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«INDIA-CHINA BILATERAL RELATIONS Political Relations The People's Republic of China (PRC) was established on October 1, 1949, and India was the first ...»

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INDIA-CHINA BILATERAL RELATIONS

Political Relations

The People's Republic of China (PRC) was established on October 1, 1949, and India was the

first non-communist country to establish an Embassy in PRC. On April 1, 1950, India and China

established diplomatic relations. The two countries also jointly expounded the Panchsheel (Five

Principles of Peaceful Co-existence) in 1954. Chinese Premier Zhou Enlai visited India in June 1954 and Prime Minister Nehru visited China in October 1954. Premier Zhou Enlai again visited India in January 1957 and in April 1960.

The India-China conflict in 1962 led to a serious setback in bilateral relations. India and China restored ambassadorial relations in August 1976. Higher political level contacts were revived by the visit of the then External Affairs Minister, A.B. Vajpayee in February 1979. The Chinese Foreign Minister Huang Hua paid a return visit to India in June, 1981.

Prime Minister Rajiv Gandhi visited China in December 1988. During this visit, both sides agreed to develop and expand bilateral relations in all fields. It was also agreed to establish a Joint Working Group (JWG) - to seek fair, reasonable and mutually acceptable solution on the boundary question - and a Joint Economic Group (JEG).

From the Chinese side, Premier Li Peng visited India in December 1991. Prime Minister Narasimha Rao visited China in September 1993. The Agreement on the Maintenance of Peace and Tranquility along the Line of Actual Control (LAC) in the India - China Border Area was signed during this visit, providing for both sides to respect the status quo on the border, clarify the LAC where there are doubts and undertake CBMs.

President R. Venkataraman paid a state visit to China in May 1992. This was the first Head of State-level visit from India to China. President Jiang Zemin's state visit to India in November 1996 was similarly the first by a PRC Head of State to India. The four agreements signed during his visit included the one on CBMs in the Military Field along the LAC covering adoption of concrete measures between the two militaries to enhance exchanges and to promote cooperation and trust.

After the nuclear tests in May 1998, the relations faced a minor setback. External Affairs Minister Jaswant Singh visited China in June 1999 and both sides reiterated that neither country is a threat to the other. President K.R. Narayanan’s visit to China in May - June 2000 marked a return to high level exchanges. Premier Zhu Rongji visited India in January 2002.

Prime Minister A.B. Vajpayee visited China in June 2003 during which a Declaration on Principles for Relations and Comprehensive Cooperation was signed. This was the first comprehensive document on development of bilateral relations signed at the highest level between India and China. India and China concluded a border trade protocol to add a border crossing between Sikkim and Tibet Autonomous Region. The two Prime Ministers appointed Special Representatives to explore from the political perspective of the overall bilateral relationship the framework of a boundary settlement.

Premier Wen Jiabao visited India in April 2005. A Joint Statement was signed by Premier Wen and Prime Minister Dr. Manmohan Singh. During the visit, the two sides issued a Joint Statement establishing a Strategic and Cooperative Partnership for Peace and Prosperity. It reflects the consensus that bilateral relations transcend bilateral issues and have acquired a global and strategic perspective. The agreement on Political Parameters and Guiding Principles signed during the visit represents successful conclusion of the first phase of the work of the Special Representatives on the boundary question.

Chinese President Hu Jintao visited India in November 2006. During the visit, the two sides issued a Joint Declaration containing a ten-pronged strategy to intensify cooperation in all areas and to give greater content to India-China Strategic and Cooperative Partnership. President of the Indian National Congress and Chairperson of the United Progressive Alliance Smt. Sonia Gandhi visited China at the invitation of the General Secretary of the Communist Party of China (CPC) President Hu Jintao on 25-29 October 2007. She met with President Hu Jintao and Premier Wen Jiabao besides other leaders of the CPC. She paid another visit to China in August 2008 at the invitation of the Communist Party of China to witness the opening ceremony of the Beijing Olympic Games and met, among others, PRC Vice President Xi Jinping.

Prime Minister Dr. Manmohan Singh visited China on 13-15 January 2008. During the visit, he had extensive discussions with Premier Wen Jiabao and met with President Hu Jintao and NPC Chairman Wu Bangguo. A joint document entitled "A Shared Vision for the 21st Century of the Republic of India and the People's Republic of China" was issued during the visit, outlining common positions on a number of international and some bilateral issues. Prime Minister also addressed a high-level business event and delivered a speech at the Chinese Academy of Social Sciences. Prime Minister visited China again in October 2008 to participate in the 7th AsiaEurope Summit held in Beijing on 24-25 October.

The President of India paid a state-visit to China from 26-31 May, 2010. In Beijing, she held talks with Chinese President Hu Jintao and met with NPC Chairman Wu Bangguo, Premier Wen Jiabao and CPPCC Chairman Jia Qinglin. The Indian President, along with Chinese Vice President Xi Jinping, attended the reception to mark the 60th anniversary of diplomatic relations jointly organized by CPAFFC and the Embassy of India. She visited Luoyang to inaugurate the Indianstyle Buddhist Temple which was dedicated as a gift from India to the people of China. In Shanghai, she visited the Indian pavilion and the Chinese pavilion at the Shanghai EXPO and also had a meeting with Shanghai Party Secretary, Yu Zhengsheng. A Tagore bust was also inaugurated by the Indian President.





Chinese Premier Wen Jiabao paid a three day official visit to India from 15-17 December 2010.

During his visit, Premier Wen met with President Smt. Pratibha Patil, PM Shri Manmohan Singh, Vice President Shri Hamid Ansari, UPA Chairperson Smt. Sonia Gandhi and the Leader of Opposition Smt. Sushma Swaraj. Premier Wen also interacted with children in the Tagore International School; addressed India-China business cooperation summit; delivered a lecture at the Indian Council of World Affairs; and attended the closing ceremony of the Festival of China in India along with PM. Six agreements on cultural exchange, green technologies, media exchanges, hydrological data, and banking were signed and a Joint Communiqué was released.

During the visit, a bilateral trade target of 100 billion USD was set to be reached by 2015. A Strategic Economic Dialogue and a CEO Forum were established; and 2011 was declared as ‘Year of India-China exchange’. The establishment of hotline between the Indian PM and the Chinese Premier, a mechanism of annual Foreign Ministers Meeting and a regular high level exchange mechanism were also announced.

The year 2011 saw a series of exchanges in diverse fields. PM Shri Manmohan Singh visited Sanya from April 12-15 to participate in the BRICS Summit. On the sidelines, PM also had a bilateral meeting with Chinese President Hu Jintao. Chief Ministers of Bihar, Madhya Pradesh and Gujarat visited China in June, September and November respectively. Similarly Chairman of Xinjiang Autonomous Region and Party Secretary of Gansu also visited India as part of the MEA-ILD exchange and Distinguished Visitors Programme of MEA. One of the highlight of the “Year of Exchanges” was the visit of a youth delegation to China, which was increased from 100 to 500. Premier Wen Jiabao met and addressed the Indian youth. Several Ministerial/Official visits to China were made to participate in BRICS activities. For the first time, India-China Consultations on UNSC issues was held in March.

Leaders of the two countries have maintained regular contacts and have met frequently during international gatherings. In 2008, Prime Minister met President Hu Jintao at the G-8 Summit in Hokkaido, Japan in July, on the sidelines of the ASEM Summit in Beijing in October. Both leaders met again on the sidelines of the SCO Summit in Yekaterinburg in June 2009. Indian PM also met Premier Wen Jiabao on the sidelines of the UNGA in New York in September 2008 and on the sidelines of the EAS in Hua Hin, Thailand in October 2009. They also met on the sidelines of the Copenhagen Summit in December 2009. In 2010, Prime Minister met with Chinese President Hu Jintao on the sidelines of the BRIC summit in Brasilia in April. Again Prime Minister met with Premier Wen Jiabao on the sidelines of the EAS in Hanoi in October 2010. PM had a bilateral meeting with Premier Wen Jiabao on the sidelines of the EAS in Bali in November 2011.

EAM Shri Pranab Mukherjee visited China to attend the India-Russia-China trilateral meeting in Oct 2007. In 2008, foreign ministers of the three countries met in Yekaterinburg in Russia in May. Following this, EAM Shri Pranab Mukherjee paid a successful visit to China on 4-7 June

2008. The Chinese Foreign Minister Yang Jiechi paid a return visit --- his first as Foreign Minister

--- to India on 7-9 September. The foreign ministers of the two countries met in Phuket in July 2009 at the sidelines of the ASEAN Regional forum meeting. It was EAM Shri S.M. Krishna's first meeting with the Chinese FM. The Trilateral Foreign Ministers' Meeting was held in Bangalore on 27th October 2009. The Chinese FM also had a separate bilateral meeting with EAM. EAM Shri S.M. Krishna again visited China from 5-8 April 2010. He held talks with the Chinese FM and met with Premier Wen Jiabao. During the visit, EAM launched the Festival of India in China and also attended a reception to mark the 60th anniversary of establishment of diplomatic relations.

Later EAM visited Wuhan on 14-15 November to take part in the IRC trilateral foreign ministers meeting. During his visit, EAM also held bilateral meeting with the Chinese FM Yang Jiechi. NSA Shri Shiv Shankar Menon visited Beijing as Special Envoy of PM in July 2010 and later visited in November to hold the 14th round of SR talks on India-China boundary question on 29-30 November, 2010. He also called on Vice President Xi Jinping. In September 2011, EAM met with Chinese FM as part of BRICS meeting on the sidelines of UNGA. In addition, the two foreign ministers have had telephonic conversations on major issues of interest.

India and China have stepped up functional cooperation in all areas. The two foreign ministries have instituted dialogue mechanisms on issues relating to counter-terrorism, policy planning and security, besides strategic dialogue and regular consultations. There are also close cooperation in areas as diverse as water resources, judiciary, science & technology, audit, personnel, finance, labour etc.

Exchanges at the government levels, Parliamentary and Party exchanges have also expanded.

Speaker of the Lok Sabha Shivraj Patil visited China in 1993, following which NPC Chairman Qiao Shi visited India in 1995. NPC Chairman Li Peng and Speaker of the Lok Sabha Manohar Joshi paid visits to each other in 2001 and 2003 respectively. Hon'ble Speaker of the Lok Sabha Somnath Chatterjee led an Indian Parliamentary Delegation to China in July 2006 during which both sides signed an MOU to further strengthen the friendly relations and cooperation between the parliaments. To facilitate high level exchanges of Party leaders from China and State Chief Ministers from India, a special arrangement has been entered into by the International Department of the Central Committee of the Communist Party of China and the Ministry of External Affairs (MEA-ILD) since 2004. There are regular Party-to-Party exchanges between the CPC and political parties in India.

India-China political relations are enhanced and strengthened by various mechanisms. There is a close and regular interaction between strategic and foreign policy think-tanks. These exchanges continued to be strengthened during 2011. CICIR has regular interactions with IDSA and ICS. The third Track-II dialogue between China Reform Forum and Aspen India was held in March 2011. USI has exchanges with China Institute for International Strategic Studies and ICWA has interactions with CPIFA. Dialogues are now being initiated between pairs of IndiaChina academic organizations.

Trade & Commercial Relations

India and China officially resumed trade in 1978. In 1984, the two sides signed the Most Favoured Nation Agreement. India-China bilateral trade which was as low as US$ 2.92 billion in 2000 reached US$ 61.7 billion in 2010, making China India’s largest goods trading partner. In 2008, bilateral trade stood at US$ 51.8 billion and China became India’s largest goods trading partner, replacing the United States of America. By the end of 2009, as a result of the world economic downturn, bilateral trade dropped to US$ 43.27 billion (a decline of 16.54%).

However, in 2010 bilateral trade reached US$ 61.74 billion, a growth of 43% compared to the same period last year. India exported goods worth US$ 20.86 billion (+52%) to China and imported goods worth US$ 40.88 billion (+38%) from China, resulting in an adverse balance of trade of US$ 20 billion. In the first 8 months of 2011, India-China bilateral trade reached US$ 48.17 billion (+19.47% over the same period last year). India’s total exports to China for this period were US$ 15.68 billion (+7.37%) and China’s exports to India reached US$ 32.49 billion (+26.33%). The trade deficit for the first 8 months has already reached US$ 16.8 billion.

Institutional Framework of Bilateral Cooperation

There are several institutional mechanisms for India’s economic and commercial engagement with China. India-China Joint Economic Group on Economic Relations and Trade, Science and Technology (JEG) is a ministerial-level dialogue mechanism established in 1988 during the visit of former Prime Minister Rajiv Gandhi to China. A Joint Study Group (JSG) was set up after former Prime Minister Vajpayee’s visit to China in June 2003 to examine the potential complementarities between the two countries in expanded trade and economic cooperation.



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