India & China

Competitive cooperation

Print edition : September 17, 2014

Prime Minister Narendra Modi explains the working of the spinning wheel to Chinese President Xi Jinping at Gandhi Ashram in Ahmedabad on September 18. Photo: PTI

India is wary of China’s influence in what it considers its backyard. Before his India visit, Xi visited the Maldives and Sri Lanka and promised huge amounts of aid for infrastructural projects in both the countries. Here, Xi is seen with Sri Lankan President Mahinda Rajapaksa in Colombo. Photo: LAKRUWAN WANNIARACHCHI/AFP

Xi with Maldives President Abdulla Yameen in Male. Photo: MOHAMED SHARUHAAN WAHEED/AFP

President Xi Jinping’s visit resulted in India and China affirming their commitment to strengthening their partnership “on the basis of the principle of equal security and mutual sensitivity for each other’s concerns and aspirations” despite persisting clouds of mutual suspicion.

THE highlight of Chinese President Xi Jinping’s tour of South Asia in the third week of September was his three-day visit to India. Before reaching India, Xi visited the Maldives and Sri Lanka. His scheduled visit to Pakistan, which was part of his original itinerary, was postponed. The political impasse in Islamabad and the security situation there were the obvious reasons for the postponement. New Delhi was not unhappy with this development as it does not want to be clubbed with Islamabad when foreign dignitaries visit the subcontinent. President Xi was given a very warm welcome in Male and Colombo. The Chinese government has promised huge amounts of aid for infrastructural projects in both the countries. China is building the main airport in Male. Chinese tourists now constitute the large majority of holidaymakers on the islands and a source of hard currency. China is already a big player in Sri Lanka, having close defence and commercial links with the government of Mahinda Rajapaksa. During his visit to Male and Colombo, Xi laid stress on Beijing’s long-standing policy of “non-interference” in the internal affairs of other countries.

India Delhi is known to be wary of China’s growing influence in what it considers its backyard. In order to counter this, the previous United Progressive Alliance (UPA) government had started working actively to foster closer links with countries on China’s periphery, such as Vietnam and Myanmar. President Pranab Mukherjee was in Vietnam in the third week of September. The timing of his visit was meant to send a not-too-subtle message to the Chinese leadership that India, too, had a lot of diplomatic cards to play. Among the bilateral agreements signed with Vietnam were energy deals, including drilling in areas claimed by China in the South China Sea. In a joint communique, the two sides expressed support for “freedom of navigation” in the East Sea/South China Sea. Vietnam wants to source sophisticated weaponry from India.

The President’s Vietnam tour was part of India’s twin-track diplomacy that aims to simultaneously improve relations with China and its rivals in the region.

In recent years, New Delhi has become noticeably closer to Tokyo at a time when Japan and China are embroiled in an increasingly acrimonious territorial dispute. Prime Minister Narendra Modi was in Japan just before Xi’s India visit. In a speech delivered in Japan, Modi had alluded to the inherent expansionist tendencies of a particular country in the region.

The unresolved border dispute between India and China was brought back into sharp focus by a minor flare-up along the Line of Actual Control (LAC), which, to the surprise of many, occurred when the Chinese President was being hosted in India. The Indian Army has been resorting to aggressive patrolling in the last few years along both the Line of Control (LoC) and the LAC. Luckily, there have not been any ceasefire violations along the LAC. India in recent years has strengthened its defences along the LAC. In Arunachal Pradesh, two new airbases have been built. Su-30 bombers have been based at the Indian Air Force base in Tezpur.

President Xi’s visit has been described as a success by both sides. Xi is only the third Chinese President to visit India. He is fast emerging as a charismatic leader in the mould of Mao Zedong and Deng Xiaoping. After taking over as President, he has outlined an ambitious foreign policy for the Asian region, based on the principles of amity, inclusiveness and mutual benefit. The Chinese government has proposed cooperative ventures with the governments of the region. The three important initiatives are the Silk Road Economic Belt, the 21st Century Maritime Silk Road and the Asia Infrastructure Investment Bank (AIIB). China wants India to play an important role in all these ventures.

Modi once again departed from set diplomatic protocol and chose to receive the Chinese President in Ahmedabad and not in the capital, New Delhi, as is the usual practice. The two leaders exhibited a warm personal chemistry. Both have tried to project an image of strongmen whose priorities are a “strong economy” and “strong security”. Xi was photographed wearing an Indian-style jacket presented by Modi. First Lady Peng Liyuan, who is a famous artist and a household name in her homeland, accompanied the President.

Substantive bilateral talks were held during the second leg of the visit in New Delhi. Like the previous government, the National Democratic Alliance (NDA) government’s focus is on economic diplomacy. Since taking over from Manmohan Singh, Modi’s focus has been on further strengthening economic links with the Asian region, especially South and South-East Asia.

The Indian government, whose leader revels in nationalist rhetoric, also continues to view China as a “rival” power and has carried on with the previous government’s “cooperation-cum-competition” policy with China. India would like to take advantage of the fact that many South-East Asian countries such as the Philippines and Vietnam are mired in long-standing border disputes with China. The current leaderships there, like in India, view China with suspicion. They are also egged on to confront China by the West and the right-wing government in Japan led by Shinzo Abe. Together with India, these countries want to ensure that China does not acquire a dominant position in the region.

Changing equations

Since the late 1990s, Indian foreign policy has acquired a pro-Western tilt. It became pronounced in the last decade when the Congress was at the helm of affairs. United States President Barack Obama’s “pivot to the East”, which was a barely disguised move to militarily and strategically pin down China, increased China’s anxieties about India’s intentions. India’s support for the Dalai Lama and its hosting of a sizable and politicised Tibetan exile community have been a major irritant in bilateral ties. With Japan assiduously courting India and harping on the so-called emerging threat posed by China, Beijing had reasons to worry. The U.S. and Japan have made no secret of their desire to draw India into an anti-China security alliance. But the Obama administration’s pivot to the East has stalled, as the U.S.’ attention has been diverted by the twin crises in West Asia and Ukraine.

The Indian side has been unhappy with the “all-weather friendship” between Islamabad and Beijing. But according to Indian officials, that relationship seems to be fraying. Pakistan’s inability to rein in its militants and its continuing lurch into political instability, according to them, have cast a shadow on the relationship. There is a feeling in the Indian political establishment that Pakistan’s strategic value to China has considerably diminished. Indian officials feel that China is not adequately restraining Pakistan from facilitating the dispatch of fighters into Afghanistan as the American forces prepare to depart.

But they feel that India and China will have to cooperate in Afghanistan. China, according to Indian officials, does not support the return of the Taliban to power in Kabul. The Chinese authorities are worried that many of the “jehadi” forces may turn their attention to Xinjiang. There has been a spurt of terrorist activities in Xinjiang among the restive Uighur populace in recent years. There are many Uighurs fighting alongside the Taliban in Pakistan and Afghanistan.

During President Xi’s visit, China would have liked a firm commitment from India for its economic blueprint for the region, but all that it received from the Modi government was mere rhetorical support. India seems to be hedging its bets even on the Bangladesh-China-India-Myanmar (BCIM) economic corridor, which would have provided direct linkages between the four countries. In a speech delivered at the Indian Council of World Affairs (ICWA), Xi said: “One who wishes to be successful seeks to help others to be successful. One who wishes to be understood understands others.”

Xi voiced support for India’s membership of the Shanghai Cooperation Organisation (SCO). The Indian side reciprocated by stating that it would favourably consider China’s request for membership of the South Asian Association of Regional Cooperation (SAARC). From available indications, India is not too keen on accommodating China in SAARC. The Indian government sees advantages in SCO membership as it will expedite the opening of the Central Asian markets. But New Delhi will not be offering Beijing a quid pro quo in the shape of a SAARC membership. The unspoken fear is that China, given its economic and military heft, will sideline India.

‘Twin anchors’

Xi said in New Delhi that the two countries should be the “twin anchors” of regional peace so as to build a security architecture for the Asia-Pacific that would be transparent and based on equality. “China and India have a joint population of 2.5 billion. If we speak with one voice, the whole world will listen, and if we join hands, the whole world will pay attention,” Xi said in his ICWA speech. China shares its land borders with many Asian countries and has a stake in the stability and prosperity of its neighbours. As a Chinese commentator pointed out, both the Indian and Chinese leaders want ache din (good days) for their people. The Chinese economy is four times the size of India’s. China has the requisite resources and funds to help other economies in the region. India is realistic about its clout and knows that it is in no position to compete economically or militarily with China at this juncture.

The Indian Prime Minister’s emphasis has been on domestic infrastructure building. The Chinese side has indicated that it is more than willing to invest, provided many of the current “security-related” restrictions are removed. Before Xi’s visit, there was talk about China pledging an investment of $100 billion. After the presidential visit, the investment announced by Chinese firms for the next five years amounts to only around $20 billion. The failure of the Indian government to lift many of the restrictions placed on Chinese businesses may be one of the reasons Chinese business houses do not want to invest in a big way. Their Indian counterparts are hungry for more investments from China and are in fact said to be putting pressure on the government to lift some of the restrictions.

China is today India’s largest trading partner but the balance of trade is heavily skewed in China’s favour. Indian traders sourcing cheap mass-produced goods from China have boosted the annual trade to $65 billion. Indian exports consist mainly of coal and other minerals.

During Xi’s visit, the Chinese side promised more access to Indian pharmaceutical, agricultural and fuel products. China will be setting up two industrial parks in India, one in Gujarat and the other in Maharashtra. Important agreements were also signed relating to Chinese investments and participation in the telecom, railways and aviation sectors. Chinese expertise in railways, which some say has surpassed Japanese technology, will now be available to the Indian Railways.

Border issue

On the campaign trail, Modi had taken a tough stance on China, stating that he would not concede an “inch of sacred Indian territory”. There is a general consensus that bilateral relations between the two giant neighbours can be truly normalised only if the long-pending border issue is resolved. The border issue was among the dominant themes figuring in the bilateral talks. The Prime Minister, during the joint press conference with the Chinese President, said that he had flagged “serious concerns” about the “repeated border incidents” during bilateral talks. He urged a “speedy resolution” of the border issue and the “clarification” of the LAC.

Xi sought to downplay the border incidents, saying that the “two sides are fully capable of acting promptly and effectively managing the situation”. Last year, the two sides had signed a Border Defence Cooperation Agreement. Xi emphasised that because the area was still undemarcated, “there may be some incidents”.

There are different perceptions on both sides on the location of the LAC. The Chinese side feels that it is the Indian Army that is responsible for trespassing. There have been no violent face-offs between the two sides for over 40 years. Xi said that he was committed to working with India to maintain “peace and tranquillity” along the border. During Xi’s visit, it was announced that an additional pilgrimage route for Indian devotees would be opened to Mansoravar via Nathula.

The two sides agreed on cooperation in the civil nuclear energy sector. China has signalled that it is willing to sell its nuclear reactors in the near future. China has now joined Russia, the U.S., France and Japan in the race to partner India in the construction of nuclear reactors. China has, however, not yet recognised India as a “nuclear weapons” power but has signalled that it is willing to do business despite India being a non-signatory of the Nuclear Non-Proliferation Treaty (NPT). The first NDA government under Atal Bihari Vajpayee had justified the Pokhran-II nuclear tests on the basis of the alleged threat posed by China. Australian Prime Minister Tony Abbot, during his visit to India in early September, signed a deal to sell uranium to India.

India and China have also agreed to start a “maritime cooperation dialogue”. The first meeting will be held later this year. The two sides will exchange views on maritime security every year and explore ways of cooperating in ensuring freedom of navigation.

A joint statement issued on the last day of Xi’s visit stressed on a “closer developmental partnership” that the two countries have cemented. The statement said that the partnership would be the “core component” of their strategic and cooperative relationship. Both sides affirmed their commitment to strengthen their partnership “on the basis of the principle of equal security and mutual sensitivity for each other’s concerns and aspirations”. The two sides also formally pledged to maintain peace and tranquillity along the border and expressed their commitment to “an early settlement” of the border dispute. There was also a commitment in the joint statement that the two sides would resolve all issues on the basis of the Five Principles of Peaceful Coexistence.

The Chinese government had made a “package proposal” way back in 1983 to solve the vexed border problem on a permanent basis. According to officials with knowledge of the negotiations, the Chinese were willing to allow India to retain the disputed north-eastern sector comprising parts of Arunachal Pradesh, including Tawang. Under the proposal, China would only keep the Aksai Chin plateau, where “not a single blade of grass grows”. India had just taken over the Non-Aligned Movement (NAM) chairmanship in 1983. Beijing wanted to distance itself from Washington and rebuild its bridges with the developing world. There was a request from Beijing for Prime Minster Indira Gandhi to visit China and help restart the healing process between the two countries. But the bitter memories of the 1962 war had not vanished from the corridors of power in New Delhi. Indira Gandhi continued to view the war as a betrayal of the trust bestowed by her father, Jawaharlal Nehru, on the Chinese leadership. A golden opportunity was missed, and China then upped the ante by adding Tawang, an important place of pilgrimage for Tibetan Buddhists, to its list of demands. Tawang was occupied by Indian forces only in 1956.

The Chinese Foreign Ministry spokesperson, speaking after the return of the Chinese President from India, said that “an important consensus” had been reached between the leadership of the two countries to keep the disputed border calm. She said the summit meeting between Xi and Modi had made “cooperation” the main theme in bilateral relations. She emphasised that relations between the two countries had now entered a “new stage”. President Xi’s visit, she added, had removed “some of the suspicions” the two countries had harboured against each other. Indian officials have also described the visit as successful but claim that the Indian Prime Minister made a “strong demarche” on the border incident during his talks with the Chinese President.

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