Sino-Indian dialogue conveys mutual confidence

New Delhi plays host to one of the largest official delegations from China this week. About 200 representatives of various government agencies, commercial enterprises, financial institutions and think tanks are in India for the Second China-India Strategic Economic Dialogue, which began on Monday.

Co-chaired by Zhang Ping, the head of China's National Development and Reform Commissi on and Montek Singh Ahluwalia, deputy chairman of India's Planning Commission, the two sides will exchange notes on developing common strategies for broader economic cooperation and promote coordination in their macroeconomic policies on mutual investments, infrastructure development, high-technology, energy conservation and environment protection sectors.

This high-visibility of China in India was triggered by the meeting of prime ministers Wen Jiabao and Manmohan Singh on the sidelines of the Seventh East Asian summit in Phnom Penh, Cambodia, last week, which was their 14th meeting in the last seven years.

The Strategic Economic Dialogue will be followed next week by a visit to Beijing by India's National Security Advisor and former Ambassador to China, Shiv Shankar Menon. His visit is expected to cover more than just border talks and will provide him with an opportunity to meet China's new leaders, and his assessment will help shape India's follow-up overtures and expectations.

These interactions are the first between the two countries since China formally unveiled its new leadership lineup. The new leaders will take over the reins of State power by March and this interim period will reveal the priorities of the new leaders, thereby setting the tone for Sino-Indian relations in the coming years.

Dai Bingguo, who has been leading border negotiations with India for the last 10 years and has held negotiations with four successive special representatives from India, will introduce the Indian team led by Menon to the new leaders.

Given the speech by the new General Secretary of the Communist Party of China Xi Jinping, as he introduced the new Politburo Standing Committee team to the assembled international media on Nov 15, China's diplomacy and soft-power are widely expected to be at the forefront of China's engagement with various constituencies both inside and outside the country. China's neighbors are expecting the new leadership to show sagacity for greater accommodations and new dynamism in China's policies and interactions.

In Sino-Indian relations, both the Strategic Economic Dialogue in September 2011 and the Special Representatives talks that were held in January this year have begun to lose their shine. There have been 14 rounds of lukewarm talks under the Special Representatives mechanism, which was created in 2003, while the Strategic Economic Dialogue, which was conceived during Wen Jiabao's visit to New Delhi in December 2010 has also been too slow to address the growing complications in their economic cooperation.

Similarly, while Chinese companies in India are reportedly involved in projects worth $60 billion their actual utilized investment remains around 1 billion dollars. Besides, there have been serious concerns in China about the large number of anti-dumping cases slapped on these companies and other restraints on them, which are driven by India's security concerns. Similarly, India has been complaining about China's lack of openness, as it pushes for Indian investments in sectors like information technology, pharmaceuticals and engineering.

Sino-Indian trade slowed during the first 10 months of this year and may not reach even last year's figure of $74 billion and it is expected that India's trade deficit with China will be significantly larger than last year's $23 billion. Unless this is rectified, it will be a drag on any sustained progress in their economic relations. However, even while India's growing trade deficit will be the big elephant in the room during the discussions this week, it does not directly fall under their Strategic Economic Dialogue.

Instead, the Strategic Economic Dialogue will be deliberating on expanding mutual investments and expanding cooperation in infrastructure projects. Trade issues between the two countries are dealt with by China-India Joint Economic Group, but it is not yet known when this will next meet.

Given that consensus has gradually come to be the defining feature of China's successive transfers of power, China's leadership transition is not likely to imply any changes in policies toward India. However, the fervor and enthusiasm of younger leaders is expected to bring greater dynamism to China-India interactions creating new windows for innovative policy interventions. And here it may not be too naive to imagine that the 200-strong Chinese delegation in New Delhi is a reflection of this.

The author is a professor of international studies at Jawaharlal Nehru University, New Delhi

(China Daily 11/26/2012 page9)