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With all eyes on Taiwan, tensions are building on another Chinese frontier: India

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China’s increased military activity in the Taiwan Strait may have grabbed all the headlines in recent weeks, but thousands of miles to the west, another simmering territorial dispute on the country’s borders looks more likely to boil over first.

Just 16 months ago, Chinese and Indian troops fought a deadly hand-to-hand battle in the Himalayas along the Line of Actual Control (LAC), the ill-defined de facto border between the two nuclear powers.

And now, tensions appear to be rising again.
According to unverified reports, troops from both sides have been briefly detained by the other, as military positions are fortified and talks to deescalate the situation seem at an impasse.
In 1962, India and China went to war over the remote, inhospitable border regions high in the mountains, eventually establishing the LAC. But the two countries do not agree on its precise location and both regularly accuse the other of overstepping it, or seeking to expand their territory. Since then, they have had a series of mostly non-lethal scuffles over the position of the border — until the June 2020 clash, the deadliest on the LAC in more than 40 years.
After that battle, in which at least 20 Indian and four Chinese troops were killed, respective military leaders have held face-to-face talks to dampen lingering tensions.

The 13th of those meetings was held Sunday — and it didn’t end well. Earlier discussions had made some progress in calming the border, but a statement from the Indian Defense Ministry on Monday accused China of no longer cooperating.

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“The Indian side pointed out that the situation along the LAC had been caused by unilateral attempts of the Chinese side to alter the status quo and in violation of the bilateral agreements,” the statement said.

“The Indian side therefore made constructive suggestions for resolving the remaining areas but the Chinese side was not agreeable and also could not provide any forward-looking proposals.”


Beijing sees the situation differently.
“China has made great efforts to promote the easing and cooling of the border situation and fully demonstrated its sincerity in order to maintain the overall situation of the relations between the two militaries. However, India still insisted on the unreasonable and unrealistic demands, which made the negotiations more difficult,” said a statement from Col. Long Shaohua, spokesperson for the People’s Liberation Army (PLA) Western Theater Command.
An extensive article in China’s state-run Global Times tabloid ratcheted up the rhetoric, accusing India of “triggering new incidents along the eastern section of the border.”

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The most influential and award-winning tech journalist based in Dhaka, Bangladesh. President of Bangladesh Tech Journalists umbrella association name Bangladesh ICT Journalist Forum(BIJF).He works for The Daily Ittefaq and is responsible for covering news, editing posts, reviewing devices, producing video reviews, and communicating with the reader base. Journalist, editor, technology, personal technology, reviews, features, analysis, media.

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China

Jack Ma to relinquish control of Ant Group

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China’s Ant Group said on Saturday that its founder Jack Ma will no longer control the Chinese fintech giant after the firm’s shareholders agreed to implement a series of shareholding adjustments that will see him give up most of his voting rights.

Ma previously possessed more than 50% of voting rights at Ant but the changes will mean that his share falls to 6.2%, according to Reuters calculations.

While Ma only owns a 10% stake in Ant, an affiliate of e-commerce giant Alibaba Group Holding Ltd (9988.HK), he exercised control over the company through related entities, according to Ant’s IPO prospectus filed with the exchanges in 2020.

Hangzhou Yunbo, an investment vehicle for Ma, had control over two other entities that own a combined 50.5% stake of Ant, the prospectus showed.

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India seeks to overtake China as the fastest growing economy in the world

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India is going to step up spending to $529.7 billion in the 2022-23 fiscal year to build public infrastructure and drive economic growth to 8-8.5%, as it looks to dethrone China as the fastest growing economy. 

Indian Finance Minister Nirmala Sitharaman, while presenting the annual budget on Tuesday, said total government spending in FY23, beginning in April, will be 4.6% more than the current 2021-22 fiscal year.

But inflation poses a major risk for the country in achieving the targeted economic growth rate, according to an economic survey tabled by Sitharaman just a day ago.  

There is a threat of imported inflation from the depreciating rupee value against the US dollar and the rising global oil prices that have touched $90 a barrel last week, the survey found.

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“Although the high wholesale price index inflation is partly due to base effects and will even out, India does need to be wary of imported inflation, especially from elevated global energy prices,” the survey reads.

The consumer price index (CPI) or retail inflation shot up to 5.59% in December last year from 4.91% in November.

What does high inflation in India mean for Bangladesh? 

Zahid Hussain, former lead economist at the World Bank Bangladesh office, said that even before this year’s proposed budget, India’s rising inflation was identified as one of the biggest challenges behind the country’s rapid economic growth.

“I think this inflation will continue even in the third wave of the ongoing coronavirus in the country. And if that happens, it will affect our economy as well. In particular, our import costs may increase slightly,” Hussain warned.

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“Our business and economic ties with India are very old. Moreover, the import-export relationship between the two countries is quite strong. Especially our imports from India have been increasing for the last few years,” he told media.

“A recent Policy Times report predicted that Bangladesh would be the fourth largest export destination for India in the current FY22. So, Bangladesh is becoming important for them day by day. However, if this picture of import is different for us, the open market will remain,” the economist also said.

Shahidullah Azim, vice-president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said that Bangladesh imports yarn, fabric, cotton, and some other apparel-related raw materials from India.

“If the inflation rate rises in India, it will have an impact on the overall economic activity of the country. So naturally, there is a strong possibility that the prices of the products we import will go up,” he added.

However, he said, in this global free-market economy, there is no chance of being dependent on any particular country for both export and import.

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“If the prices of Indian products go up, we have to find another market to meet our import demand,” he added.

He also said that there are many countries in the world that export RMG related raw materials.

“If the prices go out of our reach, then we have to rush to those countries to find new import sources,” he added.

A director of Savar-based Aboni Fashions Limited also said their factory imports a major portion of yarn and fabric from India.

“Being a neighbouring country, it is quite convenient to import raw materials from India as it saves costs and lead time,” he added.

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But if the price of apparel-related raw materials increases due to inflation, it is natural to look for a new market, he added.

In the first seven months of the current fiscal year (April-October of 2021), Bangladesh’s imports from India increased by 81% over the same period of the previous fiscal year, amounting to approximately $7.7 billion.

Spending spree to boost growth in FY23 

India will allocate trillions of rupees to expressways, affordable housing and solar manufacturing to put growth on a firmer footing in FY23, the Indian finance minister said while presenting the budget on Tuesday.

Sitharaman said public investment must continue to take the lead and pump prime private investment and demand.

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“The economy has shown strong resilience to come out of the effects of the pandemic with high growth. However, we need to sustain that level to make up for the setback of 2020-21,” she said.

She announced spending of $2.68 billion for a highway expansion programme and said 400 new trains would be manufactured over the next three years, reports Reuters.

The fiscal deficit for the current year would be 6.9% of the GDP, slightly more than the 6.8% targeted earlier, the finance minister also said.

For the next fiscal year, the Modi government is targeting a deficit of 6.4% of GDP, hoping to build on higher tax revenues and privatisation of state firms.

Abheek Barua, chief economist of HDFC Bank, told Reuters that the 2022-23 budget finely balanced fiscal retreat with supporting economic recovery. 

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“It focused on a familiar strategy of driving capital expenditure to drive growth, with the intention of crowding in private investment through higher public spending. Although markets could be disappointed with a higher fiscal deficit of 6.4% of GDP for FY23 than expected, it is perhaps prudent to not undertake aggressive fiscal consolidation at this nascent stage of recovery,” he added.

Christian de Guzman, senior vice president at Moody’s Investors Service, said: “Despite the higher-than-expected growth, we still saw a fiscal deficit that was wider than what was budgeted. That continues to demonstrate the risks that are still ongoing from the pandemic.”

Sitharaman also said the central bank would introduce a digital currency in the next fiscal year using blockchain and other supporting technology.

But India’s central bank has voiced “serious concerns” around private cryptocurrencies on the grounds that these may cause financial instability.

Financial aid for neighbours, Tk345 crore for Bangladesh

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Meanwhile, India has also announced a Rs300 crore (approximately Tk345 crore) annual budgetary financial assistance for Bangladesh in FY23, up from the Rs200 crore (Tk230 crore) in the current fiscal year.

It has also allocated Rs200 crore as aid to Taliban-ruled Afghanistan and Rs600 crore to military-run Myanmar. 

Nepal will get Rs750 crore as foreign aid from India, the Maldives will get Rs360 crore, Bhutan will get Rs2,266.24 crore, and Mauritius will get Rs900 crore.

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Taiwan reports new large-scale Chinese air force incursion

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TAIPEI, Jan 23 (Reuters) – Taiwan on Sunday reported the largest incursion since October by China’s air force in its air defence zone, with the island’s defence ministry saying Taiwanese fighters scrambled to warn away 39 aircraft in the latest uptick in tensions.

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