70 Years of Diplomatic Relations India-China

Part of: GS Prelims and GS-III- Economy terms

India and China mark the 1^st of April 2020 as the 70^th anniversary of the establishment of diplomatic relations between them starting in 1950 till now.

Facts and Figures on China-India Cooperation

• Political and Diplomatic Relations
  • The Communist Party of China (CPC) has maintained friendly exchanges with 9 major Indian political parties including the BJP, Congress and left-wing parties for a long time.
  • 20 Inter-parliamentary friendship groups have been set up by China and India.
  • There are 50 dialogue mechanisms between China and India for exchanging views on various topics of bilateral, regional and global concern.
• Economy and Trade
  • Since the beginning of the 21^st century, trade between China and India has grown from less than $3 billion to nearly $100 billion, an increase of about 32 times.
    • In 2019, the trade volume between China and India was $92.68 billion.
  • With a combined market of over 2.7 billion people and a GDP of 20% of the world's total, China and India enjoy huge potential and broad prospects for economic and trade cooperation.
• Science and Technology
  • Both nations have held Joint Research workshops on Science and Technology Innovation.
  • Indian companies have set up IT corridors in China, which help promote China-India cooperation in information technology and high technology.
• Defence
  • ‘Hand-in-Hand’ joint anti-terrorist exercises to enhance mutual understanding and trust, exchange training experiences and jointly improve anti-terrorism capabilities.
  • China-India defence and security consultation to strengthen exchanges and cooperation in the defence field.
• People-to-People Exchanges
  • Both nations have held meetings of China-India High-Level People-to-People and Cultural Exchanges Mechanism. The two sides have made new progress on exchanges and cooperation in the fields of art, publishing, media, film and television, museum, sports, youth, tourism, locality, traditional medicine, yoga, education and think tanks.
  • Sessions of the China-India High-Level Media Forum and China-India Think Tank Forum were held to strengthen exchanges and cooperation in the field of media and think tanks.
  • The two countries have established pairs of sister cities and provinces. For example, sister provinces and cities between Fujian Province and Tamil Nadu State, Quanzhou City and Chennai City.
  • The number of Indian pilgrims to the Xizang Autonomous Region of China has surged from several hundred in the 1980s to more than 20,000 in 2019.

The Progressing Relations

After the Doklam issue of 2017 & the Chumar issue of 2014 the relationship between the two countries suffered from mistrust and border issues, but the Astana Consensus and the Wuhan spirit changed the entire chemistry between the two nations.

Astana Consensus

• In June 2017, on the sidelines of the Shanghai Cooperation Organisation Summit, India & China interacted in Astana.
• The two countries agreed upon the fact that their differences should not be allowed to become disputes, & if these disputes were handled carefully they may even turn into opportunities.

Wuhan Summit

• The Wuhan meeting of April 2018, an informal summit between Prime Minister Narendra Modi and Chinese President Xi Jinping opened a new chapter in the relations of the two countries as they engaged in the wake of post-Doklam rhetoric.
• Earlier the summit was perceived as a window dressing over deeper frictions, but in reality, it proved to be a crucial rapprochement policy.
• It was a form of cultural integration & people to people interaction program, which gave impetus to the cordial relations between the two countries.

The enhanced interaction between the two nations in the past 5 years, in the form of 9-10 bilateral meetings has paved the way in eliminating their differences and clearing the misgivings & doubts.

Challenges in the Path of Progress

• China’s Aggression: China has been following a rather assertive-rather aggressive policy, which was clearly visible in its past actions like entering into the Exclusive Economic Zone (EEZ) of Vietnam and Philippines. This made other ASEAN nations wary of its intentions.
  • China's Chumar & Doklam fiasco, & the Salami-slicing (the process of gradually reducing the size of something by a series of small incremental steps) that keeps on happening on our 4000 km long border, forces us to be on our guard & improve our military infrastructure and readiness.
• South Asian Angle: The dramatic shift of economic growth from West to East demands our focus and concern on the enhanced role in the Indo-Pacific region.
  • By 2020, more than 50% of the world’s economy will be in Asia, i.e, dealing with China, Japan, India, and the ASEAN nations. So we need to play the cards cautiously & take the positive lead in the region in order to balance China’s aggression.
  • Also, China’s aggressive policy and our Act East Policy demand timely intervention in South Asia so that it could be seen as assertive rather than coming late on the issue.
• Global Issues: Changing US-China relations and related trade conflicts, Asia’s growing self-reliance on its own produced goods, & enhanced dependence of nations on the role of multilateral institutions like the UN for peace-keeping and not one single power in the West, demands the amicable Sino-Indian relations.
• Pakistan’s Angle: Pakistan’s assertion on China to raise the issue of abrogating provisions of Art. 370 in the UNSC. The CPEC, BRI and other China Pakistan initiatives expect China to take the side of its strategic partner on multinational platforms, and act against Indian interests.

The two countries convened their first Informal Summit in central China’s Wuhan in April 2018, where they exchanged views on issues of global and bilateral significance.

What are Informal Summits?

1. They act as supplementary exchanges to annual Summits and other formal exchanges such as the G20 Summit, EU-India Summit and the BRICS Summit among others.
2. They allow for a “direct, free and candid exchange of views” between countries, something that may not be possible to do through formal bilateral and multilateral meetings that are agenda-driven, where specific issues are discussed, and outcomes are more concretely defined.
3. They are impromptu in the sense that they take place when a need for them is perceived by the concerned nations.

2nd India-China Informal Summit

Here are five big takeaways:

Trade

One of the main issues between India and China is trade. During this summit, Modi and Xi reinforced their commitment to improving trade relations. This was one of the key agreements of the Wuhan summit. The leaders agreed to a new set up new mechanisms to achieve this goal.

The High-Level Economic and Trade Dialogue mechanism will look into achieving enhanced trade and commercial relations. It will also seek to address the trade deficit and issues related to investment. It seeks to build a 'manufacturing partnership' between India and China.

The takeaway: China is one of India's largest trading partners. A Reuters report stated that the bilateral trade between the two nations reached $95.54 billion in 2018, but the trade deficit was at $53 billion in China’s favour. This is the biggest India has with any country, it added.

This assurance from China comes at a time when there is a lot of opposition to India joining the China-backed RCEP deal. This deal seeks to form a free trade zone among the ASEAN members - China, Australia, New Zealand and India.

India - which has a FTA with most of these nations - has a trade deficit with most of these nations, and the fear is that this deal might flood the domestic market with more imports, while exports might not increase at the same manner.

Working together on international issues

Modi and Xi agreed that there must be a rules-based and inclusive international order, the MEA statement said. They agreed that there must be reforms that reflect the new realities of the 21st century.

They also agreed that rules-based multilateral trading systems must be supported and strengthened. The nations also reinforced their commitment to work together for open and inclusive trade arrangements that will benefit all countries. They also made a commitment to address global developmental challenges, including climate change and meet the Sustainable Development Goals.

The takeaway: India and China have many similar interests at the World Trade Organisation and at the UN. Both nations have been under stress because of US President Donald Trump's trade war and due to the rising tensions in West Asia. If they can come together and effect meaning change to resolve these issues, then other emerging economies will also stand to benefit.

India has trying to exert its influence on the global stage for a while now. China has blocked India's entry in the Nuclear Suppliers Group and has been slow to accept reforms in the United Nations. It seems unlikely that China will allow any major reform or change that doesn't serve its national interest, although India must push for it.

People to people contact

To celebrate the 70th year of diplomatic relations between the two nations, the year 2020 will be designated as Year of India-China Cultural and People to People Exchanges, the MEA said. To mark the occasion, many events will be planned, it added.

To celebrate the civilisational ties between the nations, the MEA said that the two leaders have decided to form a 'Sister-state relationship' between Tamil Nadu and Fujian Province. There is also a proposal to set up an academy to study these links.

Takeaway: The focus on tourism and contact among the people of both nations will not only boost trade, but it will help in building trust between them. Establishing such confidence-building measures can help integrating the people by removing stereotypes.

Chennai connect

In his address at the delegation-level talks, Modi said that the summit had set the path for future discussions. He said that they discussed bilateral and global matters. "The Wuhan spirit has given our relations new momentum and trust. Today, our Chennai vision will begin a new age in relations between our two countries," Modi said.

Xi said that he was happy with the welcome he received and said that invited Modi for another round of discussion China next year. The two leaders also made a commitment to manage differences  in such a way that they would "not allow differences on any issue to become disputes", the MEA statement said.

The takeaway: The 'Chennai connect' sets the tone for future discussions. Here, the two leaders agreed to set up a new mechanism to have better cooperation in trade and defence. In a statement, the MEA said that the two leaders engaged in an "in-depth exchange of views in a friendly atmosphere."

It also reinforced that this 'informal meet' concept works in the India-China context. It also set the ball rolling for more people to people contact.

Jammu and Kashmir

The discussion, or the lack of it, is the reason for Jammu and Kashmir to figure in this list.

In August, India scrapped Article 370, which gave special status to the state. This irked China, which has several interests in the state (they have invested in PoK, and claim a portion of the state). They lent their support to their "all-weather friend" Pakistan, when the latter raised this in multiple international forums, including the UNSC. However, India had responded to them saying that the matter was an internal one and the move was done to improve the lives of the people of the state, and most nations sided with India on this matter. This issue happened right before the summit, and many believed that India should raise this matter with China.  But it was not even a part of the discussion.

The takeaway: The takeaway from this is that India was firm on its viewpoint, and didn't allow another nation to talk about the nation's internal affairs. Would China allow India to raise the protest in Hong Kong? No.

The lack of Kashmir in the talks also shows that both nations are willing to look beyond, at least at the leadership level

Way Forward

• Today's achievements of India-China relations embodied the great efforts of several generations.
• Both nations need to master the four keys of:
  • Leading: It means to reach consensus and guide the direction of the development of bilateral relations under the guidance of leaders from both nations.
  • Transmitting: It means to transmit the leaders’ consensus to all levels and translate it into tangible cooperation and outcomes.
  • Shaping: It means to go beyond the mode of managing differences, shape bilateral relations actively and accumulate positive momentum.
  • Integrating: It means to strengthen exchanges and cooperation, promote convergence of interests and achieve common development.

At this moment, it is particularly important to revisit the original aspiration of establishing diplomatic relations 70 years ago and carry forward the spirit of good neighborliness and friendship, unity and cooperation.

Conclusion

Past has revealed that whenever the global opportunities have demanded the positive Sino-Indian relations, both the nations have tried to tackle their problems in a mature fashion and leave aside the differences. The best example of this could be seen in China’s recognition of bottom-up cultural people to people interaction while granting visas to Indian Mansarovar pilgrims. China needs to take into consideration the ground realities while looking at India-Pakistan relations in order to bring regional peace.

The balance of power is changing both domestically & regionally, the world in general and China in specific needs to understand that India has a cartographic position along Line of Actual Control & there are disputes still in place, but that all forms the part of internal matters of India. During this period of economic slowdown, India can bring more structural reforms in order to attract and enhance foreign Chinese capital inflow.

The need for the positive role of the two nations: The geo-political dynamics have changed in the recent past. It has been said that this century is Asia’s century, so in the light of this perception, both countries need to focus their energies more on domestic socio-economic development rather than frittering it away militarily. The greater responsibility lies on China’s shoulder to engineer greater trust and to stop creating obstacles in the path of progress on India, be it on India’s entry into the Nuclear Suppliers Group (NSG), or designating Masood Azhar as the global terrorist.

China’s dominating role simultaneously demands India to stay prepared on all fronts, i.e, militarily, economically, or diplomatically. The reorganization of the state of J&K opens the door for resolving the border dispute along LAC with China. Synergizing the efforts in order to resolve the existing conflicts is the need of the hour for mutual progress and harmony.

Jai Hind Jai Bharat