Engaging China

Prime minister Narendra Modi had made it clear that improving bilateral relations with China was among his foreign policy priorities with the telephone conversation with his counterpart Li Keqiang  after he was sworn in.

The visit of foreign minister Wang Yi as a special envoy of President Xi Jinping soon after the conversation  and  the talks he had in Delhi were an important follow-up measure and they show that Beijing also attaches much importance to improving relations  with India.

Though India’s Look East policy by definition covers better engagement with China as well, ties with Beijing are more complex and multi-faceted than those with other east and south-eastern countries.

China’s pre-eminent economic status and the historical differences between the two countries have added new dimensions to efforts to improve bilateral relations.

True to the recent trend in bilateral talks, the talks between external affairs minister Sushma Swaraj and Wang Yi had their focus on economic and trade relations. China is India’s biggest trading partner.

The bilateral trade is worth $ 65 billion and it is expected to increase to $ 100 billion soon. But it is a matter of serious concern that it is heavily tilted against India with an adverse trade deficit of $ 40 billion.

Indian exports, especially in the IT sector where it is strong, have to be increased to reduce the burgeoning trade gap.

There is also great scope for increasing Chinese investments in India in important sectors like infrastructure and manufacturing. This also received attention at the talks.

China, with its large capital surplus, is looking for fresh investment destinations. Some specific areas like industrial zones and railways, where Chinese companies have expertise, were also identified for co-operation.

China presents both opportunities and challenges for India. It has to deal with the challenge posed by China’s economic and political power and its strategic objectives.

Bilateral differences and problems, including those relating to the border dispute, have to be handled in this context. At the same time improving economic co-operation and adoption of common positions on issues like climate change are important for India.

Therefore its China policy needs to be highly nuanced and should strike a fine and difficult balance between many imperatives. The talks in Delhi have opened up possibilities of more frequent high-level bilateral meetings in the coming months.

They should expand areas of co-operation and reduce differences and divergences.

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