India was the only country in the eight-nation Shanghai Cooperation Organisation (SCO), which opposed the $ 50 billion ambitious Belt and Road Initiative (BRI) of China. Prime Minister Narendra Modi asserted that any mega connectivity project must respect sovereignty and territorial integrity of the countries. All other members ~ Russia, Pakistan, Kazakhstan, Kyrgyzstan, Uzbekistan and Tajikistan, besides China ~ backed the project at the 18th summit of SCO held at Qingdao, China. Modi spoke of the need to “respect sovereignty” in dealing with infrastructure projects, clearly signaling the government’s objection to a portion of the BRI, China-Pakistan Economic Corridor (CPEC) which passes through Pakistan-occupied Kashmir.
Modi, in the presence of President Xi and the Russian President, Vladimir Putin, said India’s commitment to connectivity projects was reflected in its involvement in the International North South Corridor, the development of the Chabahar port and the Ashgabat Agreement, which is a transport pact among several Gulf and Central Asian countries. It is aimed at creating a transit corridor to encourage trade and investment.
What Beijing got out of the summit was India’s participation in its effort to rally support for China in the trade dispute with the Trump administration. This is a lot more important to China than other issues as it gears up to counter the possibility of a trade war being triggered by Washington.
Trade between the US and China is nearly $650 billion a year, with the US importing far more than it exports. America has accused China of using unfair trade practices as well as employing coercive tactics to gain access to American intellectual property. The tariffs proposed by Trump seem designed to protect American consumers but could hurt business enterprises that depend on products and materials from China, while a trade war would threaten farmers who export their goods.
The SCO expressed its support for an “open, inclusive, transparent, non-discriminatory and rules-based multilateral trading regime” while opposing trade protectionism of any form, President Xi Jinping told a joint press conference. Mr Modi kicked off his bilateral engagements at the SCO Summit with a meeting with President Xi on June 9. Both leaders essentially underscored the significance of the Wuhan informal summit. The two sides expressed their willingness to move beyond their differences on such issues as the border dispute and cooperate in a range of other areas. A significant move was the decision on a joint India-China project for peace in Afghanistan. This will enable India to play a bigger role in Afghanistan and reduce Beijing’s reliance on Pakistan.
While Xi described Wuhan as a new starting point, Modi called the summit a milestone in the relationship. Stating that the spirit of Wuhan “underpinned” the Qingdao meeting, foreign secretary Vijay Gokhale called Xi’s acceptance of Modi’s invite for another informal summit in 2019 in India as a significant takeaway from the meeting on June 9.
Modi and Xi, who have met on more than a dozen occasions in the past four years, have been for some time trying to rise above the historical and policy trappings that has held India-China relations in an unsettled state for decades. A plan is on the anvil to create a mechanism at the level of the two leaders to provide strategic guidance to the two militaries to keep peace on the border and take forward connectivity projects in third countries, starting in Afghanistan.
During his meeting with Xi, Modi highlighted the negative balance of trade arrangement for India and expressed the hope that China would buy a range of products like rice, sugar and pharmaceuticals from India. The decision on rice exports could be a starting point for sale of Indian farm produce and processed products like sugar to China in order to reduce the trade imbalance. China’s customs administration and India’s department of agriculture on rice exports will now enable India to export non-basmati rice varieties, expanding an earlier 2006 protocol on rice exports.
Modi and Xi are both visionary leaders. Despite the border tension they want their nations to progress and are willing to come half way to put differences in the back burner and look towards the future. Under an MoU between China’s ministry of water resources and India’s ministry of water resources, river development and Ganga rejuvenation, China has agreed to share flood season data with India from May 15 to October 15 every year. It has now pledged to share data with India during the flood season, and to also provide data if the water levels exceed mutually agreed levels during the non-flood season.
China and Russia are proposing that the eight-nation SCO can become a peace platform to resolve India-Pakistan differences. In an interview with state broadcaster CGTN, Chinese foreign minister and state councillor Wang Yi said that the SCO, which has been expanded with the inclusion of India and Pakistan, could provide a “better platform” to resolve the bitter feud between New Delhi and Islamabad of over seven decades. “We know that there are unresolved historical conflicts existing between Pakistan and India. But I think after their joining the SCO, maybe we can provide a better platform and opportunities for the building of relations between them.”
On June 10, President Xi welcomed the presence of Mr Modi and the Pakistan President, Mamnoon Hussain, at the SCO as a development “of great historical significance”. “More member states mean greater strength of the organisation as well as greater attention and expectations of people of regional countries and the international community,” Mr Xi observed.
In a separate interview with CGTN, Russian President Vladimir Putin hoped that the SCO forum could provide India and Pakistan an opportunity to resolve their differences in a “multilateral format”. He was optimistic that “all countries of the region will use this platform for in-depth work in a multilateral format and resolve their differences”.
India also appeared to soften its position towards Pakistan, which it has often accused of spearheading global terrorism. India declined to single out Pakistan as a primary source of international terrorism. After engaging with China in Wuhan and Qingdao, India appeared to be rebalancing its ties with Pakistan in order to build bridges with Eurasia, within the framework of the eight-nation SCO.
In an obvious reference to the “America-first” doctrine of the Trump administration, President Xi extolled the Confucian values of harmony and mutual respect to counter the headwinds of protectionism and inward-looking geopolitics.
The Qingdao summit created unity, harmony, plurality, mutual respect and inclusivity among SCO members and promised peaceful coexistence apart from rapid economic growth.
The writer is retired Senior Professor of International Trade. He may be reached at [email protected]