India as the Next Global Manu Facturing Center - India: Where Does the National Profit Flow to? - China ...
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India: Where India as the Next
Does the National Global Manu
Profit Flow to? Facturing Center
I s s u e 5 | 2 0 1 6
国内零售价：10 元 / India 100 www.chinaindiadialogue.com
CONTENTS CHINA-INDIA DIALOGUE
02
A dministrative Agency: 主管：
China International 中国外文出版发行事业局
News Publishing Group （中国国际出版集团）
HEADLINES Publisher: 主办：
Keynote China Pictorial 人民画报社
A ddress: 地址：
06
33 Chegongzhuang Xilu, 北京市海淀区
The Dragon and the Elephant: Haidian, Beijing 100048, China 车公庄西路33号
OPENING Email:
ESSAY The Past and Future of China-India contact@chinaindiadialogue.com
Relations President: Yu Tao 社长：于涛
Editorial Board: 编委会：
Yu Tao, Li Xia, 于涛、李霞、
COMMENT He Peng, Wang Lei 贺鹏、王磊
E xecutive Editor-in-Chief: Li Xia 执行总编：李霞
Chindia@G20: Seeking Reforms through Innovation / p.10 Editorial Directors: 编辑部主任：
Wen Zhihong, Qiao Zhenqi 温志宏、乔振祺
Goa in October: English Editor: 英文定稿：
Xu Mingqiang, Liu haile
Good Ground for a New Beginning / p.14 Senior Consultant & Editor
徐明强、刘海乐
高级编辑、顾问：
Shastri Ramachandaran 夏斯特里·拉马昌达兰
16
Editors and Translators: 编辑、翻译：
STRATEGY Gong Haiying, Hu Zhoumeng, 龚海莹、胡周萌、
Liu Haile, Li Zhuoxi, 刘海乐、李卓希、
Li Yiqi, Wang Dongmei, 李艺琦、王冬梅、
China-India Relations Wang Shuya, Xu Shuyuan, 王舒雅、许舒园、
Yin Xing, Zhang Xue, 殷星、张雪、
CHANGED AND UNCHANGED Zhao Yue, Zhou Xin
Editor-Visuals & Photographs:
Laurent Hou
赵月、周昕
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罗鸿
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O verseas Distribution:
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(Guoji Shudian),
Modi’s Reform and China-India Cooperation / p.22 35 Chegongzhuang Xilu,
P.O. Box 399, Beijing 100048, China
In China, subscriptions are available
at any post office.
TREND India as the Next Global Subscription and distribution agency in Hong Kong,
Macao, and Taiwan:
Chinese Enterprises in India Manufacturing Center Hong Kong Peace Book Company, Ltd.
and Their Impact / p.26 Prospects & Problems / p.49 17/F., Paramount Building, 12 Ka Yip Street,
Chai Wan, Hong Kong
India-China Tourism DATA China standard periodical number:
CN10-1433/D
Civilizational Ties in a Modern Chinese in the Eyes of Indians Published in October 2016
Avatar / p.30 and Indians in the Eyes of
Chinese / p.54
CASE STUDY
China-India Maritime Relations YOUNG VOICES
in the Asian Century / p.34 Ways of Seeing Each Other / p.60
India: Where Does the National COLUMN I s s u e 5 | 2 0 1 6
Profit Flow to? / p.39 Chinese Museums - In Pursuit of
Preserving the Culture / p.62 Visit China-India Dialogue on the Internet:
DISCUSSION www.chinaindiadialogue.com
Follow us on:
Make in India vs. Made in BOOKS
China / p.44 An Uncertain Glory / p.64
Consultants of the China-India Dialogue Advisory Board
Alka Acharya Professor and director of the Lin Minwang Associate professor at China Strategy under the Chinese Academy of Social
Institute of Chinese Studies, Delhi Foreign Affairs University Sciences
Hu Shisheng Director of the Institute of South Ma Weigong Consultant of the National Sun Yuxi Former Special Envoy of the Chinese
and Southeast Asian and Oceanian Studies Institute of Strategic Communication at Peking Foreign Ministry on Afghan Affairs and former
under China Institutes of Contemporary University and former deputy editor-in-chief of Chinese ambassador to India
International Relations China Radio International Yang Yifeng Director of India Broadcast of
Li Daokui Economics professor and director of Sun Shihai Director of the Chinese Association South Asia Center, China Radio International
the Center for China in the World Economy at for South Asian Studies and former deputy Zhang Wenmu Professor of the Center for
Tsinghua University director of the National Institute of International Strategic Studies at Beihang University
HEADLINES NEWS CHINA- IND IA D IAL O GUE
China and India: hold financial and economic dialogue “Tai Chi & Yoga” tourism promotion held in New Delhi
China and India on August 19 held their 8th high-level Financial and Economic Dialogue ahead of To implement the 2016 “Visit China Year” program in
the G20 summits to strengthen trade and economic cooperation, with the two fast-developing India and strengthen local tourism exchange and coop-
nations underlining the need for building more solidarity to adopt more responsible macroeco- eration between China and India, Kou Wujiang, head of
nomic policies. Henan Administration of Tourism, led a delegation to
India from June 30 to July 2 and hosted the “Tai Chi &
Yoga” tourism promotion event at New Delhi on July 1.
The event attracted nearly 100 participants, including
Li Bijian, Chinese Minister-Counsellor to India, Shri
Jyoti Kalash, Resident Commissioner of Nagaland
House in Delhi, Mr. Rajan Sehgal, North President of
IGTA (India Golf Tourism Association) and TAAI
(Travel Agents Association of India) , Arvind Alok,
chairman of the Buddhist Monuments Development
Council, and delegates from the Indian Ministry of
External Affairs, Ministry of Tourism, business insiders
and journalists.
Oil demand rises in China and India China and India
CRRC launches Indian joint venture China’s Fosun to buy Data released by BP Statistical Review of World Energy 2016 identified as key
India’s Gland Pharma showed India as the world’s third largest oil consumer in transport markets
Chinese rolling stock and components conglomerate CRRC 2015 after China and the U.S. “By 2040, China and India
Corp. has opened its first joint venture manufacturing plant could double their share again to a third,” said Owain The transport sector is look-
A unit of China’s Fosun Group
in India, representing a total investment of US$63.4 million, Johnson, managing director of Dubai Mercantile Exchange ing to Asia Pacific as the key
has agreed to buy a con-
the group announced on August 20, 2016. CRRC said it was (DME). market for investment over
trolling stake in Indian phar-
the first foreign company to set up a rail vehicle assembly the next five years, according
maceutical company Gland
plant in India since Prime Pharma Ltd. from sharehold-
China to the seventh The Way Ahead
Minister Narendra Modi U.S. Transport Survey from global
ers including KKR & Co. for
launched his “Make in India” up to US$1.26 billion.
India law firm, Norton Rose
campaign in 2014. The Bavo Fulbright. China and India
Shanghai Fosun
facility is also CRRC’s first facto- are the most popular jurisdic-
Pharmaceutical (Group) Co.
ry in South Asia. tions for investment, followed
Ltd. is buying roughly 86
by the U.S., with growth
percent stake in Gland
through consolidation viewed
Pharma, including all shares
owned by KKR in addition to 2016 as the best investment oppor-
tunity currently.
shares from other sharehold-
ers. The deal is China’s largest
takeover of a company in China and India top Asia’s
India.
2016 Heroes of Philanthropy
India’s Hike app gets key Chinese partner
Forbes Asia today announced its annual Heroes of
Indian messenger app Hike has won Philanthropy list, highlighting some of the region’s note-
fresh money from investors and a key worthy givers. It honors 40 philanthropists from 13 coun-
partner from China. The latest invest- tries across Asia Pacific. Honorees include China’s Pony
ment round now sees the company val- Ma, Wang Jianlin, Lui Che Woo, Yeung Kin-man and Terry
ued at US$1.4 billion. Tencent and Gou. Five Indians have made it to the list, including Vineet
Foxconn were the biggest investors in the and Anupama Nayar, Adar Poonawalla, Amit Chandra and
latest cash injection. his wife Archana Chandra.
02 03
eWTP
HEADLINES NEWS KEYNOTE CHINA- IND IA D IAL O GUE
LinkedIn survey shows Indian and Chinese professionals
most confident globally
According to the survey Your Story @work conducted by popular career-oriented platform LinkedIn,
Indians have the highest confidence level of 55 percent in the world. China takes up second place
with a confidence rate of 54.8 percent. When it comes to praising colleagues at workplaces, Chinese
rank the highest in the world. The report pointed out that this is closely related to the rapid develop-
ment of India in recent years. The increasing impact of China in political and economic areas and the
rising competitiveness of Chinese enterprises in the global market seem to give workers a brand new
appearance.
No.1 No.2 Electronic World Trade Platform
India China 世界电子商务贸易平台
[Shi Jie Dian Zi Shang Wu Mao Yi Ping Tai]
55 % 54.8 % China Edited by Li Zhuoxi
The level of confidence on one's LinkedIn profile Most frequent to compliment a colleague
Recently, B20 (Business 20, summit backdrop of prosperous global and medium-sized enterprises to
of business leaders from the G20 cross-border e-commerce, which, participate in global trade and facil
countries) has released the B20 due to its boundless potential, not itates their integration in the global
2016 Policy Recommendations to only attracts more and more coun value chain. In China, cross border
the G20, among which is the sug tries, but also helps driving the do e-commerce has become a new
gestion for the G20 to “encourage mestic economy. channel for supply-side structural
dialogue on cross border e-com Global trade growth in recent years reform.
When China’s enterprises invest and develop in India, they need to consider an merce between private business and has been sluggish. The growth According to a recent report released
governments by building the eWTP rate of global trade, which used by China E-commerce Research Cen
important factor: India’s system and development of mechanism, such as the coun-
(Electronic World Trade Platform)”. to be higher than that of economic ter, cross-border e-commerce has
try’s mature system of legislation and young age of its working group. The objective is to promote the de growth, has been lower than the become an important platform and
Kamlesh Bhadani velopment of cross border e-com latter for the last five years. bond for the Belt and Road Initia
CEO of Chengdu Small and Medium Enterprises Investment Group in India merce. Besides, it also suggests According to the Global cross-border tive. It guides development of trade
specific measures to facilitate dia B2C e-CommerceMarket 2020 re and investment by offering more
logues between private sector and leased jointly by Alibaba Group and channels and supplies, facilitates
governments, incubate cross-bor Accenture PLC, the market size of countries to make divisions on pro
der e-commerce, and create policy global cross-border B2C e-commerce duction and cooperation, achieves
As India rises, the advantages for China outweigh the disadvantages. The average and business environment of high market, which was US$230 billion resource sharing and product sharing
age of Indians is about 10 years younger than Chinese, which means India’s domes- efficiency. in 2014, will increase to US$994 among countries involved in the Belt
tic infrastructure and huge consumer market will provide an ideal place for Chinese As the chair of SME Development billion by 2020, 29.3 percent of and Road Initiative, and will become
enterprises to enter the international market. Supporting the rise of India will at Taskforce, Jack Ma, chairman of Ali the size of global B2C e-commerce the door to supply-side structural
the same time increase the sustainability of the development of China. baba Group, was the first to propose market and 13.9 percent of global reform. Experts believe that the
building eWTP to encourage dia consumer goods trade volume. The suggestion of eWTP is rooted in Chi
Wang Wen logues on cross border e-commerce compound annual growth rate of na’s e-commerce enterprises’ active
Acting director of Renmin University of China’s Chongyang Institute for Financial Studies between private business and gov cross-border e-commerce market expansion in the global market.
ernments, which was a significant share is expected to reach 27.3 per eWTP, once built, will take utmost
part in the B20 2016 Policy Recom- cent by 2020, which means that the advantage of labor and brains,
mendations to the G20. growth of cross border e-commerce reduce trade barriers and cost of
Jack Ma has been advocating the will double the growth of domestic business transactions and circula
If the Indian economy begins to rise, then its development mode will be very similar eWTP since the Boao Forum for Asia e-commerce market and more than tion to the least, benefiting global
to China’s economic rise after the reform and opening up, which requires making this March. It can streamline present triple the growth of global consumer customers. However, building eWTP
full use of the advantage of low labor costs, and of export-oriented industrialization. global trade rules and promote devel goods trade market. is not easy in the current global
opment of cross border e-commerce, Cross border e-commerce lowers the trade environment. As the main
Feng Ming so that customers around the world threshold for enterprises’ participa advocate for eWTP, Jack Ma said
Researcher at the National Academy of Economic Strategy under the Chinese Academy of Social Sciences are able to buy and sell things easily. tion in international trade. Especially in public lately that building eWTP
The idea of eWTP is under the it has become a channel for small needed time.
04 05
OPENING ESSAY CHINA- IND IA D IAL O GUE
A
movie jointly are living in a time of collabo- part in the BRICS Leaders
produced by China ration and not confrontation.” Meeting hosted by India.
and India, Xuan Her words perfectly under- Besides high-level mutual
visits, substantial progress has
The
Zang, which hit score the future of Sino-
theaters in the first half of Indian relations. been made in cooperation
2016, tells the legendary story All of these stories show between the two countries’
of eminent Chinese monk that, as two neighbors bonded local governments. Mutual
Xuan Zang’s arduous journey together for millennia, China visits of provincial-level
alone to India seeking and India are ushering in a delegations flourished be-
Dragon
Buddhist scriptures during the new era of bilateral relations. tween the two countries.
Tang Dynasty (618-907). The Since President Xi Jinping’s Increasing numbers of
film recalls a glorious chapter visit to India in 2014 and Chinese provinces and Indian
in the history of Sino-Indian Prime Minister Narendra states have established good
cultural exchange and re-ig- Modi’s visit to China in 2015, relationship. To date, the two
and the
nites the public’s interest in particularly, the relationship countries have had ten pairs
the millennia-old friendly has witnessed a significant of sister provinces (states)
communication between the turning point and entered the and sister cities.
two countries. best period in the past half As two major developing
In June 2016, during my century. powers with many common-
Elephant
visit to Assam, I got to know a alities, China and India have
29-year-old Chinese man who CLOSER POLITICAL shared political interests in
worked together with his INTERACTIONS some international issues. In
Indian colleagues to maintain President Xi and Prime recent years, the two coun-
Asia’s oldest oil well hidden in Minister Modi entertained tries have made significant
the primitive forest in a border each other in their respective achievements in coping with
The Past and Future town. At that time, he had hometowns, marking a re- climate change together and
been married for just a month. markable improvement of collaborating under the
I have met many Chinese like China-India relations. In the BRICS framework. They have
of China-India Relations
him, who won the respect of past 12 months, several worked together to safeguard
local communities with their Chinese leaders visited India, the shared interests of devel-
diligence and hospitality while and India’s president, vice oping countries and promote
helping to improve China- president and minister of the rise of emerging econo-
India relations. home affairs consecutively mies. With the support of
A 14-year-old girl from visited China. In September China and other countries,
By Liu Jinsong Mumbai once wrote a letter of this year, Indian Prime India recently signed a mem-
to the Chinese ambassador to Minister Modi attended the orandum of understanding
India, saying that “China and G20 Summit held in China’s over its obligations to become
India should keep the past Hangzhou, and Chinese a member-state of the
behind and move ahead as we leaders are expected to take Shanghai Cooperation
Organization (SCO). As some
Indian friends said, at a criti-
GEOSTRATEGIC AND ECONOMIC INTERESTS INEVITABLY COME The poster of cal period for the rise of Asia
Xuan Zang. [CFP]
TO MIND WHEN CONSIDERING AND HANDLING CHINA-INDIA and emerging powers and the
adjustment of international
RELATIONS. SOMETIMES WE NEED TO DRAW INSPIRATION FROM THE and regional landscapes,
HISTORY OF THE SILK ROAD, SO AS TO PROMOTE MORE CULTURAL India and China should put
aside their disputes in reality
EXCHANGES BETWEEN THE TWO COUNTRIES WHILE PUTTING ASIDE and focus on regional and
global cooperation while
ENTANGLEMENTS OVER TANGIBLE INTERESTS. developing their bilateral
relations from broad and
strategic perspectives.
06 07
OPENI NG E S SAY
Doubtless, there will be ‘Digital India’ and ‘Smart Myanmar (BCIM) Economic Since India began providing prioritize people’s develop-
quarrels and dissensions City,’ thereby reshaping the Corridor and integrate it with electronic visa for Chinese ment and wellbeing when
between the two Asian neigh- landscape of Sino-Indian India’s ‘Act East’ policy. citizens in August 2015, the considering Sino-Indian
bors, but Asians have enough economic cooperation. Even in the field of tradi- number of Chinese tourists to relations and selflessly dedi-
wisdom and capacity to con- So far, the total amount of tional businesses, there are India has doubled. Mutual cate themselves to promoting
trol and settle their differenc- Chinese investments in India opportunities for the two visits between the two coun- China-India friendship. By
Indi
es through bilateral negotia- has reached nearly US$4 countries to expand and tries exceeded a million for doing so, they may not earn
tions. Besides, the common billion. In 2015 alone, China upgrade bilateral trade. For the first time. In 2015, China money and may even face
interests of the two countries signed agreements to invest example, some traders took opened a new route along the risks and loneliness, but they
overweigh their differences. US$40 billion in India. The advantage of the trend among Himalayan Nathu La Pass for can feel truly happy for hav-
Despite the fact that it is rapid growth of China’s direct Chinese young white-collar Indian pilgrims traveling to ing benefited others.
impossible to settle the investments in India has not workers for drinking tea and Tibet, which is safer and China and India share
increased the export of more comfortable and conve- similar national situations.
Darjeeling and Assam black nient. Thus, they can learn from
Doubtless, there will be quarrels and tea to China by 23 percent in Yoga, Indian food, and each other as they go forward
the first quarter of 2016. Last Bollywood films and dances on the path of development.
dissensions between the two Asian year, India exported more are becoming more popular in They need each other very
neighbors, but Asians have enough than US$100 million of black
tea to China. Due to their
China. Meanwhile, the pas-
sion for learning Chinese is
much and are eager to under-
stand and cooperate with each
wisdom and capacity to control and
a
good quality, affordable prices sweeping across India. Not other. The dragon and the
and avant-garde marketing only are more and more elephant are not enemies; they
settle their differences through practices, Chinese smart- Indian youngsters dedicated can dance together. As long as
phones are popular among to learning Chinese language, we look into the future, trust
bilateral negotiations. Indian youngsters, with sales but also many Indian compa- each other and put our bilater-
almost equal to that of Apple’s nies tend to hire employees al relations under the frame-
border dispute in a short time, only offset India’s trade defi- iPhone. In addition, trade via who can speak Chinese. A work of the Asian Century,
not a single shot was fired in cit with China, but also creat- e-commerce platforms has number of Indian colleges Chinese Dream and Indian
the border areas in the past ed enormous amounts of jobs thrived between the two and universities are offering Dream, China-India relations
decades. Incidents on the bor- and tax revenues in India. To countries, evidenced by the Chinese language programs. will stick to the right way and
Chin
der have been under control date, more than 50 Chinese cooperation between China’s It is predicted that Chinese see enormous progress.
as measures aimed at building manufacturing enterprises e-commerce giant Alibaba language will soon be popular A recent advertisement of a
mutual trust have been effec- have set up plants in India. and India’s online payment across India. Chinese smartphone manufac-
tively implemented. The For instance, Tebian Electric platform Paytm. Geostrategic and economic turer in India tells the story of
border dispute hasn’t affected Apparatus Stock Co., Ltd. interests inevitably come to a couple of childhood sweet-
the overall development of (TBEA), a private enterprise FURTHER CULTURAL EXCHANGE mind when considering and hearts who lost contact when
their bilateral relations. This in China, already built an Cultural exchanges be- handling China-India rela- growing up; but they recog-
marks a rare achievement industrial park in Gujarat, tween China and India can be tions. Sometimes we need to nize each other from a photo
ever in international relations India. Chinese telecom equip- traced back some 2,000 years. draw inspiration from the taken with their smartphones
and testifies to the great ment giants, Huawei and During much of this historical history of the Silk Road, so as and finally get married. China
wisdom of the leaders and ZTE, have set up R&D bases period, peoples of the two to promote more cultural and India are just like those
peoples of the two countries. in India. Chinese real estate countries could visit each exchanges between the two two childhood friends: They
developers – Wanda Group other freely, without the need countries while putting aside were once out of touch, but
GREATER ECONOMIC and China Fortune Land of any passport or visa. In entanglements over tangible the fate has brought the two
COOPERATION Development Co., Ltd. – pro- modern times, Western colo- interests. Both Chinese and countries together again and
Currently, increasing num- pose to help India build new nialists fomented feelings of Indians are interested in each urged them to build a shared
bers of Chinese enterprises industrial cities. China has estrangement between the other’s history and culture, bright future.
have begun setting their always regarded India as one two countries. Nowadays, and respect the historical
sights on the promising of its major partners in pro- Chinese and Indians are figures who have made great
Indian market and taken part moting the Belt and Road trying to transcend geological contributions to cultural
in India’s ongoing national Initiative, and hopes to join and historical barriers and exchange between the two
initiatives and programmes hands with India to develop achieve heart-to-heart com- countries. Such a feeling The author is Charge d'Affaires of
such as ‘Make in India,’ the Bangladesh-China-India- munication. should nudge the elite to the Chinese Embassy in India.
08 09
COMMENT
Chindia@G20
Seeking Reforms through Innovation
By Swaran Singh
CHINA AND INDIA TODAY HAVE BOTH THE OPPORTUNITY AS ALSO
RESPONSIBILITY TO WORK IN TANDEM TO COMPLIMENT EACH OTHER’S
INITIATIVES. THEY REPRESENT THE WORLD’S TWO LARGEST AND
FASTEST GROWING ECONOMIES AND IT PUTS SPECIAL FOCUS AND
ONUS ON THEM TO STEER THIS EVOLUTION OF GLOBAL ECONOMIC
GOVERNANCE BY INITIATING INNOVATIVE STRUCTURAL REFORMS.
September 4, 2016: The 11th G20 Summit opens in Hangzhou, eastern China’s Zhejiang Province,
at which President Xi Jinping delivered a speech. [by Xu Xun]
T
he 11th G20 grew by 6.7 percent and is financial crisis, recovery has the G20 Summit as “Towards greater space for agenda beyond economic
Summit in expected to reach 7 percent remained sluggish and brittle, an Innovative, Invigorated, consultations amongst issues and included political
Hangzhou took for the whole year. With good growth environment Interconnected and Inclusive developed and rapidly and security matters in their
place against the monsoon and historic tax mediocre, engulfed with World Economy,” which aims developing economies of the deliberations. This explains
backdrop of the most recent reforms under way, Goldman rising protectionism, soaring to stimulate global economic world. Starting from 1976, the why China invited non-
update of the World Economic and Sachs believes that unemployment, shrinking growth through out-of-the- informal gathering of G7 members like Egyptian
Outlook of the International India’s growth rate for 2016 trade and investments, rising box policies for promoting industrialized countries had President Abdel-Fatah al-Sisi,
Monetary Fund (IMF), which will be 7.9 percent, up from 7.6 debt and fidgety financial and inclusive trade and remained an exclusive club Singaporean Prime Minister
lowered this year’s global percent last year. This is what commodity markets, with development of robust until 1981, when they invited Li Hsien Loong and Thai
growth target to 2.9 percent makes the G20 Summit in recent exit of Britain from financial markets, to instill the European Commission, Prime Minister Prayuth
from 3.1 percent. This marks Hangzhou such a special European Union triggering market confidence and and then recruited Russia in Chan-ocha as well as the UN
the second year in a row for event for both China and undue anxieties. Therefore, as discourage competitive 1997, making it a G8 Summit. Secretary General Ban Ki-
less than 3 percent global India that are increasingly China takes over the devaluations of currencies. It was then British Prime moon, IMF Managing
economic growth. It now seen as the first and the third presidency of the G20, it faces As regards locating G20 in Minister Tony Blair, host of Director Christine Lagarde
expects advanced economies most important locomotives a formidable challenge of the evolving structures of the the 31st G8 Summit in and World Trade
to grow by 1.8 percent and of global economic growth. triggering hope and global economic governance, Scotland, who first invited Organization Director
emerging markets by an To recall, the G20 was first improving the world economy this continued expansion leaders of Brazil, China, General Roberto Azevedo to
unchanged 4.1 percent. By convened in 2008 in the mired in such prolonged from G7 to G20 has unleashed India, Mexico, South Africa the Hangzhou summit. Their
comparison, for first half of backdrop of global economic downturn. As the first step in transformation, thus (the G5) to the 2005 summit. attendance may further
this year, China’s economy slowdown from 2007. During that direction, Beijing has widening the international This was also the year when transform the fundamentals
these eight years of global aptly picked up the theme of economic regime to provide G8+5 had expanded its of global economic
10 11
COMM E N T
CHINA- IND IA D IAL O GUE
Minister Wang Yi’s visit to Goa
and New Delhi in August
seems to have already initiated
course correction in improving
atmospherics and India has
expressed its full support in
making the G20 Summit a
success for China, hoping
reciprocity in the forthcoming
BRICS summit in India, where
China is sending a 300-strong
delegation. With two-thirds of
global population and over 80
percent of global economic
output, the G20 steering global
economy presents an ideal
platform for Chindia to not just
catapult their own role and
representation but to reboot
global growth and transform
global governance structures.
It is here that China and
India must take developing
countries along to front load
long-term innovative reforms
and structural adjustments, so
as to create fertile
environment for faster
economic growth for all. Also,
China must ensure that the
G20 during its presidency
September 4, 2016: The 11th G20 Summit is convened at Hangzhou International Expo Center. [by Wan Quan] emerges as an organic and
continuous work-in-progress
governance structures. system that involves discussing free exchange of tandem to complement each China and India signing to instill mutual confidence
For a long time, China has technologies, infrastructure Chinese Renminbi and the other’s initiatives. They contracts worth US$50 billion about their partnership and
been calling for and companies, which will be Indian Rupee at the local represent the world’s two of Chinese investments in the efficacy of their decisions.
democratization of critical in the transition to a markets, as businessmen largest and fastest-growing India in the next five years. For the first time, innovation
international financial low-carbon, climate-resilient investing in each other’s economies, and it puts special Prime Minister Modi and has become the key G20
institutions to create more and resources efficient countries are faced with focus and onus on them to President Xi Jinping have agenda, characterized by
resilient mechanisms. With economies. This has already numerous problems in steer this evolution of global maintained regular hope of adopting new
the focus placed on reforms, been put in place in China’s payment through a third economic governance by interactions. Indeed, when it business models and
adjustments and innovation, 13th Five-Year Plan (2016- currency like U.S. dollar or initiating innovative comes to his meetings with financial management to
the run-up to the 11th G20 2020) and, with the the Euro. This innovation is structural reforms. China- major world leaders, other encourage new consumption
Summit has witnessed this recognition of green finance expected to guard against India relations have than U.S. President Barack patterns and introducing
China imprint through the putting high priority on international currency witnessed euphoric Obama, Prime Minster Modi new productions and
inclusion of several new environmental sustainability, speculations, thereby momentum ever since Indian has met President Xi technologies.
sectors with additional ideas the G20 leaders are likely to controlling inflation and Prime Minister Narendra maximum times. The two met
and ministerial meetings endorse it towards lowering discontent that inflation Modi came to power in May on the sidelines of the G20
expanding its agenda. China’s of finance costs for the triggers. 2014, and especially following Hangzhou Summit and are
Road and Belt Initiative will growth of green economies. China and India today have Chinese President Xi scheduled to meet again next The author is professor of Diplomacy
and Disarmament at the School of
also bring into focus China’s Similarly, at the bilateral level, both the opportunity as also Jinping’s September 2014 month at BRICS summit in International Studies, Jawaharlal Nehru
promotion of “green finance” China and India have been responsibility to work in visit to India, which led to Goa, India. Besides, Foreign University, New Delhi.
12 13
COMM E N T
CHINA- IND IA D IAL O GUE
informally. Leading from the
chair, Modi said that BRICS is
an “an influential voice” in
Goa in October
international discourse and it
was the group’s “shared
responsibility to shape the
global agenda and help devel-
oping nations achieve their
Good Ground for a New Beginning
objectives.” Xi stressed the
need to safeguard the multi-
lateral trade system, build an
open world economy and
oppose all forms of protec-
tionism and exclusionism for
By Shastri Ramachandaran making all countries equal in
terms of development rights,
opportunities, and rules.
BRICS HAS AN AMBITIOUS DEVELOPMENT AGENDA, AND SINO- BRICS has been pushing for
greater economic growth
INDIAN RELATIONSHIP IS THE SHEET ANCHOR OF THE COHESION Immaculate Conception Church in Goa, India. [CFP] among its members and
reform of the global financial
REQUIRED FOR ACTUALIZING ITS AIMS AND OBJECTIVES. architecture. Xi wants BRICS
Sino-Indian relations. concerns. to work for a bigger role on
Beijing wanted clarity on The G20 Summit was about the world stage. In moving
T
these two issues to eliminate global governance and the towards this, China wants to
hese are testing particular importance to terms of Modi and Xi. strains in the relationship architecture, institutions and ensure that the undercurrents
times for Sino- India and China is the BRICS Wang, who met Modi for 20 ahead of the BRICS Summit. systems in the emerging of Sino-Indian tension do not
Indian relations, Summit in October in Goa, minutes and had a three-hour Wang conveyed that China international order. However, affect the drive and momen-
and both New India. discussion with Swaraj in does not view India as a rival. the greater significance of the tum of BRICS. The five coun-
Delhi and Beijing are acutely Sino-Indian efforts to New Delhi, also travelled to On the contrary, the two summit, beyond its stated tries with 42 percent of the
aware of it. The relationship ensure the success of the G20 Goa, the BRICS Summit countries should strengthen agenda, is China’s emergence world’s population have a
is such that drift would mean Summit in Hangzhou and the venue. His discussions fo- their partnership, strive for in a leadership role in global combined GDP of more than
a further downslide, and BRICS Summit in Goa have cused on bilateral, regional all-round cooperation and governance and the accep- US$ 16 trillion.
neither side wants that to been underway for months. and global issues as well as push ahead with the develop- tance of this by the U.S. and BRICS has an ambitious
happen. However, in this process an the upcoming BRICS Summit, ment agenda. the international community. development agenda, and
Prime Minister Modi as important overture was the G20 Hangzhou Summit Showing China’s resolve to The summit also showed that Sino-Indian relationship is
well as President Xi Jinping Chinese Foreign Minister and the ASEAN Summit in overcome the tensions that the U.S. and China, despite the sheet anchor of the cohe-
indicated their intention to Wang Yi’s three-day visit to Laos. While India-China ties have marked bilateral ties, their differences and dis- sion required for actualizing
work for a robust revival of India from August 12 to 14, can affect the mood, temper President Xi told Prime putes, have come to terms its aims and objectives. The
bilateral ties when they met 2016, at the invitation of and direction of all three Minister Modi that “China is with each other to work impact of any discordant note
on the sidelines of the G20 India’s External Affairs summits, the two would be willing to work with India to jointly for the goals of global arising from tensions between
Summit in Hangzhou in Minister Sushma Swaraj. the twin drivers of the BRICS maintain their hard-won governance. India and China would be felt
September. Sino-Indian Although there have been a Summit in Goa. sound relations and further Similarly, China and India, far beyond the grouping. The
relations are a key determi- series of high-level visits Given the centrality of advance their cooperation.” too, need to reconcile their ripples would affect the
nant of the cohesion of between the countries earlier China and India to BRICS, Prime Minister Modi said that differences and work together region, other multilateral
BRICS. Therefore, it was only this year, Wang Yi’s visit was Swaraj and Wang, while bilateral relationship is based in the interests of the devel- forums and the interests of
appropriate that the leaders certainly not a “routine” visit. reviewing the relationship, on countries being responsive oping countries and emerging developing countries. Both
of BRICS nations, too, had a In time, Wang Yi’s visit may dwelt at length on the recent to each other’s sensitivities. economies – which is what New Delhi and Beijing are
meeting in Hangzhou on the come to be seen as a “turning “challenges” – such as, India’s Modi and Xi agreed that, for BRICS is about. acutely aware of this.
sidelines of the G20 Summit. point” or “defining moment” NSG membership and stand better ties, India and China Thus, in Hangzhou, the
After all, the next big thing on in India-China relations, at on the South China Sea (SCS) should understand and respect focus was also on BRICS, The author is Senior Consultant and
the global agenda of least during the leadership conflict –that have strained each other’s aspirations and when its five leaders met Editor of China-India Dialogue, CIPG.
14 15
STRATEGY This is largely attributed to Eastern-style sentiments.
CHINA- IND IA D IAL O GUE
iron ore accounts for more
the fact that top leaders of the To a large extent, interna- than 60 percent of Indian
two countries are “helms- tional relations depend on exports to China. As China is
men” steering the ship of interpersonal interactions speeding up its economic
bilateral relations in the right between state leaders as well restructuring and upgrade,
China-India Relations
direction. Every high-level as ordinary people. Such especially structural reform
visit could push their rela- interactions are important, in the supply side, the need
tionship to a higher level. especially those between for raw material has dropped
Since 2014, high-level inter- leaders. sharply. Meanwhile, with the
Changed and
actions between the two coun- development and revival of its
tries have been more heart- BRIGHT PROSPECT OF infrastructure and manufac-
warming. The close personal ECONOMIC AND TRADE turing sectors, India’s demand
relationship between Chinese COOPERATION for Chinese products with
and Indian leaders is an im- Since President Xi called high added value such as
Unchanged
portant factor behind their for “building closer partner- machinery and electric equip-
frequent meetings on multilat- ship” during his visit to India ment has surged. As a result,
eral occasions. In September in September 2014, the two this worsens the trade imbal-
2014, President Xi Jinping countries have seen increas- ance between the two coun-
visited Prime Minister Modi’s ingly close and extensive tries.
home state of Gujarat and sent economic cooperation. However, such a trade
his greetings on Modi’s birth- Although the two countries imbalance, which is still in
day. In May 2015, Modi visited failed to realize the goal of development, will facilitate
Xi’an, the hometown of enabling bilateral trade to India’s economic growth to
President Xi and a city of exceed US$100 billion by large extent in general.
By Hu Shisheng historical and cultural signifi- 2015, their economic relations Compared to their Western
cance in Shaanxi Province. Not have moved onto a “fast lane.” counterparts, Chinese me-
long ago, the Indian prime The Indian side is dissatis- chanical products such as
minister conveyed his good fied at its trade structure with power-generating equipment
NEW DELHI’S DILEMMA LIES ON HOW TO CHOOSE BETWEEN wishes on Xi’s birthday via his China: The majority of India’s and mechanical tools are
Twitter account. Their person- exports to China are raw more competitive due to their
COOPERATION AND COMPETITION IN ITS POLICIES TOWARD CHINA. al interactions showed their materials, and in some years, good quality and cheaper
I
n recent years, China- years. importance to high-level
India relations have From 2003 to 2012,Chinese communication. In fact,
entered a new phase top leaders met then Indian high-level “navigation” has
along with increasingly Prime Minister Manmohan been one of the most remark-
frequent high-level mutual Singh 26 times on various able features of Sino-Indian
visits. Bilateral relations have occasions. Such frequent relations for a long time.
acquired some new features meetings are rare between Despite the development
while maintaining a steady big powers. In the past cou- competition, strategic doubts,
improvement. ple of years, China and India territorial disputes, historical
continued high-level interac- burdens, and lack of mutual
HEARTWARMING HIGH-LEVEL tions at a very high frequen- understanding between the
INTERACTIONS cy. So far, Chinese and Indian two countries, China-India September 4, 2016: Chinese President Xi
In terms of political ties, top leaders have met nearly relations have maintained a Jinping holds bilateral talks with Indian
China and India witnessed 10 times on either bilateral or steady improvement since the Prime Minister Narendra Modi during the
frequent high-level mutual multilateral occasions. normalization of their diplo- G20 Hangzhou Summit. [by Xu Xun]
visits and meetings in recent Both countries pay great matic relationship in 1988.
16 17ST RATE G Y
CHINA- IND IA D IAL O GUE
have launched defense coop- some ASEAN member coun- rise based on technological,
Li Jinjun, Vice President of Oversea
Business of Guizhou Electronics INDIA’S RISING SECURITY eration process. Japan is the tries in the realm of defense financial, and political sup-
Design and Research Institute, WORRIES OVER CHINA only country building defense cooperation. port from those countries.
talks with engineer Li Shiyou over In the past two years, mili- and foreign minsters’ meeting Finally, India has publicly However, we must realize
business opportunities in electricity
tary interactions and security mechanisms with India. India intervened in the South China that the security cooperation
infrastructure construction on
a street in India. [Courtesy of dialogues between China and already expressed its inten- Sea issue. Although India that India carried out with
Guizhou TV Station] India increased obviously tion to buy Japan’s Soryu- already began drilling oil in countries which have strategic
although the two sides once class submarines. Perhaps the the South China Sea (which is doubts about China’s rise
suspended their military deal will enable Japan to called “East Sea” in Vietnam) usually has little pragmatic
exchange due to the matter of export large military equip-
prices. “stapled visas” in 2010. ment for the first time since
A survey report released by
2016, Le Yucheng said that
Chinese investments are However, compared to the Abe administration
It has become a basic consensus
the world’s leading consulting witnessing an explosive fast-growing economic coop- passed the Three Principles among Indian rulers to maintain
firm Ernst & Young on growth in India. In New Delhi eration and frequent high-lev- on Transfer of Defense
October 11, 2015, shows that alone, China Chamber of el mutual visits, interactions Equipment in April 2014, the overall stability of Sino-Indian
India was considered the most Commerce in India has more in the area of security, espe- which actually annulled the
attractive investment destina- than 300 member enterprises. cially military affairs, remain Three Principles on Arms relations.
tion around the globe in the To date, Chinese investment quite insufficient. The two Export that Japan had imple-
preceding three years. In the in India has reached nearly countries need to do more to mented for decades. in 1988, the fact that India content and aims to earn some
past couple of years, economic US$4 billion. In 2015 alone, build mutual trust in the Third, India, Japan and the under the Modi administra- benefits. It has become a basic
cooperation between China China signed agreements to security sector. United States have strength- tion frequently voiced its consensus among Indian
and India has expanded from invest US$40 billion in India. It is noteworthy that since ened their trilateral security views on the South China Sea rulers to maintain the overall
trade to a plethora of areas Similarly, Indian private Modi took office, India’s interactions. Earlier this year, issue still evoked concerns in stability of Sino-Indian rela-
including investment, infra- companies are playing an security worries over China the three countries carried China. tions. The Modi administra-
structure, environmental increasingly important role in have constantly increased. out the Malabar naval drill in India is keen on security tion is very pragmatic and
protection, high technology, promoting China-India eco- This is evidenced by the fact the Philippine Sea. This was cooperation with those coun- attaches great importance to
clean energy, and sustainable nomic and trade relations. For that India was no longer the first time for the annual tries because, on the one Sino-Indian relations. Thus, it
urbanization. It is noteworthy instance, Tata has extended reluctant to seek security military exercises to be held hand, it intends to pin down never fully supports the poli-
that the Indian government’s its reach to China – not only collaboration with the United beyond the Indian Ocean. All China’s efforts in seeking cies of the United States and
restrictions on Chinese enter- in traditional sectors like the States, Japan, and the of these indicate that India security cooperation in South Japan on the South China Sea
prises’ entry into the Indian steel and automobile indus- Association of Southeast has begun to positively re- Asia and the Indian Ocean; issue. Though cooperating
market have been evidently tries, but also in non-tradi- Asian Nations (ASEAN). spond to enticement by the and, on the other hand, it with some countries, which
loosened. In November 2015, tional sectors such as IT, Meanwhile, concern over United States, Japan, and looks to accelerate its own are severely lacking security
the Modi administration services, and smart city – and India’s security cooperation and political mutual trust in
surprisingly began issuing fast earned tremendous returns with any third party has also their relationship with China,
security permits for Chinese by investing in China. In 2014, risen in China. August 13, 2016: Indian Prime Minister Narendra Modi meets Chinese the Modi administration pays
enterprises that intended to Tata sold US$13.6 billion of First of all, India continues Foreign Minister Wang Yi during his visit to New Delhi, and holds talks for great attention to China’s
the G20 Hangzhou Summit in China. [CFP]
invest in India. In 2015 alone, products in the Chinese deepening its security coop- concerns since it is unwilling
India provided security per- market, accounting for nearly eration and strategic coordi- to sacrifice steady develop-
mits for investment projects nine percent of its global nation with the United States. ment of China-India relations.
by some 20 Chinese compa- sales. China has become the Early in June 2016, the two The most obvious evidence is
nies including Huawei (which Indian company’s largest countries finalized a 10-year that India publicly refused the
previously received much market in Asia. Logistics Supply Agreement invitation by Harry B. Harris
obstruction from India’s In fact, with a combined during Modi’s visit to the Jr., commander of the U.S.
security authorities). All of population of 2.6 billion, United States, as well as a Pacific Command, to “jointly
these indicate that the govern- China and India are capable cooperative agreement on patrol the South China Sea,” in
ment of India values the role of serving as important global building six civil nuclear March 2016. During his visit to
of Chinese capital in India’s testing grounds in promoting reactors in India. All of these the United States in June 2016,
industrialization. new business modes, product indicate that India and the Modi never mentioned the
In a speech he made before standards and technological United States have forged a South China Sea issue in his
leaving office as Chinese innovation, and incubating quasi-alliance relationship. public speeches. Soon after
ambassador to India in April industrial giants. Second, India and Japan the U.S. defense secretary
18 19ST RATE G Y
CHINA- IND IA D IAL O GUE
visited India in April 2016, the
Indian defense minister paid a 1 3 4
visit to China. Such an ar-
rangement facilitated New
Delhi to eliminate China’s
worries about India signing an
alliance agreement with the
United States. What is more
noteworthy, the Joint
Communiqué of the 14th Meeting
of the Foreign Ministers of Russia,
India and China, published in
April 2016, states that “all
related disputes should be
addressed through negotia-
tions and agreements between 5
the parties concerned.”
Doubtless, this took into 2
account China’s stance to
exclude the United States
and Japan in the South China
Sea dispute.
GREAT POTENTIAL OF PEOPLE-
TO-PEOPLE COMMUNICATION
Despite its steady growth in
the last two years, peo- 1 Staff members record the 2 A group photo of the Indian 3 July 30, 2016: Chinese 4 An Indian camper draws 5 Indian camper Siddarth receives a
marvelous performance of team in their booth. [by Zhang volunteer Wang Fan and Indian Mehndi, a temporary henna piece of calligraphy work written
ple-to-people exchange international campers at the Xue] girls have a good time on a tattoo, for a Chinese visitor. exclusively for him by Chinese
between China and India National Day event during bus to the Bund in Shanghai. [by Hu Zhoumeng] volunteer Wang Yuanlong at the
remains negligible, given the the 7th Soong Ching Ling [by Wang Fan] National Day event during the 7th
huge combined population International Summer Camp. Soong Ching Ling International
[by Hu Zhoumeng] Summer Camp. [by Zhang Xue]
and rich cultural resources of
the two countries. It is a
debatable fact that public reporting and from Western Indian pilgrims traveling to 100 million Chinese travel the constant enhancement of on building a “closer develop-
opinion has played a negative perspectives. Some Western Tibet, and India began pro- abroad each year, of which mutual trust in political and ment partnership” with
role when it comes to the countries are biased and viding e-visa for Chinese only one percent goes to security sectors and intercon- China. Therefore, it is certain
stability and development of prejudiced against China, and tourists, which are considered India. Despite the fact that nectivity – people-to-people that New Delhi will avoid
their bilateral relations, rath- sensationalize the “China two milestone events in the China and India together exchange between China and conflict and confrontation
er than serving as a propelling threat” theory. This resulted history of Sino-Indian rela- have a population of 2.6 India will increase, thus chang- with China in the time of
and safeguarding force. in most Indians holding a tions. In 2015, mutual visits billion, mutual visits between ing the landscape of Sino- Modi and even for a long time
For a long time, due to lack negative attitude toward between the two countries the two countries only make Indian relations. thereafter. New Delhi’s dilem-
of mutual understanding and China. Meanwhile, Chinese exceeded a million for the up 0.06 percent of their com- In a nutshell, India under ma lies in how to choose
communication and negative media are inclined to report first time, accounting for half bined population. the Modi administration now between cooperation and
reporting by the media on bad news about India, causing of the mutual visits between However, there is a pleasant faces the best-ever strategic competition in its policies
each other’s country, Chinese many Chinese to hold preju- China and South Asian coun- change: More and more conditions. Although India toward China.
and Indians hold negative dices against India. tries. Mutual visits between Chinese people are optimistic has intensified its suspicion of
perceptions of each other. It Fortunately, people-to-peo- China and India grew by 25 about India’s future develop- China in the security area, the
is easy for the public to be ple exchange thrived in the percent in the first quarter of ment. It is predictable that with Modi administration, which
misled by the mass media. past couple of years thanks to 2016. Of course, personal the improvement of India’s prioritizes economic develop-
Indian media habitually the effort of the governments exchanges between the two infrastructure and the growth ment and people’s livelihood The author is Director of the Institute
of South and Southeast Asian and
review China and Sino-Indian of the two countries. China countries remain limited. of middle-class population in and would seek re-election in Oceanian Studies at the China Institutes
relations based on Western opened the Nathu La Pass for Starting from 2014, more than the two countries – as well as 2019, will continue to focus of Contemporary International Relations.
20 21ST RATE G Y
CHINA- IND IA D IAL O GUE
Modi’s Reform and
Future China-India Cooperation
By Yang Xiaoping
IN THE COURSE OF ITS REFORM, INDIA NEEDS TO CONSTANTLY
STRUGGLE AGAINST THE ‘CONSERVATISM’ THAT HAS PENETRATED INTO February 25, 2015: Porters prepare to
load goods onto a train at a railway
THE BLOOD OF ITS ADMINISTRATIVE AND GOVERNMENT SYSTEMS. station in Kolkata, India. [REUTERS]
F
or a long time, the as unemployment of young the other hand, the pragmatic cost in the era of the digital population), thus threatening 144 countries/regions in
Chinese mainstream people, as well as challenges national-interest-oriented economy, and occupied a its capability for sustainable terms of international
views on India and concerning the livelihood of approach adopted by Modi certain position in the global economic development. competitiveness, and 87th
its development ordinary people including after his taking office will service outsourcing chain, Creating large numbers upon infrastructure index. It
have been very static. First, medical care, public health, probably undermine India’s creating a unique India mode, of jobs requires inflows is widely acknowledged that
India’s “unique” democratic housing, and drinking water. long-standing “strategic featuring a thriving service of tremendous foreign operation cost of business
system has created sound Narendra Modi won the autonomy” tradition though industry. investment. However, is comparatively higher in
strategic environment for 2014 general election amidst in practice India might Unlike many other India’s current overall India.
its development while also the general hopes for change. connect closer with China countries, India bypassed investment environment In this context, Modi’s
limiting its growth rate; Two years later, he overcame economically. This becomes the industrialization period is far from satisfying reform is vital for the
Second, despite the steady difficulties in an iron-fisted particularly evident as the and directly prioritized to due to underdeveloped future of India’s economy.
growth of its military manner and eventually United States continues develop the service industry. infrastructure, habitual Theoretically, the reform
strength, India still maintains enabled the passing of the to push forward its Asia However, this may exert bureaucratic practices of aims to clear those chronic
defensive strategy and keeps Goods and Services Tax Rebalance strategy. a negative impact on the administration and taxation, structural obstacles that
traditions of diplomatic (GST) Bill. These dynamics country’s development in the difficulty in land acquisition, are impeding India’s
autonomy; Third, India’s caused subtle changes in THE LOGIC PATH OF REFORM long run, for such a model protectionism from development. And
innovation capacity is rooted China’s view of India. On To some extent, the 1991 would fail to provide enough powerful labor unions and strategically, three areas are
in its well-educated elites, the one hand, the GST Bill currency crisis forced India jobs for young Indians. In environment organizations, listed as priorities, namely
and the middle class is the has resulted in substantive to launch its economic this case, India would be and fragmented domestic upgrading infrastructure,
primary driving force for its changes in India’s investment reform process. Despite its unable to take full advantage market. According to the attracting more foreign
domestic consumption. To environment, making its weak infrastructure, India’s of its demographic dividend Global Competitiveness Report investments, and creating
achieve better development investment and economic software industry made (laborers aged between 2014-2015 released by the the conditions for “re-
in future, India urgently prospects more promising, full use of its advantages in 15 and 64 account for 65 World Economic Forum, industrialization” through
needs to solve problems such which also benefits China. On English language and labor to 70 percent of the total India is ranked 71st among “Make in India.”
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