There is nothing known as a Chinese East India Company, but the pattern of trade between India and China is fast taking the shape that trade between India and England was when the London headquartered East India Company was exploiting the resources of India in the 18th and 19th century.
China is today the largest trade partner of India and the pattern of this trade between the two countries is such as would be between an imperial power and its colony. In fact with the passage of every year, the India - China trade balance is turning more adverse for India. In 2011, the adverse trade balance had risen to 27.08 billion US $, up from 20.82 billion US $ in 2010 and 15.87 billion US $ in 2009. The total trade between the two countries in 2011 was $ 74 billion.
India’s largest export to China is iron ore, which the Chinese use to produce steel. Using ore from India as also Australia and Brazil, China produces 630 million tons of steel, which is nearly 44 per cent of the world’s steel output. This steel is used to build the infrastructure of China, which in turn goes to make it a mighty nation. That might is used to threaten and blackmail other countries including India. More of this later in this piece.
The other exports of India include low price yielding commodities and primary products like copper, salt, sugar, vegetable oil and leather but there is also cotton yarn and electric machinery. But Indian companies are crying hoarse that the Chinese ease restriction of entry of Indian pharmaceuticals and IT. On paper, Chinese exports to India include fertilizers, vehicles, furniture, prefab buildings and manmade filaments. But anybody with a discerning eye and staying in India knows that the Chinese products of all sizes and dimensions have flooded the markets in India. This could include even include Kutchi handicrafts, kites, lanterns and hospital beds. It now seems that some Chinese companies want to set up units in Indian Special Economic Zones (SEZs) to be closer to the Indian markets so that they can exploit it more effectively.
The trade balance between India and China would have been even more adverse to India had not the Supreme Court stepped in last year and banned exports of iron ore from Karnataka. Bellary district of Karnataka popularly called the Republic of Bellary where the writ of the Gali brothers reigned supreme and the Indian government was all but absent – is the place from iron ore was being mined both legally and illegally – and exported to China through various ports of south India. Gali Janardan Reddy has now been incarcerated and there has been a massive crackdown on mining. This has brought down the exports of iron ore to China. But not before the Chinese have made substantial use of the Indian raw materials to build its massive infrastructure in the last few years.Increased consciousness in the security establishment of India has led to a higher export duty on iron ore and also increased railway freight rates for transporting iron ore. This has also contributed to the falling exports from last year.
But the counter lobby that seeks more exports of iron ore from India is strong: they are calling for renewed iron ore exports from India to China. They point out how the revenues of some railway zone like South Western Railway based in Hubli has been affected by the curb on exports. They also argue that the livelihood of many engaged in the mining and transportation related activities have been affected too. Representatives of the lobby also contend that India has a huge reserve of iron ore and it does not matter that if some of it is exported to China. They, of course miss the point that besides strengthening the hands of China it also was fuelling illegal incomes in India. A large part of this money was going into politics to subvert the process of democracy in India. A politically weaker India would be a perfect breeding ground for China to exploit more of India’s resources.
Remember this is the way through which the English entered India.
Not surprisingly the Chinese have also been lobbying hard so that exports of iron ore can be increased from India. They are lamenting that if Indian exports cannot be raised then they would have to scour new sources in Africa other than increasing dependence on Australia and Brazil. The Chinese ambassador to India is quoted recently as saying: “Our market (for iron ore) is always open for India.”
But behind this all is the mailed fist of the Chinese. These days the Chinese are quite vociferous about India exploring for oil and gas in the South China Sea. After an agreement with the Vietnam in 2006, ONGC Videsh – the offshore wing of the public sector company ONGC – is prospecting for two blocks in the Sea. But the Chinese are protesting claiming that they have territorial rights over the waters, which is off the coast of Vietnam. Beijing has declared that: India will have to pay a heavy price for exploring in the disputed waters of South China Sea. Not only oil exploration, the Chinese have also objected to the presence of an Indian naval ship on a good will mission to Vietnam in the South China Sea. In July 2011, INS Airavat on a friendly visit to Vietnam was contacted 45 nautical miles off the coast and threatened by the Chinese.
There have been more serious transgressions by the Chinese in recent years. When Prime Minister Manmohan Singh went to Arunachal Pradesh in 2009 to campaign for the polls, ludicrous that it may sound, the Chinese objected! “We are strongly dissatisfied with the visit to the disputed region by the Indian leader,” the Chinese posted on their foreign ministry website. For those who came in late, the Chinese have been claiming Arunachal Pradesh to be their own and have even named it as South Tibet. It is a different matter that the Chinese have gobbled up Tibet and made it their own after throwing out the Dalai Lama.
Now through Tibet, the Chinese want to control the whole of Asia. Tibet, the plateau high up in the Himalayas is the place from where all the major rivers of Asia originate. This includes the Brahmaputra, Indus, Sutlej and the Yangtze, Yellow and Mekong rivers. The Chinese are now damming the Brahmaputra (called Tsang Po in Tibet) to supply waters not only to Tibet but also other parts of China. They are also seeking to divert the waters of the Brahmaputra to the Xinjiang province of China. It is also learnt that one of the dams on the Brahmaputra called the Dagmu dam will produce power that will not only serve Guangdong but also can be sold to Myanmar, Thailand, Bangladesh and Laos. The last four countries are also at the mercy of China because the latter have been building dams on the upper reaches of the Mekong that is affecting water flow of the river downstream.
Mekong, happens to be the lifeline of Indo China. Needless to add the damming of Brahmaputra in many places in Tibet will lead to water shortages in Assam and Bangladesh. This is a real possibility that should not be discounted.
In the ultimate analysis this is the reason that China does not let go off Tibet. The Chinese have denied the Tibetans their human rights but want to use the resources of their land to increase their strength and lord it over the rest of Asia including India. But except for the Indian security and foreign establishment a large part of opinion makers are oblivious of the Chinese threat to India which is now not only military but also economic. There is much ecstasy in Indian business circles about growing Indo- China business relationship oblivious to the dangers of this relationship. Indo Chinese friendship societies have also sprouted in many cities in India. If in the good old days only the CPM cadres were the fans of China, the fan following has now extended to large sections of small, medium and big businessmen who do not understand the perils of greater engagement with China.
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