Eye on China: Delhi-Beijing Frictions – Net Rules & Inspections – Af-Pak Trilateral – Merkel’s Visit – Xi’s Reform Meeting – Trade Thaw with US

Eye on China is a weekly bulletin offering news and analysis related to the Middle Kingdom from an Indian interests perspective. This week we cover the frictions in the Sino-Indian relationship ahead of the second informal summit; German Chancellor Angela Merkel’s visit to Beijing; the Afghanistan-China-Pakistan trilateral meeting; the issuance of new Internet rules in China and much more…

I. Frictions & Fissures

India and China are reportedly preparing for a potential second informal summit between Xi Jinping and Prime Minister Narendra Modi in Mamallapuram between October 10-12. ET reports that the two leaders will talk about the boundary issue, Kashmir, BCIM, counter-terrorism efforts, the Indo-Pacific strategy and third-country cooperation and the US-China trade war. That’s a wide range of issues on the agenda for two odd days. What’s more the lead-up to this meeting is very different from the one in Wuhan. Today, frictions and fissures are apparent across the board. 

First, over the past week or so, two important visits have been postponed. The first was Northern Army Commander Lt. General Ranbir Singh’s scheduled visit to China and then Foreign Minister, State Councillor and SR Wang Yi’s to India.

Second, reports tell us that on Wednesday, troops from both sides were involved in a scuffle in Ladakh. PTI citing unidentified sources reported that “the incident took place after Indian soldiers patrolling the area (along the Pangong Lake) did not heed to objections to their presence in the area by the People’s Liberation Army troops.” Indian army sources say that the standoff was resolved after delegation-level talks on Thursday.

The Chinese foreign ministry has been quoted as saying that “the areas mentioned in the relevant reports are entirely located in China” and Beijing has been ”exercising effective jurisdiction.” “The Chinese border troops have always strictly followed the relevant agreements and consensus between China and India, carried out regular patrol activities on Chinese territory,” it added. 

At the same time, ANI reported this week that more than 5,000 troops of the Indian Army’s only Mountain Strike Corps will carry out a massive war game along with the Air Force in Arunachal Pradesh in October. The exercise will be the first of its kind along the China border by the newly-raised 17 Mountain Strike Corps.

Third, once again there is friction over CPEC. This happened as part of the MEA’s response to the joint statement issued after Chinese Foreign Minister Wang Yi’s visit to Pakistan. The statement mentioned Kashmir, opposing “unilateral” actions. In response, the MEA said that it rejects such references and repeated that CPEC projects were being carried out in illegally occupied Indian territory.

“India is resolutely opposed to any actions by other countries to change the status quo in Pakistan-occupied Kashmir. We call on the parties concerned to cease such actions,” the MEA spokesperson said.

Then, of course, there’s the RCEP. On September 14-15, India will be hosting a meeting of representatives from RCEP member states to discuss its proposals on the trade pact. Commerce Minister Piyush Goyal was in Bangkok earlier this week for an RCEP ministerial meeting. The statement after the meeting said that “negotiations have reached a critical milestone” and reiterated the commitment to conclude the pact this year. While Goyal has clearly hinted at his desire to conclude a deal this year, the reports after the meet in Bangkok tell another story. ET reports, citing an unidentified Indian official as saying that during the meeting “some countries have asked India to make up its mind if it wants to stay in the grouping.” Bloomberg reports that major sticking points remain around market access and the ability of workers to find employment in other countries. The report adds:

“The main source of tension is between India and China over the amount of goods with preferential tariffs, according to a person familiar with the negotiations who asked not to be identified. The person said India was also unhappy with the position of Southeast Asian countries on the free movement of professionals, particularly in the IT sector, and is weighing whether to be part of the deal at all.”

Weighing in the debate this week was also External Affairs Minister S. Jaishankar. Speaking during a panel discussion in Singapore, he said that India remained concerned over the unfair market access to Indian products and the “protectionist policies” of Beijing that have created a significant trade deficit between the two nations.

Despite that, there is some dialogue and cooperation that’s taking place. India is of course participating in the TSENTR 2019 anti-terror drills, with China, Pakistan, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Also this week the Sixth China-India Strategic Economic Dialogue and the China-India Economic Cooperation Forum were held in Delhi. Niti Aayog’s Rajiv Kumar who headed the Indian delegation, invited Chinese companies to invest in India’s infrastructure, housing, logistics, smart cities, manufacturing and other fields. He also called on Chinese firms to invest in export-oriented sectors in India, manufacturing and exporting from the country.

Meanwhile, the new Chinese ambassador to India seems to be taking off from where his predecessor left off. He’s been quite publicly engaged. In the past two weeks, he’s engaged with a number of BJP members.

Here’s what Sun’s mantra is for the future of the bilateral relationship:

“the two sides could promote the development of China-India relations from four dimensions, namely, “leading, transmitting, shaping and integrating”. “Leading” means to make the second informal summit a success by highlighting the guidance of the two leaders. “Transmitting” refers to the transmission of the leaders’ consensus to all levels and translate the consensus into tangible cooperation and outcomes. “Shaping” means going beyond the mode of managing differences, shaping bilateral relations and accumulating positive momentum. “Integrating” means to strengthen exchanges and cooperation, promote convergence of interests and achieve common development.”

Finally, I wanted to highlight this piece by Ding Gang, a senior People’s Daily editor. He talks about the possibility of India and US working together to balance China. Here’s an interesting bit:

“Balancing China will jeopardize India’s own interests. Since China’s development is unstoppable and is in line with the general development of the region, carrying out containment against China is highly likely to lead to the loss of opportunities for cooperation with China. India should think this through. It is impossible for regional countries to jointly contain China’s rise with the US while strengthening cooperation with China at the same time. Such a strategy might work at the very beginning, but at critical moments, relevant parties will have to make a choice.”

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