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A Neighborly Act
China-India talks produce blueprint for greater cooperation
By Swaran Singh  ·  2019-09-20  ·   Source: NO.39 SEPTEMBER 26, 2019

An office at an Internet company office in the China-India Science and Technology International Innovation Park in Linyi City, east China's Shandong Province, on May 12, 2017 (XINHUA)

The China-India Strategic and Economic Dialogue (SED) held in New Delhi, India on September 7-9 was the sixth meeting in nine years. When it was created in December 2010, during then Chinese Premier Wen Jiabao's official visit to India, the agreement was that SED would meet annually and alternatively in New Delhi and Beijing.

Though the slow progress is attributed to politics, the China-India equation has been recast after the informal meeting between Chinese President Xi Jinping and Indian Prime Minister Narendra Modi in Wuhan, capital of Hubei Province in central China, last year.

SED, led by India's planning commission NITI Aayog and China's National Development and Reform Commission, by virtue of comprising senior representatives from policymaking, industry and academic circles, has become an ideal platform for regularly sharing assessments on global macroeconomic and commercial trends and reviewing bilateral proposals for sector-specific action.

The proposals at the sixth meeting came from SED's six working groups on infrastructure, energy, hi-tech, resource conservation, policy coordination and pharmaceuticals. In the future, there will be more working groups covering new areas.

Areas of collaboration

According to a press release issued after the meeting, the talks focused on policy coordination and assessing trade and investment climates to identify potential areas of collaboration, especially in financial technology and related technologies.

Today's advanced technologies offer vast potential for China-India collaboration, such as developing artificial intelligence (AI), hi-tech manufacturing and 5G mobile communication, where China has shown its expertise. The two sides agreed to establish a working group for technology to focus on technological innovation, the industrial situation today and ways to strengthen digital partnerships, data governance and related industry policy.

The press statement also said that the two sides have agreed to explore cooperation for promoting Indian generic drugs and Chinese active pharmaceutical ingredients (APIs). While India is the largest supplier of generic medicines, China accounts for the bulk of the world's APIs. According to India's official estimates for 2018-19, China accounted for over 67 percent of India's total imports of bulk drugs and drug intermediates that enabled India to be the world leader in generic medicines.

The working group on pharmaceuticals, set up only last year, holds special promise for two reasons. First, the last decade has seen China's world-class infrastructure and equipment plus low tuition fees make it a desired destination for Indian students pursuing studies in medicine. Nearly 15,000 students were studying medicine in China, and last year more students followed suit compared to Indian students' traditional destination, the UK.

Initiatives in the pharmaceutical sector will boost the professional expertise of the increasing number of Indian doctors being trained in China. Some of them may continue to practice or research with China's health industries, becoming health ambassadors for both China and India.

Second, India's cheap generic and critical care medicines have led to the subcontinent being dubbed the pharmacy of the world. However, it has also created intellectual property right (IPR) concerns among developed nations like the United States, Japan and the Republic of Korea (ROK). The latter two are pushing for stricter IPR enforcements in the proposed Regional Comprehensive Economic Partnership (RCEP) treaty, the free trade agreement between the 10-member ASEAN countries and Australia, China, India, Japan, the ROK and New Zealand.

This would affect the marketing of India's cheaper medicines in the RCEP member countries, if not elsewhere as well. However, better China-India coordination will not only strengthen Indian pharmaceutical exports but also see China, the world's largest market, opening up further to Indian pharmaceuticals. This will provide Chinese consumers cheaper drugs and also help rectify the China-India trade deficit.

The working group on pharmaceuticals held its first meeting in Beijing in May, where it proposed to build shared platforms for cooperation through exchanges, fairs and joint China-India pharmaceutical industry trainings. This can be transformative for the two countries' pharmaceutical industries.

Railway link

Another area that has seen concrete collaborative results is infrastructure, especially in railways. China is famous for its vast accident-free, high-speed rail network that today constitutes two thirds of the world's total high-speed rail and is building maglev trains based on magnetic levitation with a speed of 600 km per hour. India by comparison stands at the cusp of revamping its railway system.

The last two decades have seen India launch smarter trains and rapid mass transit systems as higher economic growth whets the hunger for world-class infrastructure. India is developing nine high-speed rail corridors with the target of doubling the speed from the current 80 km per hour. China Railway Eryuan Engineering Group has done the feasibility study for a nearly 340-km corridor in south India, running through three cities, Chennai, Bengaluru and Mysuru. Another corridor runs from capital New Delhi to Agra City, where the iconic Taj Mahal is located.

The working group on hi-tech has proposed partnerships in policy, strategies and technologies like 5G, AI and the Internet of Things.

Chinese companies are already a formidable presence in India's e-commerce, logistics and telephony sectors, like Alibaba Group with investment in Indian digital payment platform Paytm, and smartphone brand Xiaomi, which tops the sale of mobile phones in India. Once these partnerships go official, both sides will maximize their benefits.

The energy conservation and environmental protection working group will explore cooperation in sectors like reducing coal-fired power plant emissions, sewage treatment, urban water supply and drainage, and flood prevention.

It also discussed cooperation in resource conservation through innovation and effective utilization of low-cost construction technologies and agreed to share information in areas like waste-to-power, co-processing of sewage sludge and storm-water management.

A new working group will be set up for resource conservation and environmental protection, exploring flood and erosion control methods and controlling air pollution.

The working group on energy agreed on building partnerships in new and renewable energy and supporting power grids in third-country markets, which reflects the growing mutual trust and confidence.

What makes this special is that apart from their 2005 successful joint bidding for 38 percent of Petro-Canada's share in Al Furat gas and oilfields in Syria, China and India are viewed as the world's largest energy importers and therefore, competitors.

Competitors to partners

This change of mood echoes potential partnerships in the International Solar Alliance, a grouping of over 120 countries seeking to utilize more solar energy through a common approach. The decision to undertake joint research and development of new technologies for manufacturing solar cells from new materials promises to improve efficiency while lowering costs.

China's expertise in affordable photovoltaic technologies can help both China and India switch to cleaner energy from their overdependence on high-polluting fossil fuels like coal and oil.

Despite the progress, there are still more areas to explore. One unique segment would be poverty alleviation and forming a working group on that. China has lifted over 800 million people out of poverty and India about 300 million. Just like their growing understanding on climate change mitigation or countering terrorism, eliminating poverty worldwide can provide both China and India one more actionable mission.

The author is a professor at the School of International Studies, Jawaharlal Nehru University, New Delhi, and adjunct senior fellow at the Charhar Institute, Beijing

Copyedited by Sudeshna Sarkar

Comments to yulintao@bjreview.com

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