China-India Brief #29

China India Brief #29


Published Twice a Month
May 27 – June 10, 2014

Centre on Asia and Globalisation
Lee Kuan Yew School of Public Policy


 

Guest Column

China’s “Maritime Silk Road” Proposal – An Uncertain Chalice for India?

by David Scott

On the in-tray for the newly elected BJP government of Narendra Modi is how to respond to China’s proposals on a new “Maritime Silk Road” (haishang sichou zhi lu) going from the western Pacific through the South China Sea and across the Indian Ocean. China’s concept was first unveiled by President Xi Jinping in a high profile speech to the Indonesia Parliament in October 2013. This was reiterated in March 2014 in Prime Minister Li Keqiang’s Report on the Work of the Government and his pledge there that “we will intensify the planning and building of … a 21st century maritime Silk Road”. He repeated this pledge in his speech to the Boao Forum for Asia Annual Conference in April 2014. In the quasi-official Xinhua (April 16) report entitled “China Accelerates Planning to Re-connect Maritime Silk Road”, this was explained as involving “infrastructure construction of countries along the route, including ports of Pakistan, Sri Lanka and Bangladesh”, in which China would “coordinate customs, quality supervision, e-commerce and other agencies to facilitate the scheme, which is also likely to contain attempts to build free trade zones”. Whereas Cambodia, Sri Lanka and Pakistan have all welcomed China’s proposal, there has been a resounding silence from the Indian government.

 This is not to say that India has not been approached by China to join in the Maritime Silk Road project. During the 17th round of border talks, held in February 2014, the Chinese Special Representative Yang Jiechi seemingly presented an invitation to the then Indian National Security Adviser Shivshankar Menon, but with no clear response from the Indian side. Eight months after Xi’s official enunciation of the concept, India’s Ministry of External Affairs website, complete with official speeches and Press Office material, showed a continuing official blank with regard to the Chinese proposal. This was in contrast to widespread Indian media scepticism over Chinese motives and purposes behind the proposal.

 In part, this official Indian silence was because of the imminence of the general election, with neither the incumbent Congress administration of Manmohan Singh, correctly seen as facing imminent electoral defeat, nor the then opposition BJP leadership under Modi, being in any position to commit India in any definite sense to new foreign policy initiatives. Even more so, this was because the Chinese proposal was, and remains, an uncomfortable one for India. The proposal looked positive, stressed cooperation, and so was difficult to openly reject. Indeed, it would seem well within the orbit of general government rhetoric on the desirability of closer economic cooperation with China. However, the proposal explicitly envisaged a greater Chinese presence in the Indian Ocean. This quite simply is something that India is uneasy about. India may not be able to keep China out of the Indian Ocean, but that is different from actively welcoming it in.

 The context of China’s Maritime Silk Road concept is three-fold. In part, it falls within a wider Silk Routes diplomacy, across land and sea routes to the north and south of India. In part, it is a positive alternative to the security-focussed partnerships embedded in Indian, Australian, Japanese and US adoption of “Indo-Pacific” terminology. In part, it is an attempt to counterbalance the negative imagery caused by Indian perceptions of a string of pearls encirclement policy from China towards India.

The only trouble is that from India’s point of view the countries mentioned in the Xinhua report were countries around India, on its western (Pakistan), southern (Sri Lanka) and eastern (Bangladesh) flanks. From a straightforward geopolitical point of view, it can look suspiciously akin to encirclement, the economic face of a string of pearls strategy. In addition, talk of “supervision” and “customs coordination” by China appears an unsettlingly obtrusive involvement.

 Furthermore, the possibility of an economic maritime presence brings a likely Chinese naval presence in its wake. Admittedly, China denies any such intentions, but then it is precisely Chinese intentions that continue to create problems for India. China’s anti-piracy operations since 2008 in the Gulf of Aden have brought it to the western Indian Ocean. In Pakistan, the operational transfer of the deep-water port Gwadar to the China Overseas Port Holding Company (COPHC) in February 2013 embedded China’s presence still further on India’s western flank. Indian unease over China’s growing presence in Indian Ocean waters was typified in the widespread negative comments in the Indian media, and official silence, over the three-ship naval exercise conducted in the East Indian Ocean by the Chinese navy in February 2014. This unease was also typified in the Indian government’s refusal in March 2014 to allow four Chinese warships to come over from the South China Sea to the Andaman Sea in order to join the hunt for the lost MH370 jetliner.

 Without Indian participation, the Maritime Silk Road will operate to economically bypass India and reduce India’s influence in the Indian Ocean. Indian participation offers the prospect of India helping to shape its operation in the Indian Ocean, yet such Indian participation will legitimise further and deepen Chinese involvement in Indian Ocean affairs. It will also overshadow the Mekong-India Economic Corridor (MIEC) proposal being pushed by India. This would link Myanmar, Thailand, Cambodia and Vietnam with India, and does not involve China. Acceptance of a Maritime Silk Road framework across the Indian Ocean will make it more difficult for India to resist Chinese pressure to be admitted to full membership of SAARC, the IO-ARC and the IONS.

 The BJP electoral victory in May 2014 leaves an awkward issue for India to respond to. In one widely-reported electioneering speech (“Modi in Arunachal: China Should Shed Expansionist Mindset”, Times of India, April 22), Modi indicated a more robust attitude on China. China’s Maritime Silk Road proposal represents an uncertain chalice for India. As Prime Minister, will Modi drink of it, or will he put it to one side? We shall see, as broader China policy emerges from the new government.

 

David Scott is a Lecturer in Politics and History at Brunel University.

The views expressed in this article are solely those of the author and do not necessarily reflect the position or policy of the Lee Kuan Yew School of Public Policy or the National University of Singapore.


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News Reports

Bilateral Relations

Yang Jiechi Meets with Indian Ambassador to China
MFA China, May 27
State Councilor Yang Jiechi met with Indian Ambassador to China Ashok K. Kantha at Zhongnanhai. Yang Jiechi conveyed congratulations from Chinese leaders to Narendra Modi on his assumption of office as Prime Minister of the new Indian government. He expressed that China attaches great importance to developing relations with India. China is willing to work together with the new government of India in maintaining close high-level exchanges, in strengthening cooperation in all fields, and in maintaining a good development momentum in China-India relations so as to benefit the people of both countries and make contributions to peace and development of Asia and the world at large.

New Indian Prime Minister Seeks Fresh Dialogue With China
The Wall Street Journal, May 29
India’s new prime minister reassured his Chinese counterpart on their nations’ close ties and said he was eager to work closely on any outstanding issues with Beijing. In his first phone call with a foreign head of government, Narendra Modi, who took office earlier this week, told Chinese Premier Li Keqiang that China is “always a priority in India’s foreign policy,” according to Mr. Modi’s office, while Mr. Li said his government wants a “robust partnership” with India.

Dalai Lama welcomes Chinese Foreign Minister’s visit to India
Zee News, May 30
Two days after China announced that it would be sending its Foreign Minister Wang Yi to India to meet the Indian Prime Minister Narendra Modi, exiled Tibetan leader Dalai Lama welcomed the initiative taken by the Asian giant.

India wants strong strategic partnership with China: Vijay
Business Standard, June 1
India wants to contribute “very solidly” to the peace and stability process in Asia Pacific and looks forward to further strengthen its relations with China, Japan and South Korea. Member of Parliament Tarun Vijay, as a representative of India’s new BJP-led government at the Shangri-La Dialogue, said India wants a strong strategic partnership with China. 


Chinese foreign minister to visit India
Global Times, June 3
Chinese Foreign Minister Wang Yi will visit India as President Xi Jinping’s special envoy on June 8 and 9, announced Foreign Ministry spokesman Hong Lei. Hong told a daily press conference that Wang will meet Indian state leaders and hold talks with India’s new foreign minister on the development of China-India relations. “Wang’s visit is the first contact between China and India since the new Indian government took office,” Hong said. He spoke highly of the fast development of China-India cooperation in all areas and their close communication and coordination on international and regional affairs.

Modi govt to promote civilian settlements along India-China border
The Times of India, June 4
The Narendra Modi government may not only strengthen ITBP deployment and infrastructure along the India-China border, but also promote civilian settlements in border areas. Unlike the UPA regime that was reluctant to undertake aggressive deployment of troops in stretches close to the India-China border, the Union home ministry may now go for a formal survey of the border gaps and come up with a fresh deployment plan to ensure that ITBP troops are in good strength to discourage incursions on part of the Chinese troops into Arunachal Pradesh and Ladakh. In addition to that, road connectivity will also be strengthened along the border areas. The strengthening of infrastructure will also cover construction of bridges and better mobile connectivity through setting up of BSNL towers.

Tibetan leader at Modi’s swearing in irks China
The Times of India, June 5
China has protested the presence of the political head of the Tibetan government in exile at the swearing-in ceremony of Prime Minister Narendra Modi and his Cabinet last week. The Chinese government sent a demarche to India protesting against the invitation to Lobsang Sangay, who was a special guest at Modi’s swearing in. His Facebook page later said, “Honorable Sikyong (political leader) attended the swearing-in ceremony of Indian Prime Minister Narendra Modi as an honored guest of the Bharatiya Janata Party.”

India’s defence budget is one-third of China: Pentagon
The Times of India, June 6
India’s annual defence budget is just one-third of that of China despite the tensions that remain along their shared border, according to a Pentagon report. The official annual defence budget of China in the year 2013 was $119.5 billion against India’s $39.2 billion, the Pentagon said in its annual report on China, which was submitted to the Congress. For comparison, the national defence budget of Russia in the year 2013 was $69.5 followed by that of Japan — $56.9 billion. “Despite improving political and economic relations between China and India, tensions remain along their shared 4,057-km border, most notably over Arunachal Pradesh, which China asserts is part of Tibet, and over the Aksai Chin region at the western end of the Tibetan Plateau,” the Pentagon said.

India, China to hold border personnel meet on June 10
Chandigarh Tribune, June 7
The Indian Army and the People’s Liberation Army (PLA) will hold a border personnel meeting on June 10 in the Chushul area, 200 km from Leh, along the Line of Actual Control (LAC). Chinese Foreign Minister Wang Yi, who is visiting New Delhi as the special envoy of President Xi Jinping, will hold talks with his Indian counterpart Sushma Swaraj.

India rolls red carpet for Chinese FMs first trip
The Hindu, June 8
After feting SAARC Heads of State at Prime Minister Narendra Modi’s swearing-in ceremony, the Ministry of External Affairs is getting ready to roll the red carpet for its first big visitor from outside the subcontinent — Chinese Foreign Minister Wang Yi. On the agenda, according to sources, would be the meeting schedule for Special Representatives (SRs) to discuss the most pressing bilateral issue of resolving the border dispute between both the sides. The two sides are also scheduled to talk about issues such as energy cooperation, Afghanistan and counter-terrorism, especially Jihadi terrorism, in the wake of a rise in attacks emanating from China’s Xinjiang province.

Chinese, Indian FMs hold talks on building closer bilateral ties
Xinhua, June 8
Visiting Chinese Foreign Minister Wang Yi said in New Delhi that China is willing to build closer and more comprehensive relations of partnership with India. During his meeting with Indian Minister of External Affairs Sushma Swaraj, Wang said that China and India are two important forces which are on the ascendancy in the process of multi- polarization of the world, and Sino-India ties are a bilateral relationship with great dynamics and potentials in the 21st century. Wang said that the governments of China and India share similar ideas of governance and the two countries have a convergence of their strategies of development, as both countries are seeking to realize their dreams of national resurrection. He said that after the new government of India was elected and sworn in, Sino-India relations are facing a new start and new opportunities. Therefore, as the special envoy of Chinese President Xi Jinping, he came to India to emphasize that China welcomes, supports and wishes for India’s development.

More consensus than differences with India, says Chinese Minister
The Hindu, June 8
China’s Foreign Minister Wang Yi, who begins an official visit to New Delhi on Sunday, has expressed optimism that India and China, under the new leadership of Mr Narendra Modi, could find a solution to the vexed boundary question, by showing “strong will and resolve”. In his interview with The Hindu, Wang stressed that both sides had “more strategic consensus than differences”. Wang, who will establish the first high level contact from Beijing with Prime Minister Narendra Modi’s government, called on both sides to ensure that differences over the border dispute do not “affect the normal development of our relations”. The Chinese Foreign Minister also praised Prime Minister Modi for showing the world “resolve and courage” by setting an agenda to push reforms and development and for injecting “vigour and vitality” immediately after taking charge.

Focus on ‘skill, scale and speed’ to compete with China: PM
The Hindu, June 8
Prime Minister Narendra Modi said the country needs to focus on imparting skills to its young population in order to compete with China, apart from bringing revolutionary changes in agriculture and energy sectors. “If India has to compete with China, the focus should be on skill, scale and speed,” Modi said after launching the book ’Getting India Back on track — an action agenda for reform’ at a function in New Delhi. He said that the country needs to exploit the demographic dividend as 65 per cent of population was below 35 years of age.

Border makes China and India bristle, even as they seek closer ties in trade
The New York Times, June 8
China’s state news media has welcomed India’s new Prime Minister, Narendra Modi, as a pragmatic new partner on economic matters, noting that as a regional leader, he made four visits to Beijing seeking investment and even went to the trouble of printing his business cards in Chinese characters, in the auspicious color of red. But as the two giant neighbors attempt to reinvigorate their relationship with the first in a series of top-level meetings this week, one image may interfere: that of a Tibetan man who was led to a seat near the front at Mr. Modi’s swearing-in ceremony. He is Lobsang Sangay, the prime minister of Tibet’s India-based exile government, and a man who is rarely invited to official ceremonies for fear of provoking the wrath of China. Mr. Sangay’s presence at the event attracted little notice until recently, when China lodged a formal complaint with India.

India, China fix several high-level meetings in coming months seeking to build strong ties
The Economic Times, June 9
Chinese Foreign Minister Wang Yi who came here as President Xi Jinping’s Special envoy to engage with new Indian government less than a fortnight after Narendra Modi’s swearing in, held a marathon three-and-a-half hours meeting with the Indian counterpart Sushma Swaraj. This was her first meeting with a major country since taking over as the External Affairs Ministers.  While China had earlier expressed displeasure about the presence of Tibetan PM in exile and Taiwan’s “Ambassador” at the swearing-in ceremony of Modi, the matter was not discussed at the meeting. However, the two sides decided to remain sensitive to each other’s concern.

Stapled Visas to People of Arunachal Pradesh a ‘Goodwill’ Gesture: China
NDTV, June 9
China has justified as “goodwill” gesture its policy of issuing stapled visas to residents of Arunachal Pradesh, saying such a policy does not “undermine” the positions of both India and China which have disputes over big parts of that area. “China has resorted to a special arrangement of issuance of stapled visa to address the need for travel of local people. This gesture is out of goodwill and flexibility and if we do not do that we will not be able to address the concern of outbound and overseas travel of these people,” Chinese Foreign Minister Wang Yi, on a two-day visit to India, said.

India’s Modi Holds Talks With Chinese Foreign Minister
The Wall Street Journal, June 10
India’s new prime minister, Narendra Modi, sat down for a brief, highly symbolic 45-minute meeting with China’s foreign minister, as the two wary neighbors took tentative steps to address decades of sometimes open hostility. The Chinese foreign ministry put a positive spin on the two days of meetings, saying on its website the two nations’ foreign ministers reached a consensus on four points, among them “to appropriately handle border issues.”

Discuss Tibet with Chinese minister: Tibetan group to Narendra Modi
India TV, June 10
A Tibetan organisation has written to Prime Minister Narendra Modi urging him to discuss the Tibet issue during his meeting with Chinese Foreign Minister Wang Yi. The Tibetan Women’s Association (TWA) said it would like to contest a recent statement made by Chinese foreign ministry Spokesman Hong Lei that “The door for contact is open but I want to stress that we only talk with the personal envoy of the Dalai (Lama) and we will only talk about the future of the Dalai, not anything about Tibet”. “We are very much in hope that the new prime minister will consider Tibet during this meeting,” the association said in a statement.

China Prepared to Settle India Border Dispute, Wang Says
Bloomberg, June 10
China is ready for a final settlement of its border disputes with India and prepared to invest more in the South Asian nation if trade rules are eased, Foreign Minister Wang Yi said in New Delhi. “Through years of negotiation, we have come to an agreement on the basics of a boundary agreement, and we are prepared to reach a final settlement,” Wang told reporters in the Indian capital near the end of a two-day visit that included a meeting with Prime Minister Narendra Modi.
 

News Reports

China and India in the Regions

Japan offers support to nations in disputes with China
The New York Times, May 30
Saying that his nation will play a larger role in regional security, Prime Minister Shinzo Abe of Japan said that his government would support Vietnam and other nations that have territorial disputes with China by providing patrol ships, training and military surveillance equipment. He said Japan would cooperate with the United States and other like-minded nations like Australia and India to uphold international rule of law and freedom of navigation, and to discourage China’s increasingly assertive efforts to take control of islands and expanses of ocean that are claimed by other Asian nations, including Japan. “Japan intends to play an even greater and more proactive role than it has until now in making peace in Asia and the world something more certain,” Mr. Abe said.

China, India, Japan and Russia all vie for power in Asia
WantChinaTimes, June 1
China, Japan, India and Russia are competing for power in Asia, boosting their military to defend their interests in the region, while China is also attempting to drive the United States out of the western Pacific to secure its territorial claims, according to Philip Stephens, political columnist for the Financial Times. New partnerships within this dynamic could occur as India swears in its new prime minister, Narendra Modi. According to Stephens, Modi has higher ambitions than his predecessors — to strengthen the nation’s power to match China rather than just improve India’s economic growth and living standards.

RPT-Eyeing Pakistan and China, India’s Modi bolsters security team
Reuters, June 1
India’s new Prime Minister Narendra Modi has chosen a daring former spy with years of experience in dealing with Pakistan as his national security adviser, a move officials say signals a more muscular approach to New Delhi’s traditional enemy. The choice of Ajit Doval, alongside former Indian army chief General V.K. Singh as a federal minister for the northeast region, underscores plans to revamp national security that Modi says became weak under the outgoing government.

Shangri-La Dialogue: Japan, US oppose China move on territorial claims; India yet to clear its stand
The Economic Times, June 2
Delhi is yet to formulate its position formally with a new government just taking charge but regional powers like Japan and the USA have been very vocal at the recent Shangri-La against China’s aggressive moves and manner that seemingly have proved to be de-escalating in South China Sea disputes.

India and China Back Unified Palestinian Government
The Diplomat, June 4
India and China have issued statements of support for the new Palestinian unity government which comprises the rival factions of Hamas and Fatah. The announcements from both countries came a day after Palestinian President Mahmoud Abbas swore in a cabinet. The unity government is controversial because Hamas is regarded as a terrorist organization by Israel and the United States. Hamas is an Islamist group and does not recognize Israel’s right to exist. Fatah meanwhile focuses primarily on Palestinian nationalism within a secular framework. The two groups had been engaged in conflict for years but recently reconciled in April 2014. Accordingly, Israeli Prime Minister Benjamin Netanyahu has lobbied world powers to refrain from recognizing the new Palestinian unity government.

China ship seen hitting, sinking Vietnam boat
The Times of India, June 5
Vietnam state television has broadcast a video showing a Chinese ship colliding with a small Vietnamese fishing boat which capsizes in its path not far from where China has parked an oil rig in disputed waters.  Vietnam and China have already traded accusations over who was to blame for the May 26 incident, as tensions fester between the two countries over the giant drilling platform in the South China Sea. The video, shot from a nearby Vietnamese craft, shows a much larger Chinese vessel steaming after two Vietnamese fishing boats.

China, Nepal, India cooperate to revive South-Western Silk Road
Global Times, June 6
Chinese ambassador to Nepal Wu Chuntai speaks during the interaction program of “Revival of the South-Western Silk Road: Role of trilateral cooperation between China, Nepal and India” in Kathmandu, Nepal, June 3, 2014. The interaction took place between Chief Secretary of Nepal Leela Mani Paudyal, Indian Ambassador to Nepal Ranjit Rae and Chinese ambassador to Nepal Wu Chuntai , among others.

India’s new Prime Minister Modi to visit in July
Japan Times, June 6
New Indian Prime Minister Narendra Modi will visit Japan in July. India’s Ministry of External Affairs spokesman Syed Akbaruddin said Modi has received an invitation from Japan and the visit will take place at “an early date.” Earlier, diplomatic sources in Japan said Modi and Prime Minister Shinzo Abe are expected to ensure “close coordination” in dealing with China’s growing assertiveness in the Asia-Pacific region during the visit. Abe and Modi are also expected to discuss how to advance negotiations on a bilateral nuclear energy pact while confirming plans to lay the ground for the export of US2 amphibious rescue aircraft to India.

Afghanistan takes long view with India, Russia, China
The Hindu, June 7
Afghanistan wants to buy military hardware from India, including used MiG-21 fighters, T-72 tanks, Bofors howitzers and equipment vital for command and control. But wary of upsetting Pakistan, the UPA-II government had told the Afghans that India would not be in a position to fly the equipment over Pakistani airspace for any repairs in Indian military establishments, sources said. Consequently, the Afghans approached the problem in a larger geopolitical perspective, involving a deeper and simultaneous engagement with India, Russia and China. Russia was approached to supply Indian-funded military hardware to Afghanistan, resulting in the establishment of a complex triangular partnership. Reuters had earlier quoted Indian officials as saying that New Delhi had held talks with China, Japan and Iran to find ways to fund Afghan security demands, with a price tag of around $4 billion a year.

China defends oil rig in dispute with Vietnam
The Times of India, June 8
China issued a lengthy defence of its use of an oil rig in contested waters that is at the centre of a bitter dispute with Vietnam. A statement on the foreign ministry website, relayed in full by the official news agency Xinhua, said the drilling operations near the Paracel Islands fell within China’s “sovereignty and jurisdiction”. It also accused Vietnam of acting aggressively towards Chinese personnel, accusing Vietnamese vessels of “illegally and forcefully disrupting” work there and of ramming Chinese boats.

China, Bangladesh vow to further partnership
Xinhua, June 9
China and Bangladesh pledged to further promote their comprehensive partnership of cooperation. The pledge was made during talks between Chinese Premier Li Keqiang and Prime Minister of Bangladesh Sheikh Hasina Wajed, who is also here for the second China-South Asia Expo in Kunming of southwest China’s Yunnan Province. Bangladesh is China’s important cooperative partner in South Asia and the Indian Ocean region. China is ready to take the 40th anniversary of their ties in 2015 as an opportunity to promote mutual political trust, deepen cooperation, make closer communication and push forward their comprehensive partnership of cooperation, Li said.

China sends note to UN chief to clarify Xisha situation
Xinhua, June 9
A Chinese envoy sent a note to UN Secretary-General Ban Ki-moon, presenting documents making clear Vietnam’s provocation and China’s stance regarding the Xisha Islands in the South China Sea. The documents included an article, released by the Chinese Foreign Ministry on Sunday and titled “The Operation of the HYSY 981 Drilling Rig: Vietnam’s Provocation and China’s Position”, as well as annexed material that proves the Xisha Islands are part of Chinese territory.

 

News Reports

Trade and Economy

Infrastructure sops to be India’s bait for bigger slice of China’s IT
Economic Times, June 1
India is likely to seek a bigger slice of China’s information technology market and removal of trade barriers in the pharmaceuticals sector while granting a few concessions in infrastructure sectors, according to a commerce department plan being prepared ahead of the visit of Chinese foreign minister Wang Yi to help India boost bilateral ties and reduce trade deficit with its bigger neighbour.

India scores above US, China for financial market regulation
Business Standard, June 1
Overtaking global giants like the US and China, India has scored top rankings when it comes to putting in place necessary regulations to ensure soundness of the financial market infrastructure. The assessment forms a part of a study by global groupings of capital market and banking regulators from across the world, which have analysed the necessary regulatory framework put in place in various markets to match the Principles for Financial Market Infrastructure (PFMIs).

India aims for single window clearance for IT firms in China
Financial Express, June 1
Eyeing a big foothold in China’s booming IT services industry, India aims to press Beijing for working out a “single window clearance” concept. India will keep pressing for a single window so that the Indian IT firms which are struggling to gain a foothold can enter Chinese markets, Garg who was part of the 60 member Indian services delegation who came here to take part in the 3rd China International Fair for Trade in Services (CIFTIS) in Beijing told PTI.

India and China buying more gold than produced annually
Australian Mining, June 2
In opening last week’s precious metals forum in London, Bloomberg Industries Global Head of Metals and Mining, Ken Hoffman, kicked off with some of the latest stats which showed that China and India between them are consuming more gold than the world is actually mining.

Chinese think tank visit Gujarat, look to plug Indo-China ‘trade imbalance’
Indian Express, June 2
Despite citing ‘trade imbalance between two countries’, Chinese think-tank experts, who visited Ahmedabad on Monday to understand the Gujarat model of development, said they looked forward to improved bilateral ties between India and China. While the Chinese experts likened Gujarat’s ‘development model’ to that of China, they added that Narendra Modi as the Prime Minister signals better opportunities for China. Through his interaction with the members of the local industry present, Wang Yi identified sectors such as Infrastructure and Manufacturing where the two Asian giants can work together.

India’s manufacturing, services growth outpaces China: HSBC
Times of India, June 6
Manufacturing and services sectors in India expanded at a faster rate than China’s in May even as emerging market output remained stuck in “low gear”, an HSBC survey said. The HSBC Emerging Markets Index (EMI), a monthly indicator derived from Purchasing Managers’ Index surveys, inched up to 50.6 in May from 50.4 in April, indicating weak output growth across global emerging markets.

India could pass China in economic power
Zimbabwe Independent, June 6
Soon after winning an absolute majority in the Indian parliamentary elections, prime minister-elect Narendra Modi promised “to make the 21st century India’s century.” If he can avoid tripping over his own ideology, he might just succeed.

India beats China in addition of mobile subscribers
Business Standard, June 6
For the first time, India has overtaken China in net addition of mobile subscribers in the January-March quarter this calendar year, shows the biannual Ericsson Mobility Report on global usage of mobile phones. During the three-month period, India added 28 million mobile users, while China’s subscriber base swelled by 19 million. This was unlike the past few quarters, when China consistently topped the net-addition chart.

China Focus: China, southern neighbors seek trade balance
Xinuha, June 8
At the ongoing second China-South Asia Expo, which kicked off June 6 in Kunming, capital city of southwest China’ s Yunnan Province, officials and businessmen from China and South Asian countries have pledged to expand investment, upgrade exports and domestic industries to seek import and export balance. Trade volume between China and South Asian countries increased from 35 billion U.S. dollars in 2006 to about 100 billion U.S. dollars in 2013, but the fast growth features a rising trade imbalance with China exporting more commodities.

India’s trade deficit with China mounts to $9 billion in Jan-April
The Times of India, June 8
China’s trade with South Asian nations including India has touched a whopping $100 billion even as the deficit in trade between the two countries neared $9 billion in the first four months of 2014. Trade volume between China and South Asian nations jumped from $35 billion in 2006 to about $100 billion in 2013, but the fast growth features a rising trade imbalance with China exporting more, state-run Xinhua news agency reported. The India-China trade topped much of the $100 billion as the bilateral trade totalled $65.47 billion in 2013 with trade deficit mounting to $31.42 billion. The huge trade deficit figured high on talks between external affairs minister Sushma Swaraj and her Chinese counterpart Wang Yi in New Delhi.

What India can learn from Singapore & China’s successful PSU models
The Economic Times, June 8
If elephants can’t dance, India’s public sector pachyderms just haven’t learnt to polka. They’re huge, even powerful, but nimble-footedness hasn’t exactly been the virtue of most of India’s state-owned enterprises (SOEs). Also known as public sector undertakings or enterprises (PSUs or PSEs) — the ones controlled by the Centre earn yet another acronym, CPSEs — the leaden-footed movement of many of these giants is reflected in a set of bloated numbers.

India, China decide to inject new momentum in trade ties
The Times of India, June 9
India and China decided to inject new momentum in their economic ties with both countries pushing for exploring “untapped opportunities” including setting up of industrial parks to take the bilateral trade beyond existing $65 billion annually. Joint secretary in charge of China in the external affairs ministry Gautam Bambawale said possibility of investment by Chinese companies in diverse areas were discussed in the meeting.

 

News Reports

Energy and Environment

China, India may hinder U.S. steps on warming
Japan Times, June 1
U.S. President Barack Obama is set to take his boldest step to halt the rise of the oceans and stop the warming of the planet. But it won’t be enough unless the rest of the world follows. Trimming carbon emissions from U.S. power plants by 25 percent in the coming decades, as Obama is said to be proposing, would be more than overwhelmed by increases in China and India, where coal-fired power plants are springing up and new cars are rolling out of showrooms. And while making electricity creates 40 percent of the greenhouse gases in the U.S. cutting it, as Obama proposes, will not come close to meeting the global reduction scientists say is necessary to reverse warming. For one thing, the amount of the U.S. cuts would be replaced more than three times over by projected increases in China alone. According to the World Resources Institute in Washington, 1,200 coal-fired plants are proposed globally, with more than three-quarters of those planned for India and China alone.

Two Unexpected Ways Obama’s Climate Plan Could Spur Change in China
The New Republic, June 2
Lots of numbers are being lobbed after the Obama administration rolled out its climate-change plan. But to assess the move’s environmental impact, consider a single figure: 1 percent. That’s the rough proportion of yearly global greenhouse-gas emissions that the new EPA plan is projected to cut by 2030—if the plan survives a raft of inevitable challenges and is implemented in its proposed form.

Russia-India-China, the new global centre of gravity?
Daily News & Analysis, June 3
Last fortnight, Russia and China entered into a 30-year contract worth $400 billion for supply of piped natural gas from Russia to China. This one deal could cause realignment of global relationships based on resources. India, which pays high price for gas imports, too, has begun looking at this deal. India was purchasing LNG (liquefied natural gas) from Qatar at $12 per mmBtu (million metric British thermal units) when the US was paying just $3 for the same product from the same source at the same time. Some experts say the gas pipeline should be extended from Russia, through China to India.

U.S. imposes steep tariffs on importers of Chinese solar panels
The New York Times, June 3
The US Commerce Department on Tuesday imposed steep duties on importers of Chinese solar panels made from certain components, asserting that the manufacturers had benefited from unfair subsidies. The decision, in a long-simmering trade dispute, addresses one of the main charges in a petition brought by the manufacturer SolarWorld Industries America. While it is preliminary, the ruling means that the United States will begin collecting the tariffs in advance of the final decision, expected later this year. Although the European Union settled a similar dispute with China through negotiation, tensions have still bubbled. And the United States is seeking to challenge India over the local content requirements for its solar program through the World Trade Organization.

Will India and China Join The US Push for Carbon Cuts?
Wall Street Journal, June 4
America’s push to cut carbon-dioxide emissions is partly intended to spur other large emitters—especially China—to cut their own emissions more aggressively to tackle climate change. But will it work?

President Obama’s energy policy to benefit India and China
Deccan Chronicle, June 4
The path breaking clean energy policy unveiled by the Obama administration would put the US at a disadvantage against countries like India and China, top US lawmakers and policy advocacy groups have said. “It really won’t have much impact in terms of emissions because of what less-developed countries of the world like China and India are contributing,” Senate minority leader Mitch McConnell told reporters at a joint news conference with other top Republican Senators Roy Blunt, Saxby Chambliss, John Cornyn and John Thune.

China, India Lead in Asia’s Emerging Alternative Fuels Landscape
Ethanol Producer Magazine, June 5
Driven by aggressive mandates, government support and cost advantages, China and India – the world’s two most populous countries – dominate Asia’s alternative fuels landscape, according to Lux Research. However, even strong growth will leave these nations short of their self-imposed targets.

India, China take an early lead at UN climate talks in Germany
Business Standard, June 5
Breaking from the past, the Like-Minded Developing Countries (LMDC), which includes India and China, presented the first draft for negotiating the 2015 global climate treaty, grabbing the early mover’s advantage at the UN climate talks that began in Bonn, Germany.

‘Obama’s emission policy to motivate India and China’
The Times of India, June 6
The Obama administration’s new ambitious carbon emission standard has put US in a strong position with the G7 countries and it would motivate countries like China and India to do similar bold actions, the White House has said. “What the United States, through the Climate Action Plan, demonstrating the means by which we are going to reduce our emissions, it put us in a strong position together with G7 countries to work with nations like China and India and others who have to similarly take bold action and articulate how they are going to reach their emissions reduction target as well, the Deputy National Security Advisor, Ben Rhodes said yesterday. “The key principle here is that every nation has got to step up to the plate in its own way. And, again, if the G7 can lead, we will be better able to bring China and India with us,” Rhodes said.

 


Analyses and Commentaries

Probable economic priorities of the NDA government
Pragati, May 20
Mukul Asher writes that exhibition of higher level of economic literacy by all the stakeholders, could help in better communicating public policies and progress towards effective realisation of NDA’s economic priorities. A starting point for analysing probable economic policies of the new government is the three major themes emphasised by the BJP during the campaign.

Recent events in Asia could be tipping points
Japan Times, May 27
Yuriko Koike writes on how recent events in Asia may define the region for decades to come. China’s unilateral behavior has exposed a strain of virulent anti-Chinese sentiment bubbling beneath the surface in many Asian countries. Renewed protests over China’s mining investments in Myanmar this past week confirmed this trend, one that China’s leaders seem either to dismiss as trivial, or to regard as somehow unrelated to their bullying. But the most epochal events of the last week took place in two of Asia’s great democracies: India and Japan. Narendra Modi’s landslide victory in India’s general election was not only a huge personal triumph for the son of a tea-seller, but may well mark a decisive break with India’s traditional inward-looking policies. Here, Modi will find no stauncher ally than Prime Minister Shinzo Abe, who was among the first Asian leaders to embrace him in his bid to lead India. 

India’s Modi and China’s Xi: Frenemies, or Just Plain Enemies?
TIME, May 29
Michael Schuman writes that China and India would appear to have endless reasons to cooperate. But with two nationalists in power, relations between the world’s two most populous nations could turn even frostier.

The India-China rivalry over anti-graft campaigns
Christian Science Monitor, May 29
India and China now have top leaders with vigorous campaigns against official corruption. Which country will succeed? Look to the one that can hold its leaders accountable for transparency and honesty. The two leaders in China and India have different motives for their campaigns, ones that suggest which country will win this new competition for running an honest government that serves the people.

India-China ties in the Modi era
The Express Tribune , May 30
Seema Mustafaargues that Pakistani Prime Minister Nawaz Sharif’s visit to India, while perhaps, inevitable, given the invitation extended to him by the new prime minister of India, did not really break new ground. In fact, by the time the rather tense visiting prime minister left, the bonhomie of the first day when he attended Indian Prime Minister Narendra Modi’s oath-taking ceremony, had been overtaken by the clear reluctance of the Indian side to commit beyond a ‘perhaps’, thereby leaving the state of bilateral relations almost as these were before.

India vs. China: Democracy Eases Downturns?
Wall Street Journal, May 30
Jacob M. Schlesinger argues that Beijing’s bureaucrats have clearly done better than New Delhi’s politicians in stoking rapid growth. But the true test, says India’s central banker, comes when the inevitable slowdown hits. Indian democracy, he suggests, may offer a more sustainable long-term economic model than Chinese Communism.

India to outpace China in terms of growth: Michael Spence
Moneycontrol.com, May 31
Michael Spence, professor of economics at Stern School of Business and ex-professor at Harvard, Stanford and the Hoover Institute, sees India as the star among the emerging markets and actually outshining China in terms of pace of growth. Nobel laureate and an acknowledged authority on growth and policy in developing countries, Spence feels that on policy side, the government should have an open approach.

Time for a newer, stronger Panchsheel Agreement with China
Niticentral, May 31
Calude Apri argues that if Beijing really wants to revive the Panchsheel Agreement, a new life should be given NOT ONLY to the Spirit of Panchsheel, but also to the content of the Agreement. Let India and China reopen the Himalayan passes, the consulate general in Lhasa, the Indian Trade Agencies in Yatung, Gartok and Gyantse, while China can have a consulate in Chennai and in one or two places in India.

Finance and growth in China and India
World Bank Blog, June 2
Sergio Schmukler writes that China and India are hard to ignore. Over the past 20 years they have risen as global economic powers, at a very fast pace. By 2012, China has become the second-largest world economy (based on nominal GDP) and India the tenth. Together, they account for about 36% of world population.

Gold mines fail to keep up with China and India
The Real Asset Company , June 2
Jan Skoyles argues towards the large discrepancy between gold mining rates and gold purchases by India and China. As the above ground gold stock continues to increase by less than a few percent each year, one has to ask how this leaves the amount of gold that is available to be purchased given both China and India’s growing demands.

India’s Growth Could Pass China Under Modi: O’Neill
Bloomberg, June 3
Jim O’Neill examines the strength of the Chinese economy following Monday’s strong PMI Manufacturing report, offers his outlook for India’s economy following the election of Prime Minister Narendra Modi, and previews this week’s European Central bank meeting. He speaks on Bloomberg Television’s “The Pulse.”

Will Russia-India-China become the new global centre of gravity?
DNA News, June 3
R N Bhaskar writes that India needs to look beyond the West. Friendship involving Russia, India and China will be far more rewarding. And considering that India’s per capita PPP is 2-3 times that of China, Russia, or the US, there are reasons to believe that India’s currency will grow stronger much more rapidly. But this cannot happen if India does not work with Russia and China to create a new global order.

A Chinese Monroe Doctrine?
Project Syndicate, June 5
Jaswant Singh highlights that Chinese Foreign Minister Wang Yi’s upcoming visit to India will include his first meetings with India’s new government, including Foreign Minister Sushma Swaraj and, more important, Prime Minister Narendra Modi. But the trip is about more than getting acquainted. The leaders of both countries will be taking one another’s measure, and their conclusions will determine how the relationship between the world’s two most populous countries evolves.

New era for Sino-Indian ties
China Daily Asia, June 6
Emanuel John writes that with China’s Premier Li Keqiang calling up India’s new Prime Minister Narendra Modi last week to discuss China’s keen desire to establish a “robust partnership” with India, there is a new buzz among analysts and experts that India’s policy think tanks could concentrate on China for investments. Modi, who has referred to China as “reform-minded”, responded by saying that India is keen to work even more closely with China. The telephone conversation was Modi’s first with a foreign head of government since he was sworn in as prime minister on May 26.

China’s emission cap pledge shocks India
The Third Pole, June 6
Joydeep Gupta writes that the recent announcement by a senior Chinese official that the country will cap its carbon emissions has caused shock and dismay among Indian climate negotiators, who feel that New Delhi will now be further isolated and under pressure to make a similar pledge. Both China and India made voluntary pledges in 2009 to reduce the carbon emission intensity per unit of GDP – India by 20-25% by 2020 compared to 2005 levels, and China by 40-45%. Right now China is the world’s highest carbon emitter, followed by the US and India.

Xinhua Insight: Along “Southern Silk Road”, deeper anti-terror cooperation neded
Global Post, June 7
Chinese President Xi Jinping put forward the two concepts of Silk Road economic belt and 21st century maritime Silk Road during visits to Central Asia and Southeast Asia in 2013. While “Southern Silk Road” contributed much to economic, political and cultural exchanges between China and South Asian countries, new security situations demand regional cooperation into new areas, especially fighting terrorism. “Terrorism is undoubtedly a challenge,” said former secretary of the Indian external affairs ministry Eric Gonsalves when attending the Second China-South Asian Think-Tank Forum Saturday, one of the events held during the five-day expo. The original route stretched over 2,000 kilometers from Chengdu, capital city of Sichuan Province, through cities in Sichuan and finally took traders to what is now Myanmar by way of Yunnan Province. From there, it extended through to India, Bangladesh and thence to the Middle East.

What India Gets Wrong About China
The Diplomat, June 7
Akhilesh Pillalamarri writes that prior to 1962, relations between China and India were fairly warm during the 1950s as a result of post-colonial bonhomie and Asian solidarity. The reason the Sino-Indian relationship was so frosty in the first place is largely the result of misconceptions on the part of both India’s elite policymakers and nationalists. To understand Indian attitudes towards China, it is important to go back to the 1962 Sino-Indian War, in which China decisively defeated India.

China, India strategic partners, not rivals
Xinhua, June 9
Chen Shilei writes China and India are two important forces which are on the ascendancy in the process of global multi-polarization. Their ties are a bilateral relationship with great dynamics and potentials in the 21st century. Politically, the two countries pledged to maintain the momentum of exchange of high-level visits, strengthen strategic coordination on bilateral relations and work out strategic plans, in order to give guidelines to the development of bilateral relations. The mutual complementarity of the two economies provides great potential for China and India, one being a global manufacturer and the other a major service provider, to jointly boost cooperation in bilateral trade, investment, financial services and new and high technologies.

 


Call for Papers


Call for Papers: The Fourth Interdisciplinary Symposium for Emerging Scholars on India China Studies
India China Institute

The India China Institute at The New School, in collaboration with our partners in India and China invites the submission of papers for the Fourth Interdisciplinary Symposium for Emerging Scholars on India China Studies. The symposium will be held at the following locations and dates:

China: Zhejiang University, Hangzhou, China December 12-13, 2014

India: Panjab University, Chandigarh, India December 19-20, 2014

United States: The New School, New York City, New York, April 13-14, 2015

This unique initiative is designed to provide a platform for researchers pursuing an advanced degree (MPhil/PhD), and young scholars who received their PhDs within the last 5 years, to present their ongoing research. Advanced Master’s degree students from professional fields such as law, design, and architecture are also welcome to apply. We look forward to creative interventions from any discipline, methodology, or combination thereof that address any aspect of China or India’s economic, social, cultural, and political development. Papers with a strong analytical focus on India-China interactions, comparisons, and impact will be given preference. Only papers not previously published will be accepted.

 


Journal Articles


Resilience and the Future Balance of Power
Dhruva Jaishankar, Survival, 2014
There is more to power than the traditional indicators of resources, influence and perception.

Rural–Urban Migration and Gender Disparities in Child Healthcare in China and India
Charlotte Goodburn – Development and Change, 2014
T
his article assesses the impact of rural–urban migration on gender disparities in children’s access to healthcare in China and India. Migration is usually thought to have a positive effect on child health, because of improved access to healthcare facilities, but this is not necessarily equally beneficial for both sons and daughters. Based on fourteen months of fieldwork with rural migrant families in Shenzhen (China) and Mumbai (India), this article argues that where migration improves access to healthcare, it may increase rather than decrease the gender gap in treatment of child illness in the short term, as resources are concentrated on the treatment of sons.

Creating Alliances for Renewable Energy Investment: Lessons from China and India
S Spratt, IDS Policy Briefing, 2014
‘Alliances’ of public and private actors can play a crucial role in accelerating the transition to sustainable energy systems, and these groupings can be ‘engineered’. Based on research findings from India and China this research concludes that achieving a global energy energy transition will be best served if countries forge alliances to support specialisation where they have a comparative advantage.

China’s Strategic Interests in Gilgit- Balistan- It’s Implications on India
Saini Saroj, International Journal of Physical and Social Sciences,June 5
The end of British imperialism in the twentieth century left India and China with territorial uncertainty and undemarcated boundary line. The absence of any commonly accepted maps related to mutually accepted LAC (Line of Actual Control), the understanding of where the LAC actually lies differs in context of both the countries.

 


Compiled and sent to you by Centre on Asia and Globalisation and
the Lee Kuan Yew School of Public Policy, National University of Singapore