Posted on November 20th, 2016


The most important feature in international politics today, is the rising power of China. China    is admired for its economic performance. No single country in recent times has alleviated the poverty of so many in so short a time as China, say economists.  China’s purchasing power will soon exceed that of the US. China  controls the jade mines of Burma   and has over USD 250  billion in investments in South and Central America.

China is economically and politically very strong. China can easily provide world leadership. Germany, Japan, New Zealand and Australia   have pointed out that if US withdraws from its role as world military leader, China will fill the gap. China has made it very clear that both Hong Kong and Taiwan are part of the Republic of China and the world must accept China’s ‘One China Policy’.

As Western banks withdraw, their Chinese counterparts, with abundant capital and  long-term perspectives, are providing the  loans. Chinese lenders are fast becoming global leaders in ship financing, while western banks are reducing or exiting their shipping loan portfolios, because of the strict capital requirement regulations  now in force, as the world’s shipping industry faces its worst downturn in three decades.  Bank of China, the Export-Import Bank of China, and China Development Bank, ranking sixth, eighth and 15th, have provided loan volumes of $18.5 billion, $15.8 billion and $11 billion respectively.

China has entered the shipping finance market at an opportune time. Ship asset valuations are already at a historical low, hence risks for a further fall in value are minimized. This Chinese intervention is very helpful, it comes at a difficult time,” said  a shipping finance expert, despite the current low valuation on shipping assets, over the long term at least some sectors of shipping are expected to generate solid returns.

Currently, many shipping assets, which are fundamentally sound from a long-term perspective, are competing for sources of financing, so it is a good opportunity for Chinese banks to select  solid shipping assets to finance. Critics, however, are concerned about the increasing shipping credit being provided by Chinese banks, warning that cheap capital provided by Chinese financiers may lead to an oversupply of ships. Chinese banks must study the quality and specification of the ships they finance carefully and make sure the deals are structured appropriately.

China’s defence budget has increased by double digits almost every year for the last two decades. The International Institute for Strategic Studies  (IISS)said China’s official defence budget of $145 billion  in 2016 was 1.8 times higher than those of South Korea and Japan combined. China accounted for more than a third of Asia’s total military spending in 2016.

China has  worked towards acquiring the kind of high-level, high-value military assets that the United States has used against it in the past. China’s military progress shows that Western dominance in the field of advanced weapons systems can no longer be taken for granted,” reported the International Institute for Strategic Studies.

China is beginning to export its own weapon designs, including armed drones, worldwide and is reaching “near-parity” with the West in terms of military technology. Chinese military exports to Africa last year were moving from the sale of Soviet-era designs to the export of systems designed in China.  Chinese-made armed drones had been seen in Nigeria and Saudi Arabia.  With China  planning to sell more abroad, Western forces may confront more advanced military systems, in more places, and operated by a broader range of adversaries.

The  International Institute for Strategic Studies   said in 2017  that China appears to be reaching near-parity with the West in terms of air power. China had introduced a type of short-range missile that “only a handful of leading aerospace nations are able to develop”. China was also developing “what could be the world’s longest range air-to-air missile”. One of China’s air-to-air missiles had no Western equivalent.

China was also constructing its first domestically built carrier and reportedly working on another. Military experts say that within a little more than a decade, China’s Navy may have more warships than Washington under its command. According to some estimates, over the next 10 to 15 years, China could build its naval  fleet to a total of 500, including up to four aircraft carriers and 100 submarines as well as smaller but sophisticated corvettes, patrol boats and other combat craft. The US ship ‘Carl Vinson ‘showed America’s military might as it sailed through the disputed waters of the South China Sea, but  In the event of an actual war, however, it is far from clear how long such a massive vessel would survive before being sunk, said experts.

Beijing’s military buildup is part of its strategy to dominate the  disputed territories in the South China Sea – and push America back. Many analysts believe China now possesses enough weapons technology, submarines, missiles and strike aircraft in particular, that US planners would be reluctant to risk their carriers that close to China’s coast again. China now plans to expand its military  reach to  energy-rich atolls and islands claimed by the Philippines, Vietnam and Malaysia.

China views India with disdain, considering it backward and chaotic.  China thinks India can be easily dissolved into its regional parts. China’s economic worth is five times more than that of India. China had a surplus of USD 35 billion over India in China-India trade in  2014  China has replaced India as the primary destination of outsourcing and shared service for Asia -Pacific companies.  Chinese scientists have increased their research output at a far faster rate than those in India. India has   also lost its position as protector of Nepal.  China has signed an agreement which  allows Nepal to use Chinese harbors and roads for supplies.  Those ports and roads are far away but there is hostility to India in Nepal.

China has managed to settle boundary questions  with 12 neighbouring countries, including Russia and Vietnam. China has settled its   borders with all neighboring countries except India, where it is keeping the border issue simmering. China does not recognise the ‘illegal’ McMahon line on India –China border. This was agreed by British and Tibet as part of the 1914 Simla accord. Both China and Delhi claim chunks of territory which are now in the opposite hands. Contested territories included a sliver of Kashmir and Arunchal Pradesh. China wants certain parts on the western and eastern sector of Arunchal Pradesh which are at present under India. China says these areas are within China’s traditional border with India.

China is not opposed to India’s rise, and does not subscribe to the view that Sino-Indian rivalry is unavoidable.  China will neither see India as its rival nor contain India’s development, said a spokesman. Responsible Indian politicians should not treat China as a competitor or target of containment. In the eyes of China, even if there are some competition between China and India, they are healthy competitions that will eventually help both countries develop and progress, instead of political and strategic competitions and zero-sum games.

China’s  One Belt One Road Initiative, (OBOR)  started in 2013, has received support from over 100 countries and international organizations, with nearly 50 cooperation agreements signed between governments. This initiative will connect Asia with Europe, and create new trade corridors, experts said. There will be a maze of roads and ports for China to trade its goods and services.  China built Kuaukpyu port in Burma and a pipeline to carry oil to China.  This created a gateway to China from Bay of Bengal.

China has invested over USD 50 billion in the countries along the Silk Road.  China has launched a USD 40 billion Silk Road fund to finance the projects. Observers also note that an efficient and productive Chinese shipping industry will support China’s One Belt One Road vision. Many see OBOR as a good thing. There will be robust medium-term growth as global trade increasingly centers around China, say experts. China has invested in Greece’s Piraeus Port and Turkey’s Kumport. OBOR will boost Eurasia’s connectivity and international seaborne trade.



  1. Christie Says:

    Thanks Kamalika

    There was no India before British made India. The day India is dismantled most of the problems of the subjects of the Indian Empire will go away including those of the neighbors of the Indian Union.

    It is time for the Sinhalese to unite and stand up to the Indian Empire.

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