» Business » India, China biz relations? The best is yet to come

India, China biz relations? The best is yet to come

By Anand Kumar
June 03, 2015 12:43 IST
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India should go slow on its attempts to improve the relationship with China, says Anand Kumar.

Indian Prime Minister Narendra Modi visits the Museum of Qin Terracotta Warriors and Horses, in Xian, Shaanxi province in China. Photograph: Reuters .

India lives in a troubled neighbourhood. Things have been made far more difficult with the emergence of China as a major power.

In recent times, though high level visits have taken place between India and China, the bilateral relationship has not improved.

When Chinese President Xi Jinping was planning to visit India, he first went to the Maldives and Sri Lanka, where he tried to sell his pet Maritime Silk Route project.

Both the Maldives and Sri Lanka obliged by being willing partners in this project. It was also the first visit of any Chinese president to the Maldives.

Maldives agreed to join the Asian Infrastructure Investment Bank (AIIB) as a founder member and consider a free trade agreement.

On the other hand, when Xi was in India, Chinese forces intruded into Ladakh. When Prime Minister Narendra Modi was about to start his visit of China, the Global Times of China raised the issue of Modi's visit to Arunachal Pradesh.

Though India also raised the issue of Pakistan occupied Kashmir, China brushed it aside.

The former Chinese ambassador to Pakistan, Zhang Chunxiang, called it a cliche. What is more important is the fact that just before Modi's visit to China, Xi chose to visit Pakistan, where he tried to emphasise on China's all-weather friendship with that country. China also committed to invest $45 billion in Pakistan.

Virtually nothing significant came out of Modi's visit to China. China showed India's map without Arunachal Pradesh and Jammu & Kashmir.

The $22-billion investment deal is nothing but hogwash. Chinese banks are flush with funds and with the US no longer remaining a destination for profitable investment, they are trying to pump this money into south Asia.

China has adopted a similar strategy of investment in other south Asian countries such as Pakistan and Bangladesh.

China appears dismissive not only of India but of every other power except the US.

It has proposed talks on 'great power relations' with the US.

This clearly indicates that China now considers itself a great power, like the US.

Some may argue that China is still some distance away from achieving this great power status, but the country is moving towards that goal as fast as it can.

Xi is trying to make the country a maritime power.

China's interests are no longer limited to protecting its shores. It now wants a worldwide presence and is working for a blue-water navy.

A good deal of that has already been achieved. Chinese submarines are doing the rounds of the Indian Ocean.

The Chinese Silk Route has both overland and maritime routes. The Chinese Maritime Silk Route implies shrinking India's strategic space.

It would bring China into the Indian Ocean in a big way. On the other hand, China seems to be attempting to monopolise the South China Sea.

It is creating islands on disputed territories and turning them into military installations.

It has offered the US the use of these facilities for peaceful purposes, but it also means that the ownership remains with the Chinese.

The Chinese military assertion is growing everywhere. It is felt not only by the Philippines and Vietnam but also by the US. Not much has happened under the US Pivot to Asia programme.

The country actually threatened the US when it tried to fly fighter planes over the newly created islands in the South China Sea.

China has also been successful in creating new international institutions such as the AIIB and the BRICS Bank.

Besides India, even the Western world (barring the US) has lined up to join the AIIB. In this intoxicating environment, it is highly unlikely that China would like to befriend India on an equal basis. It is quite clear it wants India to play second fiddle.

India should go slow on its attempts to improve the relationship with China.

China is eyeing the huge Indian market. It is also trying to get into the South Asian Association for Regional Cooperation.

India should leverage its trade with China to put more pressure on the country to behave responsibly.

India can't hope to get investment from China for its 'Make in India' programme when the country's industry is facing the problem of overcapacity and overproduction.

It has to look for capital elsewhere.

Anand Kumar is associate fellow at the Institute for Defence Studies and Analyses.

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