A Belligerent Dragon dancing with the Elephant

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An unfortunate incident happened on the night of 15-16 June, when the recent impasse on the LAC broke down leading to a melee at Galwan valley, killing 20 Indian soldiers and an unknown number of Chinese soldiers (43 Chinese soldiers dead reported by Indian sources). This event is in stark contrast with the statements coming from the military brass and Diplomatic sources engaged in de-escalating the tensions on the LAC with their Chinese counterparts.

The reason for the scuffle as specified by Indian Army sources, was a check-in process by a team of Indian soldiers led by Col. Santosh Babu to check and remove the left-over illegal camps built by Chinese soldiers on the Indian side of the LAC which led to over-aggressive behaviour by Chinese soldiers and fisticuffs, killing soldiers from both sides. 

With this event, the streak of no bloodshed on the LAC since 1975, in which 4 Indian soldiers of Assam rifles lost their life at Tulung La situated in Arunachal Pradesh, has been broken. This is a clear case of violation of key agreements of 1993,1996 and 2013 between both sides, through which they are committed to maintaining peace despite differing perceptions of the LAC.

The statement of Prime Minister (PM) Narendra Modi has underlined that India wants peace but “will give a befitting reply” if provoked, and External affairs minister S Jaishankar has conveyed to his Chinese counterpart Wang Yi that the Galwan Valley development will have a “serious” impact on the bilateral relationship, shows the change in the stance of the political leadership of India.

Belligerent China is pursuing her interest, at a time when global turmoil is evident due to the Corona Pandemic. Shrouded with the Pandemic, China has recently passed a Security bill for Hong-kong, started coming vociferously in the South China Sea, increased her critical narratives on Taiwan and taking a hard stance on the LAC against India, all being attempted at the same time.

The current tensions on the LAC have been perceived to be due to changing dynamics of global politics and a pro-active foreign policy of India slipping towards the anti-Chinese group, coupled with the building of a road called DSDBO (Darbuk-Shyok-Daulat beg oldie) connecting Leh with the Karakoram, build a few miles away from the Aksai Chin. But, are these the real reasons for the Chinese hard stance or are there other things we have missed?

We must bear in mind that the changing power dynamics tilting towards China is a nudge for China to be more belligerent in different areas to push for the agenda of Chinese nationalism in a time when voices are being raised against Chinese leadership at home as well as globally. At a time when the whole world is very much dependent on China for its manufacturing needs, these actions seem to be logical.

One thing which the world is isolated from is The modern Kingdom (China) with a medieval mindset. The book is written in the 5th century by a Chinese Army General Sun Tzu named "The Art of War" is still relevant today, not only for learning purposes but also for practical applications.

 "The supreme art of war is to subdue the enemy without even fighting"

                                               ~Sun Tzu

And that's what is happening now, a continuous game of hardening, followed by negotiations, almost resembling an endless motion inside a loop. China's increasing investment in foreign countries, with increasing clout through Cultural diplomacy and People's Diplomacy to have influenced all around the world, find resemblance in the work of Sun Tzu, to defeat the enemy by making him impotent even without waging a war.

As China is denying a process of exchanging the maps with India, which clearly shows the intention of leveraging the LAC position through ambiguity to pressurise India, as and when required, The nibbling away tactics are just a game of China which is the brain-Child of the most ambitious leader of China, Mr Jinping, after whose succession the flare-up on the LAC has increased, be it the skirmishes of 2013 at Daulat beg oldie and 2017 Doklam Crisis or the Current impasse on the LAC on multiple areas.

China is a country whose tactics are unknown but whose goals are very much known, The Middle Kingdom. All the moves consolidate to make China stride in that direction. The surprising move of China claiming Galwan Valley, a shift from the past, is meant to make India agree on the existing status quo, by nibbling away the occupied land from India. But the current crisis between India and China is an Eye-opening moment for India, debunking the misplaced sense of our ability to handle China and an illusion provided by the informal summits of Wuhan and Mamallapuram, and making us aware that we not only have one enemy to deal with we have two, one being in wide-open (Pakistan) and other being hiding in the face of an Economically(China).

Ashley Tellis of the Carnegie Endowment for International Peace -a South Asian Strategic affairs analyst of repute says India – like all other countries – which share a border with China have only three choices. First, retaliate against expansionism by copy-cat capture of poorly defined territory held by China. Second, resist expansionary claims actively – on the ground and diplomatically. Third lie back and accept the rape.

The third option seems irrelevant in the current scenario given the current government which is riding on the wave of nationalism finds itself in a dilemma to consider that option. The first option, employed earlier, has reaped no fruits, in the meantime leading to the current situation. Now the only left option with us is confronting through multiple fronts, with upgradation in our defence infrastructure coupled with formulating a new National Security Strategy to confront these kinds of situations in the near future, wisely. A clearer stance on the LAC, by resolving it through consensus and not allowing it to fester by clearing out all the differences as well as forging the global alliances to diffuse any unilateral action by China are the ways forward. Equally important is to consider the Economic front, to steer clear of growing Chinese dominance in the Global Economic front as well as Indian dependence on it. Ours is an Economy ⅕ the size of the Chinese, and here lies the great task ahead to be cautious of the path ahead without disturbing the interest of the Indian populace.

 

China is certainly ahead of India in Military and Economic terms, but are we willing to legitimise the killing of our fellow countrymen, just not to confront thinking of a powerful Enemy?

Indeed the steps taken by the GOI, to stop Chinese cheap goods imports to India, cancelling of Indian Railways infrastructure building deal with China and the Launch of the Atmanirbhar Bharat initiative, are some of the moves in the right direction. The government is now taking their share of responsibilities, now is the time to ask, Are we taking ours?

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This Article was originally published in the 

Eastern Herald.

A Digital idea whose time has come!!

Recently People's Bank of China(PBOC) launched a pilot project to use Digital currency, officially called as DC/EP (digital currency Electronic payment), to be used in four major Cities of Shenzhen, Suzhou, Chengdu, Xiong'an and areas that will host some of the events of the Winter Olympics 2022. The idea is to fully operationalise a digital currency before the winter Olympics of 2022, to be held in China and for that China wants to digitalise her financial system, and if successful, China will become the first country to do so. This all amidst a time when the tensions between The US and China are on an all time high, and a new term "Cold-war 2.0" is being proposed due to brewing tensions between two major rival powers.

The History of Digital Currency

In 1983, a research paper by David Chaum, introduced the idea of Digital Currency. E-gold became the first widely used internet money introduced in 1996, used until 2008 after which the US shut it down. After the Dot-com bubble of the 1990s, the idea of Digital Currency started pouring.

In 2009, Bitcoin was launched, with which the idea of decentralised block-chain based digital currency with no central server got into mainstream. Since then, digital currencies  are with us in many forms be it centralised digital systems like Google wallet and Apple pay, or Decentralised systems like Cryptocurrency (Bitcoin), they all are in our continuous use in day-to-day activities. The latest in the chain of Digital Currency is Facebook's Libra, a stable and centralised currency unlike Bitcoin, launched in 2020.

E-Yuan, the idea behind it?

China is not new to digital ways of payment, as Alipay and Wechat Pay are some of the most frequently used mediums for money transactions in China. This idea has something different which has nothing to do with making Yuan more efficient, but more to do with the geopolitical conditions.

With so much of the world dependent on U.S. banking, it can mean that even companies with no U.S. operations still depend on the American financial system.

"Even a company that has basically no trade in the United States, their banks do,” Jarrett Blanc, a senior fellow at the Carnegie Endowment for International Peace.

Faced with this Dilemma of hegemonic position of  US's Dollars in the international financial arena, China has been facing the threat of US sanctions due to continuous deteriorating relationships between both the countries. To dodge the sanctioning power of the US, China is trying to decrease the presence of Dollar in the International Market. The presence of SWIFT system, a system used for Banking transactions around the world  dominated by the US, has become a major bottleneck for Chinese plans to expand their Currency.

But there are not just bottlenecks, China has achieved successes in the past. China achieved her first win when included into The WTO in 2001, which paved the way for China to integrate herself with the World. Her next success came in the october of 2016, when Yuan(locally pronounced as Renminbi) was added to the list of the top-five most-used currencies, in addition to the U.S. dollar, Euro, Yen, and British pound, making it a part of IMF's Special Drawing Rights Basket- an international reserve asset that the IMF created as a supplement to member countries' official reserves.

Chinese plans do not stop here, the idea of Petroyuan  came into existence, to dig deep into the international financial system by paying more money in the form of Yuan instead of the U.S. dollar for trading the oil imports to China with arch rivals of The U.S. like Russia and Iran.

Consequences of this Action

Now the question arises,

Why does the World need to be threatened from this development happening in China?

The answer to this question lies in the geopolitical development around the world. As the alienation of the world with China is increasing day-by-day, the recent announcement and its hastiness put up questions about Chinese intentions. Adding to that, the growing influence of China in Economic terms and its long-term plan to challenge dollar's hegemony and to replace The US from Superpower position, increases the concern of world-over. 

In the World where nearly 90 percent of international transactions in 2019 were in U.S. dollar, and about 60 percent of foreign reserves were in the form of dollars compared to Chinese Yuan which make up to 2 percent of global payment and reserves, this action will change the perception of China around the World, which has the potential to de-stabilise the international financial system from its de-facto position.

With Digital currency in line, the technological advancements in this direction will see a major boost in the coming times. A world which is reeling under a contagious virus, halting every economic and social activity, the development in the direction of digital currency will help the world to fight better against such Pandemics in the future.

What's in it for India?

Digital India, a scheme close to Indian hearts, has been a success which helped India to increase financial inclusion as well as helped in people' turn towards paperless Currency. As Reliance jio added 200 million new internet users new internet users last year, India is poised to be the second-largest digital nation, which paved the way for more digital processes. While Bhim-UPI, and other wallet services are much of success in India, there still remains a void for Digital Rupee, which a wallet payment method can never fill.

A digital payment method like UPI or Paytm, uses the chain of Indian banks for money transaction, in contrast, Digital Rupee(centralised Bank digital Currency), will truncate this long-chain operation and will give onus in the hands of the RBI. 

In today's World, India is facing many roadblocks to her growth like lack of transparency, high financial illiteracy and financial exclusion and de-stability of Indian Rupee, a Digital Rupee is the solution for all.

This idea has many benefits like:-

1. Faster transactions from a payer to payee as the long-chain will be reduced because The RBI will be the sole body to handle the network.

2. Cost-effective management system as it will decrease the cost of printing money and decrese the time taken by the network, which will make the system more efficient in person-to-person transactions. 

3. A more transparent system which can help in  stopping illicit activities like money laundering and terrorist fundings, with a more strong financial security system.

4. Financial inclusion and Financial literacy will increase, as in today's India where there is a lack of Infrastructure and last mile connectivity to banks, this idea is a solution to all those problems.

5. A faster monetary action and a stronger Central bank, as the change in any of the banking instruments like Repo Rate or Bank rate will directly be transferred to people in a hassle-free way, and with more reserves through deposits of people in the Central bank, India will be better equiped against any financials de-stabilities, which in turn will make the working of Indian financial system more robust.

But as everything in this world comes with its own pros and cons, this idea comes with its cons which includes the privacy concerns for individuals, more controls in the hand of Government, threat of cyber crimes and erosion of existing banking models and revenues.

India which is making strides in innovation and technology in a world having geopolitical concerns, this idea is a game-changer.

Conclusion

As the war of ideology and vested-interests will accentuate in the coming times, an idea of digital innovation in financial matters will equip India for better a financial stability and more robust Currency. The idea of Digital Rupee has many upsides with quite a few concerns, now the time has come for the GOI and the RBI to look into this matter and work upon a detailed plan about structure, rules and regulations while resolving all the major concerns of this idea, to implement a Digital Rupee that will serve India better in a world full-off tumultuous shifts. The creation of Digital currency is an opportunity for India to empower its citizens and enable them to use it freely in our ever expanding Digital Economy and break free from an outdated banking system.

This is an idea whose time has come.

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This article was originally published at The Eastern Herald.