Shastri Ramachandaran: Exploiting India’s economy of dialogue with China

With the South Asia Forum’s first meeting successfully wrapped up, the next big thing on the plate of the new Foreign Secretary Ranjan Mathai is India-China relations. Later this month, India and China will sit down to a strategic economic dialogue. The intensified economic focus will also see the setting up of the India-China CEOs forum with Anil Ambani as co-chair from the Indian side.

These signify an attempt, by both sides, to boost the level of economic exchanges and business interactions. Something similar, for both India and China, obtains only in relations with the United States. While China and the US have an ongoing strategic economic dialogue, it is only with the US that India has a joint forum of CEOs. The strategic economic dialogue and the CEOs Forum are expected to add depth as well as new dimensions to Sino-Indian relations.

The complexity of Sino-India relations is challenging at the best of times as both sides tend to tread warily on the vast ground spanning multiple tracks of engagement. Mathai would be looking to sustain the momentum of present ties while adding new value and content at all levels.

Observers, especially of the economic scene, view India and China as being locked in a race. The two, each with a population of over a billion and impressive growth rates, bucked the global financial meltdown. Their robust economies are ahead of the US and Europe, and they are the best bets among emerging markets for stabilising the world’s economic recovery.

Willy-nilly, they are projected as racing to overtake each other in economic development, and the merits of their respective political systems are always compared in this context.

India appears more preoccupied with China and its achievements than the other way around. What cannot be denied is that the two are in a relationship which is at once cooperative and competitive. Hence, if there is a contest, it is not one-sided; and, their respective strengths and potential are hotly debated within and beyond their borders.

That being the case, in dealings with China, Mathai’s every move would be watched and weighed, especially as his two predecessors — Nirupama Rao (now Ambassador to the US and Shivshankar Menon, now National Security Adviser) — were ambassadors to China before occupying the top post in the Ministry of External Affairs.

Next week’s India-China strategic economic dialogue is aimed at increasing investments and tackling the trade deficit. China is India’s largest trading partner. In 2010-11, the turnover was nearly $60 billion. But India sold only $20 billion worth of goods while it bought $40 billion, and the imbalance has to be addressed.

China’s delegation to the dialogue would be led by the Zhang Ping, chief of its National Development and Reform Commission (NDRC) while the Indian team would be headed by Montek Singh Ahluwalia, Deputy Chairman of the Planning Commission.

Ahluwalia is also expected to hold talks with Zhang during his two-day visit, beginning September 26. The NDRC is China’s equivalent of our Planning Commission.

On another track, the 15th round of boundary talks, between special representatives Dai Bingguo and Shivshankar Menon, is scheduled to be held in Delhi next month. This would be the first since Mathai assumed office, and comes at a time when both sides want to break through towards a framework for making a mutually acceptable map of the border.

Apart from the economic dialogue, the CEOs forum and the boundary talks, high-level visits from both sides are pending for want of suitable dates. India has agreed to host Vice President Xi Jinping, who is expected to succeed President Hu Jintao in 2012. More than once dates have had to be shifted, and still there is no certainty of when it may happen.

New Delhi is keen to engage Xi before the year-end, after which his commitments at home would increase manifold. At the same time, this visit cannot be delinked from plans for the Indian Vice President Hamid Ansari’s travel to China, which has been put off more than once in recent months.

There are many substantive and symbolic issues on the India-China agenda that Mathai has to see through in his early months in office and before the end of this year. For instance, China’s increasing interest and influence in shaping the course of politics in Nepal would be a test of India’s striving for stability in the region as well its supremacy in Asia.

Apart from such challenges and bilateral exchanges, there are forums, such as the East Asia Summit and Shanghai Cooperation Organization, where China is already a force, but India is yet to find its feet and make its presence felt. Mathai must be acutely aware of the larger role expected of New Delhi by a number of countries which see India as a power; and these are forums where the lines of cooperation and competition between India and China could overlap.

— The author, who was senior editor/ writer with the Global Times and China Daily in Beijing, is an independent political and foreign affairs commentator based in New Delhi