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Please read Swarna Bharat Party's detailed policy on Justice systemEfficient and effective justice systemSwarna Bharat Party’s justice policyIn its 117th Report (1986), the Law Commission observed: “The Indian Judicial System is admittedly colonial in origin and imported in structure. Without even a semblance of change in the last four decades since independence, in its mode, method of work, designations, language, approach, method of resolving disputes, it has all the trappings of the system established by the foreign rulers.”All freedom must necessarily be bound by accountability. We are free to do what we please, so long as we do not harm others. The justice system ensures accountability. If we harm anyone, justice must be quick and proportionate so everyone involved can get on with their life. But today there are about 3.80 crore pendencies/arrears/backlogs and cases drag on for years altogether, depriving many citizens of justice and violating their fundamental rights to life and liberty.We will commission a first-principles review of the justice system, to report in two years. In the meanwhile, we will implement a suite of reforms, some of which are outlined below.1.1 An impeccably honest and high quality judiciaryOur judiciary must be above board and above suspicion. It is crucial that the judiciary be perceived to be absolutely honest, unbiased, and accountable. Unfortunately, influential people are able to manipulate the ‘justice’ system to avoid jail. Petitions of rich and influential people are heard within days (even hours), while matters related to the poor languish for years, often never being completed in an entire lifetime. Chief Justice P. Sathasivam of the Supreme Court has acknowledged in July 2013 that the judiciary is not untouched by corruption.[1] A strong stench of corruption is arising from the courts. Bribery and perjury have destroyed the roots of the justice system, making it less a justice system than a system of ‘match-fixing’.We will create systems to ensure an honest and unbiased judiciary.1.1.1 CRIME PUNISHABLE WITH DEATH TO BRIBE A JUDGE OR FOR A JUDGE TO TAKE A BRIBEBribing judges (and judges accepting bribes) is perhaps the worst of all crimes – since it can lead to the innocent being punished and the guilty going scot-free. There is no more heinous offender of liberty than a judge that is not impartial.We will make it a crime punishable by death to bribe any Sessions Judge, High Court Judge or Supreme Court, or for a judge to accept a bribe. Other – lower – judges too, shall be sternly punished, likewise.The government itself is a litigant in many cases and should be punished if it bribes the judiciary. A judge should receive only his salary and associated entitlements; no more. It will become a crime punishable by death of the relevant Chief Minister or Prime Minister for any government to give any additional pecuniary benefits to any judge – such as the allocation of government land at a subsidised cost – over and above the contractual amount.1.1.2 NON-DISCRETIONARY ENFORCEMENT OF PERJURY LAWSThe lackadaisical attitude of many judges towards perjury is a systemic abuse that is destroying the very foundations of the justice system. People submit false affidavits with impunity today, as judges do not seem to care. False statements and evidence are often recorded under the very nose of trial judges. ‘Witnesses’, who are bought, appear in multiple cases before the same judge, with impunity. As a result, only the honest now fear the judiciary. There is a deep sense of despair at the breakdown of the rule of law.We will legislate to require judges to mandatorily impose stiff penalties for perjury, with a minimum six month prison sentence. It will also become a criminal offence for judges to not penalise perjury. Repeat offenders – who are proven to have accepted false statements as true – will be cautioned through the senior courts and further failures will invite formal complaints and FIRs. Judges need to be held to account for the truth of any evidence they rely upon for a judgement.1.1.2.1 TRANSPARENCY IN THE APPOINTMENT AND TRANSFER OF JUDGESThe existing system of appointments to the superior judiciary, through a collegium of senior judges in High Courts and the Supreme Court suffers from perceived deficiencies in quality, being an in-house process.We will seek to discuss with the Supreme Court Chief Justice to identify and action any opportunities for improving the system of appointment of judges, including (if necessary) through reforms such as the Judicial Appointments Commission Bill and the Judicial Standards and Accountability Bill. A key to judicial appointments should be the deep held commitment of judges to liberty, including freedom of speech.NO ONE TO BECOME A JUDGE WITHOUT SIGNIFICANT EXPERIENCE AS A LAWYERCurrently there is no minimum practice requirement for becoming a judge in the district courts. People can directly appear after their law degree for an exam to become a judge. We will seek advice from the Supreme Court regarding imposing a requirement of significant case practice as a necessary pre-condition to appear in the exam in order to become a judge.1.1.2.2 INDEPENDENT COMMISSION FOR REMUNERATION OF JUDGESWe believe that most judges are poorly paid today relative to their private practice capability, creating incentives for corruption. But any corruption in the judiciary is fatal to the purpose of a justice system. We will establish an independent commission for remuneration of judges to advice on a market-comparable compensation framework. The framework should include incentives for quality, accuracy and speed of judgements. Given the extreme significance of this matter, we intend to accept without any delay the recommendations of such a commission. The people of India cannot be penny-wise and pound-foolish in relation to such a critical requirement as justice.1.1.2.3 FREEDOM (JUSTICE) MINISTER TO BE PAID BASED ON QUALITY AND SPEED OF JUSTICEThe Justice Minister, like all Ministers, will be paid partly according to results. KPIs for the Minister would include targets for resolving the case backlog, as well as indicators of speed and quality.1.1.2.4 TRAINING TO IMPROVE THE QUALITY AND EFFICIENCY OF JUSTICEWithout a commensurate strengthening of training and orientation among judicial officers / judges and lawyers, a rapid increase in the number of judges can put a strain on the quality of judgements. We will significantly upgrade the existing training systems of judges with a focus not merely on any changes to the law, but on best practice court procedures, such as that:arguments should be heard soon after the close of evidence, as they take much less time than arguments advanced after a long interval (recommendation of the 77th Law Commission);trial courts judgments should be brief and not a show of learning, and yet deal with inconvenient contentions and crucial arguments by appraising the evidence, relevant statutory provisions and such authorities that have direct bearing;Order 17, Rule 1, CPC (which does not allow more than three adjournments) should be followed and dilatory tactics including frequent adjournments, delays in filing documents, delays in serving or evading service be firmly curbed;judgments should be pronounced within 30 days (Order 20, Rule 1, CPC) and decrees within 15 days; anda time limit should be enforced on unnecessary details, such as over-proving allegations or unduly prolix examinations and cross examinations of witnesses.1.1.2.5 INTERNAL REVIEW SYSTEM: ACCOUNTABILITY FOR TIMELY JUSTICEWe will discuss with the Supreme Court options to introduce an internal review system to deal with complaints against judges and any unnecessary delays by judges.1.2 Timely, efficient and effective delivery of justice1.2.1 RAPID DISPOSAL OF CASES OF UNDER-TRIAL PRISONERSIt is a shame that thousands of under-trials are in jail for over ten years without their guilt having been established. We will cause a review of all cases of under-trial prisoners. Except for alleged crimes against person, they will either be freed on bail or permanently released if the time they have served is more than half the maximum statutory sentence.1.2.2 SIGNIFICANT INCREASE IN THE NUMBER OF JUDGESIndia currently has a ratio of around 13.5 judges for every one million persons. In developed countries, there are 130-135 judges for every one million persons. A judge needs to go into the details of the evidence and the law before deciding a case. Quality justice takes time. Without dramatically increasing the number of judges, we cannot deliver timely and quality justice to the people of India. The Supreme Court has directed an increase in the strength of judges to 50 per million in the subordinate judiciary. We believe this is an essential governance reform. We are committed to increasing the strength of judges to at least 50 judges per million within three years. Funds for this will be raised from recovery of efficient costs of the justice system through appropriate fees, and from rationalisation of the tax system.1.2.2.1 TRIPLING THE EXPENDITURE ON JUSTICE IN THREE YEARSKorea spends more than 0.2%, Singapore 1.2%, and the U.S. 1.4% of its GDP on justice. India, however, spent only 0.01% of the GDP on justice in 2000. What can be more absurd than this, that a core function of the government has been given such short shrift by successive governments in India? By cutting out unnecessary functions, we will redirect savings into core functions, one of the most important of these being justice. A quantum increase in expenditure on the justice system will be considered, at least tripling the current spending within three years, and much more in the future.1.2.3 FAST-TRACK OPTIONS1.2.3.1 FAST-TRACK COURTS TO DEAL WITH CORRUPTION/ CRIMINAL CHARGES AGAINST MPSThis policy has been detailed earlier, and is a critical part of our commitment to ensure that only good people are able to become elected representatives.1.2.3.2 FAST-TRACK COURTS FOR CRIMES COMMITTED AGAINST PERSONWe will create a fast-track system for crimes against person, with a maximum judgement time of 12 months from the date of reporting such crime, including a maximum of six months for investigation. Exceptions to this timeline will be investigated by a Judicial Commission and any necessary extensions given only in exceptional cases. Officials responsible for unnecessary delays will be punished.Terrorists and those who potentially pose a grave threat to the nation would be tried even more quickly through special courts.1.2.3.3 OTHER CASES REQUIRING TO BE FAST-TRACKEDWe will request the Supreme Court to strengthen its normal prioritisation mechanism. Cases requiring urgent attention/priority should be fast-tracked. This could include cases involving the death sentence; habeas corpus petitions; where orders have been passed staying other proceedings, or against orders of remand; cases involving senior citizens (whose timeline for justice is necessarily shorter); cases affecting custody of children; and motor vehicle accidents.1.2.4 MEASURES TO REDUCE PROCEDURAL DELAYS AND THE TIME AND COST OF JUSTICEWe will undertake a range of reforms to reduce justice system delays and costs. Illustratively, these include:1.2.4.1 PRE-LITIGATION MEASURESSection 89 of the Civil Procedure Code (CPC) provides for alternate dispute redressal mechanisms (ADRs). After issues are framed, cases can be referred to appropriate ADRs. Streamlining this process can reduce the time and other costs of justice.We will enhance the process to refer parties for counselling prior to commencing litigation, especially when there is scope for settlement. In general, all cases between two or more government agencies/departments should be settled outside courts – or through the inter-governmental machinery.We will create a regulatory regime that supports any private online dispute resolution initiatives for minor issues. In a competitive market, such systems are likely to be cheaper and quicker than comparable government systems.1.2.4.2 PLEA BARGAININGChapter 21 A of The Code of Criminal Procedure (CrPC) provides for pre-emption of trial for petty offences punishable with imprisonment up to 7 years, through a mutually satisfactory disposition where the court directs the accused to pay an agreed compensation to the victim, and may either release the accused on probation or sentence the accused to up to half the minimum punishment prescribed for the offence in question.Unfortunately, plea-bargaining is rarely used in local courts. We will review the use of plea-bargaining and streamline it, excluding certain offences such as those committed against a woman or a child below the age of fourteen. This will significantly increase its use.1.2.4.3 STERN PUNISHMENT FOR FRIVOLOUS LITIGATION AND APPEALSThe government itself is a huge contributor to justice system delays. In matters where it is a party, it is common for the government to evade notices, reply to notices without application of mind, and unnecessarily appeal even when the laws are clearly in favour of the other party. Parties with deep pockets also waste a lot of judicial time, with vicious and frivolous cases and appeals, each of which is ultimately lost with strictures.The 192nd Report by the Law Commission (2005) outlined the concept of a vexatious litigant and proposed a draft bill, The Vexatious Litigation Prevention Bill. We will enact strong legislation to impose costs on parties engaging in frivolous litigation. In particular, we will make laws to stringently punish the senior-most government functionaries found responsible for vexatious litigation.Such penalties will also apply to police officers whose parking or other tickets are dismissed by courts.1.2.4.4 STOPPING ENDLESS APPEALSDue to slack judicial action, cases in India are often disposed without deciding the real issue. This results in endless appeals. Lawyers are also paid on a per-court appearance basis, and hence have little incentive to resolve cases. Procedural laws allow lawyers of clients who oppose the resolution of a case to submit endless interlocutory appeals. We will review and streamline civil and criminal procedures, to avoid such obfuscation of justice. We will regulate legal fees to require a cap on costs to be declared for each case by litigating lawyers to prevent their incentive to lengthen proceedings.1.3 Structural reforms of the judicial system1.3.1 MAKING THE SUPREME COURT MORE ACCESSIBLEGiven the heavy caseload and backlogs, as well as the time and costs imposed on litigants to travel to Delhi from distant states, there is much merit in decentralising the Supreme Court. The 2009 Law Commission recommended that the Supreme Court be split into a Constitution Bench in New Delhi and Cassation Benches in the four regions to deal with all the appellate work arising out of high court decisions. Though the Supreme Court has expressed reservations about any such radical re-structuring, we believe that one additional branch of the Supreme Court, initially in Bangalore, should be piloted in the first instance. Any concerns of the Supreme Court about capacity to govern the Cassation Benches can be addressed through close-circuit video conferencing, so regular private meetings can be held with the Chief Justice.1.3.2 INDEPENDENT PROSECUTING AGENCYWe will create an independent prosecuting body to ensure that police and investigative agencies have collated sufficient evidence and have reasonable prospects of securing conviction, before filing a charge sheet. This will also apply to cases filed by the government in civil matters and help minimise unnecessary government-created litigation. Internal review of processes and of any complaints received, and external audit of its performance would support other governance processes in place to ensure integrity and competence of this organisation.1.3.3 COMMERCIAL COURTSGiven the costly and time-critical nature of large commercial and contractual cases (such as IPR, mergers and acquisitions), we will set up Special Commercial Courts to fast-track such litigation, with a significantly higher fee. We will also appoint experienced and qualified judges on contract for technically complex cases. Such contractual judges could be hired from anywhere in the world.These actions will also empower our judicial system to increasingly take on the role of a global hub for arbitration and legal process outsourcing.1.3.4 MOBILE COURTS, LOK ADALATS, FAMILY COURTSFor relatively minor civil matters, we will set up mobile courts and encourage people to use the services of private arbitrators. We will increase Lok Adalats to one per 50 villages, and increase the number of Family Courts.1.3.5 PANCHAYATS TO JUDGE SIMPLE CIVIL AND CRIMINAL MATTERSToday, even petty cases tend to go before judges. We will pilot the use of panchayats for some minor civil and criminal issues, and minor land disputes. If successful, this would be rolled out, while always ensuring that panchayats abide by the norms of liberty and justice.1.3.6 PILOTING THE JURY SYSTEM IN CRIMINAL TRIALSAfter first speeding up criminal trials, we will consider ways to improve the quality of judgements, including by adopting a jury system in certain trials. There are some risks to a jury system, with many prevalent citizen prejudices that could distort justice. However, a jury system respects citizens’ judgement and can, in the longer run, result in fairer judgements as citizens’ education and the ability to assess evidence improves. We will pilot this system in relatively minor criminal matters and evaluate it before considering a broader rollout.1.3.7 PRIVATE COURTS FOR CERTAIN CIVIL MATTERSWe will enact laws to enable private (including online) arbitration and courts. Citizens will be able to choose in advance the use of such private courts as part of contracts such as for the construction of a house. Upon activating a dispute, the losing party will be required to pay penalties, including reasonable legal costs. This will create competition for justice (thus also keeping government courts on their toes) and lead to innovative, quicker justice. This will also, by reducing government court caseloads, ease justice system backlogs and save taxpayers significant amounts of money.1.4 Making the justice system more humane1.4.1 FREE HIGH QUALITY LEGAL AIDThe poor (those eligible for an NIT-type payment) will also be eligible for free high quality legal aid, the costs of which will be partially met through penalties imposed on the losing parties. No aid will be provided where it is determined by the legal aid system that the party is guilty.1.4.2 EASIER ACCESS TO BAILWe will make the option of bail for most charges (excluding crimes against person) mandatory and easier, to minimise unnecessary harassment of potentially innocent people.1.4.3 PRISON REFORMS INCLUDING REHABILITATION AND REDUCED RECIDIVISMPrison should be a place for a prisoner to repent the crime and to reform, to facilitate re-integration with society upon their release. We will introduce privatized prisons (with appropriate regulatory oversight) to be partly paid on reduced recidivism ratesImprisonment, being a restriction on freedom of movement, is itself a major punishment. There is no need for further cruel and degrading treatment of prisoners. We will also take measures to look after prisoners’ families, particularly of their children, to ensure that any ill-effects on their upbringing and self-confidence due to their parents’ imprisonment are minimized.1.4.4 REVIEW OF PRIVATE COSTS OF REPORTING CRIME AND REDUCING THESE COSTSThe effects of reporting certain violent crime, such as rape, on the mind, career, marriage prospects and social status of the complainant are often enormous. The victim thus gets further victimised. These reporting and social obstacles create incentives for significant under-reporting, thus emboldening criminals.We will review the private costs of reporting violent crime and introduce a range of laws and supports that make it easier to report and reduce the distress and costs (including social costs, such as through appropriate confidentiality) involved.1.4.4.1 LOOKING AFTER THE VICTIMS OF SERIOUS CRIMESWe will strengthen systems (largely through civil society institutions) to support and rehabilitate victims (and victim families), to ensure that they are reintegrated back into society at the earliest.1.5 Modernisation of lawsWe will modernise laws, particularly the penal laws. Some of the key modernisation issues are outlined below. Some others are mentioned elsewhere in this document, such as in relation to freedom of speech and property rights.1.5.1 GOVERNMENT TO BE LIABLE FOR HARM CAUSEDWe will legislate a duty of care that all government employees must ensure in their interactions with their clients. This will allow the government to be sued for damages where government servants, through their acts of commission or omission, harm citizens.1.5.2 REVIEW OF CONTEMPT OF COURT PROVISIONSJudges need powers to enforce decorum and demand discipline as part of the judicial process. However, there is a countervailing requirement to require constitutionally consistent restrictions on the exercise of these provisions, to limit any wilful misuse. Contempt of court provisions will therefore be reviewed and appropriate rules created to ensure these powers are deployed only in extremely limited cases.1.5.3 CAPITAL PUNISHMENT FOR HEINOUS CRIMESFor heinous crimes (including serious cases of corruption, child abuse and rape), judges would be required to specifically justify any exception to capital punishment, once proof beyond reasonable doubt has been adduced. Capital punishment in such cases would create a deterrent effect.1.5.4 MINIMUM STANDARDS, NOT A UNIFORM CIVIL CODEArticle 44 of the Constitution contains a directive principle that the state shall endeavour to secure for citizens a uniform civil code throughout the territory of India.[We believe that a Constitution should not include policy mandates. Policy must remain the prerogative of elected governments. We respectfully do not agree with the policy outlined in this Article and will commend a more refined approach to the country, consistent with liberty.]In relation to the substantive content of Article 44, it is to be noted that most religions specify some level of details regarding marriage and divorce. These are personal matters involving the most intimate unit of human existence: the family. Religious obligations on families are outside the scope of a government’s jurisdiction. Even in non-religious personal arrangements about marriage, there is fundamentally no role for government. Families should be able to structure themselves without violating the life or liberty of family members or others. A marriage contract or sacrament is a matter of personal taste on which the state can have nothing substantial to say.The only role a state can have in this regard relates to establishing norm-setting minimum standards, such as a minimum age of marriage, minimum maintenance requirements upon divorce and minimum inheritance requirements in absence of a will. All that would be required would be for citizens to abide by the legislated minimum standards while complying with the mandates of their individual faiths.More broadly, since there is no role for the state in religion, we will review all religious (e.g. Hindu/ Muslim) legislation on the statue books and replace it with generic rules of accountability applicable to all citizens.1.5.5 STRONGER ACCOUNTABILITY: PRISONERS TO PAY FOR THEIR UPKEEPWe will introduce innovative methods and technologies to ensure that society doesn’t pay unduly for the upkeep of prisoners. In general, prisoners will be billed all costs of their upkeep. Where they have known resources and assets, payment will be required before they are released. For prisoners without any identifiable resources, the amount will be converted into a loan and recovered through the tax system.Wherever appropriate, prisoners will be required to serve the family or community they have harmed.1.5.6 MANDATORY IMPRISONMENT FOR GANG CRIMES AND VIOLENT SEXUAL CRIMESWe will enact mandatory minimum prison sentencing for gang crimes, violent or sexual offences against children, rape, robbery, murder, and all assaults involving serious injury to law enforcement officers. We will create a national registry for convicted child abusers so they can be readily tracked. Parole will be minimized for dangerous or repeat felons.1.5.7 STRONG LAWS AGAINST TORTUREDespite signing the Convention against Torture in 1997, India is yet to enact a law to ratify the treaty. We will introduce such a Bill at the earliest.1.5.8 REVIEW OF VICTIMLESS CRIMESUnder various victimless crime laws, people are punished even when they have not directly harmed anyone. Typically, this relates to dealing with, or consuming illegal drugs. In general, victimless crimes should not prompt punishment (even assuming that analysis demonstrates the value of such punishment) comparable with punishment for violent crime. We will review laws regarding victimless crimes for necessity, and where considered necessary, for appropriateness of punishment.1.5.9 SEXUAL ORIENTATION NOT A CRIMEWe object to Section 377 of the IPC, which criminalises homosexuality. This is proven to have a significant hereditary/ biological origin, and therefore is not only a matter of personal choice. We will abolish this ‘crime’, particularly also as it is victimless. Non-consensual gay sex will be captured by the normal provision regarding rape.We agree that gay couples that wish to live together in a marriage-like relationship, can legally and contractually do so. We also note that the state has a very limited role in determining the nature and form of marriage. To the extent customary, at present, this relationship will not be called marriage, to distinguish it from heterosexual marriage. The right to bring up adopted children will, however, not be available to this form of cohabitation, given the need to assess this issue further in the best interests of children. Such an evidence-based assessment, including extensive consultation with the community, will be commissioned in the second term of our government.1.5.10 ADULTERY NOT A CRIMINAL OFFENCESection 497 of the IPC, a provision drafted in the Victorian era, treats adultery as a crime, which can be complained against only by the husband and never by the wife. We will move adultery from a criminal into a civil offence. Adultery is a form of breach of trust and should remain a ground for divorce, but is not a criminal matter. All sexual acts between consenting adults will be removed from the IPC.1.5.11 REFORM OF CHILD PROTECTION, DOMESTIC VIOLENCE AND DOWRY LAWSMost marriage-related complaints in India are considered to be criminal in nature. This is inappropriate. Except for matters involving physical violence and abduction, all other marriage issues will be moved into civil law.While many women face an oppressive environment at home and domestic violence needs to be punished, enough evidence has now accumulated that s.498a of the IPC, which addresses domestic violence and dowry deaths, is often misused due to the absence of checks and balances and its inbuilt stereotypical assumptions about gender roles. But no assumption of guilt should be inbuilt into the law. We will make offences under s. 498a bailable and compoundable, and require that any party that files a false case be mandatorily imprisoned for a minimum of three months, with all legal costs borne by the party that filed the false case.Since India is not a signatory of Hague convention on Private International Law, any marriage-related dispute between a foreign and Indian citizen is dealt as per Indian law. Further, current laws are unclear about the rights of the other marriage partner when one spouse takes away the children without consent. We will legally endorse the international convention to ensure international standards for child protection.1.5.12 STRONG ANIMAL PROTECTION LAWSWe will review and strengthen existing laws for animal protection. Animals consumed as food should be killed in as painless a manner as the state of knowledge permits. International best practice currently requires stunning before killing large animals. We will make humane killing mandatory in all abattoirs, with transitional provisions for local butchers that currently use customary (often brutal) techniques. Punishment for repeated inhumane killing of animals can extend to jail. The laws will also apply to temples and other religious places, bringing an end to animal sacrifice that is not assisted by modern technology.1.5.13 MAKING LAWS ACCESSIBLE AND CLEAR, THUS SUPPORTING TRANSPARENCY1.5.13.1 LANGUAGE OF THE PEOPLE TO BE USEDWe will require the language of the people to be used in courts as far as ordinary civil and criminal matters are concerned.1.5.13.2 DEFINITIONS ACTAll legal definitions will be rationalised, stripped from existing legislation, and brought under a single Act. This will ensure consistency in the use of specific words in all legislation. All such terms will then be hyperlinked in electronic versions of the laws, so ordinary citizens can quickly identify their meaning.1.5.13.3 INDEXATION OF FINES, FEES AND PENALTIESWe will index fines, fees and penalties to the CPI. All such imposts will be converted into units, with the current unit values reflecting the changing value of the rupee.As part of this process, fines, fees and penalties that are set at outdated levels will be increased to reflect the current value environment, based also on cost recovery principles (with costs set at an efficient level).1.5.13.4 COMPUTERIZATION OF LAWS AND JURISPRUDENCEReady access to past judgements can help improve the quality of justice. In addition to computerization and publication of all relevant laws, all relevant jurisprudence will be digitised and published on the internet (making it fully searchable), to help improve the quality and speed of judgements. This would facilitate much shorter arguments and enable judgments to be expedited. More broadly, all modern technology will be actively used to support the justice system.1.5.13.5 TELECASTING COURT PROCEEDINGS ON CONSTITUTIONAL MATTERSExcept where matters of state security are involved, the Supreme Court will be required to telecast court proceedings on any Constitutional matter free of cost on social media and any private TV channel that wishes to broadcast these proceedings, so the people of India can better understand the framework and structure of our Constitution.1.5.14 REPEAL OF REDUNDANT LEGISLATIONA vast amount of irrelevant legislation remains on the Indian statute book. All laws, particularly pre-1947 laws will be reviewed for relevance and where found unnecessary, will be repealed within three years.1.6 Consumer protectionIt is bad business to be deceitful. ‘A habit of deceit is a mark of bad character, and bad character has a way of revealing itself no matter how cunning the individual. Deceit is both bad karma and bad business. Commerce [therefore] elevates manners and probity’. Information about a business’s character spreads across the society through gossip, newspapers and electronic media, legal case law, or even information that consumers may pay, for such as Consumer Reports in the USA. Strong business competition is a driver of good behaviour.However, there are cases where businesses cause a loss to buyers and either deny these losses, or ignore them, or themselves disappear. Such cases require specific action by the government. Where such losses are relatively minor, judicial remedy can be costly to everyone. We are committed to establishing a government led consumer protection agency that will deal with minor cases of misdemeanour by businesses and use persuasion and public shaming in cases of obvious damage. Where necessary, we will prosecute such businesses in the court of law on behalf of consumers.We will also regulate the minimal contractual requirements for various services so companies do not use the ‘fine print’ to exclude themselves from liability where they must take responsibility.

League and court battlesThe ownership of the badminton league is already being fought in court while in the Indian Super League (ISL), the football league faced a major controversy when the ISL regulatory commission banned popular club FC Goa for ‘indiscipline’ and imposed a hefty fine of US$ 1.6 million on the club owners. The club had boycotted the final prize distribution ceremony last year after some players had made allegations against the match officials.The FC Goa management had made adverse comments in the media disputing the result of league’s final last year. The team co-owner Dattaraj Salgaocar claimed that two penalties given against his team in the last five minutes changed everything. “It was a terrible referring, one-sided and it was already decided to give away the match to Chennai team,” he alleged.Amidst all this, India remains at a low 162nd spot in FIFA rankings. So much so that a nation with huge population pool to nurture talent is often beaten by much smaller nations like Nepal and war-struck Afghanistan.Interestingly, European and German clubs are far more popular in India than the Indian clubs. This is mainly due to live telecast of the FA Cup, the Bundesliga and other international fixtures. It has produced thousands of armchair football fans. But the sport has vanished from the masses. Most of the schools in India do not even have a playing field. And wherever there are fields they are dotted with cricket players. Hardly anyone plays football. The standard, therefore, remains low.During the league seasons, there is always a fight between clubs or franchises of the league and the national coaches. While the franchises want players for League fixtures, coaches demand that they be in a coaching camp for national duty. The fight goes on with the standard of the game static.Competition law and sportsWhile cricket is the king of sports in India, other team sports like football and hockey and recently even Formula 1 races are gaining popularity and viewership with large corporates evincing interest in sponsorship and willing to invest in building brands and some even acquiring popular overseas clubs that attract a young audience. IPL is now in its fifth season and its continued success has clearly demonstrated the commercial viability of franchisee, endorsement and broadcasting rights for club and league sports. The moot question therefore is whether league and club events can be held outside the National Sports Federation (NSF) and if yes, the real benefits of such events including increasing the popularity of such sports.Sports events worldwide are organized in a pyramid structure, where a particular sport is governed and regulated by a single International Federation (IF) with various NSFs affiliated to it. The IF governs the regulatory aspect i.e. laying down the rules of the sport, eligibility criteria and playing conditions. The IF also makes the annual calendar for that sport and conducts the world championship and other international level events. A corollary at the national level would be that the NSF would follow the regulations of the IF as a condition of its membership and have exclusive powers to make the annual calendar, develop grass-root level of sport and conduct tournaments and training camps in the country.The importance of the pyramid structure and the riskto the sports due to multiple sport federations have been recognized by IOC and have been addressed in the European Commission’s Helsinki Report and the White Paper on sport. Integrity, uniformity and strict control over regulations ensure that non-discriminatory uniform rules are applied to the sport worldwide and encourage growth of the sports across the globe. It includes sporting sanctions like disciplinary action, suspensions, fines and bans for behavior contrary to the spirit of sports which lie at the core of the sporting movement and can be applied only within the sporting structure.The directions of the Delhi High Court directing the Competition Commission of India (CCI) to undertake enquiry against the All India Chess Federation for preventing its players from taking part in a tournament outside its aegis, BCCI’s sanctions on the Indian Cricket League and the conduct of the World Series Hockey by the Indian Hockey Federation allegedly fall within the ambit of the IF/NSF trying to curb the advent of breakaway leagues through their rules.The IF/NSFs’ rules restricting rival tournaments and release of players for these tournaments (e.g. India) have come under the scanner of competition/anti-trust laws like abuse of dominant position and anticompetitive agreements leading to unreasonable restraint on trade. The sports industry is unique because the pyramid structure which ensures monopoly is essential in maintaining the integrity of sport and unlike other industries, the industry thrives on competition rather than from the lack of it. This reasoning gives birth to the exception of ‘Specificity of Sport’ i.e. certain sporting activities are excluded from the purview of the competition laws. The European courts while creating this exception have divided the IF/NSF activities into two parts. The first being pure sporting functions whereas the second being activities having a substantial economic impact.Pure sporting activities like laying down the rules of the sport, defining the size and weight of the ball and dimensions of the playing field are excluded from the ambit of competition laws. But activities of the IF/NSF having substantial economic impact are within the purview of the competition law.The regulatory power of the IF/NSF if used to gain commercial and financial advantage would fall within this ambit provided the following conditions are satisfied:That the agreements are not anti-competitive i.e. they do not attempt/cause appreciable adverse effect on competition; and/orThat they are not abusing their dominant position and are not imposing unfair or discriminatory conditions.The European courts have held that these conditions in the sporting sector are satisfied when a particular rule though restricting competition has a larger public objective and this objective can be achieved only by applying certain restrictive rules that are essential for the integrity, continuity, organization and conduct of the sport at national and international levels, and the rule is applied uniformly and transparently.The Competition Commission of India is faced with a similar task today to recognize the specificity of sport and carve out exceptions in the Indian scenario. The decision of the CCI will have a huge impact on the Indian sports industry as many a corporate await a chance to start their own breakaway leagues and commercially gain from the revenues generated from these leagues.Sports and Competition LawTwo teams playing against each other are like two corporate firms producing a single product. The product is the game, weighted by the revenues derived from its play. In one sense, the teams compete; in another, they combine in a single firm in which the success of each branch requires efficiency. Unequally distributed playing talent can produce “competitive imbalance”. Remuneration of the team members largely depends on the level of competition between the teams in the particular sports. sport is generally organized in a kind of a ‘pyramid’ structure, with a single governing body controlling most regulatory and commercial aspects of each sport, the governing body appears to be de facto ‘dominant’ and therefore claims relating to the abuse of monopoly.Sports governing bodies such as BCCI, often attempt to preserve for themselves the sole ability to regulate the sport and to organize events. In order to prevent the development of rival organizations, they have sought to tie players in by prohibiting them from competing in other events, on pain of exclusion from ‘official’ events, and such rules have been the subject of challenge under competition law.When the Zee launched Indian Cricket League, the BCCI sacked Kapil Dev as chairman of the National Cricket Academy for aligning with ICL and barred all the 44 defecting players from playing for India or at the domestic level. It made clear that any cricketer who aligns with ICL will be banned for life from playing for India. Such practice on part of the BCCI may attract liability under the provisions of the Competition Act, 2002. As per Section 4(2)(c) of the Act if any enterprise “indulges in practice or practices resulting in denial of market access in any manner”, then it shall be liable for abuse of dominant position. Thus, such practice of banning players from domestic tournaments on account of joining the rival leagues may prove expensive for the BCCI, which may face a challenge on grounds of abuse of dominant position.The denial of stadiums by the BCCI can attract liability for abuse of dominant position under s.4(2)(c) of the Competition Act, 2002 as by denying the use of essential facility under its control it raises the barriers to entry in the market for its competitors, resulting effectively in denial of market access. Operating from just one stadium in Panchkula (in Haryana near Chandigarh), the ICL clearly missed out on one of the integral aspects of leagues sports i.e. a fan base, since it is unable to capture home crowds for matches on account of non-access to the stadiums in the club’s cities.Sports Law and ArbitrationArbitration, a form of alternative dispute resolution (ADR), is a legal technique for the resolution of disputes outside the courts, wherein the parties to a dispute refer it to one or more persons (the “arbitrators”, “arbiters” or “arbitral tribunal”), by whose decision (the “award”) they agree to be bound. It is a settlement technique in which a third party reviews the case and imposes a decision that is legally binding for both sides. Other forms of ADR include mediation (a form of settlement negotiation facilitated by a neutral third party) and non-binding resolution by experts. Arbitration in India is governed by the Arbitration and Conciliation Act 1996 (“Indian Arbitration Act”), which is based on the UNCITRAL Model Law. The Indian Arbitration Act is broadly divided into two parts. Part I applies to arbitrations held in India, whether domestic or international, and Part II applies to arbitrations held outside India. Part II, incorporates the rules related to international arbitrations governed by the New York or Geneva Conventions. In sports, the disputes are first referred to the federations that govern a particular sport and subsequently the international authorities that govern the sport. e.g. in hockey disputes are referred to the Indian Hockey Federation and after that the International Hockey Federation.At a time when sports are becoming more professional and the stakes are becoming higher than ever, dispute resolution takes on an increasingly important role. In many respects arbitration offers the most suitable solutions with regards to the rapidity, diversity, incontestability and professionalism of the decisions rendered. With regular increase in the number of sports-related disputes in the country, India requires an independent authority that specializes in sports-related problems and that is authorised to pronounce binding decisions. The disputes when referred to courts take a long time to come up with the final decision since the Indian courts are already piled up with a number of pending cases. There is a need to have an authority for sports that offers flexible, quick and inexpensive method of resolution of disputes. With the inauguration of India’s first arbitration centre in Delhi in 2009, India is recognizing the necessity of arbitration for quicker disposal of cases. The increasing use of arbitration in sport over the last decade has challenged the legal framework in which arbitration disputes are addressed in many jurisdictions.Court of Arbitration for SportArbitration exists in international sport through the Court of Arbitration for Sport. All international disputes relating to sports are referred to it. The most prominent sports dispute resolution forum is the Court of Arbitration for Sport (CAS) which has its headquarters in Lausanne, Switzerland. The CAS was created by the International Olympic Committee (IOC) in 1983. It also has two permanent outposts in Sydney, Australia and New York, USA. It has a minimum of 150 arbitrators from 37 countries, who are specialists in arbitrations and sports law. They are appointed by the International Council of Arbitration for Sports (ICAS) for a four year renewable term and need to sign a ‘letter of independence’. The CAS also has a permanent President who is also the President of ICAS.The body was originally conceived by International Olympic Committee (IOC) President Juan Antonio Samaranch to deal with disputes arising during the Olympics. It was established as part of the IOC in 1984. However in a case decided by the CAS, an appealed was made to the Federal Supreme Court of Switzerland, challenging CAS impartiality. The Swiss court ruled that the CAS was a true court of arbitration, but drew attention to the numerous links which existed between the CAS and the IOC. The biggest change resulting from this reform was the creation of an “International Council of Arbitration for Sport” (ICAS) to look after the running and financing of the CAS, thereby taking the place of the IOC. CAS is placed under the administrative and financial authority of the International Council of Arbitration for Sport (ICAS).Almost all international sports federations or associations which are part of the Olympic Games require sports disputes arising between themselves and sportspersons to be decided by the CAS. Sporting federations whose sports are not part of the Olympics such as Formula I where the FIA which is the governing body of motor sports has its own dispute settlement tribunal. Even some sports which are included in the Olympics have their tribunals like football where its governing body FIFA has its own tribunal. For example, in 1993, a claim of bringing Formula I into disrepute was brought against former FI champion Alain Prost and the Williams Renault Team. The matter was however, satisfactorily resolved by the FIA resulting in Prost escaping a possible ban from competing in the remaining FI races of that particular season.A dispute may be submitted to the CAS only if there is an arbitration agreement between the parties which specifies recourse to the CAS. The language for the CAS is either French or English. In principle, two types of dispute may be submitted to the CAS:those of a commercial nature, andthose of a disciplinary nature.CommercialThe first category essentially involves disputes relating to the execution of contracts, such as those relating to sponsorship, the sale of television rights, the staging of sports events, player transfers and relations between players or coaches and clubs and/or agents (employment contracts and agency contracts). Disputes relating to civil liability issues also come under this category (e.g. an accident to an athlete during a sports competition). These so-called commercial disputes are handled by the CAS acting as a court of sole instance.DisciplinaryDisciplinary cases represent the second group of disputes submitted to the CAS, of which a large number are doping-related. In addition to doping cases, the CAS is called upon to rule on various disciplinary cases (violence on the field of play, abuse of a referee). Such disciplinary cases are generally dealt with in the first instance by the competent sports authorities, and subsequently become the subject of an appeal to the CAS, which then acts as a court of last instance.The CAS is governed by its own Statutes and Rules of Procedure namely the Statutes of the Bodies Working for the Settlement of Sports Related Disputes, Code of Sports Related Arbitration and Mediation Rules. According to Articles S12, S20, R27 and R47 of the Code, the Appeals Arbitration Procedure is open for the appeal against every decision rendered by a federation or club and not limited to disciplinary matters, especially doping cases. In addition, Article R57 empowers the CAS Panels not only to annul a certain decision, but also to replace a decision by a decision by a decision of the arbitrators, or to refer the case back to the issuing body. Moreover, Article R58 authorises the Panel to apply the ‘rule of law’ it deems most appropriate for the case. Thus the Panels may deviate from the laws of the country in which the federation is domiciled and reach a decision on the basis of laws of another country or other rules of law, such as general principles of law.The CAS acquires its jurisdiction in a particular case only through the mutual consent of the parties involved. Currently, all Olympic International Federations and many National Olympic Committees have recognised the jurisdiction of the CAS and included in their statutes an arbitration clause referring disputes to it. The CAS hears approximately 200 cases per year. While it was the international response to the rise in the use of performance-enhancing drugs and the resulting doping cases that fueled the creation of the CAS, the Court is called upon to assist in a wide range of sport conflicts, including sponsorship disputes, the eligibility of a particular athlete in accordance with a sport’s constitution, as well as the resolution of disagreements concerning competition results. The determination of issues arising in doping cases remains a significant portion of the CAS caseload.CAS and MediationIn addition to arbitration CAS also offers mediation services to any requesting parties of a sports dispute. Unlike arbitration, the mediation process is not binding—the mediator will provide recommendations, with solutions suggested, but these are not imposed as a result as in the case of arbitration. Mediations are designed to permit the adverse parties an opportunity to air their grievances in an atmosphere aimed at conciliation of the dispute.ADVANTAGES FOR REFERRING CASES TO CASExpertise in sports-related disciplines (there are more than 300 arbitrators from 87 countries qualified to hear CAS disputes) whereas a typical civil judge will not likely possess such sports-specific knowledge.Its arbitrators are all high level jurists and it is generally held in high regard in the international sports community.Procedure is flexible and informal.Expeditious proceeding as cases are heard and determined within a few months from the date of reference. During the Olympics, awards are required to be made within 24 hours.Lower legal cost to the participantsAlso provides mediation servicesCAS is a private procedure and therefore is conducted without the public or media interference. The arbitrators and CAS staff are obligated not to disclose any information connected with the dispute.IMPORTANT CAS RULINGSIn 2003, Canadian cross country skier Becky Scott successfully appealed to the CAS with respect to her claim that she be awarded the 2002 Olympic gold medal in the 5-km pursuit event. Russian skiers Olga Danilova and Larissa Lazutina finished first and second respectively in the competition, with Scott in third place, and each athlete passed their post-event doping test. Danilova and Lazutina each failed a subsequent doping test administered in relation to another Olympic cross-country event, when the presence of a prohibited blood doping agent, darbepoetin, was detected in each skier’s sample. Scott appealed her 5-km race result on the basis that both Russian skiers were engaged in ongoing doping practices. The Scott ruling was the first time in Olympic history that a gold medal had been awarded to an athlete as a result of a CAS ruling.In 2005, the CAS arbitration panel ruled that American sprinter Tim Montgomery be banned from international competition for two years as a result of doping, in spite of the fact that Montgomery had never failed a doping test. The CAS ruled that it could find a doping violation on the basis of the third party evidence called against Montgomery, most of which connected Montgomery to the Bay Area Laboratory Cooperative (BALCO) athlete steroid scandal that had arisen in the United States in 2003.In February 2010 Five-time Olympic speedskating champion Claudia Pechstein lost her appeal against a two-year ban for blood doping. CAS dismissed the German’s appeal against a ban imposed by the International Skating Union.Setting aside proceedings against CAS arbitral awards may only be filed with the Swiss Supreme Court due to the seat of CAS tribunals being in Lausanne.Everything you need to know about sports legislations in IndiaPer se, there are no central or state legislation to regulate sports in India; the Ministry, which was set up by the government was responsible for achieving excellence in different sports events which were conducted in India and also to build a good infrastructure for sports. By and large, the administration of sports activities is in the hands of autonomous bodies, such as Sports Authority of India (SAI), Indian Olympic Association (IOA), Hockey India (HI) and Board of Control for Cricket in India (BCCI).These governing bodies are recipients of government’s aid and are also registered under the Societies Registration’s Act of 1860.[3]THE FOLLOWING GOVERN THE WHOLE OF THE SPORTS LAWNational Sports Policy, 1984/2001The main objective behind enacting this was to raise the standard of sports for the reason that it was degrading due to corruption, betting, etc. It was later realized that the Bill of the year 1984 was incomplete, and its implementation was not complete, and in a bid to revise the bill the same was reformulated in the year 2001.The guidelines are three-fold:Firstly, to earmark the areas of responsibilities which different agencies have to undertake to develop and promote sports.To lay down the procedure to be followed by the autonomous bodies and federations to make the assistance and aid by the government available.And also identifying the sports federation that is eligible for coverage under these set guidelines.It was only after this policy that the lawmakers realized the importance of sports and therefore ‘Sports’ was included in the Constitution in the State list of the Seventh Schedule (Entry 33). The central government by the provisions of this policy aims to achieve excellence in sports on the national and global plane and collaborates with the state government and other agencies to achieve it.Sports Law and Welfare Association of IndiaIt is a non-profit national organization that aims to understand, and work for the advancement of ethical sports law in India for promoting sports. The primary task of the organization is to provide consultancy services on different matters like Indian sports policy, sports injuries, health and safety in sports, IP issues in sports, etc. It also provides a forum for legal practitioners who represent different people, to set up rules for ethics for sports persons.Sports Authority of IndiaThe Sports Authority of India (SAI) is an apex National Sports body set up in the year 1984 by the Ministry of Youth Affairs and Sports for broad-basing and bringing excellence in sports across India as a whole. It is located across 9 regions at Bangalore, Gandhinagar, Chandigarh, Kolkata, Imphal, Guwahati, Bhopal, Lucknow and Sonepat; and two Academic institutions like Netaji Subhash National Institute of Sports (NSNIS), Patiala and Laxmibai National College of Physical Education. It also accounts for academic programs like coaching and physical education awareness programs.[4]The Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) ActThis Act was passed in the year 2007; its main objective was to provide access to listeners and viewers so as to encourage a larger audience. It shall cover the sporting events which are of national importance through mandatory sharing of sports broadcasting signals with Prasar Bharati and for matters related to it. The Act provides that no content right owner or holder or television or radio broadcasting service provider can carry out a live TV broadcast of important national sporting events. For doing this, it has to share its live broadcasting signal simultaneously (except advertisements) with the Prasar Bharati.Role of different stakeholdersMinistry of Youth Affairs and SportsTo lay down the conditions for eligibility of National Sports Federation to get recognitionThe conditions that have to be fulfilled by NSFs and other agencies if they wish to acquire government aid and support.To provide assistance to the NSFs if they carry out long-term development program.National Sports FederationThe responsibility for the complete management, direction, supervision and regulation of the discipline and promotion, development and sponsorship of the discipline is on National Sports Federation. They are expected to discharge these responsibilities in consonance with the principles laid down in the Olympic Charter or the Charter of the Indian Olympic Association in compliance with Government guidelines applicable to NSFs.SAIFor providing the necessary support to NSF for the identification, training, and coaching of sportspersons, also to improvise infrastructure, equipment, and such other facilities, the SAI plays a significant role. Further SAI will also be responsible for releasing funds to NSFs against proposals approved by the Government. The release of funds to IOA shall, however, continue to be made by the concerned Ministry.[5]National Anti-Doping AgencyThe centre has set up a National Anti-Doping Agency (NADA) as an autonomous body. It consists of persons from government and non-government agencies, scientists as experts and also members from IOA. In the recent past, the controversy surrounding the intake of dope by sports persons is prevalent and in this light, NADA was set up. It shall carry out ‘in competition’ and ‘out of the competition’ testing on the sportsman. NADA helps in the regulation of sports activities so that it can be corruption-free and non-controversial.Sports law of United States of AmericaThe U.S.A. has a very systematic law for sports. They have not provided with single legislation, but have divided it into 3 categories-:Amateur sportsIt includes athletic activities from high school athletics to organize intercollegiate or international competitions which are often organized and managed by groups that make rules for eligibility and competition, and courts do not interfere with the actions of these groups as long as they abide by the rules. The Amateur Sports Act of 1978 created the Athletic Congress, a national body for governance of amateur athletes, which administers a fund that allows amateur athletes an option to get funds and sponsorship payments and also not lose their amateur status.Professional sportsIn the case of some professional sports activity, most sports leagues do have a standard player’s contract, and that shall be the guiding force behind a contract between players and owners.International sportsThe two main international sports events include the Olympics, sponsored by the International Olympic Committee, and the World Cup, which is sponsored by FIFA. The United States has done the charting of the United States Olympic Committee (USOC) in the year 1950.Some jurisdictions have passed separate legislation relating to sports. For example, in India sports information is in the Concurrent list of the Seventh Schedule (entry 33) of the Constitution on which both the union and state legislatures are proficient to put together laws. There are 3 States; Rajasthan, Himachal Pradesh and Uttar Pradesh, which have enacted laws on regulating sports activity including registration, regulation and recognition of Sports Associations (Uttar Pradesh has since repealed the Act).It is one of the main revenue generating industries of the world and with the propagation of the Internet and other forms of media, the sports industry is growing at a faster tempo. An industry of billions of dollars with an all-encompassing worldwide presence is bound to raise its own disputes. This has resulted in the growth and development of sports law as a separate regulation in its own right.

Answer will be lengthy but worth it.First you need to know about US-CHINA relations.On Dec 5,2018 in Washington DC the United States and the world marks the passing of President Bush Senior.President Bush Snr. was a truly remarkable President. For those of us engaged in the business of the world—the first Gulf War, the end of the Cold War, and the reboot of the U.S.-China relationship in the early 90s after the implosions of 1989—President Bush Snr. was a truly remarkable American, and a truly remarkable American President. And we honor him this day.Over the last twelve months, much of Asia has been turned on its head through the new dynamics we have witnessed in U.S.-China relations and on North Korea. It was only 12 months ago that the U.S. and North Korea appeared to be on the verge of armed conflict as “rocket man” was threatened by President Trump with “fire and fury” over the North’s continued nuclear weapons program. Twelve months later, President Trump and President Kim appear to be the best of friends following their historic summit in Singapore, and despite the fact that there seems to have been negligible substantive progress on denuclearization, the thaw in inter-Korean relations has been unprecedented.Twelve months ago, President Trump had just returned from his state visit plus to Beijing, where it seemed Trump’s anti-Chinese rhetoric of the 2016 campaign had finally been put to bed. But 12 months later, China and the U.S. are now in the middle of a still unresolved trade war, while the Administration has declared America’s 40-year long era of strategic engagement with China is now over and a new period of strategic competition has begun.Twelve months ago, the American, European and Chinese economies and markets were roaring. Whereas 12 months later, they are beginning to slow, albeit for different reasons, causing concerns about the sustainability of long-term growth, employment and income levels.If a week is a long time in politics, in international politics and economics, a year is an eternity. And China remains a dominant driver in all three of these major unfolding changes. During the course of this year, we have all been wrestling with three big questions: how is China changing under Xi Jinping; how is America changing under Donald Trump; and to what extent have the traditional moorings of the U.S.-China relationship of the last 40 years now been severed, in which case what, if anything, can now anchor the relationship into the future?In other words, are we now as Graham Allison warns us, now “destined for war”—either cold, medium or hot? Or is a new strategic equilibrium now possible between the two, based on a new common strategic narrative for the relationship which can be shared and observed in both capitals? The truth is, these are genuinely hard questions. There force us to think clearly about one another through the fog of perception and misperception. They force us to think clearly about our values, our interests and our identity. And they force us to think through carefully what is essential, what is non-essential, where should there be compromise, and what should remain contestable.I do not intend to try to answer all these questions today because they require further thought, although I am deeply conscious of the fact that they must be analyzed and answered soon. That’s because we are now in potentially dangerous terrain - some sort of “no man’s land” between one set of strategic assumptions about each other that have stood for several decades, and a brave new world where everything may be up for grabs.Over the last twelve months, we have, however, made a start in a series of addresses aimed at analyzing core aspects of the collective challenge we are facing. In March I spoke at West Point on the question of what does Xi Jinping want, while in June at the Lee Kuan Yew School in Singapore I began to analyses the Marxist origins of Xi’s emerging worldview. In September I spoke on America’s response to Xi Jinping though a new declaratory doctrine of strategic competition and posed a series of questions for U.S. policymakers as they seek to operationalize that strategy. I’ve also spoken in Silicon Valley on what strategic competition might look like if allied to a high technology war between the two countries. And most recently in Jakarta I’ve sought to analyze what this emerging strategic cleavage between Washington and Beijing means for South East Asia which has become the new “great game” for strategic influence, as ASEAN itself continues to hedge against a rising China and what is perceived to be an indifferent, uncertain and potentially unreliable America. We need also to analyze other regions within a similar frame: including Africa, Eurasia, the Middle East, South Asia, and Latin America. There are commonalities but differences across them all which we need to understand.In my remarks today, part of the same series, I want to look at the state of the relationship at year’s end in the aftermath of the Buenos Aires Summit; the impact of the continuing trade war on China’s unfolding domestic economic policy debate and where that may lead in the future; as well as what are the prospects for the overall U.S.-China relationship for the year ahead. I’m always challenged by Henry Kissinger who enjoins us in strategic analysis to understand first and foremost what we are seeing. And to ask ourselves also what we are not seeing. All before going onto the critical question of policy of what then is to be done.The Buenos Aires SummitWhat Presidents Trump and Xi Jinping did in Buenos Aires was buy time. Three months’ worth in fact. Which is good when measured against the alternative, which was a full-blown trade and broader economic war between the two countries starting next month. Which in turn had the potential to trigger a further collapse in global market sentiment, particularly coming on the back of other negative trends emerging in both the U.S. and Chinese domestic economies. But even from those of us who have been arguing publicly that on balance a deal of some sort between the Chinese and the Americans was more probable than not: one swallow doth not a summer make. Much can still unravel. Both Trump and Xi have indeed bought valuable, though limited, time for themselves and the world. But for a number of different reasons.To begin with, there are five, complex baskets of policy disagreements to work through. First, the current annual $370 billion bilateral trade deficit needs to be reduced. Then there are the possible cuts to tariff rates themselves. The Chinese average tariff rate currently stands at about 9.8% compared with an American average tariff rate at 3.4%. Then there are those industry sectors that are most politically sensitive in each economy, led by agriculture: Republican-voting farmers in the U.S., matched by China’s historical paranoia over national grain self-sufficiency. Then there are the three hardy perennials: intellectual property protection; forced technology transfer (an American term) and the use of the full resources of the Chinese state to support China’s stated national industrial strategy (Made in China 2025) to dominate global advanced technology markets and product standards by 2030. These three are the really ugly ones. Setting a deadline of 1 March 2019 to resolve these five problems is smart. Particularly if it’s driven hard by the prospect of a further working-level summit with Trump and Xi later in March, although I note that a number of trade professionals have argued that 90 days is so ambitious that it’s unrealistic and sets both sides up for failure.This 90-day pause also serves Trump and Xi in other ways. By March, Trump will have a fuller idea of the lay of his domestic economic and political landscape. He will then know the extent of any significant softening in the economy already induced by monetary policy tightening by the Fed, and the extent to which the American economy could then sustain further tariffs should the efforts of Chinese and American officials have come to naught. On the political front, the Mueller investigation should also have reported by March. If the results of the investigation are seriously bad for Trump, then we should be alert to the possibility of Trump having a renewed interest post-Mueller in doubling down against China—if in fact he is found then to have been compromised in his dealings with Russia. That certainly would be an “X factor” that our Chinese friends are worried about.March, however, also presents Xi and his chief economic advisor Liu He with opportunities of their own. On the international front, March might enable Xi to take a bold trade message to Davos in January, should he decide to go. China has sought to mobilize global sentiment in support of its efforts to uphold the global economic and environmental order. A major Chinese announcement on trade liberalization across the board, not just on a bilateral basis with the U.S., could indeed take the world by storm. It would also send a stark signal to the world on the 40th anniversary of the Chinese economy’s “reform and opening up”. And that indeed could represent a serious new challenge to American global leadership.Furthermore, a serious commitment to trade liberalization from Beijing, accompanied by the underlying message of competitive neutrality between foreign firms and domestic firms, as well as between private firms and state-owned enterprises, would reinforce Liu’s valiant efforts in recent months to re-prosecute the full implementation of China’s stalled “phase two” economic reform program first announced in 2013. This is something that China desperately needs for its own economic interestsThis takes us to the core question of the organic relationship between any concessions that China might offer the United States' trade and economic negotiators bilaterally, and those things that Chinese economic reformers understand needs to be done in any case domestically, if indeed the economy is to be able to have strong, sustainable growth into the future.China’s Changing Domestic Economic NarrativeThose who follow the Chinese economy closely understand the significance of the economic reform blueprint first released by Xi Jinping’s administration in November of 2013. This came earlier in his period in office. After a fierce internal debate in its preparation, agreement was finally reached on its central organizing principle that: “the market play the decisive role in resource allocation.” The decision incorporated 60 different reform measures covering ten broad categories of trade, cross-border investment, state-owned enterprise reform, competition policy, financial system reform, fiscal policy, innovation policy, labor, environment, and land reform. This was a conscious effort by China’s economic leadership at the time to transform China’s historical economic growth model over the previous 35 years to what became then universally known as “the new model”.The old model, as we are all familiar, was based on two pillars: labor intensive, low-cost manufacturing for export; reinforced by high levels of public investment in national economic infrastructure. The new model was based on three pillars: high levels of domestic consumption; private sector-driven innovation following the completion of the SOE-driven infrastructure build; and third, a sustainable development revolution.Implementation began in 2014-15 but the party’s confidence in the market was dealt a body-blow by the implosion of Chinese equity markets, and broader financial markets, in August 2015. From that time on, as we at the Asia Society Policy Institute have tracked throughout our China economic dashboard, the pace of implementation of the reform program slowed drastically and in most areas ground to a complete halt. Harsh capital controls were also imposed on China’s capital account, making it much more difficult for private firms to expand their operations abroad. At the same time, because of legitimate fears about the size of China’s debt to GDP ratio, driven in large part by an out-of-control shadow banking sector, as well as ballooning local government debt, the central government began a national deleveraging campaign which over the last several years has also resulted in credit being withdrawn indiscriminately from otherwise profitable private firms. At the same time, Chinese SOEs had been given a new lease of life where the national deleveraging campaign has had less effect on SOEs than their private sector counterparts.Furthermore, there has been the rolling impact of China’s anti-corruption campaign has fundamentally slowed government decision-making processes as officials sought to protect themselves from political exposure, which meant that the private sector-driven development projects also began to slow significantly. To this was added Xi Jinping’s emphasis on the central role of the party and the primacy of ideology, resulting in an enhanced role for party secretaries operating within private firms. And on top of all the above, there has been considerable confusion as to the precise implications of China’s so called “mixed ownership model” – whether it was an invitation for private firms to absorb poorly-performing public trading enterprises; or whether in fact it was creating a fresh opportunity for SOEs to “nationalize” well-performing private firms.All these factors had been unfolding across the Chinese economy over several years prior to the beginning of the U.S.-China trade dispute in the first half of 2018. The net effect of all of the above has been a growing number of anecdotal reports pointing to the significant slowing of Chinese economic growth during 2018 with private sector firms, concerned about an increasingly adverse policy environment, refraining to invest in further expansion of their enterprises, either at home or abroad. By the time the annual leadership retreat occurred at Beidaihe in August this year, reports had begun to come in from across the country that China was facing a serious domestic crisis of private sector business confidence with potentially profound implications for future growth.From Adversity Springs Opportunity: Competition Policy ReformIt was about at this time that those who have long understood the continuing imperatives of China’s market economic reform agenda saw an opportunity emerging out of adversity – namely to bring about the next wave of competition policy reform within the Chinese economy by opening China to more foreign competition, thereby lifting long term productivity growth. It will be recalled that competition policy reform had long been a key component of the original 2013 national economic blueprint, but had been allowed to slide.The need for a more effective competition policy was particularly felt within China’s poorly performing financial services sector. In any efficient market economy, the effective allocation of capital across competing corporate needs, based on the business case advanced by would-be borrowers, and the associated risk taken on by lenders, is fundamental to sustainable economic growth. By contrast, China’s financial services industry has developed inefficiently, despite the growing number of domestic private players within it, because capital allocation decisions are driven less by market considerations than by political or administrative necessity.China’s economic reformers are fully seized of the dimensions of this problem in the heart of the Chinese financial system. The reformers see the future lying not just in bringing China’s grossly indebted second-tier banks and SOEs back within reasonable borrowing limits from their previous borrowing and lending habits. They equally recognize the structural importance of introducing market disciplines for capital allocation decisions for the future. In other words, it’s not just the matter of cleaning up decisions from the past. It’s also about creating a functioning market framework for the future so that scares financial capital is allocated rationally, and corporate debt burdens do not simply blow out once again.Chinese reformers also see the greater introduction of wholly-owned foreign financial institutions into the Chinese domestic market as being a new way of grafting these market disciplines into the Chinese system. This differs qualitatively from previous Chinese approaches to allow limited foreign financial institutional participation within China – where foreign presence has largely been limited to minority stakes in second tier banks with the limited policy objective of Chinese banking officials “learning” how Westerners do these things, before eventually asking said Westerners to leave. The alternative approach is to fundamentally shake up the Chinese system from the top down, by introducing large-scale foreign competitors across the breadth of the financial services industry in order to force Chinese firms to be more efficient.This year, for example, we have seen a number of foreign investment limitations eased for entry into China’s $45 trillion financial services sector. These have included:Foreign investment limits in securities companies and mutual funds were raised to 51% in April and set on a three-year path to allow full foreign control. Indeed last Friday, UBS became the first foreign securities firm to be approved for majority ownership, with applications from JPMorgan and Nomura in process.Foreign insurance firms are now to be allowed a controlling 51% ownership of domestic insurers as of May this year. And German insurer Allianz was approved to be the first wholly-owned foreign insurance company on November 25. French firm AXA has quickly followed, purchasing the outstanding share of their previous joint venture on November 26.Foreign ownership limits on banks and other debt managers were also removed in August. Previously foreign firms were limited to 20% as a single entity, or 25% as a group. To-date, however, no foreign firms have applied to use the new regulations.Additional Support for the Private SectorFinancial services reform, driven by increased foreign participation is one thing. Wider reforms to promote China’s somewhat beleaguered private sector have also been forthcoming. On 19 November, the State Administration of Taxation issued a policy note outlining 26 concrete measures centered on reducing the tax burden for private firms. According to the State Administration of Taxation, these were not yet fully utilized. Nonetheless, in the most recent quarter, there were over 143 billion RMB (21 billion USD) in tax deductions for Chinese SMEs, a 41% increase from third quarter last year.Beyond these various reform measures, there have also been recent announcements from the central government aimed at improving credit availability to Chinese firms. The party secretary of the PBOC on 7 November outlined the new so-called “1-2-5” policy.This was a directive for at least 1/3 of new corporate loans from large banks to be extended to private firms;At least 2/3 of new loans from small and medium size banks; andOver the next three years, for at least 50% of all new corporate credit across the banking system to be extended to the private sector.First Steps Toward a New Chinese Political Economy?To repeat: the key to the success of this newly emerging political economy in China is the extent to which China’s economic reformers are able to develop a domestic political narrative within the party and the country which explains any “external concessions” to the U.S. Administration as necessary internal reforms to undergird China’s long-term economic growth prospects.This is a tough challenge given that over the last several years at least, Xi Jinping’s political center of gravity has lain elsewhere – namely his predilection for a stronger party, stronger politics, and a more nationalist posture. Nonetheless, it seems that Xi Jinping has now had a large encounter with economic reality - Chinese-style. Namely that the Chinese private sector really matters! Furthermore, if this economic policy correction continues, basically from left to right, then this may turn out to be a seminal period of reform indeed.There are grand precedents in recent Chinese history for such economic policy corrections to occur. Barely three years after Tiananmen, Deng Xiaoping undertook his famous Southern Expedition, where he told China to redouble its efforts in economic reform and opening to the world. And China did. Five years later Jiang Zemin, in the midst of the Asian financial crisis said to China’s emerging entrepreneurial class to “go out into the world”. And they did. Five years after that, Zhu Rongji in 2002 secured China’s admission into the WTO, heralding the next phase of China’s economic reform program, including China’s emergence as the global export superpower it has since become.It may well just be that we are witnessing a policy redirection of a similar order of significance with what is unfolding now. Certainly a careful reading is warranted of Xi Jinping’s speech of September 27 on the economy; Vice Premier Liu He’s of October 19 on the private sector, and perhaps most significantly of all Liu He’s comprehensive statement on China’s future economic direction outlined in his address to the Hamburg economic forum in late November on the eve of the G20 summit.Of course, many things can go wrong with all of this. Policy momentum may stall.Chinese bureaucrats may simply hedge their bets and sit on their hands. Even worse, they may simply resort to the vast array of non-tariff barriers at their disposal to undermine the letter and the spirit of reforms to China’s overall trade and investment policy environment on the ground. And beyond all that, China’s private sector, still facing significant restrictions on the capital account, may not respond positively to what the party and the government are now telling them to do, on the grounds that there is too much policy and regulatory unpredictability for them to have sufficient confidence to invest in the future.That’s why it will be critical to see China’s emerging data on private fixed capital investment to see whether Chinese firms have bought the Chinese leadership’s new policy message, thereby unlocking a further period of reform, opening, and sustainable economic growth.Prospects for 2019Against this general economic background, what then are the prospects for the U.S.-China relationship for 2019? By March, it’s probable that there will be an agreement between China and the United States on the quantum of bilateral trade deficit reduction and the import decisions that China will make to bring that about over time. As for tariff reform by March, that is possible, although the degree of technical difficulty remains significant. If it’s a tariff line by tariff line approach, given the multiplicity of tariffs which currently apply to the overall trading relationship, this may well blow out way beyond March. If however Chinese economic reformers take a more dramatic approach by committing to zero tariffs over time, and challenging the Americans to do likewise, that would be precisely the sort of measure which could be announced relatively rapidly. It would, however, run totally against the grain of half a century of training of Chinese trade bureaucrats to give away nothing if at all possible—let alone be seen to “give away everything” in one fell swoop.The reform of so-called forced technology transfer, within the contractual arrangements between Chinese and American enterprises, should be relatively straight forward. This, however, is different to how contractual arrangements may be interpreted on the ground, even in the absence of any specific technology transfer provisions. Intellectual property protection is deeply problematic. Not only are there traditional forms of commercial espionage. There is now cyber espionage as well. Previous agreements reached under the Obama Administration could be reconstituted. But the critical problem remains jurisdictional enforcement of breaches if and when discovered. One possible mechanism for building confidence is for all relevant contracts between Chinese and foreign firms to be made subject to international commercial arbitration regimes located in either Singapore or Switzerland. These could be designed in a manner to specifically deal with IP protection. The recourse to international commercial arbitration is now relatively common around the world. If China objected, it might also be possible to develop China’s own domestic international commercial arbitration system. But for foreigners to have confidence in this system would require China to appoint qualified foreigners to its panel of arbitrators. Other countries already do this. China could do the same. But in the absence of an independent Chinese legal system, even in the commercial law, this would seem logically to be the only way through this continuing thorn in the side of the relationship.On China’s use of state subsidies in support of its national plan for domestic and international high technology market domination, it is difficult to identify any readily available solution. The uncomfortable reality is that all countries use varying levels of government support for their indigenous technology industries. Even if we were to mandate a maximum proportion of state support for a given firm (either by way of state R&D support or other related tax breaks) the problem would invariably arise as to how all of this is measured. I am not therefore confident of a negotiated outcome in this area. America may simply need to outcompete “China at its own game” in terms of a radical increase in public investment in research and development across the full spectrum of information technology and biotechnology sectors. The major public universities would, I’m sure, welcome this with open arms.As indicated above, we should also not rule out the possibility in 2019 of China pitching any tariff reforms that it is prepared to implement to resolve the U.S.-China trade war to the wider international community as well. We should not rule out the possibility, for example, that if China was to undertake something dramatic—like a commitment to zero tariffs over time—that such a commitment would not just be made on the basis of reciprocal actions by the United States, but by all WTO member states. Indeed, this would represent and almost irresistible geopolitical opportunity for China to champion global free trade and to arrest the global trend towards protectionism that currently threatens the wider global economy. Furthermore, we should not rule out the possibility that China approaches TPP 11 member states to negotiate possible accession to the TPP. This would comprehensively outflank the United States within the Asia Pacific region. It would also turn out to be supremely ironic that a TPP originally designed by the Obama Administration as part of its Pivot to Asia, ended up including China but not the U.S. itself. China, when it sees a political and market opening, can be remarkably fleet-of-foot. The technical negotiations would, of course, be formidable. But there is already evidence of a softening in traditional Japanese reservations towards possible Chinese accession as evidenced during Prime Minister Abe’s recent visit to Beijing.On the wider foreign policy and security policy front, 2019 is likely to see China increasingly pull its head in. There is already evidence of a normalization in relations with Tokyo. The Japanese Coastguard has published data already indicating a radical reduction in the frequency of Chinese incursions into the Senkaku/Diaoyudao area in the East China Sea. China is also seeking to de-escalate tensions with the ASEANs over the South China Sea through an intensification of its negotiation of a “code of conduct”. Although maritime incidents with the United States have continued to be sharp. And may well get sharper if the United States implements a more vigorous campaign of Freedom of Navigation Operations in the coming year. China has also sought to de-escalate tensions with India following the bilateral summit with Prime Minister Modi in Wuhan in April 2018. That is likely to continue through the Indian national elections due in 2019. China may also begin to moderate its posture towards Taiwan during 2019 given the remarkably poor results of the DPP in the most recent Taiwanese local government elections.This, of course, would change radically if the United States proceeds, as is likely, with a further significant arms sale to Taiwan.Across Eurasia, the Belt and Road Initiative continues to be implemented. But for those observing China closely, the BRI now attracts considerably less political fanfare within China, at least over the last several months. It’s still too early to tell. But already there is a debate underway in Beijing about revising certain BRI modalities. The Sri Lankan case looms large in the mind of the Chinese official class. So too does the long-term affordability of this multi-trillion dollar project. We may therefore be seeing less Chinese triumphalism over the BRI on 2019 than we’ve seen the last couple of years.Common to all these adjustments in the year ahead is a general tactical approach that until such time as China is able to finally bed down the fundamentals of its trade, investment, and economic relationship with the United States, it is wise for China to reduce tensions between Beijing and other countries and regions of the world.As for China’s engagement in the wider international system during the course of 2019, China is likely to continue to be the new-found champion of the WTO. It is also likely to sustain its posture on global climate change action which it agreed to under the Paris Accord. In other words, China is likely to use the period ahead to consolidate and expand its role within the existing institutions of international governance, rather than the continued construction of new institutions of international governance that lie outside the UN and the Bretton Woods system.Of course, the BRI and the AIIB will continue. But there may well be a parallel reduction in the global profile attached with China’s more recent institutional innovations. Among some of the more sober minds in the Chinese foreign policy establishment, it’s better to focus instead on the existing machinery of the global rules-based system, particularly when the United States is demonstrating systematic contempt for those very same institutions.Taken together, these are nonetheless likely to represent tactical rather than strategic shifts in China’s overall posture towards both the United States, third countries, and the wider international system. China is likely to use 2019-20 to form a deep judgment about what happens to the future of U.S. politics. Will Trump be derailed by Mueller? What will China policy be like if Trump is weakened by Mueller? Would Pence be even more hard-line than Trump on China? And would a Democratic Party candidate, if successful in 2020, adopt an equally hard-line strategy towards Beijing, and if so, how would it differ from the Republicans?On these big strategic questions, the Chinese system moves deliberately slowly. It seeks to analyze carefully the operating environment in which Chinese strategy and tactics are deployed. And while China’s leadership has already concluded that there is indeed a deep shift in American attitudes to China, they are still uncertain as to what precise shape and form this will take in the future. Tactically, therefore, China is likely to seek to buy time to reach these conclusions. And in the meantime, to de-escalate tensions wherever possible, both with Washington and other capitals, while China seeks to reach a more fundamental judgment about America’s future strategic direction and political resolve.This is consistent with China’s predilection for the long term, rather than the short. At present, China sees Trump as being a problem for the next two years for China, possibly not longer, before being replaced by another political leader with different priorities. Whereas China equally assumes that Xi Jinping will be leading China not just for another two years, but probably another ten. Or even more.ConclusionAs I said at the outset, we are dealing with profoundly complex questions. Indeed it is historically unprecedented to be in the midst of a debate about whether the world’s largest economy and oldest continuing democracy, can happily co-exist with the world’s second-largest economy and oldest continuing civilization, given that the latter has never exhibited in its history any attraction to liberal democratic norms. But grapple with the debate we must. And resolve it we must as well. One way or the other.This is despite the fact that we must do so in the midst of an increasingly polarized debate in both countries about the other. Americans believe China is stealing their future. They are angry. They have finally woken up and are fighting back. The Chinese, whether they are on the right or the left of their own debate, believe that the Americans are now deliberately containing China because Americans cannot cope with the idea of ever being number two. Particularly if number one happens to be Asian.The debate is, therefore, a highly charged one. Which is why we need to be careful about the manner in which it is conducted in both our countries. In America, as in other countries, I am concerned about the rise of “neo-McCarthyism” in a debate which conflates concerns about the actions of the Chinese party and state on the one hand, with the actions and attitudes of Chinese Americans on the other.The recent report on foreign interference in the United States and a number of other countries is a case in point. Foreign interference, from whichever country, is an entirely legitimate subject for debate. After all, that’s why democracies have laws, courts, law enforcement agencies, the intelligence services and other institutions preserving the careful set of checks and balances guarding our civil liberties as well as protecting us against internal and external threats to our security. That’s why the best solution to questions of foreign interference lies in a policy of full transparency on the part of any institutions receiving foreign funding. It’s when things are done in secret that we should be particularly concerned.But that’s also why it’s critical to constrain the terms of the debate so that the patriotism of Chinese Americans is not brought into question. I’m concerned that in the current febrile political environment this could occur. I presume that’s why the recent report on foreign interference in this country has attracted dissenting submissions from among its authors, namely Susan Shirk.Having read Susan’s dissent, I support her reflection. I have also noted Bill Bishop’s observation about the title of the report and its conflation of the Chinese Communist Party with the simple word “Chinese”, capable as Bill says of sparking anti-Chinese sentiment in general.So as we advance this hard debate on this country’s future with China, let us learn from the events of the last Cold War, Joe McCarthy and his committee on un-American activities. This debate requires full candor. Not a show trial. We are all better than that."India and China Will Catch Up with the United States."With his prognoses on international politics he has become one of the most influential authors in the United States. The British historian, Paul Kennedy, from Yale, is considered to have been one of the brains behind the Clinton era. Thoughts on India and China as future super powers, the likelihood of military conflicts, the poker-player Vladimir Putin and the unrecognised strengths of the Europeans.Kosmos: Professor Kennedy, in your bestsellers "The Rise and Fall of The Great Powers" (1988) and "Preparing for the Twenty-First Century" (1993) you voiced concern about imperial overstretch of the United States as well as about global environmental issues. Given global warming, no one would argue with you about the latter. However, your forecast about America's dark future as a superpower has not come true. What makes you think that the current US government should still be concerned about its decline?Kennedy: First of all, we are not talking about immediate collapse of the US but about a long-term process of relative decline. A great power needs a long time to decline. The Ottoman empire took 300 years. But there are signs.Kosmos: What signs?Kennedy: International opinion has swung against the US. The attractiveness of the US Dollar has gone. The competitiveness of certain key industries like automobiles has gone. Daimler selling off Chrysler is not just economic news, it's also symbolic. The US allowed a massive build-up of very large budget, borrowing and trade deficits leading to an increasing dependency upon Asian nations to bail America out each month through purchase of treasury bonds. It's hard to think that will go on forever. This means dependency, and that's the first sign of overstretch. If the two giant countries of China and India continue to grow at eight or ten percent a year for the next few decades, they will catch up with the United States which is growing at two or three percent. That will mean shift s in the power balance. India and China will be able to pay for greater influence in world affairs and also, crudely, in military establishments.Kosmos: Will industrial growth alone do the trick for China?Kennedy: The fact that so many foreign businessmen and CEOs and heads of state feel that they have to go to Delhi or especially now to Beijing is only one indicator. Another indicator for Chinese awakening is its foreign policy. China discovers Africa. Just before last Christmas, the Chinese President Hu Jintao made three long visits to African states and signed trade agreements about oil and timber. Just before that, the Chinese government invited leaders of 43 African states to an African conference in Beijing while the US were too busy in Iraq to even notice what was happening.Kosmos: What risks are there for India and China on their way up?Kennedy: I am a bit sceptical of visitors to China and India who just visit Mumbai, Shanghai or Hong Kong and then say: Wow, that's the future! In India, in particular, the levels of rural poverty and the gap between rich and poor are widening. There is a rise of ethnic and religious intolerance and murders across India which have shot up in the past five years. And the Chinese government is clearly frightened about massive unemployment in the inner provinces and also very real environmental dangers. They have colossal domestic problems. It's not just inevitable that they grow at eight or ten percent every year and everybody gets richer. When gaps open up in society and internal tensions increase it's quite tempting for the leadership to divert attention to the foreign devils.Kosmos: Could the fall of the old empire and the rise of new ones lead to military conflicts?Kennedy: I am afraid that military conflicts are more likely than unlikely. The fi rst indicator is the pretty terrible relationship the USA has got itself into vis-à-vis the Muslim world, or at least the radical parts of the Muslim world, radical parts which not only want to hurt America and Europe but want, of course, to overthrow the governments of Saudi Arabia and Egypt to attack Israel. Secondly, we have an increasing vulnerability of the West for energy supplies, now made worse by the increasing vulnerability of China and India for energy supplies, too. A struggle for energy is already beginning. It would be surprising if there were not actual physical conflicts over control of petroleum supplies. Thirdly, Europe seems to think that naval power is not important to national policy. Why is it that the Chinese, the Japanese, the Indian and even the South Korean naval budgets are going up and up? In Asia a naval race is going on. Under these circumstances, it is pretty hard to stop some clash at sea turning into deeper trouble.Kosmos: What will be the role of Europe in this scenario? As a military power it is rather toothless.Kennedy: Admittedly, Europe has no unified foreign policy and it has no unified defence forces. The best it can do are some Franco-German joint brigades or British-Netherlands naval operations. It doesn't have much influence on the military sphere. But in the economic sphere Europe has enormous influence. It negotiates through the World Trade Organisation as a single trading block. And Europe has increased its share in the field of soft power attractiveness. Th e Europeans do a lot more in terms of aid to Africa. And they are way ahead of the US in issues of global warming. Europe has terrific strengths.Kosmos: But it has difficulties in playing them out. Recently we saw a Russian President who did not seem to be impressed by the Europeans at all. Is this a sign of new Russian strength?Kennedy: For many years all that the Russian State could do was to reduce the army and the navy. You still see dozens of rusting old Soviet warships. With the rise of oil prices and with the advantage going to Mr. Putin's poker game, he is now saying that they will be putting additional money into modernising the Russian armed forces, including the rocket forces. It now looks as if Russia's strong foundation is the high price of natural gas and petroleum. If that was to come down, which is possibly unlikely, he'd be weakened. Whereas Europe has a variety of strengths - from high technology to cultural influence to strong trade balances. Russia has a single natural resource as its strength. It is also dependent upon energy even though it is an energy exporter. The future, therefore, hangs very much on the sustainability of stable government - not necessarily democratic liberal government - on the one hand and the continuation of the flow of additional moneys to the central treasury on the other - which has allowed Russia, for instance, to start modernising its railway system and its subways. You can do an awful lot when the price of oil has gone up two or three times.Kosmos: As an historian, you tend to think rather long-term. However, would you dare to make a prognosis about the state of US foreign policy and its war against terror in four years time?Kennedy: It would completely surprise me if in four years time there was still a US army troop of 165,000 soldiers on the ground in Iraq. Public opinion is against it, the junior officers in the army are resigning as fast as they can and even George W. Bush's Republican buddies are trying to get out of it. And I think that the US could actually strengthen itself by getting out of Iraq. A critic of General de Gaulle said it would be dreadful for France to withdraw from Algeria. In fact, it freed de Gaulle to play a much more prominent role in the world and in Europe. Nixon was freed by getting out of Vietnam. He could do the diplomacy which divided China and Russia. The British were freed when they got out of India and Palestine. They could make much more of a commitment to NATO. Possibly the best argument to off er those who say we have to stay in, is that by staying in, you give advantages not just to the Iranians and the Muslim enemies; but you give Mr. Putin a big advantage and you give the Chinese government a big advantage. They want you to stay in Baghdad. And that's a strong argument to get out.Kosmos: Your books and you yourself are said to have influenced the Clinton administration. How did this reputation as one of the important minds behind Clinton grow?Kennedy: That is much exaggerated. I think it was one of my publishers who got it all pretty well wrong. I met Clinton in spring of 1988 when "The Rise and Fall of Th e Great Powers" was a very controversially discussed bestseller. I was asked to address the meeting of the Council of American State Governors which Clinton attended. At that time, he was the Governor of Arkansas. Sometime in the middle of that conference I was stopped by a lot of young and shiny American students. They were all on Clinton's staff and would later go with him in the Presidential campaign. They had copies of my book and said, "Oh, Mr. Clinton has told us all to read it and that it's terribly important, so can you sign it for us." From that incident, I think, grew a sort of legend that I was a kind of eminence grise for the Democrats. It might be good if you could cut that myth.