What China’s transition means for India

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  China prepares for generational change

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diplomacy

India-China

“Continuity” is a word that National Security Adviser Shivshankar Menon is likely to hear often from his Chinese interlocutors during his visit to Beijing, which begins today. Mr. Menon, who is also the Special Representative on the boundary question, will meet State Councillor Dai Bingguo, his counterpart on the border talks, for what officials have described as “informal talks” on the border and strategic issues of common concern. He is expected to hold talks with one of the seven members of the newly-selected Politburo Standing Committee — likely to be second-ranked Li Keqiang, the anointed Premier, subject to his availability — marking India’s first real engagement with the fifth generation of the Chinese leadership following the November 15 transition.

The once-in-ten-year leadership change in China is likely to usher in a new chapter on how the country conducts its foreign policy, officials and strategic scholars in Beijing say. Over the next four months, both the Communist Party of China (CPC) and the government that it leads will complete a sweeping change across all levels of its leadership. At the recently concluded Party Congress, the CPC selected a new 25-member Politburo and 371-member Central Committee, which will guide policy-making in all spheres for the next five years. The Parliament session of the National People’s Congress in March will be of more relevance to China’s diplomacy. The expected retirement of Dai Bingguo — one of five State Councillors who function under the four Vice Premiers of the Cabinet, or the State Council — in March has received much attention in India, as he has served as the Special Representative (SR) on the boundary talks since the current format was initiated a decade ago.

Border talks

Chinese officials and strategic scholars who focus on China-India relations say Mr. Dai’s retirement will not have much impact on the boundary talks. Mr. Dai himself, as the SR, was only tasked with the mandate of following strictly the guidelines put in place by the Politburo and Central Committee for the talks. That role will be continued by his successor as the SR — the current Foreign Minister Yang Jiechi and Vice Foreign Ministers Fu Ying and Zhang Zhijun, who were all selected as members of the new Central Committee, have been mentioned as likely candidates. Among Chinese strategic scholars, there is little expectation that the boundary talks, of which 15 rounds have been held, will yield any major concrete outcomes in the near future. Since 2005, when the two countries completed the first of three stages of negotiations by signing an agreement on political parameters and guiding principles, perceptions in Beijing are that the crucial second stage of framework negotiations has been deadlocked.

“After 2005, there is nearly no significant progress on the boundary talks,” said Hu Shisheng, a South Asia scholar at the China Institutes of Contemporary International Relations (CICIR). “If there [will] be any progress in the future,” he said, “it could be [because of] accepting and respecting each other’s LAC [Line of Actual Control] claim.” Based upon this, he said, both sides could “put aside the sovereignty issue” and leave the boundary question for next generations to solve. Mr. Hu’s sentiment was echoed in a rare commentary on the boundary talks published last month in the Liberation Daily, a newspaper with ties to the CPC in Shanghai, which suggested that both sides put aside the dispute. The commentary said even the status quo — that is, accepting the Line of Actual Control — would not be acceptable to both countries, rendering a solution unlikely in the near future.

Lack of progress on the border notwithstanding, relations with India “will be much more stable” under the new leadership because of China’s current domestic and external priorities, according to Mr. Hu. As the Work Report of the Party Congress — the policy blueprint for the next five years — stressed, the internal focus will be on development. As for the external focus, “addressing China’s relations with West Pacific neighbours and China’s relations with the U.S.” would be the likely priority, Mr. Hu said. He agreed that India fared far below issues such as relations with the United States, current territorial disputes with Japan and the situation in the South China Sea in terms of China’s pressing priorities. “In urgency, it is true that China-India relations are secondary to those more urgent issues,” he said. “[But] in China’s present foreign policy, India is regarded as one country that China has confidence in. India-China relations are not a disturbance. The Chinese government has to keep this kind of momentum. But as for issues such as … the regional order in the Asia-Pacific region in particular, climate change and trade regime talks, China’s strong partner is still India.” “So, in whatever way,” he concluded, “China needs more stable Indo-China relations.”

‘Pivot concerns’

China’s concerns on the United States “pivot” or “rebalancing”, which has emerged as Beijing’s primary foreign policy focus in recent months, is likely to cast a shadow on ties with India. “Obama’s “pivot” offers a lens through which many Chinese analysts see India’s strategic intention toward China,” said Han Hua, a leading South Asia scholar at Peking University. “The two have to talk to each other on “core interests” and how to avoid challenging those interests,” she said. “Small frictions will be still there, but in general, stable relations are the main theme in China’s India policy.”

Ms Han was of the view that China under new General Secretary Xi Jinping “will attach more importance on its relations with its neighbours than before.” Chinese officials and scholars say the new leadership is acutely aware that the past year has been a difficult one for China’s diplomacy. There is renewed concern in the region — particularly among China’s neighbours — about increasing Chinese assertiveness, in the wake of recent territorial disputes with Japan over the East China Sea islands and in the South China Sea. There is also a perception in Beijing that its diplomacy has lacked creativity and nimbleness. To elevate the level of diplomatic decision-making, the CPC is considering appointing one of its 25 Politburo members as a new foreign policy “czar” who would also hold the title of Vice Premier — a rank higher than the position held by the current top Chinese diplomat, Mr. Dai. Wang Huning, who joined the Politburo in November, has been mentioned as a candidate for the post. As an official working in the Secretariat of the Politburo, Mr. Wang regularly accompanied President Hu Jintao on almost all of his international trips, including to India for the BRICS Summit earlier this year. He speaks French fluently, and earlier worked as the Dean of the International Politics Department at Shanghai’s Fudan University.

Two other areas where a new approach by the Chinese leadership is likely to be of relevance to India are with regard to Tibet and trade. The CPC has appointed a new head of the United Front Work Department, the leading organisation in charge of Tibet policy and talks with the Dalai Lama, which have been stalled after the Tibetan spiritual leader’s representatives resigned citing a hardening Chinese position. The around 90 self-immolation protests by Tibetans have brought fresh accusations aimed at Dharamsala of a “separatist plot”. The Tibet policy will be under the charge of Ling Jihua, a protégé of Hu Jintao. Under Mr. Hu, China followed an approach to Tibet that emphasised stability and security, and stepped up pressure on the Dalai Lama internationally.

On the trade front, the past year has seen a more than 13 per cent decline in trade with India, as of October. Bilateral trade has been driven by Indian exports of iron ore and imports of Chinese power and telecom equipment. Iron ore exports are unlikely to recover as a result of a prolonged slowdown in China’s steel sector in the short-term and the government’s long-term target of rebalancing the economy. China has suggested boosting mutual investments as a way to bridge the imbalance, but its officials have voiced concern — most recently at the November 26 Strategic Economic Dialogue in New Delhi — at the investment climate in India after duties on the import of power equipment and restrictions in the telecom sector were imposed. The CPC’s Work Report highlighted health care reform and Information Technology as strategic priorities for the next five years, which may open up new possibilities for Indian pharmaceutical and IT companies. In both sectors, India is pushing for greater market access. But Chinese officials say Indian companies will, for their part, have to invest far more in the domestic market — in terms of boosting both their expertise and commitment — if they want to expand their presence in China as the country’s new leadership takes charge.