Chair: Maj Gen Dipanker Banerjee
Speaker: Rear Adml Raja Menon

Opening Remarks
Maj Gen Dipanker Banerjee

China's emergence is of importance to the international community but has particular significance for us as a neighbour. In this connection China-Pakistan relations is an area of major interest. Particularly as China has never hesitated to use Pakistan as a proxy for its larger objectives in South Asia or in the Middle East. It is imperative that we understand how China implements its policy in the future and whether it can use its growing influence to determine International Relations. Its initiatives in recent years in multilateral fora such as the SCO, the UNSC, and on the North Korea and Iran issues, along with its economic clout, accords China today a global status. Yet, at the same time it is important to remember that China is not an enemy nor even is it a potential enemy. Yet, the relationship will be complex with nuances, where competition and cooperation are likely to be the emerging norms. While making every attempt to ensure that we maintain satisfactory relations with China and all our neighbours, we need also to be aware of the way these roles are being presently played by these countries.. A nuanced understanding is necessary to shape successful policy.

Rear Adml Raja Menon

Most of the data referred to is sourced from a study group at the USI, which looked into strategic missile developments in Pakistan. The study of Pakistan invariably brings up questions of Indian capabilities and missile defence. The purpose of this paper however is not an evaluation of Indian capabilities, rather a study of systematic Chinese involvement in the evolution of Pakistan's missile defence.

Two separate narratives emerge in the study of Pakistan's missile system - one is the nuclear weapons development and the other that pertains to the delivery system. Seemingly unrelated and scattered transfers of technology from China aided both these sectors. However, systematic evaluation of these transfers makes it evident that China had a long term Master Plan that it was following all along and each of the transfers is integral to the comprehensive picture that eventually emerges.

As far as missile development is concerned, China transferred in 1983 bomb design and weapons grade plutonium and tritium to Pakistan even though it did not have the technology to utilize them. In 1984 China became a member of the IAEA although it joined the NPT only in 1992. In 1986, Chinese scientist reportedly attempted to repair malfunctioning centrifuges in Pakistan. Between 1988-89, China put into effect its Master Plan. It helped build a 27 Megawatt reactor in Pakistan, began training Pakistani nuclear physicists and transferred the Plutonium bomb design to Pakistan. Pakistani scientists visited Chinese Nuclear test sites and eventually China aided the establishment of the weapons facility at Chashma that became a new source of Plutonium. Between 1986 and 92, China shifted Pakistan from Uranium to a Plutonium cycle. With the arrest of AQ Khan in 2004 China's Plan becomes evident. The weapons design that he was caught carrying is a Chinese design from the 1960s for a Uranium bomb with a ten-kiloton yield that would weigh 450 kgs if constructed. This is the Chinese bomb that we know Pakistan has. It can be reasonably deduced that Pakistan possesses a Plutonium bomb as well; at the very least it has a Plutonium bomb design made available to it by the Chinese. Due to the problems that were encountered in maintaining the security of both these production lines, these have now been merged. After AQ Khan's arrest the US made a bomb with the design found with him but the bomb was not successful due to faulty electrical design.

The Chinese Master Plan with Pakistan matched the Plan for delivery systems as well. In 1988 China and Pakistan signed a MoU for $ 516 million of which $ 113 million was for M11 transfers. It is interesting that no explanation was given for the utilization of the remaining amount. In 1989 the CIA confirmed the transfer of M11s to Pakistan. The issue of M9 transfer under the guise of M11 transfer was brought up in a US Congressional hearing in 1992. The fact is that the transfer of M9s under the guise of M11 transfers took place and the CIA found out about it only when the factory was being built. The first M9 test firing took place in 2002.

Shaheen I is the only Nuclear tipped missile that Pakistan has and it is ten years ahead of the first generation of missile defence. For a single stage missile it is the best in the world. Held by Pakistan's North Missile group, Shaheen I is a fully operational missile. In the South Missile Group the missile Ghauri is deployed. This makes it clear that Pakistan has formulated two different geographical areas for targeting. Shaheen I gave Pakistan minimum credible deterrence for 15 years, thus logically it would not require further missile development.

However, Shaheen II was tested only in 2004. With Shaheen II the missile gap between India and Pakistan has only increased. Why Pakistan would issue such an invitation for an arms race to a country that over takes in all economic and power indices is inexplicable. Shaheen II implies that Pakistan has developed first strike capability. Its development was not given due attention in India because of our internal politics and the UPA government's coming to power.

What is most intriguing in this entire scenario is the Chinese explanation of its role. Repeatedly, Chinese scholars have dismissed technology and arms transfers to Pakistan as an event that was "in the past", although by all accounts this help has continued. Chinese explanations for their actions have also been strange. From denying transfers to alleging that they did not violate any international agreement and to finally acknowledging them as "in the past". Put into the context of China's relations with India, it is alarming to see that most transfers have taken place when India and China were engaged in diplomatic dialogue or high level visits. Thus China seems to have been systematically arming Pakistan to the detriment of India while seemingly working for improved bilateral ties with India.

India and China do share a robust economic relationship and China is slated to soon replace US as India's largest trading partner. However, the question that arises is what happens when there exists a good economic relationship but also a bad strategic relationship? In today's environment this is characterised by the US-China relationship. As US and China have become closer the Chinese have come to characterise the US as a major competitor rather than simply a competitor. There are only two examples of this in history - Germany and France prior to WW I and Japan and US prior to WW II. In both cases one party was a non-democracy. The US-China model precedes us and if the $200 billion trade between the two has not been sufficient incentive to iron out strategic differences then there is little chance that India's $30 billion trade will transform relations.

Economic and strategic relations cannot be allowed to function in separate enclaves. The discrepancy between economic needs and strategic requirements must be resolved at some stage. To understand how to deal with China we will need to understand who runs China because it is not necessarily the personnel of the Foreign Office.

Three entirely new questions emerge. Firstly, how do we manage these diverse paths? Secondly, what do we do about the problem? And thirdly, who are the people who are formulating policy in China?

Dr Srikant Kondapalli

Three questions have been thrown up. First, who is running China? China is run by the CCP whose membership has been extended to private entrepreneurs. At the second level are private entrepreneurs. The third is the PLA whose influence on policy is the greatest. The PLA has determined China's South Asia policy and its literature makes three important observations about India - first that India wants to be a great power, second India wants to be a hegemon and third India wants to dominate the Indian Ocean. It is from these observations that the policy to box India in has emerged. Encirclement by China however is not a well defined policy because at the moment China has only quasi-allies. The emphasis on building relationships in the region is evident by the number of PLA visits in South Asia. Compared to the number of visits to India, PLA visits to neighbouring countries are much greater

Second question is that of WMD proliferation. The AQ Khan episode makes it clear that Chinese designs were found in Libya. While official statements have maintained that "no transfers" or only "commercial transactions" were made. Despite growing evidence, few believe that China is a proliferator.

As far as the third question of India's response to the situation is concerned, India has two choices - it can either build a strategic defence system for the credibility of its defence or that it needs to highlight the nuclear and missile transfers from China and hope that the international community will be persuaded to take appropriate responses.

COMMENTS
CHINA

• No country is a monolith, neither is China. Problems of limitations on access of information exist in all states as does the contradiction in policy. Perhaps these contradictions are intentional. This is a scenario that must be kept in mind when evaluating Chinese policy. While trade deters war it does not close military options. Perhaps it is the influence of $200 billion worth of trade that the U.S. now employs the term "stake holder" for China. The importance of economic ties therefore should not be underestimated.

• It would seem that the economic and strategic are merging as far as China is concerned. China is poised to become India's largest trading partner. India's growth rate is improving and its youthful population will ensure that it surpasses China in per capita GDP in PPP terms by 2025. In another 15 years China and India would have to compete for international markets. As income disparities increase opportunities for instability also increase in India. As far as China is concerned maybe the tracks are not independent, its fear of India becoming a strategic partner of the United States is likely to grow and lead to responses in other areas.

• The contradiction between markets and strategic space is converging. China has to manage its market space in a certain way while simultaneously ensuring that its strategic objectives are secured. It is looking to develop missile capabilities to reach the United States because it needs to project its abilities to its people.

• There is a systemic logic to China's policy. It sees itself as functioning in insularity and leverages soft power eventually backing it with hard power.

• While it may be inappropriate to use the term "threat" in International Relations, it would be more productive if China is defined as a clear and present military threat.

• China has clearly transgressed our national interest and there is a need to recognise as well as fight for this.

• While the question of separate ministries is understandable and vacuums may exist in access to information, it cannot be believed that such major policy is formulated in ignorance.

• It is vital to engage with China and the need is for a more encompassing dialogue. Decisions of the nature being discussed take place at the highest level including in China.

• Chine re-evaluated its South Asia policy in 2005 after Condoleezza Rice stated that the US was willing to help India become a great power. Within a re-evaluated policy framework China formed a strategic partnership with India but also with other states. The reconfiguration of power position is not possible at this time and India will need to develop economically in order to challenge the position strategically.

• Chinese business and trade helped create dependence with ASEAN and today Chinese business wants South Block to intervene and assist it. If we do this it will create problems for us in the long term.

SINGLE/MULTIPLE TRACKS

• There is no reason why the economic and the strategic have to converge. We can continue economic engagement but need to be prepared for perfidy. China is a threat and our focus must be on our own preparedness.

• The fact that the Chinese function on multiple tracks should not be surprising. We must learn to do the same. We should engage South Korea, Vietnam and Taiwan in order to be better prepared.

• Although the model of France and Germany has been discussed the world is not constrained by two track engagement anymore, rather it is multi track. The business community can intervene to stop war because the economic track is important. There is no contradiction between the economic and strategic tracks for they are both part of the bigger picture. As long as Pakistan's internal logic remains the same, the ability and opportunity to use it will remain. At the same time one must not lose sight of the fact that China is increasingly defensive in its posture this is because it is aware of its limitations. There is a need to examine the idea of "convergence" that has been suggested.

• New issues of multiple tracks have not been done before and it remains to be seen how long these can be sustained.

OPTIONS FOR INDIA

• Avenues are available for dialogue with China and both track I and track II are being utilized for dialogue on proliferation. Regarding the connection between the KH55 and Babur missiles it is important to establish precisely what sort of proliferation took place and China"s role in the same.

• Although we are aware of China's capabilities, it is the intent that remains questionable. As far as Pakistan is concerned, we need to enhance our capabilities and test the Agni III.

• Taiwan has information on Chinese intent and maybe we should cultivate such contacts to develop alternate approaches.

• We have core interests that may be threatened but no study conclusively establishes that Chinese missiles in Pakistan are targeting India. China has used its soft power so effectively that it has managed to cause dissent in the US camp in Asia. However, India needs to have a decade of economic growth before it entering in to an arms race.

• Economic growth cannot be an excuse for unpreparedness. A strategic defence plan must be in place at all times. It is due to shared apprehensions regarding China that Indo-US ties are stronger today. Although in the wake of the nuclear deal not much attention has been given to it, the defence cooperation between India and US is a year old.

• The possibility of first strike is the largest asymmetry and we need to discuss pay-offs in order to assess what is possible and what is not. The real enemy is China not Pakistan.

• The proof that we have regarding Chinese activities is most conclusive and what is required now is action to tackle the same.

Concluding remarks
Amb Raghunath
The most important question is that which addresses what action India can take. China is building a state not of war but of intimidation and our policy must deal with that. China is well aware of the change in strategic environment today for there exist pressures within China that determine its policy. While we cannot produce as much as China physically, our capacity for leverages and linkages is unparalleled today and we must utilise it judiciously.