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 Xi-Modi meeting in Brazil; weak economic data; China’s small bank jitters; violence in Hong Kong worsens; US-China Economic and Security Review Commission’s annual report and much more…
I. Xi-Modi Meet, RCEP & Border Assets
The Indian government is continuing to defend its decision to walk out of the RCEP trade deal earlier this month. This week, EAM S. Jaishankar said that the decision was based on “a clear-eyed calculation of the gains and costs of entering a new arrangement” and does not suggest that India is “stepping back from the Act East policy.” Home Minister Amit Shah was far more clear-eyed about the political calculations for the RCEP decision. Writing in ET, he said: “What makes this decision significant is that this has yet again demonstrated that the PM can go to any extent to safeguard the interests of farmers, small and medium enterprises (SMEs), textile, dairy and manufacturing, medicine, steel and chemical industries.” Shah then went on to lash out at the Congress-led UPA government as having “failed in safeguarding the interests of India.”
Narendra Modi and Xi Jinping met in Brazil this week for the 11th BRICS summit. Xi reportedly invited Modi for the third informal summit next year and they talked about the WTO and the RCEP. The two high-level mechanisms, the new one on trade and the SR-level talks are also likely to be held soon.
“When I look back, we had met for the first time in Brazil itself… our journey began. The journey of unknown people has today turned into a close friendship.” This is what Modi told Xi in Brazil. Xi, meanwhile, hailed the Chennai meeting as a success. He also noted India’s guest of honor status at the recently concluded China Import Expo. Xinhua reports: “China welcomes more exports of India’s high-quality products to China, the president said, calling on the two countries to expand two-way trade and investment and create new growth points for cooperation in productivity, medicine, information technology, infrastructure and other fields.”
Speaking of cooperation, the Second Joint India-China Capacity Building Programme for Afghan Diplomats began in India this week. The two-week course apparently includes training modules on various topics covering India’s foreign policy, key international issues, multilateral diplomacy and diplomatic skills. Alas, not everything’s been so smooth. A Sino-Indian business forum event was cancelled this week after the Chinese delegation was unable to secure visas. The International Business Linkage Forum was originally scheduled to be held in New Delhi on Wednesday and Thursday. But, Indian Express reports that organisers were told last Friday by the Ministry of External Affairs that they could not issue the visas without approval from the Ministry of Home Affairs.
Meanwhile, Defense Minister Rajnath Singh was in Arunachal Pradesh this week. He called the people living in border areas “strategic assets.” His visit came to mark “Maitree Diwas” celebrations to boost civil-military friendship. Singh also spoke about plans to develop a northeast industrial corridor, adding that Arunachal Pradesh will act as a land bridge for South-East Asia where trade, jobs, tourism and economic opportunities will be available in abundance.
Singh’s comments come after reports tell us that the PLA is building villages, an extension of cantonments, close to the Line of Actual Control to ensure military and civilian population coexistence at the frontier. India Today reports that there are over two dozen of these integrated villages across the LAC, while most are in the eastern sector opposite Arunachal Pradesh and Sikkim. This has been concerted Chinese policy. Recall this October 2017 report about Xi calling on herders to set down roots in the border area “like galsang flowers,” and become guardians of the Chinese territory and constructors of a happy hometown.