A forthright Modi in China

During his China visit, Prime Minister Modi has been unusually forthright in speaking about the problems that hold back the India-China relationship. He probably feels that his desire to strengthen ties with China being so clear, he has earned the confidence of the Chinese leaders enough to be able to pinpoint India’s concerns about some aspects of China’s policies that we find difficult to digest. This is a new approach Modi has fashioned. Our earlier approach has been to soft pedal differences, avoid airing them in public and pretend they are more manageable than they actually are. There has been a tendency also to explain China’s behaviour to ourselves by becoming their spokespersons to our own people, and in the process accept some of the blame for the problems that endure.

Modi is following a different tack, that of creating consciousness in the Chinese public that China has a responsibility of addressing outstanding issues if it wants the bilateral relationship to move forward and bring about the Asian century that its leadership visualises. This is a more self-confident approach. Whether this more robust attitude will produce the results we want is not certain. China is used to such exhortations by the US, which, unlike our case, are also backed by US power. Yet, China both bends and defies to the degree necessary to manage the relationship with the US, but without changing its fundamental course of building its national power and commensurately raising the level of its strategic challenge to the US. In other words, China does not get cowed down, nor is willing to yield on essentials even when its policies do not make sense always in the light of its own self-interest as seen by external observers.

Whatever the caveats, Modi is moving the Chinese out of their present comfort zone and dealing with China with greater self-assurance which cannot but have some impact on how it treats India in the future. This is a new balance that Modi is establishing between leveraging economically the China connection for India’s development and not losing politically by diffidence in mentioning differences that endure. There are some indications that China believes that of all the partners that India is wooing for investments, it is the one best placed to meet India’s needs, especially in modernising its poor infrastructure. In other words, India’s choices are limited and this gives China a strong hand to play even in the economic field. Modi is implicitly making China reexamine its assumptions

By choice or consequence, Modi is linking the economic to the political by his double messaging in Beijing. On the one hand, the joint statement issued during the visit explicitly says that outstanding differences, including on the boundary question, should not be allowed to come in the way of continued development of bilateral relations. On the other, Modi stressed in his joint press conference with Chinese premier Li Keqiang that China needed to “reconsider its approach on some of the issues that hold us back from realising the full potential of our partnership" and “take a strategic and long term view of our relations”. This suggested that the long term relationship could be either jeopardised or impeded if China continued with its present approach. It is interesting that in asking China to think long term he summarily debunked the widely accepted myth that China thinks not years but decades ahead in policy making. Standing alongside Li Keqiang, Modi reiterated the “importance of clarification of the Line of Actual Control”, a point he had made in Xi’s presence during the latter’s September visit to India, and “tangible progress on issues relating to visa policy (stapled visa issue, no doubt) and trans-border rivers”. He also alluded to “some our regional concerns” (undoubtedly China’s policies in our neighbourhood, especially in Pakistan). It is clear that Modi raised all these issues in his private conversations with Xi and Li Keqiang, as otherwise publicly mentioning them in the latter’s presence would have seen as a form of political ambush by the Chinese premier. Modi’s intention was obviously to make public his political expectations from China in the years ahead.

Modi expatiated further on these points in his address at the Tsinghua University. He put more pressure on the Chinese government by stating publicly that if the two countries “have to realise the extraordinary potential of our relationship, we must also address the issues that lead to hesitation and doubts, even distrust, in our relationship”. This is extraordinary plain speaking. He spoke of trying “to settle the boundary question quickly” in a way that does “not cause new disruptions”- an allusion no doubt to China’s unreasonable demands in the eastern sector. This amounts to, again, asking the Chinese publicly to rethink its posture on the package deal on the border. To remove “a shadow of uncertainty” that “hangs over the sensitive areas of the border region” because “neither side knows where the Line of Actual Control is in these areas”, he recalled his proposal to resume the process of clarifying the LAC “without prejudice to our position on the boundary question”. This is a via media he is seeking between, on the one hand, stabilising the border and eliminating periodic stand-offs that damage the political relationship and make headway in other areas that much more difficult and, on the other, a permanent solution to the boundary question. It is doubtful whether China would accept this option that was always open. indeed, China was committed to this process but abandoned it favour of the Special Representatives (SR) mechanism. It is unclear, moreover, how the LAC clarification process and the SR mechanism can proceed simultaneously.

Voicing concerns about China’s increased engagement “in our shared neighbourhood”, Modi, in his Tsinghua address, called for “deeper strategic communication to build mutual trust and confidence” so as to “ensure that our relationships with other countries do not become a source of concern to each other”. In talking of “shared neighbourhood” Modi is talking about South Asia and not the western Pacific, and this is significant. To strengthen our international cooperation, he frontally sought China’s support for India’s permanent membership of the UN Security Council and India’s membership of export control regimes like the Nuclear Suppliers Group. This was unusual as such a public appeal does not normally come from his elevated position. A prime Minister should not seen as a supplicant. Anyhow, by stating all this, Modi has, in a sense, laid out the political agenda of the relationship in the years ahead from his side, which if not achieved in some measure in a reasonable time frame can become a source of criticism and could even make the economic agenda with China even more controversial as a one-sided strategic compromise.

The joint statement and the Tsinghua speech contain some notable formulations, omissions and iterations, some curious, many positive and a few negative. If the India relationship was for president Obama a defining one for the 21st century, the joint statement notes, as a rhetorical balance, that the “India-China relations are poised to play a defining role in the 21st century in Asia and, indeed, globally”. A China that supposedly rejects an equal status for India accepts in the joint statement that the two countries are “major poles in the global architecture”. On the boundary question, the old, cliched language is repeated and the emphasis remains on improved border management. No mention is made to China’s self-serving One Road One Belt (OBOR) initiative to which Xi attaches much importance, and which figured prominently in his recent Pakistan visit. Our neighbours like Sri Lanka and Nepal would have particularly noted this omission. Significantly, the joint statement contains no reference to security in the Asia-Pacific region, unlike in September 2014, which suggests a failure to agree on language on this sensitive issue. Maritime cooperation too does not figure in it, which suggests difficulties in drafting the joint statement.

We have again thanked China’s Foreign Ministry and the government of “the Tibetan Autonomous Region of the People’s Republic of China” for facilitating the Kailash Manasarovar Yatra. It would have been sufficient to have simply thanked “China” in September 2014 and now, but the Chinese obviously press us to include formulations that recognise TAR as part of the PRC in our joint statements- a practice that was discontinued by the UPA government in the face of China’s increasingly strident claims on Arunachal Pradesh. These offensive claims unfortunately continue and therefore do not justify such politically one-sided gestures by us. Maybe we think this is too sensitive a subject for us to reticent about and to keep the relationship on even keel we feel we can keep giving China comfort over Tibet even when China cynically uses Tibet to make outlandish territorial claims on us. This gesture could also have been a quid pro quo for the stronger formulation on terrorism in the joint statement that could not have pleased Pakistan (though it should be noted that the statement refers not to “cross-border terrorism” which is a formulation India uses to accuse Pakistan, but to “cross border movement of terrorists” which has a different connotation), as well as the separate joint statement on Climate Change that fully reflects India’s position and assumes importance in the context of the Climate Change summit in Paris where the effort would be to isolate India and use the US-China agreement to that end. The question though remains how India will reconcile its commitment to work closely with the US to make the Paris Conference a success with the enunciation of a common position with China which conflicts with the basic US approach.

The reference in the joint statement to the “commonalities” in the approach of the two countries to global arms control and nonproliferation is puzzling as it conflicts with reality and whitewashes China’s historical and current proliferation activities in Pakistan. To have China in return “note” our aspirations to join the NSG, is an altogether insufficient reason to make this concession and lose a political card against China and Pakistan. Opening ISRO to China through a Space Cooperation Outline (2015-2020) Cooperation may also seem premature to some, given the actual state of India-China relations.

In his Tsinghua speech, Modi noted pointedly that while both countries seek to connect a fragmented Asia, “there are projects we will pursue individually”, which implies cold shouldering China’s idea of linking our Mausam and Spice Route projects with OBOR. Progress in the BCIM (Bangladesh, China, India, Myanmar) Economic Corridor is mentioned in the joint statement, despite the danger of opening up our inadequately nationally integrated northeast to more economic integration with China. Why Modi mentioned this corridor again in his university speech is unclear, but then, having participated in the joint working group discussions on the project for some time now, it might have been tactically difficult to close the door on it abruptly.

That Modi himself announced at the last minute at Tsinghua the grant of e-visas to the Chinese after the Foreign Secretary had told the media earlier that no decision had been taken, raises questions about policy making, especially as the stapled visa issue remains unresolved. Of course, enhanced economic engagement requires easier visas and to that extent such a decision can be seen as pragmatic, but we have given up a valuable card touching upon sovereignty issues without sufficient return. No wonder the Chinese Foreign Minister was delighted by this gift from the Prime Minister.

The driving force behind Modi’s wooing of China being trade and investment, the progress achieved on that front was of principal interest in terms of outcomes. Here, the results have been less than expected. In a sense this was to be expected as too little time had elapsed between Xi’s visit to India and Modi’s visit to China to produce dramatic results. The $20 billion of investment five years promised by Xi would take time to materialise under any circumstances, but more so in the case of China as it has so far invested little in the country, its investors have limited experience of working in India, its leaders are looking for preferential treatment and want a better understanding of the legal conditions. The joint statement largely repeats what was said in September 2014 during Xi’s visit on taking joint measures to alleviate the problem of deficit and cooperate in providing Indian products more market access in China. The language is very noncommittal and it is left to the India-China Joint Economic Group to work on these issues. It was agreed that the next meeting of the Strategic Economic Dialogue, co-chaired by Vice Chairman of NITI Aayog of India and Chairman of NDRC of China, will be held in India during the second half of 2015. On the other hand, China’s economic interests in India are treated more concretely, with satisfaction expressed with the progress achieved in the Railway sector cooperation including the projects on raising the speed on the existing Chennai-Bengaluru-Mysore line, the proposed feasibility studies for the Delhi-Nagpur section of high speed rail link, the station redevelopment planning for Bhubaneswar & Baiyappanahalli, heavy haul transportation training and setting up of a railway university.

Although 24 agreements were signed during the visit and the number is impressive, in reality the most significant one relates to the opening of our respective consulates in Chengdu and Chennai and space cooperation. There is no economic agreement of note that figures in the list. Surprisingly, the joint statement contains no reference to the two industrial parks that China will be setting up in India, even if it were to merely record some progress in implementing this initiative. Even the figure of $20 billion of Chinese investments in India in the next 5 years- if nothing but for its positive optical effect- is not mentioned this time. No doubt 26 “agreements” were signed during the visit to Shanghai- mostly MOUs involving the private sector that have no binding value- in the areas of renewable energy, power, steel etc. These are sectors in which China is either already strongly present in India or is a global player as in the case of solar power. Its aim would be to capture the Indian market in what would be a highly fecund area for Chinese business given India’s massive plans in developing the solar power sector. A point to consider is whether the unfettered entry of Chinese firms would suffocate Indian enterprise in the renewable industry sector as has happened in the power and telecom sectors. Even financing of private Indian companies by Chinese banks has been put on the positive ledger in projecting the results of Modi’s visit, even though all that is meant is that China will lend money to Indian companies to buy more Chinese products and only add to the burgeoning trade deficit between the two countries. That these MOUs, if and when implemented ( many are in the form of intentions only) are potentially worth $ 22 billion is a PR exercise, which all countries resort to in order to embellish the economic “success” of visits by their leaders abroad, and can therefore be excused as standard diplomatic practice.

All in all, the China challenge for India has not been reduced by Modi’s visit. On the contrary, Modi has highlighted the political challenges ahead, as China has remained reticent on the points raised by him. Modi is to be commended for largely making the right points during the visit. There were some slippages, but this was perhaps inevitable because China holds the stronger hand. The attempt always is to enlarge the areas of real or potential convergences rather than get bogged down over contentious issues and create a situation where it becomes difficult to issue any meaningful joint statement. The problem in the India-China case is that we are not strategic partners in reality and yet claim that we are. At the end of the day, making the right points and winning them the are two different things.

As for personal chemistry between Xi and Modi, it would have been better if Xi too had avowed publicly that the two had a “plus one” friendship, otherwise the psychological advantage is with the side that remains silent. Let us also note personal chemistry can have a short shelf life in the face of hard political and strategic realities. Obama and Xi have had a shirtsleeves meeting in Palm Springs in California in 2013, Bush read Putin’s soul in Slovenia in 2001 and Obama had hamburgers with Medvedev in Washington in 2010, but these get-to-know informal meetings intended to create a personal rapport do not help resolve issues beyond a point. It remains though that both Xi and Li Keqiang made unprecedented personal gestures to Modi.