Prime Ministerial visits to neighbouring countries are always of great importance. And Prime Minister Manmohan Singh’s three-day visit, starting January 13, to China is no exception. Since the UPA government came to power in 2004, we have already had two high-level visits by President Hu Jintao, as well as that by Premier Wen Jiabao. Sonia Gandhi’s goodwill visit towards the end of last year, too, was billed high by the Chinese.
Today, Sino-Indian relations have entered a degree of complexity that did not exist earlier. This is because, despite the continuing border dispute, where no consensus seems near, India and China have managed to create a basis for mature understanding on several other issues. Chief amongst this is trade, which touched a figure of $ 14.7 billion at the end of 2007 — an increase of approximately 50 per cent — and is expected to double again by the end of 2008. These are promising statistics and China today is fast becoming India’s largest trading partner. Similarly, track two initiatives designed to increase mutual trust have also been on the rise. Several scholarly cultural exchanges take place regularly and we have added joint military exercises to this repertoire.
However, areas of dispute still remain among the two countries. The chief among this is the border issue. In the last year, China has upped the ante once again on Arunachal Pradesh. Not only does it claim Tawang, today the Chinese preface this demand as one of the Tibetan people. They also see this as a way of painting the Dalai Lama as the one willing to give up Tibetan territory. Its last ambassador, Sun Yixi, went on record in claiming all of Arunachal as part of China.
While India has downplayed the issue, China’s border claims remain a matter of concern, especially since a mutual statement had once agreed that populated areas under control would not be disturbed. China’s hardening border stand can be seen as pressure tactics to ensure that India does not become complacent about China finally accepting the Line of Actual Control as a border.
It wants to use the border negotiation as a card to pressure India at other levels, especially by pointing out to India that its growing engagement with the US will not guarantee peace on the border. The Chinese are not averse to using domestic political pressure in other countries, where necessary, to further their own ends. This, in itself, is a natural strategy used by all countries. However, in this case, India is not seen as crucial to China’s own ambitions as a world power. It is India working in tandem with the US and Japan that forces them to take us seriously.
But geo-politics apart, today, it is business that is taking the lead in the stabilisation of our bilateral ties. But even this area is not without its own problems. While China is pushing for India to sign an FTA with it, we are wary of doing so until China is given a monetary economy status. This is not easy to do since China’s manufacturing is not without State subsidies of a massive scale and non-transparency at other levels.
Although scholars have pointed out the benefits that would occur for an Asian Economic Area if the two giants were to sign an FTA, the fear of China dumping goods in India has also promoted industrial chambers and those championing the rights of farmers to take a cautionary stand on an FTA with China. It is, of course, interesting that the CPI(M) has not come out with any statement on the matter.
Further, our trade basket remains limited where exports are concerned. China is an importer of iron ore, primary and semi-finished iron and steel, plastic, linoleum and marine products. We import electronic goods, organic chemicals, pharma products, coal, coke, raw silk and briquettes from China.
However, whether an FTA is signed or not, there are other trade issues that can definitely be facilitated between the two countries. A comprehensive uniform system of custom values and a uniform system of technical standards can be brought about.
Along with this, the Indian offer to simplify visa procedures for businessmen from China is praiseworthy. It is a matter of record that the Chinese have facilitated and handed over almost double the number of visas that India has. While China has already created a visa-friendly regime, India’s archaic security considerations still hamper visa access for the Chinese.
Further, pushing land trade routes between the two countries can also be of importance in streamlining economic contacts between the two countries. The Kunming initiative linking India, Myanmar and Bangladesh (BCIM) is definitely worth exploring and perhaps key to developing our North-eastern region as a whole, instead of a few non-happening Himalayan trade routes.
Ravni Thakur is Reader, Department of East Asian Studies, Delhi University