Improving Indo-China Relations

BY K Raghunathan
The Chinese Premier, Mr Wen Jiabao’s forthcoming India visit on December 16-17 is the strategic flavour of the month. The visit comes soon after the visit of the Presidents of the US and France to India. Reports indicate that Mr Wen Jiabao will visit Pakistan after finishing his New Delhi trip.

While Mr Wen’s India visit may not gather the same media attention like the Obama visit in November, this is surely a chance to enable the highest leadership of China and India to rethink about what went wrong between them recently and why their previous accords have failed to stabilise the relationship. On its part, India would expect the visiting Chinese Premier to spell out China’s position on a number of strategic issues.
The visit comes at a time when the two countries’ strategic spheres of influence have increased greatly. While China has eclipsed Japan to become the world’s second-largest economy, India is being considered somewhat seriously as a potential candidate for a permanent UN Security Council (UNSC) membership after Mr Obama’s and Mr Sarkozy’s open articulation.
Failed accord on boundary
The tactical milieu of Mr Wen Jiabao’s visit is linked with his April 2005 tour when he came to India for the first time. However, the setting for the forthcoming visit was established during Dr Manmohan Singh’s recent visit to East Asia where the Indian Prime Minister stated that both parties “need to show sensitivity to each other’s core issues.” In addition, the Indian Prime Minister also noted that the “world is large enough to accommodate both China and India’s ambitions.” Mr Wen Jiabao responded by declaring that he would visit India in December 2010.
In the meantime, both countries have tried their best to prepare a “well-knitted” ground for open talks during Mr Wen’s visit. In fact, both China and India held the 14th round of the special representative level talks on boundary issue in Beijing in the last week of November. This latest round was significant in that it “preceded the final senior-level” dialogue between the two parties on the border issue.
Two significant agreements related to the boundary issue have previously been signed in 1993 and 1996; and then the April 2005 agreement promised a political guiding principle on the demarcation of the boundary between China and India. Despite these agreements, differences on the boundary issue have only expanded. They have seen each other more as strategic competitors, looking to cut their own niche in their style and influence. While it may not be easy to remove these competitive elements, rising complications between them need to be addressed through dialogue and direct bilateral dealings at the highest political level. That makes Mr Wen Jiabao’s visit more significant.
During Mr Wen Jiabao’s visit to India in April 2005, the two countries signed an Agreement on the political parameters and guiding principles for the settlement of the boundary question. That visit saw the two sides implementing twelve memoranda on a range of strategic issues. The “strategic partnership for peace and cooperation” formulated during the 2005 visit was to “resolve longstanding” border disputes and boost trade and economic cooperation. While the 2005 strategic partnership ethos provided adequate impetus for the greater growth of bilateral trade and commerce to an extent, the approach to solve the boundary issue has stalled because of China’s repeated irrational claims over Arunachal Pradesh.
Indo-China economic relations
Thus, Mr Wen Jiabao’s trip to India calls for clarity in the Chinese position on a range of bilateral issues related to the boundary and greater precision over issues like the stamped visa for residents of Jammu and Kashmir, visa denial to Lt Gen BS Jaswal and the emerging concerns over water. On China’s part, the most pressing point would be to amend the Chinese policy stance on issuing stapled visas to the people of Jammu and Kashmir, which largely questions India’s sovereignty over this state. While the 2005 MoU spoke of sharing “hydrological information” in Sutlej/Langqen Zangbo river in flood situations, Chinese dam construction in its part of the Brahmaputra Valley calls for greater dialogue.
Two other strategic issues that are important from India’s perspective are the planned Sino-Pakistani rail line from Xinjiang to Pakistan-occupied Kashmir and the Pakistani President Mr Zardari’s call for regular Chinese investments in the Gilgit-Baltistan region. India must expect Mr Wen Jiabao to clarify China’s stance on these issues.
While there are a whole host of security and strategic issues that can be addressed, the one that invites greater attention at the moment between China and India is the extent of their economic relations. Bilateral trade is targeted to touch $60 billion soon: in fact, the growing trade figure has been the single most stabilising factor in Sino-Indian relations. The prime necessity would be to focus on massive bilateral economic engagement, mainly when the two countries hold similar strategic positions in the global economic scenario within a grouping like the BRIC.
In this regard, the first strategic task is to balance bilateral trade. China figures as India’s largest trading partner, while India is ranked much below in the Chinese trading partner index. China’s annual exports to India are worth $27 billion; India’s exports to China are about $11billion. Mr Wen Jiabao had assured the Indian Commerce and Industry Minister, Mr Anand Sharma in Beijing in January 2010 that the two countries would like to work closely to address their growing trade imbalance; he should use his forthcoming visit to carry out this promise.
In fact, in the eighth round of the India-China Joint Economic Group (JEG) in New Delhi, India had expressed the desire to increase its exports to China. India would like to see China import more in IT and Information Technology-Enabled Services (ITES) from it, removing tariff and non-tariff barriers. This also calls for the removal of Chinese restrictions on import of Indian items like Basmati rice, fruits and vegetables, films and Indian television channels. There are also procedural blockages and time-consuming licensing processes in exporting Indian medical products to China.