Is China’s ‘peaceful development’ over?

Paper: II

Mains: General Studies- II: Governance, Constitution, Polity, Social Justice and International relations.

Why in News:

  • As news broke about the violent clashes between Indian and Chinese troops in the Galwan Valley of eastern Ladakh, in which at last 20 Indian soldiers died, a Chinese J-10 fighter briefly entered Taiwan’s air defence zone, prompting the self-ruled island to scramble its aircraft in response.
  • This was the third Chinese incursion into Taiwan’s airspace within a week.
  • Two months ago, Chinese vessels had entered the waters of Malaysia and Vietnam. Last month, Chinese Coast Guard ships pursued Japanese fishing boats in waters claimed by both countries. All these incidents point to a newfound aggressiveness in China’s approach towards its already troubled neighbourhood, from the Himalayas to the South and East China Seas.

China’s approach towards its neighbourhood:

  • Tensions in the neighbourhood are not new for China.
  • The roughly 4,000 km-long India-China border, which is not clearly demarcated, has seen occasional flare-ups.
  • In 2017, troops from both countries were locked in a face-off in the India-China-Bhutan tri-junction of Doklam for over two months.
  • China has claims over the South China Sea and “reunification” with Taiwan is one of its self-declared goals. But what makes the current stand-offs different is China’s readiness to use force in addressing these challenges.
  • This was the first time in 45 years that blood was spilt on the India-China border.
  • Last month, in an annual policy blueprint, China dropped the word “peaceful” in referring to its desire to “reunify” with Taiwan, ending a nearly 30-year-long precedent.

Sharp turn

  • This sharp turn marks China’s most major policy decisions post-COVID-19.
  • Relations with the U.S. are particularly bad, with the Trump administration now openly targeting China for its handling of the pandemic.
  • China has already slammed the U.S.’s “Cold War mentality”, referring to the period of the U.S.-Soviet contest.
  • When Australia pushed for investigation into the pandemic outbreak, Beijing punished the country by imposing trade curbs.
  • Earlier this week, an Australian citizen was sentenced to death in China over drug trafficking, complicating relations further.
  • In Hong Kong, which has been seeing anti-China protests for a year, Beijing has introduced a new national security law, granting itself broader powers in the Special Administrative Region.
  • If Xi Jinping was facing one the biggest crises of his Presidency early this year, in the middle of the COVID-19 outbreak, he now appears to be firmly in control, overseeing an expansive foreign policy that pushes the boundaries.

The virus factor:

  • In Prof. Acharya’s view, COVID-19 has brought on a “sharper turn” to China’s foreign policy because: “suddenly, it was quite obvious that China was on the back foot.
  • It was getting very bad press all around. Other countries were speaking out against its handling of the outbreak.
  • The Americans are now open about building a coalition against China. So, a lot of China’s response is part of their way of tackling this crisis. We are going to fight back is the message from Beijing.”
  • But China has always contested such analysis. In its version, China is a rising, responsible power and some tensions are part of its rise.
  • The “China Dream”, laid out by President Xi after he took power in 2012, seeks to turn the country into wealthy, strong and modern global power by 2049, the centenary of the Communist revolution.

From differences to disputes

  • As long as China takes it seriously that peaceful coexistence and development serve her interests ultimately, tensions of any kind should probably be taken as temporal processes.
  • There will be troubles. They are also good learning opportunities for every stakeholder to better coexist and cooperate for the greater collective good.
  • Acharya, however, sees a clear shift. “This [aggressive] narrative is being spelt out very systematically.
  • Between India and China, they used to say ‘don’t let differences become disputes. What’s happening now is that, across the spectrum, where differences which predate COVID-19, that predate even the ‘peaceful rise’ policy, are now literally becoming disputes. Let’s face it.”

Assessment of OIL well blowout impact on environment begins

Paper: III

Mains: General Studies-III: Technology, Economic Development, Bio diversity, Environment, Security and Disaster Management

Why in News:

A team of The Energy and Research Institute (TERI) and an accredited private agency have begun assessing the impact on the environment around the Baghjan natural gas well that caught fire after a blowout.

Background:

  • Recently, there was a continuous flow out of gas in Baghjan gas well in Tinsukia district of Assam, following a blowout.
  • The Baghjan well is a purely gas-producing well in Tinsukia district.
  • Since 2006, the gas well is being drilled by Oil India Limited (OIL).
  • It underwent a blowout – uncontrolled escape of gas at tremendous velocity – on May 27, 2020 and has been burning since bursting into flames on June 9.
  • There were reports of death of a river dolphin.
  • Locals complained of symptoms such as burning of eyes, headache, etc.
  • As many as 1,610 families with 2,500-3,000 people were evacuated to relief camps.
  • It is at an aerial distance of 900 metres from the Dibru-Saikhowa National Park.
  • Also close to it is the Maguri-Motapung wetland —an Important Bird Area notified by the Bombay Natural History Society.

Natural Gas:

  • Natural gas is the cleanest fossil fuel among the available fossil fuels.
  • It is used as a feedstock in the manufacture of fertilizers, plastics and other commercially important organic chemicals as well as used as a fuel for electricity generation, heating purpose in industrial and commercial units.
  • Natural gas is also used for cooking in domestic households and as a transportation fuel for vehicles.

Why do blowouts happen?

Sometimes, the pressure balance in a well may be disturbed leading to ‘kicks’ or changes in pressure. If these are not controlled in time, the ‘kicks can turn into a sudden blowout.

Why is it so difficult to control?

  • The control of a blowout depends on two things: the size of the reservoir and the pressure at which the gas/oil is flowing out.
  • While many blowouts automatically collapse on their own, it can take up to months.
  • To control a blowout, the first step is to pump in water, so that the gas does not catch fire.
  • This reservoir was particularly difficult to control since it was a gas well and ran the risk of catching fire at any point.

What is being done?

  • A preliminary assessment by TERI team is in progress at the site for studying air quality and noise level.
  • Bioremediation of sludge is being done using a technology developed in-house by OIL’s research and development wing.
  • Bioremediation is the cleaning of polluted sites through naturally occurring or introduced microorganisms for breaking down environmental pollutants.
  • OIL also updated the efforts to kill the well fire before capping the blowout. Certain steps such as erection of heat shield have been completed.

SEBI eases fund-raising norms for firms

Paper: III

Mains: General Studies-III: Technology, Economic Development, Bio diversity, Environment, Security and Disaster Management

Why in News:

As per a gazette notification, SEBI has allowed companies to make two qualified institutional placements (QIPs) with a gap of just two weeks between them.

Key Details:

  • It is a part of SEBI’s attempts to make it easier for listed companies to raise funds in the current volatile scenario.
  • This allows listed companies to raise funds at shorter intervals while also giving promoters the go-ahead to increase their stakes by a higher quantum without triggering an open offer.
  • This is a significant move as the earlier regulations mandated a minimum gap of six months between two such issuances.
  • In another important amendment, the regulator has said that promoters can increase their stakes in their companies through preferential allotments by up to 10% without triggering an open offer.
  • The cap was earlier set at 5%.
  • The relaxation is only for the current financial year.
  • In April 2020, SEBI had relaxed certain regulatory requirements related to rights issues and initial public offerings (IPOs) to make it easier for companies to raise funds at a time when the COVID-19 pandemic had made the secondary markets increasingly volatile.
  • It had said that any listed entity with a market capitalization of at least ₹100 crore could use the fast- track route for a rights issue. (Earlier, the norm was ₹250 crore for such offerings.)
  • Further, any company that had been listed for 18 months was permitted to raise funds through a fast- track rights issue. (The eligibility had earlier been set at three years.)
  • Also, the minimum subscription requirement to make an issue successful was lowered from the earlier 90% of the offer size to 75%.

Significance:

  • The recently announced measures along with the relaxation on rights issues, permitted earlier, are aimed at increasing liquidity for Indian companies.
  • Analysts opine that the twin moves would help in enhancing liquidity in the market.
  • The companies would be able to time fund-raising in a better manner.
  • Promoters can also acquire shares at a time when valuations were quite low compared with the historic highs.

RBI to tighten rules for home finance firms

Paper: III

Mains: General Studies-III: Technology, Economic Development, Bio diversity, Environment, Security and Disaster Management

Why in news:

The Reserve Bank of India (RBI) has proposed stringent norms for housing finance companies by mandating 75% of their home loans to individual borrowers by 2024.

Key Details:

  • A housing finance company is considered a non-banking financial company (NBFC) under the RBI’s regulations.
  • A company is treated as an NBFC if its financial assets are more than 50% of its total assets and income from financial assets is more than 50% of the gross income.
  • In the draft norms issued, the RBI proposed the definition of qualifying assets for housing finance companies (HFCs).
  • It said at least 50% of net assets should be in the nature of ‘qualifying assets’ for HFCs, of which at least 75% should be towards individual housing loans.
  • The RBI defined ‘qualifying assets’ as loans to individuals or a group of individuals, including co-operative societies, for construction/purchase of new dwelling units, loans to individuals for renovation of existing dwelling units, lending to builders for construction of residential dwelling units.
  • All other loans, including those given for furnishing dwelling units, loans given against mortgage of property for any purpose other than buying/construction of a new dwelling unit/s or renovation of the existing dwelling unit/s, will be treated as non-housing loans.
  • RBI said that an HFC could either undertake an exposure on a group company in real estate business or lend to retail individual homebuyers in the projects of group entities, but could not do both.
  • The central bank also proposed a minimum net-owned fund (NOF) of ₹20 crore as compared to ₹10 crore now.
  • Existing HFCs would have to reach ₹15 crore within a year and ₹20 crore within two years.