Indo-Chinese Relations - Ball Treading in India's Favour?

In a first instance of its kind, Mr. Xi Jinping, the powerful President of the People's Republic of China coming on his official India visit will not land in the Indian Capital of New Delhi but in the capital of Gujarat, Ahemdabad on September 17. Incidentally, the date of arrival coincides with the birthday of Mr. Narendra Modi, the Indian Prime Minister, a name which has been doing rounds in the political circles in both India and abroad. Adding another first to the series, it will be the first time when the Chinese have POSTPONED the visit to Pakistan to accommodate one extra day for India.

And all this has happened when we still have wide ranging issues with China with regards to a border dispute, frequent incursions by the People's Liberation Army (PLA) in our territory & growing Chinese involvement on security front in the Indian Sub-Continent.

It wont be wrong to conclude that President Xi has tried to highlight the importance that India now holds for China. This has been made possible by the decisive mandate with which a government has been formed at the centre lead by Mr. Modi. Since the day of coming to power the ruling government has tried to take into confidence countries like Japan, China, USA, EU, etc. regarding the India growth story. The budget set the right tone with the introduction of infrastructure schemes like development of 100 smart cities & the bullet train project between Ahemdabad and Mumbai. And since then both China & Japan have been consistently trying to woo the Indian government with one claiming to be better than the other.

A Chinese high speed train in Shanghai. The country has the world's longest HSR network
with over 11,000 KM of track in service

Indeed Modi's widely covered Japan visit has been a huge success in both diplomatic and economic terms. The country agreed to fund and provide technical guidance for the bullet train project and its name has been finalised at least informally for the much coveted project. Apart from this the countries had advance talks and agreements on a wide range of issues like developing Varanasi on the lines of Kyoto city, talks on Ganga cleanliness drive, defence cooperation, etc. And to put it in quantitative terms the country pledged a support of $ 35 billion towards India in the next 5 years. The success of the visit and PM Modi's indirect remarks on China's expansionist plans have raised many eyes in China with the Chinese media particularly going on in the offensive mode.

Modi and Abe greeting each other on the former's Japan visit. The visit was a huge success
and has raised many eyes in China

Closely gauging the chance that Japan tried to take away from China with regards to making India a close ally and a favorable investment destination the Chinese side has acted more diplomatically by giving signals of a changing relationship between the two neighbourers and the biggest signal is given by President Xi by arriving in India on PM's birthday in his home state. China is eyeing investments in infrastructure sector where it has proved its technological superiority. In railways the country is still interested to help India in building and operating the high speed Bangalore-Mumbai corridor and other similar projects. China has confirmed to invest over $ 100 billion in India over the next 5 years, a figure triple to that of Japan's investment. This brings total investment commitment from the two giants at $ 135 billion in the next 5 years, added to this will be the investment by other countries and private players who will be willing to invest by the weight-age that India's growth story has got by the Chinese and Japanese commitment. This will help India in achieving $ 1 trillion investment in infrastructure in the next five years to bridge the infrastructure deficit.

A lot more is there for China in all these investments. Chinese companies are gung-ho over the Indian markets especially the companies in the electronics segment. Companies like Huawei, Gionee, Lenovo, Haier etc. in the consumer discretionary segment have been giving fierce competition to the local as well as international players. Not to forget the latest craze for the handset maker Xiaomi which is experiencing flash sales as all its models are sold within seconds of being launched on the online retailer Flipkart.com.

President Xi is expected to play a master stroke by discussing with PM Modi about the opening of the 4000 year old maritime silk route which is high on Mr. Xi's agenda. This will not only help to increase trade between the two countries but will also make the terrain for Kailash pilgrimage less difficult for the pilgrims.

While the visit is expected to open a new chapter in the Sino-Indian relations but it would be in India's best interests to be utterly cautious while dealing with the dragon. At no cost engagements with countries like Japan, Philippines, Vietnam, etc. should be affected with whom China has been engaged in bitter border disputes. India should aim for defence cooperation with all these countries and possibly push for export of indigenous state of the art BRAHMOS missiles to these countries to help them secure their frontiers effectively.

Japan should be listed on top of the list since Mr. Modi and Mr. Shinzo Abe, the Japanese Prime Minister share close relations. India should strive for peace in the whole region and this is where it has a golden opportunity where it can try to arbitrate between China and Japan on the dispute on the ownership of Senkaku Islands. If India succeeds in bring two sides on table and help them reach an agreement that would be a huge positive for the country's global image. Doing this will be a rather challenging task since hardly ever international border disputes have been settled with peaceful negotiations.

Senkaku Islands, a set of five uninhabited islands have been a cause of dispute between
Japan and China

On personal security side the review and aggressive buildup of defence infrastructure along the Indo-Chinese border should be taken up by the Indian side which lacks readiness compared to the Chinese side in case of a hostile event. The Mountain Strike Corps should be raised quickly and provided with all modern equipment to deal with any situation on the Line of Actual Control.

On the trade side India has to try and bring down the deficit which has already reached unsustainable levels at almost $ 40 billion in favour of China. PM Modi should raise concern over Chinese trade barriers on Indian products like pharmaceuticals, metals, electronics, etc. Rules regarding registration of Indian company in China should be eased to make it favourable for Indian conglomerates to invest in China.

The trade deficit at over $ 40 billion in favour of China has already reached unsustainable levels

A few weeks ago, I had given my views on the way India should deal with China. Well, it has gone much better than what a layman such as myself in the field of international relations had desired and hope the same will continue in the times to come.