Current Affairs Feb 9

EU-China Relations amidst Covid Pandemic

Economic issues


WORKING CLOSELY ALMOST TWO DECADES, there is a growing divide between the two sides lately, spanning economic as well as political issues.


The EU has in the recent past described China as ‘an economic competitor’ and a ‘systemic rival’.

  • The EU has long expressed concerns vis-a-vis China over its non-transparent economic policies,
  • Fair market access for EU investments in China
  • Dumping of goods (exporting goods way below market prices in the importing nation) by Chinese exporters
  • Market distortions caused by the state subsidies
  • Lack of protection offered to intellectual property rights of European products

China’s attempts to lure economically vulnerable countries from Eastern and Southern Europe to their flagship infrastructure projects have caused further tensions.

For instance, when Italy joined the Belt and Road Initiative (BRI) in 2019, West European countries expressed concern, given its worrying fiscal and debt situation that has the potential to impact the fundamentals of the whole Eurozone.


The pandemic disrupted sustainable supply chains, which have led to increased calls for their diversification


The EU has been alarmed over shortages of several raw materials, including rare-earth metals, and excessive dependence on China for such materials critical for the EU’s ambitious renewable energy targets.


Chinese aid diplomacy and European perceptions


China has actively engaged with individual member states during the pandemic by offering PPE kits, masks, ventilators etc.

Beijing has used its aggressive aid diplomacy as a propaganda tool, including to shrug off criticisms about the origins of the coronavirus.

 While it looked like Beijing was winning the propaganda narrative in the EU initially, the public opinion towards China has worsened eventually.


Concerns on 5G Tech and Chinese companies


Even after US pressure on the EU to restrict market access of Chinese telecom companies, instead of an outright ban, the European Commission recommended mitigating prospective security risks by following measures like vendor diversification and exclusion of high-risk foreign 5G suppliers from key telecom assets.


Geopolitical concerns


Hong Kong

It took the EU quite a while to raise issues concerning Beijing’s aggressiveness in Hong Kong and the South China Sea, even though the writing has been on the wall for quite some time now.




Key European nations have publicly enunciated their vision for the Indo-Pacific region.

While the French were the first to outline their Indo-Pacific vision in 2018, Germany released its Indo-Pacific policy on September 1, 2020,which was also the final day of the Chinese Foreign Minister Wang Yi’s trip to Europe.

EU member states have become vigilant vis-a-vis Beijing’s 5G tech companies and have passed regulations restricting their market access.

The EU has also become more vocal on Chinese actions in Hong Kong and the South China Sea, even as the region is working towards a common Indo-Pacific agenda.



Mission Innovation

Mission Innovation (MI) is a global initiative of 24 countries and the European Union to accelerate global clean energy innovation dramatically




Ministers, Members and senior representatives from Mission Innovation Countries and international agencies also participated in the meeting. The main objective is to reflect on progress, set the scene for the discussions towards an ambitious next phase of Mission Innovation.


Mission Innovation was announced on 30th November 2015, as world leaders came together in Paris to undertake ambitious measures to combat climate changes. Mission Innovation (MI) is a global initiative of 24 countries and the European Union to accelerate global clean energy innovation dramatically.


The first phase has shown that work done under Innovation Challenges (ICs) have mobilized in a relatively short period, relying on members leadership and voluntary efforts to advance IC objectives.

 These resources have dramatically accelerated the availability of the advanced technologies that will define a future global energy mix which is clean, affordable, and reliable.


Mission Innovation’s role in mobilizing greater public and private investments and partnerships to move the innovation needle.

 Collaborative scientific efforts is needed to realize the vision of affordable and reliable clean energy system and reiterated India’s pledge to pursue a sustainable future through research-led innovations.

Need to strengthen the collective efforts towards more significant MI 2.0 and wished MI fraternity all success in its new phase and new endeavours.


In coming history will remember 2020 as the year of remarkable scientific efforts and innovation.

As the pandemic threw one challenge after another across various fields like logistics, trade, medicine and numerous others, it has been the unique out of box solutions provided by innovators all across the world which have helped save millions of lives and livelihoods”. 


In his humble opinion, bringing to the fore, the necessity as well as capability of innovative thinking to transform the world is indeed one of the silver linings that has emerged from this ruthless pandemic.


“India has long been fostering innovations and nurturing an enabling ecosystem to incubate and scale revolutionary ideas, help improve the quality of lives of people and provide solutions to global problems”



India has played a leadership role in


  • MI Steering Committee and is a member of the Analysis and Joint Research and Business & Investor Engagement sub-groups.
  • India has increased solar installed capacity by 13 times and expanded its non-fossil fuel-based power generation to 134 Gigawatts, about 35% of our total power generation.
  • India has embarked on an ambitious target of having 450 Gigawatts of renewable energy by 2030 and is confident of achieving this.
  • Renewables are no longer fringe-sources, but have become a mainstay of the energy mix. They are now critical both from an environmental and energy security point of view.

India development in Solar energy


  • India is also working to considerably increase the proportion of the biofuel blend in petrol and diesel.
  • India embarked upon the world’s most extensive clean cooking fuel programme called ‘Ujjwala Yojana’, releasing around 150 million connections so far.
  • Five Centres of excellence in Bioenergy supported by Department of Biotechnology in India are working on both fundamental and translational research for advanced bio-fuels like biobutanol, biohydrogen and biojet fuels.

During the first phase of Mission Innovation


  • Positive impact by strengthening our relationships using several innovation-driven business-models, collaborative research development and demonstration, capacity building and substantial investments which have been exponentially increased during the last five years.
  • About Start-up innovation ecosystem, the Clean Energy International Incubation Centre established by the Department of Biotechnology, India under a Public Private Partnership model has played a crucial role.
  • Clean energy challenge for scouting ideas to be incubated has resulted in 25 winning solutions covering wide range of clean energy technologies.
  • India and Sweden under a partnership have developed an Avoided Emission Framework for a sustainable future. Under this partnership, eight companies have been selected to demonstrate an initial 100 million tons of potential CO2 emission reduction by 2030.
  • We are moving towards a user-oriented “Mission approach” that focuses on converting outputs into impacts and wholeheartedly support this strategy.
  • To build on the success achieved thus far, India is committed to continuing with existing innovation challenges and developing a global network of incubators to support the start-up ecosystem through the Collaborate & Accelerate Module of the Innovation Platform.



Steps taken by Government to ameliorate impact of COVID-19 pandemic on Indian economy


  • Government announced a special economic and comprehensive package under Atma Nirbhar Bharat including measures taken by RBI amounting to about Rs. 27.1 lakh crore more than 13 per cent of India’s GDP– to combat the impact of the COVID-19 pandemic and to revive economic growth.
  • The package included, among others, in-kind and cash transfer relief measures for households, employment provision measures under Pradhan Mantri Garib Kalyan Rojgar Abhiyaan and increased allocation under MGNREGS, credit guarantee and equity infusion-based relief measures for MSMEs and NBFCs and regulatory and compliance measures.
  • Structural reforms were also announced as part of the AtmaNirbhar Bharat Package included deregulation of the agricultural sector.


Change in definition of MSMEs


New PSU policy

  • Commercialization of coal mining, higher FDI limits in defence and space sector
  • Development of Industrial Land/ Land Bank and Industrial Information System
  • Revamp of Viability Gap Funding scheme for social infrastructure, new power tariff policy and incentivizing States to undertake sector reforms.
  • 45,000 crore Partial Credit Guarantee Scheme 2.0 for NBFCs are being provided. Purchase of portfolio of Rs. 27,794 crore has been approved by PSBs and Rs. 1400 crore are currently in process of approval/negotiations as on 4th December, 2020.
  • 30,000 crore Additional Emergency Working Capital Funding for farmers through NABARD is being provided. Rs. 25,000 crore has been disbursed so far as on 4th December, 2020. Under balance Rs. 5000 crore Special Liquidity Facility for smaller NBFCs and MFIs, Rs. 130 crore has been disbursed as on 4th December, 2020.
  • Centre had enhanced the borrowing limit for the States from 3% to 5% of GSDP for FY2020-21. Under the Special Window provided by Central Government to borrow the shortfall arising out of GST implementation on behalf of States, Government of India has borrowed an amount of Rs. 78,000 crores in 13 instalments, at an average interest rate of 4.75 per cent, and passed it on to the States and UTs as on 25th January, 2021.
  • 50,000 crore liquidity through TDS/TCS rate reduction has been effected.

The Union Budget 2021-22 has also announced a number of measures to support broad-based and inclusive economic development under six pillars listed as under:


Some of the salient achievements of Pradhan mantri gareeb garib kalyaan yojana

  • Under Pradhan Mantri Garib Kalyan Package valued at Rs. 2.76 lakh crore, free food grain for 80 crore people,
  • Free cooking gas for 8 crore families
  • Direct cash transfer to over 40 crore farmers, women, elderly, the poor and the needy were provided.
  • As on 3rd February, 2021, a total of 323.19 crore person-days have been generated in the current FY 2020-21 under MGNREGS.
  • Under Pradhan Mantri Garib Kalyan Rojgar Abhiyan, employment was generated incurring an expenditure of Rs. 39,293 crore.
  • 3 lakh crore Collateral-free Automatic Loans for Businesses, including MSMEs
  • Additionally, ECLGS has been extended to 26 stressed sectors identified by the Kamath Committee and the healthcare sector till March, 2021 with operational guidelines issued on 26th November for maintaining the momentum of credit disbursements to close to 45 lakh business units.

Health and Wellbeing

Key measures include a holistic approach to strengthen healthcare with focus on three areas- 


  • Preventive Curative
  • Wellbeing Rs. 35,000 crore for COVID-19 vaccine
  • Roll out of Made-in-India Pneumococcal Vaccine across the country
  • Launching of a new centrally sponsored scheme PM Atma Nirbhar Swasth Bharat Yojana in addition to National Health Mission
  • Mission Poshan 2.0
  • Universal Coverage of Water Supply
  • Urban Swachh Bharat Mission 2.0, Clean Air
  • Scrapping policy, etc.

Physical & Financial Capital, and Infrastructure


  • Key measures include Production Linked Incentive scheme (PLI) in 13 Sectors
  • Mega Investment Textiles Parks (MITRA)
  • 7 Textile Parks, expansion of National Infrastructure Pipeline (NIP) to 7,400 projects, creation of institutional structures for Infrastructure Financing, National Monetization Pipeline.
  • Sharp increase in Capital Budget, economic corridors, flagship corridors/expressways.
  • National Rail Plan for India (2030), future dedicated freight corridor projects.
  • Strengthening of urban infrastructure, launching of National Hydrogen Energy Mission 2021-22.
  • Extension of Ujjwala Scheme to cover 1 crore more beneficiaries, development of a world class Fin-Tech hub.

Inclusive Development for Aspirational India


Key measures include ensuring MSP at minimum 1.5 times the cost of production across all commodities

  • Extension of SWAMITVA Scheme to all States/UTs
  • Enhancing agricultural credit and infrastructure funds, investments to develop modern fishing harbours and fish landing centres
  • One Nation One Ration Card, Rs. 15,700 crore budget allocation to MSME Sector, etc.

Reinvigorating Human Capital

  • Key measures include qualitative strengthening of 15,000 schools under National Education Policy
  • Setting up of 100 new Sainik Schools, Higher Education Commission of India, Central University in Leh
  • 750 Eklavya model residential schools in tribal areas
  • Revamped Post Matric Scholarship Scheme for welfare of SCs
  • Measures to enhance skilling like realignment of existing National Apprenticeship Training Scheme (NATS), etc.


Innovation and R&D

  • Key measures include Rs. 50,000 crore outlay under National Research Foundation (NRF)
  • 1,500 crore for financial incentives to promote digital modes of payment,
  • PSLV-CS51 launch
  • Gaganyaan mission activities
  • Launching of Deep Ocean Mission, etc.

Minimum Government and Maximum Governance

  • Key measures include reforms to rationalize the functioning of Tribunals
  • National Commission for Allied Healthcare Professionals Bill in Parliament to ensure transparent and efficient regulation of the 56 allied healthcare professions
  • National Nursing and Midwifery Commission Bill to bring transparency
  • Efficiency and governance reforms in the nursing profession, setting up of a Conciliation Mechanism for quick resolution of contractual disputes welfare of tea workers especially women and their children in Assam and West Bengal, etc



Budget and environment

  • Governments have not put in the substantial new financial resources raised through rapid growth into environmental protection.
  • Budgetary allocations for the Ministry of Environment, Forest and Climate Change (MoEFCC) have consistently fallen as a percentage of total allocations.
  • Second, even when there are increased allocations, such as for cleaning up the Ganga, their usage is ridden with such design flaws, inefficiencies and corruption that the environment is no better off than before.
  • On several significant items relating to the environment, and taking inflation and needs into account, allocations have remained stagnant or fallen.
  • This includes the MoEFCC and crucial institutions such as the Wildlife Institute of India and the Indian Council of Forestry Research and Education
  • There are substantial allocations to sectors that have a positive environmental impact.
  • For instance, the 2021 Budget has allocated ₹3,500 crore for wind and solar energy, ₹4,000 crore for a ‘Deep Ocean Mission’, and ₹50,011 crore for urban drinking water.
  • India’s major push for renewable energy (RE) has earned it global appreciation
  • In principle any scheme for urban drinking water is positive.
  • But with the continuation of a highly centralised approach to all such schemes, there is a ‘one size fits all’ approach, heavily focused on expensive infrastructure like big reservoirs and pipelines.
  • Instead, a decentralised approach that uses a mix of local rooftop and backyard harvesting, restoration and conservation of urban wetlands, and regenerating groundwater could achieve much better results.
  • And as in energy, there is no focus on incentivising responsible consumption, restraining luxury uses, and redistributing water more equitably, without which no amount of infrastructure will be enough.
  • The ‘Deep Ocean’ allocation is intriguing. It is being projected as a programme for conservation of biodiversity in the depths of our marine areas.
  • This would be cause for cheer, given the serious neglect of our oceanic areas.
  • Potentially, an allocation of ₹18,000 crore for public transport could have significant benefits for people and the environment if it helps to reduce private vehicle density in cities.
  • But if much of this is allocated to the metro rather than to buses and other such earthy alternatives (including last mile connectivity, incentives for walking and cycling), the picture becomes murky
  • There is then the very worrying issue of allocations to non-environmental sectors that have a negative impact on the environment.
  • For instance, the Budget proposes 11,000 km more of national highway corridors.
  • In the last few years, massive road and dam construction has fragmented fragile ecosystems and disrupted local community life in the Himalaya, Western Ghats, north-east India and elsewhere.



Development and disaster-case of Uttarakhand

  • The staggering collapse of part of a glacier in Uttarakhand’s Nanda Devi mountain and the ensuing floods that have claimed many lives come as a deadly reminder that this fragile, geologically dynamic region can never be taken for granted.
  • A significant slice of the glacier, dislodged by a landslide, according to some satellite images, produced roaring torrents in the Rishiganga and Dhauliganga rivers in Chamoli district, trapping unsuspecting workers at two hydro power project sites
  • The State’s deep gorges and canyons have attracted many hydroelectric projects and dams, with little concern for earthquake risk.
  • Red flags have been raised repeatedly, particularly after the moderate quake in 1991 in the region where the Tehri dam was built and the 2013 floods that devastated Kedarnath, pointing to the threat from seismicity, dam-induced microseismicity, landslides and floods from a variety of causes, including unstable glacial lakes and climate change
  • India is heavily invested in dam development and growth of hydropower, largely in the Himalaya region — especially to cut carbon emissions.
  • By one estimate, if the national plan to construct dams in 28 river valleys in the hills is realised in a few decades, the Indian Himalayas will have one dam for every 32 km, among the world’s highest densities.
  • Yet, as researchers say, this may be a miscalculation for reasons, including potential earthquake impacts, monsoonal aberrations that could repeat a Kedarnath-like flood, severe biodiversity loss and, importantly, extreme danger to communities downstream.
  • There is also some evidence that the life of dams is often exaggerated, and siltation, which reduces it, is grossly underestimated: in the Bhakra dam in Himachal Pradesh, for instance, siltation was higher by 140% than calculated



India’s dilemma in Myanmar

  • The long-lingering power struggle in Naypyitaw has finally ended, and the Myanmar junta, led by General Min Aung Hlaing, has won the struggle, dashing decade-long hopes for a truly democratic Myanmar.
  • The future of Myanmar’s democracy is uncertain, but the country, sandwiched between two powerful states competing for power and influence, is certain to be a key piece in the region’s geopolitics
  • Strong reactions and the threat of sanctions from the United States and the West in the wake of the recent coup could lead to unique political realignments in Myanmar.
  • As a result, even though the democratic credentials of the former State Counsellor, Aung San Suu Kyi, remain deeply diminished today, thanks to her shocking justification of the ill-treatment meted out to the Rohingya.
  • This is a coup that seems to suit no one except the Tatmadaw, the armed forces of Myanmar.
  • In the short run, the coup stands to hurt the interests of China, India and even the rest of the international community, all of whom were able to do business with Myanmar.
  • Even though international sanctions are unlikely to have a major impact on the country’s largely inward-looking junta and its Generals with little external interests,
  • it would still expect Beijing to give them political and diplomatic support both within the region and globally
  • Decisive western sanctions will force the military to get closer to China.
  • The dual power centres of the military and the civilian government that existed in Naypyitaw until recently, suited New Delhi quite well as it did not have to worry about hurting the international community’s normative concerns or sacrificing its national interests while engaging them both.
  • While India’s national interests, under the new circumstances, would clearly lie in dealing with whoever is in power in Myanmar, India would find it difficult to openly support the junta given the strong western and American stance.
  • On the other hand, it can ill-afford to offend the junta by actively seeking a restoration of democracy there. Being a close neighbour with clear strategic interests in Myanmar, offending the junta would be counter-productive
  • Although the Ministry of External Affairs statement — “We believe that the rule of law and the democratic process must be upheld. We are monitoring the situation closely” — is definitely in favour of restoring democracy, its past support for the pro-democracy movement in Myanmar is unlikely to return;
  • While a friendless Myanmar junta getting closer to China is a real worry for New Delhi, there are other concerns too.
  • For one, Myanmar’s military played a helpful role in helping New Delhi contain the north-eastern insurgencies by allowing Indian military to pursue insurgents across the border into Myanmar. Coordinated action and intelligence sharing between the two forces have in the recent past been instrumental in beating back the insurgent groups in the northeast
  • Unless the military decides to engage in a peace process to gain some brownie points for itself, the Rohingya question is likely to be pushed aside with the campaign against them continuing relentlessly.



Coal and COVID-19


How the pandemic is accelerating the end of fossil power generation


  • COVID-19 caused a temporary drop in global CO2 emissions
  • It has also reduced the share of power generated by burning coal a trend that could, in fact, outlast the pandemic.
  • A new study by a team of economists based in Potsdam and Berlin that looked at COVID-19’s impact on the energy system and demand for electricity.
  • Findings show that the pandemic, while putting a terrible toll on people’s lives and the economy, has also opened a window of opportunity to make this current trend of decreasing coal use irreversible.
  • Supported by the right climate policy measures, power sector emissions could decline more rapidly than previously thought.
  • Coal has been hit harder by the pandemic than other power sources.
  • If demand for electricity drops, coal plants are usually switched off first.
  • This is because the process of burning fuels constantly runs up costs.
  • The plant operators have to pay for each single ton of coal.
  • In contrast, renewable power sources such as wind and solar plants, once built, have significantly lower running costs and keep on operating even if the demand is reduced.
  • Fossil fuels were partly squeezed out of the electricity generation mix in 2020 and global CO2 emissions from the power sector decreased around 7%.
  • By looking at India, the U.S. and European countries alone, a more dramatic picture emerges.
  • In these key markets, where monthly electricity demand declined by up to 20% compared to 2019, the monthly CO2 emissions decreased by up to 50%.
  • The researchers estimate that it’s likely that emissions will not reach the all-time high of 2018 again.
  • Due to the ongoing crisis, 2021 electricity demand will be at about 2019’s levels, which, given ongoing investments into low-carbon generation, means lower fossil generation than in that year.
  • As long as this clean electricity generation growth exceeds increases in electricity demand, CO2 emissions from the power sector will decline.
  • High demand for electricity along with surprisingly few additions of renewable power plants from 2022-2024 and beyond, fossil fuel generation would rebound to pre-pandemic levels.
  • While the power sector has seen a dynamic transformation process even before the advent of COVID-19, the pandemic has weakened the market position of coal-fired power generation and illustrated its vulnerability.
  • Research shows that investing in fossil-fueled power is not only environmentally irresponsible it is economically very risky,
  • In the end, it will certainly take carbon pricing to cut emissions at the required pace and stabilize our Climate.
  • Yet the impacts of the Corona crisis on the power generation sector have put political leaders in a unique position.
  • Along with additional policies such as eliminating subsidies for fossil fuels and increasing investments in wind and solar power, it is now easier than ever before to put an end to high-carbon electricity.