How Arunachal Pradesh Became a Full Member of the Indian Union-Part I

    

       A few days ago the 31^st Anniversary [1986] of the establishment of Arunachal Pradesh as a full- fledged state of the Indian Union was celebrated with much enthusiasm and acclaim, but its birth was accompanied by high end tension in Sino-Indian relations and what its establishment also demonstrated was that a substantive shift in great power relations had also occurred.

     North East Frontier Agency [NEFA] as the territory was then known was a Union Territory and subject to substantive sovereignty claims by China over large tracts, amounting to nearly 90,000 square kilometers. Although in 1914 at the tripartite Simla Convention [India, Tibet and China] the McMahon Line separating Tibet from India had been agreed upon, China insisted that it had never agreed to the McMahon Line. Yet from that point onwards in time till 23 January 1959, the Chinese government, in any official document, never challenged the McMahon Line. Even when Major Khating evicted the last of the Tibetans from Tawang on 12 February 1951, there was no protest from the Chinese government. In his letter to Nehru, PM Zhou Enlai on 23 January 1959 affirmed that “the Chinese government finds it necessary to take a realistic attitude towards the McMahon Line”. But times change and so do policies. Let us fast forward to the early 1980s.

    In early 1980s PM Indira Gandhi took the decision that Indian security forces were to patrol right up to the McMahon Line so as to eliminate any chance of incursions across the line. A small detachment began patrolling the area from the summer of 1982. There were no Chinese protests when movement by Indian personnel was made in 1983 and on 28 July 1984 a seasonal post was established. However in 1986 when Indian personnel similarly moved up to the post after the winter was over, they found 40 Chinese personnel already encamped there and were soon reinforced by about 200 PLA soldiers. From 26 June 1986 onwards, a bitter exchange of protests took place, but a solution was not forthcoming. India was clearly alarmed at this new found Chinese aggressiveness coming as it did after Chinese Vice-Minister for Foreign Affairs, Liu Shuqing told us at the 6^th Round of Boundary talks in November 1985 that “India would have to give concessions in the eastern sector and China would do so in the western sector”. What these concessions were was not amplified at that time.

     Clearly recognizing the gravity of the situation the Indian Army moved quickly and in strength and between 18^th and 20^th October 1986 occupied the Hathungla Ridge above the Sumdorong Chu, overlooking the Chinese positions. A full strength brigade was deployed. Unlike the mistakes of 1962, the Indian troops never tried to hold the river line, but stood firm on high ground. By the time the Chinese crossed the Sumdorong Chu and moved forward they found well entrenched Indian troops on the ridge line. The Chinese could neither go forward nor could they retreat, for a retreat would have been rather galling. Similarly Indian troops moved with speed and alacrity and deployed Tanks both in Ladakh and north Sikkim. Clearly the Chinese had not anticipated such moves and attempted bluster in the hope that the new Indian leadership of PM Rajiv Gandhi might wilt.

    On 15^th November 1986 the Chinese sought a flag meeting in which it was agreed that force would not be used and that both sides would seek a “political solution”. Having successfully held the Chinese, the Indian side detected an opening that they had been looking for to convert Arunachal Pradesh from a Union Territory to a full- fledged state of the Indian Union. Earlier there had been apprehension that if India did so the Chinese reaction might be violent and therefore this factor had to be taken into account. The government of India now moved with speed and alacrity and after all legal formalities were completed, the new state of Arunachal Pradesh as a constituent of the Indian Union came into being in February 1987. A forceful message had been sent to the Chinese.

   As anticipated the Chinese reacted with verbal rage, but could not do much more as the Indian army was already fully deployed and ready at the borders. The Chinese Ministry of Foreign Affairs [MFA] issued a strong protest stating that “the establishment of an Indian state on Chinese territory illegally occupied constituted serious aggression against China’s sovereignty and deeply hurt the feelings of the Chinese people and that China would never recognize the so-called Arunachal Pradesh”. This high voltage reaction clearly indicated that their annoyance with India was at its peak, for being out maneuvered both politically and militarily. It was noticed from reports that the Chinese Military Attaché in Delhi, the Tibet District Military Commander and the Chengdu Regional Military Commander were all transferred; perhaps for misreading the situation. It was under these circumstances that the new state of Arunachal Pradesh was born as a full member of the Indian Union.  

  [ In Part-II the international reactions and policies of the then two great powers, the US and the then Soviet Union would be explained.]    

        

Abduction of Billionaire Xiao Jianhua and Corruption in China

      

       Chinese billionaire business tycoon Xiao Jianhua is no ordinary run of the mill businessman. That Xiao was “abducted” from his luxury flat from Hong Kong by Chinese State Security officials and taken to the Mainland, immediately raised antennas about the persona of Xiao Jianhua. Interestingly, Xiao is presently a Canadian citizen and carries a diplomatic passport of Antigua and Barbuda and probably never imagined that he would be whisked away from Hong Kong. That the Chinese state security officials would go to such lengths shows the importance of the man. He is reportedly the person who has over the years been identified as the “front-man” for business dealings of elite Chinese politicians, party hacks and senior government officials. Fairly young at 46 years old, Xiao was a student leader during the Tiananmen crack-down in 1989 and who sided with the government. He has never looked back since then and is presently reportedly worth US$5.8 billion; which makes him the thirty-second wealthiest Chinese tycoon businessman. His companies have shares in banks, insurance, coal, cement and are amalgamated under the banner of “Tomorrow Group” and are listed on the Chinese stock market.

    That this was no ordinary abduction, but perhaps something more, is bolstered by the fact that in 2012,  a company co-owned by Xiao, bought shares worth US$ 2.4 million from Qi Qiaoqiao and Deng Jiagui; the sister and brother-in –law of the Chinese President Xi Jinping. Later he admitted to NYT that he had “helped” the family of Xi Jinping. He also reportedly helped Zeng Wei, the son of the Chinese Communist Party [CCP] Vice Chairman Zeng Qinghong, to acquire Shandong Luneng, a State power company that was subsequently privatized. CCP Vice- Chairman Zeng is reportedly politically close to the former Chinese President, Jiang Zemin.

   The abduction of Xiao Jianhua raises a larger question. Is China’s anti- graft drive, so assiduously pursued by President Xi Jinping, merely a cover for getting rid of political opponents or is it actually a drive to eliminate graft from the Chinese system? Very early on in his innings as President beginning 2012, Xi Jinping had made the elimination of corruption from the Chinese political system as one of his important policy imperatives. The feeling was that corruption was slowly eroding the Communist State system, with a concomitant threat to the very existence of the Chinese Communist Party [CCP]. As it is the CCP Central Discipline and Inspection Commission reported that in 2016 about 11,000 corrupt officials were prosecuted, but significantly this figure represented a drop of about 20 per cent from those that were prosecuted in 2015.  This fall in the number prosecuted was seen as representing a winding down of the anti-corruption movement, just prior to the forthcoming Party Congress later this autumn, where Xi is expected to be confirmed for a second term and a new standing committee of the politburo nominated. In fact only President Xi Jinping and the Premier Li Keqiang are expected to retain their respective positions, out of the existing seven standing committee politburo members. It may be recalled that the real rulers of China are the seven standing committee members of the politburo. The significance of the choice being made now lies in the fact that the next CCP leader to replace Xi Jinping at the next party congress in in 1922, would also be expected to be identified from within the new standing committee members of the politburo now nominated.

    Could the abduction therefore of Xiao Jianhua be linked to murky maneuverings that are taking place within the ruling CCP leadership groups, as to who would be the eventual successor to Xi Jinping as President?  One of the easiest methods to eliminate a potential rival would be to paint him with the tar of corruption. In China the Chinese Academy of Social Sciences has estimated that the liquid assets of State Owned Enterprises [SOEs] and cash generated by land sales of the Chinese state to be about US$ 4 trillion. It is not difficult to envisage that important officials, holding extensive power, are able to easily access this cash. Even those Chinese officials, who are under investigation, continue to serve and often are even promoted. At present the Chinese judicial system is rather weak and subject to CCP guidelines and therefore cannot be considered to be independent. Without a free press, it is the word of the CCP Central Discipline and Investigation Commission that counts as the ultimate arbiter of the fate of a “corrupt” official. And the Central Commission is fully under the control of who- ever is the Party leader; in this case President Xi Jinping who operates through Wang Qishan, the politburo standing committee member in charge of anti-corruption.

     Within Chinese ruling circles the need for “stability” to the run up to the 19^th Party Congress later this autumn is seen as a paramount requirement. Thus even Xie Zhenjiang was removed from his post of Chairman of the Beijing based Securities Daily, as he was seen as to close to Xiao Jianhua. The charge against Xie was that he had the potential to create “instability” in the Chinese Stock market in conjunction with the extensive holdings of Xiao’s companies listed on the stock exchange. The Chinese political system cannot sustain the melt down of the stock exchange as had happened earlier. It would be a severe indictment of the present ruling group.

  Therefore the main beneficiary of the arrest and abduction of Xiao Jianhua is likely to be Wang Qishan, the standing committee member of the politburo in charge of the Central Discipline and Investigation Commission and who is a very close political associate of President Xi Jinping. In fact speculation abounds that if Wang is able to ensure “stability” in the run up to the 19^th Party Congress, then his chances for promotion are considerably brightened. The question therefore still remains moot whether the abduction of Xiao Jianhua from Hong Kong was linked to an anti-corruption drive, or was it linked to the political maneuverings that are going on in Chinese political system just prior to the CCP Congress? 

PLAYING THE TAIWANESE CARD

         

       When the People’s Republic of China was proclaimed by Mao Zedung on 1 October 1949, the new Chinese leadership was very clear on one aspect. Speaking to the then Soviet Ambassador Roschin, on 1 January 1950, Mao clarified that any state that was sincere in establishing diplomatic relations must first ‘completely break all [emphasis added] ties with Jiang Jieshi [Chiang Kaishek] unconditionally, refuse any kind of support and assistance to this regime making it an official declaration. It was only under those conditions that a state could send a delegation for negotiations for establishing diplomatic relations. Mao made no distinction for any state and India too had to follow Mao’s dictum.

    As far as recognition of the new Chinese regime was concerned, it was the Attlee government in London that took the lead. On 22 October 1949, Sir Esler Dening submitted a note to PM Attlee that the recognition of the new Communist government of China ‘cannot be said to be contrary to the principles and practices of international law’. On 27 October 1949 the British Cabinet approved the note and Attlee sent it to all Commonwealth governments, including India, for consideration. The British government note did not seek any assurance from the new Chinese government on whether it intended to honor all previous international obligations made by previous governments of China. The British explained away this aberration by saying that ‘the disadvantages of non- recognition were so great so as to outweigh any possible advantages to be obtained from securing Chinese assurances…’. On 18 December 1949, Attlee conveyed to Nehru that the British government intended to recognize the new Chinese government on 2 January 1950. Nehru whose personal inclinations were wholly in tune with British thinking, readily agreed; but insisted that India would recognize the new People’s Republic on 1 January 1950. Nothing was asked for in return.    

     But the Chinese were not finished just yet. They clarified that while recognition was one aspect, establishing diplomatic relations was quite another. Thus India was asked to send a delegation to Beijing to negotiate setting up diplomatic relations, as were the British. The Chinese made two demands. First, India must clarify what it intended to do with KMT Chinese properties in India and secondly it must ‘explain’ its voting patterns in the UN. For once even Nehru baulked at these untenable ‘demands’ and declined. Realizing their folly rather quickly and the felt need to keep Nehru on their side, as they were about to ‘invade’ Tibet, the Chinese quickly changed track and agreed to establish diplomatic relations with India on 15 March 1950. The British were kept waiting for years!

      Let us now fast forward to 1972. When Nixon visited China, the Chinese insisted on one core demand. The US must recognize that Taiwan was a part of China. As per the 1979 US-PRC Joint Communique, the US switched diplomatic recognition from Taipei to Beijing. In the Joint Communique, the US recognized the Government of the People's Republic of China as the sole legal government of China [emphasis added], acknowledging the Chinese position that there is but one China and Taiwan is part of China. This principle is enshrined in the two subsequent joint communiques that followed. The Joint Communique also stated that the people of the United States will maintain cultural, commercial, and other unofficial relations with the people of Taiwan. So when President Trump raised the specter of not following the ‘one China’ principle, it caused considerable consternation within the Chinese leadership. Of course, since then suitable amends have been made by the US and the ‘one China’ principle reiterated in a phone conversation between President Trump and President Xi Jinping. It must have come as a great relief to the Chinese leadership.

    However international law is sufficiently opaque on the subject and if a state wishes to exploit the loop holes; these are available. International law makes a clear distinction between the recognition of a state, as opposed to the recognition of a government. For example, India recognized the state of Israel ever since its inception, but did not recognize or establish diplomatic relations with the government of Israel till many years later. The fact remains that hardly any state disputes that Taiwan is indeed Chinese Territory. The Taiwan authorities say so themselves. But the indisputable fact is that the People’s Republic does not exercise administrative control over the whole of Chinese Territory, but only does so on the mainland and over some island territories. Taiwan remains outside its administrative control. China is the only P-5 state that does not exercise full administrative control over its entire territory [emphasis added]. Therefore the question that remains is: what should the nature of relations be that outside powers can establish with the authorities exercising administrative control in the area of Taiwan?

    It goes without saying that establishing full diplomatic relations is ruled out, since few states recognize the Taiwan authorities as the legitimate government of China. Few states would also like to risk bearing the wrath of China and its military and economic clout. Nevertheless, day to day dealings have to take place with the Taiwan authorities. The 1979 US-PRC Joint Communique also states that the people of the United States will maintain cultural, commercial, and other unofficial relations with the people of Taiwan. The American Institute in Taiwan [AIT] and the Taipei Economic and Cultural Representative Office [TECRO] does just that. Similarly India maintains representation in Taiwan under the India-Taipei Association [ITA], as does Japan and 72 other states. The Chinese authorities have had no objection to the participation of Taiwanese in the Olympics and other international events as Chinese [Taipei]. Short of official diplomatic functions at government to government level, these offices perform all other duties such as issuing visas, promoting trade etc. What if the US and all other states together, particularly in the Asia-Pacific region, were to change these innocuous names of their offices and start calling them as “Representative Office of the United States” or “The Representative Office of India” and so on? The Chinese would be certainly miffed, but it would reflect reality and would not in any case contravene any international law.  

      Last year the Chinese President Xi Jinping took the unprecedented step of meeting the former Taiwanese President, who was then still in office, in Singapore. Both met as party leaders with no mention by either side of their official designations. Therefore it follows that other state leaders could also possibly meet the Taiwanese President as party leaders, in third countries, without risking any possible Chinese reproach. It has not been tried so far by any other state leader, but the precedent is there. Should such a meeting take place, it would severely test Chinese resolve, but it would begin to give the Taiwanese an international personality.

    It must however be emphasized that playing the Taiwan card would certainly invite Chinese ire, which could prove quite costly, since China is a great power and has the capacity to inflict considerable damage. It is a 'core' issue for the Chinese. But if the Chinese continue to push their agenda aggressively, particularly in the South China Sea [SCS] area, they should also be made aware that other states in the region, and particularly in conjunction with the US, are not completely bereft of options. The Taiwanese card is always there.

Dealing With China--Part III

                                                    

                        Proposal for merging OBOR with India’s Act East Policy [AEP

 

         In his remarks at Mumbai recently the Chinese Ambassador Luo Zhaohui made the third of his proposals in that he advocated the merging of China’s ‘One Belt One Road’ [OBOR] concept with India’s ‘Act East Policy’ [AEP]. The first two of his proposals have already been dealt with in Parts I and II of ‘Dealing with China’. It is not in the public domain if any of these proposals have been formally presented to South Block and if so in what form. Nevertheless, this too is an important initiative and deserves to be studied very carefully and responded to in the course of time.

      When the Chinese Ambassador spoke of the OBOR what exactly did he have in mind? Does it mean that the OBOR initiative also includes the China-Pakistan Economic Corridor [CPEC] as an inseparable component? A clear understanding of what is on offer would assist in the study of the implications of the proposal and facilitate a response from India.

      On 7 September 2013, President Xi Jinping while addressing the Nazarbayev University made the proposal for a new Silk Road Economic Belt and later while addressing the Indonesian Parliament on 3 October 2013, proposed the new 21^st Century Maritime Silk Road. In time both these initiatives were amalgamated and became known as the ‘OBOR’ concept. The present Chinese leadership has done well to choose this name, the Silk Road, for no matter where located in the Asian heartland, the name would always find resonance. The Chinese believe that the OBOR provides a fresh way of thinking about regional and global cooperation and that by including both bilateral and multilateral cooperation in political, economic, cultural and other fields; a new paradigm would be created. Not without reason the OBOR concept takes care of China's over- capacity in steel and cement industries, as well as the desire for utilizing accumulated capital resources to further Chinese ambitions. Its scope would not be limited to Asia only, but certainly its success does, to some extent, depend on co-operation that the Chinese receive from important countries such as India. If this initiative of the Chinese authorities comes to fruition, it would link 65 countries and 4.4 billion people.

    The Indian position has been that it has never been officially consulted on the OBOR. The assumption in India is that the China-Pakistan Economic Corridor [CPEC], in which the Chinese have invested US$ 46 billion, is an important component part of the OBOR.  In December 2014, EAM stated in Parliament that ‘the government was aware that China’s involvement in the construction of or assistance to infrastructure projects, including hydroelectric and nuclear projects, highways, motorways, export processing zones and economic corridors in Pakistan. Government has seen reports with regard to China and Pakistan being involved in infrastructure building activities in Pakistan Occupied Kashmir [POK] including construction of CPEC. Government has conveyed its concern to China about their activities and asked them to cease such activities’. While EAM was expressing her concern, a PTI report quoted the Indian High Commissioner to Pakistan, as saying that ‘India has no worry over construction of the CPEC, as an economically strong Pakistan would bring stability to the region’.

      This dichotomy of approach still remains to be reconciled for it seems that it stems from strategic ambiguity. If the past is any guide then in 1965 at Tashkent, India agreed to restore the 1949 Cease Fire Line [CFL] and withdrew from areas it occupied across the CFL in the 1965 conflict. Similarly the whole ethos of the Simla Agreement in 1972 was that Pakistan would accept and at an appropriate time convert the CFL [now LC] into an international border. In 1999 as well, India maintained the sanctity of the LC, never crossed the line militarily and forced Pakistani troops to withdraw back and beyond the LC. Thus it seems that India was quite prepared to give up its claims to Pakistan Occupied Kashmir [POK], if Pakistan accepted the LC as an international border. It is not in the public domain if any such concrete offer was ever made in writing to Pakistan. On the other hand, PM Modi recently reiterated in his 15^th August Independence message that POK was indeed sovereign Indian Territory. The question is which of the two strategic modules would India prefer to pursue on long term basis?

    Thus if the CPEC is indeed a vital component of OBOR, then it violates Indian Territory and for India to accept OBOR is a matter of national territorial integrity. On the question of the CPEC traversing POK, a Chinese Foreign Ministry spokesperson Hua Chunying prevaricated on the issue and stated that ‘with regard to whether the economic corridor passes through [Pak] Kashmir, as far as I have learnt a joint committee for the construction of CPEC has been established and a second meeting has been held coinciding with the visit of the Pak President. I do not know if they have talked about whether the corridor will pass through this region [Pak-Kashmir], but I can tell you that we hope the Kashmir issue can be resolved through consultations and negotiations between India and Pakistan’. Clearly the Chinese were hoping to obfuscate the issue of POK and the fact that the CPEC passed through this region. Recent Chinese press reports have also taken the same view, calling upon India and Pakistan to settle the matter amongst themselves. 

     Therefore if India cannot join OBOR then the Chinese Ambassador’s proposal of joining the OBOR with India’s AEP clearly becomes a non –starter. Alternatively at present, India does not have sufficient economic resources or the political heft to put in place either a competitive or an alternative connectivity networks, on a scale that can offer an alternative option to the OBOR. In such circumstances would it be plausible to prudently study those components of the OBOR that may improve India’s own connectivity to major markets and just as India has chosen to join the AIIB and the NDB, also join those components of OBOR that suit India’s needs? For example, India’s proposal to build a road cum rail link to Central Asia through the Iranian port of Chahbahar could ostensibly be linked to the Chinese built routes in the Central Asian region to obtain access to both Central Asian as well as Russian destinations. Would the Chinese be prepared for allowing limited participation by India in OBOR as opposed to full participation?

        If India’s resources are indeed limited then it automatically follows that strategically these must not be spread too thin as a part of its AEP. As the Indian Ocean area is strategically extremely important for India, it may be more imperative to deploy resources to build an Indian Ocean network of ports, with connecting highways and rail routes, such as the planned Mekong-Ganga corridor and the Sittwe-Mizoram multi-modal transport corridor. Plans to develop the deep water port on Sri Lanka’s eastern coast, Trincomalee, as a major energy and transport hub are still in limbo, despite the fact that the Chinese have gone ahead and built Hambantota port in Sri Lanka and expanded the Colombo port. The Andaman and Nicobar Islands are strategically located in the Bay of Bengal and opposite the Malacca Straits and yet, India continues to treat these islands as a distant outposts rather than developing them as important commercial and transportation hubs. The idea of launching a Spice Route, Cotton Route and even a Mausam project are, at present, mostly rhetorical ripostes to China’s OBOR and to the CPEC. Much more therefore needs to be done. At some point in time strategic choices would have to be made. For the present it seems that strategic ambiguity would perhaps continue.

Dealing With China--Part-II

           

                                        The offer of a Free Trade Agreement

      In his remarks at the University of Mumbai recently the Chinese Ambassador to India Luo Zhaohui, apart from taking the initiative for a proposed Friendship Treaty, also referred to the need for a Free Trade Agreement with India. It is not in the public domain whether the Chinese authorities have officially proposed the same to India, but nevertheless it is an important development, as far as trade relations between the two countries are concerned. Before an assessment can be made on India’s response, it is imperative to first evaluate the present state of the trade relationship between the two countries.

     India’s trade relations with China have had a checkered history and unfortunately continue to remain hostage to political developments between the two countries; albeit considerably less so now than earlier. It is to the enormous credit of Rajiv Gandhi that he was the first Indian leader to realize that a solution to the vexed issue of the boundary issue was not imminent in the near future and therefore to delay normalization of trade and economic relations with China would only be counter-productive. It was Rajiv Gandhi who took the decision to de-link the two issues. It was also during his visit to China in December 1988, that for the first time a ‘Joint Economic Group’ was established. However it must be pointed out that no one in the Indian leadership, at that time, paid much attention to this aspect of the relationship, for no one anticipated or expected that bilateral trade volumes would develop so fast. And develop they did with bilateral trade that mushroomed exponentially from a paltry US$265m in 1991 to US$ 70.73 billion by 2015-16. An interesting fact is that India’s current bilateral trade with China is larger than India’s combined bilateral trade with Britain, Germany and Japan! But the main problem area is that India’s trade deficit with China is unusually high and in 2015-16 it stands at US$52.69 billion. And it is expected that this will go up even further this year. This by itself should not be a cause for worry, as India runs deficits with sixteen out of its top twenty five trade partners. The inescapable fact is that India buys more than it sells world- wide.

    Almost everyone recognizes where the real problem lies behind this massive trade deficit. India’s trade basket consists of cotton, gems and precious metals, copper and iron ore. All are commodities. China on the other hand, exports manufactured capital goods mainly for the power and telecom sectors. The fact is that India just does not produce enough high quality manufactured goods even for its own billion plus consumers, let alone for exports and therefore it has to rely on quality imports from abroad. There are many experts who feel that the inordinately high trade deficit between India and China of US$ 52.73b, is not a very serious issue; for a country such as India that is on its way to establishing an industrial base and seeks high growth rates, a larger import profile is but unavoidable. Since China is the major source of technology intensive products that are cost effective, running a high deficit with China is but inevitable.

    However running trade deficits with China may not be necessarily inevitable as presumed. According to the Chinese, the problems faced by India are elsewhere and essentially relate to restrictive labor practices, land and tax laws, rickety infrastructure and inadequate power supply. In addition while China is a part of the global supply chain, being the last stop of the manufacturing chain in East Asia; India is no- where near being a part of this global chain.

   Therefore what would a Free Trade Agreement with China entail and what would be its implications? Empirical studies show that for India any such agreement would be a non-starter, for India is not competitive at all. A FTA would not have any major impact on increasing Indian exports to China, for the tariffs that China levies on most items, in the Indian export basket, are already near zero. Further the manufacturing skills and abilities at present available in India, as compared to those available in China are rather low. Indian manufacturing industry, as presently constituted, would be badly hit. Although overall trade between the two countries might grow at a healthy pace, yet it would be mostly to the advantage of the Chinese. If for example, tariffs levied were to be reduced to say by 5 per cent across the board, then the increase in India’s exports would be negligible, whereas those of China would increase by an estimated 18 per cent.^[i] From the Indian point of view, therefore, this proposal is a non-starter. However one way forward could be to go for a selected sector wise free trade agreement, rather than one across the board. It is for this reason also that progress in negotiations in the RCEP are slow and tedious, as both India and China find it hard to reconcile their respective positions.

    One area where India needs to press the Chinese is in opening more facilities and for increasing border trade. At present the trade between India and Tibet across the land borders is very modest; in contrast to which Sino-Nepal border trade is thriving at US$542m.There are several reasons. Firstly, the lists containing items that can be traded are outmoded and not commensurate with modern requirements. Secondly, the timings when traders can conduct trade are very unsuitable, particularly since they cannot stay overnight in either country. Most border trade points are open only four days in a week. The time taken to reach border points is also a factor since the infrastructure, particularly on the Indian side is very rudimentary. For example, the road connecting Siliguri, the last railhead to Sikkim and onto Nathu La is about 143 kilometers long, it is a single lane and often subject to landslides. Sikkim has no airports, nor any railheads.

     The importance of border trade should be recognized as it is an important catalyst for poverty reduction in the border areas. Border villages are becoming de-populated on account of lack of jobs; thus posing security concerns for India. In the past many towns such as Kalimpong, Darjeeling or even Tawang, thrived due to the border trade with Tibet. Thus if border trade is revived, it can once again serve as a significant dynamic in their economic development.   

      In 1988 when a significant shift in Indian policy took place, it was the fervent hope that the goodwill thus generated with normalization in all other sectors, it would facilitate the settlement of the boundary issue. Those hopes have to some extent been belied, but what has also emerged is that the massive trade deficit generated has added an altogether new issue between the two countries. By 2030 the economies of both China and India are expected to be amongst the top four economies of the world, but unfortunately India still does not have a full time independent trade negotiator on lines of USTR.  

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[i] India-China Free Trade Agreement [FTA]: Viability, Prospects and Challenges. [Rupa Chanda/IIMB Management Review]

Dealing With China--Part I

      

    Recently the Chinese Ambassador to India, Luo Zhaohui while speaking at a function in Mumbai said that in order to improve relations between India and China “we should negotiate the bilateral Treaty of Friendship and Co-operation, a Free Trade Agreement and gather early harvest related to border issues”. Luo also raised the rhetorical question of how to “synergize China’s One Belt One Road [OBOR] project with India’s Act East Policy”. It is not in the public domain whether Ambassador Luo has officially proposed these initiatives to the Foreign Office in Delhi or whether he was simply raising these publicly to elicit and test public opinion. Be that as it may, let us assume that these are official Chinese initiatives. In Part-1, the proposed Treaty of Friendship and Co-operation is analyzed, and some suggestions offered on what should be India’s reaction?

    Whenever the Chinese take such initiatives, the most important aspect is that such initiatives must be examined in the context of the prevailing international situation; for rarely are they bereft of such linkages. In present uncertain times any Chinese strategic analyst based in Beijing would aver that the principal threat to China would be from its eastern seaboard, in tandem with the deep anxiety and uncertainties that the new Trump Administration has raised. This would also suggest that the Chinese would be keen to cover their flanks, so as to concentrate fully on the gathering storm coming from the Asia-Pacific region. The Chinese are completely unsure on how to deal with the rhetoric emanating from Washington that suggests that the two countries maybe sliding towards a conflict situation. It is highly unlikely that this might happen, given the enormous stakes that both the US and China have in the peaceful evolution of their bilateral relations. But the Chinese are clearly worried and rarely miss the importance of being fully prepared.

   If we were to look back in history, a near similar situation had risen in the late 1950s when the Chinese were bombarding the two Taiwanese held islands of Quemoy and Matsu, but were deterred from further military action when the US warned them that it would use “all means” [indicating nuclear weapons] to defend Taiwan [Note: Not Quemoy and Matsu]. This was a bitter period in Sino-US relations and it was also a period when the final break in Sino-Soviet relations took place when the then Soviet leader, Khrushchev refused to back China in case the US used nuclear weapons. On 19 March 1959 a revolt had also broken out in Tibet that led to the flight of the Dalai Lama from Lhasa to India for personal safety. On 6 May 1959 the People’s Daily published a scathing article entitled “The Revolution in Tibet and Nehru’s Philosophy”. It was popularly believed that the People’s Daily article was personally approved by Mao and carried a personal attack on Nehru for the first time since the signing of the 1954 Tibet Agreement. Nehru was devastated by the viciousness of the personal attack.

   Despite extreme Chinese unhappiness at what had happened in Tibet and their unflinching belief that Nehru was involved in the events leading to the flight of the Dalai Lama, the Chinese never lost sight of the greater strategic threat that was gathering in the shape of US military deployment in the Straits of Taiwan and the Soviet refusal to back them in case nuclear weapons were used. It was a threat that they could not ignore. Mao had referred to it in his conversation with Nehru in Beijing in October 1954. This is what Mao told Nehru:

      Between friends, there are times when there are differences; there are also times when there are fights—even fights till we become red in the face. But this type of fight is different in character from the sort of fight we have with Dulles. China needs very much. We are a new country. Although we are counted as a large country, our strength is still weak. Confronting us is a larger power America….therefore we need friends. PM Nehru can feel this. I think India also needs friends.

   Therefore it was not surprising that Chinese Ambassador arrived at South Block on 16 May 1959 and handed over a demarche. The strategic purpose clearly was to sanitize their south-western border with India. The demarche was a long rambling litany of complaints against India and was reportedly personally drafted by Mao himself, but at the end contained a most interesting proposal. It was:

  The enemy of the Chinese people lies in the east—the US imperialists have many military bases in Taiwan, South Korea, Japan and in the Philippines which are all directed against China. China’s main attention and policy of struggle are directed to the east, to the west Pacific region, to the vicious and aggressive US imperialism and not to India....India is not an opponent but a friend of our country. China will not be so foolish to antagonize the US in the east and again to antagonize India in the west...Friends! It seems to us that you too cannot have two fronts....Is it not so? If it is, here lies the meeting point of our two sides. Will you please think it over?

     The response to the Chinese Ambassador’s demarche of 16 May 1959 was personally drafted by Nehru who assessed it as “discourteous.” The tragedy lies in the fact that this demarche and its contents were taken by Nehru as a personal affront and the hapless Foreign Secretary directed to respond within a week on 23 May 1959, to say that the statement was “wholly out of keeping with diplomatic usage and courtesies due to friendly countries.” And further the astonishing remark was made that “the government of India do not consider or treat any country as an enemy country, howsoever much it may differ from it”[Was Pakistan then a “friendly” country?].  

    But let us fast forward to present times. Placed in the historical context and considering China’s deep anxiety on developments near its eastern seaboard, what then should India make of the latest Chinese offer of a Treaty of Friendship and Co-operation? The first point to understand is that there exists in the Chinese mind the belief that Indians are by nature rather fond of “Vision Statements”, “Joint Declarations”, “Guiding Principles”, “Five Principles of Peaceful Co-existence” etc. Therefore offering a “Treaty of Friendship and Co-operation” to India, at present, would be in line with Chinese thinking about Indian nature.

 Secondly, in the Chinese mind such “lofty statements/declarations” matter for little when placed in the context of real politics. These can be easily ignored or subverted should the need arise. Take for example, the 11 April 2005 Agreement setting out the “Political Parameters and Guiding Principles” for the settlement of the boundary issues. In Para VII it was agreed that “In reaching a border settlement the two sides shall safeguard the due interests of their settled populations in border areas”. Any unbiased observer would read this to mean that in the eastern sector the two sides had agreed to settle the border on the existing status quo. And yet when the political situation turned, the Chinese referred to Para V which refers to “national sentiment” and say how could they ignore “national sentiment” and concede so much territory?  Further in May 2007 the then Chinese FM told EAM that “the mere presence of populated areas would not affect Chinese claims on the boundary”. So much for the surmise derived from Para VII.

    Therefore the question that arises is how can India pin down the Chinese in concrete terms, so that they cannot escape so easily any commitments that they might make in the proposed Treaty of Friendship and Co-operation? We too should by now be aware of the nature of the Chinese mind.

      To begin with we must not reject the Chinese initiative, as Nehru had so impetuously done in 1959; but play along for it gives us room for diplomatic maneuver not only with the US, but also in the neighborhood. And yet the Chinese must be pinned down in concrete terms. On 4 November 1962, PM Zhou clarified to Nehru in an official Note [emphasis added] that in the Eastern Sector the LAC “coincides with the McMahon Line”. Zhou further said that the Indian government must be having a copy of the original McMahon map and therefore it should be easy to read the co-ordinates of the McMahon Line. That being the case, we should insist that the Chinese live up to the initiative of their then PM Zhou Enlai and not only reaffirm that the the LAC in the Eastern Sector conforms to the McMahon Line, but insist that it be demarcated on the ground to avoid any misunderstandings.

   If the Chinese government were to agree with their own stipulation, as made by PM Zhou in November 1962, that indeed would be a concrete basis for negotiating a meaningful “Treaty of Friendship”. It would also indicate serious intent on the part of the Chinese government. Anything less than this would be another meaningless document to be "misinterpreted" as the occasion demands! 

             

The Tibetan Card

     

     A glance at some recent newspaper reports would suggest that the Indian authorities are being assiduously urged to “change” their policy on Tibet and that a new policy was in the offing that would enable India to play the so-called Tibetan card. All this is in riposte to China’s anti-Indian attitude most recently manifested, once again, in the blocking at the UNSC 1267 Sanctions Committee of naming the Jaish-e-Mohammad Chief Masood Azhar as a terrorist. But what is this Tibetan card; the playing of which that is so persistently advocated and what does it entail?

    When China invaded Tibet on 7 October 1950 to incorporate Tibet into the just proclaimed People’s Republic of China, it presented India with an acute dilemma. What should newly independent India do? Hitherto policy matters pertaining to India were always decided by Whitehall taking into consideration British Imperial interests, including commercial and the safety and security of the British Empire in India. Therefore it was but natural, given the long history of association between Tibet, the British Indian government and China; that PM Nehru thought it fit to consult the Attlee government in London. He did so on 27 October 1950.  Attlee’s advice to Nehru came in the form of an eight point memorandum. Points [ii] and [v] of this memorandum are most important. These were (Point ii) that ‘India should do what it can for Tibet ...short of military assistance.’ And that (Point v) ‘recognizing Tibetan independence must be ruled out’ [emphasis added]. Similarly, the British also emphasised the following points to the US. These were [a] that Britain was ‘always’ prepared to recognize Chinese sovereignty [note: use of word ‘sovereignty’ and not ‘suzerainty’] over Tibet, but on the understanding that Tibet is autonomous and [b] that Tibet’s inaccessibility makes it impracticable to do anything to stiffen military resistance to China. Tibet has long been judged as incapable of anything more than nominal resistance [emphasis added]. Nehru accepted British government advice for he maintained in a Note on 18 November 1950 that ‘neither India nor any external power could prevent the Chinese take-over of Tibet.’ Having taken this position Nehru, conscious of India’s inferior military position, now defined Indian policy as consisting of [a] to ensure the safety and security of India [b] acceptance of Chinese suzerainty/sovereignty over Tibet and [c] to advance friendship with China. It was partially due to Nehru and the machinations of Attlee that the Tibetan question in the UN, raised by the hapless Tibetans, never preceded beyond preliminaries. It died a natural death, for by then even the US had decided to play safe.

      The 17 point Agreement signed between the Tibetans and China on 23 May 1951 ended any hopes of genuine autonomy for Tibet. Further the signing of the 1954 India-China Agreement symbolized the complete formalization of all developments since the invasion of Tibet by China and the total elimination of Indian political influence in Tibet. For the first time ever, India in a formal document recognized Tibet as an integral part of China. In international legal terms, it signalled the fact that the only country that had special relations with Tibet, had now agreed to relinquish these and did so without any reference or consultation with the Dalai Lama or even with the Tibetan government. For the Tibetans, it can be said that the curtain was finally drawn on their aspirations to be an independent state or even an autonomous one.

     From this point in time till 23 June 2003, India maintained that ‘Tibet is an autonomous region of China’. Even in the 1962 conflict and thereafter, India did not waver or change its position. However when PM Vajpayee [BJP government] visited China in June 2003, the formulation to describe Tibet’s status with China underwent a significant change. The new position was that “The Indian side recognizes that the Tibetan Autonomous Region is a part of the territory of the People’s Republic of China”[emphasis added]. This position has been reiterated since in Joint Statements/Declarations on 11 April 2005 and 21 November 2006 [PM Manmohan Singh]. Thereafter there was no mention of the status of Tibet in the 15 January 2008 ‘Shared Vision of the 21^st Century Statement’ or in the 16 December 2010 Joint Communique. The above formulation was revived later after May 2014.  

     By stating that India now considered Tibet Autonomous Region [TAR] to be a part of the People’s Republic of China [PRC] had certain distinct political connotations. Firstly, it was now understood to mean that India accepted that there was no ‘invasion’ of Tibet by China in 1950, since Tibet was a part of the PRC that had already been established in 1949. It also means that the entry of Chinese troops into Tibet in 1950 was only a part of territorial consolidation. Secondly, China had lopped off considerable parts of erstwhile Tibetan territory and incorporated these into other provinces. Thus by recognizing TAR, as opposed to Tibet earlier, India also recognized its new territorial limits and the incorporation of parts of Tibetan territory into other Chinese provinces; contrary to the position of the Dalai Lama. It may also be noted that China describes Arunachal Pradesh as "Southern Tibet".

   Thus if this be the stated position that India had taken all along, where is the space for playing the Tibetan card? Not only would India have to renege on all previous positions taken since 1950, but also consider that there is no other foreign state that recognizes Tibetan independence. China considers Tibet to be a “core” issue and therefore any change in position by India would mean that a challenge to China’s territorial integrity had been made. Its reaction would inevitably be violent. As far back as 1954 PM Zhou had told Nehru in Beijing that China was a ‘peace loving’ country, but if its territorial integrity was threatened it would react with full force. All those who insist on playing the Tibetan card should be mindful of what this entails and not treat this issue with a light heart!