Address by Ambassador Sujan R Chinoy, Director General, IDSA

At Inaugural Session of Conference

On

India-China Relations: Taking Forward The Wuhan Consensus

(Sichuan University, 25 April 2019)

Dr. Li Tao, Director of Institute of South Asian Studies, Sichuan University,

Friends,

Good morning!

It is a great honour to be here in Chengdu, a sister city of Bengaluru in the Indian state of Karnataka. It is my very first visit to Sichuan Province.

As the new Director General of the Institute for Defence Studies and Analyses (IDSA), I am glad that my Institute has enjoyed long-standing cooperation with Sichuan University. I wish to strengthen our cooperation through my visit.

Frankly, there is no better place than Sichuan to discuss India-China relations. Geographically, it offers a vantage point from where one can observe the sweeping changes underway, particularly in South-west China, South-east Asia as well as in India. I am aware of the outstanding history and contributions of the Institute of South Asian Studies since its establishment in 1964 under the instructions of then Premier Zhou Enlai.

Over the years, it has emerged as one of the finest centers in China for scholarship on South Asia. I have always believed that our study of one another should go beyond the capital cities. With rapid changes in both China and in India, there is greater need for our states and provinces to understand one another better. The Institute of South Asian Studies in Sichuan University has proved itself through the study of India from a neighbourhood perspective.

Recently, I also had the privilege of attending a dinner organised in New Delhi by my good friend Ambassador Luo Zhaohui in honour of Mr. Dai Bingguo, who was visiting India to deliver the keynote address at a dialogue between the ISAS and the Institute of Chinese Studies of India. I had first met Mr. Dai Bingguo when he had visited India as a member of a delegation led by Politburo Standing Committee Member Mr.Wei Jianxing in 1997, and I had not only organised their visit in New Delhi but had also taken them to Mumbai and Bangalore as well.  

I am aware of ISAS’ ties with both the Institute of Chinese Studies and the Vivekananda International Foundation in New Delhi. As one of India’s oldest and largest think-tanks in India focussed on defence, security and diplomacy, my Institute has contributed to the advancement of India-China relations. Most recently in March, five Chinese scholars, including from the ISAS in Sichuan University, participated in the 20^th edition of the Asian Relations Conference organised by my Institute. I hope we can work close together in the future and promote exchanges and joint dialogue.  

Friends, today, the global situation is far more complex than what it was only a few years ago. Change and unpredictability are the only constants in today’s rapidly changing world. All known paradigms and global structures are experiencing stress, calling for major readjustments and a new consensus.

Globalisation as we know it in recent decades has now run into headwinds. Power today is fractured. No single country is in a position to dominate on all issues. Even smaller countries and non-state actors have acquired the means and the skills sets to overcome asymmetry in terms of comprehensive national power. Hedging and multi-alignment according to national interests are the order of the day, including in Asia.

Asia, home to sixty per cent of the global population, has emerged as a new fulcrum for global economic growth. Today, several Asian economies are consistently registering high annual growth rates in excess of six per cent. Asia is witnessing the simultaneous rise of several powers, including China, India, Indonesia and others.

With global engines of economic growth shifting to the Asian landmass, China has achieved great success through rapid economic development. China has removed 800 million people from poverty. The changes in China, particularly in infrastructure and connectivity, are breath-taking. We congratulate the Chinese people on their success and wish them even greater prosperity in the future.

We must remember that Asia’s rise is predicated on peace and stability. Yet, it is a fact that the economic rise of Asia has not been matched by similar achievements in regard to issues of peace and security. Today, some of the highest military expenditures in the world are to be seen in Asia. Our region has many unresolved disputes and issues left over from the past, and new ones have also surfaced. They have the potential to disrupt peace and derail developmental priorities. A stable regional security architecture has yet to emerge organically in Asia.

Asia has never been monolithic. It has never supported unilateralism. Even though we have much in common, multipolarism is at the core of the Asian identity. Asia has given rise to several great civilisations that have co-existed and prospered over millennia, in India, China, Japan and South-east Asia, through a process of give and take. Asia has always been pluralistic in terms of languages, cultures and traditions.

Asia has the wisdom of its rich heritage and shared experiences of history, including the values of Buddhism that spread from India, and the common struggle against colonialism and imperialism. This reminds us that we must seek to work together for the common benefit of all nations.

I recall that senior Chinese leader Deng Xiaoping had said that the 21^st century will be an Asian century only with the fullest participation of both China and India. Similar sentiments were echoed by Prime Minister of India, Shri Narendra Modi, at the Raisina Dialogue in 2017, where he stated that there is enough room for all countries of Asia to prosper together, and that the Asia of rivalry will hold us all back; it is the Asia of cooperation that will shape this century.

Asian prosperity hinges on how well we work together to build the foundation for our future, and how well we respect the principles of pluralism, coexistence and dialogue. Prime Minister Modi has outlined the principles of engagement in the region, in the form of Samman (respect), Samvad (dialogue), Sahayog (cooperation), Shanti (peace) and Samriddhi (prosperity).

There are ancient sayings in Sanskrit- Vasudhaiva Kutumbakam- the world is one family- and Vishwa-Bandhutva- the brotherhood of the world- which symbolise India’s approach to global and regional issues. Even China’s great sage Confucius said “All the people across the four oceans are brothers and sisters”.

India is not guided by zero-sum calculations but by the desire to work with all and to resolve global problems in a cooperative spirit. These include the scourge of terrorism, particularly cross-border terrorism, which has long affected India but which also poses a threat to others in our region as well as globally. There are other challenges such as territorial disputes, illegal arms and weapons transfers, drug trafficking, poverty, unimpeded navigation and commerce on the high seas, climate change and food and energy security. India’s vision of the Indo-Pacific region is an inclusive architecture based on rules of the road.

Friends, it is in this context that both India and China need to deepen their mutual understanding and cooperation in order to forge greater friendship, eschew conflict and thereby ensure peace, stability and prosperity for our two peoples. The trajectory of India-China relations will have a deep impact on the future of Asia and issues of global peace and security.

Both India and China are expected to contribute to global economic growth in the future.  India is undergoing rapid transformation, underlined by the overall theme of VIKAS or development. Far-reaching reforms in India over the past five years have unleashed the potential for inclusive economic growth, with India now emerging as the fastest-growing large economy in the world. The reforms include the establishment of commercial courts and the passage of legislation for the Insolvency & Bankruptcy Code and the Goods and Service Tax (GST). These reforms are also aimed at transforming India into a knowledge based, skill-supported and technology-driven society; in effect, creating a New India driven by the motto of reform, perform and transform.

As a result of the progressive reforms, India has moved up 53 places in the index of Ease of Doing Business of the World Bank since 2014. India has also moved up 32 places on the Global Competitiveness Index of the World Economic Forum, 21 places on the Global Innovation Index of the World Intellectual Property Organisation and 19 places on the Logistics Performance Index of 2016 of the World Bank. India is ranked 3rd in the Global Start-Up Eco-system. In this context, the pace at which Indians are increasingly adopting digital technology is astonishing.

There is much greater emphasis today on skilling our youth and developing our capacities in manufacturing, agriculture, services and the digital sectors, especially at a time when the world is at the cusp of the Fourth Industrial Revolution. In this context, India is emerging as a global hub for manufacturing and innovation. A liberal FDI regime – one of the world’s most liberal to be precise - is a vital aspect of India’s transformation. More than 90 per cent of FDI approvals have been put on automatic route. The country registered FDI inflows of nearly US$ 62 billion in 2017-18 alone. The UN Conference on Trade and Development (UNCTAD) has ranked India 3rd among the top 10 FDI destinations. As a result of these reforms, we are looking at growth figures reaching 8 per cent or more in the near future.  

One of India’s greatest advantages is its youthful demographic profile. Half of India’s population, that is 600 million people, is below the age of 25 years. We have about 550 million people in the labour force and we add about twelve million people to our labour force every year. This is in contrast to the other large Asian economies that are today struggling with the challenge of an ageing population and labour shortage.

There is great scope for China to participate in flagship initiatives in India such as Smart Cities and Skill India programmes. China has rich experience in vocational training, and in addressing pressing issues of development such as water scarcity, sanitation and pollution. All these are of great relevance to India and the Chinese experience could contribute to our efforts. In a welcome development, Chinese investments in India have witnessed a sharp increase in the last two years, rising from US $ 668 million in 2016 to more than US $ 3 billion in 2017 and touching US $ 5.6 billion last year.

I have always believed that investment provides better ballast than trade in maintaining stability in the ship of bilateral relations.

Indian outbound Foreign Direct Investment too has very good prospects to succeed in China, particularly in IT and the services sector.

Both sides have done well in recent years to review and improve upon the visa regimes, in order to create new bridges between our entrepreneurs and our two peoples.

Friends, while continuing to expand the areas of convergence and cooperation between us, we must also seek to resolve our differences at an early date.  

We have co-existed for millennia, amicably for the most part, except for the differences that surfaced in the 20^th century. However, India and China still have a long way to go to understand one another better, partly because both countries are changing so rapidly.

I believe that stable and friendly ties are fundamentally important for the sake of future generations. In order to strengthen the positive trends in our relations following the Wuhan Informal Summit in April 2018, we need to have a roadmap for the future. I wish to make the following suggestions:

1. We need to fight stereotypes. Neither side should consider its political or economic system or socio-cultural foundations to be superior. China’s system is a choice made by the Chinese people; similarly, our parliamentary democracy is best suited to our needs. It means that there must be a non-judgemental acceptance of one another for what each side represents.

2. Scholars and opinion-makers in India needs to better understand the factors that have contributed to China’s success. Equally, China needs to understand how the wheels of democracy work in India. Greater resources need to be devoted to the study of the internal dynamics of both countries. Perhaps there are lessons for both sides.

3. India and China are not just nation states but civilizational states with a strong sense of history and identity. In dealing with each other, we must respect this aspect. We must realise that there is greater complexity in the thinking and world view of civilizational states as compared to nation states.

4. The world and the region are expected today to adjust to the accretion in China’s economic and strategic power. At the same time, China also needs to understand better and accommodate the relative rise of India. A “one size fits all approach” on the part of China towards India will simply not work.

5. Both sides need to remain sensitive to each other’s concerns.

6. Post-Doklam, both sides have made laudable efforts to stabilise relations, with good results. The Wuhan Informal Summit, the first of its kind, has provided much needed strategic guidance at the highest level, and frequent summits between our leaders would be beneficial to ties. Other high-level exchanges have provided impetus, as has the recent India-China High Level Mechanism on Cultural and People-to-people Exchanges. These need to be pursued with vigour.

7. To avoid incidents such as the Doklam standoff in 2017, both sides should strengthen dialogue, exchanges and confidence-building measures between the military establishments, on the border as well as off border. The importance of regular flag and border personnel meetings, use of hotlines, and friendly exchanges such as the Hand-In-Hand Exercise held in December 2018 in Kunming, cannot be overstated. CBMs between the Navies and Air Force are also beneficial.

8. Trade needs to be more balanced. Bilateral trade today is approximately USD 95 billion with India facing a huge and continually rising trade imbalance. China could provide India with greater market access. A small beginning has been made with regard to soybean, sugar, non-basmati rice and some anti-cancer pharmaceuticals, but this is clearly not enough. Chinese scholars need to highlight how such a trade imbalance has become a political issue involving the masses in India and their perception of China.  

9. The media in both countries need to be sober and factual in reporting.

10. Above all, I recommend that India and China should promote exchanges between the youth involving schools that can arrange home stays for students of the other side during vacations.  

11. We must speak to one another with candour at all levels, including on prevailing differences in order to address the trust deficit. Here, the importance of learning each other’s languages cannot be overemphasised.

I was recently asked if India would be ready to partner China in third countries of South Asia under what you call the “2+1 model”. I felt that this might be possible if we build greater trust. For this to be realised, there should be greater transparency and consultation in regard to China’s plans and policies south of the Himalayas. In order to avoid misunderstandings, it is best for infrastructure projects to steer clear of disputed territory. Genuine cooperation on the challenge of terrorism in our region will also help pave the way. And, every effort should be made to ensure that the other is not seen as thwarting the aspirations of the other.

Friends, India attaches great importance to its relations with China, our largest neighbour and biggest trade partner in goods. We have convergence on many issues as well as some differences. Both competition and cooperation may continue to define India-China relations, but it is important to ensure that differences do not become disputes. I believe that conflict between India and China is not inevitable.  I am confident that we can work towards this objective by fostering better mutual understanding between our two peoples.  

I wish the deliberations much success.

Thank you.