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Chinese Premier's Visit: Ambiguity prevails

R S Kalha is a former Indian Ambassador to Iraq.
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  • May 31, 2013

    It is said that the new Chinese PM Li Keqiang is a very personable, polite and a charming interlocutor; almost the shades of his illustrious predecessor Zhou Enlai. He smiles a lot and this was very evident in his public engagements in India. Whether he did so in his official and private interactions with PM Manmohan Singh, is not in the public domain. Nevertheless, what did his visit achieve and what were the results; particularly from the Indian point of view?

    In the context of Sino-Indian relations, shorn of all verbiage, there are three issues that are vital and form the core of concerns for India. These are:

    1. The boundary issue
    2. Trade and commercial relations and
    3. Strategic issues such as Sino-Pak relations and the emerging scenario in the Indo-Pacific region.

    Therefore it is a matter of considerable significance for India to know the latest Chinese position on each of these issues and importantly did Li bring any new formulations to the table?

    On the boundary issue there seems to be no further movement at all. The joint statement says that the two PMs ‘encouraged’ the two Special Representatives to ‘push forward the process [emphasis added]of negotiation and seek a framework for a fair, reasonable and mutually acceptable settlement in accordance with the agreement on political parameters and guiding principles.’ Of note is the fact that only the process is to be pushed forward and a reading of the joint statement indicates that it contains nothing new, yet the phrases are all very unexceptional. But what is missing is that there is no commitment by China for a demarcation of the LAC, in order to eliminate incursions of the type that we saw recently at the Depsang plains. All that China was willing to concede was that various border mechanisms be ‘improved.’

    Let us take the second issue. There is no doubt that Sino-Indian trade volumes have grown exponentially over the years, but so has the trade imbalance. The trade deficit from a mere US$1.08 billion in the year 2001-02, has burgeoned alarmingly to US $ 40.77 billion in the year 2012-13. The present day Sino-Indian trade relations are a fine example of trade during colonial times. India exports raw materials and China floods the Indian market with finished goods; thus sharply circumcising India’s manufacturing capacity. It is not for nothing that the growth of new jobs in India is tardy. But what did Li offer?

    Li offered ‘co-operation’ on pharmaceutical supervision including regulations, stronger ‘links’ between Chinese entrepreneurs and the Indian IT industry and ‘completion’ of photo- sanitary regulations in agro products. Missing was any indication that the Chinese had agreed to open their markets for Indian products. A CEOs Forum was also set up to be headed by Anil Ambani and Chen Yuan, Chairman of the China Development Bank from the Chinese side. It is the same Chen Yuan who approved the US $ 1 billion loan for the Sasan Power project. It is hoped that the CEOs Forum would be to suggest measures for reducing the overwhelming trade deficit. Later the People’s Daily averred that ‘China is seeking a mutually beneficial resolution.’1

    In the past it was expected that with growing trade between India and China, an atmosphere with sufficient goodwill would thus be created that would provide a momentum for an equitable solution to the boundary issue that has bedeviled the Sino-Indian relationship. No one expected that the trade deficit would pan out in such a way that it now seems that this issue is likely to cause more headaches to the Indian leadership than even the boundary issue. India simply cannot afford to run up such huge deficits year after year!

    On the third issue relating to Sino-Pak relations, Li made no public comment while in India. There is no other country in South Asia where the impact of Chinese policies is felt more than in Pakistan. There are two major factors in the Sino-Pakistan relationship that worry India. The first relates to Sino-Pakistan nuclear co-operation and the second to the massive arms supply from China to Pakistan, that encourages the latter to adopt a belligerent posture towards India.

    As far as the nuclear issue is concerned, China plays a central role in the efforts of Pakistan to increase its nuclear energy output from 770 megawatts to 8000 megawatts by 2030. Present Pakistan production is based on the Chinese supplied two nuclear reactors and a smaller Canadian one. Failing to achieve what was done for India by the US, Pakistan has looked to China to help fill the void. The Chinese do not buy the thesis that nuclear co-operation cannot be extended to Pakistan on the same basis as India because ‘India and Pakistan are different countries with different histories and different needs.’ China has criticized the ‘discriminatory’ nature of the NSG waiver given to India and has demanded the same treatment for Pakistan. China stands for nuclear equivalence between India and Pakistan. Having ‘fathered’ Pakistan’s nuclear weapons programme, China now intends to ‘grand-father’ Pakistan’s civilian nuclear energy programme.

    In addition, China is the main weapons and equipment supplier for the Pakistan Army. According to the Swedish think tank SIPRI nearly 55% of China arms exports go to Pakistan2. China’s arms exports for the period 2008-12 rose by an unprecedented 162% and it has replaced the UK as the 5th largest exporter of arms in the world. China supplies everything from fighter aircraft to missiles to naval vessels to Pakistan.

    No one is that naïve to expect that these weapons acquired by Pakistan from China would not be used against India. And yet what is to be made of the extraordinary joint Sino-Indian statement that ‘the two sides are committed to taking a positive view of and support each other’s friendship with other countries’ [emphasis added]. Does India look with equanimity at these extraordinary developments between China and Pakistan? Or is Pakistan excluded from the ambit of this astonishing view?

    As far as the Asia-Pacific region is concerned, it is a matter of satisfaction that India did not follow the Chinese prescription that issues be settled ‘bilaterally.’ Instead the two sides maintained that peace and stability in the Asia-Pacific region be based on the principles of international law. In the future too India should remain alert to Chinese attempts to play a divisive role in the evolving relationship between India and countries of East and South-East Asia.

    Thus based on the documents issued and perceptions in the public domain there is precious little that the new Chinese PM brought to the table. Certainly nothing that might have changed Indian perceptions of China for the better, particularly after the 19 kilometer incursion into the Depsang plains, was on offer. In fact the Chinese only managed to harden perceptions in India, that China is an untrustworthy friend and to quicken the pace of raising the new strike corps. Rather than pouring calumny on Japanese leaders as ‘petty burglars’ for ‘enticing’ India3, the Chinese need to seriously introspect on the reasons of India’s recent estrangement that are entirely of their own making. If the states of East and South-East Asia tend to ‘band-wagon’ together with India in the future to ‘contain’ China, the fault lies squarely on Beijing’s ham- handed policies.

    But PM Li did offer to shake hands across the Himalayas. Any takers?

    Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.

    • 1. Yao Chun/People’s Daily, 28 May 2013.
    • 2. Hindustan Times, 19 March 2013
    • 3. Yao Chun, People’s Daily, 28 May 2013.