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China, Pakistan and the regional security

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China and Pakistan had established ties in the wake of 1962, but their relations further improved in the 2000s due to changes in regional and global politics that made Pakistan a critical partner to China.

At the beginning, if we talk about the 1900s, China was in some way reluctant to have a strong friendship with Pakistan. It could be because of the idea that the Chinese had in that time like “hide your strength and abide your time”. China was in no way interested to show its power and also doesn’t want to have closer ties with any countries. But it’s not the case any longer as Beijing is more involved in today’s affairs in both “security and economy”.

Ironically, the regional countries and the world are also welcoming China’s engagement and Pakistan is one of those countries. Pakistan sees the bilateral ties as a valuable friendship and the Chinese did not see or have needed to trumpet the relationship; rather it is Pakistan which needed China more than the other way around.

However, at the moment, China also sees the bilateral ties with Pakistan important for both the capitals, as Beijing now calls Islamabad as a good friend and supportive partner.

It is not wise to always bring India into account of the flourishing ties between China and Pakistan because China and India are also connected to economic affairs. There are some issues in bordering points, but China had never appeared to play double cards in return to keep Pakistan happy.

China has its own ambitions which is to help the regional countries in security and economic affairs because the region will not reach progress if they remain in hostility.

There is an understanding that the China-Pakistan relationship was built in the aftermath of the 1962 China-India border dispute, but now the focus is more on mending the ties and improving the economy. Pakistan used this opportunity and in 1963 handed over the Shaksgam Valley to the Chinese.

China doesn’t support war between Pakistan and India

It was a good attempt, but this was not like China is not willing to have ties with India. Of course, China has helped Pakistan after receiving control of the Valley, but this was not in return of helping Pakistan to further increase its enmity with India.

There are several reasons that China is not seeing India as its predominant strategic threat. One reason is that China doesn’t believe in war. The clear example is that China did not support Pakistan in its war against India in 1965 and 1971. And also there was a big incident in 2019 when Pakistan shot down two Indian jets and nothing left for another war between Islamabad and New Delhi. Again China approached with a peaceful solution and did not support Pakistan rather called for a peaceful resolution.

Moreover, China also did not support Pakistan during the Kargil war in 1999 and during the Mumbai terrorist attacks in 2008. China at the same time is concerned about internal security of Pakistan, an Asian state with nuclear weapons, and a population of over 200 million. Additionally, there are a number of terrorist groups operating inside Pakistan, which is yet another concern of China.

China and Pakistan stress need for regional peace

China on Wednesday welcomed Pakistan’s Chief of Army Staff General (COAS) Asim Munir and along with his Chinese counterpart, they discussed regional peace and security. The meeting was held at the People’s Liberation Army (PLA) headquarters during Munir’s first day of the four-day official visit to Beijing.

A statement issued by Pakistan’s Inter-Services Public Relations (ISPR) said “both the military commanders reiterated the need for maintaining peace and stability in the region and enhancing military-to-military cooperation.” Issues relating mutual security interests and military cooperation were also discussed.

Munir is expected to hold further meetings with military leaders in China to enhance the long-standing relations between the two countries during his remaining three days. The visit comes at a time when security has deteriorated across Pakistan.

Swat blast claims 17 lives

At least 17 people lost their lives and over 50 others received injuries in a blast at counter-terrorism department (CTD) police station in Swat. The reason behind the blast is unknown. According to a preliminary report, the explosions is not due to a suicide attack, but also the cause is not clear.

The counter-terrorism office building in Kabal town of Swat after the explosion on April 25, 2023. Reuters

High alert has been declared across Swat and also security audits of important local and foreign installations have been ordered to improve security arrangements. Pakistan’s Intelligence Unit of the capitol police, also known as Special Branch and Security Division will conduct a survey for the security audit and priority would be the security audit of the Red Zone and all police installations in the capital.

In 2020, the last security audit of an important foreign installation was conducted, and now is the second such practice. After the blast, police were also ordered to wear safety gear, remain on alert and keep their distance from each other on the line of duty.

Security matters

Peaceful regions and neighboring countries, including Pakistan, Afghanistan, and the Central Asian states are important for China’s Belt and Road Initiative (BRI). Unstable region will hamper BRI’s activities, a gargantuan multilateral infrastructure and investment project that will help improve the region’s economy and security.

The current China-Pakistan Economic Corridor (CPEC) is part of the BRI that continues a variety of initiatives such as infrastructure, energy, economic zones, and the development of a strategic port, Gwadar. CPEC is part of a 62 billion development project and it is meant to be a strategic and economic connection between China and Pakistan.

The success of CPEC directly means the success of BRI itself and for that security situation in Pakistan must be improved.

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5 points in the indictment of Indian billionaire Gautam Adani

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The indictment of Indian tycoon Gautam Adani, Asia’s second richest man, on bribery charges in a U.S. federal court on Wednesday shocked India.

The charges put his empire under renewed scrutiny less than two years after allegations of financial irregularities by short-seller Hindenburg Research wiped $130bn off the group’s public market value.

Who is Gautam Adani?

Gautam Adani is the founder and chairman of the Adani Group, which has interests in renewable energy, ports, airports, construction materials, food and media. He is often referred to as ‘Number 1’ and ‘Big Man’ by other defendants in the case.

Adani, 62, from a middle-income textile family in the western Indian state of Gujarat, set up his group in 1988 to trade in commodities. Over time, Adani grew his business through an aggressive leverage strategy, moving into many sectors critical to the country’s infrastructure. The group was worth around $170 billion before the indictment led to the sale of its listed assets.

Adani’s rise mirrors that of Indian Prime Minister Narendra Modi, himself from Gujarat. Modi’s political opponents have often claimed that Modi has favored the billionaire, as Adani has benefited greatly from the tenders it has won for public projects thanks to the Modi government’s infrastructure development drive. Both Adani and the government have denied any special treatment.

What are the charges?

U.S. prosecutors allege that Gautam Adani, his nephew Sagar Adani and six other defendants conspired to pay $265 million in bribes to Indian government officials to secure ‘lucrative solar power supply contracts’. The defendants also allegedly ‘concealed’ the bribes from U.S.-based investors in order to ‘obtain billions of dollars in financing’.

The bribery scheme, dubbed the ‘Corrupt Solar Power Project’ in the indictment, centered on numerous solar power contracts awarded by the state-owned Solar Energy Corporation of India to Adani’s renewable energy unit and another Indian company, Azure Power.

Adani and others have also been charged by the U.S. Securities and Exchange Commission with making ‘materially false or misleading’ statements about anti-bribery practices when raising $750 million from investors in September 2021, including $175 million from U.S. investors.

How will the indictment affect the Group’s business?

Following the indictment, 11 of the conglomerate’s twelve companies collectively lost around $27 billion in value on Thursday, a repeat of the collapse in January 2023, when Hindenburg Research accused the group of stock manipulation and improper use of offshore tax havens, among other allegations.

Shares in holding company Adani Enterprises fell more than 22%, while shares in Adani Green Energy, the focus of the investigation, fell nearly 19%. Only New Delhi Television (NDTV), the news media arm of the conglomerate, closed marginally higher. Shares in most Adani companies continued to fall in early trading on Friday.

“The indictment could affect Adani’s upcoming fundraising plans. Adani Green Energy has reportedly cancelled the sale of $600 million in U.S. dollar-denominated bonds. The biggest short-term impact of this development is that the Adani Group may find it difficult to raise new funds, especially from leading financial institutions, until its name is cleared,” said Abhishek Basumallick, founder of investment advisory firm Intelsense.

Late on Thursday, Kenyan President William Ruto said he was cancelling Adani’s purchase of a controlling stake in the country’s main airport and a $736 million public-private partnership with the company to build power transmission lines.

How have the Adani Group and the Indian government responded?

In a statement on Thursday, the Adani Group rejected the charges in the indictment, calling them ‘baseless’.

As the U.S. Department of Justice has stated, the charges in the indictment are allegations and the defendants are presumed innocent until proven guilty,’ the group said in a statement: ‘All available legal remedies will be pursued.

There has been no official reaction from the Indian government.

Jaideep Mazumdar, Joint Secretary (East) in the Ministry of External Affairs, declined to comment when asked about the Adani issue during a press conference on Modi’s visit to Guyana in South America. “This is a press conference organised for the Indian Prime Minister’s visit to Guyana and the India-CARICOM (Caribbean Community) Summit, and I am not in a position to respond to questions beyond this mandate,” he said in Guyana’s capital, Georgetown.

Modi’s political rivals have launched a series of attacks on the billionaire.

Rahul Gandhi, senior leader of the Indian National Congress, said at a press conference on Thursday: “Adani has in a way taken over India; the country is in the grip of Adani. So, India’s airports, ports, defence industry… it is a partnership. Modi is on one side of the partnership and Adani is on the other,” he said.

Gandhi is also the leader of the opposition in the lower house of parliament and is in a powerful position to have a say in the appointment of a director of the Central Bureau of Investigation, the country’s anti-crime agency. Gandhi said his party would raise Adani’s charges in the winter session of parliament, which begins on Monday.

Is extradition expected to come up?

There is an ongoing investigation into Adani, launched last year by India’s securities regulator in the wake of the Hindenburg Research allegations.

Lawyers in India and the U.S. have said that U.S. prosecutors may seek the extradition of Adani and other defendants in the latest charges. The two countries have had an extradition treaty in place since 1997.

Prashant Mendiratta, a lawyer at the Delhi High Court, said the Indian Ministry of External Affairs would be the primary decision-maker if the U.S. government made an extradition request.

“If the Indian government refuses extradition, the prosecution can approach the Indian judiciary with a petition against the decision … there is a high probability that this will turn into a two-front legal battle,” Mendiratta added.

The Indo-U.S. extradition treaty also stipulates that an offence must be punishable by imprisonment of one year or more before extradition can be granted. Under India’s Bharatiya Nagarik Suraksha Sanhita (BNSS) Act, bribery is only punishable by up to one year in prison.

The more stringent Prevention of Corruption Act (PoCA) can also be applied in this case.

However, for the PoCA to apply, it must be proven that a bribe was solicited and accepted by the government official.

“Obviously we are aware of these allegations,” White House spokeswoman Karine Jean-Pierre said at a press briefing on Thursday when asked if the U.S. was concerned that the charges against Adani could damage bilateral relations: “What I would say is that we believe that the relationship between the United States and India rests on an extremely strong foundation based on the relationship between our peoples and cooperation on the full range of global issues.”

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Trump’s trade stance pushes Asian countries toward regional alliances

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Asian countries are responding to U.S. President-elect Donald Trump’s protectionist rhetoric by placing greater emphasis on regional and bilateral trade agreements aimed at promoting transnational economic cooperation without U.S. involvement, analysts say.

After being sworn in for a second term on January 20, 2024, Trump made tariffs a cornerstone of his campaign, pledging to impose duties of up to 20% on U.S. imports across the board, as well as a 60% tariff on Chinese goods.

At the recent Asia-Pacific Economic Cooperation (APEC) forum in Peru, leaders from many of the 21 member economies called for greater regional economic integration as geopolitical tensions rise and supply chains become increasingly fragile.

China signed a stronger trade agreement with Peru.

Indonesia finalized a trade deal with Canada.

Singapore’s Prime Minister, Lawrence Wong, emphasized the importance of reviving the Asia-Pacific Free Trade Area, an agreement still under negotiation among APEC economies.

“APEC is more important now than it was before,” Wong said, highlighting the urgency of collaboration.

Multilateral regional economic partnerships

Trade deals excluding Washington, such as the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), are expected to become more vital for Asian countries in the coming years.

“This will help us manage some of the chaos and damage from the collapsing global system,” said Deborah Elms, head of trade policy at the Hinrich Foundation, an Asia-based group promoting sustainable trade, in an interview with Nikkei Asia.

The RCEP, a trade agreement involving 15 Asia-Pacific countries—including China, Japan, South Korea, and ASEAN members—was signed in November 2020 after eight years of negotiation. Together, these countries account for roughly 30% of global GDP.

In 2017, Trump withdrew the U.S. from the Trans-Pacific Partnership (TPP), leaving Japan to lead the revised agreement. Renamed the CPTPP, the 11-member group, including Canada, Australia, New Zealand, Singapore, and Vietnam, is entering its sixth year. Trade between members rose 5.5% between 2018 and 2021. The United Kingdom joined in December, while China has expressed interest in becoming a member.

Given Trump’s anti-globalization stance, analysts suggest that Japan should expand the CPTPP by adding members and deepening cooperation with the European Union.

A Chinese delegate at APEC remarked, “At the end of the day, we have many trading partners.”

However, China’s own economic policies could pose challenges to regional trade cooperation.

Priyanka Kishore, founder of consultancy Asia Decoded, emphasized that China must boost domestic consumption and increase imports to strengthen regional trade.

“China has a crucial role to play in supporting the region’s external demand,” Kishore told Nikkei Asia, adding, “It needs to do more if it wants to be the champion of intra-regional trade.”

Finding new trading partners could take years

Higher U.S. tariffs could hit Asian economies hard, particularly those with trade-to-GDP ratios exceeding 100%, such as Singapore, Hong Kong, and Vietnam. Currently, only Singapore and South Korea have free trade agreements with the U.S.

Tariffs, paid by importers in the U.S. and collected by U.S. Customs and Border Protection, raise costs that are often passed on to consumers. However, they also hurt foreign exporters by making their goods less competitive.

According to research by Yang Zhou, an economist at Fudan University, the U.S.-China trade war cost China $35 billion, and the U.S. $15 billion in 2018 alone.

A study by Global Trade Alert, an independent organization monitoring world trade policies, explored how Asian countries might cope with losing access to the U.S. market. It concluded that it would take these countries an average of five years to establish new trade partnerships.

For countries like Thailand, the timeline could extend to 24 years, as they shift trade to China, the EU, Vietnam, and Japan. For South Korea, it might take until 2038 to fully replace the U.S. as a trading partner.

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China resumes visa-free travel for Japanese citizens

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China’s Foreign Ministry announced on Friday that the government will waive visa requirements for Japanese citizens traveling to the country starting 30 November.

Japan now joins a group of European countries, including Bulgaria, Romania, and Croatia, that have been added to China’s visa-free travel list. This arrangement will remain in effect until the end of next year.

The latest exemptions bring the total number of eligible countries to 38. Additionally, Beijing has extended the visa-free stay duration from 15 to 30 days.

This decision follows a meeting between Japanese Prime Minister Shigeru Ishiba and Chinese President Xi Jinping during the Asia-Pacific Economic Cooperation (APEC) forum in Peru last week. Both leaders agreed to cooperate based on their “common strategic interests.”

China had suspended visa exemptions for Japanese and other travelers during the COVID-19 pandemic. Since lifting its zero-COVID policy in 2023, Beijing has reinstated visa-free entry for dozens of countries in Europe and Southeast Asia. However, Japanese citizens still required visas for stays of 15 days or less—until now.

Japanese authorities have been urging Beijing to relax visa policies, aiming to facilitate travel for business and leisure. While this latest move simplifies access, it remains unclear if it will lead to a substantial rise in Japanese visitors to China, given ongoing challenges such as the weak yen, which has dampened outbound travel from Japan.

Conversely, Chinese citizens traveling to Japan must still obtain visas, a policy that predates the pandemic. According to Japanese media, Tokyo is not planning to offer reciprocal visa-free travel to China but is considering simplifying visa procedures to ease the process for Chinese visitors.

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