Building a trade wall to offset India-China differences

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Manish Chand | 18 Dec, 2010
Despite largely negative media perceptions of Chinese Premier Wen Jiabao's just-concluded visit, the Indian government considers the talks a "success" where India got China to address over USD 20 billion trade imbalance and conveyed its core concerns on Kashmir. Experts are, however, divided on the visit which some see as largely symbolic that did not lead to any big-ticket decisions or strategic breakthrough on key issues.

A day after the Chinese premier wrapped up his three-day visit to India - a visit the world watched with a lot of interest as it involved not just the world's two most populous nations but emerging global powers - the government here rejected reports about India retaliating over China's practice of issuing stapled visas for residents of Jammu and Kashmir by omitting a mention of "one China policy" in the joint statement and described the visit as a "success".

"Our position is well-known. Every time one sits down for talks, you don't have to reiterate it," an informed source close to the government told reporter.

"The draft of the joint statement has been discussed for weeks between the two sides. The host government (India) had proposed it a while ago. China did not raise any objection or insist on including India's commitment to one-China policy in the joint statement," the source added.

The source drew attention to para 4 of the joint communique that says the two sides "reaffirmed their commitment to abiding by the basic principles and consensus concerning the development of India-China relations" set out in previous joint statements in 2003, 2005, 2006 and 2008 which mentioned India's adherence to one-China policy.

During the talks, India made it abundantly clear that China must respect its concerns on Kashmir just as New Delhi respects Beijing's sensitivities on Tibet and Taiwan.

"The omission of one-China policy does not imply any change in India's stated position. Nor does it imply an allusion to a fractious issue," Salman Haider, a former foreign secretary and an ambassador to China, told reporter.

At the end of the talks between Prime Minister Manmohan Singh and Wen Thursday, the two sides agreed to a meeting of officials to resolve the contentious issue of stapled visas.

"The issue did come up in the discussions. Premier Wen Jiabao spoke about it, and we reiterated our position, the position that we have always stated through the years," Foreign Secretary Nirupama Rao told reporters after the talks Thursday, adding that it was "not a bone of contention."

India regards the Tibetan Autonomous Region and Taiwan as an integral part of the People's Republic of China.

Srikanth Kondapalli, a China expert at Jawaharlal Nehru University, refused to buy the government's "belaboured efforts" to play down the omission of one-China policy in the joint statement. "The omission is glaring. Clearly, there was some breakdown. It looks like we have made it clear that unless China accepts Kashmir as part of India, India will not repeat that Taiwan and Tibet are part of China in future joint statements," he added.

However, despite serious differences over the visa issue and China's accelerated investment in Pakistan-controlled Kashmir, government sources said New Delhi saw Wen's visit as "a success" and was satisfied by Beijing's response to addressing its concerns over the widening trade deficit that touched USD 24 billion this year.

During the visit, the two sides set an ambitious target of nearly doubling bilateral trade to USD 100 billion by 2015, set up a strategic economic dialogue to address the trade deficit, launched a CEOs' forum. Beijing agreed to provide greater market access for Indian goods to the Chinese market and decided to step up investment in the infrastructure sector in India.

The talks led to a slew of important trust-building steps that included the launch of an annual dialogue between foreign ministers and conscious efforts by both sides to focus on expanding trade and advancing functional cooperation to offset dissonance on other issues.

The two sides also signed six agreements in areas ranging from media and cultural exchanges to green technologies, the sharing of hydrological data on the Sutlej river and collaboration between their banks.

Sceptics were not impressed and found the visit high on symbolism and lacking in strategic consensus on key issues like Kashmir or the UN reforms. "It was a stop-gap kind of visit aimed at maintaining the status quo in the relationship. There was no evolution of China's stand on India's bid for the UNSC," Kondapalli said. The Chinese premier merely reiterated that China backed a bigger role for India in the UN, he said.

Unlike Wen's first visit to India in 2005 that led to the formulation of guiding principles and political parameters for resolving the boundary dispute, there was no movement on this issue, with Wen merely saying the boundary issue was "a historical legacy" and its resolution requires patience.

Haider does not share this bleak assessment. "Let's be clear. It was not a problem-solving visit. It was a trust-building visit."

"The Chinese premier made a deliberate effort to raise the level of interaction. He brought in 400 business people, interacted with school children, spoke at a think tank (Indian Council for World Affairs) in lofty terms about India-China relations, called for greater people-to-people exchanges, and repeatedly stressed that India and China are partners and not rivals. That was the most important message from the visit," said Haider.

(Manish Chand can be contacted at manish.c@ians.in)