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Improving Sino-Indian ties

Improving Sino-Indian ties
Close on the heels of a staggering Chinese defence budget of $175 billion (as against the Indian defense budget of $45 billion) comes Chinese Foreign Minister Wang Yi's observations that even the Himalayas can't prevent the improving ties between India and China and that the two countries should work compatibly rather than fighting over different issues. He also dismissed the strategic quadrilateral talks among India, Japan, Australia and the US as a headline-grabbing idea. The strategic quadrilateral talks have been initiated recently in the wake of increasing China assertions in maritime trade and security. For India, a higher Chinese defence budget also implies more of Doklam-like confrontations. As India's apprehensions that the increased flow of money in the Chinese defence sector would result in the reinforcement of men and material in Doklam-like flashpoints are likely to come true, the Chinese Foreign Minister's efforts to allay Indian fears is only marginally reassuring.
But, there is another factor that makes him speak so optimistically and that is the bilateral trade that touched the $80 billion mark in 2017. Though Indian exports grew by 40 per cent, the trade deficit stood at above $50 billion. The two countries, otherwise, do not see eye-to-eye on a number of issues including the China-Pakistan Economic Corridor and the UN ban on Jaish-e-Mohammad leader Masood Azhar. China blocking India's entry into the Nuclear Suppliers Group and the Doklam standoff are two other key irritants in the Sino-India relations. While the trade between the two countries grew by 18.63 per cent to $84.44, the balance of trade remained hugely in the favour of China, with India's imports from China standing at $68.10 billion, up 14.59 per cent over the last year figure. The trade deficit remained high at $51.75 billion, registering a growth of 8.55 per cent year-on-year in 2017.
Though there are serious differences between India and China, the trade ties are robust and growing at over 18 per cent on the year-on-year basis. China has also not conceded to the Indian demand that the country should open its IT and pharmaceutical sectors for Indian businesses to improve their balance of trade situation. At the moment, the Chinese businesses have access to various sectors of the Indian market but Indian companies do not have access to several sectors of the Chinese economy. As foreign ministries are now engaged in business diplomacy, the Chinese Foreign Minister stressing on the need for peace and cooperation underscores the need to have an enabling environment for business. Since the trade balance is in the favour of China by a margin of over $50 billion, it makes sense for the Chinese to continue the relationship and allow the benefits to accumulate from the growing business between the two countries. For India, which does not find Chinese policy conforming to India's stand on various issues from Azhar Masood to the Nuclear Supply Group, it must seek reciprocal benefits from China for allowing the Chinese companies to do business with India. The trade ties between India and China was preferred as a foreign policy tool to normalise ties between the two countries. The growing amount of business testifies to the potential that the relations between the two countries have. Now, this gain in the sphere of business has to be replicated in other spheres of relationships. The border disputes between the two countries have the seeds of mistrust and flare-ups that need to be managed amicably and swiftly so that the businesses find a conducive environment to grow rapidly. Looking at the immense possibilities and potentials that exist between the two countries, the Chinese Foreign Minister's observations that even the Himalayas cannot stop the improvement of relationships is no overstatement. Rather, more people-to-people contact has the potential to normalise the ties and force political leaders to acknowledge and admit the changing reality. India-China business has grown from strength to strength and looks irreversible. By removing the irritants like those on Doklam, Azhar Masood, NSG and allowing Indian businesses access to closed sectors of IT and pharmaceuticals, India and China will truly march towards the normalisation of relations, all thanks to allowing businesses between the two countries to flourish.
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