Speech by H.E. Zhang Yan, Ambassador of the People's Republic of China at a Lecture on China-India Relations
2012-01-12 12:38

(New Delhi, January 9, 2012)

H.E. Mr. Shiv Shankar Menon, National Security Advisor,

Distinguished guests,

Ladies and Gentlemen,

Good evening. At the outset, I'd like to extend warm welcome and belated New Year's greeting to all of you. It's indeed a great privilege for me together with National Security Advisor Mr. Menon to share our views with you on how to advance China-India relations which undoubtedly is one of the most important and multifaceted relations in today's world.

To begin with, I would like to have a glimpse of last year first.

2011 is no ordinary year for China–India relations. In spite of the complicated international and regional situation, our bilateral relations maintained a sound and steady growth with cooperation and interactions unfolding in an all-round manner. We have also successfully concluded the Year of China-India Exchange announced by the two sides during Chinese Premier Wen Jiabao's state visit to India in December, 2010. To take stock of the year, we have seen a cluster of positive development in our bilateral relations.

First, active high level interactions have visibly enhanced our mutual understanding and trust. Last year, Chinese President Hu Jintao and Premier Wen Jiabao had fruitful meetings with Indian Prime Minister Manmohan Singh respectively during BRICS Summit in China and the East Asian Leaders' Meetings in Indonesia. The two sides had in-depth discussions on issues of mutual interest and reaffirmed commitments to deepening the strategic and cooperative partnership.

Second, provincial and state level exchanges have become new highlights of bilateral relations. Successful visits by Governors of Sichuan, Guangdong and Gansu provinces and Chairman of Xinjiang Uygur Autonomous Region of China to India and Chief Ministers of Bihar and Gujarat of India to China yielded positive results in economic and cultural cooperation, bringing the local governmental cooperation into the overall picture.

Third, economic and trade cooperation maintained a robust growth and becomes a salient feature of our bilateral ties. China-India two-way trade in 2011 has touched new height. According to the estimate, during the 11 months of this year the trade volume reached 67 billion USD, up 21.8 per cent year on year and is expected to exceed 70 billion USD for the whole year. The first branch office of Industrial and Commercial Bank of China opened in Mumbai last year, marking a new milestone in bilateral financial cooperation. To settle the trade account in RMB and Rupee is another important move by two countries to facilitate the fast growing bilateral economic cooperation. Mutual investments are also gaining new momentum. One recent example is TBEA Corporation, the largest special transformer producer of China, has signed a 400-million USD agreement with an Indian company to invest in Gujarat to put up a factory for manufacturing transformers for power projects in India.

Fourth, new headway has been made in institutionalization of bilateral cooperation. The newly established China-India Strategic Economic Dialogue held its first round meeting in Beijing last September. China-India CEO Forum is also in the making. At the same time, the existing mechanisms such as the fifth China-India Financial Dialogue, the fourth China-India Defense and Security Talks and consultation on counter terrorism were successfully held in Delhi and Beijing last year. These new and existing mechanisms have helped to enhance mutual trust and deepen economic cooperation between two countries.

Fifth, cooperation on international and regional issues has acquired new momentum. Two countries maintained close consultation and worked vigorously within the framework of UN, WTO, G20 and BRICS on issues such as climate change, reform of international financial institutions, Doha Round Trade Talks as well as issues related to the situation in West Asia and North Africa. Two countries have played constructive role in the proper settlement of relevant issues and defending the interests of developing countries.

Sixth, people-to-people exchange has added new vitality to our relations. The 500-member Indian Youth Delegation visited China last September and were warmly received by Premier Wen Jiabao in the Great Hall of the People. The Year of Exchange was successful and colorful. Events like "Treasures of Ancient China" exhibition, Sichuan Week, Yunan Acrobatics Troup performance and cultural activities like "A Grand Stage for China-India Youth Traditional Culture Exchange" were organized in India and China respectively, creating cross-culture dialogues between two ancient civilizations. China has also provided financial support to the reconstruction of Nalanda University.

Ladies and Gentlemen,

The performance of our relationship in the year 2011 is impressive and fruitful. More importantly, it has demonstrated the following salient features.

First, China-India relation is anchored on a more solid political basis than before. It is encouraging to see that the leaders of two countries have viewed our relations from a long-term and strategic perspective. They have given increasing importance and attention to our relationship, which provides strong political foundation for the development of our bilateral relations. Furthermore, I have sensed a growing consensus view in favor of developing a sound and mutually beneficial relation with China among all political parties and general public in India. From the Chinese side, to build a stable and mutually beneficial relationship with India is the set policy of Chinese government. President Hu Jintao stated on many occasions that India is an important neighbor of China. China is ready to work with India to maintain the sound momentum for further advancement of the China-India Strategic and Cooperative Partnership and for the common interests of two countries.

Second, China-India relation has become more substantive. Both countries pursue an independent foreign policy and share growing common interests. Today, China-India relation is developing in a comprehensive manner and has acquired strategic significance. Both countries not only enjoy growing cooperation in economic field, but also work closely in political and security fields, bringing tangible benefits to our people. On issues directly affecting our interests as well as global situation, such as the financial crisis, climate change and issues related to the West Asia and North Africa, two countries worked constructively and effectively to defend the interests and rights of our two countries as well as that of all developing countries.

Third, China-India relation holds great potential. As two fast growing economies, China and India provide opportunities to each other. In spite of the financial and debt crisis in US and Europe, China and India enjoy stability domestically and boast a relatively rapid economic growth. With 2.5 billion populations, huge markets and rich human resources, China and India are regarded by the international community as powerhouse for world economy and are expected to play a bigger role in the reform of international economic and financial governance as well as in the global economic recovery. Faced with similar challenges and historical tasks, China and India are complimentary to each other and enjoy certain degree of synergy in their economic development. Two countries are partners of cooperation, and partners for growth and prosperity. China's development provides opportunity to India, so does India's development to China.

Fourth, China-India relation has grown matured. We are fully aware of the fact that there are differences and challenges left over by the history in our relations. But we know much better how to manage them. We are keenly aware that cooperation between the two countries benefits both, and confrontation only hurts each other. As two Asian neighbors and fast growing economies, China and India share more common interests than differences. Both have adopted a "looking forward" approach and are trying their best not to let the historical burdens to stand in the way of our cooperation. When we are facing problems, we are now more than willing to engage each other in dialogue and consultation to diffuse the risk. As to the perceived competition between the two countries, so long as it is a fair and friendly one, we also view it in a positive way. As Indian Prime Minister Mamnohan Singh and Chinese Premier Wen Jabao pointed out that the world is large enough for both China and India to develop and prosper, and there is enough room for two countries to cooperate.

Here I must point out that not every country in the world is happy to see China and India going closer and prospering together. Some even try to drive a wedge between us. I must point out again, China and India's rising together is an irreversible historical trend that no force in the world can stop. In spite of all kinds of ill-intended prophecies, China-India relation takes its own course and moves ahead, because two countries know where their national interests lie and how to handle their relations. Our cooperative relation poses no threat to others and is not developed at the expense of other countries' interests.

Ladies and Gentlemen,

2012 has just arrived and the traditional Chinese New Year, the Year of Dragon, will come soon. In Chinese culture, it is the most auspicious time to make planning. As Chinese saying goes, a good beginning is crucial to a successful year. In order to push the bilateral relations forward, we should join hands and work in the following areas.

First, efforts should be made to further increase political trust and enhance strategic cooperation. Political trust is the very foundation of any bilateral relations. To achieve this, the two sides should maintain the sound momentum of high-level exchanges and interaction. We should fully utilize all existing mechanisms to enhance the confidence and minimize the suspicion and distrust. This year India will play the host of the BRICS Summit. We should do our utmost to make the best preparation to ensure a successful and fruitful summit, thus giving positive impetus to the cooperation of five countries as well as to China and India relations. I can assure you that China will closely coordinate and cooperate with India to ensure its success.

Second, more work should be done to upgrade our economic cooperation. The global economy will remain uncertain at least for some time. China and India should optimize our own potentials and ensure healthy development of our respective economy. We should strive to meet the trade target of 100 billion USD by 2015 set by our leaders. The Chinese side is fully aware of the necessity to narrow the trade gap between the two sides in order to ensure the sustainability of bilateral trade cooperation. China will take measures to increase the import of Indian products which have market demand in China. But our cooperation should not be limited in trade only. To deepen our economic cooperation, there is much room for us to explore. Here I just provide some food for thought.

1. China and India should diversify trade structure, expand the scope and items, and increase the technical content and added value to the products. At the same time, cooperation should be expanded into financial, service and investment sectors.

2. China and India should initiate policy dialogue and coordinate our economic development strategy in order to ensure steady growth of our respective economy. China started its 12th Five-Year Plan last year. This year India will launch its 12th Five Year Plan. We should exchange our experience and methods in transforming the mode of development, readjusting the economic structure and building an environmentally friendly and inclusive economy, with a view to achieving the best results in our economic development.

3. Mutual investments should be encouraged. China welcome Indian companies to invest in China and is willing to encourage more Chinese companies, especially private companies to come and invest in India. We hope the Indian side will make additional efforts to create more conducive environment for foreign investors, especially the visa service. Two countries also can explore the possibility of jointly investing in third countries.

4. Free trade agreement or regional trade arrangement should be actively considered. FTA and RTA are useful instruments to facilitate and boost the bilateral trade in a bigger way. As first step, two countries can work on a regional trade arrangement and at the same time prepare the ground for a full-fledged FTA.

5. Efforts should be made to increase the tourism cooperation. With large population and rich tourist resources, two countries possess great potential to become major tourist destination to each other. Regrettably, last year altogether only 600 thousand tourists traveled between the two countries. Compared with 16.5 million between China, Japan and Korea, the figure between China and India is too small. I am of the view that more Chinese tourists to India can also help narrow the trade gap of our two countries.

Third, emphasis should be placed on expanding people and culture exchanges. People-to-people exchange serves as a cornerstone of state-to-state relations and can play a crucial role in minimizing the so-called "trust deficit". The Chinese side will work with Indian side to continue the annual youth exchange program and expand the exchanges of journalists, media and think-tanks. Cross-cultural exchanges can enrich the knowledge of each other and foster closer ties among peoples. We are ready to provide assistance in Chinese language teaching in Indian secondary school. And Indian students are most welcomed to study in China. We will continue to lend our support to the revival of Nalanda University.

Fourth, efforts should be made to enhance our regional and international cooperation to promote common interests. We should step up our coordination and cooperation on regional and international issues and work together to address the challenges of global implications such as climate change, food security, energy security, reform of global financial system, counter terrorism, etc. to ensure those issues will be handled in line with the interests of developing countries and in a fair and equitable manner. China and India also should strive to promote the rights and increase the say of developing countries in the global decision-making process.

Fifth, properly manage the sensitive issues and differences. Mutual understanding and mutual accommodation are crucial in dealing with differences and disagreements in our relations. We should handle them from a long-term and strategic perspective. So long as we follow the spirit of equality and mutual respect, we will be able to ensure a stable and healthy bilateral relations. It is China's policy to maintain good neighborly relations with all its neighbors, including India. We welcome India to play a more active role in international and regional affairs. We are happy to see the recent improvement of relations between India and its neighbors. A stable South Asia is not only a blessing to China and India, but also a great contribution to the region and the world at large. With the joint efforts of two countries, the situation along the China and India border area is on the whole peaceful. Efforts shall be made to do a good preparation for the 15th Special Representatives Meeting on China-India boundary issue. In order to maintain peace and tranquility of the border area before the final settlement of the issue, it is necessary for two sides to work out a new mechanism to serve that purpose. We are willing to work with Indian side to achieve that in the near future.

Ladies and Gentlemen,

China has declared to the rest of the world on many occasions that it takes a path of peaceful development and is committed to upholding world peace and promoting common development and prosperity for all countries. To this end, China has sticked to an independent foreign policy of peace. As President Hu Jintao reaffirmed in his New Year Address a few days ago, that China will continue to advance our opening-up drive for win-win results, and will unswervingly stick to the path of peaceful development and the independent foreign policy of peace. We will develop our friendly relations and mutually beneficial cooperation with various countries in the world following the Five Principle of Peaceful Coexistence. An open and harmonious China of prosperity and stability will make even more contribution to the whole world.

Ladies and Gentlemen,

Mr. Deng Xiaoping and Prime Minister Rajiv Gandhi, two great visionary leaders of China and India, shared a consensus view during their historical meeting in 1988 that China and India together can give the world new perspectives on a new international order and that the Asian age will arrive only when both China and India developed. Today the evolution of the world situation has proved their far-sightedness and outstanding vision. China and India are on their way to translating their vision into reality. What shall we do now? The answer is clear and simple. That is to cooperate. With the joint efforts of China and India, we will not only create a brighter future for our two countries and two peoples, but also make fresh contribution to the world peace and prosperity.

Thank you.

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