Srikanth Kondapalli
Albright Stonebridge Group
May 16, 2013
Chinese Premier Li Keqiang’s visit to New Delhi next week (May 19th-21st) marks the fifth Chinese Premier’s visit to India, after Zhou Enlai’s multiple visits in the 1950s – while his foster son Li Peng resumed visits after a gap of three decades in 1990s – and subsequently by Zhu Rongji and, most recently, by Wen Jiabao. The situation is similar on the Indian side, with very few Prime Ministers thinking fit to go to Beijing.
Indeed, after Wen Jiabao’s visit to Delhi in December 2010, it was the turn of Indian Prime Minister Manmohan Singh to reciprocate and visit Beijing. That did not happen, presumably to indicate the slow progress in resolving the bilateral differences between the two. This is despite the fact that four years ago, both nations decided to expand high level visits at the Presidential, Prime Ministerial, defence and foreign ministerial levels. Yet we saw only a few reciprocal visits between the two countries indicating a holdback phenomenon.
In the Chinese political system, the position of the Premier had been one of the most important positions, although the General Secretary of the Communist Party and the Chairman of the Central Military Commission are the most powerful positions in the country’s hierarchy. The current premier ranks number two, unlike his predecessor Wen who ranked third in the 16th and 17th communist party congresses in 2002 and 2007 respectively. Premier Li hardly has any military background, unlike President Xi Jinping who served the then Defence Minister Geng Biao as a special officer.
Li was brought up in the Communist Youth League hierarchy – a puritanical and ideological organization that was once headed by Hu Jintao and Hu Yaobang. Li controls several ministries and is said to have crafted the 12th Five Year Plan currently being implemented. Li proved his mettle in Henan Province and in Shenyang city. He is known for the complete transformation of the smoke-belching iron and steel city of Shenyang into a swanky one. Li is currently in charge of expanding domestic consumption so that the economy becomes more sustainable and is also committed to the necessity of tackling urbanization issues.
Li had chosen to visit India as his first overseas visit after taking over as the premier in March. This has surprised many observers. As the head of the cabinet (the State Council) Li is spearheading the recovery of the economy, which had been witnessing turbulence of late due to the intensifying Euro Zone and global financial crises. China is heavily dependent on the developed markets for its burgeoning trade, which constitutes two-thirds of its gross domestic product. China’s economy has declined in the last few years from double-digit growth rates to about 7 percent last year. Now, to sustain China’s economy, Li needs to diversify markets to developing countries, including India.
However, trade with India slumped by over 10 percent last year from $74 billion to $66 billion. This makes the 2015 target of $100 billion in trade difficult to reach, if not insurmountable. While China’s telecom and energy sectors are booming in the Indian market, even these may be affected with Huawei and ZTE reporting losses. Hence, Li is expected to give a fresh thrust to the economic ties with India. The fact that Li’s visit to Mumbai precedes his visit to Delhi – as was the case broadly with other premiers – indicates the thrust of the Chinese leadership on economic resurgence.
Specifically, during Li’s visit, a preferential treatment agreement is likely to be signed, although India has been complaining about the widening trade imbalance in China’s favour; and the lack of market economy status in China, which has resulted in discrimination against the Indian pharmaceutical and IT software sectors. This issue was raised by former Indian President Pratibha Patil during her visit to China, but in vain. China had been proposing a hi-speed railway build-up in India although China has witnessed accidents at Shandong Province and Wenzhou recently, besides corruption scandals that had consumed even the then railway minister Liu Zhijun in 2011.
China had announced $5.2 billion in investments in India at the 2nd strategic economic dialogue, early this year. It remains to be seen whether China can contribute to the $1 trillion requirement in Indian infrastructure projects. A decade ago, China had proposed a free trade agreement with India, although the latter is concerned about the negative impact of cheap Chinese goods flooding the Indian market.
Yet, during Li’s visit to Delhi the foremost issue to be widely discussed will be with regard to the transgression and pitching of tents by Chinese patrols/soldiers 19 kilometers inside Indian-claimed areas in eastern Ladakh for the past three weeks. Since India and China had announced confidence building measures (CBMs) since 1993 and 1996 and the “strategic partnership and cooperation” in 2005, the border transgression issue will be seen as incompatible to growing bilateral relations.
More such CBMs are likely to be proposed to tackle such situations in the future in the joint declaration between the two premiers, but are less likely to convince the Indian public given the backdrop of a brazen Chinese settling down in Indian-claimed areas. Whether China’s Premier will go the extra mile during this visit to assuage Indian feelings remains to be seen. Although the Indian leadership downplayed the transgression issue, the Chinese leadership is yet to explain what led its military and para-military forces to take such an offensive action.
Another project that had been a relative success with regard to bilateral relations is the joint coordination and cooperation efforts in multilateral institutions. Both countries realize that in the fast changing international and regional security situation they need to protect their core developmental interests. Hence, they joined the five-nation BRICS initiative as well as the BASIC coordination mechanism on climate change issues. This, despite the fact that each had been suspicious of the other in their respective regional settings, with China initially opposing Indian candidature in the East Asian Summit in 2005, while India had been lukewarm to China’s proposal to join the South Asian Association for Regional Cooperation (SAARC) process.
Marred by the border transgression issue, Li’s visit to India is expected to remain focused on the economic dimensions while making measured progress in the bilateral context.
Srikanth Kondapalli is Professor in Chinese Studies at the Jawaharlal Nehru University, New Delhi.
