The supreme art of war is to subdue the enemy without fighting.”

― Sun Tzu, The Art of War



Chinese take over of Hong Kong on 1st July  1997 peacefully  was based on a properly signed Agreement between the Government of UK  and People’s Republic of China and was registered with the United Nations in which the Chinese guaranteed a 50- year extension of its capitalist system. It , therefore, provided for the continuation of the existing British legal system till 2047. However, China’s recent attempt since 2019 at changing the same, in violation of the agreement , has led to a major protest movement in Hong Kong. The future of Hong Kong as a financial Centre and a free port is now in jeopardy. As flight of capital takes  place from  Hong Kong it’s position will deteriorate. China, being fully aware of it , has started developing Hainan island in South China Sea as an alternative to Hong Kong.  However, with the current anti China sentiments all over the world what is the likely success of this venture?.


From south- west of Hong  Kong is Singapore, another world leading financial centre on South China Sea and  the eastern entrance of Malacca Straits. However, across the Malacca straits on the Western entrance is the Great Nicobar Island and the entry to Indian Ocean. This island is uniquely place, is large and has sufficient fresh water.


                                         


The Great Nicobar Island (GNI)








Hong Kong, Singapore and the Great Nicobar Island with Malacca Straits in red line




In the meantime, while the Hong Kong imbroglio is going on in Hong Kong, the US Senate has unanimously passed two bills that would impose sanctions on the Chinese officials who undermine Hong Kong's semi-autonomous status, as well as the banks and state entities that do business with them. One of the bills, the Hong Kong Autonomy Act, would impose sanctions on businesses and individuals that help China restrict Hong Kong's autonomy. The second bill from Missouri Republican Senator Josh Hawley is a resolution condemning China for violating a 1984 agreement to guarantee autonomy for Hong Kong. A day after the Senate passed the above mentioned two bills,US State Department imposed VISA restrictions on Chinese officials involved with Hong Kong National Security Law- targeting Chinese Communist Party Officials involved in imposing the new law in Hong Kong. US has also said the it will end its preferential treatment of Hong Kong.

In addition, to add to this, on  17 June, President Trump signed legislation calling for sanctions over the repression of China's Uighurs. China has threatened 'retaliation' after Trump signed the legislation calling for sanctions over the repression of China's Uighurs. It has also proposed to put visa restrictions on US officials.Chinas top legislature has formally approved a controversial national security law for Hong Kong on Tuesday (June 30) that will provide Beijing with enforcement powers to prohibit and punish acts of secession, subversion, terrorism and foreign interference in the Chinese-ruled special administration region.  

Amidst the ongoing standoff between the US and China the future of Hong Kong looks bleak. China ,on the other hand, is also on the offensive and is not taking things lying down. As a retaliatory tacit, even if Honk Kong looses its importance, China is  trying to build up Hainan island in South China Sea as an alternative to Hong Kong, but without the support of Western countries can China do it alone, especially when most of the rich countries of ASEAN are not too favourable to China.

There is an active community of Ethnic Indians who have been settled in Hong Kong for many years would be feeling insecure after these developments. At this stage it would be ideal to reach out to them to relocate to GNI once a hospitable environment is created.


What does it mean for India? Either we can do nothin or leverage the opportunity now. How can we do it?


The last Indian island of the Andaman and Nicobar Archipelago is the Great Nicobar Island . This is also the last island of the Nicobar archipelago and its which is barely 90 kms from the tip of Sumatra island of Indonesia and is near the western entrance of the Malacca Straits. It’s strategic importance cannot be understated . It’s size is 921 sq kms which is bigger than that of Singapore but a little smaller than Honk Kong ( 1106 sq kms). It is mountainous and has two rivers flowing which means It has plenty of fresh water. The last point of this island is less than 100 kms from Sumatra, Indonesia tip and very near the western entrance of the Malacca straits. This island has been considered an ideal replacement to HongKong way back in 1970s . The then Trade  Development Authority of India, which has since merged or evolved into India Trade Promotion Organisation, had made a detailed 3 volume report on the issue of attracting Hong Kong businesses to Great Nicobar Island, especially the ethnic Indians.



However, as is the usual practice of Indian Government of India, these reports were never read or implemented. Hong Kong was transferred to Peoples Republic of China under an Agreement signed between the British Government and PRC in 1997. Under this agreement PRC agreed to what is better known as One country and  two China Policy. For the last 23 years the two China policy has been working quite successfully. As a matter of fact China has benefited substantially from it as while China was a closed economy, HongKong gave it the opening to World Market. However, ever since China tried to introduce its own despotic law trouble started and has been going on for the last year or so. Now it seems that the days of Hong Kong as a flourishing free Port and a Financial Centre are limited. China has itself realised it, but as the Chinese economy has become second largest in the world, it has decided to give up its One Country two system policy and put Hong Kong under its full control. Already Shanghai is now a bigger financial centre than Hong Kong  On the other hand, it has also decided to build up Hainan island in its place as a free port with a massive expenditure on its infrastructure. However, even  in South China Seas China the ASEAN countries are raising their head. They have now  In a major departure from its notoriously insipid  statements, ASEAN has reaffirmed that the 1982 UNCLOS is the basis for determining maritime entitlements, sovereign rights, jurisdiction and legitimate interests over maritime zones.”


India is now having serious issues with China along its borders. The recent incident at PangongTso and Galwan Valley in Ladakh is a reminder. This is also a strategic proposal to counter the aggressive attitude of China towards India. While South China Sea is a region of tension and turmoil due to the aggressive behaviour of China , the Bay of Bengal on the other side of Malacca Strait is a region of peace as India has tied up nearly all the Agreements between the littoral states. It is also pertinent to mention that disputes between Myanmar and Bangladesh and between Bangladesh and India have been settled amicably  by international arbitration, a mechanism that China does not accept in spite being an active member of the UN system.



THE INDO-PACIFIC AND THE NICOBAR ISLANDSSTRATEGIC ANGLE


The report of the Trade Development Authority on the Great Nicobar Island produced in the early 1970s needs to be reviewed and revised. This report had proposed that after the British leave Hong Kong and Hong Kong merges with mainland China, a number of rich Indian business groups would look for a location to relocate themselves. It was envisaged that the Great Nicobar island as a free port had great potential in attracting such people. As usual, no decision was taken by the Government of India and Hong Kong is now a Special Administered Region (SAR) of China . But Great Nicobar still retains its potential due to its strategic location on the mouth of Straits of Malacca. This island has 921 sq km of land mass( 356 sq Miles) with sufficient fresh water. However, about 2/3rd of the Great Nicobar Islands have since been declared as a Biosphere Reserve.Therefore, only 1/3rd of the landmass is available for construction. Of this some of land at the tip of Straits of Malacca has gone under shallow water including the lighthouse due to the tsunami of 2004. This land can be recovered. In effect, about 307 sq km will be available for development including defence requirements and land for local settlers at present. But land use can be changed for strategic reasons. Singapore, on the other hand , is a smaller island of about 720 sq kms but claims to be the greenest island city.

The strategic location of the Great Nicobar Island on the mouth of Straits of Malacca gives it great potential for bunkering of ships with huge tonnage of 100,000 ships passing by. With the opening of Naval Air Station (NAS) Baaz at Campbell Bay at Great Nicobar Islands, opportunities to fully exploit the geographic location of Great Nicobar Islands in commercial terms in coordination with defence requirements should be carried out without any delay. This will complement the soft power that India needs to display at the western entrance of Straits of Malacca. About one third of the worlds sea borne trade passes by Great Nicobar Island. This activity may  not disturb the forest and biosphere reserves but will enhance Indias status in the Malacca region.


The current situation in the Great Nicobar island is like this. While the island has an area of 921 sq kms, it has two reserved forest areas. At the same time some land  at Indira Point in the Southern most tip of the island facing Indonesia, alloted  to the Indian AirForce for a full sized airstrip in partially under a few feet water including the lighthouse. This land went under water in 2004 when a major Tsunami hit these islands.This land can be recovered. Further,  Great Nicobar Island also does not come under the Tribal Act unlike the rest of Nicobar, though it does host a few hundred Shompen tribals who are at food gathering stage and live in the forests. Friendly contacts have been established with them by the tribal department.


As of present there is a port in Campbell Bay with a breakwater and an airfield near Campbell Bay which is part of the naval Air Base called ‘BAAZ’ . 300 ex-servicemen families were settled with each alloted over 10 acres of land. This land once converted in its land use for other purposes would be valuable.

In addition to the above the Andaman and Nicobar Administration has announced through a tender process a Container Transshipment Terminal (CTT) at Great Nicobar Island to attract the large number of ships ( about 70,000 mentioned in the document but perhaps more) that pass by it coming out of the Malacca Straits from South China Seas and vice Versa. This project costing around Rs 10,000/ crores with its first phase to be completed by 2025, would be on PPP basis and may include Viability Gap Funding. This port will have deep water berthing facility. This may also compete with the ports at Sri Lanka.

While the proposed Container Transshipment Terminal is in the right direction, in order to compete as a Free Port, the GNI will require an entirely new set of laws including a tax regime outside the normal Indian system. A new administrative system outside even the Andaman & Nicobar Administration will be required. In fact , it may be taken out of the Administrative control of the Home Ministry and put under Commerce or External Affairs Ministry.


Dr Sanat Kaul is author of the book: Andaman and Nicobar Islands: India’s Untapped Strategic Assets published by the Institute of Defence Studies and Analysis, New Delhi and was the former Chief Secretary of Andaman &Nicobar Islands aw well as Deputy Commissioner,  Nicobar District.

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