THE YEAR OF THE DRAGON

- India should be less paranoid while dealing with China

Ronen Sen

I do not belong to the charmed circle of China specialists in India. My views are those of an observer of the evolution of China’s policies from Delhi, and during my ambassadorial assignments for nearly two decades in different world capitals, including Moscow, Berlin, London and Washington DC. More importantly, I had the privilege of being very closely involved with the visit of Prime Minister Rajiv Gandhi to China in December 1988. This was the first prime ministerial visit to China since that of Jawaharlal Nehru in 1954, and of course the first visit at this level since the 1962 conflict. An earlier visit by the then external affairs minister, Atal Bihari Vajpayee, in 1979, had ended in embarrassment. Rajiv Gandhi’s visit was preceded by renewed tensions along the north-eastern border areas and the creation of the state of Arunachal Pradesh in 1987. The regional situation was fluid. We had our peace-keeping forces in Sri Lanka, Pakistan was actively supporting secessionist forces in Punjab. Rajiv Gandhi used a direct private channel to Ronald Reagan, which led to the cancellation of proposed supplies of AWACS aircraft to Pakistan that year. This marginally eased demands for additional resources in view of prior commitments for security and in the wake of the worst drought of the century in our country and the implementation of the pay commission recommendations. There was ongoing support from outside the Indian subcontinent to insurgent groups in north-eastern India. Just before the 1988 visit, we had to correct Chinese perceptions about the reported intrusions by our combat aircraft into the Tibet autonomous region of China. The meticulous advance preparations for a carefully scripted outcome did not entirely carry conviction within our establishment. There were persisting reservations within sections of even the ruling party on both ideological considerations and the possible risks of an unpredictable outcome of the visit. A few of us were tasked by the prime minister to try and develop a political consensus to the extent possible. Rajiv Gandhi had, however, firmly made up his mind that irrespective of the lack of a domestic consensus and differing risk perceptions, he would go ahead with his visit in the larger interests of our country. Incidentally, in response to a message through a confidential private channel, the then president elect of the United States of America — George H.W. Bush — conveyed his personal assessment to Rajiv Gandhi that the Chinese leadership would respond positively to his bold initiatives. The visit to China belied all apprehensions about the outcome and, in fact, exceeded our expectations in terms of atmospherics. We did not insist on the resolution of the boundary question as prerequisite for the development of a comprehensive relationship. We recognized that the development of India-China relations in various fields would eventually create a climate conducive to a settlement. A joint working group was set up to seek a fair and reasonable settlement of the boundary question on the basis of mutual understanding and mutual adjustment. In the meantime, both countries would maintain peace and tranquillity in the border areas. A joint group was also set up at the ministerial level to promote economic, trade, science and technology cooperation. More important than meetings with the Communist Party of China general-secretary, president and premier, was that with Deng Xiaoping, who did not need any party, State or government post to maintain his undisputed leadership. The extraordinarily long and warm handshake between Rajiv Gandhi and Deng Xiaoping manifested the truly historic nature of the visit that marked a turning point in the relationship. Our prime minister was also received with great warmth in Shanghai, by the then city party chief, Jiang Zemin, who in 1996 became the first Chinese president to visit India. The only regret in my diplomatic career was the cancellation of my ambassadorial appointment to China that year, just on the eve of my scheduled arrival in Beijing after a change of government in India. In recent decades, we have had regular reciprocal visits by successive prime ministers and presidents, including Prime Minister Manmohan Singh and Premier Wen Jiabao, and President Hu Jintao and President Pratibha Patil. The Congress president, Sonia Gandhi, paid visits to China at the invitation of CPC general-secretary, Hu Jintao, and she met Vice-President Xi Jinping among others. There have also been frequent and useful exchanges at the governmental, parliamentary, business, educational, scientific and other levels. Even several years after raising the level of our talks to that of special representatives, a final resolution of the boundary question is not in sight. The substantive progress made in maintaining peace and tranquillity in the border areas is, however, welcome. It is particularly notable that after a couple of years of palpable tension, the talks on the overall direction of India-China relations between the special representatives ended on an upbeat note earlier this month. Hopefully, this signifies a strategic, and not a tactical, change of approach by both countries. Our consultations in terms of our strategic and cooperative partnership dialogue have been supplemented by the strategic economic dialogue and the establishment of a CEOs’ forum. While the US remains our largest trading partner in goods and services with a turnover of around $90 billion, China is likely to replace the US as our largest trading partner in the near future. Given a trade turnover in of over $70 billion in 2011, the 2015 trade target of $100 billion will undoubtedly be reached. Two-way investment flows are, however, much below potential. Indian investments in China are worth only $433 million. Chinese foreign direct investment was even lower, before a welcome recent surge in their investments in India. Contracted Chinese project exports to India are around $53 billion, though the realized amount is lower. Trade in services is also negligible and should be substantially increased. We obviously need better balance and diversification in trade and investments. At the same time, we need to be less paranoid and more pragmatic in thinking strategically about our long-term partnership with what will soon be the world’s largest economy. Both countries should take credible measures such as dismantling trade barriers, discouraging subsidies and unfair trade practices, and encouraging strict adherence to intellectual property rights. China has gone way beyond being a global manufacturing hub. It is making spectacular advances in frontier areas of science and technology and transforming itself into a major global research and innovation centre. It aims, for instance, to become the world leader in green technologies. Already four, possibly five, of the world’s top 10 banks, in terms of assets and profitability, are Chinese. Only the biggest of these — Industrial and Commercial Bank of China — opened an office in Mumbai four months ago. Quite apart from reciprocity, it will be to our mutual benefit to encourage other Chinese banks to commence operations in India. In recent years, the centre of global gravity has been shifting to the Indo-Pacific region in terms of economic, security and political interests. The rise of China is of major global significance, as also, to a lesser extent so far, the rise of India. The financial crisis emanating from the US and the continuing euro zone crisis have somewhat accelerated this trend. Yet the US and the European economies remain dominant determinants in an integrated global economy. The US is, and will, for quite some time, remain the only power with global reach. India continues to face threats from terrorism, proliferation of nuclear weapons and delivery systems and attempts to undermine its unity and territorial integrity, all sponsored by States in our immediate neighbourhood. There are also challenges, and corresponding opportunities, of cooperation in space and cyber security, energy security, freedom of navigation, maritime security, sharing of trans-border river waters and other issues. A unipolar or bipolar Asian or global security structure will be neither viable nor sustainable. In this context, it is important for India and China to understand, recognize and respect each other’s vital interests. Unlike the US, China and the former Soviet Union, India has not, so far, joined any alliance or formed any partnership aimed at any third country or group of countries. Neither of the countries, should, however, take the other for granted, or presume that certain actions would not result in countervailing measures in possible concert with the other partners. We should both ensure that such situations never ever arise, and that India-China relations always remain on an ascending trajectory. While concluding, I would like to go back to where I started. I recall the wise words of Deng Xiaoping to Rajiv Gandhi — that the 21st century would not become an Asian century without cooperation between China and India. That was in 1988, which was a Year of the Dragon that symbolizes all that is good and great. That year was certainly a good year for India-China relations. On January 23, we witnessed the beginning of celebrations ushering in another year. This augurs well for the future of India-China relations. The author is the former ambassador to the US