I Overview


• Politburo meets on economic work for 2021
• Central Economic Work Conference Held
• Vice Foreign Minister Le Yucheng clarifies on “Wolf Warrior Diplomacy”
• FM Wang Yi takes stock of China’s Diplomacy for 2021
• EAM Jaishankar says India – China ties have been “significantly damaged”
• India issues a National Security Directive on Telecom Sector


• Japan sets record US $ 52 billion military budget
• Quad consultations take place to further decisions taken at FM level
• Japan and India Defense Ministers Hold Telephonic Conversation
• Japan’s Economy Grew 22.9% in Q3

South Korea:

• India – ROK Foreign Ministries hold Senior Officials Talks
• India’s Army Chief visits ROK
• South Korea’s Economic Performance is Good during Covid

Hong Kong:
• HK Media Tycoon Jimmy Lai gets Bail
• HK Economy likely to contract in 2020


• US Arms Sales to Taiwan in 2020 top US $5 billion

II Developments in China

Politburo meets on economic work for 2021

Xi Jinping presided over a meeting of the Chinese Communist Party Politburo on 11 December 2020 which focused on the economic work for the Party in 2021. This is a normal sequel to the Central Committee meeting of October which approved the Plan for 2021-25 and the longer term economic goals for 2035. China will need to show stellar economic results in 2021 as it is the 100th year of the founding of the Party. Significantly, the Politburo also chalked out the anti-corruption work for the Party next year. The Politburo also decided to strengthen anti-corruption work next year to rein in “disorderly capital expansion”. The actions against Ant Financial is part of this campaign and will require careful watching over the coming months. The People’s Bank of China has already made recommendations in this regard and Ant Financial has accepted its shortcomings and agreed to abide by the recommendations of the PBC.

Central Economic Work Conference Held

The Central Economic Work Conference was held at Beijing 16 – 18 December 2020 where the decisions of the Party are conveyed further to other officials of both the Central Government as well as Provincial Governments. This year’s conference is important due to 2021 being the 100th year of the founding of the Communist Party of China. 2021 is also the first year of the 14th Five Year Plan and hence it will be necessary for the Party to exhibit solid economic achievements in the year. 

Vice Foreign Minister Le Yucheng clarifies on “Wolf Warrior Diplomacy”

A speech made by Vice Foreign Minister Le Yucheng on 5 December 2020 to the 3rd Chinese Think Tanks International Influence Forum has grabbed attention in China as well as outside for its strong defense of the so-called wolf warrior diplomacy of China since the outbreak of Covid-19. Le, who was once Ambassador to India, is reported to have stated that this is a misunderstanding of Chinese diplomacy. China has always been a country of etiquette which values harmony. He equates wolf warrior diplomacy with the “China Threat Theory” and argues that Chinese diplomacy is aimed at defending its national interest. To us, this defense of China’s current diplomacy appear weak and insipid. Actions speak louder than words and people across the world are judging China by her actions and not by the words of persons like Le Yucheng. 

FM Wang Yi takes stock of China’s Diplomacy for 2021

As is normal at the end of the year, FM Wang Yi took stock of what had transpired in 2020 and what are the aims and goals of Chinese diplomacy in 2021 an important year as it is the 100th anniversary of the founding of the Communist Party of China. Broadly speaking, the China – US tug of war for supremacy will continue and eyes will now be on the incoming new President of the United States for how he handles the relationship. China, on its part, has not given an inch and is likely to continue amassing comprehensive national power through its own economic growth and progress. India receives a mention to state that the two sides maintained strategic communication. This is strange as the dialogue is now one of the deaf and simultaneously there is a complete standoff at the Ladakh border. China’s diplomatic activities can be expected to maintain the momentum of previous years. 

EAM Jaishankar says India – China ties have been “significantly damaged”

In a speech to the Lowy Institute of Australia on 9 December 2020 EAM Dr. S. Jaishankar made some of his most candid comments on India – China relations describing them as “significantly damaged” by the border shenanigans of the PLA. He went on to add that the relationship has been “profoundly disturbed” and then went on to state that it cannot be business as usual between the two countries. The Chinese Foreign Ministry spokesperson when asked to comment on this, responded by blaming India for the standoff and the actions on the LAC. This is a clear indication of how far apart the two sides are on this subject and hence one should not expect or even desire an early resolution. 

India issues a National Security Directive on Telecom Sector

A significant decision of the Cabinet of India on 16 December 2020 has led to the issuance of a National Security Directive on the Telecom Sector in India that provides for Government to issue a list of “Trusted Sources/Trusted Products” for the Indian telecom sector. This is a prelude for ensuring that Chinese products are not included in India’s telecom sector from now onward particularly in 5G. It will also pave the way for a drawdown of Chinese products in our telecom sector as a whole. From a national security perspective this is a significant decision which will have far reaching consequences. It has come not a moment too soon. 

III Developments in Japan

Japan sets record US $ 52 billion military budget

PM Suga has set a record military budget of US $ 52 billion for 2021-22, the 9th consecutive rise in that nation’s military spending. Some new weapons which are financed include an advanced stealth fighter and longer-range anit-ship missiles. Continuing the trend of his predecessor Shinzo Abe, the current PM Suga has allocated 5.34 trillion Yen to the Ministry of Defense. Japan will also be purchasing 6 Lockheed F-35 fighters from the US next budgetary year commencing 1 April 2021. 

Quad consultations take place to further decisions taken at FM level

Senior officials from Japan and the other 3 Quad countries, including India< held consultations by video conference on 18 December 2020 to follow up the meeting at Foreign Minister level at Tokyo on 6 October. Practical cooperation in areas such as quality infrastructure, maritime security, counter terrorism, cyber security, HADR and human resource development were on the discussion table. 

Japan and India Defense Ministers Hold Telephonic Conversation

Raksha Mantri Rajnath Singh held a telephonic conversation with his Japanese counterpart Defense Minister Kishi on 22 December 2020 welcomed the fact that bilateral and multilateral defense cooperation and exchanges have continued despite the pandemic including the Malabar naval exercise as well as the signing of the India – Japan Acquisition and Cross Servicing Agreement (ACSA) in Seotember 2020. The Ministers also exchanged views on the situation in the East and South China Sea and highlighted the need for a free and open maritime order based on rule of law. They strongly opposed attempts to unilaterally change the status quo by coercion. 

Japan’s Economy Grew 22.9% in Q3

Japan’s economy expanded at an annualized rate of 22.9% in the last quarter of 2020 indicating that its economy is mending faster than expected since the onset of the Covid-19 pandemic.Thje growth came mainly from consumer and corporate spending while Government spending was also higher than earlier expected. 

IV Developments in South Korea

India – ROK Foreign Ministries hold Senior Officials Talks

Secretary (East) in India’s MEA and First Vice Foreign Minister Choi Jung-kun of ROK held consultations on bilateral and other issues on 23 December 2020 through digital video conference. Discussions covered the areas of high level bilateral exchanges, defense and security cooperation, Covid-19 response, and coordination in multilateral affairs. 

India’s Army Chief visits ROK

COAS Gen MM Naravane is visiting ROK 28-30 December 2020. He held discussions with Korea’s Defense Minister, Joint Chiefs of Staff as well as the Minister of Defense Acquisition. The objective of the visit is to further strengthen strategic and defense cooperation. It is the first ever visit of an Indian COAS to South Korea. 

South Korea’s Economic Performance is Good during Covid

Latest economic projections show that South Korea is likely to finish 2020 with an economic contraction of a mere 1%, one of the best economic performances by a major economy. One of the reasons for this good performance is South Korea’s success in tamping down on the pandemic. 

V Developments in Hong Kong

HK Media Tycoon Jimmy Lai gets Bail

HK media tycoon Jimmy Lai, an outspoken advocate for democracy in the SAR, was arrested under the new national security law on 3 December but was given bail only 3 weeks later. This and other similar cases clearly indicate how serious Beijing is to penalize those it believes are undermining the territory’s interests. 

HK Economy likely to contract in 2020

Despite the fact that HK’s economy in Q3 was a mere -3.5% smaller than that in the same quarter of the previous year, overall for the year as a whole it is likely to contract due to larger contractions in the first two quarters. It has been in recession since 2019 and is likely to continue in this state for another quarter. 

VI Developments in Taiwan

US Arms Sales to Taiwan in 2020 top US $5 billion

In a year where the US – China relationship has got weaker and more tension ridden, arms sales by the US to Taiwan are set to be around US $ 5 billion or so. Such sales are a point of great friction between Beijing and Washington D.C.

(The views expressed are personal)

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About the Author

Ambassador Gautam Bambawale

Former Ambassador of India to China and Distinguished Fellow, Ananta Centre Former Ambassador to Bhutan, China and High Commissioner to Pakistan

Ambassador (Retd) Gautam Bambawale was a member of the Indian Foreign Service from 1984 to 2018. He was India’s Ambassador to Bhutan, Pakistan and China.

Bambawale was stationed in Washington DC in 2004-07 during the Indo-US nuclear deal which transformed ties between the two countries. He has been India’s first Consul General in Guangzhou (China) 2007-09. He was Director of the Indian Cultural Centre, Berlin 1994-98.

Ambassador Bambawale worked in the Prime Minister’s Office 2002-04. At the Ministry of External Affairs he was Joint Secretary for East Asia from 2009-2014. Bambawale has dealt with China for 15 years of his 34 year diplomatic career. He is fluent in Mandarin Chinese and German.

Ambassador Bambawale is currently Distinguished Professor, Faculty of Humanities and Social Sciences, Symbiosis International University, Pune and teaches a course on Diplomacy and International Governance at the Symbiosis School of International Studies. He has an M.Phil. in Economics from the Gokhale Institute of Politics and Economics, Pune.