‘Dragon-elephant tango’ sounds good, but India must not drop its guard

Chinese Premier Li Qiang presented his government’s work report at the annual meeting of the National People’s Congress (NPC) in March. The NPC is China’s top legislative body, and the work report offers budget allocations for the coming year, including for defence, as well as puts forward policy targets such as for GDP growth. While there is a press conference by the foreign minister which draws a great deal of attention, the Premier’s work report is arguably just as important in helping us understand how China thinks about the world, and prepares itself to meet external challenges.

How then does the international element manifest itself in Beijing’s work report, and what are its implications for the globe and India, more specifically?

Of the world and affected by the world

First, China is aware of its own global economic standing, noting that it is ‘among the world’s fastest-growing major economies, continuing to contribute about 30 percent to global economic growth.’

Second, the Party-State is also aware of how much it gains from and needs engagement with the world. Economically, this manifests in the ‘record high’ foreign trade, including steadily growing exports and foreign exchange reserves that have ‘surpassed’ $3.2 trillion. The external is also at least a part of the solution to problems in the domestic economy and, hence, the call to ‘broaden international cooperation through further opening up, so as to promote greater mutual reinforcement and higher-standard positive interplay between domestic and international economic flows.’

This explains why Xi Jinping met with over 40 foreign business executives in Beijing — one of the largest gatherings of foreign business leaders Xi has ever hosted — on March 28. It also explains China’s enthusiasm for direct flights with India and calls for the relaxing of Indian restrictions on Chinese enterprises and investment imposed in the wake of Galwan.

When Li thanks “governments of other countries, international organizations, and friends across the world that have shown understanding and support for us in China as we pursue modernization”, this is not just an acknowledgement of China requiring friends at a time of growing tensions with the United States, but also a way of communicating to his domestic constituency — the 3,000-odd delegates to the NPC and to the wider Chinese population — that the Chinese regime has friends and supporters no matter what the international situation may be.

Third, the international situation is seen as challenging — ‘changes unseen in a century are unfolding across the world at a faster pace’. Among the challenges that ‘an increasingly complex and severe external environment may exert on China’ are those related to trade, science, and technology. Global economic growth itself is seen as ‘lack[ing] steam’ while ‘unilateralism and protectionism are on the rise, the multilateral trading system is experiencing disruptions, and tariff barriers continue to increase’. While such claims help shift attention away from the CPC’s performance on the economy, they also indicate that there will be Chinese pressure on countries to keep their markets open to trade with China, including its technological products, standards, and services.

Scepticism is warranted

The reality is also that the Chinese government has been reluctant to open to foreign trade and foreign-funded enterprises at home if it does not feed into its goals of improving the competitiveness of its firms and introduced new technology and/or capital and, thus, contributed also to the survival and strengthening of the CPC. The current trade wars have their origins in China ignoring the rules of the WTO and various FTAs it signed on to in pursuit of its version of atmanirbharta.

India is a victim — while one reason for the ballooning trade deficit is the lack of competitiveness of Indian products in the Chinese market, the impact of Chinese non-tariff barriers in keeping even competitive Indian products and services out of the Chinese market cannot be denied.

Recent months have seen an increased interest in both New Delhi and Beijing for improved relations. Improved economic ties will benefit both countries and both countries appear to have decided to make the most of the opportunity presented this year on the 75th anniversary of the establishment of diplomatic ties. There is greater enthusiasm in China with frequent references now to the ‘dragon-elephant tango’ by its diplomats, media and even the PLA, and a push to scale up economic and people-to-people exchanges.

However, if the incomplete resolution of issues arising along the Line of Actual Control from Chinese transgressions in 2020 were not reason enough, China’s record on economic agreements must itself cause scepticism. If China can choose not to follow through on the deal it had reached with the Americans following trade tensions during the first Trump administration, India faces dimmer prospects.

For now, though, there is likely to be an opening up, and fresh promises and agreements made. The challenge for Indian interlocutors will be to separate the wheat from the chaff and to see if they can hold China to its promises.

(Jabin T Jacob is Associate Professor, Department of International Relations and Governance Studies, and Director, Centre of Excellence for Himalayan Studies, Shiv Nadar University, Delhi NCR. X: @jabinjacobt.)

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.