Chinese investment in India is good, but border dispute needs to be settled soon!

Sydney, Sunday, 14th September, 2014

Chinese President, Xi Jinping, is visiting India this week. He will be in India on 17th -18th September 2014. Indian Prime Minister, Narendra Modi and President Jinping have already met at a BRICS nations (Brazil, Russia, India, China, South Africa) summit recently.

(Pictures from Google and PTI)

PM Modi has had a very successful visit to Japan a couple of days ago. He shares great equations with Japanese PM Shinzo Abe. Japan has decided to invest $35 billion in India over next few years. They have taken responsiblity for  Mumbai-Ahmedabad fast train too.

China wants to beat the investment from Japan, which is not difficult to understand due to geo-political competition between China and Japan at play presently. India is obviously the beneficiary, but that does not mean India should do away with its trusted friends. It is known that China is uncomfortable and concerned with India’s growing strategic proximity with USA and Japan. This mammoth investment is largely due to this factor.

Reports say that China wants to invest between $100-300 billion in India over next few years. How much is this investment exactly will be clear when it is announced officially.  It is known that China has $3.95 trillion cash reserve, of which it wishes to invest $500 billion in outbound investment. China has invested only $400 million in India so far. Chinese investment in Railways, manufacturing and infrastructure should help speed up the pace of Indian economy and growth.

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Chinese investment in India should be welcome, and it indeed is a welcome news. It addresses to some extent the trade deficit of $35 billion against India out of a total $66.4 billion bilateral trade last year.

India however needs to impress upon Chinese leadership that their investment must be coupled with satisfactory settlement of border dispute at a faster speed and their open and active support for India’s permanent membership in the United Nation Security Council (UNSC). It does not make sense that India is not a permanent member of UNSC today.

China also needs to stop supporting anti-India nations in our neighbourhood to create additional, and necessary, goodwill in India. It makes all the sense if you analyse the spectrum of mutual benefits from an investment of this magnitude. No one can deny that there is some significant trust deficit between India and China, which gets reinforced due to actions of China or actions from its client states. India needs to keep the history in its minds. I am happy to note that the present Indian Govt, keeping history in mind, has decided to develop the frontier area with infrastructure in all forms and manners.

China and India are both great civilisations. They are also great powers in their own rights. They can co-exist, and there is enough space for them both, but they need to be mindful of their respective geo-political and security imperatives, while still operating within the established international norms and principles.

It is safe to say that a lot more will need to be done to tackle the “trust deficit”, and that money alone, although welcome, will not be sufficient to remove the existing “trust deficit” between China and India!

Dr Yadu Singh

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