CHINA INDIA RECENT DEVELOPMENTS

1. BORDER ISSUE
India and China still have big problems between them. The biggest, as Modi's remarks at the press interaction noted,
was the border. Since the last major flare up in 1986-87, India and China have created a 'confidence building
measures' regime, which has effectively kept peace there. But, as incidents in the last couple of days reveal,
unsettled borders can never really be quiet borders.
For this reason, Modi, was perhaps the first Indian leader in recent times to directly speak of the issue, and that, too,
before China's supreme leader. He echoed what Xi himself has been saying, and what he reiterated that we
should resolve the border at the earliest. Second, while the CBMs have done a good work, Modi said there was a
need to, at least, work out a commonly accepted alignment of the 4,056-km long Line of Actual Control that marks the
border today. There are some 14 places on the LAC where India and China's perception of where it lies differs, and
this gives rise to the so-called "transgressions" or "incursions".
According to the 1993 agreement on maintaining peace and tranquillity on the LAC, the two countries committed
themselves to coming up with a mutually acceptable LAC. But after initial exchanges of maps, the process ground to
a halt because in Atal Bihari Vajpayee's tenure, there were expectations that the two sides would actually resolve
their border dispute quick time.
Following the appointment of highlevel Special Representatives in the wake of Vajpayee's 2003 visit to Beijing, things
moved fast and the two sides worked out a basic agreement on the "Political Parameters and Guiding Principles for
the Settlement of the India China Boundary Question "in 2005 which would essentially have the two sides swap their
claims India's Aksai Chin for China's Arunachal Pradesh.
The 17 rounds of discussions between the Special Representatives have done the required work, what is now
needed is for the political leaders, which means Xi and Modi, to finalise the settlement. There are other problems,
some that have been spoken about openly, some not and some only obliquely. Among the ones that have not openly
come up is China's activities in South Asia, especially Pakistan. As long as Beijing seeks to keep India unsettled in its
own region, we cannot really develop ties which could be called friendly
2.

VISIT

First, China is not rushing to open its coffers to India. Prior to the visit, Chinese officials had claimed that
Mr. Xi would commit to invest at least $100 billion. But the five-year plan inked by the two sides
envisages $20 billion of Chinese investment. Clearly, Beijing is waiting to see if New Delhi can walk the
talk. This is not surprising. Outside of Gujarat, Chinas experience with big ticket investments has not
been encouraging. This is precisely why the Prime Minister received Mr. Xi in Ahmedabad. Moreover,
China unlike Japan does not have long experience of working in India.
Nevertheless, Chinas inclination to test the waters implies that Indias trade deficit may not be adequately
offset by capital inflows. To be sure, the Chinese have also agreed to improve market access for Indian
firms. But it remains to be seen whether they will deliver on this. The economic imbalance between India
and China, then, may not be set right anytime soon.
Second, Mr. Modi appears lukewarm to Mr. Xis ambitious plans for building multiple silk roads.
Although India has finally agreed to consider the Bangladesh-China-India-Myanmar (BCIM) Corridor, it
is unlikely to move with alacrity. Indias own backward linkages from the Northeast leave much to be
desired. In such a situation, going ahead with a corridor connecting the Northeast with these countries
will be seen as working mainly to Chinas advantage. Nor does the proposed maritime silk road
connecting Chinas coastline with various hubs in the Indian Ocean have much traction in New Delhi.

Placing these proposals in the ice pail is not good idea, however. India must realise that these routes will
come up irrespective of its participation. Countries across the region are drooling at the prospect of big
infrastructure and cheap Chinese finance. Sri Lanka and the Maldives have lapped up Mr. Xis plans for a
maritime silk road. India, too, could benefit much from joining these ventures. For instance, the
upgradation of our coastal infrastructure would considerably aid our emergence as a serious maritime
not just naval power. Concerns about Chinese presence in the Indian Ocean can be overdone. In the
past three years, New Delhi has put in place practical arrangements for maritime security with Sri Lanka
and the Maldives, Seychelles and Mauritius.

KEY POINTS
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India, China signed 12 agreements including cooperation in railways, outer space

Will begin process of discussion on civil nuclear energy cooperation that will bolster broader cooperation
on energy security, said Modi
On the border issue, President Xi said, Due to non-demarcation of the border, certain incidents take
place but both countries have mechanisms to handle such incidents.
Agreements on 2 Chinese industrial parks & commitment to $20 billion Chinese investments in 5 years
signed
Pact on making Shanghai and Mumbai twin-cities signed
We (India, China) are emerging markets and should strive to achieve peaceful development: President
Xi
President Xi officially invited PM Modi to visit China
2015 will be called 'Visit India' year in China, and 2016 will be 'Visit China' in India
Two countries proposed cultural exchange programmes covering culture, education, tourism: President
Xi
President Xi hopes for India's support in building relations with SAARC countries