Indo-China Relations - 1 | UPSC Mains: International Relations PDF Download

India - China Bilateral Relations

Political Relations

• On 1 April, 1950, India became the first non-socialist bloc country to establish diplomatic relations with the People’s Republic of China. Prime Minister Nehru visited China in October 1954. While, the India-China border conflict in 1962 was a serious setback to ties, Prime Minister Rajiv Gandhi’s landmark visit in 1988 began a phase of improvement in bilateral relations. In 1993, the signing of an Agreement on the Maintenance of Peace and Tranquility along the Line of Actual Control (LAC) on the India-China Border Areas during Prime Minister Narasimha Rao’s visit reflected the growing stability and substance in bilateral ties.

Visits of Heads of States/Heads of Governments  

• Cumulative outcomes of the recent high level visits have been transformational for our ties. During Prime Minister Atal Bihari Vajpayee’s visit in 2003, India and China signed a Declaration on Principles for Relations and Comprehensive Cooperation and also mutually decided to appoint Special Representatives (SRs) to explore the framework of a boundary settlement from the political perspective. During the April 2005 visit of Premier Wen Jiabao, the two sides established a Strategic and Cooperative Partnership for Peace and Prosperity, while the signing of an agreement on Political Parameters and Guiding Principles, signaled the successful conclusion of the first phase of SR Talks.
• During the State Visit of Chinese President Mr. Xi Jinping to India from 17 to 19 September 2014, a total of 16 agreements were signed in various sectors including, commerce & trade, railways, space -cooperation, pharmaceuticals, audio-visual coproduction, culture, establishment of industrial parks, sister-city arrangements etc. The two sides also signed a MoU to open an additional route for Kailash Mansarovar Yatra through Nathu La. The Chinese side agreed to establish two Chinese Industrial Parks in India and expressed their intention to enhance Chinese investment in India.
• Prime Minister Narendra Modi visited China from May 14-16, 2015. Besides meeting with the Chinese leadership, Prime Minister Modi and Premier Li also addressed the opening session of the First State/Provincial Leaders’ Forum in Beijing. There were 24 agreements signed on the government -to-government side, 26 MoUs on the businessto-business side and two joint statements, including one on climate change. Prime Minister also announced the extension of the e-visa facility to Chinese nationals wishing to travel to India. 
• The momentum of meetings at the leadership level continued in 2016 too. President Pranab Mukherjee made a state visit to China from May 24 to 27, 2016. He visited Guangdong and Beijing where he met with the Chinese leadership. President also delivered a keynote address at the Peking University and attended a Round Table between Vice Chancellors and Heads of institutions of higher learning of the two countries. Ten MoUs providing for enhanced faculty and student exchanges as well as collaboration in research and innovation were concluded between the higher education institutions of the two countries. Prime Minister Narendra Modi visited China in September 2016 to participate in the G20 Summit in Hangzhou and September 2017 to participate in the BRICS Summit in Xiamen, where he also held bilateral talks with President Xi Jinping. President Xi Jinping visited India in October 2016 to participate in the BRICS Summit in Goa. The two leaders also met along the sidelines of the SCO Heads of States Summit in Tashkent in June 2016 and in Astana in June 2017.

Other high level visits and mechanisms: 

• India and China have established more than thirty dialogue mechanisms at various levels, covering bilateral political, economic, consular issues as well as dialogues on international and regional issues. The Foreign Ministers have been meeting regularly. Chinese Foreign Minister Wang Yi travelled to India from 12-14 August, 2016 during which he met with EAM and called on Prime Minister. The mechanism of Special Representatives on the Boundary Question was established in 2003. The 19th round of talks between Shri Ajit Doval, National Security Advisor and Mr. Yang Jiechi, State Councillor was held in Beijing in April, 2016. State Councillor Yang Jiechi also visited India in November 2016 where he met with NSA for informal strategic consultations. The 1^st reconstituted Strategic Dialogue between Foreign Secretary, Mr. S Jaishankar and the Chinese Executive Vice Foreign Minister Mr. Zhang Yesui was held in February 2017.  
• India and China have also established a High Level Dialogue Mechanism on Counter Terrorism and Security, led by Mr. R.N. Ravi, Chairman (JIC) and Mr. Wang Yongqing, Secretary General of the Central Political and Legal Affairs Commission of China. The first meeting of the mechanism was held in Beijing in September 2016. 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 Liaison Department of the Central Committee of the Communist Party of China and the Ministry of External Affairs (MEA-IDCPC) since 2004. There are regular Party-to-Party exchanges between the Communist Party of China and political parties in India. In order to facilitate exchanges between Indian states and Chinese provinces, the two sides have also established a States/Provincial Leaders Forum.  

Commercial and Economic Relations

• The Trade and Economic Relationship between India and China has seen a rapid growth in the last few years. Trade volume between the two countries in the beginning of the century, year 2000, stood at US$ 3 billion. In 2008, bilateral trade reached US$ 51.8 billion with China replacing the United States as India’s largest “Goods trading partner.” In 2011 bilateral trade reached an all-time high of US$ 73.9 billion. 

Current State of Play

• According to recently released data by Chinese Customs, India-China trade in 2016 decreased by 0.67% year-on-year to US$ 71.18 billion. India’s exports to China decreased by 12.29% year-on-year to US$ 11.748 billion while India’s imports from China saw a year-on-year growth of 2.01% to US$ 59.428 billion. The Indian trade deficit with China further increased by 6.28% year-on-year to US$ 47.68 billion. In 2016, India was the 7th largest export destination for Chinese products, and the 27th largest exporter to China.
• India-China trade in the first eight months of 2017 increased by 18.34% year-on-year to US$ 55.11 billion. India’s exports to China increased by 40.69% year-on-year to US$ 10.60 billion while India’s imports from China saw a year-on-year growth of 14.02 % to US$ 44.50 billion. The Indian trade deficit with China further increased by 7.64% year-on-year to US$ 33.90 billion.