Chinese bull in an Indian shop

Chinese visit was just sweet nothings

From The Statesman

By ND Batra

President Hu Jintao’s repeated statement during his four day visit that India and China were “partners for mutual benefits,” rather than “rivals or competitors” was nothing more than what a year and half ago Chinese Prime Minister Wen Jiabao’s had said at the conclusion of his visit: “India and China are partners, and they are not rivals. We do not look upon each other as adversaries.”

It seems both leaders received the same expert diplomatic advice: Stick to the message. And the message: Exchange of diplomatic platitudes to advance China’s business interests. In diplomatic terms, judge China by what China does, not by what it says. Look at the Chinese activities in Pakistan, an all-weather friend ~ from financing the building of a deep seaport, Gwadar, at the gateway to oil-rich Middle East to its overt and covert contribution for developing nuclear energy and weapons; investing and building road links with Bangladesh; and its surveillance station in Myanmar’s Coco Islands. Myanmar like North Korea has become heavily dependent upon China for trade and diplomatic support.

Nor should it have gone unnoticed China’s non-committal support for India’s efforts to access civilian nuclear fuel through Nuclear Supplier Group. President Hu’s vague official statement that “China does not seek any selfish gains in South Asia and is ready to play a constructive role in promoting peace,” has no constructive and operational meanings. China would like its presence to be felt in the Indian subcontinent. India might put up a brave face and assert that it has transcended the feelings of betrayal and humiliation when China attacked in 1962, but it does not have a definitive answer to the question whether Chinese intentions have changed. China is still holding a large chunk of territory in Kashmir, 38,000 sq km (14,670 sq miles) of Aksai Chin, which it seized after the 1962 blatant aggression, and claims more. Just before the visit it re-asserted its claim upon the entire state of Arunachal Pradesh. Another 5,180 sq km (2,000 sq miles) of northern Kashmir was given by Pakistan to Beijing as a bridal price for an all-weather friendship pact signed in 1963.

China had already built a road through Aksai Chin linking Tibet with its Xinjiang province before it laid an aggressive claim on it. Now it seeks a diplomatic solution by keeping silent over the border problem. During the eagerly visited by a Chinese President in ten years, border problems were hardly discussed. So India might eventually be persuaded under the pressure of future benefits of trade to give up its claim on Aksai Chin in lieu of India keeping what is already an integral part of the country, Arunachal Pradesh. That’s what Prime Minister Zhou Enlai said after the post-1962 aggression that India should accept “the present actualities”.

So it is back to the future with the same old Chinese argument: You may claim Aksai Chin, but we control it. China has not withdrawn other claims it makes on Indian territories. India has to create new bargaining chips in dealing with China. Trade and technological cooperation could continue to grow as they have been doing in the past few years even without a final resolution of the border dispute, though much is being made of India-China trade relations. If China is now India’s second-largest trading partner, after the USA, with a bilateral trade of $20 billion, it shows how small is India’s total foreign trade in comparison with that of China.

What does India export to China? Mostly iron ore, raw material for its construction industry and other semi-finished goods in exchange for electronics and high value added manufactured goods, which are hurting small manufacturers. China sells value-added goods to India, much as the British did during colonial times. What would India sell to China to increase to the two-way trade to $40 billion by 2010? At the current state of affairs, it would be an unequal trade relation. With its future trade surpluses, China might become a moneylender to India as it is to the United States.

It is important however to acknowledge that trade helps create jobs and reduce tension in international relations, but raising the expectations high to the level of “strategic and cooperative partnership” is not only ridiculous but also dangerous. A free trade agreement with China at present would be counter productive because it would give it an unlimited access to Indian market, which would cripple Indian manufacturers, as it has done in the United States. While the United States is a complex and dynamic economy and creates alternative jobs to replace the ones lost to Chinese manufacturing, India cannot follow the US example. As is being noticed that India is competing with China for energy, scarce raw materials, intellectual property, and outsourcing. While there are possibilities of cooperation, the competition between the two unequal countries is getting tougher.

China would cooperate with India only when it cannot compete and beat India. India’s cooperative and strategic relationship with the United States, Britain, Germany, France and other European countries ranging from fighting terrorism and the security of the Indian Ocean to sophisticated technology sharing (including nuclear energy) and building a knowledge society is far more important than another round of hype about India-China partnership. When American and European political leaders visit India, they come with business plans. Their smiles and handshakes are meaningful. Just watch what happens during the visit of a most high-powered Business Development Mission, led by Under Secretary for International Trade, Frank L. Lavin, currently touring India.