CHINA SPECIAL

New Delhi, 15 January 2008

Sino-India Ties

WILL CHINA DELIVER AT IAEA?

By M D Nalapat

(Holds UNESCO Peace Chair, Prof, Geopolitics, Manipal Academy of

Higher Education, Ex-Resident Editor, Times of India, Delhi)

When chosen by Sonia Gandhi to be the UPA's Prime Ministerial choice, it was expected that Manmohan Singh would concentrate on his core competence, which is economics, and leave foreign policy and national security to those with a better understanding of the subject. Instead, he has neglected the economy, remaining a passive spectator to the slowing down of liberalisation under pressure from the Communists.

In place of a reduction in restraints on Indian corporates, the period since 2004 has witnessed a steady increase in the Regulation Raj. Whether it is the buying of shares or the paying of income-tax, the process has been made more difficult and complicated for those hundreds of millions of citizens who lack money power or political influence. Although the UPA touts the growth rate of 9% as proof of the success of its economic management, the fact remains that this is still the "Vajpayee rate of growth". It was expected that the "Manmohan rate of growth" would be the 12% and more that China has achieved for the past two decades

It is a matter for our leaders to ponder that the Indian economy, which was double the size of the Chinese in 1950, is less than half its size today, even after the 1991 liberalisation. China's foreign exchange reserve is six times that of India, and its trade with just the US equals the entire foreign trade of India. Even as the Left parties demand a rollback of economic liberalisation, the communists in China are showing that they are the best businesspersons in the world.

At this rate, China will become a superpower in ten years, and usher in a "bipolar" world where it alone can be compared to the US. As for India, it would still be far behind, with a per capita income that is a third of China’s, despite the fact that the population of that country is even higher than India's. It is as the head of a much smaller economy that the economist Prime Minister met with his Chinese counterparts in Beijing.

Long before the PM's visit, the Chinese leadership had signalled that it was unwilling to accept the "Zhou En Lai" formula of 1961 on the boundary dispute. Then Premier Zhou had made repeated visits to India to offer Jawaharlal Nehru a border settlement based on the existing reality. Under this plan, Aksai Chin would be accepted by India as Chinese, while Arunachal would be taken as Indian by China.

Nehru, who was convinced that the Chinese were too much in awe of his stature and reputation to fight a war, rejected Zhou's offer and launched the "forward policy”, under which an under-equipped and poorly-led Indian army was asked to advance to locations held by the Chinese and "throw them out”, in Nehru's ringing words.

Instead, in October-November 1962, it was the Chinese army that threw out Indian forces from much of the territory they had claimed, although Zhou En Lai withdrew all Chinese forces from land seized by them during the humiliating conflict, that diminished Nehru and India internationally. Since then, most of the world has seen China as a pan-Asian power and India as a regional power. However, lately China is regarded as a world power and India as a pan-Asian force

If there is virtually no hope of a breakthrough in the border talks, because of the Chinese insistence on taking over Tawang and legitimising Pakistan's occupation of part of Kashmir, and if commercial treaties of any significance are impossible because of the control that the Chinese Communist Party has over product prices and raw material costs, what is Manmohan Singh aiming for in Beijing?

The Prime Minister has bet his legacy on a single issue, the Indo-US nuclear deal, and he knows that Chinese backing would be crucial in both the International Atomic Energy Agency (IAEA) and the Nuclear Suppliers Group (NSG). Thus far, directly and through other players, China has taken a stance hostile to India in both bodies. Beijing is demanding that India abandon its nuclear weapons programme and leave China with a monopoly in Asia in advanced nuclear weaponry and the missiles needed to deliver them.

This hard-line approach by Beijing will make it impossible for Anil Kakodkar and the rest of the Department of Atomic Energy team to get the minimal concessions from the members of the IAEA and the NSG that they are asking for. And in case there is no deal, the Singh-Bush agreement collapses, for it depends for its operationalisation on an acceptable safeguards agreement with the IAEA and an assurance of fuel supply from the NSG. If these are not possible, then the entire deal becomes worthless to India.

Already, the numerous concessions made by Manmohan Singh to please the US and other major powers --- concessions far in excess of that discussed by the NDA --- have created a political and scientific backlash against the deal. Unless the PM can get the minimal concessions he seeks from the IAEA and the NSG (assurance of fuel supply and non-interference with the defense programme), he will not be able to get enough political support in India to implement the deal. As Washington is finding out, New Delhi is not Beijing, Riyadh or Islamabad, where an unelected authority, a monarch and a general can agree to conditions that a democratic system would not tolerate

To get the deal past the IAEA and the NSG, Manmohan Singh needs the support of President Hu Jintao and Prime Minister Wen Jiabao. Will they give it? True, there are news reports about China's support for the India-US nuclear deal, but it remains to be seen if the hardheaded Chinese Communist Party leadership --- after decades of following a policy of containment of India --- would support a reduction in nuclear restrictions on India. Not only would such a move challenge China's current strategic monopoly in Asia, it would push India and the US closer together --- a nightmare for China. Clearly, while soothing words will as always be plentiful, actual support may yet be distant

The fact remains that India is the only country in Asia that has the potential to match and surpass China. Australia has too few people and Japan has been having economic problems for more than a decade. In case the IAEA and the NSG accept Kakodkar's present terms, it would result in the Singh-Bush nuclear deal suddenly becoming attractive to many of its critics, thus clearing the way for its adoption. The Left parties, once China is on board, will be in a bind on their stand of total opposition to a deal that would have the consent of much of the scientific community. India and the US would come much closer together, and India's economic outlook would improve.

None of this would be good news for China. It is a measure of the Nehruvian dissociation from reality of the UPA's top policy makers that they seriously expect the hard-headed Chinese leadership to help India become a strong economic power and an ally of the US. Such idealistic thinking may be what works in India (that turns the other cheek to Pakistan repeatedly, building on the concessions made at Tashkent in 1965 and Shimla in 1972), but thus far, China's leadership has shown that it is made of stronger stuff

All that Manmohan Singh is likely to get are sugary words and vague promises. In exchange, the Chinese leadership will expect substantive and painful concessions from the Indian side, such as the handing over of Tawang and the granting of free entry to Chinese companies in India. In the field of infrastructure, especially, the demand for good infrastructure has been saturated in many parts of China, even while India has primitive facilities. The Chinese will seek to send their teams to India, to build roads, ports, bridges and power plants at a profit even while they thus stave off unemployment.

Oddly, when China wanted visas for hundreds of its workers to come to India rather than recruit local labour some of the UPA’s allies lobbied (successfully) with Manmohan Singh to allow this. Beijing’s friends in the UPA can be expected to ensure that tens of thousands of Chinese workers will be given visas to come to India and work on infrastructure projects. Unless the Prime Minister agrees to this, he his unlikely to get any actual Chinese support at the IAEA and the NSG.

The question is: will he be willing to pay such a high price in order to get support from Beijing for his nuclear deal? Even if China formally backs the deal, the clout of Beijing is sufficient to ensure that several other countries (including a few in Europe) oppose India and thereby derail the deal. Manmohan Singh has shown what a forgiving and generous man he is in his negotiations with Pakistan, towards which he has taken a stand even more conciliatory than South Asia's Man of Peace, IK Gujral.

It remains to be seen if this big-heartedness of his will lead him towards the commercial and territorial concessions that China seeks. The nation awaits the price that it will be made to pay to China so as to keep Manmohan Singh's pet project, the Indo-US nuclear deal, alive. ---- INFA

(Copyright India News & Feature Alliance)