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China Prods India After Pak Free Trade Deal

While China is looking to sign free trade agreements with both Pakistan and India, the Chinese have wrapped up negotiations with Pakistan and the formal agreement is expected to be signed when President Hu visits Islamabad on November 24. Such an arrangement with India, however, seems much farther away.

The China Daily report quoted Hu Shisheng, ‘an expert with the China Institute of Contemporary International Relations,’ as saying that “It is too early for the two countries to clinch such a deal because India still has some worries about certain Chinese industrial sectors, such as manufacturing.” But other Chinese actions likely have much influence on the tenseness of the talks between the communist state and the Indian leadership.

Accompanying the announcement of China’s free trade agreement with its growing partner Pakistan, China also renewed its claim to the Indian state of Arunachal Pradesh on the northwest edge of India along the Chinese border and part of the Jammu-Kashmir territories that India and Pakistan continue to war over. This was not well received by India, as the Chinese ambassador, Sun Yuxi, said that “the whole of what you call the state of Arunachal Pradesh is the Chinese territory. … We are claiming the whole of that.”

The Indian response was immediate and strong. Indian Foreign Minister Pranab Mukherjee said flatly that “Arunachal Pradesh is an integral part of India,” and chastised the Chinese ambassador for attempting to negotiate through the media. In response, a Chinese foreign ministry spokeswoman said that the issue “can be resolved through friendly consultation.”

The sudden and very public move from China renewing a claim to already disputed territory between rivals Pakistan and India does not appear to be a move associated with a nation working to establish a free trade agreement with India. The Indian interpretation is likely and understandably one of confirmed fears of a growing partnership between China and Pakistan and a conscious choice made by Chinese leadership.

The growing economies of both India and China have served to foster improved trade relationships and at the same time increased competitive tensions between the world’s two most populated states. Whether the Chinese move on Arunachal Pradesh in the disputed Jammu-Kashmir region is an attempt to leverage future trade talks with India or a concrete indication of a forming Chinese alignment with Pakistan, which it has already invested heavily in, remains to be seen.

But the degree to which the Chinese press the issue may have a reciprocal impact of driving India even closer to the United States, which is also in a precarious relationship with Indian rival Pakistan within the context of the War on Terror. Pakistan’s Dawn newspaper reported that Pakistan received US$1.1 billion in aid during 2006 in return for its cooperation in combating terrorism.