Sunday, 25 November 2012

PM plays the business card with China (Sunday Guardian)


Indian PM Manmohan Singh with his Chiinese counterpart Wen Jiabao
t last count, 187 prominent officials and businesspersons from China have reached Delhi for the 26 November Sino-Indian Strategic Economic Dialogue, first held in Beijing in September 2011. They are to discuss a slew of policy measures which in total are expected to give a significant boost to the already-substantial trade between the two countries. While the Indian delegation will be headed by Planning Commission Deputy Chairperson Montek Ahluwalia, the Chinese delegation is led by National Development & Reform Commission Chairman Zhang Ping, and contains five individuals of Vice-Minister rank. The Chinese side are aware that the decline in Europe's economic fortunes has made the Indian market necessary for Chinese exports to grow, especially in telecom, energy and infrastructure, in each of which the market in India is in excess of $100 billion.
Senior ministers such as Telecom Minister Kapil Sibal, Home Minister Sushilkumar Shinde and Finance Minister P. Chidambaram are known to be close to the NATO bloc, and may therefore be expected to be lukewarm towards a quantum leap in Sino-Indian trade (at the expense mainly of NATO member-states). However, their stance is being countered by the Prime Minister himself, who (in the words of a senior official) "is aware that China has the largest pool of investible resources in the world" and can therefore act as a magnet for both the public as well as the private sector in India, given the paucity of funds after the 2008 financial crash in NATO capitals. "The PM also appreciates the fact that only by sourcing equipment and technology from China can power and telecom sectors get a boost that still keeps prices low," another official pointed out, adding that "rival countries are playing on security fears in order to keep away competitive products from China." That the Intelligence Bureau and other security agencies rely heavily on input from France, the UK and the US is no secret.
Among the items to be discussed on Monday is the possibility of China getting involved in the provision of high-speed rail corridors within India. In exchange, the Indian side will offer expertise in computerised systems, especially ticket booking and other services. Roads and highways are another sector that may be opened to Chinese companies, although the presence of naval fleets close to major ports means that this sector will continue to remain out of bounds. "Cheap and quick finance is the key that can enable China to beat competition (from NATO bloc economies)", a key diplomat revealed, adding that "only China and the GCC have investible resources of the magnitudes needed", now that the EU is close to insolvency and the US is skidding on the brink of a "fiscal cliff".
Other sectors where large-scale Chinese investment may be welcomed is energy, both conventional and alternative. Water conservation and utilisation is another sector where PRC expertise is seen to be useful. "Giving loans to Indian corporates and to public sector entities such as the Railways would help narrow the deficit between what China sells to India and what it buys," a senior official said, adding that "India would in exchange market its software and service industry skills" to China. Another field is education, where quality Indian universities can set up English-language campuses in China.
The delegation from Beijing is being taken to Bangalore on 27 November, so that this country's software skills can be showcased. "The PM has decided that he wants to generate a Big Bang in Sino-Indian relations the way he achieved with India-US ties in the first term," a top diplomat claimed, adding that "the fact that PM is foursquare behind this China outreach is expected to silence the lobbies of other countries nervous at China grabbing markets that were their monopolies". Will NATO's admirers prevail or will Manmohan Singh? The coming months will give the answer to that question.

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