By IPS Correspondents
NEW DELHI, Nov 28 2006 (IPS)

As the hype over a summit meeting between the world’s two most populous nations subsides, analysts here are coming round to the view that the four-day visit of Chinese President Hu Jintao to India, last week, had more form than substance.

To be fair, relations between the two Asian giants – that together account for nearly 40 percent of the planet’s population – were not expected to improve dramatically because of Hu’s visit. India and China had fought a brief but bloody border battle in 1962 and the two countries have since been unable to resolve territorial disputes along their 4,000-odd km border.

The first visit by a Chinese President to India in a decade apparently achieved little beyond staple statements of intent to the effect that it would lead to “all-round mutually beneficial cooperation” between two of the fastest growing economies in the world. Even the two-way India-China trade target that was set did not appear too ambitious – from nearly 20 billion US dollars during the current year to double that figure by 2010.

On Monday, China’s foreign minister Li Zhaoxing described Hu’s visit to India, Pakistan, Vietnam and Laos as a “remarkable success” that would further “stable and mature” relations in South Asia. A day earlier, when India’s External Affairs Minister Pranab Mukherjee was asked on television to describe the Chinese President’s visit, the phrase he used was “reasonably successful”. The interviewer repeatedly asked Mukherjee if his description of Hu’s visit did not imply that India’s expectations were not fulfilled, the minister merely repeated himself and justified his use of the phrase.

“Hu’s visit was summed up by Mukherjee aptly even if his words might appear strange to some, as strange as the language that is used by the Chinese,” says Indranil Banerjie, director, Security and Political Risk Analysis (SAPRA), a New Delhi-based think tank on strategic affairs. He told IPS in an interview that in his opinion, the Indian government was clearly unhappy at the lack of progress that was made on settling the border dispute.

China’s Ambassador to India Sun Yuxi had stirred a controversy, a week ahead of the visit, by unexpectedly stating that India’s north-eastern province of Arunachal Pradesh was Chinese territory. His comments were angrily denied by Indian officials led by Mukherjee.

Banerjie points out that even before Sun’s statement, in early-November, the Chinese government had supported a seminar where Beijing-based academics had argued that China may settle its border dispute if India agreed to part with Tawang district in western Arunachal Pradesh bordering Bhutan. The Indian participants at the seminar were somewhat lightweight, he added.

Indian analysts feel China would use the border dispute that has been dragging on for two and half decades to leverage concessions and establish its dominance over this part of the world. Defence analyst K Subrahmanyam was quoted by the “Economic Times” newspaper saying: “They’ll exploit it (the border issue) by delaying it and every time they’ll show it as a lollipop for you, but they’ll never hand it over to you.”

T.N. Ninan, editor of the ‘Business Standard’ newspaper, summarised the Indian ambivalence towards China: “At one end, there is plain fear (‘we will get swamped by Chinese products’), the inability to forget past humiliations (defeat in the 1962 border war) and suspicion about motives (‘they are encircling us’). Simultaneously, there is a state of denial (‘China’s growth numbers are exaggerated’), a combination of defiance and bravado (‘we are no less than them’), an attempt to belittle the other (‘they are neither communist nor pro-people’) and premature expansiveness at the prospect of victory (as in responses to Goldman Sachs’ forecast that Indian growth rates will eclipse China’s in 15 years).”

The joint statement issued by Hu and Indian Prime Minister Manmohan Singh pointed out that India was among the first countries in the world to recognise that there is one China. A paragraph in the statement read: “The Indian side reiterates that it has recognised the Tibet Autonomous Region as part of the territory of the People’s Republic of China, and that it does not allow Tibetans to engage in anti-China political activities in India. The Chinese side expresses its appreciation for the Indian position.”

“India’s commitment to a one-China policy is gratuitous, needless and unilateral,” argues Prof. Brahma Chellaney at the Centre for Policy Research, an independent think-tank, and author of a recent book entitled: “Asian Juggernaut: The Rise of China, India and Japan”. Chellaney told IPS in an interview that the Indian government “willingly shielded Hu from questions by journalists on China’s expansionist intentions”.

“It is paradoxical that to welcome the world’s leading autocrat, the largest democracy cracked down on Tibetan demonstrators and allowed Hu to appear at a news conference in the scripted style he sets at home,” Chellaney wrote in an editorial page article in the “Hindustan Times” newspaper on Monday. He believes the Chinese President’s call for “an early settlement of the boundary issues” was “disingenuous”. “The two countries are currently locked in what is already the longest and most-barren negotiating process between any two countries in modern world history,” he argues.

On the economic side, Hu proposed the formation of a free trade area (FTA) agreement on Thursday that “would lift the bilateral business relations to a higher level and promote regional economic integration in Asia” before a gathering of top executives of Indian and Chinese companies in Mumbai, India’s commercial capital. His proposal, however, met with a lukewarm response. Indian businesspersons privately stated that such an FTA would work against India’s interests and would widen the already-wide two billion dollar trade deficit between the two countries.

“China keeps the yuan underpriced by at least 15 percent. In a bilateral FTA, China would, through exchange rate manipulation, be imposing a hidden tax of 15 per cent on imports from India while giving a hidden subsidy of 15 percent to its own exports to India,” wrote Swaminathan S. Anklesaria Aiyar on Sunday in the “Times of India” daily.

Despite agreements on investment promotion and protection and on strengthening cooperation in the areas of information technology, energy and infrastructure that were signed during Hu’s visit, there was no concrete plan of action to diversify the composition of trade between the two India. At present, roughly three-fourths of the value of India’s exports to China comprises a single item, iron ore. (Within India, there is a debate raging on whether the country should not be exporting more value-added steel products instead of a basic raw material like iron ore.) On the other hand, more than a third of Chinese exports to India are high-value electronic engineering products.

What has rankled observers in India is that Hu’s trip to Pakistan has apparently yielded much more in terms of a free trade agreement and a stronger programme on nuclear cooperation. Given the long history of enmity between the two neighbours, the Chinese President would have committed “one of the cardinal errors of South Asian diplomacy” by hopping from India to Pakistan, wrote the “Financial Times” on Friday.

Banerjie believes that it would take awhile for the mistrust between China and India to dissipate, so that the two look on each other as collaborators and not just competitors. “Just as many in India are apprehensive about China’s intentions to ‘encircle’ the country by forging close links with Pakistan, Bangladesh, Myanmar, Nepal and Bhutan, many in China are wary about India’s attempts to come closer to the United States, Japan and Singapore, ” he said.

“Both China and India want to expand economic relations in a mutually beneficial manner, but geopolitical and strategic concerns are proving to be stumbling blocks,” Banerjie observed.

Excerpt: