China: Fuelling Insurgency in Kashmir to Further its Digital Ambitions

World over, the insurgency in Jammu & Kashmir is known for being driven by Pakistan-sponsored jihadi terror. While this is true, increasingly however, a third actor, one seemingly unusual one in Jihadi terror sponsor landscape, may be playing a role—China.

It is widely viewed that China does not tend to sponsor jihadi terror, primarily owing to its own concerns regarding the impact that would have on Xinjiang’s security. However, Beijing’s broader long-term objectives, especially vis-à-vis its digital ambitions, seem to be increasingly fuelled by—and dependent on—continued instability in Jammu & Kashmir. At the heart of this lies another seemingly unrelated factor, i.e. water.

Geopolitics and China’s Digital Ambitions

The US-China trade war has directly impacted Chinese companies’ economic prospects pertaining to microchips and other integrated circuits. These parts are crucial for China both for sustaining its electronics industry as well as to further its global ambitions pertaining to digital infrastructure. To bypass the restrictions placed by the US, China’s state-led National Integrated Circuits Industry Investment Fund has embarked on a billion-dollar microchip manufacturing programme.Leading Chinese polysilicon and silicon wafer manufacturing company, GCL-Poly Energy Holdings is already developing 130,000 metric tonne polysilicon plant outside Kashgar, Xinjiang.

The Chinese Link to the Insurgency Kashmir

Both geography and the natural resources are factors here. Two key raw materials are essential for microchip manufacturing: sand and fresh water. Sand is abundant and accessible in the Taklamakan desert near Xinjiang. However, having exhausted all its fresh water supplies due to overuse and pollution, waters from the Himalayan Indus river system are the only source available to China, particularly given how these waters flow from India into China’s “all-weather friend,” Pakistan. Thus, for China, the waters of the six Indus rivers are pertinent to its microchip and semiconductor manufacturing, and related objectives, and from a logistical point of view too, given the Taklamakan-Xinjiang-Indus rivers location.

However, the use of waters of the Indus rivers were clearly regulated as far back as 1960. Facilitated by the World Bank, the Indus Waters Treaty (IWT) is a bilateral water-sharing treaty between India and Pakistan that has been in force since September 19, 1960, made effective retrospectively since April 1960 as per XII (2) of the treaty. This treaty provides the regulatory framework for the shared use of the waters of six rivers—the Beas, Ravi, Sutlej, Indus, Chenab, and Jhelum—between India and Pakistan. The treaty has a provision for establishing a Permanent Indus Commission to settle differences and disputes. It also comprises provisions for modalities of mediation and arbitration, as well as for referring matters to a neutral expert.

Given how the IWT governs the share of water usage between India and Pakistan, China finds it more cost-efficient to secure access to the Indus waters by keeping the insurgency in Kashmir alive by spending aroundUSD 50 million via Pakistan. Thus far too, India has been unable to tap the Indus river water systems to the full extent of New Delhi’s share under the Indus water treaty, largely due to the insurgency in Kashmir. The protracted insurgencyprevents India from harnessing the full potential of India’s Indus waters share. This in turn allows more water to flow into Pakistan Occupied Kashmir, which then China intends to utilise to power its semi-conductor industry, at a time when the US-China trade war is intensifying.

For instance, Beijing is setting up five dams between Gilgit and Islamabad. East of these dams has a reservoir of 60 kilometres in length. Instead of releasing the water for irrigation, it is being stored, to power the Chinese semiconductor industry, which requires water to create these conductors. Essentially, the waters of the Indus river system are being tapped by China through Chinese built dams in Pakistan for their electronics industry requirement.

Overall, it appears that China’s electronics industry and Beijing’s global ambitions in the digital sphere is now increasingly moving forward at the cost of peace and stability in Jammu & Kashmir.