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l August 2003 l

The Kashmir Bachao Andolan Publication

l Vol 2, No 4 l


India & China: On a path of cooperation

S Sethuraman

The Prime Minister’s six-day landmark visit to China has opened up new vistas of many-sided cooperation between the world’s two largest and most populous developing countries in the political, economic and cultural fields on a long-term basis which would make for a "qualitatively new relationship" for the two Asian giants. The "common interests" of the two countries, in bilateral and global affairs, are underlined in the Declaration issued during Shri Atal Bihari Vajpayee’s visit (June 22 to 27, 2003). The important concern of a settlement of the border question has to be viewed in the perspective of the comprehensive agenda of enhanced cooperation as outlined in the Declaration.


It is customary to judge the outcome of such high-level visits in terms of positive gains for each country. Hence the assessments by experts and commentators, drawing their own inferences, often tend to vary. What is germane is to determine whether results belied expectations from the visit, keeping in view the historical background of Sino-Indian relations, which suffered badly after the l962 border war and the subsequent halting moves toward normalization of relations. In this sense, the visit may be regarded as highly successful.

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Boundary Settlement

The settlement of border issue is still pending. The process of clarification of the Line of Actual Control (LAC) was delayed due to differences of perception of the LAC and this, in turn, deferred the exchange of maps in the western sector. Nevertheless, peace and tranquility has been maintained by the two sides in the border areas as per the 1993 accord reached during the former Prime Minister Narsimha Rao’s China visit.

Significantly, in the light of Shri Vajpayee’s talks with his Chinese counterpart, Mr Wen Jiabao and other leaders, the two countries have agreed to nominate a Special Representative each to explore, from the "political perspective" of the overall bilateral relationship, "the framework for a boundary settlement". India has named the National Security Adviser, Shri Brajesh Mishra, for this purpose and the Prime Minister indicated on his return to New Delhi on January 27 that the special representatives would begin their work immediately and "the effort would be to resolve the border problem as early as possible".

This represents an advance over what looked like a frozen situation, and Shri Vajpayee feels this new initiative would help to speed up progress toward finding a solution on the border issue. The Declaration expressed the readiness of the two countries to seek a "fair, reasonable and mutually acceptable solution through consultations on an equal footing". It is also agreed to continue implementation of earlier agreements including the clarification of the 4000-km Line of Control. Hopefully, these steps would proceed in a way as to impart substance to the new road map of friendship embodied in the Declaration.

Border Trade

Of immediate importance is the opening up of border trade between the two countries. Here again, the non-recognition by China of Sikkim’s status as a State of the Indian Union since l974 had been one of the factors in the bedevilled relationship thus far.  In the context of promoting friendly relations, the two countries have now signed a memorandum on border trade, which will facilitate exchange of goods between a venue in Sikkim (Changgu) and Renqinggang of the Tibetan Autonomous Region. The Nathula Pass will be the point of entry and exit of persons, transport and commodities.

There is some criticism that while India has recognized the Tibet Autonomous Region as part of China, the latter has not come up with explicit recognition of Sikkim as a part of India.  Shri Vajpayee has pointed out that the Tibet Autonomous Region, created in 1965 had always been referred to by New Delhi as part of China and as such there is no inconsistency in India’s position as stated in the Declaration, namely, "The Indian side recognizes that the Tibet Autonomous Region is part of the territory of the People’s Republic of China". Meanwhile, for Sikkim, the new protocol generates greater opportunities for movement of goods and gives a boost to development activity in the State.

Though recognition of Sikkim as part of India is lacking in the Document, Shri Vajpayee believes that a formal recognition by China would follow "early". The Chinese official indications are that it would take "some time" to address India’s concerns on Sikkim.  On the other hand, the Chinese Government has noted with appreciation India’s position on Tibet Autonmous Region as part of China as well as the reiteration that it "does not allow Tibetans to engage in anti-China political activities". This certainly does not, and cannot, affect the asylum that India gave to the Dalai Lama who came to India when the Chinese overran Tibet in the late l950s.

Common Interests

The Vajpayee visit has to be seen in the broader context of developments in the subcontinent as well as the world over in the decade since Shri Narasimha Rao went to Beijing in 1993. Both countries are increasingly responding to the demands of globalisation.  Trade between the two countries has lately been growing rapidly in recent years and both are among the fastest growing economies in the world.

As Shri .Vajpayee said before leaving for Beijing, there is "compelling geographical, political and economic logic for closer relations’ between India and China, a view finding strong resonance with the new leadership at the helm of China. They have both common interests in deepening bilateral relations as well as coordinating their positions on ensuring "peace, stability and prosperity not only in Asia but also in the whole world".

Cooperation at the international level is needed, as the Declaration noted, to strengthen  multipolarity, enhance the positive factors of globalisation and help shape a new international economic order. The important role of the UN and efforts to strengthen the UN system including reform with greater representation for developing countries are also emphasized.

India and China share common perceptions in a number of areas including multilateral arms control and disarmament, equal security for all at progressively lower levels of armament and global negotiations aimed at nuclear disarmament and elimination of atomic weapons. The Foreign Ministers of the two countries will hold annual meetings to enhance mutual understanding and expand bilateral relations. Putting the past behind, the Declaration says the two countries are not a threat to each other and neither side shall use or threaten to use force against the other.

Economic Dimension

The economic dimension of the Prime Minister’s visit gained considerable importance and trade and economic cooperation is set to predominate India-China relations. Their bilateral trade in 2002 had reached a record 4.92 billion dollars. The two countries now consider it feasible to double their trade to 10 billion dollars by 2005. Tariff concessions on scores of items are being exchanged to boost the trade ties. The Commerce Minister, Shri Arun Jaitley, who accompanied Shri Vajpayee, held talks with the Chinese Trade Minister on stepping up the two-way trade. The next meeting of the Joint Economic Group at ministerial level would be held later this year.

A highly significant understanding has also been reached for the two countries to coordinate their strategies in support of developing countries in the tough global trade negotiations (Doha Round). They will consult and adopt a common stand on major issues affecting developing nations in the ongoing negotiations in Geneva ahead of the WTO Ministerial Meeting at Cancun, Mexico, in September.

Potential complementarities for expanded trade and economic cooperation between the two countries would be gone into by a Joint Study Group comprising officials and economists. It would report to the two Governments by June 2004. China announced during Shri Vajpayee’s visit that it would make enhanced investments in India for which it has set apart a corpus of 500 million dollars. The series of agreements signed on the occasion related to several areas including simplification of visa procedures, scientific and technological and cultural matters.

Shri Vajpayee proposed during his visit to China’s financial capital, Shanghai, an effective alliance in the information technology sector given their established strengths in hardware (China) and software (India). It is in this area that great possibilities exist for  focussed cooperation reinforcing their competitive strengths vis-à-vis the rest of the world. The largest business delegation ever to accompany the Prime Minister would surely have noted the immense scope for investment and industrial collaboration with China

Overall, the China visit of Prime Minister Vajpayee has unfolded new paths for the two great nations to build on their existing strengths and co-operate in promoting their own socio-economic development as well as in tackling the challenges to development arising out of external factors. While both countries would do their best to remain internationally competitive, the visit should help bring them together as partners and not as rivals in the dynamic Asian region.

China is no doubt far ahead of India in certain respects of development. It is the fifth largest economy and is seen as an industrial powerhouse. Its growth over the last two decades has pushed its GDP to over one trillion dollars against India’s 480 billion dollars but India, sustaining its own development momentum, is hopeful of narrowing the distance and become a developed nation by 2020.

Summing up his visit realistically, the Prime Minister says, "The road ahead is long but a good beginning has been made." (PIB Features)

Copyright © 2002-2003 Shyam Lal Watt Foundation

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