China-India parleys on economic cooperation

By Swaran Singh

Early this week, China's Development Research Centre (DRC) hosted their third annual interaction with India's apex planning body, the NITI Aayog or the National Institution for Transformation India. This was followed by Indian delegation attending a seminar in the port city of Tianjin on the theme "Investment Opportunities in India". This was organized jointly by Embassy of India, DRC and Chinese Council for the Promotion of International Trade. These events indicate both sides' willingness to turn a new page on their post-Doklam economic cooperation.

While such China-India parleys on macro-economic trends and explorations into strengthening bilateral economic partnership may not be new, their new context remains of special significance. Firstly, staring with the January Davos speech of president Xi Jinping, China has come to be viewed as the new world leader promoting free trade and globalization. In this backdrop, such dialogues present possibilities for India partnering with China in this endeavor. To India's discomfort however, this also implies contesting neo-protectionist policies of the United States and its other allies and friends.

Li Wei, head of the Development Research Center of the State Council, right, meets with Indian ambassador to China Gautam Bambawale in Beijing on November 30, 2017. [Photo: drc.gov.cn]

Second, this dialogue happens on the eve of foreign minister Wang Yi’s visit to New Delhi next Monday to attend Russia-China-India trilateral to be followed by state counselor Yang Jiechi's India visit to attend the 20th round of special representatives' border talks. Third, it was the first high-level visit from India to China after the 19th Party Congress which has strengthened president Xi's hand making his BRI the WTO 2.0. One could also add continued hyperactive foreign policy Indian Prime Minister Modi to explain this increasing excitement in their interactions.

But above all it is presence of two ambitious and decisive leaders at the helm in China and India that lends credence to such macro-economic dialogues which have otherwise been a routine at least for last forty years. It is their strong political will that may lead to bold initiatives.

It was during Prime Minister Narendra Modi's May 2015 visit to China that DRC and NITI signed a MoU for holding this annual dialogue for sharing experiences and best practices for sustainable development. The delegation from NITI Ayog now includes representatives from Ministries of New & Renewable Energy and Food Processing. Likewise, DRC invited officials from their Ministries of Finance, Commerce and Foreign Affairs as well as from National Development & Reforms Commission to participate in this brainstorming. Will this new model lead to some bold initiatives remains the pertinent question.

So far track record of earlier mechanisms has been snail paced and often imperceptible. It was the breakthrough of China visit by India's young Prime Minister Rajiv Gandhi that had resulted in creation of the first India-China Joint Economic Group in 1988. It met eight times till 2011 and surely facilitated matters as this was the period of sustained and substantive rise of bilateral trade that came to be called the most reliable as also most agreeable pillar of their rapprochement. 

The June 2003 China visit of Prime Minister Atal Bihari Vajpayee led to setting up of another Joint Study Group (JSG) that was created to explore potential complementaries for their economic cooperation. This JSG suggested creation of a Joint Task Force (JTF) to specifically examine feasibility of creating China-India regional trade arrangement. The JFT submitted its report in 2007 recommending creation of a China-India Free Trade Area to provide a new dynamism to their economic partnership. Alas! The FTA could not happen given India's concerns about it benefitting China much more than India. 

In addition to JEG, JSG and JTF, two sides had set up China-India Strategic and Economic Dialogue (SED) and a China-India CEOs Forum in 2010. The SED had set up three working groups on investment and infrastructure, water management, and energy efficiency. It had four rounds of bilateral dialogues, the last being in September 2016. In view of their increasing clout in international monetary market, their 2005 MoU had launched China-India Financial Dialogue which held five meetings till 2011. Similarly, taking their financial cooperation forward, their 2010 MoU between Reserve Bank of India and China Banking Regulatory Commission saw Industrial and Commercial Bank of China opening its first bank in Mumbai in 2011.

There has certainly been an incremental growth in institutionalization as also in defining priority sectors and co-opting practitioners. With their focus on sustainable development they have even identified priority sectors like electric mobility, clean energy, higher education and special economic zones.  There is realization that these rapidly growing developing nations need synergize their strategies to deliver effective stimulus to the weak and uncertain global economic trends. But there is need to ensure pragmatism about expectations. The DRC-NITI parleys this week strongly underline mutual appreciation of strong complementaries as also of the urgent need for strengthening their bilateral trade and investments. These are seen as prerequisite for their playing any leading role in providing direction to global economic trends. This reflects a fine balance between their commitment and complexities in operationalizing their ambitions for working together.

(Swaran Singh is professor at School of International Studies, Jawaharlal Nehru University, New Delhi)