Modi’s Japan visit: Can India Ignore China?

Guest Column by Prof. B. R. Deepak

08-Sept-2014

http://www.southasiaanalysis.org/node/1609

Prime Minister Narendera Modi concluded his 5 day long Japan visit and returned home on September 3, 2014. The visit has been regarded as a success as both the countries upgraded bilateral relations to ‘special strategic and global partnership’ as Modi and Japanese Prime Minister Shinzo Abe pledged to strengthen economic and security ties.

Modi’s close ties with Abe were distinctly reflected in the rhetoric such as ‘Japan is the closest and most reliable partner of India’, and that ‘No country has done more for modernizing India's infrastructure than Japan.’ Modi’s words including those pronounced at a gathering of business leaders in Tokyo when he said that ‘the world is divided in two camps. One camp believes in expansionist policies while the other believes in development,” and that ‘We have to decide whether the world should get caught in the grip of expansionist policies or we should lead it on the path of development and create opportunities that take it to greater heights’ were certainly offered to please his host who in an unusual gesture traveled all the way to receive Modi in Kyoto at the weekend to host an informal dinner for Modi.

The 56 point long Tokyo Declaration issued on September 1, 2014 after the summit meeting is a blue print for future collaboration between India and Japan and incorporates areas such as infrastructure, investment, energy security, agriculture and food, regional connectivity, defense and maritime security, science and technology, and people to people exchanges. The biggest take away from the summit meeting could be Japanese pledge to invest 35 billion US dollars in India within a span of five years and 480 million dollars in infrastructure loans to India.

Though Japan has been providing yen loans to India since 1958, and has remained largest aid donor of India, however, the trade and economic relations between India and Japan have remained abysmal in the light of sheer market size of India and Japan’s capital accumulation as well as technological advancement. Just consider China’s trade volume with Japan irrespective of the fact that China established relations with Japan 27 years after India’s establishment of relation with Japan. Irrespective of Senkaku/Diaoyu spat, Japan’s trade volume with China is over 300 billion US dollars, almost 4 times bigger than its trade with India. Though Japanese investment in the wake of Senkaku/Diaoyu standoff has dwindled to the tune of 9 billion US dollars per annum, but the sheer size of trade and investment tells us that China-Japan trade relations remains extremely important to both the countries and no one is willing to pull the rug, for it would be disastrous for both the countries, and may be the region as well. 

On the defense and security front nothing substantive happened, the Indian side was expecting a breakthrough in the civil nuclear cooperation as well as the purchase of US-2 amphibious planes, albeit both sides have directed the concerned departments to move ahead with the negotiations on these areas. As India has raised the private equity in defense industry to 49%, there may be joint research and development of defense related technology in future; Japan lifting the ban it imposed on 6 defense enterprises in the wake of 1998 nuclear explosion is an indication that the cooperation in defense sector is likely to be strengthened.

Notwithstanding the signals of increased cooperation in the field of security, India must be watchful of fishing is the troubled waters when the spat between Japan and China is concerned. India must pursue its stated foreign policy of strategic autonomy; therefore, to gang up with a particular country/countries against another, or slip in to the arms of US are not the options for India. In Tokyo Modi referring to ‘expansionist policies’ of some countries was totally uncalled for, as it is utterly explicit as to whom one is referring to even if one do not name the country.

India needs both Japan and China. We need investment and technology from both the countries. China undoubtedly remains India’s largest trading partner, accounting for almost 9 percent of our total trade. However, it does not figure amongst top 10 as far as foreign direct investment is concerned; Japan figures at number 4.

I believe as the Chinese president visits India during mid September, this asymmetry is done away with and China’s investment in India increases manifolds. There are already talks to establish 4 industrial investment parks with billions of dollars investment; investment in infrastructure including high speed railways. I believe our prime minister repeats the words he spoke in Japan that ‘The success of the 21st century will largely depend on the path our two nations follow.’

China’s response to Modi’s China visit could be gauged from the cautious approach it adopted in reacting to Japan-India bonhomie especially Modi’s remarks on ‘expansionist policies’ of some countries. Chinese edition of Global Times editorial ‘Japan-India containment of China is a mythomania’; Xinhua commentary ‘Abe-Modi did you have a hearty talk?’ and another one by English edition of the Global Times ‘Modi-Abe intimacy brings scant comfort’ etc. are pointer to this approach. The language was conciliatory showing understanding for ‘Modi’s emotional bonding with Japan and a little nationalistic when it comes to China.’ At maximum the intimacy will bring ‘psychological comfort to the two countries’ wrote the English version of the editorial. China’s Foreign Ministry spokesman, Qin Gang even brushed aside the bonhomie and remarked that ‘China and India are strategic partners that seek common development.’

If Modi talked about Japanese technological prowess and foreign direct investment, we cannot ignore the Chinese technology, its experiences in modernization over the last 35 years, managing big populations, and having the largest foreign exchange reserves in the world. Today, irrespective of ‘security issues’, it is the Chinese telecom companies that have revolutionized the telecom sector in India. In Gujarat it is the Chinese technology that runs the power industry. There is a huge scope in building Indian infrastructure including high speed railways with relatively cheaper Chinese technology. Chinese investment in industrial investment parks across India is another example of building trust and opening opportunities for Indian work force. Bilateral initiatives such as BCIM, and Chinese proposal seeking India’s involvement in Silk Route, Sea Silk Route that link the countries and regions by a network of roads, railways and markets are welcome steps. Active participation from India will render the ‘string of pearls’ and ‘China’s containment of India’ etc. theories meaningless, and prepare India for a bigger role not only in the regional economic development, but also in the security architecture of the region.

Therefore, India and China relationship has transcended the bilateral scope and has acquired global significance as we engage in multilateral forums such as BRICS, G20 , BASIC, ASEAN, ARF, SCO , SAARC, and even Afghanistan and counter terrorism. Yes, India and China has problems, however, the best way to deal with them is to negotiate and not let these jeopardize the overall relationship; to join the ‘united front’ of this or that country will never be in India’s national interests.

(Prof. B R Deepak is Professor of China Studies at the Centre of Chinese and Southeast Asian Studies, Jawaharlal Nehru University, New Delhi. The views expressed are his own. He could be reached at bdeepak@mail.jnu.ac.in)