Gandhigiri To China
What are the concrete results flowing from the just-concluded high-profile visit of Chinese premier Wen Jiabao to India? The answer depends on whether one is seeking it from the Indian point of view or through the Chinese prism. As I view the question as an Indian, my answer is that on a scale of 10, China scored eight and India just two from the visit.
Just look at the major irritants on Sino-Indian front. We have an unresolved border. Despite many rounds of negotiations, a border settlement acceptable to both the countries eludes. And here China’s posture is becoming tougher. The agreed principle—which, incidentally, emerged from Wen’s visit to India in 2005 that the settled population in the disputed border areas will not be disturbed in any eventual solution—has been negated by China, which is now claiming Tawang, the holy city of the Buddhists in Arunachal Pradesh, as its own. Secondly, China continues to encircle India by developing establishments and infrastructures in all the neighbouring countries of India (Sri Lanka, Myanmar, Bangladesh, Nepal and Pakistan) that have strong military implications. It is arming Pakistan with nuclear weapons and missiles, not to speak of other India-centric ammunition.
Thirdly, of late, China has been perilously interfering in India’s internal affairs by questioning Kashmir’s status; it has introduced recently the practice of a separate stapled sheet in Indian passport while issuing visa to a Kashmiri. It has also denied visa to an Indian General just because he had served in Kashmir. Fourthly, China is far from returning the Indian gesture during the 1950s of backing not only its ordinary membership of the United Nations but also the permanent membership in the UN Security Council, which, incidentally, was offered on a platter to India by the Western countries. Unlike the other four permanent members—the United States, Russia, France and Great Britain—China refuses to support noticeably India’s legitimate claim for being a permanent member. Fifthly, unlike every other country that matters in the world, China overlooks India’s concerns over terrorism that is aided and abetted from Pakistani soil.
Now, coming back to Wen’s visit, there has been absolutely no progress on any of the irritants mentioned above. And that means that Wen got away with his government’s policies vis-a-vis India despite visiting India. On the other hand, Wen achieved his primary objective of making enormous economic gains from India. He came with a huge contingent of 400 Chinese businessmen and addressed India’s business elites from FICCI, CII and ASSOCHAM. He persuaded the Indians to take the annual bilateral trade volume to 100 billion US dollars worth in five years from the present level of 60 billion dollars, notwithstanding the fact that the economic interactions so far have been one-way, favouring essentially the Chinese. First, the balance of trade has been against India to the tune of nearly 20 billion dollars. Secondly, the trade relationship is mostly uncomplimentary, with India essentially exporting precious raw material in general and iron ore in particular and China selling finished products. And this despite the fact that the raw materials that China imports from India are abundantly available in that country but which are being saved as a strategic reserve.
Thirdly, the imbalance has been further compounded by the increasingly dumping of Chinese goods in the Indian market. So much so that Indians are now flooded by the Diwali items and idols of Indian Gods and Goddesses, all made in China! Conversely, however, the Chinese authorities place many hurdles for the entry in their country of quality Indian products in the Information Technology, pharmaceutical and food processing sectors, even though China is not self-sufficient in them and imports them from other markets. And yet, China would like India to sign a free trade agreement with India! Fourthly, while China, thanks to its three trillion worth of foreign exchange reserves, is investing in a huge way all over the world, particularly in the developing countries, it is not so inclined to do so in India. Its foreign direct investment has been miniscule 52 million dollars in India. And this is in sharp contrast to a reasonable 879 million dollars that India has invested in China between 2004-05 and 2010. A particular mention in this regard is noteworthy. Indian businessmen, who are importing a significant amount of power equipment from China, have been expecting China to manufacture such equipment through FDI into India, particularly after the Reliance Power has inked recently one of the largest global import deals for 8.3 billion dollars with the Shanghai Electric Power Company. However, Chinese investments into India in power equipment manufacturing locally and setting-up of R&D and after-sale service facilities are yet to take off in any sizeable manner.
Viewed thus, Wen’s visit to India has proved to be a win-win situation for China, with India gaining very little. And yet, if I have given India two points on a scale of ten, it is precisely because after ages India did show some guts by refusing to incorporate in the joint communiqué few sentences making it clear that India believes in “one-China” principle. After every India-China summit, because of the insistence of Beijing, New Delhi always agrees to these sentences. This time, Tibet does not find a mention in the joint communique. In 2003, the then Prime Minister AB Vajpayee had surrendered the little leverage that India had over Tibet. India had recognised Tibet to be a part of China through the India-China Treaty on Tibet, 1954. Its validity was, however, for eight years. That means that after 1962, India was not bound to regard Tibet as a part of China. The 1988 statement during Rajiv Gandhi’s visit was diplomatically worded in the sense that it talked of Tibet as an autonomous region of China, meaning that India’s view on Tibet could change if Beijing takes away Tibet’s autonomy. But Vajpayee, during his visit to China, agreed unconditionally that “Tibet Autonomous Region (TAR) is part of the territory of the People’s Republic of China (PRC)”. And what is more important, such an agreement on Tibet was signed for the first time at the prime ministerial level.
How India should deal with a hostile China? Some time ago, I had argued in an op-ed in a leading English daily that “Gandhisim” could be a diplomatic tool. I will repeat the same even today. The main component of rising Chinese power is its economic strength, particularly its foreign exchange reserve, that is, dollars. And this the Chinese have earned through export of their goods, which they produce cheaply by their cheap labour, in markets all over the world. In fact, for the most part, the Chinese enjoyed a system of “one-way free trade” in open markets of the Western countries while protecting its own market against Western goods under one pretext or the other. As a result, the balance of trade was always in favour of China, and, that, in turn, endowed it with more and more dollars. This is the case even now.
In this age of the WTO, which ensures free trade, there cannot be any ideological ground to stop Chinese goods entering any country. But what we can do here is to adopt the Gandhian tool of boycott. Let us pledge ourselves not to buy Chinese goods. Once this Gandhian practice gains momentum, that is, if more and more people in the world, particularly in the United States—the biggest market for the Chinese goods—voluntarily stop buying Chinese products, it will have a salutary impact on the Chinese rulers.
The lopsidedness of the Chinese economy is so acute that an overwhelming majority of the Chinese people themselves continue to be too poor to buy their own country’s products. Once the Chinese rulers are unable to find buyers for their goods, their economic power will decline and their arrogance will evaporate. Let “Gandhigiri” prevail over Chinese “dadagiri”.
By Prakash Nanda