Wednesday, December 15, 2010


On December 15, Chinese Premier Wen Jiabao visits India for the second time after the gap of five years. A strong delegation consisting of about 300 business groups accompany him during this much publicized three days visit to India. After visiting India, Chinese Premier will fly straight to Pakistan, all seasoned companion of China, which also raise an aura of concerns for India. Prior to Wen Jiabao's visit to India, the Chinese foreign ministry expressed hope for an agreement on 'a fair, reasonable and mutually acceptable settlement through frank dialogue and consultation on an equal footing' with regarding to border disputes. However, this year marks the 60th anniversary of Sino-indian diplomatic exchange, China implies to look forward for a friendly cooperation and regarded India as a cooperative parters rather than competing rivals.1

While observing various notes written on Wen Jiabao's visit to India, I must say that the visit primarily focus on three important issues, concerning both India and China. The economic cooperation, political engagement, and environmental dailogue turns to be the highlight of Wen Jiabao's trip. Dispite having various problematic issues with India, China wants to engage with India on economic arena, where economic integration and cooperation is considered the steering wheel of China's power image in the world. India, being the rising power, economic integration is considered as an important vehicle for China's political objectivity. On the political agendas, Kashmir and Border issues will likely be an intrinsic part of this visit as both of the issues became a talking point in the recent past and needs clarification, as it is one among the core issues of India. Brahmaputra dam may somehow be raised but will not take the centerstage of this visit as the program of Wen's visit is tighly arranged with separate high level meetings of President, Vice President, Prime Minister, Chairman of UPA, and the leader of Opposition.

For this visit, let me go briefly into two main objectives of Wen Jiabao's visit.

1) Economic Integration and Cooperation:
Since the Chinese delegation consist of large business groups, it is understandable that China will put an effort on not only engaging with bilateral trade, but also to work on chanelizing investments in India. China as the second largest economy in the world, and being India's largest trading partner, it is highly important for China to engage on economic integration, for many obvious reasons. On the other hand, India as the rising power, aims to bridge the economic gaps so to match up with its trade deficit with China. Over the last decade, China gallops with a significant turn over of US$ 140 billions, India stands way behind with an insignificant US$ 52 million in FDI from China. In 2009-2010 alone, the trade deficit hopped around US$ 19 billion, where the total two way bilateral trade volume is expected to cross around US$ 60 billion this year.

It is clear that the Indian raw materials are of high demands in China, the world factory. As much as 70 percent of India's export comprises of raw materials like iron ore, cotton and chemicals. China is now eyeing on India's infrastructures like power, water and telecom and are planning to spend US$ 1 trillion till 2017 for building infrastructure to sustain a growth rate of 9-10 percent. Where as India consumes China's cheap manufactured goods like clothes, electronics, toys, and confectionaries, which caused serious threats to the Indian cottage industries.

The trade imbalance is significant and Indian government need to address the matters with the Chinese premier. It is of certain that, Wen Jiabao's visit will set a benchmark on China's insertion into Indian banking and power sectors along with raw materials like Aluminium. During this visit, China signed MoUs with various Indian companies, like Reliance Power with Shanghai Electric, ICICI Bank with China Development Bank, Essar Group with China Development Bank, IDBI with Bank of China, Adani Power with Shandoung Tiejun Electric, Vedanta Aluminium with China Aluminium International and Lupin Ltd with China Meheco Traditional Medicines. Around 48 different MoUs with the worth of US$ 16 billion were signed between India and China during the current three days visit.

It is a matter of serious question for India to think whether Chinese economic integration will serve good for India in the long and sustainable future, taking into consideration of China's active economic engagement with various countries.

China is rising economically and politically and it is rational indeed to praise the Chinese leaders for its pragmatic approach on economic development. It is also necesary for China to not only engage but to integrate economically with other countries to retain their status quo, so does India too to grow. But economic development of China somehow creates high tendency for serious political dominance. May be China put it as 'charm offensive' to serve their goal of hegemonism.

Chinese Premier's India visit talks much about economic ventures and gave it a priority above others. He stressed on partnership for cooperation rather than rivals in competition, but in reality, it is a different story altogether. With the two rising power, competition between dragon and elephant will utterly happen. The notion of 'scarcity of resources' creates competition within countries as all nations work for their own self interest. Wen Jiabao also suggested Indian government to ease restrictions on movement of investment, hinting that strict enforcement of capital and public infow from China, hampers in creating favorable conditions for mutual investments.

Here are two of Sino-Indian economic issues, which I think are important to share.

a) China's Economy in their own characteristics:
The economic integration become a tool for the Chinese political dominance over the world, as it set a classic example during the recent time, when Liu Xiaobo was awarded the Nobel Peace Prize. Chinese government condemned the award and threatened various countries with serious consequenses if attended. Many countries (mostly developing countries) willingly or unwillingly obeyed the Chinese command and skipped the award ceremony, in fear of Chinese ill-willed actions on thier respective countries. Carrot and rabbit strategy of China works in favor of China in the international political domain. Irrespective of being threatened, Indian External Minister S. Krishna makes way for the Indian envoy to attend the Nobel ceremony by differentiating it with Sino-Indian relations. But, the economic integration helps China to maintain a certain leverages to pressurize India on political issues. Well, you may call it an incursions of Indian market, like telecom and service sectors, especially in the field of banking units.

b) Incursions of Indian Markets:
Along with global economic liberalization era, India and China moves ahead with economic integration. Trade Pacts between India and China were signed several times over the years. Since then, Indian markets are being flooded with substandard Chinese goods of different varieties, which might have been fancy, affortable and cheaper to the majority of Indian lower middle class population. But, it also hamper the small scaled Indian cottage industries, which remained as the backbones of Indian economy, such as Aligarh lock industries, Varanasi Silk Industries, toy industries, Sivakasi firework and crackers industries, and even idol making industries. Despite China being a non religious state, China champions in making even statues of Indian gods and goddesses.

China, the world factory nearly consumes Indian markets and if more economic integration happens, Indian manufacturing units will succumbed to dust and shall not be able to revive. It is thus strategically important to maintain the manufacturing units, which in worst case scenerio of war, can help sustain the nation. Indian government must seriously study the implications of Chinese incursion on Indian markets and then deal with China on the economic front.

2) Political Engagement:
On political and strategic aspects, India and China needs ample of time to talk about various pending issues which were unresolved for the last six decades since the establishment of diplomatic relations. Some new issues of concerns are also needed to be clarified such like Kashmir, and UNSC membership. The political engagement and clarification between the two big Asian gaints must address on a positive and friendly tone, as Wen Jiabao patronized his visit as 'the visit of Friendship". Prior to Wen Jiabao's India visit, both Indian and Chinese high level delegation met in China to discuss about those contentious issues, which hinder India-China relations.

Over the recent past, China engrossed itself into Kashmir issue by issuing stabled visa to the kashmiris travelling China, rejecting visa to Lt General BS Jaswal, General Officer Commanding in Chief of Jammu and Kashmir and deploying few thousand Chinese PLA cadres in Pakistan occupied Kashmir. Chinese intention and admission of Kashmir as a disputed area was steered to help bolster the Pakistan's position on Kashmir. Kashmir remained as an integral part of India and India's position on Kashmir is crystal clear. Indian External Minister, S.M. Krishna explicitly mentioned to his Chinese counterpart that Kashmir is a core issue of India, just like Tibet and Taiwan to China. Though India was quite assertive in her proposition, I still have reservation about equating Kashmir with Tibet and Taiwan by oberserving from historical and strategic perspective.

Unlike before, China shifted her attention to Kashmir more rigorously than ever before. There is high indication that the bilateral talks on Kashmir between India and Pakistan be extended and expended to trilateral talk, including China. If such things happen, India needs to reopen the unfinished chapter of Chinese occupied Kashmir (Aksin Chin), which the Indian Parliament resolved to take back every inches Chinese armed forces invaded in 1962.

Earlier Arunachal Pradesh and Tawang problem were the limelight, but now it switched to Kashmir. Since the whole Himalayan border stretching from Kashmir to Arunachal Pradesh is considered so called disputed and unresolved inspite of 14th High level talks. It is of high probability that China will fiercely play a forward looking approach to create a border tension. So, it is of wise attempt for the Indian government to seek clear clarification from the Chinese government on Kashmir and remind them of the "Five principles of Peaceful Coexistence" (Panch Sheel).

While touching on the border issues, Mr. Thupten Samphel, the spokesperson of the Central Tibetan Administration (Tibetan Government in Exile) based in hilly area of Dharamsala welcomed China's "better relations with India will encourage the Chinese government to resolve the Tibet issue which will have positive impact on the border issue between the two countries."2 Indian government shall remain as cautious and be pragmatic in her approach towards China and raise the issue of Tibet.

Even though, scores of trade pacts were signed, it is difficult to change the modus operandi of both India and China on several unresolved issues relating to political and strategic relations. China's close-knit and time-testing friendship with Pakistan and Wen Jiabao's subsequent visit to Pakistan draws several curiousity about sincerity of China's mission of strategic partnership in the global politics.

1) Foreign Ministry Spokesperson Jiang Yu's Regular Press Conference on December 7, 2010

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