Prime Minister Manmohan Singh and Chinese Premier Wen Jiabao have established a personal rapport that is unique in the recent history of India-China relations. Never since the days when Jawaharlal Nehru and Chou en Lai could enjoy a smoke together has there been such informality at the highest level between the two Asian giants. It is this personal rapport that Mr Wen will seek to enhance when he arrives in New Delhi to win friends and influence people. From India’s perspective, China is different not merely because of its rising global clout, but because of its added importance as India’s largest trading partner and a country with which relations have been described as a mix of “third world solidarity and strategic rivalry”. This relationship, complex during the best of times, is currently under strain because of what India calls “Chinese assertiveness”. Premier Wen’s visit is timely in that it could help soften the tone of the relationship that has been alarmingly acrimonious in recent months.
The complexity in the bilateral relationship manifests itself at almost every level. Take trade, arguably the crowning glory of the bilateral relationship that has grown explosively from less than $2 billion a decade ago to approximately $60 billion today. The balance of trade has shifted sharply in favour of China, especially since 2005, and is estimated at $19 billion in 2009-10. The respective composition of exports also differs starkly: iron ore constitutes 40 per cent of India’s exports to China, while Chinese capital equipment and machinery are increasingly making their presence felt in India. Reliance Power’s recent $8.3 billion purchase of power generating equipment was simply the most conspicuous example of a trend that has been underway for some time now. This would be as good a time as any for India to bring up concerns regarding a persisting trade deficit with China as well as related issues hampering increased Indian exports to China like the imposition of non-tariff barriers on goods ranging from pharmaceuticals to agricultural products. Likewise, India would do well to reassure China that the large number of anti-dumping charges against Chinese firms is not part of a strategy of trade discrimination and to explain why a bilateral free trade agreement is currently not in India’s interest.
The political problems confronting the two countries are more intractable, given the long history of mutual suspicion. While talks to resolve the long-standing border issue continue, recent irritants such as China’s decision to issue stapled visas to residents of Jammu and Kashmir, operations of Chinese firms in Pakistan-occupied Kashmir and the stubborn refusal to support India’s candidature for permanent membership of the UNSC remain irritants in an increasingly mature relationship. Premier Wen arrives in a more self-assured India that recognises that the bilateral relationship will involve both competition and cooperation. Managing both is the challenge at hand. Dr Singh showed in Copenhagen, and during his visit to Beijing, that he can work with China, but in Tawang and Oslo, he defined the limits. Hopefully, Mr Wen has got the message.
