State Councillor Dai Bingguo Gives an Interview to Press Trust of India

Answer: Since we restarted the boundary talks in 1979, China and India have worked relentlessly to push forward the negotiations and achieved some positive results. In 2003, we took an innovative step and set up the special representatives' meeting mechanism. In 2005, we signed the Agreement on Political Parameters and Guiding Principles for the Settlement of the China-India Boundary Question, and moved on to explore the framework for a boundary settlement, which is the second stage in a three-stage process. The two countries have signed two agreements and one protocol on the maintenance of peace and tranquility and confidence-building measures in the border areas, and have set up a working mechanism for consultation and coordination on border affairs. These efforts have helped ensure durable peace and stability in the border areas and played a positive role in establishing and developing the China-India strategic and cooperative partnership.

The boundary question, an issue left over from history, is highly complicated. An early settlement will serve the fundamental interests of the two countries and peoples. I believe that in seeking the settlement, we should always bear in mind the overall interest of the bilateral relations, act in the spirit of peace, friendship, equal-footed consultation, mutual respect and mutual accommodation, and work to narrow differences and expand common ground. If we work in this way, we will find a fair, reasonable and mutually acceptable settlement. I hope that the special representatives from both sides will keep up the good work and finish the negotiation.

Question 5: Last decade in many ways is marked by the rise of China and to an extent India. In the new strategic environment where US policy of Asia pivots its efforts to woo India, how concerned is China? There are voices in China who say India will pursue an independent foreign policy. Is that your perception too?

Answer: The Asia-Pacific region, with relative stability and rapid development, is an important driver of world economic recovery and growth, thanks to the joint efforts of all countries in the region. We hope that the shift of US Asia-Pacific strategy will be in keeping with the trend of the times and meet the common aspiration of the region for more stability, closer cooperation and common development.

Chinawelcomes the efforts of India and the US to grow normal relations on the basis of mutual respect, equality and mutual benefit, and hopes that their cooperation will promote peace and stability of the region. In my view, India is a country of strategic independence. It will not be wooed or ordered about by anyone else. Being a forerunner of the Non-Aligned Movement and a large emerging country with growing international influence, India will stick to its traditional independent foreign policy and contribute to the peace and development of the region and beyond.

Question 6: Critics in India point to China's close "all weather" relations with Pakistan, especially in the defense area. What is your response to them? Has the Sino-Indian relationship now outgrown the Pakistan factor?

Answer: Pakistan is a neighbor and traditional friend of China. China and Pakistan have developed relations in an open and aboveboard manner. There is no hidden agenda, and the relationship is not targeted at any third party. China provides Pakistan with economic and humanitarian assistance within the realm of our capabilities and we carry out cooperation in various areas. It is conducive to the stability and development of Pakistan and consistent with the interests of all countries in the region.

Both India and Pakistan are close neighbors and friends of China. We sincerely hope that India and Pakistan will have a friendly relationship, and applaud the improvement in their relations. China will work with India and Pakistan to build sound and mutually-reinforcing relations between our three countries and create a peaceful and stable regional environment based on equality, mutual trust and win-win cooperation.

Question 7: How is the Sino-Indian defense relationship shaping? How do you view the perception in India that it should constantly match China's growing military might?

Answer: China and India have made headway in defense cooperation in recent years, as evidenced by the two exchanges of visits between our defense chiefs, the launch of Defense Dialogue, two joint military exercises involving our armies, mutual port calls by naval vessels, joint escort missions in the Gulf of Aden, as well as frequent meetings and contacts between our border troops. As we continue enhancing our mutual understanding and trust, the potential for defense cooperation will be further unleashed.

Chinaadvocates a new security concept that stresses mutual trust, mutual benefit, equality and coordination. We seek to promote security through cooperation and resolve disputes through dialogue. This is reflected in the negotiation with India to resolve the boundary question and our joint effort to maintain peace and tranquility in the border areas. China and India pose no threat to each other. The security of both countries can be achieved only by pursuing peaceful co-existence and common development. I believe that China and India will continue on this path and work to enhance mutual trust and resolve disputes through friendly cooperation. In so doing, we will promote our common security and contribute to the durable peace and common prosperity of the Asia-Pacific region.

Question 8: Lastly the two countries made strong push for trade ties in the last decade. Though it reached about $75 billion, India's trade deficit is ballooning. How does China look to address it? Can we look for new initiatives and investment in this regard from the new leadership of China?

Answer: China's economy is an open economy. We do not seek a trade surplus. While China enjoys a surplus with the US, Europe and India, it has a deficit with Japan and the Republic of Korea. It is true that China's export has grown fast, but our import has grown at an even faster pace.

In recent years, China-India bilateral trade has expanded rapidly, bringing real benefits to both sides. As neighbors and large emerging countries, China and India enjoy huge potential and broad prospects for economic cooperation. We are confident that, by working together, we will reach the goal of USD 100 billion of two-way trade by 2015. China pays close attention to the trade imbalance. We have already encouraged Chinese companies to import more from India and will continue to do so. We welcome Indian enterprises to actively explore the Chinese market. Not long after the 18th Party Congress, we held the second China-India Strategic Economic Dialogue, which produced many results. I am sure it will lend new impetus to our efforts to expand trade and mutual investment.

Chinais implementing its 12th five-year plan. During this period, China's total import is expected to reach USD 10 trillion. I sincerely hope that Indian companies will seize this opportunity and export more products that meet the demand of the Chinese market.

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