Context: India-China relations in the backdrop of recently held Informal Summit.
More in news: The second informal summit was held in the seaside temple town of Mamallapuram in Tamil Nadu on October 11 and 12.
- India and China share a 3,500-km border, over which they went to war in 1962. The course of the frontier remains unresolved despite more than 20 rounds of talks.
- Trade Relations:
- In 2018, bilateral trade between China and India reached $95.54 billion
- But this also meant a trade deficit of $53 billion in China’s favour
- The trade deficit with China is the biggest that India has with any country
Wuhan Informal Summit:
- The first informal meeting between Prime Minister Modi and China’s President Xi Jinping was held in Wuhan in April 2018, China against the backdrop of the Doklam standoff in 2017.
- Both leaders agreed then that they would continue the new format of talks to strengthen India-China relations.
- At the Wuhan informal summit, the two leaders had strategic communication on China-India relations and major international issues of shared interest.
- Putting China-India relations in the global and historical perspective, the two leaders made clear three points:
- China and India should see each other as positive factors in the changing international landscape.
- The development of China and India is an important opportunity for each other.
- China and India should view each other’s intentions in a positive, open and inclusive light.
Reasons of Trust deficit between two nations:
- The Trust deficit between the two nations was built during the Indo-China war of 1962. The 1962 war was caused in part by differences over delineating the border between two newly created republics. Resolving the border issue is key to bridging the trust deficit.
- China’s relations with Pakistan: Responding to India’s closer relations with the US, at a time when US-China relations have deteriorated, China has developed its own risk-mitigation strategy by strengthening its partnership with Pakistan. While India does not appreciate the China-Pakistan nexus, it also recognises the fact that China is not the only country that uses Pakistan to keep India off balance.
- Trade deficit: While India supported China’s membership of the World Trade Organisation, it feels China used the multilateral trade regime to acquire access to the Indian market without providing equal access to China’s. However, India’s inability to export more to China is part of an overall lack of global competitiveness that requires solutions at home.
- China’s unhelpful role in India’s desire to seek membership of the United Nations Security Council and the Nuclear Suppliers’ Group. But China is not the only major power that likes to keep the door to exclusive clubs closed to aspiring members.
Why the new informal format for the Modi-Xi dialogue is is important?
- It is not just Chjna which is against India’s membership to NSG, even US was against it till recently. Considering India’s membership of NSG and the nuclear deal, US support was entirely due to President George W Bush Jr who over-ruled naysayers within his own administration and the US Congress to favour India.
- If Modi can turn Xi into a friend, like former Prime Minister Manmohan Singh turned Bush around, China too may change its stance. It is President Bush who wiped out decades of distrust between India and the US. Same can be hoped for India and China.
Chinese President Xi Jinping’s “hundred year plan” for cementing relations between two ancient civilizations: He made two points:
- First, he situated the current phase within the long history of our civilisational engagement.
- Second, he made the important point that it would take time for a more balanced relationship to get established between China and India given the extant power differential caused by China’s spectacular rise since the beginning of this century.
Outcome of the 2nd India-China Informal Summit:
- Both Leaders shared the view that the international situation is witnessing significant readjustment. They were of the view that India and China share the common objective of working for a peaceful, secure and prosperous world in which all countries can pursue their development within a rules-based international order.
- The Leaders recognized that India and China have a common interest in preserving and advancing a rules-based and inclusive international order, including through reforms that reflect the new realities of the 21st Century.
- Both agreed that it is important to support and strengthen the rules-based multilateral trading system at a time when globally agreed trade practices and norms are being selectively questioned. India and China will continue to work together for open and inclusive trade arrangements that will benefit all countries.
- Both Leaders are concerned that terrorism continues to pose a common threat. As countries that are large and diverse, they recognized the importance of continuing to make joint efforts to ensure that the international community strengthens the framework against training, financing and supporting terrorist groups throughout the world and on a non-discriminatory basis.
- The two Leaders have decided to establish a High-Level Economic and Trade Dialogue mechanism with the objective of achieving enhanced trade and commercial relations, as well as to better balance the trade between the two countries.
- They shared the view that an open, inclusive, prosperous and stable environment in the region is important to ensure the prosperity and stability of the region. They also agreed on the importance of concluding negotiations for a mutually-beneficial and balanced Regional Comprehensive Economic Partnership (RCEP).
Prime Minister Modi and President Xi also appraised the practice of Informal Summits in a positive light as providing an important opportunity to deepen dialogue and to promote mutual understanding at the Leaders’ level in line with the ‘Wuhan Spirit’ and the ‘Chennai Connect”. They agreed to continue this practice in the future. President Xi invited Prime Minister Modi to visit China for the 3rd Informal Summit. Prime Minister Modi has accepted the invitation. However, given Xi’s 100-year perspective, both countries have to learn to live with year-to-year bumps while journeying together towards a new Asian Century.