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India & China: The Way Forward; Seminar Key Note Address of Mr Shiv Shankar Menon

( Director’s Remarks: We feel privileged to provide below for the benefit of viewers ,the full text of Key Note Address delivered, in absentia, by the National security Adviser of India Mr Shiv Shankar Menon, at a National Seminar on “India & China: The way Forward”, organised by the Chennai Centre for China Studies, on 16 March 2012)

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Shri DS Rajan, Director CCCS, Shri BS Raghavan, Patron CCCS, Distinguished participants, Ladies and Gentlemen.

Thank you for asking me to address this national seminar on ‘India and China; The Way Forward’, to mark the fourth anniversary of the founding of CCCS. This is indeed a happy occasion, a chance to recognize and thank you for the remarkable work that the Centre has done in these four years. You have hit the ground running and established an enviable reputation for the Centre in a very short period of time.

Your choice of topic for the anniversary seminar is also most appropriate, coming as it does when India and China are each undergoing rapid domestic transformations, when the relationship between the two countries has assumed new forms, and when the international environment in which we operate seems to be undergoing a fundamental phase change.

As you have an exhaustive agenda covering all these aspects of the relationship, and a most impressive list of speakers to address them, I would like to confine myself to a few general points about the relationship and its future which may be relevant to your consideration of the issue.

1. We have come a long way

Those of us who have been involved in the relationship for some time, like Rajan, know that we have come a long way from the days in the sixties and early seventies when it was an adversarial relationship, dominated by a single issue, and when communication between the two states and societies was minimal. Today India and China have a full spectrum relationship which includes elements of cooperation and competition, and which is significant not only for our two countries but for the region and the world. It also holds promise of an even better future.

This might appear self evident but is worth remembering when the din and bustle of preoccupation with daily events and the noise in the media obscures or shortens our vision. Today India has few relationships which can match that with China for its range, significance, and the variety of emotions that it evokes in both countries.

It may be worth asking how we have come to this stage in our relationship, how we have made this progress. We have managed to move forward in this relationship because the highest leadership in both countries recognized that it is the interest of both countries that it should be so, that the costs of sterile confrontation were borne by our two countries and benefitted others, and by the fact that both countries are engaged in mammoth tasks of domestic transformation which must take priority over external entanglements and complications.

What has been achieved since the eighties or more precisely since Foreign Minister Vajpayee’s 1979 visit and Prime Minister Rajiv Gandhi’s visit in 1988? The border is relatively peaceful and we have made progress in our discussions on a boundary settlement. The rest of the relationship has developed rapidly, while we address the boundary question. Our trading and economic relationship is one of the most important that India has . India and China work together on several international issues and find that our interests coincide in several global issues.

We now consult regularly with each other on matters of regional and global significance. We have structured dialogue with China on climate change issues and counter-terrorism matters. In our term as non-permanent member of the UN Security Council, we have started a mechanism of consultation with China on UN issues. We also have frequent and vibrant consultations with China in multilateral forums like WTO, G-20 and BRICS and on matters like food security, energy security and restructuring of the world economic architecture as part of our structured dialogues.People to people links have grown to the point where there are, by one count, over 7,000 Indian students in China. China is our largest trading partner in goods and a major source of equipment for important industrial sectors.

2. What about the future?

I think that there are several objective reasons for both countries to be able to keep India-China relations on the positive trajectory of the last three decades. At the same time, we are also at an inflexion point, where we will have to deal with a new set of issues and learn new ways of working together, as a consequence of the changes in India and China and of the fundamental changes in the world around us.

India and China are both young and ambitious societies undergoing rapid change. We want more. After some centuries of introversion we are both looking out and engaging with the world. Each of us has a development experience that has proved its validity and relevance in our domestic conditions. But as we step out into the world, neither of us is very clearly articulating the sort of power that we wish to be. And, what we say is often over-analysed, discounted and subjected to strange readings by the powers that be.

For a considerable time to come India and China’s primary focus must remain on their internal development. For China the issue is whether her people will grow old before they grow rich, and whether she can make the structural and social adjustments that a move to domestic demand led growth require. She is already a middle income society and is considering how to avoid the middle income trap. For India, reaping the demographic dividend that we expect to provide demand and manpower for our development will require the rapid creation of jobs and spread of new skills among our youth at rates unknown in human history, except in China. Each country probably can learn much from the other’s development experience. But the short point is that both countries will have overwhelming internal preoccupations for quite some time to come.

At the same time the very process of rapid growth that is required for internal transformation also leads naturally to the accumulation of power, improvements in the instruments of state power, and increasing dependence and therefore interests abroad. This arouses the attention of other countries, and raises questions about the role that India and China will choose to play in the international system. For the last thirty years or so, both India and China have been tactically cautious, concentrating on enhancing those factors that will enhance their domestic transformation. They have worked separately, in parallel, and now together in forums like the BRICS and G-20.

3. Objective reality

There are also objective reasons in the international situation for India and China to learn to work together. We are faced with an increasingly turbulent world. Issues like energy security, safety of sea-lanes, food security, and the world economy after the financial crisis need cooperative solutions rather than zero-sum approaches. In several of these areas, particularly on new and emerging issues, India and China have congruent interests. Over the last thirty years we have learnt to work together on these issues in the international arena, and have achieved some success. We have also recently agreed to begin a bilateral India-China dialogue on maritime issues. To the extent that one can predict the future, this commonality will grow in the years to come.

Secondly, while we both need a peaceful periphery our peripheries overlap. In these areas it is natural that we both share in interest in peace even while we compete peacefully in trade, economic and other ways to build our relationships and seek influence. Our presence in the shared zone that forms our peripheries is a fact of geography that we cannot deny. This is also the part of the world which is changing rapidly for the better in terms of economic development and political stability and where new cooperative institutions and security architectures, like the EAS or ARF, are evolving or being built. In the process, all the powers concerned will have to find new ways of cooperating which reflect the present balance of forces in the region. This is still a work in progress and is something that India and China should address as we go forward.

And in regions of increasing turbulence, as in West Asia, both India and China have a common interest in terms of stability, maintaining energy security, and preventing radicalisation which could affect each of our societies. Here again it would be logical for us to consult on the political and other aspects of developments in the region. We are today in a world where the very nature of power is changing, where regional hotspots are growing in number, and the relatively benign international economy which assisted the rapid development of India and China is being replaced by a much grimmer international economic outlook.

In other words, the international situation makes it even more important that India and China consult and learn to work together.

4. Managing Differences

In saying this I am not minimising the differences that exist between the two countries. We are still divided by the world’s largest boundary dispute in terms of area, but have shown an ability to manage differences. In 2005 we agreed the Guiding Principles and Political Parameters for a boundary settlement. We are now engaged in the second stage of a three stage process, namely, agreeing a Framework for a boundary settlement. The third stage will be translating the Principles and the Framework into an actual delineated and demarcated boundary.

While this process continues, the growing relationship throws up new issues. Perhaps the one with the most immediate significance is the very nature of the bilateral economic relationship, one symptom of which is the growing trade imbalance and the limited Indian export basket. We have begun to address these larger issues in a Strategic Economic Dialogue which began last September in Beijing and showed some useful results in terms of directions for future cooperation. Both sides have also begun to use defence diplomacy but this is a relatively underdeveloped part of the relationship that needs considerable work.

But the important point is that we have shown an ability to manage differences in the past and that there is no reason to doubt our ability to do so in the future. To argue otherwise suggests a lack of self-confidence which I find unjustified by our past history.

5. Conclusion

I trust that I have been able to suggest to you what I consider the main issues for India and China to address as we move forward in an increasingly complicated world.

As you can see this is a relationship of considerable significance to us in India, and, I daresay, of increasing significance to China as well, in today’s increasingly complicated world. It is also clear that India-China relations have recently acquired strategic significance in a world of uncertainty which is moving towards but still far from multi-polarity. So my short answer to the question implicit in the title of your conference about the way forward is that there is a constructive and positive way forward which I am confident both India and China are wise enough to take.

I wish you success in your deliberations.

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