Sunday, August 07, 2016

China paves the road to Europe

Perhaps the most fascinating aspect of Chinese President Xi Jinping’s foreign visits relate to China’s enormously ambitious One Belt One Road or the Belt Road Initiative. There is a great deal of confusion as to what exactly OBOR means. It is a compound of two separate plans to develop connectivity — one over the land across Asia to Europe, and the other through sea routes. The OBOR is not simply a collection of highways, pipelines and sea routes, but a geopolitical destination. That endpoint in both the land and maritime versions is Eurasia and the aim of OBOR is to compact the vast region and make China its driving force in the coming two decades. So, even as the US pivots to Asia, China is rebalancing to Europe.
China’s President Xi Jinping and his Polish counterpart Andrzej Duda after signing a cooperation treaty between China and Poland at the presidential palace in Warsaw on June 20. Pic/AFP

Europe is the largest economy in the world, if you count the 28 EU nations, Norway, Switzerland and Iceland. This grouping accounts for 25.4% of the world’s output in 2014 as compared to the US (22.5%) and China (13.4%). They also account for 28.5% of all consumer spending in 2014, above the 26.6% spent by US consumers and 15.6% by all BRICS nations combined. So the EU is both a potential market, as well as a source of high-tech and trade and commerce.
So, there is a class of foreign visits of Xi that are aimed at a Eurasian consolidation. It began with his first visit abroad as President, to Russia. Now it is clearer through his most recent tour to Poland, Serbia and then Uzbekistan, the last named also being the venue of the Shanghai Cooperation Organisation summit. Prior to this, in March, Xi was in the Czech Republic, and before that in October 2015, UK, and in May 2015 in Kazakhstan, Belarus and Russia.
The visits are tied to more complex regional diplomacy that is visible in the summits of China and Central and East European Countries (CEECs), also known as the 16+1 summit. In November 2015, China hosted the fourth summit in Suzhou. Countries like Poland, Czech Republic, Serbia, Albania, Bosnia, Bulgaria, Croatia, Estonia, Latvia, Hungary, Lithuania, Macedonia, Slovenia, Montenegro sent their Prime Ministers or heads of state to the event and a few others sent senior ministers. Not surprisingly, the major theme of the meeting was connectivity. CEECs want to join up with China, hoping to rub off its prosperity and gain investments through the OBOR schemes.
China has already built up an impressive set of pipelines, roads and railways to link up to Central Asia. For some years, trains have begun carrying cargo from China to European destinations — Suzhou is now connected to Warsaw, Lianyuang to Rotterdam, Chengdu to Lodz, Chongqing to Duisburg, Yiwu to Madrid, Zhengzhou to Hamburg. The time taken for freight to reach from China is two weeks, and currently they go north and join up with the Trans Siberian route, or they go through Central Asia, Iran and Turkey, which however, is not too well developed. The Chinese also have ambitions of building a third route south of Kunming to Yunan, Myanmar, Bangladesh, India, Pakistan, Iran and Turkey before reaching Europe.
The relatively lower labour costs in some of these European states are being viewed by China as intermediate bases to establish its logistics and manufacturing facilities to target the richer states of EU. The way the Chinese plan it, in the coming decades they plan to get out of low-end manufacturing and move to higher value, innovation-based products. These would obviously require better off markets, and Europe fits well into this, having markets that become progressively richer as you move from east to west.
China is also working at this problem from the other end, which was evident from Xi’s visit to
UK in October 2015. He plonked down $8.7 billion in a one-third stake on a British nuclear power plant, a deal for British Petroleum to supply China with 1 million tonnes of LNG per annum, worth $10 billion, for 20 years, Rolls Royce got engine sales worth $3 billion. In addition, there were announcements of other joint ventures and investments in areas ranging from cruise ships, research and development in tissue engineering, hospitals, real estate, electric cars, education and training. London is of great interest to the Chinese as a finance centre and in the past two years, the trading volume of the RMB has doubled and recently, the London Metal Exchange announced its acceptance of RMB. Similar Chinese investments exist in the other two major European economies, Germany and France.
In this grand scheme of things, the message to countries like India is that either you participate, or risk being bypassed. The China-Pakistan Economic Corridor (CPEC) is a manifestation of this. However, India is riposting through the Chah Bahar project and the International North South Transport Corridor to link Bandar Abbas in Iran with Russian ports. The hurdles before India are many, scarce finance being the lesser one. The big challenge is to implement the projects on schedule, something New Delhi is simply not good at.
Mid Day June 21, 2016

India needs a balanced 'give-and-take' relationship with China to negotiate NSG entry

Foreign Secretary S Jaishankar’s visit to Beijing last week indicates that New Delhi is undertaking direct diplomacy to obtain China’s support for India’s membership into the Nuclear Suppliers Group. 
This is as it should be. It was foolish and futile to try and somehow shame China into supporting the Indian cause.
Actually, the first round of diplomacy began with President Pranab Mukherjee’s visit to Beijing last month.

Foreign Secretary S Jaishankar (right) was in Beijing to undertake direct diplomacy with China, in a bid to get support for India’s membership into the Nuclear Suppliers Group
Foreign Secretary S Jaishankar (right) was in Beijing to undertake direct diplomacy with China, in a bid to get support for India’s membership into the Nuclear Suppliers Group

What is not widely known is that the Foreign Secretary, who was accompanying the President, took the opportunity to engage the Chinese foreign minister Wang Yi in a one-on-one meeting.
What transpired in either meeting will not be known, but the success or failure of the effort will soon become evident in the forthcoming NSG meeting in Seoul.

Suffice to say, it will make little difference. India has already sought and obtained a waiver to conduct civil nuclear trade from the body and also pledged to follow its rules, whether or not we are members.
However, it will be a dent in the prestige of the government, which had hyped-up India’s efforts to enter the body to the point where being denied entry will be seen as a major setback.
The NSG debate is a good primer of the manner in which world politics functions.
The NSG itself is not a body based in international law, but a cartel of the powerful - in this case, countries with the capacity to conduct nuclear trade. The only language in which it communicates is power; and the only method of negotiation is give and take.
There are other similar bodies, beginning with the G7/G8 - now somewhat chastened - but which once acted as arbiter of the international economic system.
So there is the Missile Technology Control Regime (MTCR), a club of countries which have the know-how of making missiles, space systems or their components. 
The Australia Group is a cartel of countries making chemicals and the precursors of chemical weapons - and then there's the Wassenaar Group of countries with advanced conventional weapons technologies.
As part of the India-US nuclear agreement of 2008, the US promised India ease of entry into all these groups.
This was said to be huge for India, as the only country that could achieve this goal was the US, the sole global superpower.
Being cartels and not international agreements, these regimes are not always universal. China, the major missile and arms exporting power, is not a member of the MTCR or the Wassenaar, though it claims to harmonise its rules with both of them.

Given this perspective, China’s formal position raising the issue of the Nuclear Non Proliferation Treaty was a red-herring.
It was not India’s refusal to join the NPT that led to the NSG’s creation, but its first nuclear test.
With the world more or less accepting India as “a state with nuclear weapons”, and marking this by the 2008 waiver, that issue should no longer have any salience.
Neither should the Chinese need to assuage Pakistan’s angst. 
Beijing has been a major beneficiary of Islamabad’s obsession with India. It is in its interest to prolong this situation, rather than bringing in Pakistan from the cold. 
It is actually all about that oldest issue in diplomacy - give and take. What is India willing to offer to China, in exchange for its support for the Indian application for NSG membership? 
Far from being offered something, Beijing believes it is seeing increased Indian truculence. New Delhi has gone out of its way to connect freedom of navigation issues with the South China Sea, and tried to shame China into placing Jaishe-Muhammad chief Masood Azhar in the ISIS-Al Qaeda sanctions list at the UN. Indian entities with government backing sought to organise a conference of the entire galaxy of Chinese dissidents - and that, too, at the headquarters of the Dalai Lama and the Tibetan government in exile.
As it is, India has been disdainful towards Beijijng’s pet initiative, the One Belt One Road. 

New Delhi, however, believes that it has sought to balance its ties with China by participating in the New Development (BRICS) Bank and the Asia Infrastructure Development Bank.
India has sought membership of the Shanghai Cooperation Organisation and sought to put an even spin on its position on maritime issues in the communiquĂ© issued after the Russia-India-China meeting in April, upholding UNCLOS and addressing disputes through “negotiations and agreements” between the parties concerned.
In June it dropped references to the South China Sea in relation to freedom of navigation issues.

It has also indirectly signaled that, were it to become a member of the NSG, it would consider the Pakistani application on its merits.
But what will clinch the issue is the deal Jaishankar will be seeking to strike with Beijing.
Such deals are not made in public. We can only surmise their existence through the outcomes, or in hindsight.

Mail Today June 20, 2016

No Breakthrough or Sellout, Modi’s US Trip is Part of the Great Indian Balancing Trick

Prime Minister Narendra Modi with President Barack Obama. Credit: Reuters
Prime Minister Narendra Modi with President Barack Obama. Credit: Reuters

Many of the reports on Prime Minister Narendra Modi’s visit to the US are breathless and ignorant, and in some instances verge on the ridiculous. In part, this has to do with how Modi is perceived by his numerous bhakts – and there is no dearth of such ‘devotees’ in the media. On the other hand, his energy and at times over-the-top style results in a sensory overload – and in one missing the wood for the trees.
Then, of course, is the twist that comes with state visits – they have to be huge successes and so incremental advance is projected as breakthrough. Phrases like ‘indispensable partner’, ‘priority partner’ and so on are used liberally in joint statements to dramatise the effect.
So it is with the prime minister’s latest US visit. In substance, what it achieved was an all-round advance in issues ranging from climate change, clean energy, civil nuclear and defence cooperation to science and technology, cyber security and intelligence sharing. But to be honest, there was no one area that stood out and in which a real breakthrough was achieved.
Modi is being credited with things he didn’t do. Take the Missile Technology Control Regime (MTCR), for instance, to which India is gaining entry thanks to the Supreme Court, which allowed the Italian marine charged with murder to go home, pending his trial. In response to the court’s order, the Italian government lifted its hold on India’s ascension to the MTCR. Claims that Modi’s visit will now lead to cutting-edge weaponry coming to India are equally misleading.
In fact, the Modi government’s successes are going against itself, with many people believing that India is now in a tighter American embrace – an impression senior officials in the government are now trying hard to dispel.  A closer look at the outcome will reveal that far from ‘giving away the farm’, Modi’s team has stuck to a fairly conservative script and, in some areas, advanced Indian interests.
A conservative script
Take climate change, for instance. The US was very keen that India commit to ratifying the Paris Agreement this year. President Barack Obama has made the treaty a legacy issue of his administration and wants to push for ratification this year, before his term ends. But, even while agreeing to the goals of the treaty, India has refused to commit itself to any timeline.
Secondly, in the Indian-American joint statements from 2014 and 2015, the two sides upheld the importance of ensuring the freedom of navigation and overflight, “especially in the South China Sea”. In the joint statement issued on June 7, there is no mention of the South China Sea. This is a significant signal to China that India is not ganging up with the US against it on the South China Sea issue, whatever the US establishment believes. The Chinese, presumably, have no problems with a general assertion of the importance of the United Nations Convention on the Law of the Sea, and the freedom of navigation and overflight.
Thirdly, take the logistics support agreement that the US has been pushing for years. India first insisted and obtained an agreement specific to it, called the Logistics Exchange Memorandum of Agreement. This, as the wording suggests, is less than a full-fledged agreement and specifies cooperation in areas like joint exercises, training and humanitarian relief, rather than provideing for automatic access to facilities for operational contingencies.
Next, as the economic section of the joint statement brought out, India did not budge in its positions on intellectual property rights (IPR) and the bilateral investment treaty (BIT). Neither did it concede anything on the totalisation agreement.
Finally, in concluding his paean in the new Indo-American symphony, Modi emphasised that while there is a convergence of “interests and concerns”, it is vital to have “autonomy in decision making” in view of the “differing perspectives” India and the US have on certain issues.

An uneven trajectory
It is true, of course, that the US has also hardly budged on many of the issues of concern to India, especially terrorism emanating from Pakistan, flagged so emphatically by Modi in his address to the US Congress, without, of course, mentioning Pakistan by name. Equally important, the US did not budge on its views on the BIT, IPR and the totalisation agreement.
The movement in technology-sharing was incremental. A confusing formulation in the joint statement is the designation of India as a “Major Defence Partner” of the US. This category seems to have been created only for India and, as Sushant Singh explained in the Indian Express, is not backed by either a presidential directive or legislation. On the other hand, there is an existing category called ‘major non-NATO ally’ (MNNA), which is defined by a section of the Foreign Assistance Act. Very close allies of the US, such as Australia, Israel, Japan and South Korea are covered by this category, as are Pakistan, Bahrain, Afghanistan and Kuwait. In December 2014, the US passed the US-Israel Major Strategic Partner Act, a new category, one notch higher than MNNA.
It remains to be seen whether India can occupy a place similar to Israel in the American establishment’s legislative – and not just figurative – heart.
This year, there have been moves to pass special legislation to advance India-US ties, such as the Advancing US-India Defence Cooperation Act moved by Senators Mark Warner, John Cornyn and Marco Rubio in May 2016.
On the eve of Modi’s speech to the US Congress, two Congressmen, one a Republican and the other a Democrat, introduced legislation in the House of Representatives to designate India as a ‘special global partner of America’.
The US will pass the real test of sincerity when both houses pass, and the president signs, these legislations. But the very fact that the Acts have been put forward reflects the enormous interest within the US system in developing strong ties with India.
The US and India have been on a trajectory of improving relations since Indira Gandhi’s meeting with Ronald Reagan at Cancun in 1981. An entire generation has passed since then. There have been many ups and downs. Now, the two seem to be moving from a stage of corresponding interests to one of converging interests. But this is so only in some areas. When it comes to India’s bĂȘte noire Pakistan, the US and China are closer to each other than the US and India. The US also does not take sides when it comes to India’s border dispute with China. Of course, the US has far heavier economic and trade ties with China than with India.

The Asian pivot
The US’s most obvious interest is in anchoring its Asian pivot on the enormous geo-economic mass of India. Its other allies – Japan, Australia, the Philippines – simply lack the heft of India. The Indian market, too, is not entirely uninteresting for the US, especially when the Chinese are drawing very clear red lines to exclude US companies like Google, Facebook and Amazon, and thus putting the others on alert. Given the relative decline of the US, India offers it the means through which it can maintain its primacy without taking unnecessary risks.
As far as China is concerned, India’s views are informed by its border dispute and China’s all-weather friendship with Pakistan. Earlier governments were deferential to Chinese concerns and hesitant in enhancing cooperation with the US. Under Modi, the  government has spelled out a Joint Strategic Vision for Asia-Pacific and the Indian Ocean Region and worked out a roadmap “to better respond to diplomatic, economic and security challenges in the region”.
The Modi team has worked with the belief that being sensitive to China’s concerns provided no payoffs in South Asia. Beijing has continued to support Pakistan’s military ambitions and is now set to enhance its economic commitment there. Its indiscriminate support includes blocking Indian efforts to designate certain Pakistani nationals as terrorists under the ISIS-Al Qaeda sanctions committee of the UN. So, Modi has stepped up cooperation with Japan, Vietnam, the US and Australia. But as his visit to the US indicates, he has sought to nuance the Indian commitment.
However, India’s grand strategy must be informed by its regional predicament. China presses on us through our border dispute, and through its relationship with Pakistan and our other South Asian neighbours. But China is also a huge area of opportunity for India in terms of its capital, market and infrastructure expertise. It is important, therefore, for India to engage skilfully in play-offs with both China and the US. That would be the acme of diplomatic achievement.
The primary Indian goal in foreign policy is in effecting an economic transformation of this large and very poor country, even while ensuring the security of its territory and peripheries. The world’s richest and most powerful nation, the US, is a good partner in this enterprise. So is our giant neighbour China, with its vast investible resources. The trick is to finesse our respective goals in a manner that ensures regional stability, peace and prosperity.
The Wire June 14, 2016

Modi's US visit 2016

The challenge a writer confronts in analyzing anything Prime Minister Modi does is separating hype from achievement. And so it is with his recent US visit which was mainly routine, but has important clues pointing towards a maturing of his foreign policy.
The hype, of course, remains overwhelming and so does the spin. But that’s the Modi style, and you need to discount for it.  Take the issue of the Indian entry to the Missile Technology Control Regime. “India becomes a member of MTCR: PM Modi’s  big diplomatic success” read a headline in one of the country’s leading Hindi dailies. Actually, the moment the Supreme Court allowed the Italian marine held on murder charges to go back home two weeks ago, pending his trial, the Italian government withdrew its hold on India’s MTCR membership.
MTCR is not a gift from anyone; it was part of a deal in which the US agreed to get India into a range of technology control cartels like the MTCR and NSG, in exchange for a) putting its  civil reactors under IAEA safeguards b) agreeing not to conduct any more nuclear tests c) accepting the IAEA’s stringent additional protocol d) agreeing to abide by the NSG’s rules, current and future, without being a member of the NSG and e) giving significant business to American nuclear reactor companies.
We have kept our part of the bargain, now the US must reciprocate.
When you measure the visit on transactional scales-- the kind you must always use in international relations—you will see it was about  give and take. Notwithstanding the optics and the hype, the alleged friendship between Modi and Obama has little leverage here.  
Intriguingly,  in the joint statement issued on Tuesday the words “South China Sea” are missing. In Modi’s first visit to Washington in 2014 and during Obama’s visit to New Delhi  in 2015, the joint statements had spoken of the need of ensuring freedom of navigation and overflight throughout the Asia-Pacific region, “especially in the South China Sea.” There are three possible explanations. One,  India is delicately distancing itself from the somewhat advanced position of 2014 and 2015. Two, that this is part of a bargain with Beijing whose payoff will be in the NSG. Three, that it is simply an oversight signifying nothing.
An interesting  addition to the formulation this time speaks not only of upholding UNCLOS, ensuring freedom of navigation and overflight, but also “exploitation of resources as per international law” . This must be seen in the context of India’s interests in oil blocks off Vietnam, one of which is under challenge from China.
The Modi government finally announced its agreement on the Logistics Exchange Memorandum of Agreement (LEMOA),  something of primary  benefit for the US Navy since for some time to come, the Indian Navy will focus on the region between the Malacca Straits and Suez. Additionally, India committed to join the  Paris Climate Change Agreement but without accepting any  timeline which must have disappointed the Americans since the pact is something of a  legacy issue for Obama and he is keen have it ratified before it leaves office.  
On defence, there is more spin than achievement. “Major defence partner” means little, unlike “major non-NATO ally” which has a legal standing. The much touted Defence Technology Trade Initiative (DTTI) is not likely to yield much anyway.  A  technology leader does not share technology for love or money. You may do it for  money, as the indigent Russians do, but you do not give your  cutting edge stuff. But beggars, they say, cannot be choosers.
There is important movement in cyber-security and information sharing between the US and Indian terrorism screening authorities. But as for economics and trade, the ball remains in the court of the respective private sectors. The things that the two governments should do are simply not happening--  the completion of  the totalisation agreement, ironing out  differences over IPR and the Bilateral Investment Treaty.
Beyond the give and take is the emerging triangular relationship in Asia involving the US, India and China. It is in India’s interest to remain a pole, howsoever weak in this triangle, instead of becoming an adjunct to the US. By playing a balancer, New Delhi stands to gain, and beyond the rhetoric over the South China Sea, our border dispute and Sino-Pak relations, there is a lot that China has to offer. Our interest is in steadily and surely building up our economy in the period of our opportunity, which is the next two decades, and avoiding conflict to the extent we can.
In his speech to the US Congress, Modi spelt out the scope and terms of our engagement. He spoke of the overall convergence between the US and India, flagged several key issues like the lack of a security architecture in Asia and the importance of isolating “those who harbour, support and sponsor terrorists” (read Pakistan). But he also said that “autonomy in decision making and diversity in our perspectives can only add value to our partnership” (read strategic autonomy).
Economic Times June 9, 2016

Shangri La: A wasted opportunity

The Shangri-La dialogue hosted annually by the Institute of Strategic Studies, London, is a major event in Singapore. Though it has, in recent years, become something of a China versus US event, it is a place where defence ministers, security wonks and media gather, an ideal place to make a statement, signal an intent or a new policy.
Defence Minister Manohar Parrikar with US Secretary of Defense Ashton Carter at the Shangri-La Dialogue in Singapore on June 4. Parrikar could have been much more forceful in articulating a new and nuanced point of view as Carter did. Pic/AFP

By that measure, to go by the remarks of our defence minister Manohar Parrikar at the forum, the opportunity was sadly wasted. For years, India has avoided sending a senior figure to the dialogue. This was based on prudence and a desire to steer clear from the US-China stand-off. But after deciding to send a senior minister, a member of the Cabinet Committee on Security, the government did not give him much to say from a platform from where he could have credibly spelt out India’s military posture in the Indo-Pacific.
The Modi government bills itself as being a departure from the past, one which revels in wading into the thick of foreign affairs, often even jettisoning protocol to make a point. It did not shy away from telling Beijing (as Modi did last year) that Sino-Indian relations were being hampered by poor choices being made by China (read Pakistan).
The Parrikar speech was all over the place. Having placed territorial disputes as number one in his list of security challenges in the region, Parrikar promptly declared that number two — terrorism — remained “the foremost challenge to our region.” If he was indeed seeking to limit himself geographically to the South-east Asian region, he should have done his homework — terrorism is not a major issue there, though there have been incidents in the past and there is a historical Islamist insurgency in southern Philippines. However, there is concern that in the Islamic State could emerge as a challenge in the coming years. But it is not as though Parrikar offered any solutions here.
Number three — the maritime domain — the minister noted was the one that he saw “most clearly.” Having spoken of the Malacca and vulnerable waterways, he jumped to the Mumbai attack and Somalian piracy, which by any measure have taken place through or on the high seas, not waterways.
The Minister did spell out the traditional Indian stand of not taking sides in the South China Seas disputes and upholding the freedom of navigation and overflight in accordance with international law, especially the UN Convention on the Law of the Seas (UNCLOS).
The minister’s suggestion was on the need for “collective action and cooperation” to deal with the situation. Interestingly, in recognising, as he did “that security in Asia is primarily the responsibility of the Asians”, he sounded more like a Chinese official than one whose government had last year made certain commitments to the US through a Joint Strategic Vision for Asia Pacific and the Indian Ocean to “develop a roadmap… to better respond to diplomatic, economic and security challenges in the region.”
Parrikar’s ambivalence, or to be more accurate confusion, stems from a well-considered Indian policy of using the South China Sea to occasionally needle Beijing, but steering clear of any deeper commitments which could needlessly involve us in a quagmire in a region far from where our primary security interests lie.
Nevertheless, a government that says it Acts East could have been much more forceful in articulating a new and nuanced point of view just as US Secretary of Defence Ashton Carter did. Carter toned down his China bashing of last year’s Shangri-La, where he attacked China’s militarisation of the South China Sea. This year, speaking on the eve of the US-China Strategic and Economic Dialogue in Beijing which began on Monday, he called on all parties to join a “principled security network,” even though he did not quite spell out what that meant. His talk of China isolating itself because of its behaviour lacked credibility, given the deep economic ties Beijing has with the region and with the US and Japan.
Actually, many US allies are now wondering how to get US to ratify UNCLOS. The US has used international law as a weapon to belabour China, but it has itself not ratified that key instrument of maritime international law. The US claims to observe it, but that is not quite the same thing. President Obama has recently once again appealed to the US Senate to ratify the UNCLOS, but that is not likely to happen.
The second issue the US has with its allies is that it is going soft on the Trans Pacific Partnership (TPP). Here again, Obama lacks the time to push for it, and it is far from clear whether his successors will.
Meanwhile, the overwhelming feeling is that all sides are talking past each other in the South China Sea isssue. The arbitration council decision on the Philippines case is likely to trigger consequences we cannot easily predict.
Mid Day June 7, 2016

Beijing's artificial islands bring South China Sea crisis to the boil

A tribunal of the Permanent Court of Arbitration in The Hague is ready to give its verdict on a complaint by the Philippines, which has challenged China's territorial rights in the South China Sea.
The verdict is set to address the simmering crisis in the South China Sea which will come to the boil later this month.
China has rightfully asserted that the tribunal cannot adjudicate maritime boundaries; these can only be determined through bilateral negotiations between the parties in question.

However, under the UN Convention on the Laws of the Seas (UNCLOS), the tribunal can indeed declare whether a particular feature is an 'island' - and thus entitled to a 200 nautical mile exclusive economic zone (EEZ) - a 'rock' which only permits a 12 nautical mile territorial sea, or a feature visible only in low tide, which does not provide for any maritime zone.
The issue has raised eyebrows because China has constructed artificial islands over some of these rocks, and low-elevation features, and is claiming an exclusive economic zone around them.
Under UNCLOS, artificial islands and structures like oil rigs do not confer territoriality of any kind. 
China says it is not participating in the arbitration, even though the UNCLOS does not confer it any right to exclude itself from the process.

Beijing has not been clear whether it is claiming the islands of the South China Sea, over which it says it has historical rights

Indeed, UNCLOS says that even if a party refuses to participate, the tribunal can give its verdict -which is final and without appeal.
In the build-up to the verdict, China has strongly denounced the process and made it clear that it will not abide by the ruling.
It has questioned the bias of the tribunal, and termed it as a kangaroo court.
At the same time, it has built up a military presence in some of the artificial islands. 
The US has made it clear that it expects Beijing to abide by the verdict - and if it doesn’t, the US and its allies will ignore Chinese claims, sail through the waters, and fly over them.

The Chinese position on the South China Sea is complicated and there is a touch of mendacity around it.
Beijing has not been clear whether it is claiming the islands of the South China Sea, over which it says it has historical rights, or the boundary it has laid out in maps through what is called the Nine Dash Line.

UNCLOS has clear sections on historical rights, and the problem for the Chinese is that since only two of the islands were historically habitable, they cannot indisputably prove this includes the entire Paracel and Spratly island groups.
The Nine Dash line is even more problematic. Firstly, no country can assert a maritime boundary; it must be negotiated with the specific neighbour.
For example, India and Pakistan have failed to negotiate their maritime boundary because of their Sir Creek dispute.
The Nine Dash line follows no maritime principle, insofar as many of the areas it claims are beyond 200 nautical miles from the nearest rock or feature claimed by China. In other words, they are simply lines on a map that China insists the world has to accept.

Now, not only is China readying to reject the arbitrary award, it has hinted that it will establish an Air Defence Identification Zone over the area.
Its not clear whether it plans to set up an ADIZ over the islands it has built, or over the entire Nine Dash line area.

An ADIZ has no basis on international law. Yet many states, especially the US, have established them in the name of national security.
Civilian aircraft flying through these zones have to notify their flight plan in advance to the country which claims a particular ADIZ.
There is no problem if such a zone is over undisputed territory, but in the case of China, it has previously established one covering the Senkaku Islands it disputes with Japan and there are places where its ADIZ overlaps with that of South Korea.

Many airlines and countries have accepted the Chinese rules, but many others ignore them. But they are a ready pretext to stage a crisis. 
In the past, China has denied plans to set up an ADIZ in the South China Sea. But China is well known for shifting goal-posts at will. After all, it had given a public declaration in the past that it would cease island building in the South China Sea, but as of now it continues its activities. 
India needs to keep a careful watch on the situation, especially since our friends the US, Vietnam, and Japan want us to play a larger role in the region.
Riling China is fair-game considering Beijing’s role in South Asia. But we need to think our game through.
Mail Today June 5, 2016