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Need to take an extra step & maintain new equilibrium with China: Ex-NSA Shivshankar Menon

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A boundary is a useful issue to regulate the temperature of India-China relationship, but it’s a lever, said Menon.

Former National Security Adviser Shivshankar Menon spoke to ThePrint’s Editor-in-Chief and Chairman Shekhar Gupta on NDTV’s weekly show Walk The Talk, about China.

Menon said India needs to talk to China to work out a new equilibrium in the relationship, because so many things have changed around the countries, and in the relationship itself.

Here is the detailed transcript, edited for clarity:

SG: Hello and welcome to ‘Walk The Talk’. I’m Shekhar Gupta and I’m with somebody who will take you through a tutorial on understanding China. But before I do that, I will give you a little story. Almost three decades back, in 1989, when the Tiananmen Square incident took place, I was the only Indian journalist – with photographer Prashant Panjiar – who went to cover it. At that point, everybody in the diplomatic corps there or in the foreign media was saying this is the end of Communist China. The 25th army was revolting, the 37th army was revolting, and the Chinese Communists “cannot control it”.

There was one Indian diplomat, with two of his aides, who took me out to lunch and said nothing of the sort is happening. One of them said, “Take your pictures now because soon they will start washing the streets of bloodstains and then there will be publicly televised trials.” Which is exactly what happened. That officer was Shivshankar Menon, who then rose to be the National Security Adviser.

There were two others with you – Gautam Bambawale, the ambassador in China, and Vijay Gokhale, who is now foreign secretary. So this was quite an elite group who knew what was happening in China.

Menon: I think we were relatively objective compared to the others, because we had no ideological dog in this fight, and for us it wasn’t part of the Cold War – whether liberalism was winning or Communism was winning. It was about the politics of what we saw going on around us. So I think we were right then. But we are not always right.

SG: Not always right, but in this case the world was wrong because they had…

Menon: Because they had blinkers. They looked at it from a European point of view, and in Europe at least you could see the Cold War collapsing, the Soviet Union collapsing. Borders were opening, there was huge migration cross Hungary, Czechoslovakia, East Germany. There was pressure, you could see that and what (Mikhail) Gorbachev had started in the Soviet Union was already showing its effects.

SG: You said we don’t always get it right. Give us some examples of when we got it right and we did not get it right.

Menon: Well, with China – since you mentioned it – I think for about 30 years we got China right. Clearly in the late 1950s and early 1960s we didn’t. We ended up in conflict, we didn’t get it right. But I think if you look at it from roughly the mid-1970s onwards, for about 30-35 years we got China right. We found a modus vivendi. We actually handled the relationship, both of us. Now we’re in a new situation – both of us. And now we have to see whether we can get it right. Both of us, it can’t be one-sided, It’s not only our getting it right.

Many of the big things, actually, we got right. Nehru was one of the first to see the Sino-Soviet split, and to say it’s real when the Americans thought this is a devious Communist ploy to convince them that they had split. We got globalisation right – we are the second biggest beneficiary of the globalisation decades, from the 1990s up to the 2008 crash. Whether we got the post-crash world economy right, I’m not sure, and today, I think we’re a bit confused. We have a trade and economic policy which seems to be heading towards closing down. We’ve raised customs duties for the first time since 1991. But on the other hand, I think, we know we have to be more engaged.

SG: We’re trying to be Trump without the wherewithal…

Menon: (laughs) I don’t think we can.

SG: So, what are the challenges today in the Sino-Indian relationship, for India and for China, in understanding each other?

Menon: I think there are two problems. One is, today, we have both expanded our definition of our interests, and the example I like to cite is: In 1991, when we started reform, 15.3 per cent of our GDP was external merchandise trade. Most of it went West through Suez. Now by 2014, 49.3 per cent of our GDP was external merchandise trade – import, export – which means almost half the GDP is in the rest of the world. And a huge proportion of it, maybe not 50 per cent but certainly close to 40 per cent, went East through the South China Sea. Suddenly, South China Sea freedom of navigation has become an Indian interest and has become a significant Indian interest. In the same period, from 1991 to 2014, China starts drawing this nine-dash line, oil and gas is discovered, China starts calling it a core interest, in 1996, they inform the UN.

SG: You start conjuring up new islands…

Menon: Islands, artificial islands, etc… militarise the area. So you start rubbing up against each other in the periphery in which you are. So it’s no longer just a bilateral issue like you used to have. You have the boundary, but you learnt how to manage it, both learn how to live with a status quo, maybe not settle it, but you know nobody’s died on that boundary for years (since 1967). You had other bilateral issues, but now you have a more complicated issue. Secondly, there was a time when most issues internationally were North-South issues, and you and China were on the same side – on the South. China’s now a middle-income country. $8,000 plus per capita income.

SG: Four times ours…

Menon: You also have changed your interest. So look at the difference – on climate change, for instance, you used to be together in basic with South Africa, Brazil. You used to work together on one side, at Copenhagen it worked very well together. By the time you get to the Paris agreement, basically the US and China do a deal, because China’s interests are much more aligned with the US than they are with you. Your interests have also changed on issues like IPRs and so on. Trade, the globalisation decades when everything was open – trade was flowing freely, investment… That’s over. After the crisis, everybody’s turned protectionist. Now the world is being carved out into bits and pieces. There’s a tariff war starting between China and the US. You are not sure to what extent to get involved in the RCP – which is the whole new free-trade area which is being built, now will actually become Chinese-led area, they are the biggest economy.

SG: Can you explain the RCEP?

Menon: The Regional Comprehensive Economic Partnership.

SG: And how does this work?

Menon: Well, I think it is going to be an arrangement for trade, economic investment, services – all in this whole area in the Asia-Pacific, and it’s being done under the East Asia Summit, but it’s open to all other countries as well. Once this area opens up – lowers tariffs, opens up the economy and markets to each other, it’ll all start getting integrated. Already, global supply chains, value added chains run through you, you produce after all an iPhone and in the US about 25 per cent of the value is the original ideas, the design and so on. China adds about between 3 and 5 per cent. Other bits are added in Taiwan, South-East Asia and so on. It’s all linked – one production chain. You have a choice – either you’re going to be a part of these, in which case you’re part of the world market, or you’re not. If you want to protect your industry, you can’t be a part of this. So you are torn, you have to decide. And in the last three to four years, you’ve not made up your mind which way you want to go. You’re reviewing your free-trade agreements – the existing ones – and you’ve entered into new trade agreements, and in the negotiations, everyone else is not quite not sure where you stand.

SG: So in the process our exports have suffered.

Menon: We haven’t still reached the levels that we had before the crisis.

SG: In fact, since 2014, our exports our down.

Menon: They are steadily down.

SG: It’s alarming because this is in the time global economy is growing and global trade is growing…

Menon: You know we keep talking about Suez to Malacca as our area of interest. Less than 15 per cent of your non-oil trade is with this area. It’s actually outside this area that you do all your business. So your geopolitical interests are bigger than your grasp. And you should actually be engaging with the whole world, but if you’re shutting your mind and closing yourself down, you can’t claim to be a global power and run one kind of political or larger strategy while you’re shutting down your economic and other engagement with the rest of the world. You have to bring these two in line with each other. That’s one challenge.

But for the Chinese… what it means with our relationship with China is, China now is playing a different game. The game now is about the access to markets, raw materials… she’s building ‘Belt and Road’, is integrating economies to herself, and we have to see how we figure in this new world that’s been created.

SG: Can we stop it?

Menon: I don’t know whether you need to stop it. You should see how does it help you to transform India. Our job is to transform India. There are bits of what China’s doing, like CPEC in Pakistan, which obviously hurt your sovereignty. This is Indian territory and it creates a Chinese stake in maintaining Pakistani presence there.

SG: Although we have stopped protesting lately…

Menon: You know you can protest again tomorrow. I don’t go so much by the words as what we do, but there are other bits of connectivity which are useful to you. The Chinese built an expanded Colombo port… 83 per cent of what goes through there is to or from India. Our ports are inefficient, Colombo is efficient. Now you get the use of this port, and it helps your economy, they’ve built it, but it’s open to everybody and it’s a commercial proposition, Colombo port can pay back whatever. Unlike Hambantota. So for me, it’s a question of picking and choosing – which engagements work for you and the criterion should always be: Does it help India’s interest? Does it help us to make India a prosperous, strong country?

SG: Have we made some mistakes dealing with China lately?

Menon: I’m not sure that I’d call them mistakes, because I haven’t been involved in the last four years so it’s very difficult to actually say if it’s right or wrong. There are some things that I personally think might have been done slightly differently. But I wouldn’t call them mistakes…

SG: Tell us what could be done.

Menon: …Partly because we are both operating in great uncertainty. On Belt and Road, for instance, I think we need to be a little more discriminatory between the bits that hurt us and which bits of Belt and Road actually make sense, economically which will be open, which will help us, and which will not be open, and which obviously have strategic purposes – you judge those differently, you deal with those differently. And ultimately I think the bits that make economic sense will get done. The other bits… you know, a dud is a dud whether you own it or somebody owes you money for it, it’s still not going to pay you. So I’m not sure whether other bits will ever get done.

SG: So CPEC is probably…is it a dud, you are saying?

Menon: No, I think the bits that make money will get done. Bits that serve China’s and Pakistan’s strategic interests like the port in Gwadar – I don’t think it will make money but it will be built because it serves their strategic interest.

SG: So now it’s quite evident that the Chinese have so much invested in Pakistan, Pakistan does effectively become a protectorate now.

Menon: Well they have a huge interest now in Pakistan’s future, in its relative stability, at least enough to justify their investment.

SG: So it narrows India’s strategic options…

Menon: It increases the levels of Chinese commitment and it changes. BRI itself will change the various options available to you – what policy options you have. It will change the operating environment in many ways.

SG: So why not balance your troubles with CPEC with opportunities of BRI?

Menon: That’s what I would say makes sense. For me that is clever policy and just saying ‘Oh I will speak for other people’s interests’, ‘Oh this is debt trap’… Other people are clever, they can figure it out too, they are not such idiots. You don’t need to speak for others.

SG: What else could we have handled better?

Menon: Well, that was one, but I think the rest, overall I think the basic thrust that we need to talk to the Chinese to work out a new equilibrium in the relationship because so many things have changed, around us also, and in the relationship itself. I think that basic thrust is correct, actually, but we need to take it one step further. We need to take it to a new strategic framework and be much more proactive and get into much more details, strategic conversations with the Chinese, understanding where the world is going, what is core to them, what is core to you, how can you live with…

SG: Do the Chinese understand they cannot take more territory from us?

Menon: I don’t think, frankly, if you look at their actual behaviour, where we have been for several years, and I mean now for four decades. And I’m not sure territory is the real issue. A boundary is a useful issue to regulate the temperature of the relationship, but it’s a lever.

SG: That’s a good line… I wish it was mine…

Menon: (laughs) But I’m not sure that the driver is about territory. I think it’s a slightly different problem. Both are living with the status quo and have lived with it, and respected it. It’s probably our most peaceful border in practice. No smuggling …

SG: After the Nagaland, Mizoram business, there’s not even been much arms…

Menon: No, not across this border. It comes though Myanmar, it comes through other places – that’s not the problem.

SG: Did we handle Doklam well?

Menon: Doklam per se, reasonably tactically. But I think there’s a larger issue there which is still open, which I don’t think we have put our heads around. I’m not sure that we have thought through where this does this go, all the next steps that China could take, you could take, what happens in the context in the region. I think there’s a whole set of other issues.

SG: And Bhutan?

Menon: Bhutan is one big part of that because I think a lot of it was designed actually for its effect on Bhutan.

SG: And have the Chinese achieved that effect?

Menon: I don’t know. I don’t think so. I mean there’s no sign yet, but we have to see. This is not over and it’s like most things on the India-China boundary – they have a long past, long tale, and it takes a while.

SG: So Doklam, two questions. One, would we have been better off not to let it play so much in domestic politics as a great tactical and military success – that we showed the Chinese that we are different?

Menon: Well I think this was the first time the Chinese actually went public and made a big fuss to start with, even though they then later quieted down. But if you look at what some of Global Times were saying, but even what the foreign minister was saying, some of it was very extreme. So it’s really natural in a democratic polity that you’ll respond. I think the problem is, and this is not only true of Doklam, it’s also true of surgical strikes, relations with Pakistan and many other relationships – we’re now playing foreign policy for domestic political gain. It’s become part of your domestic politics, which is not a very good thing.

There are risks on both sides. It turns the opposition into opposing things which are actually in the national interest, just because it is being played for political gain by the government. And it tends the government into actually making foreign policy choices based on how they’ll play at home, which is not the way you should be judging it. You should judge it in terms of your own interests and which way it helps India, rather than your winning an election or two.

SG: So, you don’t like the idea that this should become part of Indian politics?

Menon: I don’t like that at all.

SG: Was it done in the past?

Menon: I’m sure people did it, but they felt ashamed about doing it, and they did it much more quietly… and they regretted it, and they paid for it.

SG: If you look back on Vajpayee after Kargil, he stopped talking about it because then he was making peace. Frankly, we had big failures at Kargil. How do people come in settle down, dig in your territory…

Menon: How did it happen, how are you surprised based on this… But you learnt from Kargil – you had the Subramanian committee, you had the report. You changed the way you handled intelligence. You did a whole series of changes.

SG: We learnt the lessons.

Menon: We set up an NSC!

SG: So you learnt the lessons but you didn’t go crowing about it. So the other thing, if the message of Doklam is essentially to Bhutan, asking Bhutan to make its choices…

Menon: If you really want to deal with things, talk to us.

SG: So isn’t that what Chinese are telling all our neighbours right now?

Menon: Well, not just our neighbours. Look at what they are doing at the South China Sea – the message to most of the other countries around the South China Sea is you can’t rely on the Americans. Come and deal with us. This, I think, is the general message across the periphery that ‘Come and deal with us directly. Don’t rely on outside powers, don’t rely on other people’. In other words, China’s primacy is being asserted in the region.

SG: Is that what they are doing in the Maldives, in maybe Seychelles, in Sri Lanka, Bangladesh, Nepal?

Menon: I think what we are seeing is, yes, an assertion of China’s primacy, it’s strongest on their immediate borders. Further out you get, it’s less and less. They see themselves as a global power, but they are also realists, so it depends on how much actual power they can deploy – they will assert that much primacy.

SG: So how does India deal with threats to its own preeminence in the immediate neighbourhood?

Menon: I don’t think it’s a zero-sum issue like this, where any Chinese presence is… there’s never been exclusivity in the Indian Ocean region. It’s interesting, if you look at the whole – at no stage, even the height of Pax Britannica, the Royal Navy never controlled all 10 choke points of the Indian Ocean, whereas South China Sea, East China Sea – these are closed geographies which one or the other power has managed – the Americans have used it to contain China. So there’s a big difference in the way it works.

I’m old enough to remember, in 1963-64, there was a huge fuss in India saying Sri Lanka has signed a rice-rubber pact with China. “Oh! The Chinese are coming”. China will be in the region; so is the US; so are other countries. Forget exclusivity. So you can’t treat this as a zero-sum, that anything that comes is a threat to us. You need to be better at the game and you have few advantages in your own region, all kinds of affinities – economic, cultural, linguistic, religion. Every border of yours has cross-border ethnicities. The Chin in Myanmar are the Mizos on our side. You have populations across, you have links whether of marriage, of jobs. The more you open up your economy, the more you integrate them. You saw it with Sri Lanka – you did a free trade agreement, they survived 26 years of civil war with only one year of negative growth. Nepal had 12 years of civil war and still survived it. Why? Because open to India, and you’re open to them. In a sense you are integrated to a much greater extent than China ever will be.

SG: So was it a mistake to ‘punish’ Nepal?

Menon: Well, we deny that we ever punished Nepal. But I think yes, there is a perception problem in Nepal today that we have to address. But the fact is that geography, culture, history everything works for you.

SG: The Nepalese don’t like to be reminded of it all…

Menon: Well, that is the most dangerous thing to say. I know we love to say to them that “Aap toh bilkul hamare jaise hain (You are just like us)”. But that sounds to them like we’re swallowing them up.

SG: That they’re like a Puerto Rico to us.

Menon: But you know this is not unique to us. This is what Edward Luttwak called ‘great power autism’. There is a certain lack of sensitivity to other people that all great powers display – whether it’s the Chinese, the Americans – maybe we are acting like a great power. But yes, we should show considerable sensitivity to our smaller neighbours, especially those who feel their identity could easily be threatened by us. And, you remember Zia-ul-Haq when he was asked why you’re doing Nizam-e-Mustafa, ‘Islamisation’. He said if an Egyptian stops being a Muslim, he’s still an Egyptian. If a Pakistani stops being a Muslim, he’s an Indian. I think we have to be very conscious.

SG: Yes, that’s when he started looking West, and that’s where ‘Khuda hafiz’ became ‘Allah hafiz’ on their radio and TV.

Menon: So I think we need to be sensitive to this, to the fact that just by being who we are – a large plural multi-ethnic, multi-religious, multi-linguistic society. We can represent a threat to small, fragile identities.

SG: Read the future. Two years from now, where do you see the India-China relationship?

Menon: I think we both have other, bigger fish to fry. We both have huge domestic jobs to do – for our own country, there are far too many sick, poor, illiterate, etc. The Chinese also have major domestic issues in how they handle their own economy, their own society, and not getting caught in the middle-income trap, which is very important for them. And, we have to deal with a very uncertain world. Trump has added to the uncertainty, he made everybody much more nervous. They now have a trade war on their hands since yesterday. So frankly, I see both of us as continuing to do what we have done, which is we don’t need one more bit of trouble, strategically, neither us nor the Chinese. So we live and let live. But we have to find an equilibrium at which we can do this.

SG: This has been a great conversation. What we need is continuity, but also an open mind.

Menon: A little more confidence and an adjustment to the new situation we have. My worry is if we keep on doing the same old thing in a different context, you’ll end up with bad results. You need to adjust to each other.

SG: You know sometimes I think we are so wounded in our heads, scars on our minds, by 1962 that we are still fighting the tactical battles of 1962. We want to fight 1962 better again.

Menon: Maybe some of us, but I think we have learnt, I think we have grown. I think we are the last generation that remembers Panditji’s voice on the radio. You know when he was talking about the humiliation. I think after us, when I talk to younger people – I teach a course now these days in university – I find that all these students were born in this century and that much of my life for them is ancient history. So I think we are past this.

SG: Anything before Google was invented is ancient history. Just as we used to say AD and BC we should now say pre-Google and post-Google.

First, I hope this is true. And second, still the most valuable thing is wisdom from those who have lived through this, and there’s nobody better than you. I think we are very assured that two of the people who were in your dream team are now handling essentially China the foreign secretary and the ambassador.

Menon: Thank you, thank you very much. This was wonderful.

This interview was transcribed by Aastha Singh and edited by Shreyas Sharma. Watch the full interview on NDTV here.

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  1. A new modus vivendi, equilibrium, call it what you will. Two broadly comparable young nations, ancient civilisations, one took a break out in 1978 and has not looked back since. The other followed suit in 1991 but has not stayed the course as consistently forcefully. Now, two non intersecting orbits. We must deal creatively with the power differential, even as we try to move to a much higher orbit.

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