Exclusive! 'By 2012, we brought China boundary row to point of solution'

'Now it is really a question of whether both political leaderships wish to do it now. It is a big thing to do because it means that we have to change the way we learnt to draw the map of India in our schools because you will never get hundred percent of what you want from a settlement.'

'The Chinese also have to learn to change the way they learnt to draw the map of China in their schools. A settlement will mean give and take. It will mean adjustments.'

A sensational interview on India-China relations, with the man most qualified to answer. Shiv Shankar Menon -- India's former ambassador to China, former foreign secretary and former national security adviser -- speaks to Sheela Bhatt/Rediff.com

Shiv Shankar Menon was national security advisor to Prime Minister Dr Manmohan Singh from January 2010 to May 2014, a period when plenty happened, but he never spoke to the media on the record. Menon was also the prime minister's Special Representative to conduct border talks with China.

Menon's tenure as foreign secretary from October 2006 to August 2009 was no less eventful, as it was then that the India-US nuclear deal was concluded, generating parliamentary heat. There was also the hyper-reaction the government had to face over the 2009 talks in Sharm-el-Sheikh between Dr Singh and his then Pakistani counterpart, Yousaf Raza Gilani.

The joint statement issued then mentioned for the first time ever India's alleged role in Balochistan, which even the Congress Party was up in arms against. As the then foreign secretary Menon was the one who took the flak for it.

Menon has extraordinarily rich experience in the Indian Foreign Service, having served as ambassador and high commissioner to Israel (1995 to 1997), Sri Lanka (1997 to 2000), China (2000 to 2003), and Pakistan (2003 to 2006). He enjoyed the complete trust of then prime ministers Atal Bihari Vajpayee and Dr Singh.

Menon was also a member of India's Atomic Energy Commission (2008 to 2014) which gave him inside knowledge of India's nuclear strengths. In 2010, he was chosen by Foreign Policy magazine as one of the world's 'Top 100 Global Thinkers'. After retirement he has been a Richard Wilhelm Fellow at MIT and a Fisher Family Fellow at Harvard in 2015.

Menon is currently chairman of the advisory board of the Institute of Chinese Studies in New Delhi, and is a Distinguished Fellow at the Brookings Institution, Washington, DC.

Menon, an alumnus of Scindia School, Gwalior, and St Stephens in Delhi, where he studied ancient Indian history and Chinese, belongs to an elite family of diplomats. His maternal grandfather, K P S Menon, was posted in Nanjing, then capital of China, as India's agent general. After Independence, in 1948, he was appointed India's first foreign secretary.

His father, P N Menon, is a part of India-China-Tibet history as he served as India's consul general in Lhasa and was deputed by Jawaharlal Nehru to receive the Dalai Lama in March 1959 when the Tibetan spiritual leader sought permanent exile in India.

His maternal uncle, also K P S Menon, was ambassador to China between 1985 and 1987, before becoming foreign secretary.

Menon's father-in-law, Ram Sathe, was India's last consul general in Kashgar in Xinjiang, China's Muslim majority province, and later became foreign secretary too.

Given all this family history, it is only natural that Shivshankar Menon is fluent in Chinese.

The rich family culture has provided him the suaveness to handle power and the tenacity to pursue ideas. In the very first year after retirement he has been able to ink the history of India's dealings with China and the Tibet issue and his own family's parallel trajectory in diplomacy.

He took time off to write two books. The first about his family's engagement with Indian diplomacy vis-a-vis China, the second book is about India's foreign policy options.

It is no exaggeration to say there is no Indian alive who is better placed to speak on China with depth as Menon, because from 1943 to 2014, with an interruption of a couple of years in between, Menons and Sathe have dealt with China in some capacity or the other. 

Sheela Bhatt/Rediff.com speaks to Shiv Shankar Menon, image, left, for the first ever, in-depth, exclusive and authoritative version of successive Indian governments' views on China.

The first of a four-part interview:

Do you perceive a significant shift in Prime Minister Narendra Modi's China policy?

I think the China policy of this government is still evolving.

Two things are happening at the same time, it is not only this government' s China policy that is evolving but I think the situation in the Asia-Pacific is changing. China has changed.

If you look at Chinese policy since 2008, it has shifted decisively from the kind of policy that China was following before that, which for most of the time the NDA (National Democratic Alliance and the UPA (United Progressive Alliance-I had to deal with. At that time China basically followed, as Deng Xiaoping said, things like tao guang yang hui, which is keep your head down, hide your lights, build up your own capabilities -- it is a Chinese phrase.

China is now much more positive about projecting power, about playing her international role and saying what she mean -- they call it fan fa you wei, it means having a certain capability. Also playing their role in public, in the international sphere, as they say, being responsible.

That obviously means a much more active pursuit of Chinese interests. And, now they talk of the China Dream, you know. You see this in many things like the One Belt One Road, the Maritime Silk route, and what is happening in the South China Sea, in the East China Sea.

Everywhere, you will see much more China activism. You can call it assertive, whatever you want to call it. You can spell it in different words depending on your attitude. But the fact is that China is changing.

So you have a changed Chinese policy, you have a changed situation in the Asia-Pacific. You have the United States rebalancing, you have the situation after the economic crisis in 2008, you have much more interdependence.

Now the US is trying to negotiate its own trade pacts like the Trans-Pacific Partnership. In the East Asia Summit, we and the Chinese agreed to do the RCEP (Regional Comprehensive Economic Partnership). We in India have related agreements, we have a very active Look-East, now Act-East, policy.

So the situation has changed fundamentally, and naturally the Modi government's China policy will have to evolve to deal with this.

It is one thing to say China is our biggest neighbour, we want to keep the peace on the border, we need to do everything including strengthening ourselves, making sure that Confidence Building Measures work -- that is all basic.

But how does China help India's transformation, India's economic development?

China has the excess capacity, it has the excess capital. We need the infrastructure. Can we do that together? I think Prime Minister Modi has been talking about that. How do we work together in the region?

You know, these are things that we have to work out and so policy will evolve, but I think it is still at the first stage of evolving.

Do you find that Modi wants to use the India-China relationship and the entire diplomacy around the relationship to drive a more economy-based relationship?

I think that has always been so ever since 1988. That has been the primary motivation about our China policy. We want to manage differences like the boundary by making it peaceful. We did the Border Peace and Tranquillity Agreement in 1993 and we have managed that.

Basically we have kept the status quo as it is. It has been a generally peaceful border.

Manage your differences while you build on what you can which is common.

I think our main goal has always been the goal of every Government of India, from 1947 onwards, to transform India first. It has never been our intention to do some grand things outside.

Dr Manmohan Singh had 10 years in office. Why could India not get China's substantial investment, more business and deeper engagement in the Indian economy to the fullest possible extent?

When I went as ambassador in 2000 to China, this was during NDA-I, our total trade was around $2.5 billion. Now we have crossed $71 billion, we will cross $100 billion very soon. I mean, that is a huge increase. China is now our largest trading partner in goods.

On the issue of investment -- we have been very hesitant about Chinese investment in India. In the last few years, when I think we were much more confident of dealing with foreign investment, we were still not 100 per cent confident about Chinese investments. After all, look at the argument we have about FDI in retail. There are sectors where we are very nervous. And we are still arguing about how much defence cooperation is possible with foreign money.

They (the government) are saying we will take up case-by-case, which means we are not sure. So I think the lack of investment is our own responsibility.

Third, there has been a big debate within India about strategic sectors, and the effects on security of allowing an overwhelming Chinese presence in certain sectors like telecommunications.

But when you were NSA, you were in charge of security issues. At that time you could have cleared the cobwebs.

Well, it is not only a security issue. Normally what happens is that there is also a business protectionist lobby in Delhi. They use the strategic argument. It is an excuse most of the time. There are cases where it is serious and those are cases when the government will step in and lay down criteria.

Like telecommunications?

Like certain forms of telecommunications, not all telecommunications, but certain forms of telecommunications. There are certain other sectors as well, but where do you draw the line?

I mean the US, for instance, wouldn't let the Chinese or even Dubai Ports World to invest in their ports. Is that strategic or not? You have to choose to allow investments in our ports.

When you were in the PMO you could have done so at the highest level.

During NDA-I, there had been a Chinese attempt to invest in ports in India. At that time it had been turned down in Kerala. So there was an established policy, but it gets established case-by-case, after a discussion, after a process.

But it was not a policy against the Chinese, it was a policy that certain kinds of investment in our ports would not be allowed. That has now been relaxed for everybody, not only for China.

I mean this is not China-specific, but those are decisions which are judgement calls. And you cannot say there is a correct solution to this problem.

Countries choose their own criteria and their own sectors to say yes or no to certain kind of investments.

India's diplomacy and political set-up, year after year, have some inherent mindset about our China policy. It sometimes looks mysterious. Why are we not pro-active?

Mysterious? I don't think our China policy is mysterious. Our China policy is very simple.

Isn't it so that after a certain point of time even the economic relationship looks somewhat limited?

It will be.

It is not growing in a big way.

I think the fact is that both sides have to be willing. This is not a problem that is peculiar to the India-China relationship. You look at the India-US relationship. I mean, it is a natural economic fit and yet today the issues that actually divide you are no longer political or strategic. They are economic issues because each side wants to get the best deal that it can. So it will negotiate.

With the US it happens to be Intellectual Property Rights etc... These are big issues now with the US and so you can always say oh, but you have not achieved the potential that you thought you would. Everything hasn't been solved. It is a process. You are trying to get the best that you can.

Now China has not been a capital surplus country until very recently. Only in the last few years is China exporting more capital than she is importing. Otherwise, she was the biggest recipient of investments, all FDI used to go to China; she was importing capital.

Yes, some went out. China built up her reserves, but last year for the first time China invested more money abroad than foreigners have invested in China. So you have to look at it as a process when both sides are ready.

Secondly, it is a fact, you have to be attractive. Others have to see an advantage for themselves to invest. Now for a long time, for many years till recently, people saw advantage in bringing in portfolio investment because interest rates were high in India. Now if rates start going up in the West, the dollar will strengthen, people will put that sort of money elsewhere.

You have to react to events, to find solutions to situations.

Is the mindset of the Indian establishment, when they deal with China, confident?

I think it is confident.

Or is it cautious?

It is cautious because of the history.

Secondly, because there is a very large group of people in India who have never gotten over 1962. Even now there is a whole generation living including those up to my generation -- we were conscious in 1962. We remember the radio broadcasts, we remember the radio blackouts and so on. So up to my generation there are a lot of people who would say: 'Oh, you can't trust the Chinese, they will do another '62.'

Do you remember when three years ago people were saying that in 2014 there would be a war with China? And some big names were saying this in India. What happened?

Also, in the rest of the world, there are some countries who are quite happy to see India and China at loggerheads. It helps them because they can then balance the situation. They can manage both China and India better. So it is not that everybody wants India and China to have good relations, to solve all their issues.

Sir, knowing your background and family background, which has been associated with China for over half a century, you were in the best possible position within the PMO to deal with China. We expected the entire thing to go a few steps forward.

Well, let me put it this way. I think dealing with China has actually been one of our success stories, India's success -- because Menon is not India. You know, I cannot, I do not determine policy.

I actually think that we have dealt with China very successfully in the last few years. Because we have managed the world's biggest boundary dispute without allowing it to affect the rest of the relationship.

We have actually managed to deal with incidents on the border much more effectively than ever before. Wangdung in '86 took seven-and-a-half years to sort out. Depsang in May 2013, we sorted out quietly in two weeks, through diplomacy we restored the status quo; and we managed it fine.

But that is only managing the problem. As for solutions, such as a solution to the boundary question -- I think we have actually built up the rest of the relationship to the point where solving the boundary question or not having solved the boundary question is not the biggest limiting factor.

But it can be done. We have got it to the point where it can be done by an act of political will on both sides.

By 2012, I think, we had brought it to that point. Now it is really a question of whether both political leaderships wish to do it now. It is a big thing to do because it means that we have to change the way we learnt to draw the map of India in our schools because you will never get hundred percent of what you want from a settlement.

The Chinese also have to learn to change the way they learnt to draw the map of China in their schools. A settlement will mean give and take. It will mean adjustments.

Is India ready?

That is a political call. Only a political leadership can say 'Look, it is worth it!'

Is it worth it?

Well, for me the measure has to be how much change from the status quo is involved. After all, the status quo has now lasted for 50 years. One has lived with it. It has not stopped India from growing at 6.5% for 35 years etc etc. China has done very well.

Both of you have lived with the status quo. So if there is not too much change from the status quo, if there are political gains to be got from having a settled border and boundary, and it then removes one mental block, then I think it is worth doing.

But there is a political cost. There will be people at home saying: What is this? You have given up Indian territory. You will go through our typical debate, you know how it is. Someone will end up going to court. There will be a political furore.

So you need to do the political work of preparation before a settlement. But, it (the boundary settlement with China) can be done and I think the ordinary people would like it.

I am sure, because every time we have done anything like this, the biggest argument is -- oh, but the people will oppose it. Right?

Yes.

But when under (Prime Minister P V) Narasimha Rao we signed the Peace and Tranquillity Agreement with China in 1993, what did we do? We said: We would both respect the status quo, we will not change it by force, irrespective of what we might think where the boundary is and we will maintain this.

We promised and we made it a signed agreement. What is that? That is a huge commitment. It is a huge change. What happened? Everybody in India said: Well done, you brought peace.

I mean, an ordinary Indian is interested in peace. S/he is not interested in opposing this, unless you make it a political issue. You may run a campaign for days on Times Now (laughs). And then, of course, you can arouse emotions, create excitement.

It was the same for the Bangladesh Land Boundary Agreement, and when we tried the peace process with Pakistan (Sharam-el-Sheikh) there was a huge political furore. If it had been allowed to work, it would have been popular. It did not work for different reasons unconnected with the merits of the agreement.

When we did the Lahore bus yatra, for instance, or when we did the Muzaffarabad-Srinagar bus service, all these, you know, were popular. For me the people actually are not against such agreements... people actually understand the basics of it very well. People understand what is important.

Why could Dr Singh not do it, then?

As I said, with China we have done whatever technical work has to be done. I mean, a whole series of people have done the work. We have brought it to a point where we know what our respective stands are... Now it is a question of a political decision.

But both sides have to make the decision; it is not only an Indian decision. China also has to choose. And these decisions must be simultaneous.

• Part 2: 'Terrorism is something you have to deal with. But that is a political call'