The
visit of Chinese Premier Wen Jiaobao to India last week came to a head on
Monday, when the prime ministers of the world''s two most populous countries
signed 11 groundbreaking agreements. The main agreement was aimed at resolving
the boundary dispute that has bedevilled relations between them for more than
four decades. The
accords included improving trade and cultural ties, economic cooperation and
expanding aviation links. India and China will "make meaningful and mutually
acceptable adjustments to their respective positions on the boundary question,
so as to arrive at a package settlement to the boundary question", the
border agreement said, adding that "the differences on the boundary question
should not be allowed to affect the overall development of bilateral relations".
The boundary settlement must be final, covering all sectors of the India-China
boundary, it said. The frontier "should be along well-defined and easily
identifiable natural geographical features to be mutually agreed upon between
by India and China", and interests of settled populations in the border
areas will be safeguarded in any final settlement. India
says China is occupying 38,000 square kilometres of Indian territory in Kashmir,
some which was illegally ceded to Beijing by Pakistan in the 1950s. China
claims ownership of 90,000-square-kilometres in Arunachal Pradesh. The border
agreement was signed by India''s national security advisor M K Narayanan and
Chinese Vice Foreign Minister Dai Bingguo. China has already concluded comprehensive
settlements with nearly all countries it had borders disputes with
including the erstwhile Soviet Union, Pakistan, Myanmar and Laos except
with Vietnam and India. While
euphoria over the border agreement may have overshadowed the visit, Wen was
quietly pursuing an economic agenda, which may shortly dominate the relationship
between what many perceive as the two rising economies of the 21st
century. Reviving the five-decade-old slogan ''Hindi Chini, Bhai Bhai'' to a
standing ovation at Delhi IIT on Tuesday, Wen asserted that the two countries
were not rivals or competitors but friendly neighbours who wanted to further
improve their relations through cooperation. Noting
that India and China were the largest developing countries with the fastest
economic growth, he talked nostalgically about Panchsheel and emphasised
that the two countries should work together to make the 21st century Asia''s.
"Some see India and China as competitors... I disagree," Wen told
IIT students. He said that his country wished to see India "prosperous
and developed". He
quoted Mahatma Gandhi, Jawaharlal Nehru, Rabindranath Tagore and Amartya Sen,
as well as Deng Xiaoping and the ancient Chinese traveller to India, Huen
Tsang. Wen said India and China should "close ranks" on international
issues and enhance communication and coordination to work together to promote
establishment of a just international economic and political order, pointing
out that trade relations between the two countries were not commensurate with
their potential. He
said India was strong in a number of sectors like farm products, auto-parts
and pharmaceuticals, which would be highly competitive in China. A strong
demand existed for India''s service sector. Similarly, China was strong in
areas like electronic goods, which could find a market in India, he said.
It was "critically important" for the two countries to keep their
relations on track for development of both the nations besides peace and development
in Asia and the world at large. While Wen spent four days in the country,
just one of them was spent with Indian leaders. The real story of the visit
may have to be sought from his highly publicised visits to India''s software
capital Bangalore, apart from his dekko at IIT Delhi. Referring
to a memorandum of understanding on financial dialogue signed during the visit,
a Chinese Ministry of Finance communiqué said it had set up a financial
dialogue mechanism with its Indian counterpart in a bid to boost their exchanges
and cooperation on major international financial issues. "The mechanism
will help promote the global economy in a balanced and orderly manner,"
the statement said. The dialogue between the two countries will be held once
every 12 to 18 months at a deputy ministerial level or other levels the two
sides agree upon. Their
dialogue will include matters related to international economic forums and
institutions. China has also set up financial dialogue mechanisms with the
United States, Britain, France and the European Union. Where
this exchange leads to finally will be decided by the political will on both
sides to take the process forward, but initial reactions indicate that the
potential is enormous. Within a few days, Russia officially indicated its
strong approval of the process. The beleaguered former superpower has long
been seeking an Asian troika with these two upcoming countries to create a
counter to an America-dominated unipolar world order. Influential
sections of the western media, dominated as it may have been during the visit
by events in Rome following the passing away of Pope John Paul II have, significantly,
conceded that the agreements between the two Asian giants could produce a
new world order. Prime Minister Manmohan Singh''s statement, that "India
and China can together reshape the world order" has not gone unnoticed.
The fact that China has a growing dominance in cheap manufacturing and a new
sophistication in computer hardware, while India is an emerging force in computer
software and a variety of online business services has brought about a grudging
realisation that the two countries'' economic strengths don''t so much compete
as complement one another. If fused, it could make the pair a powerhouse in
the technology-driven, Internet-wired world taking shape.
"If India and China cooperate in the IT industry," Wen Jiabao told
listeners in Bangalore, "we will be able to lead the world. It will signify
the coming of the Asian century in the IT industry." It''s not an altogether
new idea. A study last December by the US National Intelligence Council has
warned as much. The
council concluded that the rise of the Asian giants "could usher in a
new set of international alignments" and pose new and unpredictable challenges
for Washington, just as the rise of America in the 20th century displaced
Europe especially Great Britain as the global economic leader. "In
the same way that commentators refer to the 1900s as the American century,"
the study said, "the early 21st century may be seen as the time when
some in the developing world, led by India and China, come into their own."
Already, Beijing has all but swallowed the American textile and toy industries,
not just by undercutting American labour, but by matching US quality and attracting
US industry. The
rise of India may have been far less well documented in the west, but if the
pundits have it right, it''s India, not China, that will emerge as Asia''s economic
gorilla. It is only a matter of time before India becomes the world''s population
leader and, by 2020, India could pass China as the world''s fastest-growing
economy, according to the National Intelligence Council study. India
enjoys other advantages over China. It has the largest English-speaking population
on Earth English being the lingua franca of global business. And it
is a democracy that, in theory at least, should become a safer, more stable
destination for investors in the long term. The
Indian-Chinese rapprochement is seen in the west as primarily economic. Both
countries need an extended period of strong growth to reduce their mammoth
unemployment problem. But the west sees strategic interests behind the bonhomie
too. Both India and China have problems of Islamic militancy in Kashmir
and Xinjiang respectively and both want to seal off any possibility
of outside help for the militants. A
memorandum of understanding on the expansion of aviation allows the two countries
to open their freight markets to each other. Passenger planes can fly to six
cities in each country up to 14 flights per week, which will keep increasing
year by year. The agreement also includes details on code-sharing cooperation
of airline companies, aircraft leasing and foreign pilots hiring. China Eastern
Airlines has already announced a Mumbai-Shanghai-Beijing service beginning
April 18, four times a week. Air China and Indian Airlines are expected to
follow. In
recent years, trade and tourism between the two countries have developed rapidly.
Bilateral trade volumes reached $13.6 billion in 2004, up 80 per cent over
the previous year and will surpass $20 billion by 2008. Personnel exchanges
are expected to increase 30 per cent in 2005. Wen''s
visit to Bangalore was most remarkable; the premier spent his time visiting
software major Infosys Technologies, the Indian Institute of Science (IISc)
and the Indian Space Research Organisation (ISRO). He said that his country
would send 100 students to Infosys for training in information technology.
China has long-harboured ambitions to become a global leader in the software
sector, which it already is in hardware. Wen stressed on the need for India
and China to come closer in the areas of science and technology. "Science
and technology can be a very effective bridge," he said, proposing a
joint steering committee to guide bilateral cooperation in science and technology.
He also called for collaboration at the level of institutions in the two countries,
as well as and more student and faculty exchange. Shortly
after the premier''s visit, Infosys announced it would scale up its Chinese
operations and take in 1,000 software engineers in Shanghai by March 2006.
"We have a modest presence in China now with about 150 employees. Though
our subsidiary generated revenues of Rs8 crore last year, it suffered a net
loss of Rs8 crore. We will invest in technology as well as people to expand
our operations in China," CEO and managing director Nandan Nilekani said. Though
politicians and industrialists from the two Asian giants differ over the merits
of the free-trade agreement mooted by Wen, both agree on education for their
citizens. Wen Jiabao, emphasised the importance of owning intellectual property
and making school education mandatory. Innovation and ownership of intellectual
property rights (IPR) were themes he returned to constantly whether
he was addressing industry at the India-China business co-operation conference
organised by Ficci, CCPIT and CII, or to IIT students. "Innovation is
the soul of a nation and, in future, there will be a competition for intellectual
property rights in the global markets. The future belongs to countries which
can create and retain IPR within their boundaries," he said. One
hundred engineering and technology institutions modelled on the IIT
that''s what a member of the Chinese education delegation privately claimed
his country was working towards. Officially, however, there was no such admission.
Fielding a question on China''s plans for IIT-like institutes, the Chinese
premier said that the IITs were "famous institutions and world-class",
but that China already has 2,000 institutes of higher learning with 20 million
students. By
the end of 1998, China had 22,549 scientific research institutes, including
5,778 research and development institutes employing 9,35,000 people specialising
in scientific research. Universities and colleges have 1,487 research and
development institutes for science and engineering, industry, agriculture
and medicine to form a complete scientific research system. But they still
have nothing like India''s IITs, which are recognised the world over for excellence. But
then India has a great deal to learn from China too. Observing that India
and China were at the crossroads of history, HRD Minister Arjun Singh said:
"We have a great deal to learn from each other..." He advocated
investment in education and social infrastructure and favoured exchanges between
faculty and students of select institutions of excellence in higher education,
saying it would help create a positive atmosphere. "For quality education,
we have to devise innovative means," Singh concluded. Innovation, it
seems, is the key to the future and, if Asia''s two strongest nations can take
the tide at the flood, the talk about making the 21st century an
Asian story will not remain a tall tale.
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