It’s always long term for China


Pragati

By Rahul Sharma

There is nothing to be excited about Chinese President Xi Jinping’s decision to skip Pakistan during his forthcoming South Asia tour. Some might argue that it would have been a good time for Xi to land in Islamabad to show support for the country roiled by political uncertainty, but let’s be clear that the call to stay away does not reflect any change in relations between the two long-standing friends.

Xi is due to visit India, Sri Lanka and the Maldives later this month, trips during which he will test prime minister Narendra Modi’s keenness to improve trade ties between the world’s two most populous countries and reaffirm Beijing’s deepening ties with Colombo that has attracted vast amounts of Chinese investments in its infrastructure.

Ties between India and China have always been testy given the border dispute that saw the two go to war back in 1962. Frosty relations have thawed in recent years and trade between the two neighbours has grown, but there is still a long way to go before any degree of mutual trust can be established.

Indian foreign minister Sushma Swaraj said this week that while Modi and Xi had established good relations when they met at the BRICs summit in Brazil soon after general elections in India, she also made it clear that Beijing had been delivered a strong message that it had to respect the “one-India policy (which means no claims on Arunachal Pradesh) given that New Delhi recognised Tibet and Taiwan to be part of China.

One thing India and its diplomats can be clear about is that his decision to skip Islamabad from his tour does not mean China is ready to dump Pakistan. Usually Chinese leaders club their visits to India and Pakistan, but all that a de-linking this time around could possibly do is give New Delhi temporary comfort that at this point it figures higher in Beijing’s priority than in the past.

One thing India and its diplomats can be clear about is that his decision to skip Islamabad from his tour does not mean China is ready to dump Pakistan. Usually Chinese leaders club their visits to India and Pakistan, but all that a de-linking this time around could possibly do is give New Delhi temporary comfort that at this point it figures higher in Beijing’s priority than in the past.

China seldom takes a short-term view of the world, and has clearly defined its relations with other nations on the basis of its long-term goals and needs. A recent info graphic in Global Times, a Chinese government-run newspaper, provided a view of how Beijing divides its worldly ties.

China essentially follows four partnership models: creative partnership, comprehensive cooperative partnership, strategic partnership (of cooperation) and comprehensive strategic partnership (of cooperation). The difference, according to the newspaper, is that while cooperative partnerships are formed at a fundamental level, are bilateral in nature and focus mainly on politics, economics, science and technology and culture, the strategic partnerships can be both bilateral or multilateral and are based on benefits of national security.

While one would imagine that diplomacy and foreign relations are usually dynamic in nature and, therefore, likely to change depending on circumstances, in China’s case one can merrily assume that any shift will only be snail paced with little or no change in the foundation. Foreign policy, like so many other things in China, can be rather nuanced and small variations in definition of relationships can mean a lot more than what the world outside may understand.

So it is interesting to see that China clubs the European Union and most large European nations except Germany and Russia as those with which it has a comprehensive strategic partnership. With Germany it has an “all-round strategic partnership” and with Russia it is in a “comprehensive strategic partnership of coordination”

With India, Afghanistan, South Korea and Sri Lanka, Beijing shares a “strategic cooperative partnership”. That means it sees all of them through the same prism, an idea that may not appeal to India, but might go down well in Kabul and Colombo.

According to the Global Times, China’s ties with ASEAN, central Asian republics, the United Arab Emirates, Canada and some East European countries are seen to be one of “strategic partnership”, while those with Nepal, Congo, Bangladesh and some other key African nations fall under the head “comprehensive cooperative partnership.”

The emerging great power rivalry with the United States and the old, historic unhappiness with Japan has led China to define its relationship with these two very differently than those with other nations of the world.

It calls its engagement with the United States a “new model of major-power relationship”, which means Beijing definitely sees itself in league with Washington, an idea that obviously reflects on its relationships with other capitals. In short that means that while China is willing to engage with all, it doesn’t consider anyone a bigger rival than the United States. Countries such as India are, therefore, mostly marginal to China’s larger cause.

Similarly, its defines ties with Japan as a “strategic relationship of mutual benefit.” Given the huge bilateral trade and Japanese investments in China even as the two battle over a gory past, the definition makes sense.

Pakistan is the only country with which China has an “all-weather strategic partnership of cooperation.” In layman’s terms, it simply means that Beijing considers its relationship with Islamabad over and beyond its ties with all others. The phrase “all-weather” is key; China might be willing to shift gears either way in its relations with other countries, with Pakistan it will always be an even ride just as it has been for the past several decades.

Let’s not forget it was Pakistan that essentially helped Beijing open its door to the world in the 1970s, an event that has now propelled China to almost become the world’s biggest economy. China never forgets its friends and that’s a thought Pakistan can live comfortably with irrespective of whether it has a democratically elected government or army rule.

It’s also a thought India’s new government needs to keep in its mind while dealing with Beijing and Xi, the now all-powerful man in China.

Rahul Sharma, a former newspaper editor, is President, Rediffusion Communications, Mumbai; Secretary, Public Affairs Forum of India, and a keen foreign policy follower. Views are personal.

Is Chinese Money Good?


By Rahul Sharma

BusinessWorld

In the larger scheme of things there are today two countries that have the capability and the capacity to funnel substantial investments into foreign markets. One is the United States – the traditional home of large multinational companies with global footprint. The other is China, which is looked at with suspicion not only in India, but in the United States as well.

At a time when India needs to attract higher foreign investments – not only to bridge its gaping current account deficit, but to also create millions of new jobs – there is a need to look at Chinese companies differently than we have in the past. And we can learn lessons from the Americans, who worry about China’s rise as much as we do.

The first lesson is to be pragmatic. The second is to find a right balance between politics and business despite the usual noise that tends to drown reason to accommodate the interests of both sides.

Last year, two Chinese technology companies – Huawei and ZTE – were hauled over the coal by the intelligence committee of the U.S. House of Representatives after concerns over national security threats. “Chinese telecommunications companies provide an opportunity for the Chinese government to tamper with the United States telecommunications supply chain,” the committee’s investigation report said.

It recommended that the United States should view with suspicion the continued penetration of the US telecommunications market by Chinese telecommunications equipment manufacturers and private companies should consider the long-term security risks associated with doing business with these Chinese companies. Of course, the two companies protested loudly as anybody would, but the report is now a permanent marker in US-China relations.

However, Americans turned out to be eventually pragmatic. They have not only allowed Chinese companies to invest in the key energy sector, last month the largest acquisition of an American company by a Chinese firms went through without serious hiccups.

There was cause of celebrations when shareholders of the US Smithfield Foods Inc. agreed to sell their company to China’s Shuanghui International Holdings Ltd for $4.7 billion. The deal went through despite initial concerns over national security.

Let’s return to India. The same telecommunications companies that got hammered in the United States have also been under the government microscope for some time. Every Chinese company looking to invest in India quickly becomes a victim of a 50-year-old narrative when India and China went to war over a border issue. Since the issue remains unresolved, the mindset demands that everything China and Chinese needs to be looked at suspiciously.

If for a moment we do agree that Chinese companies have sinister plans to destabilize India, we need to look West – towards Europe, Africa and both North and South America where cash-flushed Chinese state-owned and private firms have been on a business buying spree for some years now. While the big focus was energy earlier, the trend has changed as different businesses (going cheap everywhere post the 2008 financial crisis) are being eyed and bought.

Given that most American companies have virtually given up on India and are keener to invest in their domestic economy that is beginning to finally expand, the only source of investment that India could possibly look at is China. However, it has to be pragmatic and balanced in attracting the kind of investments it wants and in sectors where the threat factor is low. Let’s not forget that the eventual plan of the two countries is to raise bilateral trade to $100 billion in the next few years, and that opens up several possibilities for Chinese investments in sectors that are safer from a “national security” point of view.

While geopolitics will always continue to play a strong role in India-China relations, let’s also understand and appreciate that the two need each other – for different reasons of course. While it is in India’s interest to bridge its trade deficit with China, it is also in China’s interest to get a toehold in the Indian market at a time when its exports to the West are shrinking and its overall economy beginning to slow down.

Similarly, it is in the interest of Chinese companies to overtake Japanese and South Korean brands that have made India a strong home in the last two-odd decades. For India, which is now talking of allowing Chinese companies to set up shop in special economic zones (than let them run around freely in the countryside), the focus should be on getting the best deal for the government and the people.

National security, like everything else, is relative to the situation on ground at a certain period in time. India needs to handle matters with China confidently and keeping its interests in mind.

Let’s go back to the Americans again. Back in 1971, President Richard Nixon and his right hand man Henry Kissinger set the ball rolling to bring China into the global economic mainstream. The reason was geopolitical, For three decades after that American companies poured in billions of dollars into that country, bringing it to a point that now Americans themselves have started looking at China as an emerging global power that could overtake the United States in the near future.

The threat of China to the superpower is as real as it to a regional power such as India, which also happens to share a troublesome border issue with the large neighbor. Good business always makes for good politics and, therefore, it is in the interest of bother India and China to ramp up investments.

India doesn’t have to entirely follow the American way, but it can surely learn how to deal better with the Chinese by letting them in in a manner that helps New Delhi resolve its economic troubles.

(The columnist, a former newspaper editor, is President, Public Affairs, Genesis Burson-Marsteller and co-founder of Public Affairs Forum of India. He has a keen interest in China and Southeast Asia. Views are personal