PM's China Visit: BRICS and the Bilateral Dynamics

Here's the link to an article of mine on the PM's visit to China, published by ORF. Indian Prime Minister has left for China for the third BRICS (Brazil, Russia, India, China and now South Africa) Summit, but one of the key questions is as to what such coalitions mean for India-China bilateral relations.

For the full article, click here.



Besides the BRICS Summit in Sanya, on Hainan Island, Prime Minister Manmohan Singh and Chinese President Hu Jintao are scheduled to hold separate bilateral meetings, discuss a range of issues from economic to political and strategic issues. However, the Chinese officials have clarified to the Indian side that only multilateral issues and trade (establishing a strategic economic dialogue at the BRICS level is one item on the agenda) be discussed and that bilateral controversial issues are off the table during the Summit meeting.

At the multilateral level, the BRICS grouping is expected to discuss the international situation in the economic, financial, political and security domain. Obviously Libya is an important issue for all the BRICS countries. Except for South Africa that voted in favour of the UN Security Council Resolution 1973, the other four countries - India, China, Brazil and Russia - had abstained from voting sending vague and ambiguous signals to Libya and the rest of the international community. However, it should be noted that the Libya vote was not the result of any collective decision taken by the BRICS. It was driven primarily by each country's individual foreign policy orientations than a common BRICS position. While China has justified its abstention by arguing that it does not interfere in another country's internal affairs, the Indian position has not been very clear. Some reports have argued that the open-ended nature of the Allied action is what got New Delhi worried. However, India's stand on the issue of use of military power against civilian population is contradictory. India stands aside while another government is using military power against unarmed civilians, even though India observes strict limitation on the use of military force in domestic rebellions. This contradiction will create problems to its standing in the coming years on the issue of UN's R2P (Responsibility to Protect) principle and willingness to take on greater responsibility in global affairs commensurate with its growing stature.

What does BRICS really mean? The fact that Goldman Sachs identified Brazil, Russia, India and China as the fastest growing economies and coined the term BRIC does not mean anything and cannot become effective glue to stitch the group together as a cohesive unit. The grouping has by and large remained a forum that has debated or taken positions on what may be termed as "soft" issues such as climate change, trade issues and so on. The lack of strategic content in the grouping has impeded the growth and development of BRICS as a forum that can effect significant changes in global politics.

Even on the climate change issue, there has been no common position. Russia's stance on climate change has been significantly different from that of India and China's. Despite the fact that China has become the largest emitter of green house gas, India has found it convenient to go under the Beijing shadow although India has taken important steps to curb green house gas emissions, thereby compromising India's position in the climate change debate. However, India and China coming together and taking common positions has often been cited as major breakthroughs in India-China relations.

How far is this claim valid? It can be argued that while the two countries may have cooperated at the multilateral fora, India-China bilateral relations have also witnessed worsening of the ties partly because of China's less than supportive role at the multilateral fora when it came to strategic issues affecting India (China's role at the NSG and its efforts to sabotage an ADB loan for India are examples).

From the Chinese side, it supports India when they perceive a potential benefit in improving ties, which by and large have remained in the economic arena or improving its own image as it holds major events. The two recent instances have been when China issued regular stamped visas to one singer who was travelling to China for performing at the closing ceremony of the Asian Games; and when four journalists hailing from J&K travelling with PM for the BRICS Summit, because they did not want the visa issue to become a dampener on either of the two occasions held by China on its soil.

For Beijing, the West (including the US and Europe) is no more the market for their products. Asia is the future market and in Asia, India provides the largest market for the Chinese products and services. This explains the Chinese rationale in emphasising economics as the biggest agenda in the bilateral ties (evident during Chinese Premier Wen Jiabao's visit to India with a 400-member economic delegation).

India is all for strengthening ties with China, including in the economic arena. The bilateral trade had touched nearly $62 bn in 2010 and the two countries are expected to take this to $100 bn by 2015, which is not an unrealistic target. However, India has to address a few issues even in this area, which is otherwise booming. While the trade touched $62 billion, China's exports had gone beyond $40 bn, further increasing the trade imbalance between the two. Another issue for India has been the lack of access to the Chinese markets for Indian products particularly in three sectors - agriculture, IT and pharmaceuticals.

Lastly, what is that India achieves through BRIC/S that it cannot or has not achieved through bilateral means?

Global governance is one issue through which India-China relations may be tested. Is China willing to live with an India that is more assertive and influential in Asian and global affairs? China has so far not exhibited such support as it deals with India. Its changing policy on Jammu & Kashmir (manifested through the issuance of stapled visas; circulation of internal documents in China indicating the deletion of 1500 square kilometres from LAC on the Ladakh sector) questioning the territorial integrity of India; its South Asia policy aimed at circumscribing India's manoeuvrability even within South Asia (China-Pakistan defence and nuclear weapons collaboration, China-Nepal, -Sri Lanka defence ties, and more recently utilising economic aid as an effective tool in furthering the Chinese interests are few examples) are some of the underlying issues that trouble India-China relations.

Three of the four BRIC countries are active and credible nuclear and space powers, yet the group has not managed to initiate a dialogue on non-proliferation or outer space issues. The lack of strategic depth and mutual trust among these countries come as major impediments in making this bloc a strategic one - one with teeth that can challenge the current policies on these issues or one that can institute a new mechanism to avert the dangers of proliferation or weaponization of outer space.

Each of the five BRICS countries has their own strengths in the S&T arena. While this area should have been an ideal candidate for strengthening cooperation among these five countries, the group has not been able to exploit this strength for a variety of reasons.

Therefore, India has to be realistic enough to understand that heightened engagement between India and China in BRICS or any other multilateral fora has serious limitations - limitations imposed by the underlying Chinese objective of keeping India bogged down in South Asia as a regional power.

Wen Jiabao Visit -- Expectations and Deliverables

Here's the link to an article of mine on the recent visit of Chinese Premier Wen Jiabao, looking at the potential areas that the Indian leadership is likely to take up with the visiting leader. For the full article, click here.

Chinese Premier Wen Jiabao is on a three-day visit to India against the backdrop of both increasing rivalry between the two Asian giants as well as opportunities for greater cooperation. This is manifested from time to time as both tension and cooperation, both at the bilateral and multilateral levels. Whether tension or cooperation predominates this visit will reveal a lot about the long-term prospect of this important bilateral relationship.



The two sides have improved their relations to a great extent in the last few years, particularly in the economic domain. The trade ties have grown from just US $ 1.99 billion in 1999 to nearly US $ 60 billion this year, but without seeming to have any positive impact on the political relationship. This article outlines the major concerns that New Delhi has. How they are addressed by the two sides will decide how this visit is judged.

For the Indian side, there are four key issues that Prime Minister Manmohan Singh will likely take up with Wen Jiabao. These are the opening of Chinese market for Indian goods; Chinese policy approach on Jammu & Kashmir, including that of the issuance of stapled visas; nuclear cooperation with Pakistan; and terrorism.

Opening up of the Chinese Market

India-China economic and commercial relations have improved tremendously in the last few years. Even while there is imbalance in the trade, this is one area that has continued to flourish without major hurdles. The trade deficit is hugely in favour of China. Another area of concern is that India continues to export mostly raw materials while we import manufactured products. This imbalance is an issue that needs to be addressed.

One major demand from the Indian side has been the opening up of the Chinese market for India. India has demanded opening of the market in three key sectors – pharmaceuticals, IT and agriculture. In spite of efforts by the Indian government and the private sector, there has been hardly any movement. India has a sizeable R&D and technological base in the area of pharmaceuticals and India has produced a variety of cheap and effective drugs for a number of diseases including AIDS. However, India has not been allowed to operate in the Chinese market. Similar has been the case in the areas of IT and agricultural products. This is another issue that the Indian leadership has to take up with China.

Chinese Policy on Jammu & Kashmir

China’s policy on Jammu and Kashmir has oscillated from one end of the spectrum to the other. From a policy of neutrality in the 1980s and 1990s, China has adopted a more active and partisan role today. China’s policy on J&K today represents a mix of aggressiveness and determination, emboldened by the rising politico, economic and military might of the nation. This change in its stance is partly contributed to by the fact that the US is a declining power and there are other power centres in the making, including that of New Delhi and Beijing. The Obama Administration, particularly in the first year of its administration, followed an extremely pro-China policy, adding to the confidence of Beijing. Because of this, China began to sense that it was an important power to reckon with, not just in the region, but even in global terms. Such confidence on the part of Beijing led to more aggressive behaviour in China’s dealing with all of its neighbours and even the United States. The number of maritime issues between the PLAN (PLA Navy) and the US Navy and conflicts involving Vietnam and Indonesia, and India on the land border, are reflective of China’s growing muscle and its willingness to flex its muscles. This new more interventionist policy on J&K appears to be an outgrowth of the US-China joint plan of action vis-a-vis South Asia. It appears to be an after-effect of the US-China Joint Statement in November 2009 for the two countries to jointly manage South Asia. While the issuance of stapled visas may not be directly linked to the changed policy on J&K, China has begun to make serious assertions that the Indian-controlled part of Kashmir is a disputed territory.

Nuclear Cooperation with Pakistan

Nuclear and missile cooperation in India’s neighbourhood has had long-lasting impact in the geopolitics of South Asia. China’s proliferation of nuclear weapons/technology along with its delivery vehicles has clearly altered the India-Pakistan military balance. While some analysts suggest that this is a thing of the past, the recent Chinese proposal to build additional nuclear plants in Pakistan indicates otherwise, in addition to being a clear violation of the international agreements that China is party to. China is seeking to ‘grandfather’ the current agreement into an earlier agreement for the supply of the nuclear reactors. The international community, including the UN and its associated bodies, appears to be unable to persuade China to desist from supplying these reactors. The US appears unable or unwilling to put the kind of pressure needed to stop Beijing from carrying out this arrangement.

Pakistan’s nuclear weapons and the issue of nuclear proliferation have continued to be major issues of concern for US, India and the global community at large. Earlier revelations about AQ Khan having assisted Libya, North Korea and Iran with materials related to uranium enrichment is neither forgotten nor can it be ruled out in the future. The US’s overlooking of Pakistan’s nuclear activities in the 1980s to achieve its Cold War objectives has led to these dangers in Pakistan today. If the US is unwilling to take strong measures against the latest Chinese proposal, the effects could be much more damaging not only for India, but for Pakistan, China and the US.

Terrorism

While India and China are “victims” of terror, the two countries differ drastically on the definitional aspects of terror. For India, terror has originated and continues to originate from Pakistan while China has refused to put the responsibility on Pakistan. The best illustration was the post-Mumbai terror attacks when the UN was to take action against the Pakistan-based terror groups for their role in the Mumbai attacks. China refused to see India’s or even the larger global community’s point of view on fixing the responsibility on Pakistan. China has to recognise that it cannot selectively fight Islamic terrorism only in Xinjiang.

While these are some of the issues that India should take up with the Chinese leadership, it will be naive to expect that China will give in on any of these issues. Wen Jiabao’s visit to India is more of a good will visit or a CBM (Confidence Building Measures) measure to cool the temperatures after the recent tensions on the border as well as the J&K issues. This visit is not expected to be a foreign policy success for either of the governments, from that limited perspective. However, the two countries will continue to be on an “engage” mode, since engagement is the mantra.

As far as China is concerned, Wen Jiabao’s trip is almost singularly driven by economic objectives, evident from the 400-member business delegation that is accompanying Wen Jiabao. China, particularly after the global financial crisis, is on a look-out for markets in Asia, and India offers the largest market. Therefore, China’s singular focus on economic issues is understandable, but India should not give into the Chinese demands without a quid pro quo.

India-China Relations: Economics Is Not All

Here's the link to an article of mine on India-China relations, arguing that economics is not all. Trade and commercial ties have a limited role in fostering ties; in fact, they are subordinate to and occur within the more important structure of inter-state relations.

India and China have grown lot closer in the last few years compared to the previous decade. There has, however, been a simultaneous rise of mutual suspicions. While the economic interaction between the two sides may have reached great heights, this cannot eliminate the growing suspicion on the strategic front.



An NBR study recently argued that “Economic interdependence is hardly a “silver bullet” guaranteed to pacify interstate conflicts. Though it may constrain conflict escalation processes, interdependence also generates serious economic frictions that can easily offset or overwhelm its conflict-suppressing effects.”1 Meanwhile, there have been several studies arguing that economic traction between the two sides have several positive spin-off effects on India-China relations.2 I would argue that commerce clearly has a limited role to play in a country’s strategic game plan. Trade and commerce do not alter the realities of the strategic front.

India-China economic and trade ties have been growing in the last few years, from just US $ 1.99 bn in 1999 to nearly US $ 60 bn. in 2010. Despite the imbalance in the trade, trade is one area that has continued to flourish without major hurdles. Liberal theorists assume that improved trade relations will diminish the scope for international conflict. The theorists believe in the “trade brings peace” argument,3 which is opposite to what the Realists would argue. The Realists are of the view that “trade and investment flows as occurring within — and being subordinate to — the more significant and enduring structure of interstate relations. It is international peace that permits and enables trade, not the reverse.” Additionally, Realists argue that “rational and responsible national leaders never lose sight of the fundamentally anarchic nature of the global system,” and “consequently, where economic liberals stress mutual absolute gains from trade, realists are primed to notice relative gains in which one party, or one country, benefits more than the other.” 4 Realists essentially see international politics as a state of anarchy, with none able to enforce law. Even when states agree to certain international rules and regulations, it is up to the state to enforce such laws, depending whether those laws are favourable to the state or not; protect their interests/security or not. As Armijo explains, “In such a self-help system of mutual distrust, the only rational stance for a responsible national government, sadly but inevitably, leads to large defense expenditures, arms races, and the potential for instability and even war, as insecure states may be tempted to attack preemptively.” This clearly explains the emerging India-China dynamics. Is trade and economic well-being of the other in the mutual interest of India and China? While it may be the case, but this trade and well-being aspect need to be situated within the overall framework of inter-state relations between India and China. Under such a scenario, economic well-being of each other may not be the case. For instance, India trying to create its own markets in Asia will not seen favourably by China.

Another liberal argument is that both India and China have collaborated at various international fora on issues like climate change and WTO issues and that these interactions have fostered closer partnership between New Delhi and Beijing.5 Have these interactions, however, penetrated deep enough to reduce the suspicion and tension that has characterised India-China relations in the last few years? The answer may be no. While the two countries have worked together on some of these issues, competition and rivalry between them has only risen in the past few years.6 China has been increasingly testing India’s dominance in its own backyard. Despite SAARC being India’s creation, Beijing is much more active today in the organisation than India is.7 Beijing’s presence in South Asian countries, solidified through increasing trade and investment measures, have reduced India to a big geographical entity with not much influence.8 China’s pro-active approach towards South Asia appears to be a result of its own deepening relationship with South Asian countries as well as fulfilling its objective to emerge as a kind of “guardian” to all the South Asian countries. Second, it seems as an after-effect of the US-China Joint Statement in November 2009 for the two countries to jointly manage South Asia.

As India continues to re-define and modify its foreign and security policies, given its increasing stature in the international arena, there is bound to be competition for influence, resources and so on. For instance, China has been critical of India’s closer ties with the United States or other Asian powers that could be apparently detrimental to Beijing’s own regional and global role. Beijing has also been wary of India’s Look East policy, its strengthened relations with Japan, Vietnam and several other ASEAN countries. Beijing feels that India’s diplomacy in Southeast Asia could potentially hamper China-ASEAN ties as well as reduce Beijing’s manoeuvring space in Asia. China’s increasing foray into Indian Ocean region has been allegedly to secure its own energy supplies and ensuring energy security. China has been seeking to build alternate energy transport and trade routes, anticipating problems on the Malacca Strait sometime in the future. However, given the kind of China wariness that exists in New Delhi, China’s expanding influence and presence in India’s neighbourhood has clearly upped the ante within the establishment as well as outside.

Chinese actions raise suspicions in Delhi mainly for two reasons. One, factors like history and unsettled boundary and territorial issues will continue to hinder any prospect of India and China forging closer meaningful ties in the foreseeable future. The baggage of history continues to be a strong factor in India-China ties. The history and unsettled boundary issues as well as their respective roles in the emerging Asian strategic framework have created severe constraints in working out a good partnership between India and China. The trust deficit between New Delhi and Beijing is not something that is going to change dramatically in the next few years. Border issue is a symptom of the larger problem that exists between India and China. It is India’s increasing role and influence which is the crux. Even while both India and China recognise their inevitable role in shaping the Asian security order, they do differ radically on the kind of Asian layout for the future.9 India has continued to work at an inclusive approach as opposed to the Chinese’ exclusivist approach which appears directed against India, US and Japan. Beijing has continued to believe that its peaceful rise and the emergence as a dominant power in Asia is only an assumption of its rightful place in the region and in fact a return to the old, but natural order for the region. India may not be willing to see an Asia dominated by any one power.
________________________________________

1 William R. Thompson and David P. Rapkin, “Will Economic Interdependence Encourage China’s and India’s Peaceful Ascent?,” in Strategic Asia 2006-07: Trade, Interdependence and Security (National Bureau of Asian Research, Washington), available at http://www.nbr.org/publications/strategic_asia/pdf/Preview/SA06/SA06_China_India_Rise_preview.pdf.
2 For example, Christopher J. Rusko and Karthika Sasikumar, “India and China: From Trade to Peace,” Asian Perspective, vol. 31 no. 4, 2007, available at http://www.asianperspective.org/articles/v31n4-d.pdf;

3 John R. Oneal, Bruce Russett and Michael L. Berbaum, “Causes of Peace: Democracy, Interdependence, and International Organizations,” International Studies Quarterly, vol. 47, 2003, pp. 371-93; Christopher J. Rusko and Karthika Sasikumar, “India and China: From Trade to Peace,” Asian Perspective, vol. 31 no. 4, 2007, available at http://www.asianperspective.org/articles/v31n4-d.pdf, cited in Leslie Elliott Armijo, “The BRICS Countries (Brazil, Russia, India, and China) As Analytical Category: Mirage or Insight?,” Asian Perspective, vol. 31 no. 4, 2007, available at http://www.asianperspective.org/articles/v31n4-a.pdf.

4 Leslie Elliott Armijo, “The BRICS Countries (Brazil, Russia, India, and China) As Analytical Category: Mirage or Insight?,” Asian Perspective, vol. 31 no. 4, 2007, available at http://www.asianperspective.org/articles/v31n4-a.pdf.

5 Christopher J. Rusko and Karthika Sasikumar, “India and China: From Trade to Peace,” Asian Perspective, vol. 31 no. 4, 2007, available at http://www.asianperspective.org/articles/v31n4-d.pdf.

6 The increasing number of intrusions /and transgression on the India-China border, even in the sectors that were otherwise peaceful; Chinese Ambassador in India stating that the entire State of Arunachal Pradesh belongs to China; China’s issuance of stapled visas to people from Jammu & Kashmir; denial of visa to Gen. BS Jaswal, Commander, Northern Command; China gaining de facto control of Gilgit-Baltistan region, are instances of China trying to test India on the politico-strategic front.

7 While one can say that India has been laid back and even apathetic to its own neighbours, China’s argument that it is simply engaged in practical diplomacy may be farfetched.

8 China is clearly taking important steps to solidify its relationship with SAARC as a whole, in addition to having excellent relations with each of the member countries. At the recently concluded SAARC Summit, Beijing proposed an assistance of $300,000 to the SAARC Development Fund.

9 Gwadar Port in Pakistan and Hambantota Port in Sri Lanka are cases in point. However, each of the relations that Beijing has cultivated in India’s neighbourhood has had its negative impact on India’s own bilateral ties.