China acts big, India small

At stake is the value of Chinese currency, the Yuan. Many in Washington have convinced themselves that an undervalued Yuan is among the reasons for the growing US trade deficit with China, which has mounted to US $232 billion in 2006 from US$205 billion in 2005.

While the Bush administration applies pressure on Beijing to raise the value of the Yuan by at least 10 per cent, Democrats are threatening a 27 per cent punitive tariff on import of Chinese goods.

Beijing, as always, is playing it cool. It is giving in a bit by increasing the bandwidth of Yuan trade from 0.3 per cent to 0.5 per cent. Its annual trade mission, timed to precede this week’s talks, has been traveling round the US with promises to buy more American products including soya beans worth nearly US$3 billion. Beijing is acutely aware that Washington could become a lot more confrontational if the Republicans, who are generally free trade-oriented, lose the White House in the next polls.

Currency might well be the ultimate symbol of national sovereignty. In a world of interdependence, though, absolute sovereignty is elusive even for the strongest powers.

China, unlike India, has no time to waste on such puerile slogans as ‘national sovereignty’. Beijing recognises the importance of managing its relationship with the US and preventing a premature confrontation. If that involves some domestic compromises, then so be it.

In contrast, the UPA Government appears bereft of any strategy as it lets the big moment in its bilateral relations with the US drift away.

African arms

China has denied allegations from Amnesty International that it was selling arms to Sudan in violation of the UN embargo. The Chinese denial focused more on the charge of illegality rather than the fact of arms sales. A spokesperson said Beijing “has always maintained a responsible approach to arms sales, dealing with sovereign states, rather than individuals or organisations”.

Beijing’s arms sales exploit a grey area in...