27 September 2014

India & China: The chill factor

Sep 26, 2014

On September 21, President Xi ordered the PLA to follow the instructions of the President. But he also asked them to improve the PLA’s readiness to fight and win a limited regional war. Observers are still reading the tea leaves.

Chinese President Xi Jinping’s visit to India was almost a back to back event following Indian Prime Minister Narendra Modi’s successful four-day visit to Japan from August 30.

The Japanese Prime Minister, Shinzo Abe, quite clearly spared no effort to make Mr Modi’s visit a success. He received Mr Modi in Kyoto and spent a day with him showing him the sights there. This is quite unusual given prevailing international protocol norms and Japan’s own traditional reserve. The following day both leaders met in Tokyo in an official setting and several major joint cooperation and assistance initiatives were announced.

The most notable of these was Mr Abe’s announcement of a $35 billion investment in India within the next five years. There also seemed a convergence on security perceptions and the Indian Prime Minister made a pointed reference to the expansionist tendencies of some nations. He 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. The path of development is essential and I feel Asia has to lead the world in 21st century, and India and Japan will have to together add to the glory of the path of development.” It was quite clear he was alluding to China, with whom India has a long pending territorial dispute, as does Japan.

Mr Modi and Mr Abe quite significantly also agreed to look into upgrading to a “two-plus-two” format for security dialogue by teaming together their foreign and defence ministers. They also directed officials to commence working level talks on defence equipment and technology cooperation.

The visit of President Xi Jinping of China was originally supposed to begin on September 22 but it was brought ahead as his Pakistan leg had to be scrubbed with the capital of China’s principal ally in the region under siege by the government’s more militant opponents. This made it the first time a Chinese head of state or government visited India without a balancing visit to Pakistan. Chinese media tried to put a spin on this by suggesting that by not bunching India and Pakistan together, the Chinese leader was signaling a change in Chinese attitudes. Few in India were taken in by this.

The Chinese also made much of the fact that President Xi was beginning his official trip with a visit to Mr Modi’s hometown of Ahmedabad instead of the usual and formal first stop at New Delhi. But Indian media made it known that even President Barack Obama visited Mumbai before he came to New Delhi, and besides, Mr Modi himself went to Kyoto before Tokyo.

But many were taken in by the expectation that China will announce a much bigger investment package to trump the Japanese. A couple of days prior to the visit, the Chinese consul-general in Mumbai, Liu Youfa, told Indian media that Chinese firms were eyeing over $50 billion worth of investments in modernising the Indian railways and running high-speed trains. President Xi, he said, would bring with him $100 billion of investment commitments over five years, nearly three times as much as the $35 billion secured by Mr Modi in Japan.

Like Mr Abe did with him, Mr Modi pulled out all protocol stops to greet Mr Xi and his glamorous wife, the singer Peng Liyuan, and even accompanied them on a visit to the Sabarmati Ashram, where Mahatma Gandhi lived. Mr Modi also gifted Mr Xi with a Nehru style waistcoat that he wore for the rest of the day, much to the delight of the media, who saw in it a sign of warmth between the two leaders. But this didn’t last very long.

On that very day as Mr Modi was getting ready for a banquet in honour of Mr Xi, the Indian Prime Minister was informed that Chinese soldiers had taken up threatening positions on the disputed Sino-Indian border at a remote village called Chumar in Ladakh. After dinner Mr Modi took aside Mr Xi and made it known that this was unacceptable and that the People’s Liberation Army 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 PLA matched this with an additional deployment of its own. President Xi informed Mr Modi that he has ordered his troops to pull back to defuse the tension. But that has not happened till now.

Obviously there were consequences. The investment proposal announced by Mr Xi turned out to be a much more modest $20 billion, and the expectations that he will trump Mr Abe remained just that. Clearly a chill had descended.

The two sides issued separate communiqués and as if to underscore the evaporated bonhomie, Mr Modi made a pointed reference to the unhappy border situation and urged an early resolution. On his part Mr Xi urged, “When China and India will speak with one voice, the whole world will notice.” He also said: “China and India are important neighbours for each other. 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.” He concluded that China has the determination to work with India to settle the boundary question at an early date.

Indian observers are still perplexed by this turn of events. Many here believe that it was deliberate, with Mr Xi choreographing it, while others believe that it was a deliberate faux pas by elements within the PLA to weaken the President. Two PLA appointments by Mr Xi after his return to Beijing lend credence to talk of dissonance within the PLA. PLA generals Li Yuan and Zhang Youxia, both believed to be close to Mr Xi, were promoted and made vice-chairman of the all powerful Central Military Commission and the PLA’s discipline commission respectively. And on September 21, President Xi, addressing his military commanders at a conference in Beijing, ordered the PLA to follow the instructions of the President. But he also asked them to improve the PLA’s readiness to fight and win a limited regional war. Observers are still reading the tea leaves.

The writer held senior positions in government and industry, and is a policy analyst studying economic and security issues. He also specialises in the Chinese economy.

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