India, China vow to carry forward ties through talks

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ON A POSITIVE NOTE: Prime Minister Manmohan Singh and his Chinese counterpart, Wen Jiabao, exchange pleasantries prior to a bilateral meeting on the sidelines of the 17th summit of the Association of Southeast Asian Nations in Hanoi on Friday.


HANOI: India and China on Friday expressed their determination to carry their relations forward through dialogue, with Prime Minister Manmohan Singh and Chinese Premier Wen Jiabao instructing their officials to “work their way through” all difficult issues.

The two leaders met for 45 minutes on the sidelines of the Association of Southeast Asian Nations (Asean) summit.

Mr. Wen said he would visit India before the year-end. He suggested that both sides reach consensus on some major aspects to lay the foundation for the visit.

Both leaders instructed their Special Representatives to address the border issue with a “sense of urgency,” with Dr. Singh highlighting need for both sides to be sensitive to each other's core issues. The Special Representatives were asked to meet in Beijing before next month-end and given clear directions on how the two leaders wanted them to resolve all difficult issues, National Security Advisor Shiv Shankar Menon told journalists.

Both leaders covered the entire gamut of relations, including the issue of China issuing stapled visas to people domiciled in Jammu and Kashmir and the consequent pause in the high-level defence exchanges. “In their 10th meeting in six years, they took a broad view of the strategic significance of India-China ties and expressed satisfaction at the development of relations,” Mr. Menon said.

Mr. Wen agreed with Dr. Singh's oft-repeated statement that there was enough space in the world to accommodate the growth of both countries. There was enough space for India and China to have a cooperative relationship in “all areas.”

Mr. Menon said that prior to Mr. Wen's arrival in December, India was looking forward to the opportunity provided by the visit on Sunday of Zhou Yong Kan, Member of the Politburo Standing Committee of the Communist Party of China, to “have much freer and broader exchange of views.”

Trade imbalance

Mr. Wen said China was “very conscious” of the trade imbalance with India and listed some of the steps taken by Beijing to address this issue. Mr. Menon pointed to regular high-level meetings on the issue and the resultant diminishing of the imbalance. “We will continue to work on it.” Bilateral trade in the first nine months of the year touched $45 billion and was on course to meet the target of $60 billion for the year.

Asked to spell out the core issues that Dr. Singh wanted both countries to be sensitive of, Mr. Menon declined to “put a gloss” on what the Prime Minister specifically said.

The Prime Ministers resolved to continue working together on a range of issues, including climate change, counter-terrorism, disaster management, energy and food security on which both had “similar or identical views.” They did not discuss the G-20 summit in Seuol next month.

They said they were looking forward to early resolution of the border issue on the basis of the guiding principles and political parameters agreed upon in 2005.

 

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China and India: friction grows; so do business ties

China and India: friction grows; so do business ties | beyondbrics: News and views on emerging markets | FT.com

This week began with India being pushed by the US to take a “more active” role in political and security cooperation in Asia, at a time when the region is becoming increasingly anxious about a more assertive China.

Indian leaders themselves have expressed fears their country is being hemmed in by Beijing’s expanding ties with Pakistan, Burma, Nepal and Sri Lanka. But recent days have provided a reminder that trade and business ties between the two regional heavyweights are proliferating too.

On Thursday, India’s Reliance Power ordered a massive $10bn worth of power generation equipment from Shanghai Electric Group in a deal financed by Chinese banks - a move that Anil Ambani, the Indian billionaire and chairman of Reliance ADA, described as “the largest order in the history of the power sector”.

The previous day, the governments of Hong Kong and China’s Guangdong province held a joint conference in New Delhi, the biggest of its kind, where they tried to entice more Indian businesses to join those already operating in China, including 1,500 that have bases in Hong Kong.

As the week wore on, political leaders from China and India offered calming - and uncannily similar - words on the two countries’ coexistence as they attended a meeting of the Association of Southeast Asian Nations in Vietnam, where they eventually met on the sidelines.

India’s prime minister Manmohan Singh first said that “the world has enough space” for both China and India to compete economically. Then on Friday, the Chinese premier Wen Jiabao said: “There is enough space in the world for India and China to achieve common development … to have cooperation.”

But don’t take that to mean all is well. India is clearly taking a more strident approach in its engagement with China. The countries’ disputed 3,500km border is still a persistent source of tension. And that’s one reason why India is bolstering its military capabilities by turning increasingly to US defence products - including a possible $11bn deal to buy 126 fighter jets to rearm its out-of-date air force.

Against the background of that uneasy relationship, the FT reported earlier this year that a group of Chinese mobile handset makers were considering setting up manufacturing facilities in India in an effort to gain political capital in their most important export market.

In public, business people like to pretend they operate in a realm free of geopolitics (not least because it helps them dodge tricky questions). But in China and India they will have to adapt to the reality of tensions between Asia’s two powers - and hope that in a small way they can reduce them by expanding business ties.