Dai talks the talk, walks the line for Xi

2012-02-01Asia Times

BEIJING - China State Counselor Dai Bingguo's visit to India was a success beyond expectations, occurring 50 years after the two countries fought a brief but very violent border war over the Himalayas. Dai's trip marked the beginning of a thaw, and it put ties between the two Asian giants not on the integration track dreamed of some years ago, during the time when "ChIndia" was a fashionable word, but at least off of a dangerous war path.

Dai spoke of the beginning of a golden period between the two countries and managed to strike the right chord both in what he said and how he behaved. On January 16, Dai wrote in the Indian daily newspaper, the Hindu: "While working hard to develop itself, China is fully committed to developing long-term friendship and cooperation with India. It is our genuine hope that India will enjoy prosperity and its people, happiness ... There does not exist such a thing as China's attempt to 'attack India' or 'suppress India's development'. China will remain committed to the path of peaceful development." [1]

Testimony to and the result of this success was the agreement on the borders, which - while not groundbreaking - was a major step in averting potential flare ups in what is the longest contested boundary in the world. The two countries set up a mechanism of consultation for the Line of Actual Control of the border. On the border, there has been no incident since the 1988, and the two sides have agreed in recent years on the political parameters and guiding principles to set up a future boundary between them.

These are very important broad issues, but on the ground, there are many differences even regarding the Line of Actual Control. It is very rugged terrain: there are mountains and rivers, and the morphology can change with the seasons.

There is overlapping territory - quite extensive in places and not marked by barbed wire or anything like that - where patrols of both countries walk, often shadowed by the other side and each believing it is its own territory. That is beyond the issue of different claims: the two sides do not even agree on what territory is actually under each other's control - something that rarely happens in contested territories in peace time.

Periodically, militaries of the two sides meet at a local level and report "incursions" to each other. This practice gives each military huge power to control the pace of progress and the situation, and puts both sides at the will of the initiative of local commanders, who could derail the overall situation. Dai and his counterpart, India's National Security Adviser Shivshankar Menon, this time agreed on a mechanism to involve the central government in these meetings. This would limit the possibility of incidents, but it should also help to slowly build a concrete agreement on the ground about lines of control. This, in turn, could be the realistic premise to draw an actual contour on the map between the two countries and settle the border issue.

But this is still quite far away. Drawing a border would expose both countries to nationalistic backlashes. An agreement should be presented to the Indian parliament, where nationalists could shoot it down because it sells out sacred territory to the Chinese. Then details would become public and would taken up by Chinese nationalists, who could similarly take aim at their own government for selling out to the Indians. A vicious cycle could follow where each side would be hostage to its own growing public opinion.

Yet for the time being, diplomats on either side are not really thinking about a time frame to solve the border issue. This seems quite far-fetched. Public opinion in India, where anti-Chinese sentiments run deeper because of the defeat in the war, has to be addressed in a convincing fashion to create the right atmosphere for more significant progress on both sides. On this front, Dai's visit was a first step in the right direction, and this visit seems part of more careful foreign strategy.

On Christmas day in Beijing, Chinese leaders met the new Japanese Prime Minister Yoshihiko Noda and found reassurances regarding the situation in North Korea, where former leader Kim Jong-il had just passed away. This did not totally repair relations - the already tense situation escalated last year during the confrontation over the Senkaku/Diaoyu islands, which are claimed by both countries - but helped to mend fences since the two countries found a common interest in keeping volatile North Korea under close scrutiny and talking about the economy.

In this area, the visit clinched two important deals. The first is a swap agreement between currencies of the two countries, which is a significant step in making the yuan an international currency. Japan is the third-largest economy in the world, and China has signed similar agreements with a score of other countries while it holds a crawling peg with the US dollar. Then the euro area is the only important economy without a specific currency agreement with China.

Moreover, the two countries agreed to revalue against the US dollar, a step that should help to rev up the still-faltering American economy by cutting Chinese and Japanese imports, boosting American exports, and encouraging Chinese and Japanese direct investment in United States.

These two meetings seem to be the backdrop to the February 14 visit to Washington of Vice President and China's anointed future leader Xi Jinping. Xi is expected to pave the way to a new spring of ties with America since bilateral friction has continued to build after the failure of the Copenhagen conference on climate change in December 2009.

The idea in Beijing seems to be that the G2 cannot be resuscitated, as it would scare most of China's neighbors. They would feel they could get squeezed out of the US-China embrace. Then the new bilateral relations have to occur by comprehending and involving other Asian countries, and this has to start with the main players in the region, Japan and India, who have to be engaged in a very concrete manner politically, strategically, and economically, and who cannot be handed just a few symbolic candies in the form of aid or more trade. Then the two recent Chinese meetings with Japan and India appear to go in this direction.

The Xi visit to America will have to beef up this impression by addressing America' and other countries concerns about the perceived Chinese military build-up, growth of military expenditures, and slow progress on political reforms. There are vague signs that China is making preparations to address these issues stemming from the theory of Peaceful development, such as a recent speech by China's President Hu Jintao on culture. [2]

Here, objectively, the new emphasis on the strategic importance of culture ("wenhua") to build a strong country ("qiang guo") is linked with the projected expansion of China's soft power, and it represents de facto a de-emphasis on military strength. If the country can be strengthened by the expansion of the soft power of culture and there is lesser need for great expenditures for weapons, then one can think of spending more on culture and less on fighting hardware. Then the military could be more involved in the cultural field, creating soft power, and it can pay less attention to increasing its arms.

Hu's speech could open the "theological premises," necessary in the Party theory, for this kind of switch, which could be crucial to prevent the arms race starting in Asia. Vietnam and the Philippines are spending more on weapons because of the perceived China military threat.

The Beijing switch in political attitude in the region could create the conditions for China to parallel America's announced decrease in military expenditure, without appearing to China's domestic audience to be weakening its international position - rather, China is strengthening it. On January 27, US Secretary of Defense Leon Panetta announced a $33 billion cut in the military budget.

These are only possibilities at the moment, they could soon be creating a new political horizon in Asia, which in time could help solve even more political issues - if China manages to keep navigating these difficult waters on an even keel. On this horizon, the European countries are totally absent, being absorbed for months by the convoluted troubles of the euro and a few countries' risks of default. Germany, China's main economic partner in Europe, might want to be involved in this new grand Asia-Pacific game.

German Chancellor Angela Merkel is due in China on Wednesday, and her main focus should be on the euro and Chinese support for the distressed currency. Yet, perhaps one more reason to quickly solve the euro problems is to allow Europe to be able to focus on the new reality in Asia and avoid missing a historic political and economic opportunity in the region.

1. See here (
2. See Qiushi, January 5, 2012, Hu Jintao Qiushi' xuanwen: qiangdiao jianshe shehuizhuyi wenhua qiangguo ( I would also thank professor Moss Roberts for having pointed this to me.  (2012-02-01 Asia Times)


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