To outsiders, China is the only Asian tiger that has military capability to start and sustain a long-drawn-out war, considering its numerous armies and state-of-the-art weaponry. But in reality that military permutation is absolutely incorrect: Japan as well as India are formidable Asian military powerhouses that can hold their own when it comes to regional military showmanship. As a matter of fact, Japan has to its name an inglorious militarization past when it occupied many countries in the Asia sub-region, including China itself and countries like Singapore, Philippines, South Korea and so on. Indian military might has withstood Chinese armies on several occasions. A typical India-China onslaught that readily comes to mind is the “Border War” of 1962 when Indian soldiers defended a strip of land in the Himalayas, which China also laid claim to.
It wasn’t surprising when China strongly protested against India’s invitation to Japan to be part of Malaba military exercises previously scheduled to take place in October. Even though India and the United States had, in the past, invited Japan to the same military drills, this time around India has had no apparent option but to buckle under Chinese pressure. This explains why Malaba exercises previously scheduled for October have been canceled by India.
ValueWalk's Raul Panganiban interviews Kirk Du Plessis, Founder and CEO of Option Alpha, and discuss Option Alpha and his general approach to investing. Q1 2021 hedge fund letters, conferences and more The following is a computer generated transcript and may contain some errors. Interview with Option Alpha's Kirk Du Plessis
China vs India: The troubled Asian diplomacy
There are some diplomatic juggernauts at play here, and if you are not keen on troubled Asian diplomacy, you may end up scratching your head in confusion. To set the record straight: China’s disapproval comes from the realization by Chinese leaders that Japan joining forces with India is particularly aimed at alienating China. It is almost impossible for Chinese technocrats to overlook Japanese militarization past, a terrible event that has often overshadowed whatever development Japan and China had made to normalize their relations.
India cannot risk anything at this moment to jeopardize its economic and diplomatic ties with China, in spite of the challenges both countries face to sustain this bad marriage. The volume of Indo-China trade in 2010 stood at $30 billion, smaller than the international trade between India and Japan. For economic reasons, Prime Minister Narendra Modi might have made the decision to forgo Malaba military exercises to pacify China. India needs rapid economic growth in order to manifest the economic recovery that Prime Minister Modi has promised in his campaigns before his election to the elevated office of Indian leadership.
China has not been able to halt similar military drills between the United States and Japan, owing to the close military relationship between the two nations. So, China wasn’t going to tolerate any plan by Japan to build military alliances with other Asian countries. In his sharp criticism of Japan. Lu Yaodong, the director of the Institute of Japanese Studies at the Chinese Academy of Social Sciences said, “this year’s participation [in the Malabar exercises] makes clear that Japan’s underlying intention is to build a maritime cooperation alliance in the Asia-Pacific region, and if Japan continues on this path, it will certainly pose serious threats to the regional security and even dampen the common development of the region,” Lu intoned.
Japan and India have recently struck an agreement to exchange weapons as Japan lifted its self-imposed, post-war embargo on arms export. This agreement is expected to deliver to India some US-2 Amphibious Aircraft. While the canceled Malaba military drills may not affect the purchase of advanced aircraft by India, but China has successfully driven a wedge between the two nations–a development that may see India and Japan staying apart as far as military cooperation is concerned.
China has every reason to doubt Japan’s military ambitions: Just of recent, Japan’s parliamentary lower house voted unanimously to repeal a clause in their country’s Pacifist Constitution which forbids Japan from committing its troops to military operations outside its borders. If the Upper House follows the same path, Japan will now have the legal right to send its soldiers to fight internationally. A report surfaced lately that the Japanese Government is in a preliminary talk with the Philippines’ leaders to provide them three advanced spy aircraft (Beechcraft TC-90 King Air Planes) they could fly over the disputed South China Sea. A move that has purportedly received lukewarm response from China as Chinese Defense Ministry issued a sharp rebuke, “We hope that military cooperation between the relevant countries can benefit regional peace and stability, rather than the opposite.”
United States’ stance in South China Sea
It is clear from all indications that Japan is acting out US script on the maintenance of security in the region. Publicly, the position of the United States has been to encourage all the countries fighting over the islands located in South China Sea to embrace peace and seek legal and peaceful resolutions to the impasse. In the just concluded ASEAN meeting in Malaysia, some of the South-East Asian countries contesting the islands with China have sought some legal codes that would define each nation’s jurisdiction on the islands, an expectation that wasn’t met during the meeting.
However, China through its news outlet, Xinhua accuses the world press for heating up the region with their inflammatory headlines. China vehemently denies militarizing the islands; it accuses its rival and the United States for trumpeting falsehood without double-checking their claims. Chinese leaders have always wanted to paint themselves as peace-loving bunch, and that any attempt for other Asian nations such Malaysia, Philippines, Indonesia, Taiwan, Brunei and Vietnam to cause unrest in the region would be met with equal measure by China.
Equal measure? It is a fact that none of its Asian competitors can equally match China’s military might: A country that spends hundreds of billions of dollars on military expenditures, and second only to the United States! So far, China has been playing to the gallery by announcing in a recent meeting in Singapore a halt in its island-building plan. Chinese leaders are calling all parties involved in the disputes to come to the table and design a functional approach to resolving the issue.
While India is not part of the South China Sea problem, its military romance with Japan is what has caused untold anger in Beijing. Prime Minister Modi understands how strategic Chinese economic alliance is towards actualizing all his goals for the development of India. And the last thing Prime Minister Modi needs now is a political upheaval with the main Asian Tiger, its biggest trading partner. It is not clear at this moment if India can eventually maintain its relationship with China in the long term. This is because India has gladly opened its arm to the United States recently, and there is no doubt that military alliance will be one of the strategic relationships the United States wants to have with India.
Found itself trapped between Japan and the United States, two nations that China strongly perceives as rivals and possible enemies. But as long as India still needs Chinese help in developing its economy through improved and bigger international trades, the Indian leaders may need to find a way to strike up some kind of alliances that would serve its interest as well as keeping good rapport with the other countries. It is true to state that Asia is at a crossroads right now, and any mistake to handle this delicate issue with levity may backfire and pit one nation against the other in a bloody, all-out war for supremacy!