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June - July 2005


Political News

Wen Jibao, The Chinese Prime Minister, Comes Calling on New Delhi

by Sashanka Sekhar Banerjee


“ The handshake between you and me will catch the attention of the whole world”
- Wen Jiabao telling Manmohan Singh at the India, China-ASEAN Summit in Vientiane, Laos November 2004

The supposed impact of the famous handshake was put to test at the 4 day visit in April 2005 of Wen Jaibao, the Prime Minister of China to India.

For more than 3 decades since the sixties, India, then a nation bereft of much clout on the world stage, had ardently courted the friendship of China almost unilaterally. It was a lonely furrow and the frustrations of New Delhi having to countenance an unresponsive Beijing were immense. The two nations even fought a short and sharp war in 1962. Mercifully, the circumstances changed, thanks to India’s recent spectacular economic growth and the programme of modernisation of its armed forces on an unprecedented scale. India is now both economically and militarily a powerful nation.

Beijing is beginning to realise that not only India needs China for vital support but that, in an inter-dependent world, China has also no choice other than to seek India’s partnership – a vibrant democracy of a billion people, a responsible member of the UN, offering the attractions of a huge untapped market with a highly educated middle class of approximately 300 million, a leader in IT, commanding an impressive base of scientific research, a nuclear power and a neighbour with 2400 miles of common borders - to help push each others strategic and economic agendas on the world stage for mutual benefit.

India too recognises that China is emerging as a military as well as an economic superpower with the potential to overtake the US in the near future. The attractions of a huge market opening up next door is not one to be ignored any longer. Bordering such a country should therefore be regarded more as an asset and an opportunity waiting to be explored rather than seen as a threat in the context of its past experience.

The immediate concerns therefore should be that irritants of the past need to be set aside. Co-operation not confrontation should guide the relationship between the two Asian giants.
So what do the two nations want or expect from each other and how can they achieve these goals?

Both China and India need to resolve peacefully and amicably the vexed border disputes, that have soured their relationship since the sixties. Tranquillity along the Line of Actual Control is therefore of prime importance.

Push for a massive expansion in trade and commerce for mutual benefit China should support India’s candidature for a permanent seat in the UN Security Council, which is one issue that will help bonding the two nations together.

China should consider taking symbolic steps to retract from using Pakistan as an instrument for the military containment of India.

Work closely on the world stage on developmental and strategic issues within the context of the UN, WTO, G-8 and other such international bodies.

The two nations should begin work towards establishing a strategic relationship.

The questions that instantly come to mind are: Given today’s circumstances, how far China or for that matter India are prepared to go to accommodate each others rising expectations ?
China’s position on India’s candidature for a permanent seat in the UNSC

In the background of the UN General Assembly taking up the issue of restructuring of the Security Council in September 2005 in New York, India, as a contender for a permanent seat in the UNSC, has been recently working overtime drumming up support from among the 191 members of the UN to its candidature.

Taking note of the conditions of peace and tranquillity prevailing along the Line of Actual Control, the desperate urgency for finding a framework of solutions to the long-festering border disputes has therefore taken just a step back in the order of priorities. The areas needing attention have shifted to securing Chinese support for India’s case for a permanent seat in the UNSC and giving a big push to the need to expand trading relationship.

Of the 5 permanent members of the UNSC, India has secured commitments of support from three nations namely Britain, France and Russia. While the US says that it has not made up its mind yet although it acknowledges that India is already a major world power, China seems to be sitting on the fence unable to come clean, although it is interested in promoting a strategic relationship with India. Pakistan’s opposition to India’s case for a seat in the UNSC may be a factor in China’s prevarication on the issue. There are several other reasons too. Securing the support of China during Wen Jiabao visit therefore stood as a serious challenge for India. According to press reports, We Jiabao told Manmohan Singh during their delegation level talks on April 11, 2005 “China would be pleased to see India as a permanent member of the UNSC”. What followed was a media hype interpreting the supposed statement as Beijing’s firm commitment to New Delhi. Which was not the case. What Wen said was that China would be “pleased” to see India as a permanent member in the UNSC. The statement was left open to interpretations. Coinciding with Wen’s India visit, Beijing was witnessing demonstrations, for the first time since Tiananmen Square, protesting against possible inclusion of Japan as a permanent member of the UNSC, which China opposes. China’s India stand, non-committal though it was, surely looked reassuring compared to its categorical rejection of Japan. It may also be noted that India and Japan have formed a grouping with Germany and Brazil known as the Group of 4 and are jointly fighting for the UNSC seats. Complicating the China-Japan stand off further, energy hungry Japan, the third largest energy consumer after the US and China, has started drilling for oil and gas around Senkaku Islands in East China Sea claimed by both Japan and China to be their own. This could in time escalate into naval clash unless contained. A creeping confusion even a rift among the G-4 can not be ruled out. To set matters at rest, Wen in a press conference in New Delhi on April 12 clarified that China supported India’s aspirations to play a bigger role in international affairs including the UN.

Expanding Sino-Indian Bilateral Trade Ties.
It is a sign of the times that Wen Jiabao’s India visit in April 2005 - first by a Chinese Prime Minister since April 1960 when Chou en Lai came calling which was followed by a war in the next two years in 1962 - started from Bangalore, India’s IT capital and the hub of scientific research, making thereby a forceful statement that expansion of economic ties has to play a key role in the development of bilateral trade relations between the two resurgent nations. He visited Infosys and Wipro among other IT and bio-technology giants and the Indian Institute of Science in the city and after being suitably impressed said that joining up Chinese strengths in hardware and India’s leadership in software, could together make the 21 century the Asian Century.

A Joint Study Group (JSG) commissioned by the two governments taking account of a jump of 70 percent in bilateral trade volume noted that from the current volume of $14 billion it has the potential to go up to $30 billion by 2010. It was set as the target. The JSG identified a series of measures related to trade in goods and services, investment and other areas of economic co-operation and recommended their expeditious implementation to remove impediments and facilitate enhanced economic engagement between the two nations. At the Wen-Singh Summit, India and China resolved that an all-round expansion of economic co-operation including trade and investment constituted important dimensions for a stronger India-China relationship. The India-China Joint Economic Group has been asked by the Prime Ministers to start work on the implementation of the recommendations of the JSG. At the Summit a Memorandum of Understanding was also signed launching an India-China Financial Dialogue.

Reeling out statistics to remove doubts from the minds of the detractors – ironically foremost among them being the Indian Communists – of the liberalisation process in India , the Chinese Prime Minister said the major driving force of the Chinese economy was wide-ranging reforms and opening up had transformed the old economy into a market economy. The economy was unshackled unreservedly free from any bottle-necks, giving market forces full play. He said that China could invest in India in biotechnology, computer hardware and telecom hardware. “ There is a lot we can do for mutual investment and co-operation. Chinese Government will encourage trustworthy Chinese enterprises to invest in India”.

Setting out the Guiding Principles for the Settlement of Sino-Indian boundary disputes:
The guiding principles document is the first such prepared and endorsed by the two nations which is a milestone in itself. It states that border disputes should not be allowed to affect bilateral relations. The two sides will resolve the issues through peaceful and friendly consultations, neither party using nor threatening to use force against the other. The final settlement of the boundary question covering all sectors should be fair and acceptable to both sides. Due consideration will be given to each others strategic interests. The two sides will take into account historical evidence, national sentiments, practical difficulties, reasonable concerns and sensitivities of both sides and the actual state of the border areas. The boundary should be along well-defined and easily identifiable natural geographical features acceptable to both sides. The due interests of settled populations in the border areas will be safguarded. Modern cartographic and surveying practices and joint surveys will be used for the delineation and demarcation of the boundary. The two sides will respect and observe the Line of Actual Control and work together to maintain peace and tranquillity in the border areas. The Special Representatives on the boundary question shall continue their consultations to evolve an agreed framework for a settlement providing the basis for the delineation and demarcation of the India-China boundary to be undertaken by civil and military officials and surveyors on both sides.

Other businesses.
India will build, in traditional Indian architectural design, a Buddhist temple within the Baima Si White Horse temple complex at Luoyang in Henan province in central China, It will serve as an enduring symbol of Indian cultural influence in China inducted by Emperor Ming and followed up by other rulers of the Han dynasty during 25-225 AD epitomising how Buddhism from India became an integral part of Chinese culture and life.

The frequency of air connectivity is billed to go up from the present two per week, to 18 this summer to 28 flights per week next winter to 42 flights weekly from the summer of 2006. The changes reflect that China is moving in the direction of open-skies policy with India. It may be of interest to note that India has also signed open-skies agreement last April 2005 with the US and Great Britain.

The Chinese connoisseurs of fine foods will soon be tasting such Indian agro-products like Basmati rice, Alfonso mangoes, bitter gourd and so on for the first time in their lives.

China invests $1 billion in the development of Gwadar port in Balochistan, Pakistan.
Wen Jiabao, during his 2005 South Asian journey, was careful not to ignore Pakistan, China’s traditional friend and ally. As China expands its blue-water navy to its littoral shores, developing military relationships with countries like Burma, Pakistan and other nations in its neighbourhood are parts of a well thought out game-plan. From Coco Islands and Kyaukpyu port in Burma, to Chittagong in Bangladesh, to Gwadar in the Gulf of Hormuz in Pakistan, China is busy developing port facilities to serve its very special economic and military needs. Gwadar will be capable of serving both civil as well as military purposes. The Chinese delegation announced the grant of $1 billion for the development of the Pakistani port. Pakistani officials claimed that Gwadar’s China connection would help frustrate India’s domination of the regional waterways. In the event of a future war, so the argument goes, India will not be able to impose a naval blockade against Pakistan thanks to the Chinese presence in Gwadar and therefore in the wider Persian Gulf region. However, such theories become valid only after they are successfully put to test. India is also developing a powerful blue-water Navy of its own with a long reach stretching from the Gulf to Australia. It is fair to assume that the Chinese presence in Gwadar has been factored in by the Indian Navy’s policy planners.

What are the wider implications of Wen’s visit ?
Significantly, no mention was made of the proposed Grand Asian Alliance between India, Russia, China although substantive discussions are said to be progressing at a high level. It is being promoted mainly by Russia as the visible icon of multilateralism. Meanwhile, there are reports that Washington is quietly promoting the idea of another triangular alliance in Asia with the US, India and Japan as its members but references to the idea are still a taboo. The Japanese Prime Minister Junichiro Koizumi will be visiting India soon. It will be an important event in the busy diplomatic calendar for India. Japan has already said that its trade and investment portfolios have reached saturation point with China and would be happy to shift its economic focus to India. India’s gain will be China’s loss. Beijing will lose a big chunk of its annual $ 160 billion trade with Japan at the cost of India. Japan’s joint stand with India for UNSC permanent membership with the other two G-4 nations Germany and Brazil is a red herring to China. It will test the nascent India-China friendship to its limits.

The author is a retired Indian diplomat.

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