- Joined
- Apr 17, 2009
- Messages
- 43,132
- Likes
- 23,834
The over dependence on cheap Chinese products, to include heavy machinery would be paving a way for Chinese neo colonialism.Global Insights: China-India Strategic Relationship Marking Time
Richard Weitz | Bio | 21 Dec 2010
Column
Chinese Premier Wen Jiabao visited New Delhi last week for the first time in almost five years, accompanied by more than 300 Chinese business leaders. The composition of Wen's delegation made clear that the Chinese were eager to return to the formula successfully pursued by Chinese and Indian officials during the past two decades: keeping their issues of divergence -- primarily strategic issues such as their boundary disputes, PRC ties with Pakistan, and the Sino-Indian military rivalry -- in the background, while focusing their talks on areas of greater potential convergence, such as expanding mutual trade and investment opportunities.
Although this approach was pioneered by former Indian Prime Minister Rajiv Ghandhi in 1988, when he became the first Indian prime minister in 34 years to visit Beijing, some Indians now worry that Beijing seeks to make their country economically dependent on China in order to enhance the PRC's leverage regarding areas of competition and conflict.
Indian trade with China has been growing faster than with any other country, making the PRC India's largest trading partner in 2008. Whereas bilateral commerce amounted to only $3 billion in 2001-2002, two-way trade should reach approximately $60 billion this year. Yet, the trade imbalance in Beijing's favor has widened just as dramatically in recent years, and could exceed $25 billion for 2010 -- India's highest bilateral annual trade deficit with any single foreign partner. The multi-billion trade gap is partly caused by the Chinese buying primarily low-value Indian products: More than half of the PRC's imports consists of raw iron ore and other low-end commodities and raw materials, rather than high value-added goods such as processed steel.
Both sides complain about barriers to their direct investment in the other country. These impediments often reflect strategic considerations, such as India's concerns about giving the Chinese -- who the Indians suspect of conducting cyber-spying on Indian computer networks -- access to India's information-technology sector. For whatever reason, Chinese investment in India was a mere $221 million in 2009, representing just 0.1 percent of the PRC's total external foreign direct investment. By contrast, Chinese investment in Pakistan is seven times greater.
Shortly before Wen arrived, Indian Foreign Secretary Nirupama Rao called on PRC authorities to help create "a level playing field" for Indian investors in China, citing the need to expand "access to Chinese markets especially in the area of pharmaceuticals, IT, engineering goods, where our companies have often faced non-tariff and opaque barriers." Rao said that the Indian government aimed to take reciprocal measures to encourage Chinese investment in India, since "India needs an investment of $1 trillion during the next Five-Year Plan period in infrastructure." Rao further added that "China is well-positioned to participate in this process." One notable difference between the Chinese and Indian economies is that the PRC has far superior economic infrastructure, whereas India's global economic potential is hobbled by its lagging energy, transportation, communications, and other networks.
In New Delhi, Wen said that Chinese and Indian companies would sign six major business deals worth an estimated $16 billion, several billion more than what U.S. President Barack Obama announced during his visit the previous month. The new China-India contracts include power, communications, and other infrastructure equipment -- with Chinese banks supplying most of the funds.
Following Wen's meeting with Indian Prime Minister Manmohan Singh, the two issued a joint communiqué that provided some details regarding how they would improve their bilateral economic ties. According to this document, China and India will establish a CEO forum to consider how to overcome barriers to mutual direct investment. They will also open a strategic economic dialogue on macroeconomic policy coordination. Finally, Wen and his Indian hosts announced a goal of $100 billion for two-way trade by 2015.
Wen said he was eager to see an early beginning to the negotiations regarding a possible free trade agreement between the world's two fastest-growing major economies. Yet, there was no mention of a possible start date for such talks in their communiqué. Although the Chinese government has sought an FTA with India for years, Indians fear that such an arrangement would lead to a further deterioration in their trade balance due to the resulting influx of cheap Chinese goods. That could also devastate India's weaker domestic industries, most of which need to develop further to compete effectively with their Chinese counterparts.
The communiqué avoided direct mention of how the two governments might address their strategic differences. Rao said that Wen and Indian leaders engaged in frank discussions in private about their regional concerns, including Pakistani-based terrorism. For the first time, the Chinese government implicitly acknowledged Indian concerns about Pakistani extremists by publicly reaffirming its support for U.N. Security Council Resolution 1267, which imposes sanctions on individuals, companies, and other entities engaged in international terrorism. Rao also confirmed that the Sino-Indian communications hotline, one of their confidence-building measures negotiated earlier but not yet implemented, had begun operating shortly before Wen's arrival.
As in their other previous joint statements in recent years, the two governments reaffirmed their desire to resolve their border disputes peacefully. Special representatives from both countries have held 14 rounds of talks on the issue over the past years, with few results. In his public remarks, Wen said it could take generations to resolve the complex disputes, which are embedded in each country's lengthy history and sense of national identity.
Indian critics of New Delhi's non-confrontational stance toward China noted that, despite his conciliatory rhetoric, Wen gave little evidence of actually changing Chinese policies that challenge Indian sovereignty. These include Beijing's claims that the eastern Indian state of Arunachal Pradesh is an extension of Chinese-ruled Tibet; and the PRC's refusal to grant regular visas to Indian citizens of Kashmiri origin who travel to China. On this occasion, India responded by refusing to include its usual recognition of the PRC's sovereignty over Tibet and Taiwan in the joint communiqué.
Critics also noted that Wen continued on to Islamabad immediately after leaving India. While there, he reaffirmed PRC military and nuclear assistance to Pakistan, which Indian strategists see as designed to enhance Pakistan's potential as a military rival to India, and with it, Beijing's leverage over New Delhi.
In contrast to their bilateral tensions, China and India cooperate more effectively on a number of global issues. For example, they have aligned in several multinational dialogues, including the BRIC grouping (Brazil, Russia, India, and China), the December 2009 Copenhagen Climate Change Summit, and multilateral initiatives to reform global financial institutions and enhance global food security. The United Nations has also offered opportunities for cooperation, with China even supporting India's recent successful bid to occupy Asia's non-permanent seat in the U.N. Security Council beginning in January 2011. Still, Wen failed to echo Obama's call a few weeks ago to make India a permanent UNSC member. The joint communiqué simply states that, "China attaches great importance to India's status in international affairs . . . [and] understands and supports India's aspiration to play a greater role in the United Nations, including in the Security Council."
To prevent another five-year gap in senior-level bilateral visits, the joint communiqué said the two countries would conduct such reciprocal exchanges more regularly. That can only be a positive development given both countries' surging economic growth and increasing international influence in recent years -- and likely in years to come. But in future, leaders on both sides must make a greater effort to use those meetings to address their strategic differences if enduring progress in the bilateral relationship is to occur.
Richard Weitz is a senior fellow at the Hudson Institute and a World Politics Review senior editor. His weekly WPR column, Global Insights, appears every Tuesday.
Kadam Tal
It maybe noted that the article states - More than half of the PRC's imports consists of raw iron ore and other low-end commodities and raw materials, rather than high value-added goods such as processed steel.
It is the Chinese way to ensure a slow dependence on China.
While China cannot change Indians into vassals of China as they did not other non Han races who were slowly assimilated, the Chinese way of slowly converting people to their way of thinking should never be forgotten. It is subtle and unobtrusive and is projected as a 'win win' for those following their ways.
An explanation that it is so is the simple allegory that China is actually a devious imperialist and colonialist country with cunnig ways to make people dependent on them.
To believe that China is not a colonialist or an imperialist power would be a wrong premise. It may appear incongruous prima facie, but a look at their history would indicate that precisely the size of China today was but a legacy of colonial pursuit. The key 'magic wand' was to change the population brought under Chinese rule, by Chinese expansion and colonial pursuit was to do so 'by the Chinese way'. In short, destroy the captured peoples' culture, heritage, traditions, customs, languages and instead transplanting it with Han replicas. In addition, the Chinese employed humiliation on the captured people by calling them barbarians, wherein they found solace and respect into 'converting' to being Hans!!! I have at length explained in many of my posts and so recounting would be repetitious.
However, for those interested, here is an interesting link on the Ancient Chinese Barbarians;
Ancient Chinese Barbarians
That said, it will be seen that while India is having a huge trade deficit with China and that too buying cheap and low end goods, China with stoic ensured that India does not get a headway into China with high end products and services which can queer her commanding economic leverage.
It is interesting how the Chinese are touting a FTA with all due politeness and with the ulterior motive to destroy India's economic growth!!
The Chinese chicanery is worth observing. While reaffirming its support for U.N. Security Council Resolution 1267, which imposes sanctions on individuals, companies, and other entities engaged in international terrorism, Wen praised Pakistan for its immense effort in the War of Terror. It short, it indicates China has no principles.
In the strategic realm Wen gave little evidence of actually changing Chinese policies that challenge Indian sovereignty. These include Beijing's claims that the eastern Indian state of Arunachal Pradesh is an extension of Chinese-ruled Tibet; and the PRC's refusal to grant regular visas to Indian citizens of Kashmiri origin who travel to China.
However, it appears that India's patience is wearing thin. India responded by refusing to include its usual recognition of the PRC's sovereignty over Tibet and Taiwan in the joint communiqué.
Therefore, as it stands, there is little hope of an Sino Indian thaw.
In this connection, the visit of the Russian President and signing of the huge defence deal is an indicator of India, resolve to identify the Chinese puzzle in concrete strategic terms, wherein, while keeping the Indo US strategic ties in place to ensure that the seas remain strategically sanitised, she also attempt to woo Russia into a partnership whereby China has little elbow room for manoeuvre in the neighbourhood, with Russia imposing her squeeze on the land mass. Hence, China from all ends remain 'boxed' and confined from any attempts at mischief.