India, China target $100 bn trade, but no headway on stapled visa (Roundup)

Thursday, December 16, 2010

NEW DELHI - Rejecting any rivalry between them as they become global emerging powers, India and China Thursday agreed to address contentious issues, including stapled Chinese visas for residents of Jammu and Kashmir, set an ambitious trade target of $100 billion by 2015 and launched a strategic economic dialogue to trim trade imbalances.

The two sides took several important decisions to keep the relationship, prone to volatility, on an even keel during talks between Prime Minister Manmohan Singh and his Chinese counterpart Wen Jiabao, who began his three-day visit to India Wednesday.

These included the launch of an annual dialogue between foreign ministers, setting up a strategic economic dialogue to address India’s trade deficit estimated to be around $24 billion this year, launch of a CEOs’ forum, and greater market access for Indian goods to the Chinese market.

But the outcome of discussions between the two leaders fell short of New Delhi’s expectations as Beijing neither gave a pointed assurance about stopping stapled visas for residents of Jammu and Kashmir nor did it change its stance on India’s bid for a permanent seat in the UN Security Council, confining itself to backing New Delhi for a bigger role in the UN.

Manmohan Singh and Wen held talks to forge “strategic consensus” on a range of issues, including the widening trade deficit, global terrorism, nuclear non-proliferation and climate change. The two leaders, who enjoy excellent rapport, had also met over a dinner Manmohan Singh hosted Wednesday night.

After their talks lasting an hour and a half at Hyderabad House, the two leaders agreed that there was “enough space in the world for the development of both India and China and enough areas for both to cooperate”, said a joint communique.

They welcomed the launch of a hotline between the prime ministers, that became operational four days ago, as an important step to build trust and expand cooperation on critical global issues needing urgent consultations.

“Our relationship has transcended the bilateral dimension and has assumed global and strategic significance,” Manmohan Singh said while toasting the Chinese premier at a banquet he hosted in his honour. “The fact is that when India and China, representing more than two and half billion people, speak in one voice, the world listens.”

Manmohan Singh underlined that a strong partnership between India and China will contribute to long-term peace, stability, prosperity and development in Asia and the world.

The two sides signed six agreements in areas ranging from media and cultural exchanges to green technologies, the sharing of hydrological data on the Sutlej river and collaboration between their banks.

They also reiterated their resolve to actively seek “a fair, reasonable and mutually acceptable solution” to the decades-old boundary dispute.

In a speech at the Indian Council for World Affairs (ICWA), Wen said the boundary issue was “a historical legacy” and its resolution requires patience. “It will not be easy to completely resolve this question. It requires patience and will take a fairly long period of time,” Wen said.

Wen brought up the issue of stapled visas and said that Indian and Chinese officials should meet and resolve it as that has tended to cloud relations in the last two years since Beijing began this practice.

India has expressed displeasure at China virtually questioning Indian sovereignty over Jammu and Kashmir by giving stapled visas to residents of the state who seek to visit that country, and at China’s accelerated investment in Pakistan-controlled Kashmir that New Delhi sees as a strategic threat.

Foreign Secretary Nirupama Rao quoted Wen as saying that “China takes this issue, takes our concerns very seriously” and that “officials of the two sides should have in-depth consultations so that this issue can be resolved satisfactorily”.

Asked if the Indian side made it clear to the Chinese that Jammu and Kashmir was to New Delhi what Tibet was to Beijing, Rao said: “Our position is well known to the Chinese.”

Unlike previous joint statements, the joint communique this time made no mention of India’s commitment to one China policy, which some saw as New Delhi’s way of signalling displeasure at China over the issue of stapled visas. Rao, however, rejected this assessment, saying India’s position on one China policy has not changed.

Don’t read too much into it, she said.

In an important development, China shed its earlier ambivalence and agreed to back the UN resolutions that proscribe terrorist organisations like Al Qaeda and its affiliates like the anti-India Lashkar-e-Taiba.

India also took up the issue of terrorism emanating from Pakistan and pressed the Chinese leader to take it up with the Pakistani leadership when he visits Islamabad after wrapping up his visit to New Delhi Thursday.

There was no perceptible advancement of China’s stand on India’s bid for a permanent seat in the UN Security Council.

“China attaches great importance to India’s status in international affairs as a large developing country, understands and supports India’s aspiration to play a greater role in the UN, including in the Security Council,” was all that the statement said.

The two sides also decided to increase cooperation between the Reserve Bank of India and China Banking Regulatory Commission, while agreeing to extend permission to their banks to open branches and representative offices in the other country. These came on top of some 50 deals worth $16 billion entered into between enterprises of the two sides Wednesday to coincide with Wen’s visit.

In his second visit to India, Wen hoped that his visit will widen and deepen relationship and lead to the forging of “strategic consensus” on a range of issues.

“With our joint efforts, we will be able to take out friendship and cooperation to a higher level in the 21st century,” the Chinese premier said at Rashtrapati Bhavan where he was accorded a ceremonial reception.

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