Rise and co­ex­ist

In­dia seeks China’s friend­ship with cau­tion as ter­ror­ism, pro­tec­tion­ism cast shadow

Global Times - - Front Page - By Li Qian

In­di­ans feel strongly about China’s stance on Ma­sood Azhar

In­dian schol­ars are in­ter­ested in how or­di­nary Chi­nese peo­ple think about In­dia

The fact that Chi­nese over­seas projects typ­i­cally send work­ers to ac­com­pany in­vest­ment has met with pro­tec­tion­ist con­cerns in In­dia

More than 20 world lead­ers are set to con­gre­gate in Bei­jing in May for the first One Belt and One Road sum­mit, though one of China’s most im­por­tant neigh­bors will likely be con­spic­u­ous in its ab­sence – In­dia.

In fact, of­fi­cials and ex­perts in both coun­tries doubt that In­dia will be of­fi­cially in­volved in the One Belt and One Road ini­tia­tive in any way. One ma­jor prob­lem, In­dian ex­ter­nal af­fairs of­fi­cials say, is that the ini­tia­tive in­cludes the China- Pak­istan Eco­nomic Cor­ri­dor, a key co­op­er­a­tion pro­ject be­tween China and Pak­istan which passes through Kash­mir, a re­gion claimed by both Is­lam­abad and New Delhi.

“For us, there are ques­tions of sovereignty which need to be ad­dressed first,” said In­dian For­eign Sec­re­tary Subrah­manyam Jais­hankar dur­ing the Global Times’ visit in In­dia in mid- Fe­bru­ary.

How­ever, In­dia has been en­thu­si­as­ti­cally push­ing for greater trade with China and at­tract­ing huge vol­umes of Chi­nese in­vest­ment, push­ing eco­nomic co­op­er­a­tion be­tween the two coun­tries to un­prece­dented lev­els.

Many In­dian ex­perts agree that bi­lat­eral re­la­tions with China, in both geopo­lit­i­cal and eco­nomic terms, are more im­por­tant than ever be­fore at a time of un­prece­dented eco­nomic chal­lenges and un­cer­tain­ties brought about by the pro­tec­tion­ist- lean­ing new US pres­i­dent.

But how to ef­fi­ciently work to­gether for mu­tual ben­e­fits and how to man­age dis­putes be­tween the world’s two largest de­vel­op­ing coun­tries re­quires wis­dom and pa­tience.

Mu­tual mis­trust

Step­ping out of New Delhi’s Indira Gandhi In­ter­na­tional Air­port, one can­not miss the gi­ant posters advertising Chi­nese elec­tron­ics firms Oppo and Gionee, which are clear in­di­ca­tors of a strong Chi­nese pres­ence in the eco­nomic life of the South Asian na­tion; the down­town Chi­nese em­bassy, which lo­cal In­dian of­fi­cials claim is the big­gest em­bassy com­pound in the world, is proof of the diplo­matic im­por­tance Bei­jing has placed on New Delhi.

In­dian of­fi­cials from the Min­istry of Ex­ter­nal Af­fairs and the Min­istry of Fi­nance that met with the Global Times unan­i­mously stressed the im­por­tance of bi­lat­eral re­la­tions and ex­pressed their will­ing­ness to boost ties. Re­la­tions be­tween China and In­dia have been mov­ing in a friend­lier di­rec­tion in the past two to three decades, though ob­sta­cles have come up from time to time.

Counter- ter­ror­ism is one area in which China and In­dia should make spe­cial ef­forts to­gether, ac­cord­ing to For­eign Sec­re­tary Jais­hankar.

Bi­lat­eral ties have been high­lighted in re­cent months af­ter In­dia crit­i­cized China for block­ing the United Na­tions from list­ing Pak­istani na­tional Ma­sood Azhar as a ter­ror­ist and ob­struct­ing In­dia from be­com­ing a mem­ber of the Nu­clear Sup­pli­ers Group.

The Chi­nese for­eign min­istry has said more proof of Azhar’s ter­ror­ist deeds needs to be pro­vided by In­dia and that In­dia should do suf­fi­cient diplo­matic ground­work with non- pro­lif­er­a­tion treaty sig­na­to­ries be­fore the UN passes the mo­tions.

In­dia is on high alert for po­ten­tial ter­ror­ist at­tacks, as seen from the strict se­cu­rity checks at ho­tels in its cap­i­tal and

“In­dia wants to ex­port more to China. We want to have more mar­ket ac­cess in China.”

Shak­tikanta Das direc­tor of Depart­ment of Eco­nomic Af­fairs, Min­istry of Fi­nance of In­dia

ma­jor cities. Azhar’s mil­i­tant group is sus­pected of at­tack­ing In­dian mil­i­tary fa­cil­i­ties near the Pak­istan bor­der and con­duct­ing other ter­ror­ist at­tacks.

Sin­cere com­mu­ni­ca­tions are needed be­tween China and In­dia to solve dis­agree­ments on this is­sue, said Sun Shi­hai, deputy direc­tor of the In­sti­tute of Asia- Pa­cific Stud­ies at the Chi­nese Academy of So­cial Sci­ences. China a is also a vic­tim of ter­ror­ism and shares com­mon in­ter­ests with In­dia on this is­sue.

China has a very strong, prin­ci­pled po­si­tion on counter- ter­ror­ism. We hope the po­si­tion China al­ready has will be fur­ther im­ple­mented,” said Jais­hankar, say­ing that dis­cus­sions with China over the mat­ter are still go­ing on. Jais­hankar will co- chair the China- In­dia Strate­gic Dia­logue in Bei­jing start­ing Wed­nes­day, at which bi­lat­eral ties and dis­putes are ex­pected to be dis­cussed.

Schol­ars in In­dia, on the other hand, are ea­ger to know more about or­di­nary Chi-nese peo­ple’s view of In­dia. Dur­ing meet-ings be­tween the Global Times and In­dian think tanks, at least two In­dian schol­ars ex­pressed con­cern that the Chi­nese pub­lic does not pay as much at­ten­tion to In­dia as In­di­ans do to China.

What do ed­u­cated young Chi­nese think In­dia, what do they know of In­dia, as a peace­ful coun­try? A good neigh­bor or bad neigh­bor?” asked Gurmeet Kanwal, Distin-guished Fel­low of the In­sti­tute for De­fence Stud­ies and Analy­ses ( IDSA), while Ja­gan-nath-Panda, an East Asia re­search fel­low at IDSA who au­thored the book In­dia- China Re­la­tions wanted to know “why is Chi­nese me­dia cov­er­age on In­dia so mi­nor?”

One other ques­tion re­peat­edly raised dur­ing the ex­changes in­cluded “How will re­la­tions be­tween China and the US change with Don­ald Trump as pres­i­dent?”

When elab­o­rat­ing on In­dia’s diplo­matic re­la­tions with other coun­tries, In­dian offi-cial and schol­ars of­ten stressed that In­dia de­vel­op­ing its re­la­tions with the US doesn’t mean it is act­ing against any other coun­try.

Un­even trade and in­vest­ment

Be­sides Oppo, Xiaomi and Huawei, a num­ber of Chi­nese smart­phone and tablet man­u­fac­tur­ers have per­me­ated the fast-grow­ing In­dian mar­ket and be­come house- hold names. As the Chi­nese smart­phone mar­ket nears sat­u­ra­tion, In­dia has proved to be a con­ti­nent that no am­bi­tious com­pany can af­ford to ig­nore. In­dia cur­rently has more than 1 bil­lion mo­bile phone users, among whom only 250 mil­lion are smart­phone users, demon­strat­ing huge mar­ket po­ten­tial for the years to come.

This po­ten­tial is not just in the phone sec­tor, ex­perts say, ex­plain­ing it lies in many in­dus­tries.

On the other side, In­dia is also look­ing for greater ties with China and the eco­nomic op­por­tu­ni­ties this may bring. Jais­hankar stressed that In­dia is a found­ing mem­ber of the China- ini­ti­ated Asia In­fra­struc­ture In­vest­ment Bank and is the sec­ond largest share­holder af­ter China, and said In­dia ad­vo­cates con­nect­ing closely with China.

The ea­ger­ness of In­dian po­lit­i­cal and eco­nomic elites to im­prove re­la­tions with China and boost eco­nomic ties is ev­i­dent.

Un­der Prime Min­is­ter Naren­dra Modi’s “Make in In­dia” strat­egy, In­dia is thirsty for for­eign in­vest­ment to in­dus­tri­al­ize the coun­try, for which China is a nat­u­ral part­ner.

Right now China is the fastest- grow­ing source of for­eign di­rect in­vest­ment to In­dia. Di­rect in­vest­ment from China to In­dia topped $ 1.063 bil­lion in 2016, ac­cord­ing to fig­ures from the Chi­nese em­bassy in New Delhi, six times what it was 2015.

At least seven Chi­nese smart­phone man­u­fac­tur­ers have es­tab­lished or plan to es­tab­lish fac­to­ries in In­dia.

But In­dia wants more than just in­vest­ment, and is in re­turn ey­ing the Chi­nese mar­ket. China is more in­ter­ested in in­vest­ing in In­dia than buy­ing In­dian- pro­duced prod­ucts, com­plained Shak­tikanta Das, head of the Depart­ment of Eco­nomic Af­fairs, Min­istry of Fi- nance. Bi­lat­eral trade be­tween China and In­dia has been hugely un­even, with China en­joy­ing a huge sur­plus. Fig­ures from China’s Gen­eral Ad­min­is­tra­tion of Cus­toms show that In­dian ex­ports to China con­tracted 18 per­cent in 2016 com­pared with the pre­vi­ous year, con­tribut­ing to the rise of its trade deficit with China from $ 45 bil­lion to more than $ 46.5 bil­lion.

This was one of the rea­sons be­hind calls to “boy­cott Chi­nese prod­ucts” in In­dia in the sec­ond half of last year.

Brush­ing off the im­pact of such cam­paigns, Das said busi­ness­peo­ple who think their busi­ness is af­fected by Chi­nese im­ports are free to ex­press them­selves, but reaf­firmed that “In­dia wants de­velop very, very good eco­nomic re­la­tions with China.”

“In­dia wants to ex­port more to China. We want to have more mar­ket ac­cess in China,” said Das, urg­ing China to fur­ther open up sec­tors like IT soft­ware and agri­cul­tural prod­ucts.

In­dian- made prod­ucts are not com­pet­i­tive in the Chi­nese mar­ket, there­fore In­dia should fo­cus on sec­tors it has ad­van­tages in, like fur­ther im­prov­ing the “soft en­vi­ron­ment” for for­eign in­vest­ment as well as in­fra­struc­ture, a long- time headache for in­vestors, Sun Shi­hai told the Global Times.

For Ga­gan Sab­har­wal, global trade devel­op­ment direc­tor of the Na­tional As­so­ci­a­tion of Soft­ware and Ser­vice Com­pa­nies ( NASSCOM) in In­dia, the big­gest po­ten­tial of Sino- In­dian eco­nomic co­op­er­a­tion lies in In­dian IT en­ter­prises pro­vid­ing soft­ware ser­vices to Chi­nese man­u­fac­tur­ers.

In­dia took the route of pri­or­i­tiz­ing ser­vice in­dus­tries like in­for­ma­tion tech­nol- ogy over man­u­fac­tur­ing. That led to the IT in­dus­try, and es­pe­cially soft­ware ser­vices, to de­velop into a state- of- art sec­tor. A num­ber of In­dian com­pa­nies ded­i­cated to soft­ware ser­vices for for­eign com­pa­nies are world lead­ers in the sec­tor. There is thus huge po­ten­tial for co­op­er­a­tion with Chi­nese en­ter­prises which ex­cel in hard­ware man­u­fac­tur­ing but are in need of soft­ware ser­vices.

NASSCOM, with more than 1,100 mem­ber firms, has been ac­tively seek­ing op­por­tu­ni­ties to part­ner Chi­nese man­u­fac­tur­ers and In­dian soft­ware providers. One of its mem­bers, In­fosys, cur­rently has 60 per­cent of its busi­ness in the US, fol­lowed by the Euro­pean mar­ket. China is new on its busi­ness map and it is hop­ing for a huge in­crease in busi­ness.

How­ever, bi­lat­eral eco­nomic re­la­tions are still far from achiev­ing har­mony. The model of Chi­nese over­seas projects typ­i­cally send­ing work­ers to ac­com­pany in­vest­ment has met with pro­tec­tion­ist con­cerns.

“Please do visit the metro rail here [ in Delhi]. It’s fully Ja­panese fi­nanced,” said Shekhar Sinha, for­mer Chief of In­te­grated De­fence Staff with the Western Naval Com­mand. “We do not like too many for­eign­ers in our coun­try. We man­age the Ja­panese [ pro­ject] with ev­ery­body in­clud­ing the su­per­vis­ing staff be­ing In­dian. We are not Africa. We have ac­cess to Ja­panese money, we have ac­cess to Amer­i­can money. We have ac­cess to World Bank money … We have for­eign ex­change sav­ings, which is one of the high­est in the world, that’s why we achieve the 7 per­cent- rate growth.”

“You can­not deal with In­dia the way you deal with Mozam­bique,” he warned.

How­ever, like it or not, China and In­dia must find a way to co­ex­ist for the un­prece­dented “si­mul­ta­ne­ous reemer­gence of the two great civ­i­liza­tions,” said Alok Bansal, direc­tor of In­dia Foun­da­tion, a top think tank in the coun­try.

Pho­tos: Li Qian/ GT

The In­dian Gate looms from afar in cen­tral New Delhi. Top left: A logo of Chi­nese smart­phone man­u­fac­turer Oppo hangs on a street in Ban­ga­lore. Top right: For­eign Sec­re­tary Subrah­manyam Jais­hankar speaks to the Global Times dur­ing an in­ter­view in New Delhi.

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