In recent months, there have been numerous sources of strain between India and China on strategic issues. First, China prevented the UN sanctions committee from declaring the mastermind behind the Pathankot attack, Jaish-e-Mohammad Chief Masood Azhar, a terrorist.
More recently, China opposed India’s bid to become a member of the Nuclear Suppliers Group, on the pretext that only signatories to the Nonproliferation Treaty (NPT) can become members of NSG. Only a handful of countries had opposed India’s bid, with both the United States and Japan firmly backing India.
For its part, India has raised a number of objections to the China-Pakistan Economic Corridor (CPEC) on the grounds that it passes through the disputed territories of Gilgit-Baltistan. It is not just the Pakistan factor that has led to tensions between both countries; Beijing has also objected to India’s participation in maritime exercises in the South China Sea. For a long time, India was reticent to join hands with the United States and Japan, but New Delhi’s pragmatism led it to join hands with both. India’s decision to hold the most recent Malabar naval exercises jointly with Japan and the U.S. off the Philippines coast took Beijing by surprise.
Economic Ties: The Role of Indian States and Chinese Provinces
Amid all these differences on strategic issues, economic ties have been increasing in recent years. While there is no doubt that trade is skewed in favor of China, a number of Chinese investors have evinced interest in India and are exploring new avenues for investment.
Apart from the pragmatism shown by successive governments over the past decade and a half, as well as the efforts made by the business community on both sides, state governments in India as well as provinces in China deserve credit for seeking to strengthen not just economic linkages, but also people-to-people ties. Interestingly, during his visit to India in September 2014, President Xi Jinping first landed in Ahmedabad, not New Delhi; likewise Indian Prime Minister Narendra Modi’s first stop during his China visit was Xi’an, Xi’s hometown.
More recently, following President Pranab Mukherjee’s visit to China in May 2016, two Indian chief ministers visited China: Andhra Pradesh Chief Minister Chandrababu Naidu (from June 21-26) and Madhya Pradesh Chief Minister Shivraj Singh Chouhan (June 19-25). Both went to China with the key aim of reaching out to Chinese investors and seeking investment in a number of areas, including infrastructure.
Chouhan, whose visit was part of an exchange program between the Indian Ministry of External Affairs and the International Liaison Department of the Central Committee of the Communist Party of China, reached out to big investors and invited them to the Global Investors Summit to be held in Madhya Pradesh in October 2016. The Madhya Pradesh chief minister, on his return from China, stated that while China may have opposed India’s bid for NSG, “Dialogue should continue to strengthen economic ties between the two countries.”
Apart from securing commitments from a number of investors, including Ansteel Engineering Technology Corporation Limited, Naidu, chief minister of Andhra Pradesh, also sought to enhance people-to-people linkages. In this context, a sister state agreement was signed between Guizhou province and the state of Andhra Pradesh. Naidu also spoke about his plans for Amaravati, the capital of Andhra Pradesh, and its rich Buddhist heritage.
Naidu, who as chief minister of Andhra Pradesh in the late 1990s had played a key role in making Hyderabad (now the capital of Telangana) into an IT hub and managed to rope in big names like Microsoft, previously visited China in April 2015. He had been sent by the Ministry of External Affairs. During his visit in 2015, Naidu aggressively wooed investors and MOUs were signed between the Andhra government and companies for investment in the solar energy sector, while a number of business-to-business agreements were signed as well. During this visit, Naidu was able to attract Chinese smart phone manufacturer Xiaomi, which subsequently opened a plant in Andhra Pradesh, where Taiwanese company Foxconn (the worlds largest contract manufacturer of smart phones) is assembling Xiaomi phones.
Likewise, in January 2016, Haryana Chief Minister Manohar Lal Khattar visited China and met with a number of investors. During his trip, the Dalian Wanda Group evinced interest in developing an industrial park in Kharkhoda, Sonipat (near New Delhi). Wanda Chairman Wang Jianlin met the chief minister during his visit, and also attended the Happening Haryana Investors Summit held at Gurgaon in March 2016.
In September 2015, Telangana Chief Minister K. Chandrashekhar Rao embarked upon a ten day visit to China. Maharashtra Chief Minister Devendra Fadnavis visited the country in May 2015, accompanying Modi on his trip. This trend of chief ministers visiting China has witnessed an increase in recent years, but began earlier. Other CMs who have visited China include Nitish Kumar (Bihar), K Siddaramiah (Karnataka), and Modi himself as Gujarat’s CM.
The India-China State Level Dialogue
During his China visit in May 2015, Modi was accompanied by Fadnavis as well as Gujarat Chief Minister Anandiben Patel. Recognizing the importance of ties between states and provinces, the India-China Forum of State Provincial Leaders was inaugurated by the Indian PM and his Chinese counterpart, Li Keqiang, during the visit. The United States and China have had a similar governor-level dialogue since 2011; this dialogue has helped in further expanding both economic and people-to-people ties. Links between provinces and states have played a key role in fostering ties between India and China for over three decades.
One particular focus for state-to-province engagement is building tourism linkages. States like Telangana and Kerala have been promoting their heritage and holding roadshows to promote tourism in China. China observed an India tourism year in 2015, while India is observing a China tourism year in 2016.
While serious strategic differences cannot be ignored, state and provincial governments can make substantial contributions in strengthening economic relations and people-to-people contact. Their increasing participation in India-China relations is a welcome development.
Tridivesh Singh Maini is a New Delhi based policy analyst associated with The Jindal School of International Affairs, Sonipat, India.