India-China ties at a crossroads

[Neo]

Monday, 20 November 2006

India-China ties at a crossroads

By Sanjoy Majumder
BBC News, Delhi

When Hu Jintao arrives in India on Monday it will mark the start of the first visit here by a Chinese president in a decade.
It's a measure of how relations between the two Asian giants have been captive to years of mistrust, mutual suspicion and rivalry.

But a growing trade relationship between two of the world's fastest growing economies is challenging traditional mindsets and is encouraging vastly improved ties.

Trade between the two countries is expected to touch $20bn by next year - in the 1990s it hovered around the $250m mark.

Many view the economic relationship between the two as complementary rather than competitive.

While India has the resources to satisfy China's growing appetite for raw materials such as iron ore, steel and plastics fuelling its massive manufacturing industry, China can provide manufacturing expertise and investment in infrastructure.

Regional ambitions

Many Indian IT firms, the country's growth industry over the past decade, have already established offices in China.

But for two countries which have ambitions of being the unrivalled regional superpower, it is only natural that economics is often undermined by politics.

Indian industry complains that China needs to be far more transparent in its dealings - for instance, they argue that there are hidden subsidies in China allowing its products to be priced far lower than the competition.

There are also fears that China is flooding India with low-quality consumer goods - a fact that is illustrated vividly by a trip to any Indian market where Chinese-made clothes, furniture, electronic goods and even firecrackers are widely available.

"But many of these goods are far lower in quality than what the Chinese sell to the West, including the United States," a top industry official says, refusing to be named.

But China has its own concerns.

It says Delhi is blocking investment in areas such as ports and telecommunication, citing security concerns.

While India denies it discriminates against Chinese investment, a recent internal report prepared by the country's national security council argued for new legislation to monitor investment from countries which could pose a risk to national security, including China.

Dispute

India's relationship with China, however, also has a significant geopolitical dimension.

The two countries have a long standing border dispute and a recent statement by the Chinese ambassador in India, in which he said Beijing laid claim to the state of Arunachal Pradesh in north-east India led to a furious reaction from Delhi.

While the claim is not new, and India for its part claims a part of Kashmir under Chinese control, it certainly reopened old wounds and raised fresh concerns in Delhi.

India and China fought a brief war in 1962 with a decisive victory for the Chinese, an event which many Indians still view as traumatic.

But Delhi is also suspicious of China's relationship with its long-time rival Pakistan.

Beijing and Islamabad share close military ties and there are suggestions that President Hu will announce a major nuclear deal with Pakistan during his visit to that country, immediately after his India trip.

That is something that will certainly not go down well in Delhi which cited the threat from China as its primary motive to declare its nuclear status in 1998 by carrying out a series of nuclear tests.

For its part, China is concerned about Delhi's growing ties with Washington especially the landmark nuclear agreement between the two allowing India access to civilian nuclear technology.

India is also wary of China increasing military and trade ties with a number of its neighbours.

Both countries are competing for influence in Burma and Nepal and the fact that the Tibetan government-in-exile is based in India is something that still annoys China.

The two sides also have differences over the Indian Ocean.

Despite this, many in India believe that it is possible and in fact important to do business with China.

At least one illustration of the seriousness with which India views its relations with its giant neighbour is the growing interest in Chinese language classes at its various universities and institutes.

The question is, how easily can Delhi bury the ghosts of its past.

http://news.bbc.co.uk/2/hi/south_asia/6157364.stm

 

[Goodperson]

Though I donot read much about this in Indian media This what I read in Dailytimes.
But we need to wait and watch as many things go behind close doors.So its too early to say the ties are warming up or are at crossroads.

China to sign US-like N-deal with India
http://www.dailytimes.com.pk/default.asp?page=2006\11\21\story_21-11-2006_pg1_1

* China hopes India will be drawn away from US
* India hopes better ties will dilute Beijing’s close relationship with Pakistan
By Khalid Hasan

WASHINGTON: China and India are poised to sign a civilian nuclear cooperation deal, similar to the recent agreement between the US and India, during President Hu Jintao’s four-day state visit to India beginning this Monday, according to a report in Boston Globe.

Datelined Beijing, the report quoting Indian officials says the deal would foster the exchange and purchase of nuclear technology between the two states. An announcement to this effect is expected to be included in a joint statement at the end of the Hu visit on Thursday.

Chinese nuclear specialists have been in India conducting meetings with Indian counterparts, one of the officials said. While the exact terms of the potential China-India nuclear agreement have not been finalised, they are expected to be similar to the terms of the civilian nuclear agreement India concluded with the United States on July 18, 2005. And while that deal is likely to be amended in the coming months in ways that may not be acceptable to India, in China’s case no such hurdles should exist.

Over the last year, the US and China have been trying to build closer ties with India, according to Sun Shihai, deputy director of the Institute for Asia Pacific Studies at the Chinese Academy of Sciences in Beijing.

He said, “The US always said it wants to use India to balance China. China feels it needs to engage India more (and) develop some kind of Russia-China-India cooperation. So there is some kind of competition happening.” Initially, China had criticised the Indo-US deal, saying it violated international non-proliferation principles. But Sun said Hu persisted in repairing ties with India, and an official in New Delhi knowledgeable about the nuclear negotiations with China, said the nuclear deal would largely be the fruit of Hu’s efforts.

The same official said, “We had been talking to the Chinese for a while but China’s military and foreign and defence ministries had all been against the deal. Hu and the Communist Party were the ones pushing it through, and they seem to have taken control of China’s India policy.” On the Indian side, the deal is said to have been brokered by Mayankote Kelath Narayanan, Singh’s national security adviser.

According to the Boston Globe, “Another factor is that just as China apparently hopes its warming ties with India will draw India away from the US, India hopes closer relations with China will dilute Beijing’s close relationship with Pakistan. Over the last two years, China had indeed cooled ties with Pakistan. While Hu is also expected to sign nuclear agreements with Pakistan, ‘the Pakistanis will get much less than what they want,’ an Indian official said.”

 

[Neo]

India and China 'to double trade'

India and China have pledged to double trade to $40bn (£21bn) a year by 2010 during talks between Indian PM Manmohan Singh and Chinese President Hu Jintao.

Mr Hu also said the two sides would continue efforts to solve their long-running border disputes.

He was speaking in the capital Delhi during the first visit to India by a Chinese head of state for 10 years.

China and India have overcome many hurdles in recent years but differences remain, correspondents say.

The BBC's Steve Schifferes says the two sides have different objectives in the trade deal.

China wants to boost its exports of manufactured goods to developing countries, while Indian firms, which have a comparative advantage in outsourcing of business and IT services, want more investment in China.

'Peace and tranquillity'

Mr Singh said there was enough space for the two countries to develop together in a "mutually supportive manner" after talks with President Hu.

We both believe that an early settlement on the boundary question serves the fundamental interest of our two countries
President Hu [/B]

"We will endeavour to raise the volume of bilateral trade to $40bn by 2010 and encourage two-way investment flows," the Indian prime minister told a joint news conference in Delhi.

That objective was reinforced by Mr Hu, who said the two sides would "sign an agreement on investment, promotion and protection between the two countries".

During their talks, the two leaders had decided "to speed up the joint feasibility study on a regional trade arrangement", Mr Hu said.

Last year, China formally recognised the border state of Sikkim as part of India. The two sides also agreed to continue to work together to resolve other border issues.

Mr Hu said that that work would continue. "Pending an eventual solution to the boundary question, the two sides need to continue their efforts to work together to maintain peace and tranquillity in the border areas," he said.

Meanwhile, a number of Tibetan activists have been detained in Delhi for protesting at Mr Hu's visit and alleged Chinese atrocities in Tibet.

India now recognises Tibet as part of China, but still hosts more than 100,000 Tibetans, including the Tibetan government-in-exile led by the Dalai Lama.

Old tensions

Mr Hu arrived in Delhi on Monday evening. His four-day trip also includes a visit to the financial capital, Mumbai (Bombay).

Rising trade between two of the world's fastest growing economies is encouraging vastly improved ties, the BBC's Sanjoy Majumder in Delhi says.

Annual bilateral trade which was worth only about $250m as recently as the 1990s has mushroomed in recent years.

But our correspondent says that mutual economic interests are often undermined by politics, given that the two countries have ambitions of being the unrivalled regional superpower.

The Asian giants fought a brief border war in 1962, which ended with a decisive victory for the Chinese, an event which many Indians still view as traumatic.

India's border state of Arunachal Pradesh is still claimed by China, while India lays claim to the Aksai Chin region in the north of Kashmir, which is administered by China.

Delhi is also suspicious of China's relationship with its long-time rival Pakistan - which Mr Hu is due to visit after his trip to India.

China, meanwhile, is concerned about Delhi's growing ties with Washington, especially a landmark nuclear agreement which allows India access to civilian nuclear technology.

Both India and China have produced staggering economic growth in recent years, but India continues to lag behind on many fronts, correspondents say.

China has a literacy rate of 95%, compared with India's 68%. Indian exports of manufactured goods in the financial year ending last March were valued at $71bn, compared with $713bn for China.

http://news.bbc.co.uk/2/hi/south_asia/6158824.stm

 

[Neo]

Wednesday, November 22, 2006

India and China to double trade, resolve border dispute

* Joint declaration calls for civil nuclear cooperation

NEW DELHI: India and China on Tuesday decided to “promote” civil nuclear cooperation, accelerate boundary settlement and open more trade points along the border.

Foreign Secretary Shiv Shankar Menon told reporters that the two sides had reached an agreement to enhance trans-border connections and allow movement of vehicles.

The new border points discussed were Damchok in the Ladakh region of Indian-held Kashmir and Beitling in the northeastern state of Arunachal Pradesh. The talks between Prime Minister Manmohan Singh and Chinese President Hu Jintao lasted 100 minutes.

Asked to elaborate the nuclear cooperation, Menon downplayed it, saying such cooperation also existed between the two countries in the past.

A joint declaration issued at the end of talks also called for advancing civil nuclear cooperation. “Considering that expansion of the civilian nuclear energy programme is an essential and important component of both India and China’s national energy plans to ensure energy security, the two sides have agreed to promote cooperation in the field of nuclear energy, consistent with their respective international commitments,” the declaration said.

Hu assured Singh China would not be an “obstacle” to India’s bid to become a permanent member of the United Nations Security Council.

Singh allowed China a consulate general in Kolkata. It was agreed that China would provide India a 5,000 square metre plot free of charge to construct a consulate general in Shanghai. India will also open a consulate general in Guangzhou to promote trade and tourism, Singh told the media.

The declaration also stressed cooperation in space technologies and satellite technologies, use of outer space for peaceful purposes and joint projects in climate change, earthquake engineering, nanotechnology, biotechnology and medicine.

Hu dismissed the speculation that China did not want the boundary issue to figure during the discussions.

No questions were allowed at the joint press interaction at the end of the talks. Hu and Singh read out brief statements and later the joint declaration was issued.

Singh said that he and Hu had agreed to make the positive development in India-China relations in recent years “irreversible”, adding that “cooperation in civil nuclear energy will be promoted”.

Singh said two special representatives had been asked to “accelerate efforts” to reach a settlement on the boundary issue. Indian and China also agreed to promote investments and establish a hotline to sort out disputes.

http://www.dailytimes.com.pk/default.asp?page=2006\11\22\story_22-11-2006_pg1_2

 

[Neo]

Behind China and India's Awkward Courtship

Analysis: Border disputes and Chinese ties with Pakistan have long divided them, but business could bring them together
By SIMON ROBINSON/NEW DELHI

Wednesday, Nov. 22, 2006

As Chinese Premier Hu Jintao began his four-day visit to India —the first by a Chinese head of state in more than a decade — there was plenty of talk about the good ties between the two countries, about the free trade agreement they hope to sign and about the fact that 2006 is "India-China Friendship Year." But what you won't hear as much about this week, at least not officially, are the tensions that remain between Beijing and New Delhi.

China's Ambassador to India, Sun Yuxi, prompted angry rebuttals from Indian officials last week when he reiterated China's claim to the eastern Indian state of Arunachal Pradesh during a TV appearance, noting it was "Chinese territory" and that China claims the "whole of that" state, which it calls Southern Tibet. Beijing has also complained that Delhi is throwing up unfair barriers to investment by snarling Chinese companies in bureaucratic red tape, and chafed at a decision to bar a company linked to the Chinese military from taking up a lucrative air cargo contract, apparently over security concerns. And, of course, China remains a close ally of Pakistan, India's archenemy, a friendship Hu will shore up during talks with President Pervez Musharraf in Islamabad as soon as he leaves India.

With a third of the world's population and two of its fastest- growing economies between them, the relationship between China and India is one of the most important of the 21st century. If they clash — as they have in the past over border disputes — global economic growth and stability will suffer. But as both have grown economically, relations have warmed: China-India trade is expected to reach $20 billion this year.

Moreover, India is obsessed with China. Mainland goods from refrigerators to clothes to cameras to children's toys flood Indian markets. China's pavilion is the most popular by far at the India International Trade Fair, which opened in Delhi last week and attracts hundreds of thousands of visitors some days. (At one stand, The Hindu newspaper noted with amazement, punters can buy not only a pair of bargain-priced Chinese jeans, but also the Chinese machinery that makes them.) Indian newspapers are talking up the idea of an emerging "Chindia" — a phrase coined by Indian economist Jairam Ramesh — that acts as a counterbalance to traditional powers Europe and the U.S. And while the government still focuses on their differences — theirs is a democracy, Indian officials note, where laws are debated and voted on rather than pushed through by an all-powerful one- party state — it also looks to the success of Beijing's economic reforms as a model for transforming its own country.

Nevertheless, it will probably take some bold steps for Beijing and New Delhi to put the past behind them. "There's still a general climate of anxiety that persists between the two countries despite better relations," says Manoranjan Mohanty, co-chair of the Institute of Chinese Studies in New Delhi. "That history is not easy to erase." But if Hu's trip is considered a success — Delhi promises that Chinese investors will be treated the same as any other and promises to make it easier for Chinese entrepreneurs to obtain visas, while each nation announced it will open consulates in more of the other's cities — India and China may find that their past differences become easier to ignore.

http://www.time.com/time/world/article/0,8599,1562321,00.html

 

[Neo]

Thursday, 23 November 2006

India and China's new course

By Sanjoy Majumder
BBC News, Delhi

Hu Jintao last visited India in 1984.

Twenty-two years later, as the Chinese president renewed ties with his closest Asian rival, he saw an India that had changed considerably.

Politically, India is no longer dominated by a single party but instead is governed by relatively stable if somewhat unruly coalitions.

Economically the country is snapping at China's heels, competing with it for global energy resources to feed its fast-growing economy while also presenting an attractive market for Chinese goods.

So the tone for the visit was set right at the beginning - a gracious formalness befitting two proud and ancient civilisations combined with a brisk, businesslike, if bullish, approach.

Simple message

President Hu's meetings with Indian leaders were flawless - correct, measured and polite but not warm or over-friendly.

The message was stark in its simplicity.

"China is ready to work with India," the president said in a keynote speech delivered to politicians and opinion-makers in Delhi.

Both China and India recognise that they need each other and that they need to work for mutual benefit even while preserving their self-interest.

That is why, even in the midst of a host of economic agreements, both countries also agreed to cooperate in the field of civilian nuclear energy.

It is a contentious area - while China has been suspicious of India's recent deal with the United States which gives it access to civilian nuclear technology, Delhi is unhappy with Beijing's reported plan to extend its nuclear cooperation with Pakistan.

But as India's Foreign Secretary Shiv Shankar Menon says: "Both countries can work together while preserving their self-interest."

So while politically Beijing might be concerned about India's nuclear capabilities, economically it spies business opportunities to help develop nuclear reactors and provide fuel.

China is also a member of the 45-member Nuclear Suppliers Group - a body which needs to ratify the agreement between the United States and India.

"We need China's help, if not active, but passive, to turn the NSG decision in our favour," says Naresh Chandra, a former Indian ambassador in Washington.

Common ground

It's this pragmatism which is pushing decades of mutual suspicion and antagonisms aside in favour of new, robust ties.

So the two countries signed some 13 agreements in a range of areas, from opening new consulates in Guangzhou and Calcutta to one on protecting their investments in each others countries. There was even an agreement on how to jointly preserve their cultural monuments.

Both countries have a lot in common:

*Their economies are growing rapidly
*They have large populations
*Their physical resources are stretched to the limit

But there are, of course, plenty of unresolved issues.

Chinese companies say they are being blocked from investing in some areas such as ports and telecommunications.

While India denies this, it has said it will make it easier for Chinese businessmen to get visas - one long-standing concern.

For its part, Indian industry is wary of being undermined by Chinese manufacturers who have the ability to push cheaper, better produced goods into the Indian market.

Despite this, the overwhelming sense is that the two countries can collaborate rather than compete and as a result, the two leaders have decided to work to double their trade to $40bn by 2010.

"One must realise that it is businesses that compete, not countries," says KK Modi, a leading Indian industrialist and a former head of India's Chamber of Commerce and Industry.

"And increasingly, businesses will work across borders."

Moving on

India and China have a turbulent history.

They fought a border war in 1962 - it led to an overwhelming victory for China and India has lived with the bitter memory since.

While the border issue is still to be resolved, the strategy is clearly to reduce the possibility of political disputes overturning the economic gains.

So while both political differences may occasionally flare up, for the most part it will be business as usual.

Nothing illustrates this better than the way in which India handled protests against President Hu's visit by Tibetan activists.

India has a large number of exiled Tibetans who are allowed to live here but have limited political influence.

During the president's visits to Delhi and Mumbai, the protesters were kept away from the venue of his meetings.

In one instance, a few of them broke through the security cordon in Delhi and in Mumbai a Tibetan protester set himself on fire near the president's hotel before being led away.

From the diplomatic point of view, it was just a brief hiccup in what has been a smooth if unexciting visit.

http://news.bbc.co.uk/2/hi/south_asia/6176374.stm