India - China Diplomay

8/12/2019 India - China Diplomay

1/36

INDIA - CHINA DIPLOMACY

BY - ISHITA MALHANAPRAJITA MALHAN

BHARTI SINGH

GAURAV BHANDARI

BABITA

ANKITA SIKKA


2/36

History

Both countries entered the international stage at

about the same time: India in 1947 and the

Peoples Republic of China in 1949. Their relation

was off to a good startNehru chose to establish

peaceful and cooperative neighbourly relations andsupported Beijings claim for a seat in the UN & 2

agreements were signed in 1954 one on trade, the

other on peaceful coexistence

However, behind the cover of the agreements Mao

promised its people from the very beginning thathe will do everything to regain the territories along

the Himalayan border, which once belonged to

China


3/36

in 1958/59, Nehru changed his perceptions about

China when troubles in Tibet broke out once again.

It was at the time when the Dalai Lama fled and

eventually got exile in India

Thus New Delhi started strengthening its defences

on the borders.

For the next three decades the relation between

the two nations became very difficult as incidents

during the 60s and early 70s show

1. 1962 Border War: China attacked India and seizedIndian territory

2. 1971 during the Indian-Pakistani War, China

supported Pakistan militarily and politically


4/36

From the mid 70s on, the relation improved slowly.

Diplomatic and Trade relations were resumed and

were stable

Throughout the 1980s the relationship were

difficult although not hostile. Numerous efforts to

solve the border dispute failed. In addition China

started its policy of encirclement India countered

with its Look East Policy

Rajiv Ghandis visit to China in 1988 marked a new

era in the Sino-Indian relations. It was the first visitof an Indian Prime Minister to China after a gap of

more than 25 years


5/36

Two years later, the geopolitical situation changed with the

disintegration of the Soviet Union and a new unipolar

world order dominated by the US. Such profound changes

did also influence the foreign policies of China and India: China

Sino-Russian relations improved remarkably. The Sino-US

relations however deteriorated.

China was strongly opposed to a unipolar world order.

India

The disintegration of the Soviet Union posed a serious

challenge to Indias foreign policy: India was deprived of a

crucial source of support although they were still allies ,

only weaker

Sino-Indian Relationship

The visit of Gandhi and the end of the Cold War paved the

way for a relatively harmonious decade in Sino-Indian

relations. During the course of a number of high-level

visits, important agreements in the economic, scientific

and military fields were signed


6/36

Indias decision to go nuclear (Pokhran ll) marked

another turning point in Sino-Indian relations.

Although India had already considered nuclear tests

before, China was taken by surprise

From a foreign policy point of view India saw its

interests threatened by:

1. a strategic Sino-Pakistani alliance (China supporting

Pakistan with nuclear equipment2. and by continuing China policy of encirclement. As

India was not ready to acknowledge Chinas

hegemonic position in Asia, it eventually launched

the nuclear tests.

Beijing demanded an immediate roll back of the

nuclear weapons programmes of India and froze

diplomatic relations with New Delhi for a few

months.


7/36

One year after Pokhran ll, the Kargil crisis began. In

India there was uncertainty about Chinas position in

this Indo-Pakistani Conflict in Kashmir. Surprisingly,

Beijing acted very cautious by not taking Pakistansside and commending both parties to return to the

negotiating table

2000 marked a gradual re-engagement of Indian and

Chinese diplomacy.

2003 ushered in a marked improvement in Sino-

Indian relations following Indian Prime Minister Atal

Bihari Vajpayee's landmark June 2003 visit to China.China officially recognized Indian sovereignty over

Sikkim as the two nations moved toward resolving

their border disputes.


8/36

Military Ties

India and China have progressively stepped up

military contacts both at the headquarters and field

levels since resolving to improve bilateral ties in the

1990s.

The tempo and quality of the interactions picked upafter then Defence Minister Pranab Mukherjee

visited China in 2006 and signed a memorandum of

understanding on exchanges and cooperation in

defence.

The intention to increase military-to-military

interaction was firmed up with the first defence

dialogue in Beijing followed up with the first joint

exercises in Kunming in 2005.


9/36


10/36

Economic Relation

China's economic relations with India have

shown significant improvement over the

passage of time. Both the economies have

emerged as economic superpowers owing to

their rapidly-expanding consumption goods

market, easy availability of raw materials,

cheap labor force, and favorable economic

infrastructure.


11/36

Introduction of Economic

Wing Government has decided to set up an economic wing

in its diplomatic mission in Beijing, signifying the

growing financial clout of China which has become

India's largest trading partner

The economic wing will have eight posts, including

one counselor, who will be appointed by the

Department of Economic Affairs

The objective of such a wing is to attract investments

from China and coordinate with various ministries and

departments in Chinese government such as Finance

and Planning Commission .


12/36

The wing will also be in touch with the Chinese

government on the issues of G-20 to have a

coordinated approach.

India has such economic units in its missions in the

US, the UK and Japan among other countries and

the fact that the wing is now being created in its

embassy in Beijing indicates the importance itattaches to Chinese investments in the country.

The mandate of economic wing is different from

that of commercial wing, which was alreadyfunctional in the mission. The commercial wing

primarily focuses on bilateral trade.


13/36

Bilateral Trade

The history of bilateral relations between China and

India dates back to mid 1980s. The process of

dialogue initiated by the governments of the two

countries at that point of time was quite helpful in

identifying the common trade interests. Effortswere initiated to make the most of their economic

strengths so as to further the economic relations

between India and China.


14/36

The trade relationship between these two

countries has historically been tenuous at best.

They have not been trading as often and as much

as one would expect this two giants to trade. The

markets have opened up right now to each other.

"There was a big influx of Chinese manufactured

goods to the Indian markets usually consumer

items like electric fans, batteries and such other

items. India has also started making its presence in

information technology markets felt withinmainland China."


15/36

The Evolution of India-China

Trade

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Exports (from India to China) Imports (from China to India)


16/36

TRADE DEFECIT


17/36

Trade Deficit

Trade between India and China has jumped substantially from

$1 billion in 2001 to $52 billion in 2008 and the two sides are

targeting to reach $60 billion.

However, Indias current annual exports to China stands at

about $11 billion, while China exports goods worth $27 billion

to India.

This creates is large and growing trade deficit that India is

experiencing in its bilateral trade with China that needed to

be corrected.


18/36

China is Indias largest trade partner, while India is Chinas

tenth largest partner.

The government is closely monitoring the Chinese response to

its concerns over the widening trade gap, which could reach$24-25 billion this year

Incase, China fails to take adequate steps in the next few

months to reduce the deficit and move towards a more

balanced trade ties, India is prepared to take retaliatorymeasures

Even if tariffs are lowered on manufactured products, India

can't compete with China on manufactured products


19/36

Graph showing defecit


20/36

Reasons for deficit

India has sought to diversify its trade basket, but raw

materials and other low-end commodities such as iron ore still

make up about 60 percent of its exports to China.

In contrast, manufactured goods -- from trinkets to turbines --

form the bulk of Chinese exports.

In an illustration of India's dependence on Chinesemanufacturing, Shanghai Electric Group Co agreed in October

to sell power equipment and related services worth $8.3

billion to India's Reliance Power.


21/36

According to some economists, India's at a phase of capital

expenditure that is 15 years behind China

China also was importing a lot of capital goods in the initial

period of growth takeoff in the 1980s with periods of trade

deficit.

Also there are procedural bottlenecks, including time

consuming licensing procedures, being faced by Indian drugs

and pharmaceuticals, which needed to be removed.


22/36

Indian businesses cite Chinas tariff barriers of as high as 30-

to 35 percent for the manufactured equipment industry as a

hindrance to market entry with the same barriers in place for

the agriculture industry

Custom procedures, standards, certification, regulatory

practices and quantitative restrictions were also cited as

problem areas in exporting goods to China by the Federationof Indian Chambers of Commerce and Industry


23/36

Proposed steps to handle defecit

In a joint economic group meeting with his Chinese

counterpart Chen Deming, commerce minister Anand Sharma

pressed for following issues

greater import of IT and ITeS by China from India,

removal of tariff and non-tariff barriers restricting import of

power plant equipment from India,


24/36

removal of restrictions on import of Basmati rice, fruits and

vegetables

landing rights for Indian TV channels in China, and import of

more Indian films by China

Removal of procedural bottlenecks including time-consuming

licensing procedures being faced by Indian drugs and

pharmaceuticals


25/36

Effect on the relation

Already, India and China have clashed repeatedly over a raft

of issues including their long-disputed border, China's

increasingly close relationship with Pakistan, and fears of

Chinese spying.

No other country has initiated more anti-dumping

investigations against China at the World Trade Organisation

than has India.

In May, India barred its mobile phone operators from placingorders with China's Huawei Technologies and ZTE Corp

because of national security concerns.


26/36

On the other hand both sides have something to gain from

the relationship.

The 2010 December visit of Chinese Premier Wen Jiabao

comes at a time when the Chinese are really keen that the

Indians do not become a fully fledged member of the U.S.

camp

India needs Chinese backing for a permanent seat on the U.N.

Security Council and both countries have stood together to

resist Western demands in world trade and climate change

talks.


27/36

DUMPING


28/36

Dumping

They are using the big Indian market merely to dump their

products and by doing so they are killing the Indian units.

For example last year during Diwali, China made crackers were

sold in the Indian market. These crackers reportedly containedSulphur. Sulphur is more harmful than Nitrate, which is used

in India to make crackers. Since the Chinese crackers were

cheaper than the Indian crackers, so they managed to attract

innocent and largely illiterate Indian lot. As a result the Indiancracker industry saw a decline in the revenue.


29/36

Because of cheaper prices products made in China are

becoming more popular among the Indian masses. This has

had a very negative effect on our own manufacturing units

and as a result many of them have had to shut shop.

For instance, data reveals that 60 per cent of the industrial

units in the industrial belts of Thane and Bhivandi near

Mumbai have been closed down. ( Indian cottage industriesi.e handicraft)


30/36

Due to its cheap labour, China offers lowpriced imports such

as textiles and clothing, electronic devices, machinery, etc .

According to official data, Chinese imports stood at $3I9

million (Rs 1,435 crore) during April-June this year ascompared to $223 million (Rs 1000) crore during the

corresponding period of the previous year. ( data source

www.indiamart.com/new )

It has also affected Indian Export market,as china has replacedindian goods in the foreign market as being cheaply produced.


31/36

Strategy to Gain Global Market

Share

They are killing the economy of not only India but also the

economy of the whole world very slowly. They are selling their

cheap products on very cheap rates and we people are getting

addicted of these cheap rated things and after few years there

will come a time when you will see only the chinese goods in

the markets because all the other manufacturers will become

bankrupt and after that China will start to rise the rates of

their products i.e. there will be complete monopoly of chinaon the goods market. Thats the policy on which china is

working now a days.


32/36

Future Prospects

During the 10 visit of Chinese premier Wen Jiabao to India,

following outcomes & prospects have been highlighted

China and India have vowed to raise bilateral trade to $100

billion by 2015, from $60 billion in 2010

The aim is that both the countries be able to raise the bar of

friendship and cooperation to a high level in near future

to be able to raise friendship and cooperation to a high level

in the new century


33/36

two nations will formalize regular visits between heads of

state and government, open a telephone hotline between the

two premiers and their foreign ministers will meet once a

year.

The two sides agreed to initiate a strategic economic dialogue

to enhance macro-economic policy coordination.

Two-way trade is expected to reach $60 billion in 2010

compared with a target of $40 billion, which represents a 30-

fold increase since 2000.


34/36

agreed to take measures to promote greater Indian exports to

China with a view to reducing India's trade deficit

agreed to push forward with efforts to peacefully resolve their

nations' lingering border disputes.

China understands and supports India's wish for a bigger role

in the United Nations including the UN Security Council,

Beijing would like to strengthen consultation with India on

political and military affairs to beef up mutual trust.


35/36

On cross-border rivers that India has long claimed China is

damming, Wen has stated that any exploitation in the upper

stream will go through scientific planning and studies and

interests of the lower-reach nations will be taken fully intoaccount. The two nations' ministries of water resources have

thus signed a memorandum for China to provide data to India.

Also, it is encouraging to hear China is willing to allow theIndian service sector, pharmaceutical and agricultural

products to enter the Chinese market to bring down India's

trade deficit


36/36

THANK YOU

India - China Diplomay

Documents

Transcript of India - China Diplomay