China-India Brief #95

china-india-brief-95


Published Twice a Month
May 31 – June 27, 2017

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


Guest Column

What Does India’s SCO Membership Mean For Sino-Indian Ties?

by Rupakjyoti Borah

At the recent (June 8-9) Shanghai Cooperation Organisation (SCO) summit held in Astana, Kazakhstan, both India and Pakistan became full members. As a result, SCO represents “over 40 per cent of humanity and nearly 20 per cent of global GDP.” Earlier in May, India became the only major economy not to participate in the Belt and Road Forum, with even the US and Japan sending some kind of representation. In a statement on India’s stand on the Belt and Road Forum in Beijing last month, its Ministry of External Affairs had noted that “we are of firm belief that connectivity initiatives must be based on universally recognized international norms, good governance, rule of law, openness, transparency and equality. Connectivity initiatives must follow principles of financial responsibility to avoid projects that would create unsustainable debt burden for communities; balanced ecological and environmental protection and preservation standards; transparent assessment of project costs; and skill and technology transfer to help long term running and maintenance of the assets created by local communities. Connectivity projects must be pursued in a manner that respects sovereignty and territorial integrity.”

What does Indian membership in SCO and non-membership in the Belt and Route Initiative (BRI) mean for India-China relations?

First, New Delhi has signalled clear red lines when it comes to concerns about its sovereignty, as the CPEC (China-Pakistan Economic Corridor), which is a part of BRI, passes through Pakistan-occupied Kashmir (PoK).

Second, New Delhi’s BRI decision reflects the fact that after a period of trying to woo China during the initial years of this government’s tenure, New Delhi has concluded that while it expects Sino-Indian economic ties to move ahead, on the political front it will no longer be business as usual.

Third, Beijing also has its own set of worries over Pakistan, a fact that was clearly signalled at the SCO Summit. In the aftermath of the killing of two Chinese nationals in Pakistan’s Baluchistan province, it was widely reported that President Xi Jinping snubbed Pakistani Prime Minister Nawaz Sharif by refusing to grant him a bilateral meeting at the summit.

Fourth, participating in the SCO Summit was also New Delhi’s way of making sure that it is not left out of a grouping which is important for a number of reasons. The region is key for India’s energy security. It is also important in respect of Islamic extremism and terrorism. Afghanistan (which is an observer in the SCO) is important for India’s national security, as instability there can affect security in Jammu and Kashmir. In addition, Pakistan’s growing closeness to Russia is worrying for India. Russia conducted joint military exercises with Pakistani forces after the deadly Uri terror attacks on Indian security forces in September last year – a development that did not go unnoticed in New Delhi.

What Lies Ahead for Sino-Indian Ties?

India-China relations will be affected by other factors. A great deal will depend on the outcome of Modi’s visit to the US. There have been concerns expressed in India over the statement of President Donald Trump on restricting the number of H1B visas. Any curtailment of visas will impact a large number of Indian software professionals and software companies operating in the US. In addition, on the issue of climate change, Trump’s statement that India is trying to extract “billions and billions and billions of dollars” from developed countries in order to keep its promises on emission cuts has cast a shadow over India-US ties.

The future of India-China relations will also depend on Chinese security and economic calculations. For instance, China will need to collaborate with India when it comes to Afghanistan. India also represents an economic opportunity for China. With the US pulling out of the TPP (Trans-Pacific Partnership), the RCEP (Regional Comprehensive Economic Partnership) negotiations assume increasing significance. China and India are key members of RCEP. Beijing wants greater access to Indian markets and RCEP could be a vehicle for this.

PM Modi has laid stress on India acting tough on issues where its core interests are concerned and the same can be said of China under President Xi Jinping. Hence, it seems that in the foreseeable future, China and India will cooperate in some areas while there will be serious divergences of opinion in other areas. The challenge for both India and China will be to manage a good balance between cooperation and divergence.

 

Dr Rupakjyoti Borah is a Visiting Research Fellow at the Institute of South Asian Studies, National University of Singapore (NUS). He was earlier an Assistant Professor of International Relations at PDPU, India and a Visiting Fellow at the University of Cambridge. The views expressed are personal. He can be contacted at isasrb@nus.edu.sg

 

The views expressed in the article(s) 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.


 

News Reports

Bilateral relations

China denies intrusion in Indian airspace
The Times of India, June 6
China’s Ministry of Defence has rejected a statement by external affairs minister Sushma Swaraj about Chinese helicopters violating the Indian airspace over the border near Barahoti in Uttarakhand. The differences have erupted ahead of a June 8 ceremony in Asthana, that will see India and Pakistan joining the Shanghai Cooperation Organization. The ministry said that the Indian reports about airspace violation by China were “not factual” and Chinese helicopters had not intruded the Indian territory. “The Chinese army carried out routine training activities on its side of the Line of Actual Control. Indian media reports do not match the facts,” it said.

Incursions across India-China border matter of perception: Army chief Bipin Rawat
Hindustan Times, June 10
Army chief Bipin Rawat claimed that allegations of incursion by Chinese helicopters or army men into Indian side of border are matters of perceptions by the two sides rather than incursion attempts. Speaking to the media in Dehradun on the sidelines of the passing out parade of Indian Military Academy, General Rawat stated that perceptions in India and China about the Line of Actual Control (LAC) are different which leads to allegations of territorial or air space transgression. “Counter intrusions take place from both the sides of LAC. We also fly our helicopters on the space that may be considered intrusion by the other side,” Rawat said emphasising on the need to improve relations with China.

India, China need to handle sensitive issues, Xi tells Modi at SCO meet in Astana
Hindustan Times, June 11
China and India should work together to address sensitive issues and help each other in meeting developmental goals, Chinese President Xi Jinping told Indian Prime Minister Narendra Modi on Friday. In his first meeting with the Chinese leader in eight months, Modi told Xi the two countries needed to “properly deal” with sensitive issues. “China and India are two major countries and should focus on more cooperation alongside providing assistance to each other on developmental goals,” Chinese foreign ministry Hua Chunying quoted Xi as saying. The two leaders met in Astana, Kazakhstan on the sidelines on the Shanghai Corporation Organisation summit.

China accuses Indian border guards of crossing into its territory
Reuters, June 27
China has accused Indian border guards of crossing into its territory from the state of Sikkim on India’s northeastern border with Tibet, the Chinese foreign and defence ministries have said, complicating an already difficult relationship. Geng Shuang, a spokesman with China’s foreign ministry, said Indian guards “obstructed normal activities” by Chinese forces on the border and called on India to withdraw immediately, according to a ministry statement late on Monday. He urged India to respect China’s territorial integrity and the border treaties signed by the two countries, and said China had already suspended official pilgrimages at the Nathu La Pass, which lies on the frontier between Sikkim state and Tibet.

 

News Reports

China and India in the Regions

SCO to expand as Xi attends summit
Global Times, June 6
The Shanghai Cooperation Organization (SCO) will accept India and Pakistan as full members, which will not have an impact on the unity of the organization, but the SCO will offer a platform for New Delhi and Islamabad to solve their disputes between themselves, experts said. Chinese President Xi Jinping is set to visit Kazakhstan from Wednesday to Saturday and attend the 17th SCO summit in Astana, capital of Kazakhstan, where India and Pakistan, two SCO observers, will be granted full membership, Chinese Assistant Foreign Minister Li Huilai said at a press conference on Monday. The membership process for India and Pakistan began in 2015. Kyrgyz Deputy Foreign Minister Emil Kaikiyev told the Xinhua News Agency that “the decision [to grant India and Pakistan full membership to the SCO] is historic, because with the increase in membership to eight states, the SCO can become an essential component of the global security system.”

US, China, India to be top prospective destinations for foreign direct investment: UNCTAD report
Global Times, June 8
The United States, China and India are considered to be the most prospective destinations for foreign direct investment (FDI), predicted the United Nations Conference on Trade and Development (UNCTAD) on Wednesday in its annual report on investment.  According to the World Investment Report 2017: Investment and the Digital Economy, global FDI flows retreated marginally in 2016 by 2 percent to 1,75 trillion US dollars, amid weak economic growth and significant policy risks perceived by multinational enterprises.  Flows to developing countries were especially hard hit, with a decline of 14 percent, while FDI outflows from developed countries decreased by 11 percent, mainly owing to a slump in investments from European multinational enterprises.

NSG ends without deciding on India membership, experts say China impasse will delay further
The Hindu, June 24
The Annual plenary meeting of the Nuclear Suppliers Group (NSG) in the Swiss capital of Berne (July 22-23) ended without agreeing on India’s case for a membership, for a second year, although member states agreed to convene another meeting on the subject of non-signatories to the Non Proliferation Treaty, like India and Pakistan, in another five months. According to a public statement issued on Friday night by the 48-member body, that holds all consultations in secret, and takes decisions by consensus, “The NSG had discussions on the issue of ‘Technical, Legal and Political Aspects of the Participation of non-NPT States in the NSG’. The Group decided to continue its discussion and noted the intention of the Chair to organise an informal meeting in November.”

India to buy U.S. predator drones to keep an eye on China: Gen. Jack Keane
Fox Business, June 26
Retired Gen. Jack Keane on Monday said President Trump will announce an arms deal between the United States and India involving the sale of unarmed surveillance drones. In an interview with FOX Business’ Stuart Varney, Keane said the sale of the U.S. military’s primary drone used in Afghanistan and Iraq is about India’s concerns over China. “They [India] want to use that for their own defensive of security as China begins to rise in the area and begins to have influence in the Indian Ocean and the countries that border it,” he said. According to Keane, India is concerned with China’s increasing presence in the region as it continues to expand its naval base near the Indian Ocean in Djibouti.

 

News Reports

Trade and Economy

China could offer shortcut for India as it pursues large-scale rail network upgrade
Global Times, June 4
“If you want to get rich, build roads first.” This old Chinese saying is a typical description of the role of China’s roads and railways in facilitating its economic development. Given the country’s advanced technology and experience in infrastructure construction, cooperation with China would offer a shortcut for countries like India that tend to copy the China model. Just last week, India’s Railway Minister Suresh Prabhu said that the ministry aims to replicate the China model for the country’s railways, according to a report by the Times of India. And the government needs to put major investment into the rail sector in the coming 30 years to catch up with China, Prabhu estimated, adding that rising debt should not be a concern, as it is an inevitable part of revamping infrastructure.

China could benefit from Trump-Modi summit
Global Times, June 22
It will be interesting to see how Indian Prime Minister Narendra Modi’s visit to the US will influence the two countries’ bilateral economic ties. India-US economic relations have not always been seen as having the same order of magnitude as China’s economic ties with the US, and the main reason for this is that India lags behind China in terms of opening up its market to foreign investors. US President Donald Trump has put the world on notice that “America First” is not just campaign rhetoric but an actual policy position. If Trump fights for US firms’ interests and persuades India to promise wider opening-up during his summit with Modi, China, as a key economic partner of India, will also gain benefits. Therefore, China is paying close attention to Modi’s upcoming US visit.

China welcomes US-India ties as Trump, Modi meet amid increased trade friction
Global Times, June 27
Chinese experts said that China welcomes the development of relations between India and the US, as the leaders from the two countries met on Monday, saying relations have “never been better.” US President Donald Trump on Monday held talks with Indian Prime Minister Narendra Modi at the White House, eyeing a robust partnership despite their growing trade friction, the Xinhua News Agency reported on Tuesday. The two leaders hailed strong bilateral ties and pledged to enhance cooperation in areas such as trade and anti-terrorism. “After our meetings today, I believe that the relationship between India and the United States has never been stronger, has never been better,” Trump said in a televised remark with Modi at the White House Rose Garden, Xinhua reported. “My visit and our talks today mark a very important page in the history of the collaboration and cooperation between our two nations,” Modi said.  “Even though US-Indian relations have been improving in the past decade, Trump’s attitude towards India had been unclear before this meeting, and he has given it a positive spin,” Ni Feng, deputy director of the Institute of American Studies at the Chinese Academy of Social Sciences, told the Global Times on Tuesday.

 

News Reports

Energy and Environment

U.S. departure from Paris deal turns spotlight on China
The Hindu, June 2
The decision by the United States to walk out of Paris climate agreement has opened the debate about China now assuming global leadership for a greener world. An article in the Hong Kong-based South China Morning Post (SCMP) points out that the U.S. decision to quit the Paris deal “cedes global climate action leadership to China, which Trump chided in his speech, and the European Union (EU).” The controversial decision by the Trump administration followed a meeting in Germany between China’s Premier Li Keqiang and German Chancellor Angela Merkel, where the two leaders pledged to work together on a cleaner environment, including climate change.

Merkel’s Chief of Staff says EU to join China, India on climate
Bloomberg, June 4
German Chancellor Angela Merkel’s chief of staff, Peter Altmaier, said Europe will move forward with countries such as China and India after the U.S. pulled out of the Paris climate treaty. “The U.S. exit from the climate accord is a major setback,” Altmaier wrote in a guest op-ed in Bild am Sonntag newspaper published on Sunday. “Even in the U.S., people are sad and angry, because they recognize that their country’s exit is the costliest option and will be a setback of decades.” Merkel said “nothing can or will stop us” the day after Trump announced that the U.S. would pull out of the treaty it signed in 2015. The day before, Chinese Premier Li Keqiang, standing alongside Merkel at a joint news conference in Berlin, said China will honor its Paris commitments. Earlier in the week, Indian Prime Minister Narendra Modi said his country felt obligated to protect the environment.

Coal on the rise in China, US, India after 2016 drop
ABC News, June 26
The world’s biggest coal users — China, the United States and India — have boosted coal mining in 2017, in an abrupt departure from last year’s record global decline for the heavily polluting fuel and a setback to efforts to rein in climate change emissions. The reasons for this year’s turnaround include policy shifts in China, changes in U.S. energy markets and India’s continued push to provide electricity to more of its poor, industry experts said. President Donald Trump’s role as coal’s booster-in-chief in the U.S. has played at most a minor role, they said. The fuel’s popularity waned over the past several years as renewable power and natural gas made gains and China moved to curb dangerous levels of urban smog from burning coal.

 


Analyses

China praises Modi, but would stop India from entering NSG
The Times of India, June 6
China on Monday revealed two sides of its realpolitik game in the region three days before India and Pakistan are due to join the Shanghai Cooperation Organization. There is a possibility of a meeting between Prime Minister Narendra Modi and Chinese President Xi Jinping during the SCO membership ceremony at Asthana on June 8. Chinese foreign ministry praised the Prime Minister for a recent comment on India-China relations. At the same time, Beijing sent out a clear signal that it would continue to block India’s entry into the Nuclear Suppliers’ Group, and never budge from its blatantly pro-Pakistan on the issue of terrorism

Beijing’s goodwill shown in India joining SCO
Global Times, June 12
India and Pakistan were finally admitted as full members to the Shanghai Cooperation Organization (SCO) on Friday at its 2017 summit in the Kazakh capital of Astana. A common concern from the international community is that the two historic enemies may bring their bilateral contradictions into the significant regional framework and consequently damage its operation. Such concerns are justified. The South Asian Association for Regional Cooperation (SAARC) remains idle as a result of the perennial rift between the two neighbors. India even pitched the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation in joint effort with South Asian countries, Thailand and Myanmar, but excluded Pakistan. India and Pakistan are the two largest countries in South Asia. Their territories, populations and economic volumes exceed 90 percent of the regional total, but their long-standing discord has held the SAARC back. Nonetheless, this is not the case with the SCO. In this framework dominated by China and Russia, neither India nor Pakistan can play as a big role as they do in the SAARC.

SCO will not be used by China to intervene in Indo-Pakistan disputes
Global Times, June 12
China and Russia both hope that India and Pakistan can find an effective mechanism to solve their problems. If India and Pakistan can focus more on peace and economic development, all countries in the organization, including China and Russia, will benefit from it. The SCO has the potential to mediate between India and Pakistan, but only the word “potential” can be used in the short term. There is a deep divide between India and Pakistan, so it will be difficult for the SCO to bridge this with its regular mechanism in the short term, and the SCO will by no means become a channel for China to intervene in any conflict between India and Pakistan.

India and Pakistan will add vitality to the ‘Shanghai Spirit’: China Daily columnist
The Straits Times, June 13
At the 17th Shanghai Cooperation Organisation summit in Astana, Kazakhstan, President Xi Jinping witnessed the official inclusion of India and Pakistan into the regional bloc, as well as the adoption of a convention on anti-extremism. As China succeeds Kazakhstan as the SCO chair for a year, observers are wondering what the expansion of the bloc will mean for the “Shanghai Spirit”.  The accession procedures for India and Pakistan, which started in 2015 at the Ufa summit in Russia, are not just about institutional expansion or revision but also improvement.

What’s at stake for China as unsure Modi meets unpredictable Trump?
South China Morning post, June 25
Trump’s indifference is particularly troubling for India, coming as it does when it needs the US the most – to hedge against an assertive China. As Carnegie India director C Raja Mohan put it in a recent talk at the Foreign Correspondents Club of China in Beijing, “The Chinese feel the arc of history is bending in their favour. They don’t have to accommodate others. The way the Asian order is evolving, there will be only one tiger on top of the mountain.” India and the US have been cultivating one another precisely for such an inflexion point in history. Their relations have hence gone from strength to strength since Bill Clinton’s visit in 2000, propelled by bipartisan support in both countries for closer ties.

 


Books and Journals

Behind the Ties that Bind: Diaspora-making and nation-building in China and India in Historical Perspective 1850s-2010
Asian Studies Review, 2017
Whereas the rare existing comparative studies of Chinese and Indian diaspora policies have focused on recent periods following economic restructuring in both countries, this article, by Els van Dongen, using a historical perspective, looks at diaspora policies in both countries from the angle of conceptions of the nation. Comparing three specific periods – the early twentieth century, the period between the 1950s and the 1970s, and the period since the 1970s – the article argues that there was a similarity between China and India in terms of how conceptions of the nation expanded and contracted together with both domestic and international changes during these periods, in spite of differences in nationality laws. As such, it demonstrates that countries with nationality laws based on jus sanguinis are not necessarily always more inclusive towards diaspora populations than those with nationality laws based on jus soli. In both cases, there is a tension at work between a state-led paradigm that is territorial in nature and ethnic and cultural notions of nationhood.


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