China 2015: Resetting the Asian Growth Story?€¦ · dEsign Manoj Raikwar ownEd, PrintEd and...

China 2015: Resetting the Asian Growth Story?

INTERVIEW

“Silk Route will be a Game Changer”

ECONOMY

Made in China and Rising Wages

FOREIGN POLICY

Managing the Geopolitical Implications of China’s Economic Rise

January–February 2015 • ` 100An India-China Economic and Cultural Council publication

Multilateral Engagements and China’sNeighbourhood Policy in 2015

Backed by the confidence of surplus foreign reserves, contemporary China is using regional multilateral forums to assert its position on the global platform. Regional venues such as SAARC, APEC, ASEAN, BCIM, EAS and SCO is providing China a stage to persuade, engage and co-opt regional countries which may, in addition, help a slowing China to deal with its economy.

In an increasing multi-polar world, Beijing is embracing multilateralism as its international policy. In doing so, the major focus is on vibrant Asian region which provides for benefits at multiple levels.

However, China’s pursuance of multilateral diplomacy in the neighbourhood is not all that benign. Beijing is guided by its own strategic economic, political and security interests, just as any other country would be.

The slow growth of 2014 at 7.4 per cent was bit of a dampener for China, but then it also has propelled Beijing to work on regional integration more forcefully. Here is why. To spur domestic growth, China needs increased commerce and trade. The ambitious proposal of BCIM-Economic Corridor, or the ‘Southern Silk Road’, provides for enhanced connectivity and cross-border flow of people and goods. The Maritime Silk Route-Beijing’s grand Indo-Pacific strategy in the peaceful Indian Ocean-is an effort toward working out new transportation corridors to get connected to Indian Ocean Region (IOR). IOR gives China, the route-connectivity to Africa and Oceania.

Asia’s geo-political architecture will change if Beijing’s strategy of co-opting and securing cooperation proves successful. Forums have provided that lead to China, however, the change is likely to be slow. Every country in the region is dictated by its own interest like China. India, for example, has increased its defence and naval collaboration with ASEAN countries, particularly Vietnam (in hydrocarbon and defence) in the backdrop of Beijing’s growing interest in the Indian Ocean Region. Philippines, to protect its own interest, has made a legal case against China over maritime. So, is Asia looking forward to China’s dominance at all?

It is likely that by 2015-end, China’s aim of securing regional cooperation through its new initiatives may themselves be hindered due to ambiguity, lack of transparency, lack of institutionalization and procrastination. Or, a low growth forecast may force Beijing to focus on revitalising its domestic front instead of pursuing the ‘Going Out’ (Zou Chuqu) strategy, chasing leadership ambition through multilaterlism. In either case, the year 2015 will be worth watching for.

Urmila Rao(Executive Editor)

www.icec-council.org

Vol 5, Issue 1, Jan-Feb 2015

Editor-in-ChiEfMohammed Saqib

ExECutivE EditorUrmila Rao

Editorial BoardMani Shankar Aiyar

P.S. DeodharDilip Cherian

Amir Ullah KhanChen Si (China)

Editorial tEamIrfan Alam

Shawahiq SiddiquiManish Vaid

Monish TourangbamAmrita Jash

Tarun Chhetri

dEsignManoj Raikwar

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1. Chinese Diabolo (Yo-Yo)

2. Contortion

3. Duo Balancing

4. Comical Act

5. Magical Tactics

6. Swinging Hoop

7. Ball Juggling

8. Bowl Rolling

9. Hat Juggling

10. Martial Arts

Program-

January–February 2015 India-China Chronicle |3|

FOREIGN POLICY34 Managing the Geopolitical

Implications of China’s Economic Rise

Despite the economic content of the relationship, there is enough clarity that India, the US and most of the Southeast Asian countries do not want to see the rise of an aggressive China that could destabilise Asia

GEO-POLITICS38 Revival of the Silk Road:

Implications for Eurasian Geopolitics

An ambitious China is leaving no stone unturned for the development and sustainability of the ‘New Silk Road Economic Belt’ (NSREB) across continental Eurasia, even as the ‘three evils’–of international terrorism, religious extremism and ethnic separatism– threatens to turn the picture grim. The NSREB requires peace and stability in Eurasia for its smooth development and operation.

REGION42 India-China: Handshake for

Regional Parity

India-China growth story seems incomplete because of the regional disparity and also the fact that the two economies cannot rise without having substantial linkages with each other and other countries on the eastern flank.

parties met at Bangladesh in December 2014 to give the project a formal institutional shape. What lies for India in BCIM-EC?

MaRITIME28 China’s Grand Strategy

for High Seas In China’s dream of establishing ‘Indo-

Pacific era’ with India, the interests may not be shared. The architecture of China-backed Maritime Silk Route does not augur well with India’s strategic interests. Find out how.

INTERVIEW32 “Silk Route will be a

Game Changer”

Mr. Ravi Bhoothalingam, Chairman of Manas Advisory, an executive coaching firm and business consultancy service for Indian and Chinese companies, shares with Urmila Rao, his views on the unique challenges that the two neighbours face in boosting their economic relationship. It ranges from lack of language translators to complex tax rules and the familiar terrain of political mistrust that sets back economic ties. Mr. Bhoothalingam, an Honorary Fellow of the Institute of Chinese Studies, India, shares more views.

LaW46 Umbrella Protest and

China’s Unending Quest for Rule of Law

China’s notion of ‘Rule of Law’ is considered cosmetic. Is President Xi ready to dismantle this notion, in a bid to improve China’s image? The next few years will be interesting to watch out, to view how the legal and judicial reforms will develop in Communist China.

aGRICULTURE52 Sowing New Seeds of Reform

In China, the ‘liuzhuan’ scheme gives farmers land- use rights that can be transferred to others in exchange for a rental fee. Is this ‘de facto land privatization’ scheme helpful in boosting agricultural productivity? The article explores China’s third wave of land reforms in addition to other challenges bogging the sector.

FIRST PERSON56 India’s Perception Among

Common Chinese

What perceptions do common Chinese hold of India? Are diplomatic efforts capable of enhancing India’s image among the Chinese vox poupli? Or does Soft power of ‘Bollywood’ hold more sway? Tilak Jha explores China through his eyes

60 Exhibitions & Trade Show

In India and China

|2| India-China Chronicle January–February 2015

CONTENTS

Regional multilateral forums are giving China a solid platform to assert its rising strength. Years of stellar economic performance has allowed Beijing to exert quite the influence in the Asia-Pacific region through these forums. Initiatives of development bank, regional security grouping, trade deals and economic strategies have been announced and underlined in these forums. But as the Chinese economy slows down with reduced growth projections for 2015, Beijing needs multilateralism more than before. After all, success of China’s grand strategies depends on cooperation from the region. But is the region willing to cooperate? Find out.

14COVER STORY

China 2015: Resetting The Asian Growth Story?

4 Brief News

ECONOMY6 Made in China and

Rising Wages Rising wages in China is eroding the

advantages that the manufacturing sector had earlier. Now the cost of production is rising rapidly and the cheap labour trend on which the phenomenon of ‘Made in China’ was built, is no longer viable.

ECONOMY10 Exploring the India-China

Trade Deficit

Few months in power, the Narendra Modi led government has put India’s Southeast Asia diplomacy in high gear. Aimed at intertwining economies, interlinking destinies and creating an arc of prosperity across the region, India’s “Act East” Policy is now cruising along on a high trajectory. Against this background, the article examines the economic relationship between India and China and explores the trade deficit issue from an economic perspective.

GEO-ECONOMICS24 BCIM Corridor: Connecting the

Geopolitical Dots

For the BCIM-EC project (Bangladesh-China-India and Myanmar-Economic Corridor), China pledged $40 billion to enhance Asian connectivity. Beijing also launched the Asian Infrastructure Investment Bank to revitalize the BCIM process. The four


China’s average double-digit growth rate has come to a halt. In 2013, China registered growth rate of 7.7

per cent , however, in 2014, economy slid to 7.4 per cent, slightly below the government’s target growth of 7.5 per cent. Premier Li Keqiang said that China would balance efforts to stabilize economic growth and boost structural reforms in 2015, as downward pressure on growth still remains, reported Xinhua news agency................................................................................................................

China reacted sharply to Japan’s foreign minister Fumio Kishida’s statement that acknowledged Arunachal

Pradesh as “ India’s territory.” China disputes with India over Arunachal Pradesh calling it South Tibet. Beijing asked Tokyo to “understand the sensitivity of the Sino-India boundary issue”.................................................................................................................

In a move that may worry New Delhi, Beijing declared year 2015 as ‘China-Pakistan Year of Friendly Exchanges’. The

Chinese Ambassador to Pakistan Sun Weidong said that there is a huge opportunity for Sino-Pak all-weather stra-tegic partnership. China and Pakistan are pushing forward construction of a China-Pakistan economic corridor. The Ambassador expressed hope that ‘Pakistan could play an active leading role in promoting the construction of the “One Belt, One Road,” which are initiatives to revive the ancient Silk Road with a focus on infrastructure.’

Sn ip p tSe

of party rules and called for corruption eradication efforts. China's top legislature, in addition to other authorities had assembled to study President Xi Jinping's latest anti-corruption instructions. At the National Committee of the Chinese People’s Political Consultative Conference, the top political leaders of China were told to fulfill the instructions of President Xi and were asked to adhere to the anti-corruption instructions as “important political task.” Central authorities, legislators, and party members were told to be self-disciplined and to safeguard unity within

the party. The Supreme People Procuratorate and the Supreme People’s Court too pledged ‘relentless punishment for corrupt officials’.

China to Invest in Silk Road Links

The Northwest regions of China will invest more in tourism, infrastructure, and tourism- related industries

to attract visitors to the ancient Silk Road that linked China with Central Asian nations. Shaanxi province had launched a tourism investment fund of 5 billion Yuan. Gansu province, with more than 1,600 kilometers of the Silk Road, has rapidly improved its transportation network. In the next five years, it is slated to connect major national scenic spots and major transport roads with nearby cities. The China National Tourism Administration has declared this year as the Silk Road Tourism Year. China expects that this initiative will promote regional cooperation and mutual understanding between the nations involved. Tourism and marketing authorities will work with other

departments like culture, transportation, and public facilities to expend the current tourism products and improve the tourism experience.

China Bans U.S. Poultry

China recently prohibited import of US poultry, eggs and poultry products after the discovery of highly

contagious avian flu in the Pacific Northwest. The US exports of chicken, turkey and duck products to China in 2014 were valued at $272 million. China’s ban has been criticized by the US. “There’s absolutely no justification for China to take such a drastic action,” Jim Sumner, USAPEEC's president said. He also said that these restrictions could negatively impact China’s domestic poultry industry. Meanwhile, all poultry and poultry related products shipped from the US after January 8, 2015 would be returned or destroyed by China.


INFOCUS | INDIA-CHINA | NEWS

HK Halts Investment Immigration Programme

Hong Kong has decided to halt its capital investment immigration program, which used to allow people to

gain residency by investing HK$10 million ($1.28 million) in the local financial market. Chief Executive Leung Chun-ying said Hong Kong no longer had the economic

environment of 2003, when the plan was introduced to counter recession by attracting new capital to stimulate growth. Leung said the need for Hong Kong now is to look for talent rather than money. The decision has been met with a mixed response amid speculation that the suspension may not

be permanent. Some analysts feel investments in business rather than in stock markets would be more beneficial to the economy as that would create jobs and ensure more transparency in transactions in keeping with the Chinese mainland's anti-graft efforts.

China’s Central Bank to Increase Re-lending

The People's Bank of China has decided to increase its re-lending quota by 50 billion Yuan ($8.20 billion) in

a bid to increase its financial support for small businesses and agriculture.

The central bank, which uses the re-lending monetary tool to increase the liquidity of financial institutions and guide credit flows, said in a statement in Beijing that it would continue its monetary policies “with better coordination of tight and loose monetary measures and proper fine-tuning.”

The year 2014 saw a record 267.8 billion Yuan accumulated in the re-lending quota, with 215.4 billion Yuan going to agriculture and 52.4 billion to small and micro-businesses.

Sri Lanka Continues Energetic Cooperation with China

The new Prime Minister of Sri Lanka, Ranil Wickremesinghe during his meeting with Chinese

ambassador Wu Jianghao on January 14, 2015, said that his country will build strong cooperation with Chinese counterparts. It seems both the nations are

eager to develop relations to further strengthen bilateral cooperation in various fields for mutual benefit. Relations between China and Srilanka got cosier under former president Mahinda Rajapaksa when the US and Canada, cut back on aid, criticizing Srilanka in its war against Tamil rebels. China stepped in with billions of dollars in loans for new ports and roads for Srilanka. New Delhi is closely watching the relationship between the two unfold, even as, unlike Rajapaksa, incumbent President Maithripala Sirisena has hinted less reliance on China.

Windows 7 Support Postponed in China

Microsoft has postponed “mainstream support” of Win-dows 7 operating system in China. No new features

or free help will be provided to Windows 7 users, however, the company will continue to patch security vulnerabilities untill 2020. This means that Chinese users will run Win-dow 7 without full original factory support in all the PCs, laptops and smartphones. With Windows 7, which holds another 38.3 percent of the market, being added to the products without support, 95 percent of the web-connected Windows devices in China will not get full technical sup-port from Microsoft, Chinadaily.com.cn reported. Nearly 57 percent of the Windows-based devices that have con-nected to the Internet in China are still running Windows XP, a system Microsoft stopped upgrading entirely last year. Local cyber security companies, including Qihoo 360 Technology Co Ltd and Beijing Rising Information Tech-nology Co Ltd, have provided security updates for Windows XP users in China since Microsoft ditched the product, the website further reported.

Xi Jinping’s Anti-Corruption Instructions

President Xi in the fifth plenary session of the 18th Communist Party of China’s (CPC) Central Commission

for Discipline Inspection (CCDI), stressed on pursuance


A minimum wage increase by 10 per cent on an average, leads to an average increase in production costs in manu-facturing industries between 0.4 per cent to 0.5 per cent. Also, the mini-mum wage policy contributes more to the average wage hikes in labour intensive firms or in firms which have lower asset per capita compared to other firms. In terms of employment, a rise of minimum wages by 10 per cent leads to an employment loss of about 0.6 per cent.

Minimum Wage Levels in ChinaThere is no uniform minimum wage

level for the entire country. Minimum wages are set by local governments. Each province, municipality, autono-

mous region and even district sets its own minimum wages keeping local conditions, including economic con-ditions and living standards, in mind. The provincial government sets out multiple minimum wage categories for the region as a whole, and each city and each county within the region chooses the appropriate minimum wage level based on local conditions. In Zheji-ang for example, four minimum wage classes were set across the province, with top tier cities such as Hangzhou, Ningbo and Wenzhou choosing the highest minimum wage level, known as ‘Class A’, while other cities such as Jiaxin, Jinhua and Taizhou settled on the next highest minimum wage level, or Class B. For cities such as Shaoxin

wages and shifting allocation of the resultant increment in labour income from savings to spending.

Increased wages will lead to more buying power for consumers, however, it will also negatively impact cost ad-vantages of enterprises. From 2002-11, average annual wages have increased by 3.3 times. As such, the manufactur-ing sector has reached the Lewis Point. According to Lewis (1972) and Ranis and Fei (1961), the Lewis point is the period during which expansion of la-bour demand exceeds labour supply,

Since 2003, the phenomenon of labour supply exceeding labour is no longer the main characteristic of the Chinese labour market. As the aver-age age of the working population increases, labourers from rural areas, particularly those whose human capi-tal endowment if weak, are less capa-ble and less willing to migrate. Com-bined with other reasons, the rural labourers’ supply is decreasing, whilst the demand in urban areas is unremit-ting resulting into labour shortages. In addition to the labour scarcity, rising costs in China’s traditional manufac-turing clusters, which include land prices, tightening environment regu-lations and wage overheads have al-ready been posing serious challenges for manufacturers. Lack of labour and an increase in wages is bringing about a steep increase in the production costs of various industries, especially in labour intensive industries. The scenario in 2015 is not expected to change much.

After the Setting Up of Minimum Wages

The issues of wages became even more troubled for manufacturing en-terprises after minimum wages were set in the country in 2004. Production costs soared by 7.56 per cent in agri-culture owing to increase of 10 per cent in wages. Manufacturing industries’ production capabilities also got affect-ed by the same. Textiles, apparels and handicrafts were the worst affected ones, followed by extraction industries such as coal mining and the purifica-tion of water and related works.

Increase in Average Yearly Wages in Manufacturing

Source: National Bureau of Statistics, China Statistical Yearbooks.

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013


INFOCUS|CHINA|ECONOMY

Rising wages in China is eroding the advantages that the manufacturing sector had earlier. Now the cost of production is rising rapidly and the cheap labour trend on which the phenomenon of ‘Made in China’ was built, is no longer viable.

and Rising WagesSriparna Pathak

Cost advantage is the basis of the ‘Made in China’ phenom-enon. China capitalised on its

vast labour pool and low wages and instantly began the process of assem-bly line manufacture of cheap prod-ucts. At the time of Deng Xiaoping’s enunciation of reforms, wages were extremely low-ensuring low produc-tion costs for manufacturing enter-prises. At the time, the average yearly wage in the manufacturing sector was 597 Yuan. In 2009, the hourly com-pensation in the manufacturing sec-tor remained far below most of its East Asian neighbours such as Japan, wherein the figure stood at US$ 30.03, the Republic of Korea at US$ 15.06,

and Singapore at US$ 17.54. However, the hourly compensations in China were roughly at par with those in Phil-ippines, wherein the figure stood at US$ 1.70.

Lately, wages have been increasing in China, reducing cost advantages in manufacturing. Manufacturing sec-tor wages, according to statistics from the National Bureau of Statistics, have risen 71 per cent since 2008. The an-nouncement of minimum wages is leading a lot of investors and foreign companies to shift away from China to other countries offering cost ad-vantage in production. The rationale behind setting up minimum wages’ is visible in the country’s 12th Five Year Plan (FYP 2011-15). FYP depicts three legs to the consumer led growth; boosting employment, increasing


were not enough to meet the living ex-penses in cities. The greatest challenge currently for the economy is to imple-ment the Henry Ford principle of pay-ing the workers enough so as to enable them to buy the products they make. Rising wages are also leading to great-er inflation in China, which may lead to an erosion of China’s advantage in its prime export destinations such as the US and the EU, which in any case have been affected since 2008 global financial crisis. As such, the wages are growing much faster than the overall economy, which has been fuelling in-

flation and real estate bubbles in a sce-nario where banks are willing lenders. In all, while the intention behind rais-ing wages is noble, the fact remains that they are not serving any purpose to the workers-the ones it is supposed to bring advantages to.

Will the Wage Increase Help?China’s GDP growth has slowed

down to around 7 per cent per annum, and wages are growing much faster than the overall economy. Wage growth in the private sector was around 14 per cent in 2012. As such, manufacturing

What is Leading to Wage Increase?Wage increase can be traced to a number of factors. 1) China reaching its Lewis turning point: When the ratio of

jobs to job seekers exceeds 0.96 per cent, labour shortag-es emerge. In May 2010 for example, in Eastern China, the availability of number of rural workers suitable for labour intensive work in the region dropped steeply from 120 mil-lion in 2007 to just 25 million in 2010.

2) Rising living costs in urban areas: The Consumer Price In-dex (CPI) in 2011 for the entire country stood at 5.4 per cent and the cost of living in cities like Beijing and Shang-hai remained out of reach for labourers. This is the case in most of the coastal provinces which are richer than the other provinces of the country. Therefore, some multina-tional companies (MNCs) like General Motors, Intel and Motorola have moved manufacturing facilities inland to

avail benefits of greater supply of labour. 3) Ageing population and increasing education levels among

the younger generation workers: Members of the one child policy generation are now entering the labour force, and are contributing to the changing labour mix immensely. Compared to the older counterparts, the younger ones seek different terms of labour than earlier generations did.

4) Wage increases and higher minimum wages: The Labour Contract Law of 2008 improved wage standards and enlisted the provision of the protection of workers from baseless dismissal. Also, Beijing’s government increased the minimum wage by 20 per cent in the third quarter of 2010. Manufacturing companies are not at ease with the increased rise in production costs, and many have even started seeking viable options in countries like Vietnam.

firms need to increase productivity in order to maintain margins through technological investment, cut manufacturing costs or grow sales. Labour productivity improvement has the potential to offset some but not all of the wage growth in any case.

So, will wage increases hold China in good stead? The outlook for ‘Made in China’ in 2015 is grim in the present circumstances. Instead of wage increases, which reduce the country’s edge in manufacturing, a reinvigorated effort in fulfilling the previous reforms would prove to be a better solution to ensure economic growth and political stability in the near future. The belief that a higher minimum wage is socially beneficial for the workers is a delusion in case of China. Workers who retain their jobs are made better off, but this comes at the expense of unskilled labourers who go jobless, or are unable to find employment. If the minimum wage is higher than the prevailing market wage-which is determined by the forces of demand and supply, considerable number of workers will either lose their jobs or will have their wages cut. Given the fact that the plans to hike wages will continue well into 2015, the prospect for ‘Made in China’ seems to be grim as much as for the tag as for the workers.

The author is Associate Fellow, Observer Research Foundation, Kolkata


INFOCUS|CHINA|ECONOMY

and Yiwu, the local governments have not yet decided on the most suitable minimum wage level.

Article 48 of the Labour Law states that the mandatory minimum wage should be set at a level which is ad-equate to meet the daily needs of em-ployees. Nevertheless, it was not until March 2004, that the Ministry of La-bour and Social Security implemented its Minimum Wage Regulations, and guidelines were put in place to estab-lish a framework for calculating and adjusting the minimum wage.

By increasing minimum wages, the government is shifting from preferen-tial policies for foreign investors to-wards favouring its local labour pool. The rationale is that wage hikes will boost domestic consumption, which will keep the economy expanding, while overseas demands for Chinese goods remain weak. Also, the attempt is to retain public support for the Com-munist Party of China and to accelerate the country’s shift away from capital intensive and polluting manufactur-ing to a more services driven economy. Therefore, in 2012, China’s Ministry of Human Resources and Social Securi-ties revealed the latest minimum wag-es, and accordingly provinces and cit-ies have set up minimum wage levels. In all, 23 regions across China adjust-ed minimum wage levels in 2012. Ad-ditionally, since January 1, 2013, four regions, i.e. those of Beijing, Henan, Zhejiang and Shaanxi have improved their wage levels. Zhejiang’s ‘Class A’ cities now rank second in the country in terms of minimum wages set up, which stand at 1,470 Yuan. Beijing has the country’s highest minimum wages per hour, which stand at 15.2 Yuan per hour, followed by Xinjiang and Shenzhen at 13.4 Yuan and 13.3 Yuan respectively. This is an attempt by the Government to lure labour into the Western provinces-which lack devel-oped industrial set ups so far. Guang-dong and Beijing are provinces with the highest minimum wages. Given property price hikes and lack of access to social welfare in more developed coastal provinces, migrant labourers now prefer to stay in their areas of ori-

gin. Simultaneously, as manufacturing enterprises face a shortage of labour in the coastal regions, they will attempt to move inland, which have lower min-imum wages, which will enable to keep the enterprises’ costs of production low. Thus, this particular distribution of minimum wages makes sense, given the fact that a certain level of wages in provinces like Xinjiang and Tibet will spur consumption in the autonomous regions, while manufacturing enter-prises which are feeling the pinch of high labour costs in the coastal re-gions will move inland, which will lead to a more equitable distribution of industries across the county.

Impact on ‘Made in China’Government policies including in-

creases in the minimum wages and currency revaluation, are shifting in favour of improving domestic workers’ welfare and away from maximising benefits for investors and manufac-tures in the country. However, as com-panies seek to move up the innovation ladder, focus on productivity gains is leading to rising costs, as companies seek to invest more in sophisticated technology and equipment. Additional costs due to wage increases adversely

affects the manufacturing enterprises. While some manufacturing firms

are relocating to other countries which have cost advantages, others are moving to the central and western regions of the country. Processing and manufacturing firms like Foxconn have begun to move in greater numbers as rising wages eliminate cost advantages.

Wage Increases= Boon For Labourers?

The worrisome fact is that while average monthly wages for Chinese rural migrants in 2013 increased by 13.9 per cent over the previous year, living expenses increased at a much faster rate, effectively cancelling gains made. According to National Bureau of Statistics, released on May 12, 2014, per capita living expenses increased by 21.7 per cent on average to reach 892 Yuan per month. The primary reason behind higher living expenses was a 27 per cent increase in accom-modation costs which make up about 50 per cent of the total living costs for migrants. 90 per cent of low skilled la-bourers personally interviewed, com-plained of sky rocketing living costs, and stated that the increased wages


as raw materials, intermediate goods, consumer goods and capital goods according to the WTO classification, gives a more insightful inference on trade trends. The data shows that 89 per cent of Indian exports com-prised of raw materials and inter-mediate goods and 83 per cent of imports comprised capital goods and intermediate goods. This is con-trary to popular perception that In-dia imports more of consumer goods. In fact, in 2013, share of imports was just 14 per cent of India’s total imports from China. Within consum-er goods too, India mostly imported articles of plastic for industrial use and refractory bricks, blocks, tiles and

similar refractory ceramic construc-tional goods. This sets to rest the concern that many analysts have raised regarding Indian consumer goods market being affected by a surge in imports from China.

Widening Trade DeficitKeeping in view the trends of

exports and imports between India and China, it is clear that the trade balance started swinging in favour of China 2003 onwards. Since then, this has continued and there has been a widening trade deficit for India against China. The trend has been attributed to a host of factors, particularly, export restrictions and export duties

but trade analysts are apprehensive about the kind of effect it would have on the economic relations between both the countries. Trade is already swinging in China’s favour and sign-ing of the agreement may aggravate the existing trade deficit.

The widening gulf between India’s exports to and its imports from China has brought forth issues of achieving a more sustainable and balanced bilat-eral trade between the two countries. It also brings forth questions that pertain to utilizing the inherent trade comple-mentaries. What have been the trends in trade between India and China? Is the burgeoning trade deficit with China actually bad? What measures should the Indian economy undertake to combat the growing deficit?

A Background TrendBilateral trade between India and

China increased rapidly since the mid-90’s and picked up significantly after China became a member of the WTO in 2001. In 2013, the India’s exports to China stood at $16.4 billion, whereas imports stood at $51.6 billion.

India’s exports to China have been growing at a much faster rate than its total bilateral trade. In 2012, total bilateral trade between both countries was around $68 billion with an exponential growth of 28 per cent over the period 2000-13. Even though the current bilateral trade is among the highest with partner countries for India, there exists enough potential to reach $100 billion by 2015.

Trade data clearly demonstrates the dominance of Chinese exports in the bilateral trade between India and China (Refer Figure 1). The fact that India’s imports from China were 10 per cent of its total imports from the world in 2012, points to China’s significance as a trade partner.

India’s main imports from China have been electrical equipments, machinery and telephones. Its top export items to China include cotton, copper articles, organic chemicals, cathodes and iron ore (Refer Figure 2).

Items of trade between India and China, classified into segments such Source: Authors calculations using UN COMTRADE data

Figure 2: Top 5 items of trade between India and China (2013)

Source: Authors calculations using UN COMTRADE data

Top exports of India to China

Top imports of India from China

Figure 1: India-China Trade over the years (1996-2013)

India’s Export to ChinaIndia’s Imports from China

1995 2000 2005 2010 2013

Years

60

50

40

30

20

10

0Trad

e Va

lue

(in U

SD b

illio

n)

India-China Trade over the years

Cotton yarn, single (excl. sewing thread)

Polypropylene, in primary forms

Iron ores & concentrates, non-agglomerated

Cathodes & sections of cathodes, of refined...Cotton, not carded or

combed

Urea

Parts of telephone sets

Portable automatic data processing machines

Comodities not specified elsewhere

Telephone for cellular/wireless...

Trade Value (in billion USD) Trade Value (in billion USD)

0.5 1.23

1.34

2.2

2.45

4.52

0.5

1.05

1.93

2.76


INFOCUS|INDIA-CHINA|ECONOMY

Few months in power, the Narendra Modi led government has put India’s Southeast Asia diplomacy in high gear. Aimed at intertwining economies, interlinking destinies and creating an arc of prosperity across the region, India’s “Act East” Policy is now cruising along on a high trajectory. Against this background, the article examines the economic relationship between India and China and explores the trade deficit issue from an economic perspective.

Exploring the India-China

Samridhi Bimal and Devyani Pande

In the recent times, India has taken a slew of steps to galvanize relations with Southeast Asia, the economi-

cally vibrant region. India’s foreign relations policy has now acquired substantive economic and strategic weight with negotiations under Re-gional Comprehensive Economic Part-nership (RCEP) agreement. The RCEP is believed to define economic integra-tion in the world’s most dynamic re-gion of Asia. China and India are the key economies in this agreement. The stakes in the negotiation are very high,

Trade Deficit



segments over and above the existing ones. The World Trade Report, 2013 states that some of the main trends that will affect world trade would be—emergence of Global Value Chains (GVC’s), growth of trade in services,

rise of emerging economies and evolv-ing perceptions about the link be-tween trade and development. GVC’s have assumed importance with trade and production fragmentation among countries leading to specialization in

production since no country can have comparative advantage in all segments or for all stages of production in a product/sector. China has emerged as a hub for GVC activities with the local firms setting up various production assembly lines and sub-sequently emerging as transnational corporations. Unfortunately, India has not been able to capitalize on this phenomenon, despite its proximity to China. Electronics and electrical goods have been the prime mover of global production networks in East Asian markets. India can benefit from China’s import dependent participa-tion in the global production network for IT and electronics. Exporting IT and electronics intermediates to China can provide a boost to India’s domestic manufacturing and lead to its eventual integration into the value chain for IT and electronics.

Strong adherence to such produc-tion processes and spirit of regional-ism has increased interdependence between countries, with which bilat-eral trade between India and China is most likely to increase. The need for firms to organize their supply chains across different countries has led to demand for regional trade agreements that cover much more than preferential tariffs.

India’s proactive approach towards regional integration will have a strong bearing on the dynamics of India-China trade relations also. If the RCEP agreement comes through, it will be a paradigm for regional trade co-operation offering significant opportunities to engage for the key players of RCEP in Asia-India and China. A natural path for economic integration between India and China would be to then enter into a Free Trade Agreement (FTA), if benefits of bilateral integration (through greater market access for Indian goods to China and increase in Indian exports to China) are realized under the RCEP.

The authors are researchers at Indian Council for Research on International Economic Relations (ICRIER),

New Delhi. The views expressed are personal.

Shifting Capabilities

In the India-China context, both countries have distinct capabilities: one is referred to as the “world’s office”, the other “world’s factory”, reflecting their

comparative strength in services and manufacturing respectively. The massive diversified manufacturing sector in China has propelled its manufacturing exports. Chinese strategy of building big manufacturing companies that can sustain large R&D budgets has enabled them to not only compete on the basis of just cheap labor or costs but also on the basis of technological innovation. With the changing industrial structure of the country, a large portion of Chinese exports are becoming high-tech exports. In contrast, manufacturing sector in India has not been performing too well in the last few years, thus increasing its dependence on imports for competitive and technology intensive manufactured products to intensify its domestic industrialization.

The government has been trying to curb the influx by applying protectionist measures. Economists believe that such protectionist moves will hurt India much more than China in the long run, depriving Indian consumers and producers of goods they cannot find at home. Rather than regulating imports, India needs to boost exports and particularly in the services sector.



on iron-ore and copper, lack of market access for Indian pharmaceuticals, IT and fishery in China and the surge of petroleum and gold exports to India. In 2013, India’s largest trade deficit, among the partner countries, was with China. An astronomical trade deficit figure of USD 35.21 billion does raise a few apprehensions and concerns.

To view the deficit problem in a holistic way, one needs to delve into the economics of trade deficit and analyze the consequences thereof. Aggregate and bilateral deficits are largely attributable to macroeconomic factors. The other reason for deficit is the ‘triangular trade’, which pertains to cross-country differences in the patterns of demand and supply. It means that a country will run bilateral deficits with a country which is usually an important supplier of goods.

Bilateral trade deficits are basically a perennial policy issue. There are not just two countries in the world, so one cannot analyze the bilateral deficits and surpluses in a multi-country world. India’s obsession in solving bilateral trade deficits with a specific partner has taken it far afield from the fundamental problems of overall trade deficits and underlying

macroeconomic conditions at home (low GDP, inflation, low investment, etc). Overall trade deficit is essentially a macroeconomic issue and cannot be resolved with trade policies. That is to say trade policies targeting particular industry or trading partner may only work to affect the composition of trade but not the aggregate balance.

A Cause for Worry?Trade is vital to the enhancement

of economic and political cooperation between India and China. In the third India-China Strategic Economic Dia-logue meeting at Beijing in 2014, both sides recognized that as major devel-oping economies, they needed to raise the level of economic engagement. With a view to promoting greater eco-nomic and commercial engagement, both sides also acknowledged the need to explore potential synergies in areas where the two sides have mutual complementaries, improve trade and investment environments and work towards removing market barriers. This came in addition to recognizing the need to enhance cooperation in project contracting, deepening busi-ness to business exchanges, improv-ing transportation links, encouraging greater bilateral investment and work-ing towards achieving a balanced and sustainable bilateral trade. Trade defi-cit came up as a prickly issue for India, in particular, its sustainability. India’s trade deficit crossed the US $30 billion mark in the latter half of the 2000’s and has now become unsustainable. In this context, the Indian side iter-ates the need to reduce the deficit to a sustainable level by increasing exports in competitive sectors like niche engi-neering products, IT-enabled services, cotton textiles, home furnishings and pharmaceuticals.

Though deficit is a cause of anxiety, it is important to recognize that India’s overall aim must not be to balance trade with China, or target a particu-lar trade deficit. At this juncture, India needs to look beyond the concerns of trade deficit with China to strengthen its collaboration and enhance trade in

Tackling High Trade Deficit: India’s Response

Trade deficit is not a new phenomenon for the Indian

economy. India has been recording sustained trade deficits since 1957. Today, India has trade deficits with over 80 countries and for the year ending March 2013, it recorded a trade deficit of $87.8 billion. A trade deficit simply represents outflow of domestic currency to foreign markets. A large and unsustainable increase in sale of domestic currency can drive value of domestic currency down; thereby making imports more expensive. India runs a trade deficit with two kinds of countries. Under category 1, there are countries which are rich in petroleum, oil and natural resources, the demand of which is inelastic for a country like India. Under category 2, there are countries like China, Taiwan and South Korea from which high-tech machinery are imported in India to raise productivity levels.

Figure 3: The widening India-China trade balance

Source: Authors calculations using UN COMTRADE data

India’s Export to China India’s Imports from China

60

50

40

30

20

10

0

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Trad

e Va

lue

(in b

illio

n U

SD)

The Widening Gulf


are useful supplement to our economy, can and should be put to use for the benefit of socialism.”

Zhu, on the other hand formally invoked the term “Going Out” (Zou Chuqu) in a 1999 speech, wherein he asserted a connection between the paucity of resources (particularly oil) and a need to go abroad, asserting, “Domestic development and produc-tion of oil can no longer keep pace with the needs of the country’s economic and social development, resulting in and increasing imbalance between oil supply and demand.”

This strategy helped China to boost its economic activity not only to feed its ever increasing energy intensive manufacturing sector but also to support the resultant economic activities. Consequently, China observed three and a half decades of near double digit growth, transforming nation from largely rural and poor society to world’s one of the leading

Manish Vaid and Urmila Rao

In recent past China has forged itself to an active multilateral diplomacy alongside its enhanced

engagements on bilateral basis. Buoyed with stronger economic growth and increasing foreign exchange reserves, it has been successfully able to pursue its regional diplomacy, leading to a series of regional as well as sub-regional cooperation framework in Asia such as ASEAN Regional Forum (ARF), Asia-Pacific Economic Coop-eration (APEC), Asia-Europe Meeting (ASEM), Shanghai Cooperation Or-ganisation (SCO) and more recently Bangladesh-China-India-Myanmar Economic Cooperation (BCIM-EC).

Chinese multilateralism gives this country a leeway of mobilising its huge cash pile accumulated in the form of foreign reserves to fulfil its objective of rational political and economic or-der which can promote peace, devel-

opment and multipolarisation, while offering security and economic coop-eration to the countries concerned. While this argument holds sound and interesting, the origin of Chinese thought process behind reaching out to outside countries can be cor-related with its ‘Going Out’ strategy, when Deng Xiaoping, in his efforts to open up China, stated that China’s economy rested in engagement with the outside world.

Riding on ‘Going Out’ StrategyThis manifestation was further

re-instated by former President Jiang Zemin and Premier Zhu Rongji to lib-eralise Chinese economy, as a result, under their leadership China joined the World Trade Organisation. In fact, Jiang linked international expansion as critical to development, as he stated that, “Foreign funds, resources, tech-nology and skilled personnel, along with privately owned enterprises that


INFOCUS|INDIA-CHINA|COVER STORY

China 2015: Resetting The Asian

Growth Story?


Regional multilateral forums are giving China a solid platform to assert its rising strength. Years of stellar economic performance has allowed Beijing

to exert quite the influence in the Asia-Pacific region through these forums. Initiatives of development bank, regional security grouping, trade deals and economic strategies are announced and underlined in these forums. But as

the Chinese economy slows down with reduced growth projections for 2015, Beijing needs multilateralism more than before. After all, success of China’s

grand strategies depends on cooperation from the region. But is the region willing to cooperate? Find out.

|14| India-China Chronicle January 2015


low at 7 per cent (which is below compared to India, projected to grow from 5.8 per cent from 2014 onward), ensures a scenario where China would be compelled to slow down unless it brings out strong stimulus package to boost its economy. Chinese economy is primarily based on exports and invest-ments accompanied by low personal consumption, making it both energy and mineral intensive.

Overseas Investment Key for Chinese Multilateralism

China, in order to deal with current economic impasse, has rather preferred to go for reforms instead of coming out with ‘strong economic stimulus’. Some of these reforms are too challenging to be implemented due to limited options to China’s alternative growth model. Though,

China believes that its ‘Going Out’ strategy through overseas investment in series of regional initiatives would support reversing its sluggish economic growth. Such regional initiatives

include announcement of $40 billion Silk Road fund by President Xi Jinping, to back infrastructure construction, resources exploration and industrial cooperation for countries along the “One Belt and One Road” and proposal of building Asian Infrastructure Investment Bank (AIIB), for inter-connectivity and mutual access of neighbouring countries.

China’s ambition is reflected from the fact that for the first time in his-tory, it became a net capital exporter where the country’s outbound invest-ment outnumbered foreign direct in-vestment in 2014. The country’s in-vestors, channelled capital into 6,128 overseas firms in 156 countries and region in 2014, with outbound invest-ment reaching $102.89 billion, up 14.1 per cent from a year earlier, according to the Ministry of Commerce (MOC),

China has long wished to be a member of saarC to engage

more emphatiCally in the south asia region. while the wait is on, through pieCemeal moves, China

has involved the member-Countries through settings

suCh as China-south asia expo, China-south asia

business forum etC



trading nations. This growth further led to increased foreign exchange reserves to as high as $3.5 trillion, facilitating an expansion in military expenditure.

Economic Slowdown to Hamper Chinese Dream?

Undoubtedly, with strong ambition of fulfilling its own dream of becoming the ‘Great Power’ in congruence with promoting peace and development across the world space possible, China has so far led from the front to create several multilateral forums, using its huge cash reserves.

But the romanticism of export-led Chinese economy, propelled by property market now seems to be ending with current growth registering slowest since past 24 years. Most of the previous stimulus investment policies, since global recession of 2008 were financed heavily by the local governments, having limited resource and heavy debt burdens, which has escalated to an estimated $2 trillion, or 25 per cent of the GDP at year end 2012. If one scrutinizes August 2014 data ranging from property sales,

investments and industrial production, they have shown sudden weakening of growth. The property sales which have fallen 8 per cent so far last year has eaten away the revenues of the local government due to holding back on land purchase by property developers resulting from lean property markets.

Notably, China’s property sector accounting for 15 per cent of China’s GDP, has become one of the biggest factors slowing down of its economy, affecting overall demand growth of the Chinese which had, in the past, led to surge in resource quest, particularly the global crude oil. Now, global crude

oil price, which remained fairly stable from 2010 until mid-2014 at around $110 a barrel, nose-dived to below $50 a barrel. And with International Monetary Fund (IMF) further trimming growth forecast for China to 6.3 per cent in its January 2015 World Economic Report updates and Iran hinting of the oil price to fall further to $25 a barrel, there seems no scope of Chinese economy for early recovery.

Now, there is a big question mark on whether China would still be able to continue with its multilateral regional diplomacy and continue to economically pull its weight in strengthening ASEAN, APEC, SCO or even BCIM. With recent economic growth projections of China by in-ternational institutions like IMF and World Bank keeping it significantly

Travelled a Long Distance: APEC and China

In 1980, when APEC started as Pacific Economic Cooperation Conference (PECC), China had shown keen interest in its membership. But a formal

invitation was extended to China, Taiwan and Hong Kong only ten years later at the second ministerial meeting held in Singapore in 1990. A year before, owing to events in and around Tiananmen Square in June 1989, China was excluded.

Today, China commands a position in writing APEC’s script and is in a league no lower than Pacific heavyweights such as the US, Australia or Russia. Beijing has come a long way from that point in APEC, when the US was believed to be the string puller, in that, using APEC as a device to foster regional cooperation for its own benefit. Today, China commands weight. It trades heavily with South Korea, Japan, and ASEAN. It is proposing futuristic economic projects such as Bangladesh-China-India-Myanmar Economic Corridor (BCIM-EC) and Maritime Silk Route with adequate focus on Asia region. China is rather creating a new Asia order.

However, Beijing is not ignoring India even if it is writing the narrative. Inviting India to APEC was a strategic move, for instance. China seeks greater role of India in Shanghai Cooperation Organization (SCO) and in BCIM and Maritime Silk Route projects. Two decades back, the narrative was different, however. It was widely believed that China was blocking India’s efforts to join APEC.

India, so far, has reciprocated with caution. It has not yet framed any comprehensive plan with regard to regional integration while working with China.


during the Summit that could have played the spoilsport in clearing of these projects. The border tension, in fact was also reflected in Modi’s speech, when he stated that, “The bonds will grow...through SAARC or outside it.. among us all or some of us.” It was hoped that this SAARC Summit would succeed in breaking new grounds after some serious efforts made by Prime Minister Modi, in inviting SAARC member countries during the swearing ceremony and putting neighbours at the core of India’s foreign policy agenda. This effort seemed to offer fresh lease of life to the dying SAARC.

China long wished to be a member of SAARC and has continued to push for its greater role in South Asian region. For better communication and contact and to maximise the advantage as an observer member, China appointed permanent representative to SAARC. Further, China is being consistently pushing for its greater role with each of the member countries in South Asia, either bilaterally or through multilat-eral settings such as China-South Asia Expo, China-South Asia Business Fo-rum and China-South Asia Friendship Organizations’ Forum.

Exerting Greater Weight Through APEC?

With Asia-Pacific Economic Co-operation (APEC), however, China is able to bring larger structural shift in the eco-politics of the Asian region. A

stance to that effect got clearly mani-fested in APEC 2014, held in Beijing. At the APEC Summit, President Xi Jinping underlined on ‘Asia Pacific Dream’ for open regional economy to boost free trade and investment.

In its Asia Pacific Dream, China has invited everyone including the US and India. Xi-Obama signed historic deal on reducing carbon emissions at the Summit. Both the countries also signed a military accord to avert clashes between each others’ planes and warships off the Chinese coast. There was also an understanding to cut tariffs for technology products and visa deal was agreed upon with potential strategic implications in the long-term. Calling further shots in the Summit, President Xi also proposed “One belt, One Road” plan in a bid to co-opt regional players and consolidate its rising economic profile.

It has been observed that Beijing’s tone and tenor with member-states is

changing; inclined more toward co-operation as opposed to coercion. In APEC 2014, Beijing, the host, received Japan warmly. On the sidelines of the Summit, Xi-Abe had a formal meeting aimed at mending ties over their his-torical and territorial enmity. Russia too received a warm embrace as the two countries, keeping their historical differences aside, met to sign multi-billion dollar energy and resource cooperation. India, non-member of APEC, was invited in the Summit. In addition, Beijing also encouraged New Delhi to become a founding member of AIIB (backed by China).

Therefore, despite economic slow-down, it is expected that by 2015 Sum-mit, China would wield more influence on the world stage. APEC accounts for nearly half of global trade. Beijing used the APEC Summit 2014 to full use by exerting its rising economic and po-litical influence not over merely Asia but also in the Pacific circles. APEC 21-member economies are home to around 2.8 billion people and rep-resents approximately 57 per cent of world GDP. It represented 47 per cent of world trade in 2012. In 2015, it is hoped that China would increase its normative profile, which till now looks like an un-worked patch in the rising-power discourse.

Beijing: Revising Eco-Politics?Some assertions were clear by Bei-

jing in APEC-2014, such as the plan of Free Trade Area of the Asia-Pacific (FTAAP) agreement. FTAAP is seen as a response to Washington’s Trans-Pa-cific Partnership (TPP) that includes 12 APEC nations including Japan and

India-ASEAN: Time to Revitalise

ASEAN-India relations too need revitalization. ASEAN dialogue partner, India, recently upgraded itself from ‘Look East’ Policy to ‘Act East’ Policy. Now,

it needs to focus on increasing trade relations in a rather sustained manner. Currently, the two-way trade with ASEAN stands at around $80 billion a year. A Standard Chartered report forecasts Indian exports into ASEAN to rise. Even as India prepares to draft the next five-year plan of action for ASEAN-India relations beginning in 2016, one has to wait and watch how China-India-US dynamics unfolds in the home of ASEAN.

Trend of ASEAN Trade with ASEAN +3, ASEAN +6 and EAS (in US $ billion), 1993-2013

3,000

2,500

2,000

1,500

1,000

500

0

TOTAL 430EAS 281ASEAN +6 206ASEAN+3 191Intr ASEAN 82

Note: ASEAN+3 includes intra ASEAN, China, Japan, and Republic of Korea, ASEAN+6 includes ASEAN+3, Australia, New Zealand, and India, EAS (East ASIA Summit) includes ASEAN+6, Russia and USA

Source: ASEAN Trade Statistics Database, as of 24 July 2014

TOTAL 2,512

EAS 1,706ASEAN +6 1,431ASEAN+3 1,335

Intra ASEAN 609

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013



People’s Republic of China. According to China this would

help it in maintaining its political and economic status in the Asia-Pacific region and its leadership in the world, while ensuring that the country gets better returns from such overseas investment projects, through spreading the risks involved in various projects as aforementioned. Therefore, the objectives of engaging in forums like SAARC, APEC, BRICS, ASEAN and BCIM are optimised and win-win conditions are provided to the member countries.

Dragon Looks South via SAARCThe South Asian Association for

Regional Cooperation (SAARC), which came into existence in Dhaka, Bang-ladesh in 1985, is one of the oldest regional organisations. It was consti-tuted with the idea of working together on the common objectives like world

peace, security and development. The basis behind any regional cooperation including SAARC has being to reap the benefits of common history and experiences of the past.

Therefore, underlying principle of the SAARC charter was to foster re-gional cooperation based on mutual trust and respect for the territorial

integrity and sovereign authority of each member states. But now there has been a growing perception that SAARC, despite having all the char-ters and principles in place, has failed to bring out any concrete outcome. It is often argued that absence of a sound bilateral relationship among the mem-ber states and the lack of effective functioning of the Association as a whole will continue to be problematic.

This was clearly witnessed during the 18th SAARC Summit where standoff between India and Pakistan surfaced yet again and failed to optimise the benefit accrued to each of the member states, when at least three projects, namely, an electricity grid, trade in electricity and road and rail connectivity appeared to be a non-starter due to inconclusive internal process by Pakistan. Though it could have been the ongoing border incursions and ceasefire violations

it has been observed that beijing’s tone and

tenor with member-states is Changing;

inClined more towards Co-operation as opposed

to CoerCion. in apeC 2014, beijing, the host, reCeived japan warmly


nounced another project viz, Kuantan Industrial Park in 2013, in bid to accel-erate cross-border movement of man-ufactured goods. China’s cross-border cooperation zones with Myanmar and Vietnam is also in progress.

Through these sustained efforts, China not only plans to increase its own economic and political cachet in the region, but also aims to set up a bulwark against the US, which has growing interest in the region. The interest is fuelled by the vibrancy of the Southeast Asian markets. The US too wants regional integration so that the consolidated position in Southeast Asian nations will help it to contain China and its rising influence in the region.

As complex as US and China’s relationship can get in the background of Southeast Asia, predications too can get complicated. As a single geo-political entity will China be favoured

or the US by Southeast Asian nations? Or will the region seek role of multiple players to safeguard against one nation’s stifling dominance? Will the region itself get strong enough, given the huge disparities in income and structural deficiencies?

ASEAN visions include commu-nity-building, economic integration and stronger regional ties. In 2015, the spirit in which economic integra-tion is sought, may not inch forward for ASEAN. One of the biggest road-blocks would be the ongoing dispute over South China Sea (SCS). Territo-rial claims in SCS are laid by China

ASEAN signing a Declaration on the Conducts of Parties in the South China Sea in 2002, with the goal of promot-ing peaceful, friendly and harmonious environment. It is unlikely that in 2015 any amicable solution will be attained on this front. Several nations of the region covet the resource-rich SCS is-lands driven by the desire of domestic growth and security concerns.

Nevertheless, China’s role in galva-nizing region’s economic success can’t be overlooked. The year 2014 saw ne-gotiations underway to build an up-graded version of the China-ASEAN Free Trade Area (CAFTA), an idea first

and partly by Philippines, Vietnam, Malaysia, Taiwan and Brunei. In 2012 ASEAN summit, tensions ran high over the issue of SCS, never seen be-fore in ASEAN’s 45-year history. It is quite likely that the national senti-ments will gain precedence over su-pranational economic integration. Philippines is already locked in bat-tle with China over SCS; a decision by the arbitral tribunal at The Hague on the Philippines’ case against China is pending. China has already ‘rejected’ the arbitral jurisdictions over the sea boundary limitations. The acrimony over SCS continues despite China and

by engaging asean member-Countries, China plans to inCrease its own

eConomiC and politiCal CaChet in the region

as well as setting up a bulwark against the us, whiCh has growing interest in the region



Australia, but not China. Both the countries are jostling with their own plans to turn the Pacific into a free-trade area and test their influence in the region. China believes in the “the eventual realisation” of FTAAP.

China is being looked upon as giv-ing APEC an Asian identity which was missing earlier. Or perhaps it is the other way round. The multilateral venue, APEC, is becoming an official platform where China is showcasing its prowess. While APEC 2013, held in Bali, saw China proposing setting up AIIB (set with starting capital of $50 billion), APEC 2014 witnessed China’s launch of Silk Road Fund, with con-tribution of $40 billion. In propos-ing these initiatives, China sends out strong signals to the West as well to Asia. AIIB is seen as rival to West’s IMF, World Bank and Asian Develop-ment Bank. Further, China with its two funded initiatives, namely, the New Silk Road and BCIM, proposes a better infrastructure, an increased connectivity and more trade among the Asian nations.

The APEC summit, 2014 was way beyond mere symbolism; it saw weight of China. It is expected that Beijing will be able to sustain its assertive leader-ship position in the Asia region and among the Pacific marvels even in the coming Summits (Philippines, 2015) and (Peru, 2016) with its long-term strategic vision.

Further, if one has to believe in the statement of Mr. Liu Zhenmin, Vice Foreign Minister of China, given at the 18th Summit of SAARC in Kathmandu, Nepal (November 26, 2014), one can get enough hints about China’s vision for South Asia as well. At this Summit, in order to realize the Chinese dream and align it with transforming South Asia, Liu Zhenmin urged for greater cooperation.

Liu laid emphasis to enhance Chi-na-South Asian trade and investment to $150 billion and $30 billion re-spectively. Clearly, China is leaving no stone unturned to use SAARC as effectively as it is using APEC. For this China has planned several ini-tiatives in 2015, including, the Semi-

nar for Cadres from South Asian Political Parties, the symposium for promoting South Asian countries’ exports to China, the China-South Asia think tank strategic dialogue and the exchange program for SAARC countries’ radio and TV journalists, producers and hosts.

Last year China took series of initia-tives such as Economic Belt Silk Road, 21st century Maritime Silk Road and Community of common destiny be-tween China and ASEAN. The other

initiatives included China-Pakistan economic corridor, BCIM economic corridor and the Asian Infrastructure development bank, along with the an-nouncement of establishment of Silk Road Fund, to highlight China’s plan to take these forward in 2015.

All these initiatives, according to China, would be possible only with the joint efforts of all the countries concerned. Beijing emphasises that these efforts will deepen practical co-operation, promote integration and advance development amidst integra-tion. These initiatives will bolster the connectivity of policy, road, trade, currency and people across the region, providing economic prosperity.

China in ASEAN Just as APEC, ASEAN (Association

of South East Asian Nations), provides regional optimism to China, who as a dialogue partner, emerged as ASEAN’s largest trading partner. As shown in the figure, in 2013, ASEAN’s total trade with China was $350.5 billion that accounted for 14 per cent of ASEAN’s total trade and represented an increase of 9.7 per cent on year-on-year basis. In contrast, ASEAN’s trade with USA, Japan, EU-28 and Canada posted the lowest annual growth rates from 5 to 7 per cent per annum on an average.

China’s efforts of enhancing economic ties with the 10-member ASEAN countries through increased trade and new continental and mari-time connectivity has not come a day soon. By deepening economic inte-gration and forging stronger regional ties, China is securing political consen-sus, and its own securitization in the ASEAN region.

Earlier China worked with ASE-AN’s founding member, Singapore, to set up two flagship government-to-government projects, namely, Suzhou Industrial Park and Tianjin Eco-city. It evinced interest in setting up a third project during 2014 ASEAN Sum-mit. China worked with the Malay-sian Government too, another core ASEAN member, to set up China-Ma-laysia Qinzhou Industrial Park and an-

Co-opting Asian Region with East Asia Summit

At the 9th East Asia Summit (EAS) in Nay Pyi Taw, Myanmar, Premier

Li Keqiang emphasized that China is a stable force in the East Asian re-gion and will follow the path of peace-ful development. There seems to be wide gap between the rhetoric and the activities taking place on ground. China’s border skirmishes with India, its historical animosity with Japan, claims over South China Sea are a few sour points in the EAS goals that includes political and security coop-eration among others. Infrastructure development, regional trade, pover-ty eradication and fighting epidemics are other goals. Challenges exist in the realisation of the goals because self–interest of nations have thus far gained precedence over the regional interests. The countries lack politi-cal will to cooperate, funds to drive growth are meager and institutional-ized cooperation is absent. Working with these drawbacks, China may not hold that strong a clout in the EAS. The US and Russia’s inclusion in the EAS in 2011, further thwarts China’s dream of Asia for Asians. Straddling the conflicting interests of the other Big Three- the US, Rus-sia, and Japan- whose political and ideological interests are different, prevents Beijing from obtaining full-scale cooperation.


Manish Vaid is Junior Fellow at the Observer Research Foundation, New Delhi and

Urmila Rao is Executive Editor, India-China Chronicle

New Beginnings with BCIM BCIM or Southern Silk Road,

another branch of China’s New Silk Road strategy, holds great importance in integrating economies of South Asia.

BCIM Forum for Regional Coop-eration, also known as “Kunming Initiative” came into existence in Au-gust 1999, a year after Professor Che Zhimin, the then Deputy Director of the Economic and Technological Re-search Centre of the Yunnan Provin-cial People’s Government presented a note at a Conference hosted by the Institute of Chinese Studies (ICS) in New Delhi. He defined the scope of the proposed sub-region of China, India, Myanmar and Bangladesh, which can lead to a ‘cooperative zone’.

After more than a decade and greater push by the Chinese, the significance of the BCIM re-emerged, when during 2013, China and India spearheaded the corridor with the urge to bring some momentum to it. The success of BCIM Car Rally of February 2013 between Kolkata and Kunming brought a decisive momentum to this corridor. As a result this project found mention in all subsequent joint declaration made during the bilateral visits of Chinese Premier Li Keqiang to India in May 2013 and subsequently by Indian the then Prime Minister Manmohan Singh to China in October 2013. These bilateral exchanges then paved way for first JSG meet on December 18-19, 2013 in Kunming.

Recently, the second meeting of the Joint Study Group (JSG) of BCIM-EC on December 17-18, 2014 was successfully convened by bringing on the board, modalities of the future course of action of this project.

The initial total estimated cost of BCIM-EC project would be about $22 billion for which 55 per cent may be contributed from the multi-billion dollar fund, while the balance will be borne by the four governments and the private sector.

Therefore, though BCIM finally succeeded in covering larger ground with concerted and coherent efforts of India and China, (having a potential

of becoming a model for similar such multilateral initiatives), it remains to be seen if either of these countries are eyeing memberships through en-hanced cooperative mechanism. The apprehension remains as to whether China would come out well fighting its own economic crisis through the forum-pushes.

So the first challenge confronting China is the reforms which it wishes to undertake to bring its economy back on track, wherein right kind of reforms would play a major role. But a host of longstanding economic risks, such as escalating debt levels, waning property market and resultant defaults in the real estate sector, are likely to overshadow gains from lower

oil prices. Economic reforms will have a bearing on Beijing’s political tone also. In a bid to obtain regional cooperation, China has to balance economic, political, cultural and diplomatic fronts. The task cut out is tough. But it is never easy for a rising power. Or is it?

Marching Ahead But Bottlenecks Are Plenty

The APEC 2014 Summit saw President Xi Jinping underlining ‘Asia Pacific Dream’ to promote free trade and investment in the region. The Summit

also saw Beijing’s push for Free Trade Area of the Asia-Pacific (FTAAP). China is now skillfully straddling between domestic growth, security and global position. Setting up FTAAP in opposition to Washington’s proposal of Trans-Pacific Partnership (TPP) underlines the straddle; China aims to test its own influence in the Pacific. Beijing’s claim over restive South China Sea is another test for the same.

With surplus reserves in tow, China announced establishment of Asian Infrastructure Investment Bank (AIIB) in October 2013, with registered capital of $100 billion. China says it wants to remove monetary hurdles for the region’s ‘unity and development’ and bridge the massive infrastructure funding gap of as large as around $8 trillion which existing banks like Asian Development Bank (ADB) and World Bank cannot offer. Consequently AIIB is largely seen as a rival to West’s IMF, World Bank and ADB by many.

Forums help in advancing and strengthening of diplomatic ties, however, countries may not like to get pressurized by China in any manner. Philippines, Vietnam, Malaysia, Taiwan and Brunei lay claim on South China Sea as much as China does. It is clear that behind the economic bonhomie, Beijing aims for political consensus and its own securitization in the region.

China’s plans’ for co-operation may take time to materialize as its proposed initiatives lack institutionalization and political willingness from several countries of the region. In addition, Asian forums too lack the desired degree of political and legal weight to give shape to Beijing’s initiatives. The scenario in 2015 is not expected to change much. That is because, at lower growth pace, Beijing is likely to focus more on domestic economic reforms rather than going aggressive on leadership ambitions.



mooted in 2002 and saw coming into effect first on 2010. In 2015, CAFTA may gain momentum. China is set to launch the fund-raising for ‘China-ASEAN Fund’ on Investment Coopera-tion. The China Development Bank is also setting up a China-ASEAN special loan for infrastructure development. Further, China-backed AIIB plans to provide financial support to regional infrastructure projects and prioritise ASEAN connectivity. China-ASEAN Expo 2014 saw Chinese government and the ASEAN sign an MoU worth about $8.1 million on disaster man-agement, to provide humanitarian assistance to help countries affected by disasters.

In taking lead on setting up these initiatives in the region, China continues to set up a framework for political clout as well. This raises significant questions: Will a deeper

involvement add stability to the region or will it destabilize it? Regional coun-tries are wary of China’s engagement and assertions.

ASEAN Economic Community (AEC) originating from ASEAN Vision 2020, adopted in 1997, aspires to create a single market and production

base with a free flow of goods, services, investments, capital and skilled labor by 2020. If AEC is created on its set target period of December 2015, it may add credibility to this group. China may take lead position in AEC. The ASEAN since 1967, has been the most significant multilateral group in Asia. Ironically, it never gained teeth to handle serious economic or security challenges, including disputes in the SCS. There is no formal mechanism yet established to facilitate cooperation or sort out differences. In 2015, the script may not be any different unless ASEAN countries, a region of 600 million people, together work in pooling of funds and gaining an equal say on matters. Regional togetherness remains a product of good governance, equal economic strength of nations, robust coordination and structural capacity; ASEAN has to work on all.

asian forums themselves laCk the

desired degree of politiCal and legal

weight to give shape to beijing’s initiatives. the

sCenario in 2015 is not expeCted to

Change muCh


mar. Hence, it becomes imperative to focus on the genesis of BCIM-EC, which though at its nascent stage, has a strong potential to augment China’s economic prowess and regional might that can be equated with greater opti-mal and strategic gains.

A New Economic ‘Silk Route’ in the Making

The inception of ‘BCIM-EC’ was initially conceived in 1999 in Kunming, and was called the ‘Kunming Initiative’, wherein the aim was to establish bilateral trade and investment along the old Southern Silk Road, linking the Bay of Bengal with India’s Northeastern Region (NER), Bangladesh and Myanmar to Southwest China through deeper integration of its constituent

economies. Founded under Track-II framework, the idea was mooted by following institutions from the BCIM countries-namely, the Centre for Policy Dialogue (CPD) in Bangladesh, Yunnan Academy of Social Sciences (YASS) in Kunming, China, the Centre for Policy Research (CPR) and the Institute of Chinese Studies in India and the Ministry of Border Trade of Myanmar.

The agenda behind this initiative was to foster greater connectivity and regional cooperation by making it a growth quadrangle or regional Eco-nomic Development Area (REDA) and use the region’s untapped resources. In that, China and India’s technologi-cal sophistication, labour efficiency and better infrastructure would be

equated with that of Bangladesh and Myanmar’s rich unskilled and skilled labour force and basic technological assets. But the inspiration to formal-ise sub-regional BCIM was led by the success of other growth zones such as the Greater Mekong Subregion (GMS) and the Southern China Growth Trian-gles and the Growth Triangle compris-ing Johor State of Malaysia, Singapore and the Riau Islands of Indonesia.

With its slow and steady functional pace, the BCIM initiative has gradu-ally surfaced on the regional sphere with its concentrated focus on achiev-ing cooperation, connectivity and ex-change. In 2011, emphasis was laid on building greater connectivity by BCIM economic corridor, through railways, highways, personnel and information flows, tourism, energy links and peo-ple-to-people contact. Having a long term goal of comprehensive and sus-tainable development, the BCIM-EC is mainly designed to convert the advan-tages of political, geographic and eco-nomic complementaries into coopera-tion and sustainable growth for smooth goods’ flow, sound governance, social harmony, mutual benefit and common development. The advantages that emanate for China-the largest manu-facturing exporter–are Myanmar, that serves as a primary goods exporter and storehouse of abundant cheap labour, India as a leading services exporter and Bangladesh as service exporter as well as low-end goods manufacturer. Thus, this meaningful connectivity ap-proach seeks to ease market access of goods, services and energy, elimina-tion of non-tariff barriers and better trade facilitation through investment and infrastructural development.

The potential regional growth zone and the intrinsic high-level interac-tions have transformed the nature of the BCIM forum from ‘Track-II’ to ‘Track-I’- elevating the scope of the re-gional collaboration. In this backdrop, a solid foundation in this initiative was laid by the Kunming to Kolkata (K2K) Car Rally in February 2013 via Kolk-ata, Dhaka, Imphal and Mandalay to Kunming, setting the stage for the pos-sibility of actualising the BCIM-EC.

China needs to aChieve seCurity and stability

along the region for its development and henCe

it has been repositioning yunnan from a peripheral

provinCe to the Centre of various Cross-border

eConomiC networks

countries- ‘Bangladesh, China, India and Myanmar’ or ‘BCIM’. This multi-modal corridor project intends to con-nect and enhance the cross-border flow of people, goods and services in these four countries, dismantling the physical borders that restrict closer connectivity.

Since its inception in 1999, the BCIM initiative has been a non-functional body as that of SAARC. But despite its non-functional character, what makes BCIM a potential regional forum is worthy to note. As it is argued that once BCIM becomes functional and concretised it will combine the China-India-ASEAN Free Trade Area, there-by, making it the biggest free trade area in the world. Herein, with the changing international scenario paral-leled with the rapid emergence of Chi-na in the world economic radar based on its purchasing power parity (PPP), BCIM offers an advantage for the ris-ing dragon. Being a potential growth zone, China’s interest lies in making it an ‘Economic Corridor’ (EC), which is mostly argued to be ‘China’s New Eco-nomic Silk Route’ in order to expand and strengthen its economic power. Parallel to its ‘Maritime Silk Route’, BCIM-EC provides China a platform to revive and explore the scope of its ancient silk route running from Chit-tagong to Yunnan through Myan-


INFOCUS|INDIA-CHINA|GEO-ECONOMICS

For the BCIM-EC project (Bangladesh-China-India and Myanmar-Economic Corridor), China pledged $40 billion to enhance Asian connectivity. Beijing also

launched the Asian Infrastructure Investment Bank to revitalize the BCIM process. The four parties met at Bangladesh in December 2014 to give the project a formal

institutional shape. What lies for India in BCIM-EC?

Amrita Jash

In the twenty-first century, ‘Mul-tilateralism’ has become the code of world politics. In this attempt,

regionalism and sub-regionalism has become the integral characteristic of functioning in the international sys-tem thriving on the mantra ‘all for one, and one for all’. This phenom-enon has led to the replacement of

BCIM CorrIdorConnecting the

Geopolitical dots


the command of politics by econom-ics. Conforming to this international behavioural politics, the rising Asian Giant ‘China’ is not left apart as it has readily adopted multilateralism as an important pillar of its foreign policy-whereby the Dragon seeks to enhance its power in the international system. In this systemic dynamics, China’s in-volvement in the multilateral forums has been expanding and evolving un-

der various political umbrellas, such as–ASEAN, EAS, APEC, BRICS and so on. Among these, the most notable factor is China’s emerging interest in the South Asian landscape, exemplary of which is its drive for upgrading its observer status to that of permanent membership in SAARC. To this ef-fect, China’s most nascent initiative has been the making of a sub-regional cooperative forum of the four Asian

January–February 2015 India-China Chronicle |27||26| India-China Chronicle January–February 2015


However, the BCIM initiative gained momentum with Chinese Premier Li Keqiang’s visit to India and interac-tion with Indian Prime Minister Man-mohan Singh in May 2013, which el-evated the BCIM process to inter-gov-ernmental level. In this process, the first official meeting of the Joint Study Group (JSG) of the BCIM-EC was held in December 18-19, 2013 in Kunming, which marked the official launch of the inter-governmental process of BCIM-EC. China pledged $40 billion to set up a Silk Road Fund to break the financial bottleneck in Asian con-nectivity. Following the institutional mode, the second meeting of the JSG was held on December 17-18, 2014 in Cox’ Bazar, Bangladesh. This meeting finalised a common agreement from all four countries to provide a time line to synthesise and finalize a com-mon report on ways to make progress on the EC, linking the four countries by mid-2015.

The significance of this sub-region-al cooperative forum is attributed to the 2,800 km long BCIM-EC, part of the historic Silk Route aimed to connect the Kolkata-Kunming route (Kunming-Ruili-Bhamo-Lashio-Man-dalay-Tamu-Imphal-Sylhet-Dhaka-Kolkata). The cooperation framework envisions to link some of the ports and key nodes, cities and growth cen-tres of the four countries through im-proving and developing key economic infrastructure. In the process, the EC is expected to unlock parts of the countries towards facilitating greater economic synergies. The corridor will cover 1.65 million square kilometres, encompassing an estimated 440 mil-lion people in China’s Yunnan Prov-ince, Bangladesh, Myanmar and Bihar.

China’s Strategic Interests in BCIM

With its economic stronghold in the BCIM initiative, China’s entails strate-gic interests in building the BCIM-EC as a successful growth zone. Unlike its ‘Maritime Silk Route’, in this initiative China envisages a modern network of high-speed rail, motorways, pipelines, waterways, ports, power supplies, fibre

optic cables and others. Beijing’s pri-mary driver is the economic necessity which it plans to attain through greater interdependence. The advantage lies in making the BCIM-EC-China-India Free Trade Area which holds greater economic prospects and optimal gains for China. To fulfil its interests, China has launched the Asian Infrastructural Development Bank (AIDB) in Beijing to revitalize the BCIM process and fetch the optimal gains by building the Corridor.

The larger goal is to achieve great power status by expanding the global role and influence through multilateral

institutions. China aims that with physical connectivity, the regions will not perceive China as a threat and China would be able to make its stronghold in South Asia. South Asia is where India stills maintains a dominant position and China is keen to make inroads.

It is imperative for Beijing to achieve security and stability along the region for its development and hence it has been repositioning Yunnan from a peripheral province to the centre of various cross-border economic networks.

Yunnan’s strategic geographical location provides for natural advantage to connect to the greater economic zones in both Southeast and South Asia. The stability and security along the borders through multilateralism is significant for Beijing and BCIM- EC makes a good taste case for emerging China.

Amrita Jash is a doctoral candidate at the Centre for East Asian Studies, School of International Studies,

Jawaharlal Nehru University, New Delhi.

the bCim-eC, 2,800 km long, is designed to Convert the

advantages of politiCal relations, geographiCal proximity and eConomiC

Complementary into dividends of Cooperation


India’s Concerns of MSRIndia has shown apprenhensions

towards China’s invitation of MSR proposal, primarily because of lack of clarity about the economic and trade designs, infrastructural linkages and above all the larger strategic motiva-tions. India’s concerns to the China’s MSR is in the background of its own broader security and economic impact and their implications for the overall national interests. MSR conceptu-ally intertwines with India’s vision of an Indo-Pacific neighbourhood and even though it lies in the economic maritime boundary vision of India, the lack of clarity and the regional strategic implication is a concern for India.

China is attempting to create eco-nomic relationships with ASEAN countries through trade, port and continental land bridges to counter the US influence and draw ASEAN and littoral Indian Ocean within its sphere of influence. Infrastruc-ture investment and maritime com-merce is important for China to stimulate its domestic economic growth. From Indian perspective, the concern is related to broader geo-stra-

tegic implications particularly in the Indian Ocean. The strategic objectives of MSR raises questions on Chinese real intentions. China has steadily expand-ed its influence in the Bay of Bengal and Arabian Sea by building ports in Sri Lanka and Pakistan. It is helping build Sandia Deep Sea port in Bangladesh and is carrying other Indian Ocean littoral engagements through a strat-egy generally referred to as ‘String of Pearls’. Pakistan, Bangladesh and Sri Lanka has pledged support to MSR initiative as part of the overall Asian Security Plan. India is concerned that countries like Bangladesh and Sri Lanka will get drawn into the Chinese orbit. One of the reasons for the re-gional outreach of India is to prevent such a potentially disturbing develop-ment by restabilising Indian credibil-ity with its neighbours.

Indian concerns emanate from the architecture of MSR and its proposed linkages to Chinese land bridges that would push India to straddle from West to East. On the West, is the proposed China-Pakistan Economic Corridor that would link the rest-less Xinjiang province of China with Chinese developed deep sea port at


INFOCUS|INDIA-CHINA|MARITIME

In China’s dream of establishing ‘Indo-Pacific era’ with India, the interests may not be shared. The architecture of China-backed Maritime Silk Route does not augur

well with India’s strategic interests. Find out how.

China’s Grand Strategy for

High SeasAkshita Mathur

China has proposed to revive the centuries’ old ‘Silk Road of the Sea’ into a 21st century

Maritime Silk Road (MSR). The MSR initiative is a channel for Beijing’s grand strategy; MSR aims to seize the opportunity of transforming Asia and creating space for itself. The success of the MSR initiative or China’s ‘maritime renaissance’ will be extremely consequential to the region’s future stability and global peace.

The thrust on reviving ancient mar-itime routes is Beijing’s first global strategy to improve connectivity with Southeast Asia, South Asia, West Asia and even Africa. By building a network of port cities along the Silk Route, Chi-na is seeking to link to the economic hinterland. The idea of MSR was first mooted when President Xi Jinping presented the concept in a speech to Indonesia’s Parliament in October 2013. The five key elements of the MSR are policy coordination, connec-tivity, trade and investment, people-to-people links and finance of growth.


Southeast Asia, the idea is receiving greater acceptance.

If Corridor project fructifies, it would mean enhanced trade and con-nectivity. It will also mean that China will upgrade infrastructure and port facilities in Bangladesh and Myan-mar. This later could become impor-tant trading hubs. With three major neighbouring countries coming incre-mentally within Chinese influence and Myanmar becoming a major energy transport hub security of the Bay of Bengal, might create major strategic challenges on the Eastern sea board of India and may lead to a direct confrontation with the PLAN.

Maritime DistressMSR is couched largely as an

economic initiative, however, maritime space in the Indian Ocean Rim (IOR) is likely to be contested despite being conceived as ‘Global Commons’. Important regional and extra-regional actors such as India, China, Japan, Korea and the US among others, would like to ensure that sea lanes of communications which are vital to national growth and development remains open and not manipulated by contending powers.

The logic of IOR becoming a con-tested space is also dictated by views of Chinese leaders who believe that the growth of the economy and contin-ued dependence on natural resources would have to translate into expansion of Chinese naval power in the long run, requiring capabilities to accomplish missions in the IOR as well. This in fact, is the rationale that is driving the PLAN to extend its operational range from ‘near’ and ‘middle’ seas to ‘far seas’ that stretch to the East of Indian Ocean extending to the East coast of Africa. It is this broader strategy of projecting power up to and beyond 1000 nautical miles from its territo-rial waters that is behind the growing focus on maritime force development. What not is ruled out is the possible deployment of nuclear attack subma-rines and carrier based task forces in IOR by 2020, along with potential na-val base set-ups in the Indian Ocean.

For India, these projections are by no means small. The Indian political and strategic establishment sees the Indian Ocean as an area of Indian domination and influence. Just like the Chinese, India needs to protect its core interests such as trade, economy and resources. Chinese influence over a period, could extend up to West-ern Pacific, South China Sea, Eastern

Mediterranean, the Central and South-ern Indian Ocean, on islands such as Diego Garcia, Madagascar, Mauritius, Reunion and Seychelles. It could also be inclusive of South Africa and Aus-tralia as they dominate the Southern approaches of the Indian Ocean. As India begins to interact with the IOR powers off its own coast, shaping of future maritime environment compe-tition will be manifested.

Given the dilemma sourrounding India’s position on the MSR, maritime cooperation between the two countries seem bleak. India has proposed and alternative “Project Mausam” which aims to re-construct maritime linkag-es in antiquity and has a geopolitical context to it.

India could follow a two-pronged strategy. It could deepen its economic linkages through MSR and draw China into major infrastructural investments. Second, it could hedge the MSR strategy and continue to engage China in benign exercises in the maritime domain.

india is apprehensive of china’s invitation on

Msr proposaL, priMariLy because there is aMbiguity

with regard to econoMic and trade designs,

infrastructuraL Linkages and above aLL, the Larger

strategic Motivations.india’s concern is reLated to broader geo-strategic iMpLications particuLarLy

in the indian ocean

Akshita Mathur is an Associate Researcher at National Maritime Foundation, Delhi.


INFOCUS|INDIA-CHINA|MARITIME

Gwadar. Indian apprehensions cen-tres around the proposed corridor passing through Pakistan Occupied Kashmir (PoK), a disputed Indian ter-ritory. The road rail communications will allow China to make strategic moves in PoK. Given its military and nuclear collusion, this would be a se-rious development with major impact on India’s security. Once the corridor develops (year 2019-20) Gwadar will become an important commercial hub for both China and Pakistan. This pro-vides China an access to the Persian Gulf and is in proximity of the pro-posed Indian developed Iranian port, Chahbhar (40 NM) which will increase its ability to support both naval as well as commercial activities in both the South Arabian Sea and the Western Indian Ocean. In all likelihood, it might be developed as a possible future naval and communication base en-gaging the PLAN (People’s Liberation Army Navy) directly into the Indian Ocean. Therefore, despite the Chinese map showing MSR bypassing Paki-stan, geopolitical realities and huge infrastructural investments clearly indicate it to be a part of the over-all strategy of China, Pakistan not

being highlighted on the MSR map could have been a deliberate effort by the Chinese to prevent fierce Indian reaction.

High Tensions on Western Sea Board

Chinese facilities along the Western Sea board has the potential of presenting naval threat scenario, together with the Chinese forays in Bay of Bengal. This will force India to

develop additional access points and facilities astride the proposed Chinese Silk Road including Gwadra/Mekran Coast. India will have to work with Iran to upgrade facilities in Chahbhar and work closely with regional countries along the proposed route to ensure credible Indian presence and safeguard commercial interests. Lastly, it also means that India will need to spend more on long haul vessels to ensure greater endurance and sustainability for its power projection and expeditionary roles. This will lead to not only a major recasting of plans from the existing force, but a nuanced shift in the focus. These reasons deter India from being enthusiastic for the Chinese MSR proposal.

The BCIM Corridor (Bangladesh, China, India and Myanmar) proposed to connect India’s north-east with Chi-na’s Kunming province through road and then railway, packs in several se-curity concerns too. The corridor’s connectivity is through India’s restive Northeast. Earlier, India was luke-warm on this project but with Prime Minister Modi’s push for improved economic and cultural linkages and connectivity with the Northeast and

in the backdrop of chinese ‘Msr’ proposaL, india

wiLL need to spend More on Long hauL vesseLs to

ensure greater endurance and sustainabiLity for

its power projection and expeditionary roLes. this

wiLL Lead to not onLy a Major recasting of pLans

froM the existing force, but a nuanced shift in the focus


attempt to delink the political and economic issues and to improve trade and investment ties with China. India needs massive investment in infrastructure and China has both the funds and the expertise to invest in these areas. This can only be beneficial to India’s economy and ultimately for income and employment generation in India, which is after all the Government’s goal of ‘vikas’.

Q: There is an increased focus on reviving the ancient silk corridors in Bangladesh, China, India and Myanmar (BCIM) to boost trade and investment. How are Sino-Indian companies reacting to this development? Will it turn out be a

game-changer in increasing trade across border regions?A: The silk routes and corridors are definitely a game changer, as they will vastly improve the ability to trade and transport goods, services, ideas and people across the many countries of Central, South, South-east and East Asia. Indian companies must, of course, plan to benefit from these developments but whether they actually do so is dependent on the Indian Government’s view of India’s participation in these initiatives. As of now, that view is not clear, and I do hope that this is not another bus that India will miss.

Q: With PM Mr. Modi going aggressive on the foreign policy/ diplomatic forefront, how do you see economic relations between the two countries panning out in 2015 in relation to other countries in the Asia-Pacific region.A: The Prime Minister has started with bold and imaginative initiatives with regard to our neighbours, but on the China front, a clear policy is yet to emerge. India has reacted very cautiously to the Chinese invitation to India to join the Maritime Silk Road, for example. It seems that fears of economic domination by China and/or security concerns (or both) are playing a somewhat excessive role in creating such an attitude of caution if not reluctance. But on the contrary, India has many cards to play where Indian companies and the Indian people can benefit by being linked more closely to the markets and production centres across all of Asia. India must of course strengthen its own economic capabilities, but whilst doing so must follow a planned approach to integrate itself within an increasingly inter-linked and fast-growing Asia. Failure to do so will mean that in years to come we will find that our neighbours might have outpaced us in many ways. Development and security must go hand in hand.

do not reflect what difficulties Indian businessmen actually face in China, or vice versa, which are quite unique. For example, Chinese businesses face problems with the Indian bureaucracy in obtaining visas, especially for research or academic personnel. Amongst our officials, there tends to be an atmosphere of suspicion regarding Chinese investment proposals. In addition, the Chinese are unfamiliar with the problems and lack of reliability of Indian electricity supply and delays in logistics and difficult cross-province transport of goods due to complex tax rules. Equally, Indian businesses find it difficult to deal with the often non-transparent and vague Chinese rules and regulations at the central and provincial levels. Perhaps the biggest problem is the unfamiliar language and the huge lack of Chinese-language translators and interpreters available within India for the use of travelling Indian businessmen. This leads to Indian business people being unable to deeply understand the Chinese market and consumer trends and therefore to create products for it, or to hire Chinese people who can do this for them. If this had been done better, we would not have such a large trade deficit with China. In contrast, Chinese businesses are even making and selling images of Indian Gods for every conceivable festival in India! Q: To what extent does the issue of border mistrust cause an adverse impact on trade relations?A: These issues definitely cast a pall on Sino-Indian economic relations, since they condition the bureaucracy in India to be wary of Chinese investment and of its citizens. But even with the border issues existing as they do today, I cannot see why trade and investment cannot be improved considerably. After all, China has excellent and extensive trade, investment, tourism and educational relations with Japan, Vietnam and Taiwan, though all of them have serious political issues with China. India should certainly

Comprehensive eConomiC engagement with China in

goods, serviCes, investment, student exChanges and tourism will aCCelerate

india’s development. after all, it is inherent eConomiC

strength that lies at the heart of seCurity


INFOCUS|INDIA|INTERVIEW

“Silk Route will be a Game

Changer”

Q: Chinese companies are moving up the innovation ladder, adopting sophisticated technologies and becoming less of a manufacturing hub. In addition, minimum wages are rising. In this background, would 2015 be the end of the ‘Made in China’ era?A: No, 2015 will certainly not be the end of the ‘Made in China’ era. It is true that wages in China, especially in the eastern seaboard, are rising rapidly. There is also a strong move by the Government to upgrade the level of Chinese industry to become more value-additive through modernisation, R&D and innovation. However, these moves will take considerable time to work their way through the system. Some of the manufacturing units where

China is too costly have already moved to inland provinces of China or to Vietnam, Cambodia, etc. But wages in central and western provinces of China are still low, and the manufacturing being relocated there will remain competitive for several years, especially since Chinese infrastructure and transportation logistics is excellent.

Q: In the latest World Bank report ‘Ease of Doing Business’, ranked on several indicators, China sits at 90th position, compared to India which is on 142th position. What is your view with respect to difficulties faced by Chinese firms while starting a business in India and vice-versa? A: These reports usually are written with a Western perspective and often

Mr. Ravi Bhoothalingam, Chairman of Manas Advisory, an executive coaching firm and business consultancy service for Indian and Chinese companies, shares with Urmila Rao, his views on the unique challenges that the two neighbours face in boosting their economic relationship. It ranges from lack of language translators to complex tax rules and the familiar terrain of political mistrust that sets back economic ties. Mr. Bhoothalingam, an Honorary Fellow of the Institute of Chinese Studies, India, shares more views.


tual suspicion and strategic uncer-tainty pervades the relationship. The military modernisation seen in both the countries reflect a recurring sense of threat perceived from each other, that builds into the security dilemma inherent in the relationship. China’s assistance to countries like Pakistan in its strategic sectors has not helped the trajectory of India-China relation-ship either. The extent of economic and strategic influence that China wields in the Asian landscape is significant, even impinging on India’s neighbourhood. Though the nature of China’s econom-ic investments in South Asian coun-tries is largely commercial and civilian in nature at present, they are seen as having potential military applications. The geopolitical as well as the geo-eco-nomic spaces of India and China criss-cross each other, necessitating sober analyses from both sides regarding the feasibility of finding more conver-gences in the relationship. There are increasing debates on whether China really sees India as threat. However, there seems to be larger acknowledge-ment that India’s intentions to partner

Though The naTure of China’s eConomiC

invesTmenTs in souTh asian CounTries is largely CommerCial and Civilian in naTure aT presenT, They are

seen as having poTenTial miliTary appliCaTions. There

are inCreasing debaTes on wheTher China really sees

india as a ThreaT

geopolitics of Asia with implications for the global order at large. With China adopting free market economy, various dividends have been seen in China, most particularly in the mili-tary sector. The military moderniza-tion of any aspiring power is guided by the economic rise of a country and when a country becomes a trading na-tion, a sustainable military might is seen as required to deter any potential disruption to the economic growth of the country. Simultaneous with the economic rise of China has been an effort by the Chinese government to project a ‘peaceful rise of China’ to the rest of the world. It has invested in diplomatic efforts to project its rise as being commensurate with the peace and stability of the international sys-tem. China wants to be seen as work-ing towards the internal development of the country and its people with no negative repercussions for the region and beyond. However, the rise of Chi-na has affected its strategic behaviour in a way that has invariably increased the threat perception of its neighbours in East Asia, Southeast Asia and South Asia as well. China’s rising capabili-ties and its intentions to claim mari-time boundaries in the South China Sea and the East China Sea have been seen as major signals of its aggressive-ness in the region. Even as economic interdependence between China and other countries remain a major factor in their relations and is often seen as a deterrence against escalation of con-flicts in the region, unresolved bound-ary dispute with India and incidents of border incursions by the Chinese have raised concerns in India and increased the level of threats perceived from a rising China.

China’s Rise and Strategic Interpretations

China’s unmistakable develop-ments in major sectors of power in-dicators has led to increasing discus-sions around the world about China’s strategic intentions and its aspirations to become a global power. Emerging powers in Asia like India and extra-regional powers like the United States

of America are reflecting the repercus-sions of China’s rise in their strategic documents. Non-alignment 2.0 in India’s case has clearly discussed the complex relationship with a rising power like China in its vicinity. While both India and China cannot ignore each other in terms of economic op-portunities to be gained from each other and hence the need for stability in the relationship, a history of mu-


INFOCUS|INDIA-CHINA|FOREIGN POLICY

Despite the economic content of the relationship, there is enough clarity that India, the US and most of the Southeast Asian countries do not want to see the rise of an aggressive China that could destabilise Asia

Managing the Geopolitical Implications of China’s

Economic RiseDr. Monish Tourangbam

China’s economic rise and its dividends across multiple di-mensions including its mili-

tary modernisation and continental as well as maritime approaches have spawned debates and deliberations regarding the nature of China’s rise. India has had a complicated relation-ship with China but it is a relationship that needs to be managed for the sake of regional stability. China’s economic rise and the complex interdependence

that it has built with a host of countries including India necessitates a sober analysis of the changing geopolitics in Asia,which also involves extra-region-al actors like the United States. Hence, it becomes imperative to not only as-sess the geopolitical implications of China’s economic rise but also to ana-lyse how relations have been managed and how it can be better managed for not only regional but also global peace and stability.

China’s economic boom has un-doubtedly impacted debates and de-liberations pertaining to the emerging



maritime trade corridors, the increas-ing activities of the Chinese Navy, the Indian Navy as well as the continued dominance of the US Navy, and the emergence of threats from non-state actors in the high seas all lend more credence to discussing the opportu-nities for cooperation and also the challenges of rising possibilities of maritime competition and clash.

Economic Dynamism in Asia: Geopolitical Implications

The internal dynamism in India and China and the need for resources for the continued domestic growth in both the countries automatically leads to increasing external ambitions that are redefining the debates over continental as well as maritime trade. The dynamism of Asian markets is leading to various multilateral and bilateral forums aimed towards economic structuring of the region. And, the unmistakable rise of China as an economic behemoth has been central to these webs of economic

linkages and interdependence developing in the region and beyond. Hence, as regional and extra-regional countries manoeuvre the complex geo-economics, the invariable centrality of the China factor in forums including as well as excluding China will be paramount. In a globalised world determined by increasing levels of complex interdependence, coalitions and partnerships will be fluid rather than ones based on structured and cemented alliances. Therefore, even as India and its prospective partners in the region talk about shared strategic interest, countries’ strategic visions at the end are dictated by their own interests and striking unison among them is easier said than done. As debates and deliberations abound on the relative decline of the United States, neither the United States is declining so fast, nor is China rising so fast as to topple the supremacy of the United States. In this complex uncertainty prevailing in the global system, striking common grounds

and building habits of cooperation on setting rules of the road and adhering to them attain paramount importance. And, the management of China’s rise seems to be at the centre of both Asian regional and global geopolitics. However, even as every country gives primacy to the management of China’s rise, China is itself very much involved in managing its own rise in the international system.

Hence, the globalised world demands a more shrewd game of manoeuvring amidst the minefields of emerging geopolitics and geo- economics with opportunities of co-operation and challenges of potential conflict.

Dr. Monish Tourangbam is Assistant Professor at the Department of Geopolitics and International

Relations, Manipal University, Karnataka



with other countries in the region and beyond to manage China’s rise are be-ing watched keenly in Beijing. India’s rising strategic capabilities and aspi-rations make it a protagonist in the changing dynamics of global politics, and the centrality accorded to India’s role in US re-balancing strategy to-wards the Asia-Pacific testifies India’s significance and by corollary, the rel-evance of India-China relations. How-ever, great power competitions and the various permutations and combi-nations inherent in them are anything but linear.

Managing China’s Rise: Strategic Responses

The strategic logic of increasing engagement between India and the United States is to be seen in the para-mount importance given to the ration-ale for managing China’s rise. Such a strategic rationality is clearly seen in the convergence between India’s ‘Look East’ Policy (now elevated to ‘Act East’ Policy) and America’s re-balancing

strategy, both to a large extent depend-ent on the strings of partnerships built with Southeast Asian countries that are wary of China’s strategic rise. Both of these are broad-based policies that see each country’s national interests through a more stable and secure Asia with interdependent economies built on the principle of mutualism. But at the same time, both also aim at pre-cluding the rise of an uncertain Asia with an aggressive power free to resort to unilateral moves in the region.

The emerging geopolitics in Asia is rendered more complex by the in-creasing economic interdependence that exists between China and these countries, that has nevertheless failed to translate into greater strategic trust. Despite the economic content of the relationship, there is also enough clar-ity that India, the US and most of the Southeast Asian countries do not want to see the rise of an aggressive China that could de-stabilise Asia. Econo-mies in this globalised era are both too intertwined and interdependent

for politics of ‘curtains’ and ‘walls’ to be played à la the Cold War. Moreo-ver, America’s complex tango with China leaves India nervous and con-cerned about the prospects of a power condominium between a power in relative decline and a power seeing an undoubted rise. India is wary that Chi-na’s relatively increasing power vis-à-vis the US could lead to the US accom-modating China to the detriment of India’s interests. Thus a more adept handling of relations is required where India’s strategic partnerships with re-gional and extra-regional countries are augmented to enable a more transpar-ent and stable Asia to grow. However, such strategic signalling cannot come at the expense of relations like that of India-China that is consequential not only for the regional but global stabil-ity. Effective communication needs to be maintained between the two coun-tries because military modernizations that are justified as defensive from one side might be seen as offensive on the other side. The increasing salience of


XUAR will also ignite the similar tin-derboxes in other ethnic minority re-gions like Tibet, undermining the na-tional unity and stability.

New Silk Road, New AmbitionsAt the same time, from an economic

perspective, China wants to narrow the developmental gap between its prosperous Eastern coastal provinces and its relatively deprived Western inland provinces. With respect to external trade, China wants to explore new markets as well as maintain and expand existing ones. China would like to move away from its trade dependency on the US, which is facing a relative decline in its economic fortunes. China also wants to diversify its trade connectivity from seaborne to inland routes. This attempt to diversify is in response to excessive dependence on the risky sea lanes for trade in commodity and energy, especially in context of the US’ thrust on the vital maritime Indo-Pacific region.

All these motivations also come under the larger ambit of Chinese President Xi Jinping’s vision of the “Chinese Dream”, which aims for the all-round rejuvenation of the Chinese nation. The Silk Road can therefore, act as a symbolic instrument and vehicle for China to implement and propagate its vision of a return to pre-eminence. The renewal of the old Silk Road was planned way back in the 1990s after the collapse of the Soviet Union. However, it became at least partly manifested only when the “Western Development Policy” was launched as a predecessor to the NSREB in 2000 to solve the uneven

East-West development in China.Because of its strategic significance,

the NSREB has become an integral part of China’s diplomatic practice of late. The diplomatic visits by Xi and the Premier Li Keqiang and their en-gagement with Eurasian leaders over the past year have been well demon-strative of this trend. It was during Xi’s first visit to the Central Asian coun-tries in September 2013 that he first espoused the concept of the NSREB in the international arena. During this visit, he presented a five-point pro-posal on the NSREB to these coun-tries at the 13th annual Heads of States Summit of the Shanghai Co-operation Organization (SCO) in Bishkek, Kyr-gystan. These included strengthen-ing policy communication, road con-nections, trade facilitation, monetary co-operation, competitiveness and people-to-people relations. China has also extended its Silk Road diplomacy to countries in South Asia, West Asia and even Europe during the visits of Xi and Li to the countries in these regions over the past one year.

The groundwork necessary for the establishment of the NSREB has started gaining momentum a year after Xi administration came up with the proposal. The NSREB’s main route starts from Xi’an, and passes through XUAR, Central Asia, West Asia, Eastern Europe and Central Europe to Venice. Therefore, China’s key work on NSREB abroad starts in Central Asia. Over the past couple of years, China has established strategic partnerships with all the five Central Asian states. New gas and oil agreements have been signed by China with Kazakhstan and Turkmenistan, respectively, and the China-Central Asia gas pipeline project has been further expanded. Apart from these, a China-Eurasia Economic Fund has been established and the SCO Agreement on Facilitation of International Road Transport was signed after ten-year-long negotiations. China has also signed an agreement with Serbia, Hungary and Macedonia for jointly building a land-sea express passage linking China to Central and Eastern Europe.

nevertheless congruent with contem-porary strategic considerations.

China has strong domestic security and economic imperatives to breathe new life into the old Silk Road. Pri-marily, China wants to ensure nation-al unity and stability in its Western territories. The Xinjiang Uyghur Au-tonomous Region (XUAR) of West-ern China has considerable volatility in its security setting. This is because segments of the native Uyghurs, an ethnically Turkic population, has in-creasingly been turning hostile to the growing presence and influence of Han Chinese in XUAR. This hostility has been manifested in terror attacks by Uyghur groups both against the Han settlers and their assets, as well as the government, which is perceived to be subjugating the Uyghur identity and repressing their Islamic faith. The vicious cycle of violence by Uyghur groups and the resulting crackdowns by the state have resulted in the grow-ing precariousness of the security situation in XUAR. The Chinese gov-ernment fears that any instability in

Central asian region is the hub of the eurasian geopolitiCal

setting. by seCuritizing CommerCial routes, China

plans to transform the regional seCurity as well as geopolitiCal destiny of

adjoining Countries like india


INFOCUS|INDIA-CHINA|GEO-POLITICS

An ambitious China is leaving no stone unturned for the development and sustainability of the ‘New Silk Road Economic Belt’ (NSREB) across continental Eurasia, even as the ‘three evils’–of international terrorism, religious extremism and ethnic separatism– threatens to turn the picture grim. The NSREB requires peace and stability in Eurasia for its smooth development and operation.

Anand V

The Silk Road helped in shaping the history of the Eastern and Western ends of the Eurasian

landmass through centuries of inter-actions, and this in turn shaped the history of Central Asia itself. China had a dominant position in this politi-co-economic system, especially during the Tang dynasty, with the tribute sys-tem guaranteeing safety of the routes. However, this overland trading route became redundant after the discovery by the Europeans of new sea lanes of communication between Europe and Asia. This led to the colonization of Asia by the European powers and the eventual “Century of Humiliation” episode in China’s history, whereby its long held dominance came to an end by the 19th century. As a result, it can be seen that China’s over-arching ambition with reviving the old Silk Road into the New Slik Road Economic Belt (NSREB) has deep, historical linkages, which are

Revival of the Silk Road:Implications for Eurasian Geopolitics



obvious reasons. On the other hand, the development of the NSREB itself may turn out to negate, to some extent, the threat which may seek to undermine it. The development of the renewed Silk Road may not only solve the domestic economic disparities in China, but also the inter-regional developmental imbalance between Central part of Eurasia and its Eastern and Western rims. In short, the establishment of the NSREB may itself result in the creation of a self reinforcing system in Eurasia, integrating developmental and security ends and means.

Implications for IndiaThough the main artery of the

NSREB is not planned to pass through India, the setting up and the securitization of the route will have considerable implications for India. The plan for establishing Bangladesh-China-India-Myanmar (BCIM) multi-modal corridor from Kunming to Kolkata through Mandalay, Chittagong and Dhaka, though it precedes the NSREB by a decade, cannot be seen as separate from its larger futuristic vision. This is because, even though it started as a track-two initiative in the 1990s, it was taken over by India and

China at the official level for planning and implementation only after the Xi administration came to power and Premier Li visited India in 2013.

In the case of the MSR, the competing strategic interests of both the countries in the Indian Ocean have resulted in India taking an ambivalent stance. In contrast, the economic interests and security concerns are shared for India and China with respect to the NSREB. Firstly, India is seeking membership in the SCO, the probable centre-piece of China’s securitization strategy for the NSREB. Secondly, Afghanistan is an area where Indian and Chinese security interests converge, as both countries want to keep the country stable for pursuing their reconstruction, mining and infrastructure investments. Thirdly, what Kashmir is to India, Xinjiang is to China when it comes to preserving the national unity and stability. In both these cases, threats come from the “three evils”. Pakistan’s connection to separatist and terrorist groups targeting India and Afghanistan is well established and is major point of contention between the two. Of late, it has also been revealed and acknowledged by China that Uyghur terror groups, in

addition to operating from Central Asia, have also been operating from the territory of its “all-weather” friend, Pakistan. This has led to China formally taking up the issue with Pakistan. The way NSREB is heading, it is certain that there could be more attacks planned against China, and this may lead to China increasingly pressurizing Pakistan to take serious action against terrorist elements on its soil.

Thus, the securitization of NSREB has the scope for effectively bringing China on the same page as India, the way the 9/11 fallout made the US toe the Indian line against terrorism orig-inating from Pakistan a decade ago. While it remains to be seen what role India will play in the NSREB as well as its securitization, it can be said that the country will stand to benefit from the initiative. Considering the bigger canvas, history seems to repeat itself as the Silk Road once again seeks to integrate the Eurasian landmass into a single developmental and security network.

Anand V. is a doctoral candidate at the Department of Geopolitics and International Relations, Manipal

University, Karnataka



China has further extended the ten-tacles of its Silk Road infrastructure into Western Europe. In addition to the Chongqing-Duisburg cargo rail link opened in 2011, the Chengdu-Lodz and the Yiwu-Madrid cargo rail links were launched in 2014. The NSREB, together with its sister project on the maritime realm, the 21st Century Maritime Silk Road (MSR) is worth US$21 trillion and will together encompass a market of 3.8 billion people across more than 50 countries. As a result, China is setting up a $40 billion Silk Road Fund, the country’s largest-ever inter-governmental coop-eration fund for financing projects in these two initiatives.

Threats to the SustainabilityThe NSREB requires peace and

stability in the Eurasian heartland for its smooth development and operation. For this to be achieved, China needs the partnership of each of the major stakeholders along this route. Most of the threats which exist in the region which will seek to undermine this initiative are shared, and therefore requires a joint effort in confronting it. The “three evils” of international terrorism, religious extremism and

ethnic separatism are understood to be the biggest threats to the establishment of a sustainable NSREB.

Of late, a string of terrorist attacks took place in China by groups affiliated to the Uyghur cause, including the Kunming knife attacks of March 2014 and the Urumqi suicide bombings of May 2014. The terrorist groups which are targeting China in general and XUAR in particular, have been said to have their safe havens along the NSREB, from the Ferghana valley to the tribal regions of Pakistan. In addition to this, the withdrawal of the US-led forces from Afghanistan has added to the volatility of the pivotal region encompassing the NSREB. China’s inclusion in the target list of the Islamic State of Iraq and The Levant (ISIL) has also heightened the threat perception for the NSREB plans. In this background, China has started its efforts to securitize the route. This pursuit of China was initially articulated during the Conference on Interaction and Confidence Building Measures in Asia (CICA) in May 2014 at Shanghai, where Xi called for the creation of an Asian led “new regional security cooperation architecture.” More recently, during

the 13th meeting of Prime Ministers of SCO held at Astana in December 2014, Li called for a new centre which would foresee future security challenges to Eurasia.

Since a joint effort is warranted to securitize the route, China will have to bring together the organizations which could cater to the security needs of the Eurasian region. The SCO does not have a joint security force structure similar to the likes of NATO and the Russian led Central Security Treaty Organization (CSTO). However, going by Li’s statement in Astana, the SCO seems to be only the nodal organization so far which will be capable of co-ordinating security co-operation between the nations and regional organizations involved in the future protection of the NSREB. Through the China-centric organization’s probable new role, China will certainly seek to recreate the tribute system-based co-operative security model for the old Silk Road from history.

This model will provide impetus for an enhanced regional security system in the Eurasia. Since the threats are shared, the resources for countering them will also be shared, with China assuming the lead responsibility for

China’s Gateway to the West

China’s infrastructure preparations for reviving the old Silk Road are also reflected in its domestic

developmental activities in XUAR. The region is seen as the gateway to the West, due to ethno-geographic and trade links with the Central Asian states. The Chinese government is planning to set aside $16.3 billion for funding the domestic infrastructure build-up towards the Silk Road revitalization. Apart from a comprehensive modernization of the region and their rail and road connectivity to the Eastern coastal cities, China is planning two Special Economic Zones in Kashgar and Horgos, which will also act as transportation hubs of the NSREB. In addition, the Lanzhou New Area is being planned as the first Free Trade Zone of this type in Northwest China, and the first on the historic Silk Road. Therefore, it can be seen that China has been directing its efforts at home to be in sync with its efforts abroad so as to facilitate the development of a shared base for setting up the NSREB.


BCIM Economic Corridor (BCIM-EC)

Substantial proofs of regional dis-parity in India and China are the Northeastern states of India and Southwestern regions of China re-spectively. For reasons more than one, the two respective regions of India and China could not achieve their desired potential in the past half-a-century. Cognizant of the pressing need to de-velop these underdeveloped areas, India and China seem to be pinning their hopes on the BCIM-EC (Bang-ladesh, China, India, Myanmar Eco-nomic Corridor). The other virtue of the BCIM-EC is that it not only aims to connect the two underdeveloped regions of India and China, but also the two immediate neighbours, Bangladesh and Myanmar, which have been struggling with under- development and poverty for the past several decades.

BCIM-EC is one of the many ini-tiatives taken or supported by India to address the challenge of regional disparity. The other initiatives include BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral, Technological and Economic Cooperation) and MGC (Mekong Ganga Cooperation). How-ever, BCIM-EC is the only initiative that includes both China and India as

with China but in India that is not the case. Economists often argue that India is an economy fuelled not by foreign trade but by domestic con-sumption, however, even on that parameter, such linkages are missing in case of India.

Japan, South Korea and Australia- major economies of the Asia-Pacific region–are not only prominent stakeholders in the Chinese economy but are also in the list of top ten trading partners of China. The US also has huge stakes in the Chinese economy and is in the list of China’s top five major trading partners. On mutual investments Japan, South Korea and Australia show encouraging trends with China.

In case of India, however, while China is the biggest trading partner, more than three-fourth of the total trade comes from imports (thus, the balance of trade is in China’s favour), with abysmal Chinese investments in India. Surprisingly, both Japan and South Korea do not even figure in the list of top five trading partners of India.

Clearly, India has remained aloof from the rise of other Asian powers and has not greatly benefitted from their economic capabilities so far, a trend that needs immediate course correc-tion. Nevertheless, recent advances in

trade ties and investment agreements with Japan offer a score of opportuni-ties. Visit by the Indian Prime Minister Modi to Japan in August-September 2014 was a good start in this regard. Japan has promised to invest in India, especially in the infrastructure sector, which is a welcome move. Addition-ally, India has also become one of the largest recipients of Japanese ODA (Official Development Assistance).

In comparison to Japan and South Korea, India and China seem far be-hind in terms of comprehensive devel-opment. Though it can be said that due to huge geographic size, India and Chi-na have not achieved a uniformly de-veloped state, but the fact remains that regional disparity has marred their success story.

BCIM-EC Is onE of thE Many InItIatIvEs takEn

or supportEd By IndIa to addrEss thE ChallEngE of rEgIonal dIsparIty

and ConnECtIvIty wIth thE nEIghBourIng

CountrIEs InCludIng ChIna, MyanMar and BangladEsh


INFOCUS REGION

India-China growth story seems incomplete because of the regional disparity and also the fact that the two economies cannot rise without having substantial linkages with each other and other countries on the eastern flank.

Dr Rahul Mishra

The rise of India and China has been phenomenal in the last Tbeen phenomenal in the last Tdecade, contributing to the rise

of Asia. Apart from India and China, Japan, South Korea and the ASEAN member countries, particularly Indo-nesia, have also contributed to the rise of Asia in the global system. Yet, being the two of the biggest countries in de-mographic, geographic and economic terms, with biggest armed forces in the world, these two giant Asian neigh-bours definitely have greater roles to play than the other countries.

India-China: Handshake for Regional Parity

Rise of India and ChinaTo a great extent, rise of India and

China, at least in economic terms, has not been influenced by each other. So far, both India and China have realised their goals without much economic in-ter-linkages. While in the case of Chi-na, such linkages are provided by Ja-pan, South Korea and Australia; in the case of India, such robust linkages are yet to evolve, primarily due to the fact that India is yet to achieve such strong trade, commerce and investment link-ages with the global economic sys-tem. For instance, while in the case of China-eight of its top ten trading part-ners have 100 billion plus trade figure

INFOCUS|INDIA-CHINA|REGION


of the key points of discussion during the meeting was on reviving the K2K (Kunming-Ruili-Bhamo-Lashio-Man-dalay-Tamu-Imphal-Sylhet-Dhaka-Kolkata) route. The route, which is more than 2500 km long, is part of the old Silk Route. During the meet-ing it was also agreed that each mem-ber country would provide their vi-sion of the BCIM-EC during the next meeting, to be held in Kolkata, India in 2015. Clearly, regular interactions among the leaders and the academi-cians prove that both India and China are keen to promote the BCIM-EC and help realise the stated goals.

Scholars, who accuse India of being a reluctant partner in the BCIM-EC, argue that India is not keen to go ahead with the project, as it is nervous of China’s rise. One cannot deny that mutual distrust, at least on a few issues, does prevail between India and China. However, instead of shying away from it and overlooking the matter, both India and China need to work on troublesome issues including

the boundary dispute and trade imbalance. One of the fundamental concerns for India has been prolonged India-China boundary dispute. During Xi Jinping’s India visit, Prime Minister Modi raised the issue and pointed out that such incidents affect cordial bilateral ties. The onus lies on China to ensure that the problem is resolved

with utmost urgency so as to allay Indian apprehensions. China, being the bigger partner, needs to ‘travel more than half’ to make BCIM-EC a reality. Taking such a step would not be a standalone and an exceptional move; in the 1990s China took such steps in materialising the GMS (Greater Mekong Subregional) initiative to improve ties with the Central Asian Republics.

China has resolved its land boundary disputes with almost all its neighbours including Vietnam, which is believed to be its old rival. Cooperation, trust and mutual respect are the two-way channels based on reciprocity.

Dr. Rahul Mishra is Research Fellow at the Indian Council of World Affairs, New Delhi. Views expressed are those of the author and

do not reflect the views of the ICWA

whIlE IndIa nEEds to BalanCE Its tradE wIth

ChIna, It also has to systEMatICally sEEk

ChInEsE, JapanEsE and south korEan forEIgn

dIrECt InvEstMEnts In kEy arEas suCh

as InfrastruCturE dEvElopMEnt, powEr supply,

sanItatIon, transport, EtC


INFOCUS|INDIA-CHINA|REGION

members at a sub-regional level. BCIM-EC, initiated in 1999, a Track

II dialogue process, was termed as the ‘Kunming Initiative’ in the beginning. With the convening of the BCIM Car Rally in early 2013, the initiative got a major fillip. Subsequently, in May 2013, when the Chinese Premier Li Keqiang visited India, further discus-sions were held in terms of strengthen-ing the BCIM initiative.

Subsequently, the Ministry of Ex-ternal Affairs, Government of India, established the Indian component of the Joint Study Group and involved the Indian Council of World Affairs (ICWA). ICWA convened a day-long seminar on BCIM-EC in early Decem-ber 2013, to ‘deliberate on numerous issues pertaining to various facets of the BCIM-EC particularly the ‘3 Cs’

namely: ‘connectivity’, ‘commodity’ and ‘customs’, that have direct impli-cations for India and the other partner countries of the BCIM-EC.

Later, on December 18-19, 2013, the First JSG meeting was held in Kunming, China, which was attended by representatives from the four gov-ernments, a range of academicians and enterprises. The meeting was a milestone in the BCIM process as it marked the official launch of the inter-governmental process of BCIM-EC. During the meeting, it was agreed that “the proposed Corridor could run from Kunming (China) in the East to Kolkata (India) in the West, broadly spanning the region, including Manda-lay (Myanmar), Dhaka and Chittagong (Bangladesh).” It was further stated in the meeting that, “With the linkages of

transport, energy and telecommunica-tion networks, the Corridor will form a thriving economic belt that will pro-mote common development of areas along the Corridor.”

In order to sharpen the attempts to make the BCIM-EC more effective, four primary areas were earmarked: physical connectivity, trade in goods, services and investment including finance, environmentally sustainable development and people-to-people contacts.

When President Xi Jinping, paid a state visit to India on September 17-19, 2014, the issues pertaining to BCIM-EC figured in the discussions between him and the Indian leaders.

The second meeting of the JSG was held at Cox’s Bazar in Bangla-desh on December 17-18, 2014. One

Six Conditions for a Successful BCIM-ECIn order to tap the full potential of the BCIM-EC, some steps need to be taken. It is in this context that six conditions may be listed:1. Mutual investments: more economic linkages are

needed to ensure that India and China grow together and shed the baggage of mutual distrust. During his India visit, the Chinese President Xi Jinping promised around US$ 20 billion investments in India, which needs to be converted into reality. Compared to the Chinese investments in other big economies of the Asia-Pacific–(Japan, South Korea and Australia) China’s investment in India is almost negligible. A massive trade imbalance, which is in favour of China, has posed further challenges for the bilateral ties.

2. More joint projects for infrastructure development: India and China’s recent initiative to establish the BRICS Bank (New Development Bank) and the Asian Infrastructure Investment Bank (AIIB) are two promising initiatives that have the potential to transform the underdeveloped patches lying in the territories of the member countries into growth zones. AIIB can be of great help in realising the objectives of the BCIM-EC.

3. India should seek support from Japan, South Korea, Singapore and Australia: As mentioned above, India has to partner with other major stakeholders of the Asia-Pacific in strengthening trade and investment inter-linkages, particularly with regard to developing its Northeastern states. BCIM-EC offers an unprecedented opportunity in engaging the major

Asia-Pacific economies such as Japan, South Korea, Australia and Singapore, which are also the key countries in infrastructure development and power generation projects.

4. Equitable outcomes: An essential requisite for mak-ing BCIM-EC a success is active participation and share of Bangladesh and Myanmar. The grouping must not be confined to the perspectives of India and China and at-tempts must be made to ensure that this sub-regional grouping remains equitable and a mutually beneficial project for all and involves Bangladesh and Myanmar in all respects.

5. More communications: Due to the lack of substantive people-to-people contacts, India-China relations have been mostly driven by their respective central governments. Unlike India’s border with Myanmar, Bangladesh and even Pakistan there are no ethnic communities (except Tibetans, which is a much complicated issue) along the two sides of the border that can effectively influence the relations. Therefore, there are no ‘bottom up’ pressures on the Government to bring more warmth into the border relations. More people-to-people contacts at all levels are needed to improve bilateral communications.

6. Settling India-China border mistrust: Last but not the least, there needs to be mutually agreeable resolu-tion to the boundary dispute otherwise it would be ex-tremely difficult for BCIM-EC to realise its fullest poten-tial. China should take the lead in resolving the bound-ary in a fashion that it is agreeable to both the parties.


China’s notion of ‘Rule of Law’ is considered cosmetic. Is President Xi ready to dismantle this notion, in a bid to improve China’s image? The next few years will be interesting to watch out, to view how the legal and judicial reforms will develop in Communist China.

Piyush Singh

In September 2014, the massive mass protests in Hong Kong evoked memories of the Arab

Spring movement. Thousands of pro-democracy protestors poured out on the streets to vent their grievance against the Communist Party of China. The protestors demanded that China must adhere to the Hong Kong Basic Law as was agreed in Sino-British Joint Declaration when British handed over the region to China in 1997. The root of the controversy is Article 45 which is being interpreted differently by Hong Kong and China. The swift crackdown of protests in Hong Kong by CCP who are rejecting the notion of “one country, two systems” brings forth the larger question of Rule of Law in China.

President Xi Jinping, since his ascendance to power, has repeatedly stressed on following the Rule of Law. He has categorically emphasized on adhering to the constitution of China and implementing it in a just and fair manner. However, the reality is quite different from the rhetoric. Actually, the Rule of Law, is nothing but Party’s endorsement of its authoritative mandate.

Cosmetic Judicial ReformsThe main purpose of the judicial

and legal reforms is actually designed to lend legitimacy to the Party rule,as opposed to usher in real change. The Chinese judiciary is under pressure from several fronts ranging fromadhering to the Party line, to tackling corruption and dealing with mass resignations, to name a few. In the sector of legal reforms, conviction rate in China is still one of the highest in the world. People are becoming increasingly tired of corruption and expect judiciary for a fair verdict.

The Fourth Plenum held in October, 2014 in Beijing focused primarily on Rule of Law and proposed many ideas for true legal reforms such as establishment of circuit courts under the direct supervision of the Supreme Court to stop local Party interference in judiciary, more professionalized and independent judiciary, selection of judges of higher courts from the legal fraternity as opposed to picking from the Party. These were some of the thoughts which were backed by the Party leadership. However, the political and law committees continue to remain powerful, mocking the Rule of Law. Xi’s focus on Rule of Law and constitutional supremacy is laced


INFOCUS|INDIA-CHINA|LAW

Umbrella Protest and China’s Unending Quest for

Rule of Law



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with deep flaws. Instead of the Rule of Law, ‘Rule by Law’ is the Party’s acquired tone.

The State interprets law to advance Party’s mandate. Efforts are geared towards promoting the Communist Party as an essential feature of the constitution itself, and thus making the current stance as part of the basic structure of the constitution. Though the Party, in public, has pledged allegiance to the constitution and the legal system, it continues to remain above the law and hostile to true constitutional development of the country.

President Xi has warned Party officials against advocating a Western style democracy in China. Since2012, many reformers, both within and outside the Party have been arrested and kept under house arrest. The present situation in China is reminiscent of the stance taken during the infamous 1989 event. Experts say that any sort of continuous mass protest in Hong Kong will lead to a chaotic situation and will be difficult to handle.

Time and again China has subverted the Rule of Law. In 1982, when the current Chinese constitution was being drafted, efforts were made by legal scholars to incorporate independent judiciary and basic human rights, but both never saw the light of the day. Subsequent efforts in 1999 and 2004 for the same, met a dark fate.

Beijing is attempting to salvage people’s belief in the Party, by hitting the ‘tigers’ in the Party namely, Bo Xilai and former security czar Zhou Yongkang on corruption charges and is trying to win people’s confidence. However, the act has evoked mixed response globally. Many experts believe that targeting both was more inline to remove opposition to President Xi within the Party rather than convicting them on actual corruption charges. In any case, President Xi’s ‘crack down’ on corruption has raised his popularity among the common people.

Another important issue emerging from implementation of legal reforms is economic development. Xi has

categorically stated that economic reforms are his top priority in order to catapult the country to a high-in come grade. He emphasized that the legal reforms are geared towards attaining this mammoth task.

Notion of Legal Reforms The offered justification of legal

and judicial reforms is a veneer for the Party to affirm its dominant status. The Party is institutionalizing the type of governance it deems fit, regardless of the constitution. In doing so, the Party believes that the basic structure of the constitution will commensurate to its actions and hence would become difficult to amend. Building up Rule of Law with socialist characteristics

is the main goal of the Party. It has aggressively rejected that Western style democracies and Western thoughts of Rule of Law will not endure in China and will only lead to the country falling into chaos.

The next few years will be interesting to watch out in the sphere of development of legal and judicial reforms. As Xi has consolidated his power and enforced his leadership on the people, he will no longer need such dictums to work in his favour. He may occasionally use such programmes to quell dissidents both within and outside the Party, however, viewing anti-corruption drive–that proved to be the farce of Rule of Law–as validation of legal reforms will be too much to ask for. To promote true judicial and legal reforms, Xi has to break barriers within his Party and in the judicial system, which seems highly unlikely as present. In the meantime, it is wait and watch for handling Hong Kong protests, which many say will return full force.

Piyush Singh is B.A, LL.B. student atHidayatullah National Law University, Raipur.

Views expressed are his own

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Jayshree Sengupta

It is time for China to gear up for fresh reform measures in its agri-cultural sector. When Mao’s land

reform experiments with community based/collectivized farming failed, China realized that different type of reforms is necessitated. The year 1978 marked the beginning of looking at agricultural reform under the House-hold Responsibility System in which households were required to provide to their collective units, quotas of food grains in return for tools, draft ani-mals, seeds and other essentials. Own-ership of land lay with the communes but the user and production rights were decentralized. In effect, Deng Xiaoping moved agriculture towards a market economy.

Further reforms were introduced in 1993. The grain rationing system was abolished and 90 per cent of all annual production was allowed to sell at market determined prices. There was an increase in public investment in agriculture as the government engaged in irrigation projects, larger state farms and encouraged mechanization and intensive fertilizer use. Agrarian sector spearheaded reforms in the rest of the economy. It catalyzed growth in the wider rural economy and Chinese population grew richer and moved to towns and cities. Agricultural growth fuelled rapid urbanization and industralisation.

Challenges in Agriculture

Today, rapid industrialization and urbanization has claimed large por-tions of arable land. Combined with huge population, China needs to in-crease food supply by 40 per cent to meet the increase in food demand by 2030. In 1995, per capita land area was 0.08 hectares but it is likely to go down to 0.05 hectare by 2030. China has to feed three times the number of people per unit area of land than the rest of the world. In addition, the growing middle class is consuming more pro-tein diet, but feeding that demand may be difficult with increasing land and

water constraints. It has 1.4 million square kilometers of arable land and only 1.3 per cent of land permanently supports crops. The size of the farms is small and is divided into 200 million households where average allocation is just 0.65 hectares.

The root of China’s problems is the limited availability of arable land. In addition, farmland quality in China is facing degradation and 2.9 per cent of farmland has medium to serious pol-lution levels. China uses 7 per cent of world’s farmland to produce but is able to feed 22 per cent of the global population. The country has reached self-sufficiency in food production but imports soybean and cotton. Recently, however, China has been importing food grains and imported 2.6 million tons of rice, 5.5 million tons of corn and 4 per cent of global grain produc-tion in 2012. On the whole it imported more than $46 billion in food grains in 2013.

Lately, the government’s policy seems to be geared towards reducing the number of people dependent on agriculture. But people want to stay in the rural areas tied to land because it offers a form of social security for millions of registered rural residents. An increase in China’s agricultural productivity has been achieved through vigorous application of mechanical power and fertilizers. In 2012, for the total sown area of 163 million hectares, 583 tons of chemical fertilizers and 750,846 million kwh of electric power was used. About 63 million hectares were irrigated from

The rise in producTion is due To an increase in yield as opposed To increase in

planTed area. china boosTed iTs grain producTion by more

Than 50 per cenT during The 1980s and 1990s when

agriculTure grew aT 5.3 per cenT per year


INFOCUS|CHINA|AGRICULTURE

In China, the ‘liuzhuan’ scheme gives farmers land- use rights that can be transferred to others in exchange for a rental fee. Is this ‘de facto land privatization’ scheme helpful in boosting agricultural productivity? The article explores China’s third wave of land reforms in addition to other challenges bogging the sector.

Sowing New Seeds of Reform


3200 companies it oversees, to build a stronger presence in sectors such as seeds and dairy. The Cultivation Bureau owns 6 million hectares of farmland, employing more than 13 million people. It produced 5 per cent of total grain output in 2013.

The top leadership’s call for creat-ing modern agricultural corporation is aimed at preempting the growing pro-clivity of the Chinese population to im-port food online from abroad. This is because the Chinese population is hav-ing less and less confidence in home grown products. The state agricultural corporation is aiming to produce prod-ucts like baby milk formula to regain people’s confidence.

The lack of mechanization in small farms is hindering increased productivity in small farms. Farmers lease land from the local government which owns the land– but farmers can sell the produce in the market. However, land leasing means lack of incentives for innovations in farming. Pooling of small farms for cultivation has been tried successfully to make mechanization possible.

China maintains a firm baseline that arable land never shrinks to less than 120 million hectares. The recent-ly introduced ‘liuzhuan’ scheme gives farmers land-use rights that can be transferred to others in exchange for a rental fee. The goal is to stimulate a private land market and allow China’s family run, labour intensive farms to change hands and get amalgamated into large scale industrialized busi-nesses. In theory ‘liuzhuan’ allows this to happen without cutting ties between rural families and the land because they collect rental fees as a safety net.

Cooperation with India in Agriculture

Being members of the BRICS, Chi-na and India can cooperate in diverse areas of agriculture. Since the use of chemical fertilizers is causing serious problems of ground water pollution and other environmental concerns in both the countries, the two coun-tries could cooperate in agricultural research in the use of more organic

fertilizers. China’s agricultural re-search declined since early 1980s and reached quite low in 1999. Agricultural research has to be stepped up especial-ly in raising productivity and in organ-ic farming. Similarly, conservation of water is important for both countries and there could be joint ventures in water management programmes.

Preservation of fruits and vegetables is another area for engagement to prevent wastage of fresh produce. India too is concerned with food security just as China. One way to ensure that is checking malpractices in food adulteration. In China, pork contaminated with Clenbuterol or from diseased pigs has been discovered. Fake mutton and beef from rat, fox and mink with chemicals like toxic gelatin have been found.

With rapid urbanization both

countries are in need of feeding a big urban population. China is trying out urban farming and production of veg-etables in vacant plots of land in urban areas. India too should devise ways of increasing supply of vegetables for the urban consumers. Best practices can be shared. Further, the issue of land degradation in rural areas is com-mon to both where cooperation can be helpful. Collaborations on agricultural and research can be seriously looked into. Both countries require more peo-ple to move out of agriculture which means agricultural productivity has to rise. In the case of China, farmers are hard pressed due to small size of farms. Some farmers are employing methods to adulterate food products. Raising farm incomes has to be aimed at in both the countries. If the water, fertilizer and mechanization problems can be solved, farm incomes will rise. Greater mechanization would help improve agricultural production. In China, efforts are underway to con-solidate small land holdings. Larger land holdings would give more access to credit and permit mechanization.

Agricultural sector cannot be ignored by either China or India because of the size of the population and the need for food security.

Agriculture in ChinaChina entered WTO in 2001. Since 2004, China is a net agricultural import-ing country. Its imports are mainly land- intensive agricultural products and it exports labour- intensive products. China imports 40 per cent of global cotton production and 60 per cent of global soybean production. China has relatively limited comparative advantage in grain production and hence it will have to step up productivity. Food safety is a becoming a major problem. Rising food prices due to rising labour costs is a cause of worry. As is known, food inflation affects poorer households as they spend a large proportion of their incomes on food. The government has urged farmers to undertake reforms and help curb infla-tion. Food accounts for one third of items in the basket of goods used in the calculation of consumer price index. China will remain a powerful agricultural producer and the largest producer of rice, pork, fruits and vegetables but the sustainability of agriculture is clearly under threat. It is very likely that China will remain a food-importer and will influence global food prices.

agriculTure uses 76 per cenT of china’s waTer and iT has

only 7 per cenT of world waTer availabiliTy. shorTage of waTer

for boTh agriculTure and indusTry is a major challenge.

To Tackle The problem, china has embarked on a waTer

demand managemenT scheme ‘crop per drop’

The author is Senior Fellow at Observer Research Foundation, New Delhi. Views expressed are her own.


INFOCUS|CHINA|AGRICULTURE

a total of 89,221 small medium and large reservoirs. Other inputs like machinery and tractors have increased over the past few years.

Agriculture WoesIntensive fertilizer use has led to

severe land contamination. Almost one tenth of China’s farmland is highly contaminated with heavy metals.

Water scarcity is a problem. Agriculture uses 76 per cent of China’s water and it has only 7 per cent of world water availability. To combat the problem China recently embarked on a water demand management scheme “Crop per drop”. This scheme has been the key in the water conservation drive. Instead of implementing stricter water pricing-hurting farmers- saving water for downstream industry is being encouraged. However, much of the water is directed towards cattle-

farming due to increase in meat consumption owing to rise in urban incomes. It takes 16000 liters of water to produce 1 kg of beef as opposed to 2000 liters of water to produce 1 kg of wheat. By the end of 2014, roughly 170 million cubic meters per year of saved water is likely to be transferred from irrigation to industries’. The government declared

“We can’t change the price of water we charge to farmers—that’s fixed (at roughly 1 cent per cubic meter), but we can help farmers use less and make sure the water is transferred to those who really need it.”

To ensure food security, the Agriculture Cultivation Bureau of the Ministry of Agriculture is integrating some of the 1700 state farms and

Source: China Statistical Handbook 2013


China’s much publicised and ongoing multi-level crackdown against corrup-tion up to the highest level. Few in In-dia would bother about their country beating China on the global corruption index. As mixed election results in re-cent weeks and various opinions in Indian newspapers suggest, many In-dians are yet to believe that the water-shed 2014 Loksabha elections brought a real change in India. However, India

under Prime Minister Narendra Modi is being keenly watched in China by intellectuals and policymakers alike. Talks of India’s resurgence abounds and India gets a serious attention on topics far and wide.

For the common Chinese, issues of Tibet-India complexities or border dispute are immaterial since their coverage in Chinese media is next to none. Even when they are published, it matters little for the Chinese since few of them read newspapers in detail like those in India. The news to the public here mostly comes from Weibo (Chinese Twitter) and at times TV. This means that the news they often read is primarily updates and that too the most popular ones. This turns out into a situation where the political worldview of the Chinese is tilted in favour of economics and not really politics. The controlled and limited student politics in Chinese

A monastery wall talking about India-China

For common chinese, issues oF TibeT-india complexiTies

or border dispuTes are immaTerial since Their

coverage in chinese media is nexT To none. censorship and propaganda are norms

noT excepTions

signature software company Infosys makes quite the cut on Chinese shores.

The challenges of measuring perceptions are subject to subjec-tivity howsoever objectively done. It becomes more in a society that is inherently busy in its own chores and is disciplined to the point of de-termination to better the next day. This is what I figured out along the corridors of Zhejiang University in Hangzhou and across the Zhejiang province – one of China’s richest provinces that borders Shanghai and Yiwu – the world’s biggest small commodities market that trades millions worth of goods with India.

Political PerceptionsFor the first time in nearly two dec-

ades, Transparency International in its annual survey of corruption, ranked In-dia lower at 85th position than China’s 100th. Interestingly, it came despite


INFOCUS|INDIA-CHINA|OpINION

What perceptions do common Chinese hold of India? Are diplomatic efforts capable of enhancing India’s image among the Chinese vox poupli? Or does Soft power of ‘Bollywood’ hold more sway? Tilak Jha explores China through his eyes

India’s Perception Among Common Chinese

Tilak Jha at Zhejiang University

Tilak Jha

Until the Loksabha elections of 2014, for common Chinese, India was ‘tied power’,

grappling with poor situation of law and order, infrastructure bottlenecks, red tape and apathetic work culture. The only two exits amid these gloomy perceptions of India were the city of Bangalore and the Hindi film industry ‘Bollywood’. Neither, though, fully projects India’s real image. While ‘Bollywood’ provides enough space to oscillate between a ‘3 Idiots’ and a ‘Slumdog Millionaire’, Bangalore’s

INFOCUS|INDIA-CHINA|FIRST PERSON


figure out even for most English-savvy Chinese professors. They are used to aspirated tones – Chinese language herself has high number of them.

Chinese are ethnically, linguistically and visually more homogenous as opposed to Indians. It is difficult for a Chinese to identify an Indian. With the typical North Indian look, you will be more often identified as a Pakistani Muslim or an Arab eating Halal food. Indians from Northeast are often identified as Chinese. Racial bias is rare in busy markets, tourist sites or universities and an Indian often gets more attention than any other South Asian national.

Bi-lingualism is rare and being a non-Chinese does not make you any less likely to be talked out in non-stop Chinese. Mandarin is the first, second and the third language for life outside university and you can expect little more than a few English phrases from shopkeepers and chauffeurs. In this regard, Indians are considered smart as they often speak more than two languages.

Vegetarianism in China is an alien

concept other than religious Buddhists who happen to be a rare species. Chinese eat more variety of meat than any other race in the world. No surprise, they doubt the survival of a purely vegetarian Indian!

Economic PerceptionsThere is phenomenal gap between

India and China’s infrastructure. Be it roads, railways, electricity, real estate or public spaces; China has more infrastructure. The increasing infrastructure gap between India and China makes India look bleak to a Chinese. India is perceived to be a small economic power with little other than software. While the Indian market, like markets over the world, is flooded with Chinese products; ‘Made in India’ products are difficult to locate in China.

A ‘Made in China’ product is costlier in China as compared to India. That matters little to urban Chinese who are used to a distorted market. India for them is the poor little cousin which remains destined to suffer. This view though is changing post the May 2014

elections. There is a realisation that India is getting its act together very fast under this new leadership and it could be a matter of less than a decade of consistent development when India would start to matter. The Chinese believe that the Western world wants India to pick up momentum.

The Chinese don’t want to miss the Indian bandwagon, either. The urgency to keep an eye on India is significant as they want to make up for the gap that is left due to weakening Western economies. Nearly 2300 Chinese students study in India’s metros and their feedback back home is creating another sequence of vox populi about India and Indians’ abilities. India is particularly welcome in a buyers’ market like Yiwu even as they face competition from the same markets.

On a recent visit to Yiwu, interactions with the traders’ organisation revealed emerging challenge from low cost countries like India. Wages in China are moving upward and online sellers eat into the already small margins. At the same time, the untapped potential of the huge market of India is what they depend on.

My TakeawayPopular perceptions about India

are shallow and the Chinese are quite likely to get influenced by propagan-da of its state-led media. In China, censors and propaganda are norms not exceptions. Few countries enjoy continuous goodwill in the Chinese media, least of all Japan. Yet, Japan is seen far positively compared to some of China’s friendly nations. Japanese products command admira-tion and envy. A whole lot of tourism campaigns by India’s culture ministry does precious little, compared to the reputation of an Infosys or a ‘3 Idiots’.

In all likelihood, under the new leadership India is well placed to have an incremental reputation in the eyes of a common Chinese than it does now.

Tilak Jha is doctoral researcher on Chinese media at the Jawaharlal Nehru University, New Delhi. He is currently in China’s Zhejiang University.


INFOCUS|INDIA-CHINA|OpINION

universities are regimented to toe the one party line does the rest of the bit.

With specific reference to India, Chinese students are not taught about the 1962 Sino-India border conflict, let alone have any sense of pride or regret about it. They express wonder on India’s discomfort about China but look shocked when told that China waged a war against India and continues to occupy large swathes of Indian territory including portions of Pakistan Occupied Kashmir. In general, few Chinese students involve in political debates and discussions. Questions and counter questions, let alone difficult questions, are only occasionally heard in Chinese classrooms. And if the class is in

English, one can rest assured that only a few Chinese students will raise any question. On a discussion regarding democracy in a class of political economy, everyone but Chinese students will speak. It is thus, not surprising to see a point in Renaud Egretau’s 2012 paper which says that even Chinese diplomats who worked in India had far less understanding of India than desired.

The Chinese, in general, have a high regard for the Western countries and their political system even though they believe that things are going in the right direction in China. Chinese do not easily entertain political discus-

sions. However, persuade them and most of them concede that the Indian political system is like the American or the British and is hence, something better than China in the long run, even if not currently efficiently work-ing. They particularly find the Indian Parliament to be a very difficult place and remain clueless about decision making in India.

Indian courts are nevertheless considered powerful and their freedom to deliver judgments against the party in power is praised. Their view of the Indian judiciary gets little support from Chinese media which reports more about India’s poor infrastructure and growth bottlenecks apart from news of rapes and floods.

Social PerceptionsI have a Chinese roommate in my

university dormitory – something quite rare in China since dorms of international students are usually separate from Chinese students. Besides, there are 14 other Chinese students from across China on my floor. None of them plan to visit India,

except for a brief period to see Taj Mahal. Still, everyone has seen a few Bollywood movies, love Indian dance and know about India’s software prowess. The teaching community shows keen interest in India’s potential though with caveats. Caste questions are often raised and end up with their curiosity in knowing my caste. In any case, less and often negative news from India provides few reasons to a Chinese to cherish the idea of India.

Few young Chinese profess to be associated with any religion though personally I find them closer to Indian civilisation than most Westerners. Buddhism and Yoga are two other major Indian ideas they find more in resonance with than any software programs originated till date

Those who have visited India unfailingly mention the bad state of hygiene and sanitation. India is seen to be poor and backward albeit with remarkable potential. This is quite palpable in Chinese thinking of Indian education. Most often it has to do with English. Indian English is difficult to

i have a chinese roommaTe in my universiTy dormiTory,

someThing quiTe rare in china since dormiTories

oF inTernaTional sTudenTs are usually separaTe From The chinese sTudenTs. There

are 14 oTher sTudenTs From across china on my

Floor buT none oF Them are inTeresTed in visiTing india excepT To see The Taj mahal


EXHIBITION DATE VENUE EVENT PROFILE CONTACT PERSON

Ad:tech 19 - 20 April 2015 Gurgaon, Haryana, India

On the ad:tech will, in addition to a variety of advertising and marketing tools, conferences and meetings in the issue examines how digital and interactive media against traditional media platforms can argue and how the quality of these advertising forms can be increased.

Tel: +91 (0)11 41536990

International Exhibition and Conference on Sugar

22 - 23 April 2015 Mumbai, India Sugar Asia in Bangkok is an international trade fair for sugar, ethanol, distilleries, bioenergy and agriculture. Numerous exhibitors are presenting their technologies for the sugar industry and related industries. Alongside the exhibition there is also a conference where experts provide interesting information.

Tel: +91 (0)11 41536990

LED Expo 2015 O7- 09 May 2015 Bombay Exhibition Center

LEDs play an indispensable role today in all the electrical and electronic devices used daily. They come in different sizes & colors, can work with very low volts & are anti-shock. All these are getting more widely used in lighting, automobiles, televisions, computers, cell phones, city lighting, building faces, billboards etc.

International Animal Industry Expo

03- 05 May 2015 Pragati Maidan New Delhi, India

The IAI International Animal Industry Expo is the world's leading trade fair for dairy products, poultry and livestock industry, which takes place once a year in New Delhi. It is regarded as the showcase of the animal industry. Exhibitors show the latest fattening, feeding, meat and disinfection systems, innovative refrigeration, cooling and sanitation technology, but also feed and feed additives.

Pixie Consulting Solutions LtdTel: +91 (0)98120 82121

Sugar Asia 22-23 May 2015 Bombay Exhibition Center BEC Mumbai, Maharashtra, India

Sugar Asia in Bangkok is an international trade fair for sugar, ethanol, distilleries, bioenergy and agriculture. Numerous exhibitors are presenting their technologies for the sugar industry and related industries.

Tel: +91 (0)11 41536990

Palm Expo 28-30 May 2015 Bombay Exhibition Center BEC Mumbai, Maharashtra, India

The Palm Expo, being held at the Bombay Exhibition Center of Mumbai, is one of the most important events of the audiovisual and live entertainment sector in India. It is a specialised fair showing more than 1000 products equipped with the latest technology of the business.

Diversified Communications India Pvt. Ltd.

Jewellery, Pearl & Gem Fair

05-07 June 2015 Hitex Exhibition Center, Hyderabad, Andhra Pradesh, India

The Jewellery, Pearl & Gem Fair is the most important fair for the international jewelry industry in India's space. An excellent platform to present new collections, to attract potential customers and business contacts to build.

UBM plcLudgate House 245 Blackfriars RoadSE19UY London, Great Britain &

Intec Coimbatore 05-09 June 2015 Codissia Trade Fair ComplexCoimbatore, Tamil Nadu, India

Industrial leaders from all over the world present their technological ideas: This exhibition is communication and information platform in the industry and offers the exhibiting companies the opportunity to present to an audience of experts.

Tel: +91 (0)422 2221582

Automotive Engineering

07-09 June 2015 Chennai Trade CenterChennai, Tamil Nadu, India

Automotive Engineering Show is a trade fair for automotive and industrial modernization. The exhibition focuses primarily on vehicle components and the optimization of production facilities.

Tel: +91 (0)22 28324830

India Packaging 10-13 June 2015 Pragati Maidan New Delhi, India

The India Packaging Show in Neu Delhi is a trade fair for the packaging industry. International manufacturers and suppliers of machinery, materials and services for the food, pharmaceutical and packaging industry from India and neighboring countries are meeting there.

Tel: +91 (0)22 27812093

Solar South 19-21 June 2015 Chennai Trade Center Chennai, Tamil Nadu, India

The Solar South in Chennai is a B2B exhibition for the solar industry and provides visitors from the sector a wide range of possibilities. They can meet here with colleagues, network, collaborate and make business contacts, and generally get a better access to the solar industry, with all its opportunities and possibilities.

Tel: +91 (0)44 22501987

Logmat 19-21 June 2015 Chennai Trade Center Chennai, Tamil Nadu, India

The Logmat is an international trade fair for logistics and material handling, which will be held in Chennai. It is aimed at professionals from the fields of logistics, storage, transportation, supply chain management, material handling and packaging.

Tel: +91 (0)44 22501987


ShowsExhibitions&TradeIn India • In China

IndIaEXHIBITION DATE VENUE EVENT PROFILE CONTACT PERSON

ACMA Automechanika 26 - 01 March 2015

Pragati Maidan Exhibition Center, New Delhi 110002, India

The ACMA automechanika is a dynamic exhibition and the only event of the industry in India. The fair takes place every two years in New-Delhi and contains all elements of the automotive industry including spare parts, repair, accessories, recycling, disposal and service.

Tel: +49 (0)69 75750

International textile fair 12 - 14 March 2015

Export Promotion Industrial Park, White Field, Bangalore 560048, Karnataka, India

The homtex - India International Home Textile Exhibition - in Bangalore is an international textile trade fair. The event continues to be an international business platform and order show in the industry. Every year, this declared as a pure trade fair visitors event, a wide range of highly innovative and creative fabrics with an excellent price-performance ratio.

S S Textile Media Pvt. Ltd. Tel: +91 (0)80 25544711

The Secutech India 12 - 14 March 2015

Bombay Exhibition Center BEC, Mumbai, Maharashtra, India

The Secutech India is an offshoot of the Intersec in Frankfurt and has developed in India as one of the leading trade fairs for electronic security, home security and fire protection. It is the largest of its kind and opens exhibiting companies access to the Indian security market.

Messe Frankfurt GmbHTel: +49 (0)69 75750

The India Shoes and Accessories Forum

18 - 20 March 2015

Bombay Exhibition Center BEC, Mumbai, Maharashtra, India

The India Shoes and Accessories Forum - ISAF - taking place at the Bombay Convention Center of Mumbay constitutes an important event for all business people involved in the shoe and accessories business.

Images Multimedia Pvt Ltd.Tel: +91 (0)11 40525001

Gem & Jewellery India International Exhibition

20 - 22 March 2015

Chennai Trade Center Tamil Nadu, India

The Gem & Jewellery India International Exhibition is the most important fair for the international jewelry industry in India's space. An excellent platform to present new collections, to attract potential customers and business contacts to build.

UBM plc Ludgate House 245 Blackfriars Road SE19UY London, Great Britain & Northern Ireland

Medical Fair 21 - 23 March 2015

Mumbai, India Medical Fair India discover the latest range of products and solutions in medical technology, hospital and laboratory equipment, furniture and equipment, diagnostic devices, orthopedic products, blood pressure monitors, surgical instruments, sensors, Life Support Systems and many other medical devices and solutions for hospitals, diagnostics , Pharmaceuticals, medicine & rehabilitation and care in old age.

Messe Düsseldorf India Pvt. Ltd. Tel: +91 (0)11 26971745

The Fastener Fair India 23 - 24 April 2015 Mumbai, India The Fastener Fair India in Mumbai includes all sectors of the broad spectrum of industrial fasteners and fixings. The exhibition provides an ideal opportunity for all industry professionals to expand business contacts and to present the latest products and technologies to a qualified audience.

Tel: +44 (0)1727 814400

The SMM India 02 - 04 April 2015 Mumbai, India The SMM India is the leading fair of the maritime economy in India. It takes place every two years in Mumbai and is the trade fair for shipbuilding, machinery and marine technology with the largest international character. Visitors and exhibitors from all over the world represent the current state of the maritime industry worldwide and can here present their latest technologies or receive information about the latest products, innovations, trends and services.

Tel: +49 (0)40 35690

Chemspec 16 - 17 April 2015 Mumbai, India Some of the world's largest supplier, manufacturer or supplier of fine and specialty chemicals and related products and services to take part in the Chemspec India in Mumbai. The event is the perfect opportunity to meet with new or existing business partners and expand the opportunities for companies.

Tel ; +44 (0)1737 855000


EXHIBITION DATE VENUE EVENT PROFILE CONTACT PERSON

China International Helicopter and Air Sports Fair

28 - 04 April Asian International Yacht City

China International Helicopter and Air Sports Fair 2015 (CASF 2015), organized by Guangzhou Grandeur Exhibition Services Co., Ltd., will be staged at Asian International Yacht City during April 28-May 4, 2015.

Ms. Louise Lu Tel:+ 86-186-2090 0544

Boat China & Water Sports Expo

28-03 May 2015 Asia International Yacht City Guangdong, China

Boat China & Water Sports Expo in Guangzhou is a fair for sailing, windsurfing and water sports. Visitors have the opportunity to see the most beautiful yachts and the fastest motor boats. In addition, modern equipment is presented for water sports. With a wide range, and their interesting framework program, the fair is a great opportunity to spend a relaxing day with the family.

Guangzhou Grandeur Exhibition Services Co., Ltd

SpringFair CantonTex 07-09 May 2015 PWTC Poly World Trade Center1000 Xingang East Rd Haizhu Guangdong, China

The SpringFair CantonTex is an international trade fair for apparel fabrics and yarns, to be held in Guangzhou. Numerous exhibitors from many countries show their products. This exhibition is communication and information platform in the industry and offers the exhibiting companies the opportunity to present to an audience of experts here.

Tel: +86 (0)20 87015017

World Travel Fair 08-10 May 2015 SEC - Shanghai Exhibition CenterShanghai, China

World Travel fair is China’s largest and most influenced outbound travel exhibition. Co-Hosted by Shanghai Municipal Tourism Administration and VNU Exhibition Europe, the World Travel Fair (WTF) was designed to be a platform for international tourism players to provide their overseas travel resources for China´s market.

Tel: +86 (0)21 61956088

Wenzhou Optics Fair 08-10 May 2015 Wenzhou International Convention & Exhibition Center Zhejiang, China

Taking place under the patronage of the Wenzhou Glasses Chamber of Commerce, Wenzhou Optics Fair has turned into one of the most important fairs for the chinese optical manufacturing and into a leading event on the eyewear sector. Local and international exhibitors will provide a preview on new products, latest technologies and market trends to the visitors from China and abroad.

Tel: +86 (0)577 88905186

China Glass 20-23 May 2015 CIEC - China International Exhibition Center, Beijing, China

The China Glass Expo is one of the largest glass-fairs of Asia and is one of the most important international trade fairs for glass production and processing. It was founded in 1986 and is aimed both at professionals as well as to public audiences.

Beijing Zhonggui Exhibition Co. Ltd.Sanlihe Road 11, Haidian District 100831 Beijing, China

Hospital Build & Infrastructure

23-25 May 2015 Dalian World Expo CenterXinghai Bay 116022 Dalian, Liaoning, China

Hospital Build & Infrastructure China in Dalian is an international event for investment, planning, design, construction, operation, management and rehabilitation of health facilities, institutions and organizations.

Informa Exhibitions Head OfficeHouse 30-32 Mortimer StCH-6300 London, Great Britain & Northern Ireland

International Building & Construction

02-05 June 2015 Shanghai World Expo Exhibition & Convention Center Shanghai, China

International Building & Construction is an international construction trade show in Shanghai. It takes place in conjunction with the exhibition for kitchens and bathroom furniture Kitchen & Bath instead.

Tel: +86 (0)21 32224777

CIEPEC China Environmental Protection Expo

09-12 June 2015 CIEC - China International Exhibition Center Beijing, China

CIEPEC - China International Environmental Protection Exhibition and Conference is one of the leading showcases in China in the key sectors of environmental protection technologies. Its objective is to provide a platform for those companies and organizations, which are engaged in supply, development and manufacturing of systems and equipments for water treatment, air pollution control, waste disposal and recycling and renewable energies.

Tel: +86 (0)10 51555020

Beijing Essen Welding & Cutting

16-19 June 2015 Shanghai New International Expo Centre - SNIEC Shanghai, China

Beijing Essen Welding & Cutting is a trade fair for welding and cutting technology.Here exhibitors from all over the world machines and systems for welding, torch cutting, soldering, brazing, thermal spraying, bonding as well as destructive and nondestructive testing. Other exhibition themes are the Occupational Safety and Health at Work.

Tel: +49 (0)201 72440

BioPh China 24-26 June 2015 Shanghai New International Expo Centre - SNIEC Shanghai, China

The BioPh China is an international trade fair for biotechnological solutions for the pharmaceutical industry. It takes place once a year in Shanghai and has firmly established itself in the market. Here, companies and organizations in the development and research of new methods of treatment using biotechnological methods or made from living organisms and derived from them are represented.

UBM plcLudgate House 245 Blackfriars RoadSE19UY London, Great Britain & Northern Ireland


chInaEXHIBITION DATE VENUE EVENT PROFILE CONTACT PERSON

International Conference on Smart Manufacturing

28 - 02 March 2015

Guilin Bravo Hotel The main objective of 2015 International Conference on Smart Manufacturing (ICOSM 2015) is to present the latest research and results of scientists related to Smart Manufacturing topics.

Ms. Aimee Zhou Tel: + 1-302-444-8432 (USA) / +86-27-86666663 or +86-18062000004

International Conference on Electronics Engineering and Power Engineering

28 - 02 March 2015

14 South Ronghu Road (Ronghu Nan Lu), China, Guilin

The 2nd International Conference on Electronics Engineering and Power Engineering 2015 (CEEPE-II 2015) provides opportunities for the different areas delegates to exchange new ideas and application experiences face to face, to establish business or research relations and to find global partners for future collaboration.

Ms. Teresa Zhang, Tel: +86-27-8666 6663, +86-180-6200 0004

International Conference on Information Management

28-02 March 2015

TBA (To Be Announced) / TBC (To Be Confirmed)

2015 International Conference on Information Management (ICIM 2015) provides opportunities for the delegates to exchange new ideas face-to-face, to establish business or research relations as well as to find global partners for future collaborations.

Ms.Carina LiuTel: +1-302-444-8432 (USA); +86-27-86666663 or +86-18062000004 (China),

Hong Kong International Diamond, Gem & Pearl Show

02 - 06 March 2015

AsiaWorld-Expo (AWE)

Organized by Hong Kong Trade Development Council (HKTDC), 2015 Hong Kong International Diamond, Gem & Pearl Show will be staged at AsiaWorld-Expo (AWE) during March 2-6, 2015. 2015 Hong Kong International Diamond, Gem & Pearl Show is a specialised trade platform for loose stones and raw materials, featuring a wide range of diamonds, pearls, precious and semi-precious stones.

Ms Beatrice Lee Tel: + 852-2240 4323,

Asia's Fashion Jewellery & Accessories Fair

03 - 06 March 2015

AsiaWorld-Expo (AWE)

The steady growth in the number of exhibitors since the first held of Asia's Fashion Jewellery & Accessories Fair (AFJ) in 2007 attests to the strong industry support and the show’s growing popularity. Grab this chance to meet quality buyers and explore new business opportunities.

Tel: +852-2585 6127

China International Agrochemical & Protection Exhibition

11 - 13 March 2015

Shanghai New International Expo Centre

The 16th China International Agrochemical & Protection Exhibition, as the world’s largest exhibition in agrochemical industry, will be staged during Mar.11-13, 2015 at Shanghai New International Expo Centre (SNIEC), China.

Ms Maggie Ma, Tel:+ 86-21-5134 8916

The 22nd South China International Printing Industry Exhibition 2015

09 - 11 March 2015

China Import and Export Fair Pazhou Complex

The 22nd South China International Printing Industry Exhibition 2015 (Printing South China 2015), the famous show in printing and lable industry in China, is organized by Adsale Exhibition Services Ltd and is to be held at Area A of China Import and Export Fair Pazhou Complex, Guangzhou from March 9 to March 11, 2015.

Tel: +852-2516 3389 / 2516 3326

Guangzhou International Automotive Air-conditioning & Equipment Exhibition

12 - 14 March 2015

Poly World Trade Expo Center

Acting as the best exhibition platform for auto air conditioning industry, AAC China 2015 - the 12th Guangzhou International Automotive Air-conditioning & Equipment Exhibition which is organized by Guangzhou Best Exhibition Co. Limited. will take place during March 12-14, 2015 at China Import and Export Fair Pazhou Complex, Guangzhou, China.

Tel: +86-20-8961 7099

China (Shanghai) International Health Industry Exhibition

27 - 29 March 2015

Shanghai Mart CIHE 2015 - 2015 China (Shanghai) International Health Industry Exhibition is the largest, most authoritative and comprehensive international grand meeting of Health Industry, which will be staged on Mar.27-29, 2015 at Shanghai Mart.

Amy Lin, Tel: +86-21-3641 1666; +86-21-6592 9965,

China International Water Jet and Industrial Safety Show

30 - 01 April 2015 Shanghai World Expo Exhibition & Convention Center

As one important part of China Clean Expo 2015, China International Water Jet and Industrial Safety Show 2015 will be staged at Shanghai World Expo Exhibition & Convention Center (SWEECC, Formerly Shanghai World Expo Theme Pavilion).

Steven Lee, Tel: +86-21-3339 2070

IT and Security Shangha 30 - 02 April Shanghai New International Expo Centre

Digital experience is a new standard for premium hotel services, which makes IT & Security one of the most rapid growth hotel sectors. IT and Security Shanghai 2015 is made for security needs of Hotel industry. It is organized by Shanghai UBM Sinoexpo International Exhibition Co., Ltd and is to be held at Shanghai New International Expo Centre (SNIEC) from March 30 to April 2, 2015.

Ms. Jojo Zhang, Tel: +86-21-3339 2233; +86-21-6437 1178-507

Coffee and Tea Shanghai 30 - 02 April Shanghai New International Expo Centre

Coffee and Tea Shanghai 2015, plays a crucial role in attracting professional buyers from café, hotel, catering, bakery store, bar,water bar and other consumer places, not only it drives brand new consumer products, but also advocates brand new life-style.

Mrs. Helen Fan Tel: + 86-21-3339 2198

Entry will be on first come first serve basis. Kindly confirm your participation at the given detail

RSVP: 011-41017185, Email: [email protected]

1. Chinese Diabolo (Yo-Yo)

2. Contortion

3. Duo Balancing

4. Comical Act

5. Magical Tactics

6. Swinging Hoop

7. Ball Juggling

8. Bowl Rolling

9. Hat Juggling

10. Martial Arts

Program-

At 7:00 PM on Friday, 27th February 2015

Venue: Sirifort Auditorium 1Sirifort Auditorium, Asian Games Village Complex, New Delhi

Cordially invites you to

Embassy of the People's Republic of China in the Republic of IndiaIn Association with

India China Economic and Cultural Council

To mark the 65th Anniversary of the Establishment of DiplomaticRelations between China and India and celebrate

Sirifort Auditorium, Asian Games Village Complex, New DelhiSirifort Auditorium, Asian Games Village Complex, New DelhiSirifort Auditorium, Asian Games Village Complex, New DelhiSirifort Auditorium, Asian Games Village Complex, New Delhi

China 2015: Resetting the Asian Growth Story?

INTERVIEW

“Silk Route will be a Game Changer”

ECONOMY

Made in China and Rising Wages

FOREIGN POLICY

Managing the Geopolitical Implications of China’s Economic Rise

January–February 2015 • ` 100An India-China Economic and Cultural Council publication

China 2015: Resetting the Asian Growth Story?€¦ · dEsign Manoj Raikwar ownEd, PrintEd and...

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Transcript of China 2015: Resetting the Asian Growth Story?€¦ · dEsign Manoj Raikwar ownEd, PrintEd and...