Reading the China–India tea leaves

Int’l Relations

Chinese President Xi Jinping’s visit to India followed quickly on the heels of Indian Prime Minister Narendra Modi’s successful four-day visit to Japan from August 30.

Modi was visibly pleased by Japanese Prime Minister Shinzo Abe’s announcement of a $35-billion investment in India within the next five years. There also seemed to be a convergence on security perceptions, and the Indian prime minister pointedly said, “Encroaching on a country, entering into sea somewhere, entering a country and occupying territory ­– this expansionism cannot do good to humanity in the 21st century.” He was clearly alluding to China, with which India and Japan both have long-standing territorial disputes.

Modi and Abe also agreed to upgrade the security dialogue to a “two-plus-two” format by bringing together their foreign and defense ministers. They directed their officials to commence talks on defense equipment and technology cooperation.

President Xi Jinping visited India from September 17–19. The Chinese made much of the fact that he began his official trip with a visit to Modi’s hometown of Ahmedabad instead of the usual and formal first stop at New Delhi. Many Indian commentators, however, made it known that even U.S. President Barack Obama visited Mumbai before he went to New Delhi, and that Modi himself went to Kyoto before Tokyo.

Many expected China to announce a much bigger investment package to trump the Japanese. A few days before Xi Jinping’s visit, the Chinese consul-general in Mumbai, Liu Youfa, told Indian media that Chinese firms were considering more than $50 billion worth of investments in modernizing the railways and running high-speed trains in India. President Xi Jinping, he said, would bring with him $100 billion of investment commitments over five years – nearly three times as much as the $35 billion that Modi secured in Japan.

Like Abe did with him, Modi pulled out all the stops to greet Xi Jinping, and even accompanied him to the Sabarmati Ashram, where Mahatma Gandhi once lived. Modi also gave Xi Jinping a Nehru jacket, which he wore for the rest of the day, much to the delight of the media, who saw in it a sign of the warmth between the two leaders. But that didn’t last very long.

On that very day, as Modi was getting ready for a banquet to honor Xi Jinping, he was informed that Chinese soldiers had taken up threatening positions on the disputed Sino-Indian border in the Chumar area of Ladakh. After dinner, Modi took the Chinese president aside and made it known that this was unacceptable and that the People’s Liberation Army (P.L.A.) must pull back.

By the time the two met in New Delhi the following day, India had moved an infantry battalion to the area to reinforce its garrison. The P.L.A. matched this with an additional deployment of its own. Xi Jinping then informed Modi that to defuse the tension, he had ordered the P.L.A. to pull back. But it has not yet done so.

A palpable chill descended on the talks, and the investment proposal that Xi Jinping announced turned out to be a considerably more modest $20 billion.

The two sides issued separate communiqués that only served to underscore the evaporated bonhomie. Speaking at the customary joint press conference, Modi made a pointed reference to the unhappy border situation and urged an early resolution.

For his part, Xi Jinping said, “When China and India will speak with one voice, the whole world will notice.” He also said that the “China–India border issue is an issue left over from history” and that “the two sides are fully capable of acting promptly to manage incidents on the border.”

Indian observers are still perplexed by this turn of events. Many believe that Xi Jinping choreographed it, while others believe that it was a deliberate faux pas by elements in the P.L.A. to weaken Xi Jinping.

The fact that Xi Jinping promoted two P.L.A. generals (who were believed to be close to him) after his return to Beijing suggests the latter. Li Yuan was made vice-chairman of the all-powerful Central Military Commission, and Zhang Youxia became head of the P.L.A.’s discipline commission.

On September 21, at a conference in Beijing, President Xi Jinping ordered his military commanders to follow the instructions of the president, but also asked them to improve the P.L.A.’s readiness to fight and win a limited regional war. Observers are still reading the tea leaves.

 – written by Mohan Guruswamy, provided to BBJ by The MarkNews

Mohan Guruswamy was a top adviser to India’s Ministry of Finance. He is a senior fellow for NATO’s think tank, the Atlantic Council, and head of the Centre for Policy Alternatives in New Delhi. He is co-author of the book, Chasing the Dragon: Will India Catch-up with China?

 

ADVERTISEMENT

European e-commerce soars during pandemic - study Analysis

European e-commerce soars during pandemic - study

Lawmakers approve 2022 budget Parliament

Lawmakers approve 2022 budget

Duncan Graham reelected as BCCH president Appointments

Duncan Graham reelected as BCCH president

Chain Bridge to be closed for traffic for 18 months City

Chain Bridge to be closed for traffic for 18 months

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.