highly probable is the fact that it originated in animals and then a strain which can be passed on from human to human caused its spread. Whatever, the reality, there is no doubt that the corona virus is indeed a global pandemic now with countries across the globe uniting to fight it. Incidentally, North Korea, Mongolia as well as Russia have closed their borders with China in an effort to prevent the spread of the virus.
The Government of India has prepared some Air India aircraft to fly into Wuhan and pull out the remaining Indians there which includes about 200-odd students. The Chinese Government has not been giving clearance to such flights but is likely to do so within the next couple of days. These evacuees are to be kept in isolation wards prepared for this eventuality in the NCR of Delhi.
The big lesson from this current outbreak of the corona virus is how the globe is interconnected today and that we must prepare ourselves for a global pandemic of possibly larger proportions.
President Xi Jinping visits Myanmar
Chinese President Xi Jinping made his first visit of 2020 to Myanmar on 17-18 January 2020, the first such State visit in 19 years. It signified the importance of this bilateral relationship and also brought the two governments closer to each other than ever before. This is the 70th anniversary of the establishment of diplomatic relations between the two countries. 33 agreements, MOUs and other contracts were signed during the visit indicating that China intends to further embrace Myanmar. These agreements are in the areas of railways, power, infrastructure, human resource development and others including a shareholders agreement for the Kyaukphyu Special Economic Zone. Many of these projects will be included in China’s ambitious Belt and Road Initiative. Xi not only met and held discussions with Myanmar’s President but also Counselor Aung Saan Su Kyi as well as leaders of some of the political parties in the ethnic areas where Chinese projects are being undertaken. All-in-all, this is one more step in the steady Chinese approach and diplomacy towards its neighbors in this case Myanmar.
India – China Trade down in 2019 as compared with 2018
Quick estimates from China Customs indicate that bilateral India – China trade in calendar 2019 amounted to US $ 92.67 billion down about US $ 3 billion compared with 2018. Chinese exports were US $ 74.72 billion while our exports were a meagre US $ 17.95 billion, leaving a trade deficit of US $ 56.77 billion (as compared to US $ 58.04 billion in 2018). This deficit with China contributes massively towards India’s overall global trade deficit and hence is problematic. Given the composition of India’s exports and imports from China it seems difficult to bridge this gap unless there is some out of the box thinking. Non-tariff barriers against India’s two major export items – pharmaceuticals and computer software – are part of the story. However, we must focus on the Invisibles side of the Balance of Trade particularly on tourism and education in order to narrow this deficit.
China’s Great Wall Motors to buy GM plant
There are reports that Chinese firm Great Wall Motors is set to buy the General Motors Talegaon plant for US $ 250 – 300 million. Rather than such brownfield investment we need to encourage greenfield investment from China.
Huawei permitted to participate in 5G trials in India
India announced that it would permit the Chinese telecom major Huawei to participate in 5G trials in India, an announcement received with much relief by China’s Government. India continues to assess the national security dimensions of permitting Huawei in our 5G telecom network.
III Developments in Japan
Japan confirms 3 new cases of corona virus
The Japanese authorities have confirmed 3 new cases of corona virus bringing the total number of Japanese persons with the disease to 14. There is concern in Japan of how the corona virus will be combated and whether it will negatively impact the Summer Olympics in Tokyo this year.
PM Abe considering Moscow visit in May
PM Abe is considering making a visit to Russia in May this year to mark the 75th anniversary of the end of World War II in Europe. Such a visit would carry special significance for relations between Moscow and Tokyo. However, it is doubtful if the two nations will be able to resolve their long standing territorial issues by then.
Former Emperor Akihito Collapses and Loses Consciousness
There is concern in Japan about the health of former Emperor Akihito who earlier this week collapsed and lost consciousness temporarily. A later medical check up however displayed no significant irregularities.
IV Developments in Hong Kong
10 cases of corona virus in HK
10 cases of the corona virus have been reported in HK, even as people there seek to purchase masks for their personal use. The HK authorities have also stopped permitting people from the Mainland to cross to HK temporarily. Even while this is ongoing medical health workers in HK are threatening to strike work, an inopportune time if any.
V The US-China Trade and Technology War
Phase – 1 Deal marks a temporary truce
The Phase – 1 deal between the United States and China marks at best a temporary truce between the top two economies of the world. It enables President Trump to return to his voters this November and enables him to tell them what he can achieve with China. For the Chinese leadership it marks a truce for the moment and enables them to gather their forces once again for possible renewed hostilities on this front. It appears to us that when and if President Trump wins his re-election he is likely to renew the trade and technology war with China as there are many unfinished parts of his agenda. On its part, China is girding for this possibility.