India's 'Special China Problem': Jaishankar Stresses On Investment Precautions Amid Ongoing Border Standoff

External Affairs Minister S Jaishankar, addressing a conclave in New Delhi on Saturday, highlighted India's "special China problem" and the ongoing four-year military standoff on the Line of Actual Control (LAC).

He said that the state of the bilateral relationship between India and China necessitates careful scrutiny of Chinese investments and a cautious approach to trade and other exchanges with the neighboring country.

Photo Credit: PTI

Jaishankar, who has consistently argued that the normalisation of India-China relations is inseparable from peace and tranquility at the border, reiterated this stance during his address.

The relations between the two Asian giants have reached their lowest point in six decades since the face-off on the LAC began in April-May 2020.

"India has a China problem, a special China problem, that's over and above the world's general China problem," Jaishankar said, pointing out that India's challenges with China are unique and compounded by the ongoing border tensions.

He also noted that India is not alone in grappling with issues related to China, as European countries and the US are also engaged in key economic and national security discussions concerning China.

In his remarks, Jaishankar warned that when dealing with China in areas such as trade, investments, and other exchanges, it is essential to consider the distinct nature of the country.

"The basics start to go off track if one neglects to consider that this is a very unique country with a very different way of working," he explained.

Given the "very difficult situation on the border for the last four years," Jaishankar asserted that "the sensible response is to take precautions."

He further elaborated on the need for heightened scrutiny of Chinese investments in India.

"It's common sense that investments from China would be scrutinised. I think the border and the state of relations between India and China call for it," Jaishankar stated.

He observed that even countries without borders with China, such as the US and European states, are increasingly scrutinising Chinese investments due to national security concerns.

Jaishankar clarified that the Indian government's position has never been to completely halt Chinese investments or business dealings with China.

"Now it has never been the government's position that we should not be having investments from China or doing business with China...The issue is not do you have investments from China or not, it's not a yes or no answer. It is what should be the appropriate level of scrutiny, how should you handle it," he said.

The minister also pointed out that the concept of national security has evolved and expanded in recent years. He raised concerns about India's reliance on Chinese imports in sensitive sectors, particularly pharmaceuticals and telecommunications.

"If we were completely reliant...on pharmaceuticals from China, does it not have national security implications? If your telecom is based on Chinese technology, can you be impervious to it?" Jaishankar questioned, underscoring the thin line between economics and security when dealing with China.

Moreover, Jaishankar addressed the issue of trade deficits with China, noting that many countries, including India, are now voicing concerns about this imbalance.

He argued that these countries "consciously chose to overlook the nature of Chinese production and the advantages which they enjoyed in a system where they got a level playing field" decades ago, contributing to the current trade dynamics.

Earlier in May, during the Confederation of Indian Industry (CII) annual business summit, Jaishankar had urged Indian firms to assess their business dealings with China through a "national security filter."

He argued that in light of the ongoing standoff on the LAC, Indian businesses should prioritise sourcing from domestic manufacturers and carefully evaluate national security sensitivities in their business propositions.