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Need For An Effective National Cyber Strategy

India needs an efficient national cybersecurity strategy keeping the evolving cybersecurity environment in its calculus. The recent trends, which have changed the nature of threats in cyberspace, need attention too.

S.D. Pradhan

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CYBER STRATEGY
CYBER STRATEGY

The need for National Cyber Strategy is acutely being felt to provide a sense of direction to all stakeholders, particularly when the information networks and core national interests are threatened by states or non-state actors supported by them. The strategy would also define the goals in a given situation for all stakeholders. Strategic planning is a tool that is useful for guiding decisions and even for evaluating progress and changing approaches when moving forward to deal with serious challenges.

Besides, it would convey the resolve of the country to respond to a severe cyber-attack in a manner that would inflict unacceptable damage to the adversary and their supporters and thereby deter the adversaries from harming our interests. The activities of others using cyberspace shape the current cyber environment. The risks and challenges depend upon the actions and intents of others. The threats in this domain are assuming each day new worrisome dimensions. New methods are being adopted to achieve the objectives of cyber attackers.

We are going to face more destructive attacks rather than disruptive attacks in the coming period. And cyber-attacks on our critical infrastructures have the potentials to damage national security severely. Given the above, several countries are preparing themselves for offensive operations. A US report suggests that about 30 nations are building cyber warfare capabilities, and more than 130 nations are acquiring “cyber weapons”.

While these capabilities and weapons would change with time, the use of artificial intelligence could significantly upgrade their destructive power. China, which is now using AI in the cyber domain, perceives that the warfare would shift from “Informatised” to “Intelligentised” warfare. This would not only change the nature of conflict in the future but also demand structural changes in the armed forces. There is no doubt that the AI-based cyber weapons would be far more deceptive and destructive.

The cyberspace has become a new frontier of warfare. As we have to deal with the unique challenges, we need a strategy both for countering the threats and deter our adversaries from launching the attacks because of the penalty that would be imposed on them. In essence, we need a cyber-strategy to neutralise the risks from cyberspace. To formulate a national cyber strategy, it would be necessary to assess our security environment, which is shaped by the capabilities and intents of other nations.

Most advanced countries have developed cyber strategies based on offensive operations for which they have created specialised units. We would need to counter them when the situation arises. Not doing so on the plea that we are not the US, China or Russia would keep us weak and an easy victim of coercion. We should not hesitate to adopt the best practices of others — though taking in view our peculiar conditions. The reasons for other countries to adopt offensive cyber strategies are not far to seek. Three factors are responsible for this.

First, as cyberspace is largely owned and operated by the private sector, controlling cyberspace becomes very difficult. Second, early warnings, like in the physical world, are not possible in cyberspace. Hence it is easier to go in for offensive ops than defensive ops. Third, cyber threats are seen as international attacks on national interests. A study of the national cyber strategies of the US, China, Russia, and the UK points out certain common elements in their strategy.

Three factors are common to the strategy of the countries mentioned above. First, the cybersecurity is perceived as a part of national security and all are accepting the possibilities of cyber-wars. They have listed in their cyber strategies or doctrines several steps like enhancing capabilities to defend the critical infrastructure, information data and network; enhancing capabilities to respond to the cyber-attacks in real-time; developing abilities to identify the sources of attacks; integrating it with armed forces operations; preparing for both defensive and offensive operations, and having an empowered body (involving top policymakers) to prioritise operations and ensuring that various stakeholders to act as one force.

The US’s National Cyber Security Strategy states that the security of cyberspace is fundamental for national security and prosperity of its people. China considers that national security is closely linked with cybersecurity. “No national security without cybersecurity,” said Chinese President Xi Jinping to the state-run news agency Xinhua in April 2014. The establishment of the National Security Commission (NSC) and Central Network Security (CNS) and the Informatization Leading Small Group, with Xi as their head, also bear testimony to this line of thinking. The Russian cybersecurity strategy identifies cyber-security, privacy, and information security as vital to the national interests of Russia.

The UK’s cybersecurity strategy aims at making the UK as one of the most secure nations to do business. The second is the use of cyber capabilities to deter adversaries. Cyber operations are not merely seen as supplementing military operations but are also used as a deterrent. The US has tasked the Department of Defence to “contribute to the development and implementation of a comprehensive cyber deterrence strategy to deter key states and non-state actors from conducting cyberattacks against US interests”.

The US National Security Strategy announced in 2018 makes it clear that the US would respond offensively and defensively when attacked in cyberspace in areas ranging from critical infrastructure to space exploration to intellectual property protection. In China’s concept, the deterrence of cyber operations could serve the same purpose as nuclear deterrence in an international environment. The overall Chinese strategy hinges on several military and nonmilitary capabilities including nuclear, conventional, space and information warfare, economic, diplomatic, scientific and technological.

It also depends on the collective will of the nation. They all constitute essential components of a credible “integrated strategic deterrent”. The Russian strategy stresses the need to have the ability to counter cyber threats and considers cyber operations as a part of hybrid wars. In the UK’s cyber strategy, which is available only in statements of officials, deterrence occupies a key position. The Defence Secretary explaining the UK’s offensive cyber operations in his speech at Cyber 2017 Chatham House Conference (in June 2017) stated that “the UK’s National Offensive Cyber Planning allowed it to integrate cyber into all their military operations”.

And the third element is that in all the countries mentioned above, there is a higher thrust on developing domestic capabilities to produce necessary IT products. They are doing away with their reliance on foreign equipment and systems. India needs an efficient national cybersecurity strategy keeping the evolving cybersecurity environment in its calculus. The recent trends, which have changed the nature of threats in cyberspace, need attention. Strategic deterrence now incorporates a well-defined role for cyber that is likely to expand in the future, and strategic deterrence has begun to play a role in cyber deterrence strategy.

Experts opine that it is logically more stable and potentially peaceful to have a system of deterrence that is structured mutually across major powers, giving no one state the ability to disrupt cyber equilibrium. Therefore, our national cyber strategy has to be based on the above three elements. The severe threats are originating from principal adversaries, who could use non-state actors. Hence the need would remain to deal with the principal adversaries, and therefore our national cybersecurity strategy must relate to our national security strategy.

This requires not only an effective cybersecurity strategy but the adequate capability to quickly pinpoint the source of an attack and specialised force to undertake offensive operations to neutralise the source of threats. Fortunately, India has initiated steps to form the Defence Cyber Agency — a tri-service agency — which would fight wars in the cyber domain and formulate doctrine for cyber warfare. It was a much need step. The government should ensure that this agency is given full support to achieve the objectives.

The use of cyberspace for military operations would also infuse jointness among the three Services. The appointment of CDS would further help in integrating the operations of Air Force, Navy and Army. Though attribution remains a problem, a declaratory strategy with an emphasis on deterrence can dissuade the principal adversaries and groups supported by them from launching attacks on our critical infrastructure or on our core national interests.

The National Cyber Security Strategy should indicate in clear terms that any breach of India’s cyberspace from foreign actor would be treated at par with violations of our sovereign territory, airspace or territorial waters. We could indicate that our cyber strategy would be based on “Forward Active Defence”, i.e. could take steps to neutralise the source and could use any means at our disposal to inflict unacceptable damage on the attacker.

We can maintain ambiguity on the actual triggers, and such decisions can be taken later when a severe attack takes place. Simultaneously, we have to encourage research in having the capabilities to pinpoint the source of attacks. With improved investigative techniques and equipment, it should be possible. It may also be mentioned that serious attacks come from the interface of humans and human computers, and therefore, an efficient counter-intelligence system could help in pointing the adversary state.

An overarching national cyber strategy also demands a highpowered organisation to take decisions to deter principal adversary, to launch operations, if required, to neutralise the source of threat for the protection of national critical infrastructure and core national interests, to task different entities both government and private and ensure their compliance of directions. It is heartening to note that India may soon have a single authority or agency responsible for covering the entire spectrum of defensive cyber operations in the country for better command and control.

It would help in ensuring an integrated approach towards cyberattacks and achieve synergy between different entities. And lastly, we should also avoid reliance on the imported equipment and systems as they could have backdoor surveillance tools that could provide critical information to foreign countries. The Parliamentary Standing Committee on Information Technology 2015-2016 had recommended that necessary incentives should be given to domestic companies to manufacture appropriate IT products indigenously. In a timebound manner, all the organisations and companies should start using indigenous products. This should be given a more significant push now.

S.D. Pradhan is the former Deputy National Security Advisor and Chairman, Joint Intelligence Committee, National Security Council Secretariat.

Defence

BEIJING’S CCP-LED GOVERNMENT IS A BULL IN CHINA SHOP

It is time that we study China and handle it with better understanding. Building an unrealistic image of that nation will defeat the purpose of taming the Dragon.

LT GEN PR SHANKAR (Retd)

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China’s callousness in allowing the virus to spread and then taking advantage of it at the cost of people at large have not been accepted. What the world saw was Beijing displaying a sense of being ordained to rule the world; whose time had come with the virus.

There are too many amongst us who predict that China will come breathing fury and fire of a mythical dragon. It won’t happen because it can’t happen. Very clearly the facts show that China is not the behemoth it is being made to be. In any case till such time the CCP is in power, India has to deal with an inimical China.

China is facing ‘deep’ isolation in the international environment. It started with the cover up of the Wuhan Virus and its aggressive and assertive expansionism. The expansionism found military expression in the China Seas and Eastern Ladakh. Political expansionism spread to Hong Kong when the National Security Law was imposed in contravention to international agreements. The idea of gobbling up Taiwan is an eternal Chinese and CCP obsession. Future expansionist plans include parts of Bhutan, Nepal, CARs and Russia. After the initial gains, there has been a military push back notably by USA and India. Both of them have stopped the Chinese juggernaut in its tracks. The physical isolation imposed by the virus has been followed by geopolitical, diplomatic, technological, and isolation. It is now heading into trade and economic trimming. The real test of character is how an individual or a system behaves under stress. When put under stress by the Wuhan Virus, the true ‘Chinese Character’ revealed itself. A ‘what is mine is mine and what is yours is also mine’ kind of a greedy China emerged.

 China’s callousness in allowing the Virus to spread and then taking advantage of it at the cost of people at large has not been accepted. What the world saw was China displaying a sense of being ordained to rule the world; whose time had come with the Virus. They also witnessed total Chinese disregard for the international rules based order, attempt to gain control over governments through debt traps, influence operations, social media surveillance, intelligence collection and plain coercion. Chinese characteristics which came through were IPR theft, wolf warrior diplomacy and weaponisation of the virus through health and mask diplomacy. Key motives which have emerged are unbridled profits and geopolitical control.

 It emerged that China also weaponises public opinion by manipulation, misinformation, sowing dissent, and discord in democratic societies. The legal loopholes of democracies are exploited. It shapes domestic and international public opinion blatantly through media, military experts, and political parties portraying itself as a victim. It provides legal justification, through mythical history. Target countries are left with no choice but to accept the Chinese fait accompli. Chinese narratives were being built through pliant politicians, media, officials, international institutions, think tanks, academic institutions, workers unions, industry, and even foreign governments to influence thought and decision. The intrusive and pervasive extent of Chinese seepage into the international environment and respective domestic environments has been exposed. It needs to be stopped. That is what all countries are doing.  

Military Incapability:

 The effectiveness of a global power lies in its ability to win wars. The US, the erstwhile USSR, and the United Kingdom proved that a superpower must shed blood — own and that of your enemy’s. Unless China is prepared to fight and win or seen to be winning it is simply not a superpower. One can talk endlessly of unrestricted warfare or multi domain warfare or all other kinds of warfare but wars have to be ultimately won on ground. After all we are humans. We are not birds, fish, space creatures or electronic chips. Currently China is outmanoeuvred by India in Ladakh and boxed in by the USA in the China Seas. The PLA has turned up short on this score. China’s strategy of ‘Belligerent War Avoidance’ has not worked. If the PLA cannot militarily enforce and achieve the CCPs political aims, China will not succeed. Very importantly, the military state of affairs indicates that China is not yet capable of protecting its overseas economic interests. In fact it is vulnerable on this count. The Chinese stress has been on development of Comprehensive National Power which might get you a seat on the UN Security Council but not a military victory. The drawbacks of PLA are evident in China’s White Paper on Defence. It is an overtly political paper. The focus is on organisation, mechanisation, informationisation and of all things micro-corruption! If a nation has to talk of rooting out micro-corruption from its armed forces in an international document, then it is an admittance of incompetence.  

When there is no mention of improving combat effectiveness at cutting edge levels in such a paper, then it is some sort of an expectation that your enemy will roll over due to sheer bluster. The PLA might bully small nations with weak forces. When arraigned against professional and strong-armed forces it is being found out. PLA is an inexperienced force under transition. Neither fit for continental nor overseas engagements. When the transition is complete and if it gains experience, it might be different. That is an IF. In the current situation ‘if’ it cannot prevail over India it will be a total loss of face. The military future of China is not very rosy — politicised leadership, unproven manpower, unproven weaponry, unproven capabilities. 

Minority Fracture: 

China is a diverse nation composed of 56 ethnic groups. Han Chinese account for 91.59% and the other 55 make up the remaining 8.41%. Among the non-Han ethnic groups, 44 ethnicities occupy their own autonomous regions, or counties. The largest ethnic minority groups in China are the Zhuang (16 million), Manchu (10 million), Hui (9 million), Miao ( 8 million), Uyghurs (7 million), Yi (7 million), Tujia (5.75 million), Mongols (5 million), Tibetan (5 million), Buyei (3 million), and Koreans (2 million). The degree of integration of ethnic minorities varies. Uyghurs and Tibetans are not integrated with the Han or CCP or China. Of late, this is spreading to Mongols also. The Government does dot trust these minorities.  They are under strict state regulation. Religious autonomy is restricted. At various points of time these minorities have had major problems. Any signs of resistance from these ethnic minorities are interpreted as separatism and draws severe repression. These minorities occupy around 50% of the total area. They are not well off as compared to the Han. Han migration is encouraged into these areas through development and construction projects. Chinese government sees economic development as the main solution for ethnic dissent. 

 However these areas are being kept less developed inexplicably. The CCP wants to integrate them forcefully into the mainstream through side-lining ethnic languages, religion and customs. Tibetan and Uygur minority language schools have been closed since 2017 and replaced by Mandarin Chinese instruction. The same is being done now in Mongol areas. They are discriminated against in the job market.  Their populations are not being allowed to expand through forced sterilisation. 1.3 million Uyghurs on average per year have been put through ‘vocational training’ internment camps from 2014 to 2019. They have now put 500,000 Tibetans into forced-labour camps for militarized vocational training aimed to reform ‘backward thinking’ and improve ‘work discipline’. Forced integration of Tibetans into the system is a recent phenomenon. There is a clear fracture with Tibetans, Uyghurs and Mongols which is enlarging. 

The Hong Kong democracy undercurrent will not vanish. Chinese preoccupation with Taiwan will not evaporate. If things deteriorate other minorities might also raise a flag. The implication is that the ‘Westwards Development’ agenda and the ‘Dual Circulation’ strategy which are to rescue the Chinese economy are at further risk. China will have to constantly invest considerable political, economic and military effort to keep these rimland areas under control and survive as a single entity. It will have to keep looking inwards. The international environment will also not respond favourably to China till such time it discriminates with its own people. This will inhibit their superpower drive.

 Post-Virus Economy: 

The high flying Chinese economy has been brought down to earth by the virus. There is no doubt that it is recovering. Notwithstanding propaganda, the economic recovery has been found to be patchy and overhyped. In the short term things will look normal. In fact Xi Jinping has reiterated that the Marxist political economic model will be the bedrock for China’s  growth. Further he was only partially right when he said that the situation was ‘deep and complex’. It is actually beyond that. With Germany joining the Indo-Pacific Club, most of the big economies and rich nations are now ranged against China . That is going to be a big blow to China. What does it mean? The Made in China 2025 plan is facing stiff problems due to lack of ‘Core Technology’ as mentioned by Xi Jinping himself. Its Military Civil Fusion methodologies have been found out and exposed. They are being culled. China is being placed in a technology denial system. China does not have the technological ability to overcome all those barriers which Xi Jinping spoke of. As much as China has progressed in some fields, it has stagnated in others. Hence its economy will have a limiting factor at some stage. The BRI and its flagship CPEC have run into economic, political, and strategic rough weather.  The BRI model  is no longer sustainable. China has not managed macroeconomic risk well. It has not given adequate attention to building political capital. Its choice of weak nations and debt trap diplomacy has led to a BRI backlash. BRI is now being subjected to a higher level of audit.  Renegotiation is on the cards in many cases. There is also a reluctance on the part of countries to commence new projects. China will have to settle for far less geopolitical/economic dividends than it had set out to reap.  Most importantly, the decoupling initiative of all the big economies will hit China hard. Economic shrinkage is a matter of time and that will be permanent. On that there is no doubt. 

The  Dual Circulation model  has not got much traction. It is contingent on the success of three things. One. Internal consumption has to go up. In the short term, Chinese are simply refusing to consume. In the long term an aging China cannot consume.  Two. The Go West Policy can only succeed if Tibet, Xinjiang, Mongolia  and Western regions prosper. That looks unlikely due to political and ethnic factors. Three. Exports must increase but are going to reduce. The current enhanced expenditure on the Military situation will take its economic toll.  The overall outlook for the Chinese economy does not bode well. Someone sensible has to do the maths.

 Analysis 

All the issues highlighted and analysed are issues common to any country. What is special here?  The difference is that China has an overbalanced and rigid polity which is driving the country to an unrealistic destiny. China is fixated with overtaking the USA. Its thinking is that others including India are handmaidens in that journey. The White Paper on Defence 2019 actually spells that without saying so. On the other hand the Chinese nation is imbalanced at this point of time – economically, militarily, diplomatically, environmentally and ethically. The Nation and the Government are at odds with each other. At the same time, Indian resistance is something new and totally unexpected. Currently, China is flummoxed as to how to contend that. Hence it will gather itself and come back at us with vengeance. 

So how do we deal with China?  We deal with facts and how they are presented to us. There are too many amongst us who predict that China will come breathing fury and fire of a mythical dragon. It won’t happen because it can’t happen.

 Very clearly the facts show that China is not the behemoth it is being made to be. In any case till such time the CCP is in power, India has to deal with an inimical China. It will do us well to remember that after the US, India is enemy Number 2 hereafter. Their strategists, analysts and ‘Global Times’ will attribute their failures to us. Also, China has become habituated to the fact of blaming others for its own faults and deficiencies. Its leaders will externalise failure and the needle will swing to India. Hence, the lesser of China in our society the better it will be. The importance of Aatmanirbhar Bharat lies in the fact that we should consume to make our economy thrive and not consume to make the China Dream happen! When soldiers march in step on a bridge it tends to collapse. Why? Resonance! If even some issues facing China resonate then there will be a major change. 

To recap, the issues are — diseases, aging, ethnic disparity, pollution, agriculture, degradation, climate change, diplomatic isolation, military limitation and economic trimming. China is a society without a check. It will continue on its improbable path at breakneck speed. Many of these factors are resonating and if the cadence is strong enough, we will see political change without fail. The Chernobyl factor is at work. Make no mistake about that. We should be prepared for the fallout of that change. From a long term perspective, it will be prudent to catalyse the change. The next standard question is will it lead to a China collapse? The simple answer is it will not. Will China become a superpower? The chances are no. What will happen? The economy was all set to shrink in the forthcoming decade anyway. It will get accelerated. Currently the world will consume what China produces and it will appear that the Chinese economy is still booming. However, in a couple of years when Chinese mega projects bottom out, organised decoupling takes effect, pollution takes effect, and aging progresses, the shrink will be visible. We will then see the Chinese economy right sizing. Accordingly, the polity will change.

 This analysis is a ‘man without a dog’ effort. There could be shortcomings and it is probably full of holes. I concede. However, it is based on facts. It is not an exercise in wish listing. The facts reveal a vulnerable China. We need to do a holistic fusion analysis based on multiple inputs from institutional experts. It will enable us to then handle China in a realistic manner. From the analysis, writings and commentaries in public, it is evident that we are obsessed with Pakistan which is such a waste of time. For long, India has let the Ministry of External Affairs and some traders handle China exclusively. They have built an unrealistic image of China and allowed it to seep into our society. It is time that we study China and handle it with better understanding rather than the illiterate manner we have so far adopted. That is why we see a Dragon instead of a teeny weenie Chinaman who is sitting on a nuclear reactor about to go critical.

 Lt Gen P.R. Shankar was India’s DG Artillery. He is highly decorated and qualified with vast operational experience. He contributed significantly to the modernisation and indigenisation of Artillery. He is now a Professor in the Aerospace Dept of IIT Madras and is involved in applied research for defence technology. His other articles can be read on his blog www.gunnersshot.com.

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Defence

Rajnath Singh lays foundation stone for IMA Dehradun underpass

Ashish Singh

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Defence Minister Rajnath Singh laid the foundation stone for the construction of underpasses at the Indian Military Academy, Dehradun, via video conferencing from Delhi on Sunday. Addressing the ceremony he said that it is strange that it took 40 years to get a green signal for the construction of these underpasses which will facilitate seamless movements among the three campuses of the Academy. As of now, traffic signals are an impediment for the trainee cadets to smoothly cross from one side to the other. Alternatively, this is also a hassle for the local people during the movements of IMA Cadets. With the rise in population of Dehradun, the capital of Uttarakhand, the movement of traffic has increased causing frequent traffic jams. The construction of the underpasses will ease traffic flow on NH-72. Besides the people of Dehradun, the underpasses will also greatly benefit the people of other parts of Uttarakhand, Punjab, Himachal Pradesh and Haryana.

 The proposal for the underpass was mooted in October 1978 keeping in view the security of the General Cadets and the convenience of the people of Dehradun. However, the work on the project could not start due to various issues of ownership and funding. On 7th December, 2019 during the passing out parade AT-2019, Rajnath Singh announced the Acceptance of Necessity (AoN) of the value of Rs 45 crore which set the ball rolling for the construction of the underpasses.

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Defence

INDIAN ARMY CELEBRATES 193RD GUNNERS’ DAY

Ashish Singh

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28 September is celebrated as the Gunners’ Day every year as on this day in 1827 Five (Bombay) Mountain Battery equipped with 2.5 inch guns was raised. Presently it forms part of 57 Field Regiment. Artillery has grown in strength and capability with each passing year. Today the Artillery boosts of a dynamic inventory which ranges from Ballistic Missile, Multi Barrel Rocket launchers, High Mobility Guns, Mortars Precision Guided Munitions for destruction of enemy targets to Radars, UAVs and Electro optic devices for locating and carryout Post Strike Damage Assessment (PSDA). The Artillery has always been a battle winning factor and as per the new generation of warfare (Non Contact Warfare), its role and significance is bound to increase manifold in future. 

The Regiment of Artillery is proud of a glorious past replete with rich traditions and gallant achievements. It has acquitted itself as the battle winning factor in every occasion whenever the integrity of our nation has been threatened. The Regiment rendered yeoman service to the nation during all the major conflicts with adversaries and during disasters and natural calamities. The regiment boasts of one Victoria Cross, one Distinguished Service Order, 15 Military Crosses during the pre-independence era and one Ashok Chakra, seven Maha Vir Chakras, nine Kirti Chakras, 101 Vir Chakras, 63 Shaurya Chakras, six Bar to Sena Medal, 485 Sena Medals besides many other decorations. The role of Bofors in Kargil conflict also established beyond doubt that Artillery firepower plays a defining role in achieving victory in the modern battlefield. The accurate artillery fire on enemy positions during the Kargil war had reduced their defences to rubble thereby degrading the enemy’s fighting potential.

 The rapidly progressing transformation of the Indian Artillery into a state-of-the-art combat force by equipping itself with modern weapon systems incorporating the latest technological advancements will help the Gunners in honouring their motto, “Sarvatra Izzat-O-Iqbal — Everywhere with Honour and Glory”. The Artillery is amongst the forefront Arms of the Indian Army engaged in modernising in terms of equipment and support systems. All these modernisation programme upgrades will enhance reach and precision of the Artillery and strengthen its punch against the enemies under the “Make in India” initiative of the Government.

 On this occasion, Lieutenant General CP Mohanty, General Officer Commanding-in-Chief, Southern Command, conveyed his best wishes to the serving and retired personnel of Regiment of Artillery and lauded them for their selfless devotion and dedication to duty towards the Indian Army and the Nation.

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Defence

The Dragon’s mindless growth poses big environmental risks

China’s myopic decisions leading to indiscriminate industrialisation, construction of huge dams and
other so-called developmental activities are fraught with the danger of big environmental disaster.

LT GEN PR SHANKAR (Retd)

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Environmental degradation and pollution are serial stranglers. Environmental degradation began with Mao’s ‘conquest of nature’ idea. The Chinese economy and severe environmental degradation took off together five decades back. China embraced industrialisation and economic progress unhesitatingly. Quick time centralised decision making without due checks and balances was the norm. Polluting industry was, in fact, enabled. Environmental regulation was blindsided. As China’s economy and geopolitical power grew, the negative consequences were on food, water and health securities. China has faced three-fold environmental degradation. One, developing an overpopulated and underdeveloped society, at frenetic pace has induced ecological stresses of land and water shortage, deforestation, and desertification. Two, its gigantic industrialisation and rapidly increasing urbanisation in a globalised economy has resulted in huge pollution including generation of marine and toxic wastes. Three, climate change has started to make its presence felt. At some stage the economy will be impacted, slow down and start shrinking. 

Dammed Degradation

 Since the 1950s, the Chinese have built around 22,000 dams which are more than 15 meters tall. It is roughly half the world’s total. More than 16 million Chinese have been relocated to make way for these hydro projects. They have over 125 mega dams with heights more than 100m. These mega-dams,block the flow of rivers, create floods, affect agriculture and fisheries, increase the chances of earthquakes, and destroy environments. To quote a view ‘rather than benefiting populations with non-polluting power, China’s dam builders are making a Faustian bargain with nature, selling their country’s soul in their drive for economic growth’. Extreme view? It was recently borne out by the massive flooding of the Yangtze basin in the course of which it was feared that the Three Gorges Dam, the biggest dam in the world, would collapse. It is so massive that it has the capacity to slow the earth’s rotation. It is now internationally recognised that the entire exercise has been a huge environmental disaster. The sheer number of dams has created so many water bodies that it has induced local climate change whose effect is being felt within China. The larger issue of global climate change will wreak greater disasters. To illustrate the argument, the analysed complexity of issues surrounding the Three Gorges Dam is reproduced ‘Factors are color-coded whereby green factors signify ecological issues and blue ones signify sociological issues. Beginning with the left, the Three Gorges Dam project has caused forced migration of many people both directly due to Chinese government policy as well as indirectly through landslides and erosion. Furthermore, forced migrants put pressure on urban centres insofar as they need housing and jobs that may not necessarily be available. This in turn affected the standard of living by contributing to poverty, among other things. All of this acted to erode social stability, which is itself a form of latent conflict and which is requisite for violent overt conflict. On the right hand side, we see that the dam disturbs fault lines and causes watershed erosion, both of which negatively affect ecological stability. Furthermore, the dam is believed to be connected to earthquakes in the area due to its massive size. All of these disruptions signal the potential for grave ecological problems such as ecological collapse, biodiversity loss, erosion, etc.’ 

Kingdom of Rare Earths

 China is the ‘Kingdom of Rare Earths’ with a market share of 80-90% in the past two decades. Rare earths are used in semiconductors and energy saving devices (see graphic). China’s rare earth map is shown below. Rare earth mining has a parallel and thriving huge black market. It is extremely polluting and contaminating to the extent that ‘cancer villages’ have sprung/springing up near mines. Rare earth mining is a contamination time bomb for the Yellow River in the North. In the South, China’s mega-cities like Guangzhou, Shenzhen and Hong Kong may have already been affected by the radioactive toxicity related to uranium. It is no more a matter of ‘if’, but ‘when’. Water for agriculture and drinking in all rare earth mining areas and in downstream areas is heavily contaminated by excessive amounts of ammonia, nitrogen, cadmium, lead and its compounds. Remuneration from rare earths is inadequate to offset costs in health and environmental cleaning. Take another case of Titanium. China is the dominant player in the international market. Titanium mines destroy nature and habitat. The extracted ore is refined with Chlorine which is a huge environmental hazard. It is another saga of pollution and contamination. Sichuan, Hubei, Yunnan, Hainan, Guangxi and Guangdong have Titanium deposits. Sichuan has the largest deposits. Incidentally, India has huge reserves of Titanium. However, its extraction will defoliate the Deccan. Not an option and that is why we have not gone for it. A similar pollution / degradation story repeats with every form of resource extraction in China. The ‘Cancer Village’ map , which is result of all such pollution, can be seen below. Presently, more than 50% of China’s surface water is not fit for human consumption. 60% of the groundwater under Chinese cities is considered to be ‘severely polluted’. The World Bank (2007) estimated that the health cost of cancers and diarrhoea associated with water pollution reached approximately US$8 billion in 2003 in rural areas of China. Today it must be many times more. Resource extraction will extract more from China than imaginable. The damage has already been done and that too in its prosperous coastal belt. 

Other Stranglers

 There are other environmental degradation, pollution and contamination examples. Approximately 70% of the electronic waste generated worldwide used to be processed in China. It poses substantial risk to health and the environment (Ni and Zeng 2009). Small-scale rural factories known as ‘township and village enterprises’ contribute significantly to China’s growing rural pollution problems. China is world’s largest manufacturer, trader and fossil fuel consumer. It is responsible for 47% of the world’s coal burning, which is more than all other countries in the world combined. The list is endless.

 Energy

China’s energy demand is likely to peak between 2035 and 2040 (see graphs). Its oil demand is expected to peak in 2030. However its petrochemical and gas demand will increase till 2050. China’s import dependence on oil and gas will continue to be around 50%. Coal is set to lose ground to renewables. However, it is still expected to account for 40% of power generation in 2035. The share of coal in China’s primary energy mix is expected to fall as shown in the graph. Renewables, oil and gas combined will overtake coal’s share of primary energy consumption by 2050. Having said all that coal will still remain the single largest supply source through to 2050. If one analyses this data, a few things stand out:- China will continue to be energy dependent and vulnerable. It will never attain energy security. Coal based energy will not vanish. Its effect on pollution will endure. Overall CO2 emissions are expected to fall only after 2035. China has committed to Carbon neutrality by 2060. By then it might be too late. Per capita requirement and consumption of energy will continue to increase as China modernises. China will continue to extract rare earths. Rare earths are extensively used in magnets for wind generation. Hence reduction in pollution due to renewables will be offset by pollution due to rare earths. Pollution will not decrease. China, in all likelihood, will enter into a state of energy entropy. 

Lt Gen PR Shankar was India’s DG Artillery. He is highly decorated and qualified with vast operational experience. He contributed significantly to the modernisation and indigenisation of Artillery. He is now a Professor in the Aerospace Dept of IIT Madras and is involved in applied research for defence technology. His other articles can be read on his blog www. gunnersshot.com.

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Defence

Mythical Dragon, real China

After the coronavirus pandemic hit the world, China has constantly tried to project itself as a
superpower but is it really powerful? Or, is it wearing a mythical Dragon‘s mask to intimidate others?

LT GEN PR SHANKAR (Retd)

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Myths and Reality

Xi’s Call: China is real. The dragon is mythical. However we will stick to the real China in this analysis. In May, Xi Jinping called on the PLA to be prepared for wars. He signalled what he was up to and conveyed it. We did not heed to his intent. How wrong were we?   Similarly When Xi Jinping, spoke to scientists  it was one such moment when a vista was revealed. Two significant aspects of that talk stuck a chord in me. He spoke of the ‘deep and complex’ changes that China faced in the domestic and international environment. He also spoke of the big  problems that were ‘choking’ and ‘strangling’ China. These included lack of advanced agricultural technology and reliance on imported seed, critical component shortcoming in core manufacturing technology, dependence on overseas oil supplies, pollution, poor distribution of water resources and an ageing population which needed improvements in pharmaceuticals and medical equipment. These issues are underlying and permanent to China. They are largely pre virus. The chemistry of ‘deep’ complex’ with ‘chokers and stranglers’ needs better appreciation to get to realism.

The World According to Xi: China is modernising. Its economy, power and influence have grown. It is set to overtake USA shortly. However the Wuhan virus has changed things. Issues and events are panning out in a manner that forces a rethink. In the last six months China has alienated major powers of the Indo Pacific – India, Japan and Australia. All other countries of the region feel threatened.  t has also managed to alienate USA, Canada and Europe. It has got into a military conflict with India and USA; when it was really not needed. It is shaking up the entire global order. It is trying to impose its vision on the whole world. When we see and read commentaries on China , they are one dimensional and often magnify China to  proportions of a mythical dragon all set to conquer the world. It appears that China is unstoppable. The world according to Xi looks forbidding. However the reality is far different. There are logical opinions which suggest that China has peaked and will actually decline from hereon. The Wuhan Virus only hastens the process. There are many discordant issues in China which will inhibit and eventually cap China’s rise. That is what Xi Jinping had on his mind when he spoke what he did. In India, we need to get a handle on the entirety of China to deal with it squarely. This analysis presents the large canvas of China.  

Jekyll and Hyde Cycle: Step back into history. Ever since  the CCP came into the scene a century back, China has had periodic convulsions. Mao unleashed ‘The Great Leap Forward and The Cultural Revolution’. In four decades China was taking ‘The Great Leap Backwards’.  China talks of a ‘Century of Humiliation’. However the CCP wreaked half of that humiliation through the greatest man made famine in which 35-45 million people died and were reduced to cannibalism. In the 70s, China adopted the ‘One Child Policy’. It  appeared to be the greatest of social reforms of that era. Half a century later it is one of the greatest disasters in Chinese and human history.  Mao spoke of  ‘Conquest of Nature’ and Deng Xiao Ping felt that ‘To Become Rich is Glorious’ when he kickstarted the four modernizations. Their successors ‘Conquered Nature’ mercilessly and ‘Made China Rich’ through dizzy economic growth. Four decades later China seeks glory but is entering a decline, seeded at the start itself. The Jekyll and Hyde cycle of the CCP is discernible  –revolutionary idea, electrifying start, great promise and seemingly impressive progress to disastrous ends due to unsustainability, unpredictability and unintended outcomes. 

Freedom Vs Prosperity: CCP and Xi Jinping view national economic growth and power as commodities fungible with people. The transaction being – ‘you give up your freedoms and we will give you prosperity’. From an economic point of view, China is already a superpower. However growth has to be for the people. Their perspective tells a different story. Discrepancies  have surfaced ever since the Wuhan Virus has struck the world. Some  instability is discernible in the Chinese monolith. India needs to be cognisant of this.  Whether China is a superpower or not,  India has to live with it as a neighbour. Realism will enable us to deal with it better. Historically an unstable China has been troublesome – to India and the world at large.

Pre Virus Economic Growth: China has clocked stupendous economic growth. It  was poised to overtake USA. Its future trajectory up to 2050 indicates that it will continue to rise. (see table). All set to achieve the ‘China Dream’ through prosperity, collective effort, socialism, and national glory. The  great rejuvenation of the Chinese nation is imminent. The Chinese aim is to be a ‘moderately well-off society’  by 2021 and a ‘fully developed nation’ by 2050. Inherent in this is to be the sole superpower on earth. Herein lies the rub. The ‘chokers and stranglers’ of Xi Jinping are lying in ambush.

Chokers’

Aging Choker: An aging population is the main ‘Choker’. The one child policy reduced birth rates drastically. As against the standard replacement rate of 2.1, the birth rates fell to 1.18. Despite lifting the one child policy in 2015, the birth rates will not cross 1.7. People  are not marrying or having a second child. Reasons include rising prosperity, opportunities for single women,  young couples opting for single child and gender imbalance.  As a result the population is expected to peak at 1.4 billion around 2030 and decline thereafter (see graph). The population will reduce to about 1 billion by 2100. 

Child population (0-15) and dependency is expected to be around 20%. Simultaneously the share of the aged (65+) is set to steeply grow due to increasing lifespans (see graph). China is the fastest aging country in history. Overall, Child and Old-aged dependency will keep increasing. This has manifold implications. Some are highlighted. One. The working population will keep decreasing. A smaller number of  workers will have to take care of an increasing number of old and young people. The overall standards of life will correspondingly decrease. Two. As  population ages, additional resources are needed to meet the needs of the elderly – medical, energy, housing, food. China has a very weak social welfare system for the aged. An estimated 23 % of the old-aged cannot take care of themselves. The aged also represent a shrinking tax base.  Overall, the government revenues will be strained. Three. The percentage of unmarried men in their late 30’s will quintuple by 2030. This will have adverse societal impacts. Four. When the work force declines, wages increase, productivity goes down and profits go down. Lesser workers means lesser consumption spending.  China has no choice but to export. However most consuming countries are also aging. Their consumption will go down.  The overall economy will dip. The key to Chinese prosperity lies in countries capable of consuming in the future like India, Indonesia and Nigeria. The prediction is that in the period 2020-30 the economy will start shrinking. Five. An aging society and increased urbanisation reduces availability of farmers. It brings up the issue of food security. Six.  The one child condition, limited youth and urbanisation will have an adverse impact on the availability of the right material for armed forces (see graph). There are other unforeseeable issues which will vector themselves in as China  goes along. 

Food Problems: Currently China is facing a food crisis. It is likely to have domestic and geopolitical fallouts. This brings focus on to an issue which has been choking China historically. Chinese history is full of famines. However, ever since Mao’s policies induced the Great Famine, China has not really faced a food crisis. In fact China has carried out vast agriculture reforms. Today China is the world’s largest producer and consumer of agricultural products. Recent developments have however raised concerns about its food security. China  has 19% of the global population but only 7% of arable land and freshwater resources. Both  are diminishing. There are questions of sustainable development due to environmental degradation, pollution, climate change, disease, urbanisation, industrial growth and demography.  More than 40% of China’s arable land is degraded seriously. Food production is reducing. Demand for agricultural products has grown due to a burgeoning population, growing industrial economy, and expanding consumerism.  Believe it or not, China has the maximum  obese people in the world. China became a net food importer in 2004. Its import dependence is irreversible. It will face a domestic grain supply gap of about 130 million tonnes by the end of 2025. It continues to import seeds due to lack of technology. Wheat, corn and rice are the main ingredients of the Chinese food basket. These crops have been threatened by floods, typhoons and draughts – all in one season. Climate change might also be playing its part. Pork is the main meat. However availability of pork has been affected badly due to the African Swine Flu for the past three years. Corruption/inefficiency in logistics and storage as also insect infestation threaten its inventory. About one-sixth of the total grain produced in China is wasted annually in the production, processing and transportation cycle.    China might not run out of food but prices are rising and there are creases of economic worry.

Unprecedented Chokers: China has faced unprecedented rainfall, floods, typhoons and droughts this year. Diseases specific to this year include the Wuhan Virus and Brucellosis (an infectious disease caused by bacteria from livestock which can also infect humans and leave men infertile). African Swine Flu, Plague, Yellow Fever, Polio, Avian Influenza, SARs are recurring diseases in the recent past. It raises a lot of issues. Is it due to pollution, environmental degradation, climate change or all? In any case the effect of this continued disease and pestilence is only going to get more serious as China ages. This budding superpower is unhealthy.

Stranglers – Pollution and Environmental  Degradation

Overview: Environmental degradation and pollution are serial stranglers. Environmental degradation began with Mao’s ‘conquest of nature’ idea. The Chinese economy and severe environmental degradation took off together five decades back. China embraced industrialisation and economic progress unhesitatingly. Quick time centralised decision making without due checks and balances was the norm. Polluting industry was, in fact, enabled. Environmental regulation was blindsided. As China’s economy and geopolitical power grew, the negative consequences were on food, water and health securities. China has faced  three-fold environmental degradation. One. Developing  an overpopulated and underdeveloped society, at frenetic pace has induced ecological stresses of land and water shortage, deforestation, and desertification. Two. Its gigantic industrialisation and rapidly increasing urbanisation in a globalised economy has resulted in huge pollution including generation of marine and toxic wastes. Three. Climate change has started to make its presence felt . At some stage the economy will be impacted, slow down and start shrinking.

Dammed Degradation: Since the 1950s, the Chinese have built around  22000 dams  which are more than 15 meters tall. It is roughly half the world’s total. More than 16 million Chinese have been relocated to make way for these hydro projects. They have over 125 mega dams with heights more than 100m. These mega-dams, block the flow of rivers, create floods, affect agriculture and fisheries, increase the chances of earthquakes, and destroy environments. To quote a view ‘rather than benefiting populations with non-polluting power, China’s dam builders are making a Faustian bargain with nature, selling their country’s soul in their drive for economic growth’. Extreme view? It was recently borne out by the massive flooding of the Yangtze basin in the course of which it was feared that the Three Gorges Dam, the biggest dam in the world, would collapse. It is so massive that it has the capacity to slow the earth’s rotation, It is now internationally recognised that the entire exercise has been a huge environmental disaster. The sheer number of dams has created so many water bodies that it has induced local climate change whose effect is being felt within China. The larger issue of global climate change will wreak greater disasters. To illustrate the argument,  the analysed complexity of issues surrounding the Three Gorges Dam is reproduced ‘Factors are color-coded whereby green factors signify ecological issues and blue ones signify sociological issues. Beginning with the left, the Three Gorges Dam project has causing forced migration of many people both directly due to Chinese government policy as well as indirectly through landslides and erosion. Furthermore, forced migrants put pressure on urban centres insofar as they need housing and jobs that may not necessarily be available. This in turn affected the standard of living by contributing to poverty, among other things. All of this acted to erode social stability, which is itself a form of latent conflict and which is requisite for violent of overt conflict. On the right hand side we see that the dam disturbs fault lines and causes watershed erosion, both of which negatively affect ecological stability. Furthermore, the dam is believed to be connected to earthquakes in the area due to its massive size. All of these disruptions signal the potential for grave ecological problems such as ecological collapse, biodiversity loss, erosion, etc.’

Kingdom of Rare Earths: China is the ‘Kingdom of Rare Earths’ with a market share of 80-90% in the past two decades. Rare earths are used in semiconductors and energy saving devices (see graphic). China’s rare earth map is shown below. Rare earth mining has a parallel and thriving huge black market. It is extremely polluting and contaminating to the extent that ‘cancer villages’ have sprung/springing up near mines. Rare earth mining is a contamination time bomb for the Yellow River in the North. In the South,  China’s mega-cities  like Guangzhou, Shenzhen and Hong Kong may have already been affected by the radioactive  toxicity related to uranium. It is no more a matter of ‘if’, but ‘when’. Water for agriculture and drinking in all rare earth mining areas and in downstream areas is heavily contaminated by excessive amounts of ammonia, nitrogen, cadmium, lead and its compounds. Remuneration from rare earths is inadequate to offset costs in health and environmental cleaning. Take another case of Titanium. China is the dominant player in the international market. Titanium mines destroy nature and habitat. The extracted ore is refined with Chlorine which is a huge environmental hazard. It is another saga of pollution and contamination. Sichuan, Hubei, Yunnan, Hainan, Guangxi and Guangdong have Titanium deposits.  Sichuan has the largest deposits. Incidentally, India has huge reserves of Titanium. However its extraction will defoliate the Deccan. Not an option and that is why we have not gone for it. A similar pollution / degradation story repeats with every form of resource extraction in China. The ‘Cancer Village’ map , which is result of all such pollution, can be seen below. Presently,  more than 50% of China’s surface water is not fit for human consumption. 60% of the groundwater under Chinese cities is considered to be ‘severely polluted’. The World Bank (2007) estimated that the health cost of cancers and diarrhoea associated with water pollution reached approximately US$8 billion in 2003 in rural areas of China. Today it must be many times more. Resource extraction will extract more from China than imaginable. The damage has already been done and that too in its prosperous coastal belt.

Other Stranglers: There are other environmental degradation, pollution  and contamination examples. Approximately 70% of the electronic waste generated worldwide used to be  processed in China. It poses substantial risk to health and the environment (Ni and Zeng 2009). Small-scale rural factories known as ‘township and village enterprises’ contribute significantly to China’s growing rural pollution problems. China is world’s largest manufacturer, trader and fossil fuel consumer. It is responsible for 47% of the world’s coal burning, which is more than all other countries in the world combined. The list is endless.

Energy: China’s energy demand is likely to peak between 2035 and 2040 (see graphs). Its oil demand is expected to peak in 2030. However its petrochemical and  gas demand will increase till 2050.  China’s import dependence on oil and gas will continue to be around 50%. Coal is set to lose ground to renewables. However it is still expected to account for 40% of power generation in 2035. The share of coal in China’s primary energy mix is expected to fall as shown in the graph. Renewables, oil and gas combined will overtake coal’s share of primary energy consumption by 2050. Having said all that coal will still remain the single largest supply source through to 2050. If one analyses this data , a few things stand out:-

China will continue to be energy dependant and vulnerable. It will never attain energy security. Coal based energy will not vanish. Its effect on pollution will endure. Overall CO2 emissions are expected to fall only after 2035. China has committed to Carbon neutrality by 2060. By then it might be too late. Per capita requirement and consumption of  energy will continue to increase as China modernises. China will continue to extract rare earths. Rare earths are extensively used in magnets for wind generation. Hence reduction in pollution due to renewables will be offset by pollution due to rare earths. Pollution will not decrease. China, in all likelihood, will enter into a state of energy  entropy.

Deep And Complex’ Problems

Deep Isolation: China is facing ‘deep’ isolation in the international environment. It started with the cover up of the Wuhan Virus and its aggressive and assertive expansionism. The expansionism found military expression in the China Seas and Eastern Ladakh. Political expansionism spread to Hong Kong when the National Security Law was imposed in contravention to international agreements. The idea of gobbling up Taiwan is an eternal Chinese and CCP obsession. Future  expansionist plans include parts of Bhutan, Nepal, CARs and Russia. After the initial gains, there has been a military push back notably by USA and India. Both of them have stopped the Chinese juggernaut in its tracks. The physical isolation imposed by the virus has been followed by geopolitical, diplomatic, technological, and  isolation. It is now heading into trade and economic trimming. The real test of character is how an individual or a system behaves under stress. When put under stress by the Wuhan Virus, the true ‘Chinese Character’ revealed itself. A ‘what is mine is mine  and what is yours is also mine’ kind of a greedy China emerged. China’s callousness in allowing the Virus to spread and then taking advantage of it at the cost of people at large has not been accepted.   What the world saw was China displaying a sense of being ordained to rule the world; whose time had come with the Virus. They also witnessed total Chinese disregard for the international rules based order, attempt to gain control over governments through debt traps,  influence operations,  social media surveillance, intelligence collection and plain coercion. Chinese characteristics which came through were IPR theft, wolf warrior diplomacy and  weaponization of the virus through health and mask diplomacy. Key motives which have emerged are unbridled profits and geopolitical control. It emerged that China also weaponizes public opinion by manipulation, misinformation, sowing dissent, and discord in democratic societies. The legal loopholes of democracies are exploited. It shapes domestic and international public opinion blatantly through media, military experts, and political parties portraying itself as a victim. It provides legal justification, through mythical history. Target countries are left with no choice with but to accept the Chinese fait accompli. Chinese narratives were being built through pliant politicians, media, officials, international institutions, think tanks, academic institutions, workers unions, industry, and even foreign governments to influence thought and decision. The intrusive and pervasive extent of Chinese seepage into the international environment and respective domestic environments has been exposed. It needs to be stopped. That is what all countries are doing.  

Military Incapability: The effectiveness of a global power lies in its ability to win wars. The USA, USSR, and the United Kingdom proved that a superpower must shed blood – own and that of your enemy’s. Unless China is prepared to fight and win or seen to be winning it is simply not a superpower. One can talk endlessly of unrestricted warfare or multi domain warfare or all other kinds of warfare but wars have to be ultimately won on ground. After all we are humans. We are not birds, fish, space creatures or electronic chips. Currently China is outmanoeuvred by India in Ladakh and boxed in by USA in the China Seas. The PLA has turned up short on this  score. China’s strategy of ‘Belligerent War Avoidance’ has not worked. If PLA can not militarily enforce and achieve the CCPs political aims, China will not succeed. Very importantly, the military state of affairs indicates that China is not yet capable of protecting its overseas economic interests. In fact it is vulnerable on this count. The Chinese stress has been on development of Comprehensive National Power which might get you a seat on the UN Security Council but not a military victory. The drawbacks of PLA are evident in China’s White Paper on Defence. It is  an overtly political paper. The focus is on organisation, mechanization, informationization and of all things micro-corruption! If a nation has to talk of rooting out micro-corruption from its armed forces in an international document, then it is admittance of incompetence.  When there is no mention of improving combat effectiveness at cutting edge levels in such a paper, then it is some sort of an expectation that your enemy will roll over due to sheer bluster. The PLA might bully small nations with weak forces. When arraigned against professional and strong-armed forces it is being found out. PLA is an inexperienced force under transition. Neither fit for continental nor overseas engagements. When the transition is complete and if it gains experience , it might be different. That is an IF. In the current situation ‘if’ it cannot prevail over India it will be a total loss of face. The military future of China is not very rosy – politicized leadership, unproven manpower, unproven weaponry, unproven capabilities.

Minority Fracture: China is a diverse nation composed of 56 ethnic groups. Han Chinese account for 91.59% and the other 55 make up the remaining 8.41% . Among the non-Han ethnic groups , 44 ethnicities  occupy their own autonomous regions, or counties. The largest ethnic minority groups in China are the Zhuang (16 million), Manchu (10 million), Hui (9 million), Miao (  8 million), Uyghurs ( 7 million), Yi (7 million), Tujia (5.75 million), Mongols (5 million), Tibetan (5 million), Buyei (3 million), and Koreans (2 million). The degree of integration of ethnic minorities varies. Uyghurs and  Tibetans are not integrated with the Han or CCP or China. Off late, this is spreading to Mongols also. The Government does dot trust theses minorities.  They are under strict state regulation. Religious autonomy is restricted. At various points of time these minorities have had major problems. Any signs of resistance from these ethnic minorities, is  interpreted as separatism and draws severe repression. These minorities occupy around 50% of the total area. They are not well off as compared to the Han. Han migration is encouraged into these areas through development and construction projects. Chinese government sees economic development as the main solution for ethnic dissent.  However these areas are being kept less developed inexplicably. The CCP wants to integrate them forcefully into the mainstream through side-lining ethnic languages, religion and customs. Tibetan and Uygur minority language schools are  closed since 2017 and replaced by Mandarin Chinese instruction. The same is being done now in Mongol areas. They are discriminated in the job market.  Their populations are  not being allowed to expand through forced sterilisation. 1.3 million Uyghurs on average per year have been put through ‘vocational training’ internment camps from 2014 to 2019. They have now put 500,000 Tibetans into forced-labour camps for militarized vocational training aimed to reform ‘backward thinking’ and improve ‘work discipline’. Forced integration of Tibetans into the system is a recent phenomenon. There is clear fracture with Tibetans, Uyghurs and Mongols which is enlarging. The Hong Kong democracy undercurrent will not vanish. Chinese preoccupation with Taiwan will not evaporate. If things deteriorate other minorities might also raise a flag. The implication is that the ‘Westwards Development’ agenda and the ‘Dual Circulation’ strategy which are to rescue the Chinese economy are at further risk. China will have to constantly invest considerable political, economic and military effort to keep these rimland areas under control and survive as a single entity. It will have to keep looking inwards. The international environment will also not respond favourably to China till such time it discriminates with its own people. This will inhibit their superpower drive. 

Post Virus Economy: The high flying Chinese economy has been brought down to earth by the virus. There is no doubt that it is recovering. Notwithstanding propaganda, the economic recovery has been found to be patchy and overhyped. In the short term things will look normal. In fact Xi Jinping has reiterated that the Marxist political economic model will be the bedrock for China’s  growth. Further he was only partially right when he said that the situation was ‘deep and complex’. It is actually beyond that. With  Germany  joining the Indo Pacific Club, most of the big economies and rich nations are now ranged against China . That is going to be a big blow to China. What does it mean? The Made in China 2025 plan is  facing stiff problems due to lack of ‘Core Technology’  as mentioned by Xi Jinping himself. Its Military Civil Fusion methodologies have been found out and exposed. They are being culled. China is being placed in a technology denial system. China does not have the technological ability to overcome all those barriers which Xi Jinping spoke of. As much as China has progressed in some fields, it has stagnated in others. Hence its economy will have a limiting factor at some stage. The BRI and its flag ship CPEC have run into economic, political, and strategic rough weather.  The BRI model  is no longer sustainable. China has not managed macroeconomic risk well. It has not given adequate attention to building political capital. Its choice of weak nations and debt trap diplomacy has led to a BRI backlash. BRI is being now subjected to a higher level of audit.  Renegotiation is on the cards in many cases. There is also a reluctance on the part of countries to commence new projects. China will have to settle for far less geopolitical/economic dividends than it had set out to reap.  Most importantly, the decoupling initiative of all the big economies  will hit China hard. Economic shrinkage is a matter of time and that will be permanent. On that there is no doubt. The Dual Circulation model has not got much traction. It is contingent on the success of three things. One. Internal consumption has to go up. In the short term, Chinese are simply refusing to consume. In the long term an aging China cannot consume.  Two. The Go West Policy can only succeed if Tibet, Xinjiang, Mongolia  and Western regions prosper. That looks unlikely due to political and ethnic factors. Three. Exports must increase but are going to reduce. The current enhanced expenditure on the Military situation will take its economic toll.  The overall outlook for the Chinese economy does not bode well. Some one sensible has to do the maths.

Analysis

All the issues highlighted and analysed are issues common to any country. What is special here?  The difference is that China has an overbalanced and rigid polity which is driving the country to an unrealistic destiny. China is fixated with overtaking USA. Its thinking is that others including India are hand maidens in that journey. The White Paper on Defence 2019 actually spells that without saying so. On the other hand the Chinese nation is imbalanced at this point of time – economically, militarily,  diplomatically, environmentally and ethnically. The Nation and the Government are at odds with each other. At the same time, Indian resistance is something new and totally unexpected. Currently, China is flummoxed  as to how to contend that. Hence it will gather itself and come back at us with vengeance.

So how do we deal with China?  We deal with facts and how they are presented to us. There are too many amongst us who predict that China will come breathing fury and fire of a mythical dragon. It won’t happen because it can’t happen. Very clearly the facts show that China is not the behemoth it is being made to be. In any case till such time the CCP is in power, India has to deal with an inimical China. It will do us well to remember that after USA, India is enemy Number 2 hereafter. Their strategists, analysts and ‘Global Times’ will attribute their failures to us. Also, China has become habituated to the fact of blaming others for its own faults and deficiencies. Its leaders will externalise failure and the needle will swing to India. Hence, the lesser of China in our society the better it will be. The importance of Atma Nirbhar Bharat lies in the fact that we should consume to make our economy thrive and not consume to make the China Dream happen!  

When soldiers march in step on a bridge it tends to collapse. Why? Resonance! If even some issues facing China resonate then there will be a major change. To recap, the issues are – diseases, aging, ethnic disparity, pollution, agriculture, degradation, climate change, diplomatic isolation, military limitation and economic trimming. China is a society without a check. It will continue on its improbable path at breakneck speed. Many of these factors are resonating and if the cadence is strong enough, we will see political change without fail. The Chernobyl factor is at work. Make no mistake about that. We should be prepared for a fallout of that change. From a long term perspective, it will be prudent to catalyse the change.  

The next standard question is will it lead to a China collapse? The simple answer is it will not. Will China become a superpower? The chances are no. What will happen? The economy was all set to shrink in the forthcoming decade anyway. It will get accelerated. Currently the world will consume what China produces and it will appear that the Chinese economy is still booming.  However  in a couple of years when Chinese mega projects bottom out, organised decoupling takes effect, pollution takes effect, and aging progresses, the shrink will be visible. We will then see the Chinese economy right sizing. Accordingly the polity will change. 

This analysis is a ‘man without a dog’ effort. There could be short comings and it is probably full of holes. I concede. However it is based on facts. It is not an exercise in wish listing. The facts reveal a vulnerable China. We need to do a holistic fusion analysis based on multiple inputs from institutional experts. It will enable us to then handle China in a realistic manner. From the analysis, writings and commentaries in public, it is evident that we are obsessed with Pakistan which is such a waste of time. For long, India has let the Ministry of External Affairs and some traders handle China exclusively. They have built an unrealistic image of China and allowed it to seep into our society. It is time that we study China and handle it with better understanding rather than the illiterate manner we have so far adopted. That is why we see a dragon instead of a eeny weenie Chinaman who is sitting on a nuclear reactor about to go critical.

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Lt Gen PR Shankar was India’s DG Artillery. He is highly decorated and qualified with vast operational experience. He contributed significantly to the Modernization and Indigenisation of Artillery. He is now a Professor in the Aerospace Dept of IIT Madras and is involved in applied research for defence technology. His other articles can be read on his blog www.gunnersshot.com

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Defence

A massive push for indigenous production of defence equipment

Under the Aatmanirbhar Bharat campaign, the Defence Ministry has prepared a list of 101 items for which there would be an embargo on the import beyond the timeline indicated against them. This would offer a great opportunity to the Indian defence industry to manufacture these items using their own design and development capabilities to meet the requirements of the armed forces in the coming years.

Ashish Singh

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The Cabinet Committee on Security, in its meeting held on 29 July 2020, approved to convert Ordnance Factory Board (OFB), a subordinate office of Ministry of Defence, into one or more than one 100% Government-owned corporate entities, registered under the Companies Act 2013. The corporatisation of OFB will improve its autonomy, accountability and efficiency in ordnance supplies.

A new category of capital procurement ‘Buy [Indian-IDDM (Indigenously Designed, Developed and Manufactured)]’ has been introduced in Defence Procurement Procedure (DPP)- 2016 to promote indigenous design and development of defence equipment. It has been accorded top most priority for procurement of capital equipment. The ‘Make’ Procedure of capital procurement has been simplified. There is a provision for funding of 90% of development cost by the Government of India’s industry under Make-I category.

 In addition, there are specific reservations for MSMEs under the ‘Make’ procedure. Seperate procedure for ‘Make-II’ category (Industry funded) has been notified under DPP to encourage indigenous development and manufacture of defence equipment. Number of industry friendly provisions such as relaxation of eligibility criterion, minimal documentation, provision for considering proposals suggested by industry/ individual etc. have been introduced in this procedure. So far, 49 projects relating to Army, Navy & Air Force, have been accorded ‘Approval in Principle’, out of which 9 projects have already been issued Project Sanction Order for prototype development.

 Under ‘Aatmanirbhar Bharat’ campaign of Govt of India, Ministry of Defence (MoD) has prepared a list of 101 items for which there would be an embargo on the import beyond the timeline indicated against them. This would offer a great opportunity to the Indian defence industry to manufacture these items using their own design and development capabilities to meet the requirements of the Armed Forces in the coming years. This list includes some high technology weapon systems like artillery guns, assault rifles, corvettes, sonar systems, transport aircrafts, light combat helicopters (LCHs), radars and many other items to fulfil the needs of our Defence Services.

 An innovation ecosystem for Defence titled Innovations for Defence Excellence (iDEX) has been launched in April, 2018. iDEX is aimed at creation of an ecosystem to foster innovation and technology development in Defence and Aerospace by engaging Industries including MSMEs, Start-ups, Individual Innovators, R&D institutes and Academia and provide them grants/ funding and other support to carry out R&D  which has  potential for future  adoption for Indian defence and aerospace needs. Under the iDEX scheme, a maximum of Rs 1.5 crore funding is available to a participant for development of a prototype.

 More than 700 start-ups participated in 18 problem statements pertaining to National Defence requirements, launched under 3 rounds of Defence India Start-up Challenges (DISC). 58 winners were announced after rigorous evaluation of applications by the High-Powered Selection Committees. Contracts have already been signed with several winners followed by release of tranches for several cases for prototype/ technology development.

 Government has notified the ‘Strategic Partnership (SP)’ Model in May, 2017, which envisages establishment of long-term strategic partnerships with Indian entities through a transparent and competitive process, wherein they would tie up with global Original Equipment Manufacturers (OEMs) to seek technology transfers to set up domestic manufacturing infrastructure and supply chains. Government has notified a ‘Policy for indigenisation of components and spares used in Defence Platforms’ in March, 2019 with the objective to create an industry ecosystem which is able to indigenize the imported components (including alloys & special materials) and sub-assemblies for defence equipment and platform manufactured in India. An Inter-Governmental Agreement (IGA) on “Mutual Cooperation in Joint Manufacturing of Spares, Components, Aggregates and other material related to Russian/Soviet Origin Arms and Defence Equipment” was signed during the 20th India-Russia Bilateral Summit in September, 2019.

 The objective of the IGA is to enhance the After Sales Support and operational availability of Russian origin equipment currently in service in Indian Armed Forces by organizing production of spares and components in the territory of India by Indian Industry by way of creation of Joint Ventures/Partnership with Russian Original Equipment Manufacturers (OEMs) under the framework of the “Make in India” initiative. 

  In February, 2018, Government decided to establish two defence industrial corridors to serve as an engine of economic development and growth of defence industrial base in the country. They span across Chennai, Hosur, Coimbatore, Salem and Tiruchirappalli in Tamil Nadu and across Aligarh, Agra, Jhansi, Kanpur, Chitrakoot and Lucknow in Uttar Pradesh (UP). Offset guidelines have been made flexible by allowing change of Indian Offset Partners (IOPs) and offset components, even in signed contracts. Foreign Original Equipment Manufacturers (OEMs) are now allowed to provide the details of IOPs and products after signing of contracts. In order to bring more transparency and efficiency into the Offset discharge process, “Offset portal” has been created in May, 2019. Defence Investor Cell has been created in February, 2018 in the Ministry to provide all necessary information including addressing queries related to investment opportunities, procedures and regulatory requirements for investment in the sector. Defence Products list requiring Industrial Licences has been rationalised and manufacture of most of parts or components does not require Industrial License. The initial validity of the Industrial License granted under the IDR Act has been increased from 03 years to 15 years with a provision to further extend it by 03 years on a case-tocase basis. 

Under the latest Public Procurement Order 2017, Department of Defence Production has notified list of 24 items for which there is local capacity and competition and procurement of these items shall be done from local suppliers only irrespective of the purchase value. An indigenization portal namely SRIJAN has been launched on 14.08.2020 for DPSUs/ OFB/Services with an industry interface to provide development support to MSMEs/Startups/Industry for import substitution. 

In May, 2001, the Defence Industry sector, which was hitherto reserved for the public sector, was opened up to 100% for Indian private sector participation, with Foreign Direct Investment (FDI) up to 26% both subject to licensing. Further,  Department for Policy of Industry and Internal Trade, Ministry of Commerce & Industry vide Press Note No. 5 (2016 Series), has allowed FDI under automatic route upto 49% and above 49% through government route wherever it is likely to result in access to modern technology or for other reasons to be recorded. Further, 44 FDI proposals/Joint Ventures have been approved for manufacture of various defence equipment, both in public and private sector. Government has brought in significant reforms to promote FDI in Defence sector in the country, to complement and supplement the domestic investment. Through FDI, domestic companies are benefited by way of enhanced access to supplementary capital and state-of-art-technologies, and also exposure to global managerial practices resulting in employment generation and accelerated growth of the sector. 

Review of FDI policy is an ongoing process and changes are made in the FDI policy regime, from time to time, to ensure that India remains an attractive investment destination. FDI in Defence Sector has been enhanced up to 74% through the Automatic Route for companies seeking new defence industrial license and up to 100% by Government Route wherever it is likely to result in access to modern technology or  for other reasons to  be recorded. 

 The obligatory government approval for existing FDI approval holders / current defence licensees for change in equity / shareholding pattern up to 49%  FDI has been proposed to be replaced with mandatory declaration for the same within 30 days of change of equity / shareholding pattern. The proposals for raising FDI beyond 49% from such companies could also be considered with Government approval.

 Enabling MSMEs in expanding their base

 The ‘Make’ Procedure has been simplified with provisions for funding of 90% of development cost by the Government to India’s industry and reserving Government funded Make-I projects not exceeding development cost of Rs. 10 crore and procurement cost Rs. 50 crore per year for MSMEs. The industry funded Make-II Projects not exceeding development cost of Rs. 3 crore and procurement cost Rs. 50 crore per year have also been reserved for MSMEs.  iDEX is also aimed at supporting MSMEs, Start-ups, Individual Innovators etc provide them grants/ funding and other support to carry out R&D. Besides, approximately 11,000 MSMEs as vendors are engaged in supplying various items to OFB and Defence PSUs. To bring MSMEs into the defence supply chain  and thereby boost the self-reliance of the country in defence and also contribute towards defence exports market, DDP has made a scheme of promotion of MSMEs in defence. 

Under this scheme funds are provided to industry associations to organize seminars in different parts of the country. MSMEs are partnering in DRDO projects and also DRDO developed technologies are also being transferred to them. 

They are important partners in industry ecosystem for the production of DRDO developed products.Various initiatives have been taken to address issues of timely payments like implementation of TReDS in DPSUs. Regular interactions are taking place to settle the grievance of vendors at OFB. Defence Investor Cell has been opened in DDP to address the issues being faced by vendors especially MSME vendors.

 Non-Core items of OFB have been uploaded on GeM which would enable them to supply the items hitherto reserved for Ordnance Factories to the Armed forces. Ministry of Micro, Small and Medium Enterprises implements various schemes and programmes for promotion and development of Micro, Small and Medium Enterprises (MSMEs) including defence sector MSMEs across the country. These include Prime Minister›s Employment Generation Programme (PMEGP), Scheme of Fund for Regeneration of Traditional Industries(SFURTI), A scheme for Promoting Innovation,   Rural   Industry  and  Entrepreneurship  (ASPIRE),  Credit Guarantee Scheme, Credit Linked Capital Subsidy and Technology Upgradation Scheme (CLCS-TUS), Technology Centre Systems Programme (TCSP), Micro and Small Enterprises-Cluster Development Programme (MSECDP), Procurement and Marketing Support Scheme etc. and also reviews and monitors the progress of the implementation of the Public Procurement Policy for MSEs Order, 2012.

 The Defence Offset guidelines have further paved the way for proactive participation of Micro, Small & Medium enterprises (MSME) of India by incorporating a scheme of multipliers of 1.5 for engaging MSME as Indian Offset Partners (IOP). There is no prescribed allocation/proportion between DPSUs and private sector. Efforts are, however, being made to create a level playing field between DPSUs and the private sector. 

Investment through FDI route

In May, 2001, the Defence Industry sector, which was hitherto reserved for the public sector, was opened up to 100% for Indian private sector participation, with Foreign Direct Investment (FDI) up to 26% both subject to licensing.  Further, Department for Promotion of Industry and Internal Trade, Ministry of Commerce & Industry vide Press Note No.5 (2016 Series)’, has allowed FDI under automatic route upto 49% and above 49% through government route wherever it is likely to result in access to modern technology or for other reasons to be recorded.  Further, FDI in defence industry sector is subject to industrial license under Industries (Development & Regulation) Act, 1951 and manufacturing of small arms and ammunition under the Arms Act, 1959.  As per the data furnished by 37 companies in Defence and Aerospace sector, so far (i.e. till June, 2020). FDI inflows of over Rs 2883 crores have been reported in Defence and Aerospace sectors through automatic route.  Further, FDI inflows of over Rs.1849 crores have been reported in Defence and Aerospace sectors after 2014 through automatic route. 

Corporatisation of OFB

 The Cabinet Committee on Security in its meeting held on 29.07.2020, has approved to convert Ordnance Factory Board (OFB), a subordinate office of Ministry of Defence, into one or more than one 100% Government owned corporate entities, registered under the Companies Act 2013.The Corporatisation of OFB will improve its autonomy, accountability and efficiency in Ordnance Supplies.On the issue of corporatization of OFB, the Federations of Defence Employees working in Ordnance Factories observed a Strike from 20/08/2019 to 25/08/2019. Strike marginally affected the normal production activities in all 41 factories for five working days. Normal production resumed across all factories from 26th August, 2019 onwards.The Department of Defence Production has been continually engaging with the Federations and Associations of Ordnance Factories with regard to their views on the said transformation. An Empowered Group of Ministers (EGoM) has been constituted under the chairmanship of Minister of Defence to oversee and guide the entire process of corporatisation of OFB, including transition support and redeployment plan of employees while safeguarding their wages and retirement benefits. 

Startups in Defence Sector

Government is making efforts to promote start-ups in the defence sector under ‘Aatmanirbhar Mission’ to localize the production of defence sector products. Innovations for Defence Excellence (iDEX) framework, was launched by Department of Defence Production, with the aim to achieve self-reliance and to foster innovation and technology development in Defence and Aerospace Sectors by engaging Industries including MSMEs, start-ups, individual innovators, R&D institutes and academia. Under iDEX, the projects or problem statements are identified based on the requirements projected by the Armed Forces, OFB & DPSUs. 58 iDEX winners have so far been identified for 18 problem statements/challenges under three rounds of Defence India Startup Challenge (DISC). 

Separate procedure for ‘Make-II’ category (Industry funded) has been notified under Defence Procurement Procedure to encourage indigenous development and manufacture of defence equipment. Number of industry friendly provisions such as relaxation of eligibility criterion, minimal documentation, provision for considering proposals suggested by industry including start-ups/individual etc. have been introduced in this procedure.DRDO has created eight Advanced technology centres across India to carryout research activities in the identified futuristic/new technology areas.

  These technology centres provide support to Academia to carry out directed research in the identified thrust areas related to defence applications.Atal Innovation Mission (AIM), NITI Aayog has set up a total of 68 Incubation centres across the country. Some AIM incubators focus on areas closely associated with deep-tech, aerospace etc. CODISSIA Defence Innovation and Atal Incubation Centre is a specific incubator which focuses on Defence Innovations and start-ups. iDEX envisages to engage with existing Defence Innovation Hubs (defence related MSME clusters) and create new hubs where innovators can get information about needs and feedback from the services directly and create solutions for India’s major defence platforms. Nine Institutions have been identified and are working as partner incubators to support activities under iDEX.

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