Hu's the problem?

Since the Chinese are not known to mince their words, the dialogue between the government and Chinese President Hu Jintao when the latter comes calling later this month, promises to be interesting. When the NDA government had justified India's nuclear tests in 1998 by citing the Chinese threat (in a letter to US President Bill Clinton), the Chinese had responded by speaking of the territorial dispute it had with India and included the whole of Arunachal Pradesh in its claims. The new point of friction is not nuclear policy but India's treatment of Chinese companies and Chinese business interests. In the past, state-owned firms like Mahanagar Telephone Nigam have been allowed to buy equipment from Chinese suppliers, but in Bharat Sanchar Nigam's latest tender, Motorola was apparently disqualified because its equipment was made in China. Not so long ago, there was a hue and cry about Chinese telecom equipment supplier Huawei's presence in Bangalore and its security implications, but the government subsequently encouraged Chinese firms to bid so as to lower the prices of the telecom equipment it was buying. In recent weeks, there have been delays in giving clearance to Reliance Industries (which wants to get 2,000 Chinese technicians to lay part of its gas pipeline network); the same thing happened in the case of the Apache SEZ in Andhra Pradesh, which wanted to hire 20 Chinese specialists. Since approval was finally given, the ill-will that had been created by then was pointless. Similarly, the delay and finally the refusal to allow Hutchison Ports to participate in the bidding for Kandla port have, similarly, been seen as a hostile move by the Chinese authorities.

It is true that security perceptions differ, and that other countries behave in the manner that India does on the entry of foreigners into the ports sector""while the US had a problem in allowing Dubai Ports to run port services in that country and actively followed a policy to drive it out, India has no such problems and Dubai Ports controls various ports here. But the government needs to be clear about what the consequences of such actions will be, and decide on whether it is ready to pay the price. China has emerged as an important destination for Indian exports and the government is keen that the current levels of bilateral trade rise from $24 billion to around $40 billion. That kind of jump cannot take place if Chinese businessmen/professionals have a problem in getting visas to visit India. What complicates matters is that India's so-called security concerns and the resulting policy mandates, such as insisting that only Indian nationals man top posts in telecom firms and not allowing such firms to access their networks from overseas, are themselves a subject of dispute within the Cabinet""in this case, while the security set-up is in favour of them, the telecom minister makes no secret that he thinks the conditions are a bad idea.