Chinese antics have India fuming
By Sudha Ramachandran
BANGALORE - China's blocking of India's application for a loan from the Asian
Development Bank (ADB) has raised hackles in Delhi, marking the first time
Beijing has dragged a bilateral territorial dispute with India into a
multilateral financial institution.
China asked for a postponement of an ADB board meeting on March 26-27, which
was set to discuss the 2009-12 strategy for India. On the table was an Indian
request for a US$2.9 billion loan approval. What appears to have got China's
goat was the inclusion of a $60 million flood management, water supply and
sanitation project in Arunachal Pradesh. Although China gave no explanation for
its move at the ADB meeting, ADB sources in
Delhi say that India's inclusion of a project in "disputed territory" prompted
the Chinese decision.
China maintains that Arunachal Pradesh, which lies in India's northeast, is
"southern Tibet". It lays claim to around 90,000 square kilometers of territory
in India's northeast, roughly approximating the Indian state of Arunachal
Pradesh. During the 1962 border war, China advanced into and briefly occupied
territory here before announcing a unilateral ceasefire and pulling back to the
McMahon Line that India recognizes as its border with China. In 1987, there
were serious skirmishes at Sumdorong Chu in Arunachal Pradesh.
Despite the general improvement in Sino-Indian ties, China has not given up its
claims on Arunachal Pradesh, even becoming more assertive in making these
claims in recent years. Incursions into Arunachal and Sikkim have been
frequent. The entire 4,057-km-long Sino-Indian border is disputed.
China's move at the ADB meeting isn't surprising. It has always objected to any
development whereby India asserts itself vis-a-vis Arunachal Pradesh. Only a
few days earlier, China raised objections to India's President Pratibha Patil
visiting Arunachal Pradesh and objected to Prime Minister Manmohan Singh's
visit there last year.
In 2007, a civil servant from Arunachal Pradesh was denied a Chinese visa on
the grounds that he was from Chinese territory and hence didn't need one.
During ongoing negotiations on the border dispute too, China is said to be
rigid on its claims in Arunachal Pradesh.
Thus, an objection to an Indian loan involving Arunachal Pradesh was to be
expected at the ADB.
An annoyed India has conveyed its displeasure with the ADB for allowing China
to bring bilateral baggage to bear on its lending policies. It has made it
clear that it will not remove the Arunachal project from the plan. This is the
first time that an ADB loan to India - the largest recipient of ADB funding
last year - has been blocked.
Days after the setback at the ADB, India struck back. It turned down China's
informal request to be included in some form, ie as observer or associate
member, into the 33-member Indian Ocean Naval Symposium (IONS) initiative
started by India last year.
Reports in the Indian media have described Delhi's decision to exclude China
from the IONS initiative as a tit-for-tat response. Officials of India's
Ministry of External Affairs (MEA), however, deny that the decision on IONS is
related to China's action in the ADB.
"China cannot be included in this initiative as IONS is restricted to Indian
Ocean littorals, which China is not," an MEA official told Asia Times Online.
India's rejection of Beijing's request to be part of IONS has to do with its
long-standing anxieties over China's growing presence in the Indian Ocean. With
half the world's containerized freight, a third of the bulk cargo and
two-thirds of oil shipments traversing this waterway, the Indian Ocean's
importance for global trade is substantial. Its significance for India's
economic development and security too is immense as most of India's trade
depends on the sea for transport, while nearly 89% of India's oil imports
arrive via the sea.
India is uneasy with China's presence in the Indian Ocean as it believes it
poses a threat to its security and other interests.
"That India's decision on IONS followed close on the heels of the ADB
developments is purely coincidental," the official said.
But a Chinese scholar on South Asia who spoke to Asia Times Online on condition
of anonymity said that India is "reading too much on the Chinese move at the
ADB". It was a "routine protest that had to be made. Had China not raised an
objection, India would have seen it as softening on the part of Beijing on the
issue."
"The meeting has only been postponed," he pointed out, adding that China would
not sabotage the approval of India's loan when the meeting is rescheduled. "At
a time when China is seeking a larger role for itself in multilateral financial
institutions, it would not want to be seen as obstructionist or as using its
position in these forums to settle bilateral scores," the scholar said.
But Indian officials are wary. With China's clout in global financial
institutions growing, there is some concern in India that Beijing will use its
influence to keep India in check.
After all, "China's use of its position in multilateral forums to clip India's
wings is not new," the MEA official said.
Indeed, Beijing has resisted India's membership in the Association of Southeast
Asian Nations Regional Forum and the Asia-Pacific Economic Cooperation and has
never been keen on India becoming a permanent member of the United Nations
Security Council. At the Nuclear Suppliers Group meet in Vienna last year, when
a waiver of restrictions on nuclear trade with India was being considered,
China sought to block a consensus from emerging in favor of India.
Indian officials say that China's move at the ADB is an issue of concern not
only for India but other countries. China could use its position in
multilateral financial institutions to hold back funds for countries that take
a position that is more sympathetic and supportive of Tibetan leader the Dalai
Lama for instance, or of Taiwan. Beijing could flex its muscles in these
situations as well.
Sudha Ramachandran is an independent journalist/researcher based in
Bangalore.
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