Modi and Xi talked much, but said nothing

Inscrutable China

The just-ended second Modi-Xi informal summit at Mahabalipuram will go down in history for what was not said rather than for what was said and agreed upon between the two top leaders of India and China. Both carefully tried not to bite the bullet and come to bold decisions on bilateral matters. The meeting as such is significant, however, for direct communications and gauging of each other’s intentions and objectives. But that is not enough to assuage the feelings and the contentious developments that preceded the meeting.

Firstly, as Foreign Secretary Vijay Gokhale said at the end of the meeting, the Kashmir issue – which has been gathering storm since August 5 -- was not discussed by Prime Minister Narendra Modi nor even mooted by his guest, President Xi Jinping.

Since August 5, when Parliament revoked Article 370’s special provisions for the state of Jammu and Kashmir and divided it into two Union Territories, China’s response has been unprecedented in nature. It called the Indian move “unacceptable,” as if Kashmir ever was a part of China. On top of it, it took the matter to the United Nations Security Council for “closed door negotiations.” Foreign Minister Wang Yi, despite the counsel by External Affairs Minister S Jaishankar, raised the same issue at the UN General Assembly, stressing on respecting the UN Charter, UNSC resolutions and on not changing the status quo – all on issues that Beijing has no locus standi on.

Secondly, after the meeting, both decided that terrorism is a “common threat” and that they intend to make “joint efforts” on a “non-discriminatory basis.” In light of China’s hold on Pakistan-based terrorists at the UN 1267 committee on counter-terrorism, there was some progress recently when Masood Azhar was finally listed by the committee. China, in this case, relented only after US threats on this issue. In light of Beijing’s overall encouragement of Pakistan, including on Kashmir, it needs to be seen whether the Modi-Xi summit will lead to any positive impact on the matter.

Thirdly, of the five issues that were mooted at the previous meeting at Wuhan in April 2018, while most were discussed at Chennai, no clear decisions were taken, suggesting that these remain work in progress. For instance, border stability and the necessity of introducing new confidence building measures was suggested so as to avoid Doklam-type incidents. However, the two leaders merely reiterated the same point again, suggesting that differences remain on the issue.

The unmanageable trade deficit issue was raised at Wuhan, as India has been doing with China since 2010. Over the last decade, the cumulative trade deficit in favour of China has risen to $726 billion. To bridge the deficit, India suggested to China to observe market economy status (enshrined in the WTO) so as to trigger Indian exports, and removal of non-tariff barriers that discriminate against Indian products, or investments from China into India.

Since Wuhan, as China’s new Ambassador Sun Weidong said, there has been a 15% increase in Indian exports to China. But in absolute figures, this is miniscule. The same period also saw the annual trade deficit rise to over $65 billion in favour of China. President Xi during his visit to India in 2014 promised $20 billion in investments over the next five years. There remains a Yuan-ing gap between saying and doing – not a Renminbi has been invested. Now, at the summit, both sides decided to constitute a “high-level” committee, to be headed by India’s Finance Minister and China’s Vice Premier, the progress on which will at best be seen in the indefinite future.

On the upcoming Regional Comprehensive Economic Partnership arrangement, India reiterated its position for a “balanced” and non-discriminatory approach. It needs to be seen if India can achieve this.

On one issue suggested at Wuhan -- people-to-people contacts and cultural relations -- there was some progress at Chennai. A few days ago, India announced further liberalisation of e-visas for Chinese tourists. The Modi-Xi summit declared Tamil Nadu and Fujian Province as sister-states, and they are to explore maritime connectivity. They also announced that the two countries would observe 2020 as the ‘Year of India-China Cultural and People-to-People Exchanges’. These may be good, but not actually the stuff of summitry between two rival rising powers with proxies, trade imbalances and unresolved borders.