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The PM’s Visit to China: Regional Trade Issues Srikanth Kondapalli
To situate the issue in a wider context, the urge for setting up Free Trade Areas (FTA) is increasing in the world today as exhibited by the success of the European and North American integration processes. Today, these FTA’s have proliferated to nearly 200 such regional/bilateral agreements encompassing more than half of global trade. China had concluded or in discussions to set up FTAs with about 30 countries including with Association of Southeast Asian Nations (ASEAN) (in 2002), Chile and Pakistan (in 2006). While China is widely known to have exerted pressure on India for an FTA, the latter is wary of jumping into the fray as the proposal is fraught with long-term consequences not only impacting domestic economic sectors but also in the larger strategic landscape of Asia and beyond. As a large country, with more than a billion population (that is exhibiting younger profile - and hence with the drive) and posting near double-digit economic growth rate figures along with mature service and software sectors, India needs to study carefully such proposals. Indeed, India currently has concluded FTAs with five countries (with Sri Lanka in 1998) and six preferential trade agreements, although with ASEAN it is in discussions for the last three years to initiate an FTA. Indeed, Indian proposals for FTA with ASEAN were making less progress due to difference of opinion on the “negative” and “sensitive” lists, although the Indian side attempted to accommodate the ASEAN members by reducing the sensitive list of items from 854 to 560 with further discussions in reducing them. The India-China differences on FTA have several dimensions. Firstly, reportedly opposed by the “Mumbai Club”, the indigenous producers are wary about competition from the Chinese goods not only in their influx into the Indian market (thereby displacing indigenous products) but also in posing stiff competition in other global markets. Despite relative opening up of the Chinese economy from 1978, but reinforced from the southern tour of Deng Xiaoping in 1992, this section argued that Chinese products are heavily subsidized, costing procedures not fully compatible with free market mechanism, Yuan currency convertibility issues and a weak system of rule of law. While these are common global complaints against China, in the Indian context, other issues such as high transportation costs (in terms of land routes between the two countries complicated further by Chinese intransigence in solving the border dispute) and insurance rates have added fuel to the fire in stalling FTA proposals with China. Indeed, the Federation of Indian Chamber of Commerce and Industry was lukewarm to the idea of a FTA arrangement with China while Shanghai Chamber of Commerce is widely believed to be exerting pressure on the Chinese leadership to exploring more business opportunities with India. Secondly, while the Indian side had called for pan-Asian FTA (by PM Manmohan Singh at the second East Asian Summit at Cebu in January 2007), the Chinese side along with South Korea and some ASEAN countries opposed this idea. Indian proposals were backed by Australia, New Zealand, Malaysia and Indonesia. It appeared that South Block is concerned about the uninterrupted Chinese inroads into Central, South and Southeast Asia through infrastructure projects and the effect this could have on marginalization of India. A pan-Asian FTA could avoid such pitfalls as there could be better level-playing field. In this scenario the “rules of origin” principle could stall Chinese influx of cheaper goods into the Indian market. In this context, the American retailer Walmart, which predominantly dishes out cheap Chinese products, was reportedly blocked by the Indian government to protect the Indian industry. Thirdly, India-China economic relations, while on the upswing in bilateral trade figures, has not provided for much comfort for the Indian side. With negative balance of trade position to India and in favour of China (to the tune of about $10 billion in 2007), the trade basket confined to predominantly raw materials or low end products, along with more Indian investments in China (an estimated $954 million) as compared to less Chinese investments in India (an estimated $54 million), drastic measures for called for but with no way ahead to redress such phenomena. Meanwhile, Indian anti-dumping duties on Chinese products are increasing while China for the first time in late 2006 imposed duties on Indian chemical dyes. This could lead to further friction between the two sides. Again, border trade (estimated to be above $100 million) is a miniscule when compared to the overall bilateral trade ($38.6 billion in 2007). In this context, border trade through Shipki La, Lipulekh and Nathu La have not shown substantial increases. The 2006 agreement to open Demchok is also unlikely to radically change this situation. Indeed, as the Chinese violated the 2006 understanding on trading “local” products and attempted to export electronic and other goods produced elsewhere in mainland China, these were swiftly sent back. As mentioned above, dragging border dispute also implies that both sides could not set up custom houses for regulating trade on the border areas. Article written for IANS on January 19, 2008.
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By all accounts the recent visit of Prime Minister Manmohan Singh to Beijing is considered to be successful in expanding bilateral trade issues. With an impressive $ 38.6 billion in bilateral trade, investments contemplated in each other’s markets and physical connectivity explored between the two countries, bilateral engagement in these fields is poised to expand in the short-to-medium terms. When compared to the relative stagnation or even a stalemate on other issues such as border dispute, economic issues promise to b broaden the bilateral interaction between India and China.
That the bilateral economic relations are headed for a more systematic and comprehensive relationship is indicated by the joint declaration. Premiers Manmohan Singh and Wen Jiabao stated on January 14, 2008 that they welcome the conclusion of a feasibility study, set up by both in April 2005, on a possible “high-quality” Regional Trade Agreement (RTA) provided such an arrangement is “mutually advantageous”. It appears, on the latter phrase, there is no consensus so far on the cost-benefit equation.
I can't go on, says Beckett's Unnamable. I will go on. A writer's injuries are his strengths, and from his wounds will flow his sweetest, most startling dreams.
And Proust, too, killing himself to write his book comes close to the concept of dharma when, echoing Balzac, he says that in the end it's less the desire for fame than 'the habit of laboriousness' that takes a writer to the end of a work. But dharma, as this ideal of truth to oneself, or living out the truth in oneself, can also be used to reconcile men to servitude and make them find in paralyzing obedience the highest spiritual good. 'And do thy duty, even if it be humble,' says the Aryan Gita,
'rather than another's, even it be great. To die on one's duty is life: to live in another' death.
My discovery over the years is that the mother tongues have so much in them, so much that is alive, and are much more pervasive, in all strata of society, in all ages from children to the very old, men and women, literate and non-literate. What holds them together? It's not Sanskrit. It's these mother tongues. I think I went into linguistics because of that. That spoken languages had to be very, very important. It was important in my youth to have discovered this.
Writing is a concentrated form of thinking. I don't know what I think about certain subjects, even today, until I sit down and try to write about them. Maybe I wanted to find more rigorous ways of thinking. We are talking now about the earliest writing I did and about the power of language to counteract the wallow of late adolescence, to define things, define muddled expression in economical ways. Let's not forget that writing is convenient. It requires the simplest tools. A young writer sees that with words and sentences on a piece of paper that costs less than a penny he can place himself more clearly in the world. Words on a page, that's all it takes to help him separate himself from the forces around him, streets and people and pressures and feelings. He learns to think about these things, to ride his own sentences into new perceptions.
Always dream and shoot higher than you know you can do. Don’t bother just to be better than your contemporaries or predecessors. Try to be better than yourself. An artist is a creature driven by daemons. He doesn’t know why they chose him and he is usually too busy to wonder why. He is completely amoral in that he will rob, borrow, beg, or steal from anybody and everybody to get the work done.
I am trembling with cold