Negotiators used the then-impending Brics summit in Xiamen on September 4 as a deadline to resolve the stand-off over Doklam, since India’s prime minister Narendra Modi and China’s president Xi Jinping - pictured here together in New Delhi in September 2014 - were expected to meet on the sidelines of the conference. Manish Swarup / AP
Negotiators used the then-impending Brics summit in Xiamen on September 4 as a deadline to resolve the stand-off over Doklam, since India’s prime minister Narendra Modi and China’s president Xi JinpinShow more

In Beijing’s thinking, the best weapons don't win today’s wars, but the best narrative does



Donald Trump's apocalyptic threats against North Korea have attracted much international attention but not China's unceasing warmongering against India. As the face-off between Indian and Chinese troops on the small, desolate Doklam Plateau drags on, Beijing continues its sabre-rattling against India.

The rising Himalayan border tensions have been underscored by an August 15 clash elsewhere in which several Indian and Chinese soldiers were wounded, not by gunfire but by rock throwing.

Xi Jinping, China's president, has sought to present himself as the voice of reason by calling for US restraint on North Korea, even as his regime has issued threats to India. The American press has published Mr Xi's call for dialogue and negotiations to find a diplomatic solution to the North Korea issue without citing his opposition to similarly settle the Doklam impasse.

In reality, Mr Xi faces a frustrating paradox: He is seeking to avert a military conflict over the potential threats posed by North Korea's nuclear and missile advances just as he is searching for a way to punish India, including potentially employing force.

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By standing up to Beijing in the face of harsh warmongering, India has challenged China's reputed pre-eminence at a time when Mr Xi is busy with his own domestic political machinations in the run-up to the critical Communist Party congress in the autumn. India has stood its ground at Doklam, a 3,350-metre-high plateau along the border that Bhutan and Tibet share with the Indian state of Sikkim. Narendra Modi, India's prime minister, has declared his country is "capable of thwarting any challenge to its security."

China has threatened to teach a bigger lesson to India than it did in 1962 when it carried out a surprise trans-Himalayan invasion just as the Cuban missile crisis had raised the spectre of a nuclear conflict. China’s hostility towards India is occurring at a time when another missile crisis is haunting international security.

China is central today to the US strategy against North Korea. A US military conflict with North Korea, Beijing's estranged ally, could easily draw in China.

Trump’s threat to rain “fire and fury” on the regime in Pyongyang, along with other statements from US officials about the possibility of war, has unnerved Beijing, despite Washington subsequently seeking to ease fears. This factor could be one of the reasons why China, even at the risk of being all bark and no bite, has thus far not acted on its unremitting threats to teach India a lesson.

India, however, cannot afford to be complacent. New Delhi cannot overlook the fact that Mr Xi’s regime has been mobilizing domestic support for a possible war with India, which it has painted as the aggressor, while claiming China to be the aggrieved party.

For example, after weeks of escalating war rhetoric, China released a 15-page position paper on August 2 that accused India of "invading Chinese territory." It came a day after Mr Xi, in a speech marking the 80th anniversary of the founding of the People's Liberation Army, vowed not to permit the loss of "any piece" of Chinese land "at any time or in any form."

More significantly, the standoff has highlighted how China is implementing its new three-pronged doctrine against India, waging media, legal and psychological warfare to "win without fighting," and, in case it fails, to prepare the ground for military operations. A 2008 Pentagon report to Congress said China's doctrine was being "developed for use in conjunction with other military and non-military operations."

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In Beijing’s thinking, according to a subsequent Pentagon report in 2014, “it is not the best weapons that win today’s wars but rather the best narrative”, even if it is a false narrative. On the Doklam issue, as it has done in the South and East China seas, China is operating on the Orwellian principle that “if you say it enough, they will believe it.”

A fusillade of fresh warnings to India to back down or face dire consequences has been delivered this month by the Chinese defence and foreign ministries and other state mouthpieces. As a former PLA general has acknowledged, “such strong response from the Chinese government has been rare.”

If the probability of a military conflict over North Korea’s actions recedes, would the risk of a Chinese military attack on India increase? Mr Xi has sought to reduce tensions over North Korea by banning imports of North Korean iron, lead and coal and promising other steps to rein in Pyongyang.

However, there are other factors that Mr Xi must consider, including a shaky Chinese economy, hot-money outflows, the forthcoming party congress, and the September 3-5 summit of the Brics grouping in China. Unless the Himalayan border situation deteriorates, Mr Modi will likely be at the summit.

China’s modus operandi to alter the territorial and maritime status quo in Asia has been to wage stealth wars. Doklam would represent a turning point if China’s bullet-less aggression of the past decade in Asia escalates to a shooting war with India.

Deception, tactical surprise, shrewd timing and lightning conflict have been the common elements in China’s use of military force under communist rule. The goal in all cases has been to stun the enemy and make quick military and political gains.

China cannot count on all these elements today. India, for its part, cannot afford to take any major risk. Only an India fully prepared to counter and defeat aggression can deter China from initiating a military conflict.

Brahma Chellaney is a geostrategist and the author of nine books

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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