Originally Published 2010-12-16 00:00:00 Published on Dec 16, 2010
China, particularly after the global financial crisis, is on a look-out for markets in Asia, and India offers the largest market. Therefore, China's singular focus on economic issues is understandable, but India should not give into the Chinese demands without a quid pro quo.
Wen Jiabao Visit: Expectations and Deliverables
Chinese Premier Wen Jiabao is on a three-day visit to India against the backdrop of both increasing rivalry between the two Asian giants as well as opportunities for greater cooperation. This is manifested from time to time as both tension and cooperation, both at the bilateral and multilateral levels. Whether tension or cooperation predominates this visit will reveal a lot about the long-term prospect of this important bilateral relationship.

The two sides have improved their relations to a great extent in the last few years, particularly in the economic domain. The trade ties have grown from just US $ 1.99 billion in 1999 to nearly US $ 60 billion this year, but without seeming to have any positive impact on the political relationship. This article outlines the major concerns that New Delhi has. How they are addressed by the two sides will decide how this visit is judged.

For the Indian side, there are four key issues that Prime Minister Manmohan Singh will likely take up with Wen Jiabao. These are the opening of Chinese market for Indian goods; Chinese policy approach on Jammu & Kashmir, including that of the issuance of stapled visas; nuclear cooperation with Pakistan; and terrorism.

Opening up of the Chinese Market

India-China economic and commercial relations have improved tremendously in the last few years. Even while there is imbalance in the trade, this is one area that has continued to flourish without major hurdles. The trade deficit is hugely in favour of China. Another area of concern is that India continues to export mostly raw materials while we import manufactured products. This imbalance is an issue that needs to be addressed.

One major demand from the Indian side has been the opening up of the Chinese market for India. India has demanded opening of the market in three key sectors – pharmaceuticals, IT and agriculture. In spite of efforts by the Indian government and the private sector, there has been hardly any movement. India has a sizeable R&D and technological base in the area of pharmaceuticals and India has produced a variety of cheap and effective drugs for a number of diseases including AIDS. However, India has not been allowed to operate in the Chinese market. Similar has been the case in the areas of IT and agricultural products. This is another issue that the Indian leadership has to take up with China.

Chinese Policy on Jammu & Kashmir

China’s policy on Jammu and Kashmir has oscillated from one end of the spectrum to the other. From a policy of neutrality in the 1980s and 1990s, China has adopted a more active and partisan role today. China’s policy on J&K today represents a mix of aggressiveness and determination, emboldened by the rising politico, economic and military might of the nation. This change in its stance is partly contributed to by the fact that the US is a declining power and there are other power centres in the making, including that of New Delhi and Beijing. The Obama Administration, particularly in the first year of its administration, followed an extremely pro-China policy, adding to the confidence of Beijing. Because of this, China began to sense that it was an important power to reckon with, not just in the region, but even in global terms. Such confidence on the part of Beijing led to more aggressive behaviour in China’s dealing with all of its neighbours and even the United States. The number of maritime issues between the PLAN (PLA Navy) and the US Navy and conflicts involving Vietnam and Indonesia, and India on the land border, are reflective of China’s growing muscle and its willingness to flex its muscles. This new more interventionist policy on J&K appears to be an outgrowth of the US-China joint plan of action vis-a-vis South Asia. It appears to be an after-effect of the US-China Joint Statement in November 2009 for the two countries to jointly manage South Asia. While the issuance of stapled visas may not be directly linked to the changed policy on J&K, China has begun to make serious assertions that the Indian-controlled part of Kashmir is a disputed territory.

Nuclear Cooperation with Pakistan

Nuclear and missile cooperation in India’s neighbourhood has had long-lasting impact in the geopolitics of South Asia. China’s proliferation of nuclear weapons/technology along with its delivery vehicles has clearly altered the India-Pakistan military balance. While some analysts suggest that this is a thing of the past, the recent Chinese proposal to build additional nuclear plants in Pakistan indicates otherwise, in addition to being a clear violation of the international agreements that China is party to. China is seeking to ‘grandfather’ the current agreement into an earlier agreement for the supply of the nuclear reactors. The international community, including the UN and its associated bodies, appears to be unable to persuade China to desist from supplying these reactors. The US appears unable or unwilling to put the kind of pressure needed to stop Beijing from carrying out this arrangement.

Pakistan’s nuclear weapons and the issue of nuclear proliferation have continued to be major issues of concern for US, India and the global community at large. Earlier revelations about AQ Khan having assisted Libya, North Korea and Iran with materials related to uranium enrichment is neither forgotten nor can it be ruled out in the future. The US’s overlooking of Pakistan’s nuclear activities in the 1980s to achieve its Cold War objectives has led to these dangers in Pakistan today. If the US is unwilling to take strong measures against the latest Chinese proposal, the effects could be much more damaging not only for India, but for Pakistan, China and the US.


While India and China are “victims” of terror, the two countries differ drastically on the definitional aspects of terror. For India, terror has originated and continues to originate from Pakistan while China has refused to put the responsibility on Pakistan. The best illustration was the post-Mumbai terror attacks when the UN was to take action against the Pakistan-based terror groups for their role in the Mumbai attacks. China refused to see India’s or even the larger global community’s point of view on fixing the responsibility on Pakistan. China has to recognise that it cannot selectively fight Islamic terrorism only in Xinjiang.

While these are some of the issues that India should take up with the Chinese leadership, it will be naive to expect that China will give in on any of these issues. Wen Jiabao’s visit to India is more of a good will visit or a CBM (Confidence Building Measures) measure to cool the temperatures after the recent tensions on the border as well as the J&K issues. This visit is not expected to be a foreign policy success for either of the governments, from that limited perspective. However, the two countries will continue to be on an “engage” mode, since engagement is the mantra.

As far as China is concerned, Wen Jiabao’s trip is almost singularly driven by economic objectives, evident from the 400-member business delegation that is accompanying Wen Jiabao. China, particularly after the global financial crisis, is on a look-out for markets in Asia, and India offers the largest market. Therefore, China’s singular focus on economic issues is understandable, but India should not give into the Chinese demands without a quid pro quo.

(Dr. Rajeswari Pillai Rajagopalan is a Senior Fellow at Observer Research Foundation, New Delhi)

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Rajeswari Pillai Rajagopalan

Rajeswari Pillai Rajagopalan

Dr Rajeswari (Raji) Pillai Rajagopalan is the Director of the Centre for Security, Strategy and Technology (CSST) at the Observer Research Foundation, New Delhi.  Dr ...

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