Geography Reference
In-Depth Information
argue that such economic activity makes war between the two countries less likely because
they would have too much to lose, but that is surely as realistic as Nehru thinking that Ch-
ina and India could become partners. If China decided a war was essential for some greater
purpose, it would surely not be put off by the economic links.
Substantial trading ties did not, for example, stop it dangerously escalating a confronta-
tion with Japan in 2013 over possession of disputed islands in the East China Sea, though
the counter view is that China would not eventually allow such a row to escalate too far.
Telecom imports from China in 2010-11 totalled $6.7bn, ranging from phones and at-
tachments to networks, with two Chinese companies, Huawei and ZTE, becoming major
Ren Zhengfei, a former officer in the People's Liberation Army, and it is hard to believe
that he can now have a totally independent existence, even though he has said he has cut
ties. The company has a five-year $2bn investment plan in India and is the second biggest
provider of networks after Ericsson, with a 25-30 per cent market share. It supplies all of
the country's top telecom operators and individual companies and also has a substantial
share of the market for devices such as data cards and phones. Huawei is also active in the
Maldives, Nepal and other neighbouring countries. I have asked various Indian officials
and policy pundits about the extent of the national security risks of such a Chinese presence
in India's communications. Most have ducked the issue, offering no solution and taking the
same line as India's telecom operators - that the products are irresistible. Huawei says, for
example, that its total costs of ownership (purchase prices plus maintenance) are 25-30 per
The potential international threat was highlighted in October 2012 by a US Congress in-
telligence committee, which warned that companies such as Huawei and GTE could disrupt
and others denied the allegations and explained how they co-operate with governments and
other users to screen and secure their equipment. Huawei responded in 2013 by suggesting
it might be cutting back on its US business plans, but also suggested that the US view was
a protectionist ploy encouraged by its telecom companies. Other countries such as Canada,
Australia and the UK are also worried and there have been some blocks on the companies
obtaining government network contracts.
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China also has orders for potentially sensitive power plant equipment exceeding 44,000
nerable companies that urgently need help. The debt-strapped Reliance Group controlled
by Anil Ambani, for example, placed two orders totalling $10bn for power equipment from
Shanghai Electric Group in 2010 and raised $2bn financing from Chinese banks for that
order and for some refinancing of its telecoms business. There are also security concerns
about Chinese bids for Indian power transmission grids. The State Grid Corporation of Ch-
