The global interest
generated by the visit of prime minister Narendra Modi to Wuhan for an
‘informal’ summit meeting with the Chinese president Xi Jinping is a testimony
to the importance of these two Asian giants in the present global order. China
and India are not only important for each other, their agreements or
disagreements on issues can now influence the global narrative. The world today
is dealing with intractable issues of terrorism, rise in protectionism and
climate change and both India and China have to make important contributions in
these matters.
Modi government’s
foreign policy has been focused on developing bilateral ties to serve India’s
interest with various countries. Bilateral relations are all about
give-and-take.
There are many sore
points in the Indo-China relationship from our point of view. The dispute arising
from China’s refusal to accept Macmohan line as the international border hangs
like Damocles sword over our relationship and the standoff at Doklam was a
chilling reminder of it. China’s unqualified support to Pakistan has also been
a cause of concern here. It has allowed Pakistan to raise its stakes against
India. India has also expressed its displeasure at the ‘One Belt One Road’ (OBOR)
passing through Pakistan occupied Kashmir (POK). India’s attempt to get Masood
Azhar designated as international terrorist by the United Nations has constantly
been vetoed by China. It has also frustrated India’s goal of becoming a member
of Nuclear Suppliers Group (NSG). China’s refusal to share river water data on
Brahmaputra and others was also an irritant.
China has its own
reasons to be frosty with India. India’s asylum to Tibetians is not viewed very
kindly by it. India’s growing proximity with United States of America and the
coalescing of this association with Japan and Australia with a view to ensure
freedom of navigation in the South China Sea irks China. Chinese riding
roughshod over its smaller neighbours has led these countries to develop closer
ties with India, which even with all its limitations, is seen as a country that
can stand up to China. It is in this background that this informal summit is
taking place.
In spite of all these
hiccups, there are several considerations in which India can be benefited from better
ties with China. China is the biggest trading partner of India and runs a
considerable balance of trade surplus with India at around $50 billion. India
has expressed its discomfort at this skewed trade relationship and China has
expressed its willingness to address the issue. With the labour cost rising in
China, a lot of low value addition manufacturing will become internationally
uncompetitive and will have to move out to countries. India can benefit from
this by insisting that Indian MSME clusters be made part of Chinese global
supply chain. The second leg of achieving trade balance can be higher exports
of agricultural and pharmaceutical goods and IT services. India must insist
that tariff and non-tariff barriers do not stultify the export of Indian
products and services in these categories. It is of paramount importance that
India finds outlet for its increasing agricultural production, failing which
Indian farmers will continue to suffer from price crashes. India should also
insist on local production of Chinese imports to bring down trade deficit. Such
a shift in manufacturing will also complement government’s ‘Make in India’
initiative.
India also stands to
benefit if it can attract foreign direct investment (FDI) from China. According
to the provisional figures for the year 2016-17 of the Reserve Bank of India, FDI
received from China was USD 198 million whereas the total FDI received that
year was USD 36.32 billion. Thus China’s share in total FDI was about 0.55
percent. According to the World Investment Report 2017, which was jointly released
by the United Nations Conference on Trade and Development and the Chinese
Academy of International Trade and Economic Cooperation under the Ministry of
Commerce, China was the second largest source of outward FDI in the year 2016
with the figure being USD 183 billion. China as a source of FDI is therefore
virtually untapped. These FDI can be in the field of Power, Fintech,
infrastructure sector and railways, where India needs huge capital investments.
India can also work with
China in the areas of energy security, water security and climate change.
Indian and Chinese interests converge on the issue of energy security as they
both are dependent on foreign sources of fossil fuels. At the recently
concluded 16th International Energy Forum, it was agreed that India
and China will work together to leverage their buying power to get better deals
from oil exporting countries. China can also be of great help in developing our
renewable energy sector. Mansarovar, which is the source of three major rives
that pass through India, lies in China and we need Chinese cooperation in order
to fully utilize these rivers.
Gains to China from a
good relationship with India are also considerable. Assured of a responsible
behavior from China in consonance with the international laws, India will have
no reason to be a part of any international containment strategy against China.
Further, as China prospers it would need outlet for its capital. India, with
its vast market, can be one of the attractive opportunities. China’s most
ambitious global signature project of One Belt One Road, which seeks to
recreate the silk route of the old times, cannot be truly successful without
the participation of India.
India and China share
very old cultural and civilizational ties. It is hoped that the sagacity of the
leadership of these two countries at the Wuhan meet will provide the two
countries with a new template to revive the old bonds.
Gopal Krishna Agrawal
National Spokesperson
on Economic affairs of BJP
9810019753
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