India china april -2012 by India China Chronicle

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Vol 1, Issue 2, April 2012 EDITOR-IN-CHIEF Mohammed Saqib EDITOR Prashun Bhaumik EDITORIAL BOARD Abid Hussain Mani Shankar Aiyar P.S. Deodhar Dilip Cherian Amir Ullah Khan Parama Sinha Palit Chen Si (China) EDITORIAL TEAM Anchit Goel Irfan Alam Manju Hara Sumelika Bhattacharyya Shawahiq Siddiqui DESIGN Sita Raikwar OWNED, PRINTED AND PUBLISHED BY Mohammed Saqib PUBLISHED FROM A-82, Zakir Bagh, New Delhi - 110025 ADDRESS FOR ALL CORRESPONDENCE India China Chronicle K-19 (GF), South Extension - II, New Delhi - 110049 Telefax: 011-46550348 PRINTED AT Anne Print Solutions B-32, Okhla Industrial Area, Phase-I, New Delhi-110020 Tel. 011-40525878, 011-65690940 Email: info@anneprintsolutions.com All Rights Reserved. Reproduction in whole or in part without written permission is prohibited.

All advertising enquiries, comments and feedback are welcome at icec@icec-council.org The information contained in this magazine has been reviewed for accuracy and is deemed reliable but is not necessarily complete or guaranteed by the Editor. The views expressed in this digest are solely that of the writers and do not necessarily reﬂect the views of the magazine.

Bottoms Up! For 17 years, officials from nearly 200 countries have gathered under the auspices of the United Nations to try to deal with one of the most vexing questions of our era – how to slow the heating of the planet. Every year they leave a trail of disillusion and discontent, particularly among the poorest nations and those most vulnerable to rising seas and spreading deserts. Every year they fail to significantly advance their own stated goal of keeping the average global temperature from rising more than 2 degrees Celsius, or about 3.6 degrees Fahrenheit, above preindustrial levels. There is no denying the dedication and stamina of the environment ministers and climate diplomats who conduct these talks. But maybe the task is too tall. The issues on the table are far broader than atmospheric carbon levels or forestry practices or how to devise a fund to compensate those most affected by global warming. What really is at play here are politics on the broadest scale, the relations among Europe, the United States, Canada, Japan and three rapidly rising economic powers, China, India and Brazil. Those international relations, in turn, are driven by each country’s domestic politics and the strains the global financial crisis has put on all of them. And the question of “climate equity” – the obligations of rich nations to help poor countries cope with a problem they had no part in creating – is more than an “environmental” issue. Effectively addressing climate change will require over the coming decades a fundamental remaking of energy production, transportation and agriculture around the world – the sinews of modern life. It is simply too big a job for the men and women who have gathered for these talks under the United Nations Framework Convention on Climate Change, the 1992 treaty that began this grinding process. The United States is determined to sweep away those distinctions and work toward a system where all countries are bound by the same rules. The conference in Durban kept the tiered system alive for another few years, but it is fading. And by the time the next phase of the Kyoto Protocol expires in 2020, a good many leaders hope that it will be gone for good. So who is qualified to tackle these tasks? Two years ago, more than 100 heads of state and leaders of governments, including President Obama, joined the United Nations climate conference in Copenhagen hoping to write a new, legally binding treaty covering all parties. That assignment proved too much even for the leaders, and the meeting collapsed in acrimony and finger-pointing. Few top leaders have shown up at the two subsequent meetings, in Cancún, Mexico, in 2010 and in Durban last year. The agenda has narrowed and expectations have shrunk, yet the ship sails grimly on. And as one observer at Durban put it: “Instead of waiting for them to negotiate some grand bargain, we have to keep working on the ground. Progress is going to come from the bottom up, not the top down. That’s just reality.”

CONTENTS

COVER STORY

Feedback

INTERVIEW

We are all equally vulnerable

RR Rashmi is the Joint Secretary in the Ministry of Environment and Forests, Government of India and works on issues of climate change. Here he speaks with Shawahiq Siddiqui on a range of issues on climate change and India’s position in the global arena.

Caught in semantics 24

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Two Degrees of Separation

Rolling the ball in Durban

Irfan Alam spoke with Abha Shukla, Secretary, BEE on the bureau’s journey so far.

INTERVIEW

China market is not a cash cow

Ravi Shankar Bose is the Director of Fugumobile Ltd, a successful Shanghai based company started by Indians. He speaks with Anchit Goel about his experiences in China.

Our Water Our Life

The key to successful community participation in water supply management is to make the community understand the value of water resources and invite them to participate in managing the scarce resource.

DOING BUSINESS IN CHINA

The First Step

China is not the easiest places to do business in. A guide to overcome hurdles across the Great Wall.

Ringing in the New

It was a unique celebration – the combining of two joyous occasions finding expression in one.

Exhibitions & Trade Show

TOURISM

The Brave New G2 World

10 places to see in China that aren’t the Great Wall

Glacier lakes, mountain forests, sandy beaches and more. Here’s a list of some dramatic destinations that you may not have yet considered for your trip to China

While most people are looking for a US-China G2 along the lines of the old school, the most important G2 could be that of China and India. We should see these two in a relationship that is mutually beneficial.

INTERVIEW

Need to make consumers aware of energy efficiency

No force in the world can stop China, India from rising together

REPUBLIC DAY & CHINESE NEW YEAR

CHINA-INDIA AS TRANSFORMATIVE FORCE

MANAGEMENT & DELIVERY OF WATER SERVICES

The scope for environment consultancy is opening up in India what with more and more businesses realizing the importance of doing ecologically sound business.

Climate change is a double whammy for developing and poor countries as they are brought to the brink of global tipping point largely by indiscriminate historical and current emissions of the rich, industrialized and developed world. And now they are being pushed by global climate politics which is solely dictated by safeguarding self interests to pay for the sins not committed by them.

DEVELOPED & DEVELOPING WORLDS

Climate change is a matter of justice. The richest countries caused the problem, but it is the world’s poorest who are already suffering from its effects. In Durban, the international community should have committed to righting that wrong. But instead it got caught with semantics.

Open Sesame

The Durban conference’s greatest achievement was acknowledging the fact that current policies were not enough and that it was time for a change in how we viewed climate change and green energy.

POLITICS OF CLIMATE

MUST SHED HISTORICAL BURDEN, MUST COOPERATE

ENVIRONMENTAL CONSULTANCY IN INDIA

INDIA-CHINA RELATIONS STRATEGIC

Linked like two wings of a bird

India and China will be able to successfully face the challenges that the new geopolitics are throwing up and would best serve their own national interests by further deepening their strategic cooperative relationship. FILM REVIEW

The Flowers of War

BEYOND THE GREAT WALL

Have a dragon year!

April 2012  India-China Chronicle |3|

F E E D B A C K

New Chapter Need to Democratize Small Businesses by Zhang Weixin, was an interesting article to read about the small private businesses in China. Though they have played a major part in improving the country’s overall economy and have played a major role in providing employment and services, they are still lagging behind. The problems are well understood, like the quality of produced good, management and many other factors which China needs to overcome in order to reach new heights in the global arena. It was a good article with many insights into the problems of the small business specific to China. Congratulations to ICEC for the opening of a new chapter in Ahmedabad. This new chapter will help take India-China relations to a new level. Interaction of personnel from different sectors on the same platform between two countries will surely help and improve relations in trade and allow for more cultural interactions in the coming years. – Raj Bora, Vice President IFFCO-TOKIO General Insurance Going Green The article—Going Green now to avoid Going Red later—in the last edition of the India-China Chronicle made for a very interesting read. The SME sector comprises a large portion of economic activity globally, thus |4| India-China Chronicle  April 2012

making them highly energy intensive. It is quite disconcerting to find out how this sector has not been made aware of the high carbon emitting potential it can have and the policies related to it. Mr Shawahiq’s article was a well researched and a descriptive note on how these enterprises can aim at reducing their carbon emissions and the legislation and regulatory framework that is available. It is also remarkable to note how SMEs can view climate change policies as opportunities for accessing technology and finance. I am sure that if there are provisions and innovations in other countries that have helped SME’s reduce their carbon footprint, India should adopt these at the earliest too. – Shilpa Chohan, Advocate Delhi High Court MSME Impact MSMEs can have a much wider reach and impact on the society. MSMEs which account for the second largest source of employment should be the target area to improve the ecosystem and conserve the environment. Therefore, it is very important that the MSMEs should adopt CSR activities for its sustainable future. SIDBI is doing a very good job by financing small and medium enterprises for sustainable

development. However, more initiatives, awareness programmes and promotional activities should be carried out in order to build a sense of responsibility among the MSMEs. Setting up of institutions for green financing will be an effective method for sustainable development. – Vishal Acharya, Assistant General Manager, Cluster Pulse Nerves of Steel The last issue of the India-China Chronicle has been able to give us an insight into how the industries in China have grown so rapidly over the last few years. I especially like the article China’s nerves of steel which gave a deep insight into the present day scenario of the industrial boom in China and how it is looking to transform itself from a country which is looked at as a manufacturer of the world to a country which is fast becoming the new innovators of the world. The Chinese have been able to tap the potential of their skilled manpower and develop many joint ventures that have helped the Chinese to learn about the technologies of the world. Even though India is only second to China when it comes to the growth rate but we still have a long way to go before we can catch up with China. We should look at strengthening our own R&D sector and learn to develop our own indigenous technologies. – Saloni Jha Mishra, Assistant Director, FICCI Love Lost Issues related to women have always been there in every society. Women not only have passed through some of the most terrible times but also have also been exploited. The article by Manju Hara, Love Must Not Be Forgotten definitely gives readers an insight into Chinese society, and the status of women in China. The result of several inequalities over centuries on different grounds has provoked many women writers to showcase the emerging image of women in China. The writer has pointed out a few of the interesting novels which are worth a read – Shallu Khetan, Student, IP University

INFOCUS | INDIA-CHINA | INTERVIEW

We are all equally vulnerable

RR Rashmi is the Joint Secretary in the Ministry of Environment and Forests, Government of India and works on issues of climate change. Rashmi belongs to the 1983 batch of the Indian Administrative Service (IAS). He has been dealing with Climate Change matters as Joint Secretary, Ministry of Environment and Forests, Government of India for the last eight months. He has participated in several important bilateral and multilateral negotiations on behalf of India. In his career spanning more than 25 years, he has acted as trade negotiator on behalf of India. Here he speaks with Shawahiq Siddiqui on a range of issues on climate change and India’s position in the global arena.

ICC: There have been many versions about the role that India played at Durban. What actually transpired? Rashmi: Before Durban, with my little understanding, India had lots of hope to stir the process itself on behalf of developing countries. In Durban the major role was to save the Kyoto Protocol. In fact, it was the Environment Minister from India who played a pivotal role in foraging a consensus. The talks would have completely collapsed without her. We were heading nowhere and EU was not willing to move further on the Kyoto Protocol unless they were assured of some road maps beyond 2020. So, we finally broke the impasse with an understanding that there will no be agreement on the legal forms of the final outcome, whether it is binding or non-binding, legal or in some other form, that issue will be revisited as we proceed along with the negotiations. That was the fundamental issue in Durban. Did India play a leadership role for developing countries? We have been able to safeguard the fundamental interest of developing countries by ensuring that there is no commitment to reduce the emissions till 2020. And also, beyond 2020 we have ensured that the new arrangements that are going to evolve will be under the Convention (UNFCCC). Now if one is familiar with the convention, the fundamental issue is that the countries must take action according to their responsibility. There is a principle of common but differentiated responsibility and the principal of equity. So, the arrangements that evolve post 2020 period will have to be constructed according to these principles. In a way these two are the major gains of the Durban conference. From our perspective, we have been able to bring the Kyoto Protocol back on track and established the second commitment period without any legal obligation for any developing countries. One way to look at it could be that the commitment to emission reduction that was to come within the period of 2020

|6| India-China Chronicle  March 2012

has been stretched beyond. Did we delay the ﬁnal outcome by postponing it to 2020? It is a mistake to presume that climate change takes place because of current emissions. Climate change does not take place or has taken place because of the emissions that took place in the last 10 years, or will take place in the next 50 years. Climate change is entirely an environment phenomenon which is attributed in totality to the emissions by the developed countries in the past 150 years. In short the point is we are not saying that we should be shy of our ambitious actions, rather we

THE PAST CANNOT BE IGNORED; THE DEVELOPED COUNTRIES WHICH HAVE THE RESOURCE MUST BE WILLING TO INVEST IN A RATIONAL WAY AND SHOULD IMPLEMENT WHAT THEY HAVE COMMITTED (TO REDUCE THEIR EMISSIONS) AND THIS IS THE REAL CHALLENGE

should contribute to expect the best possible results. All countries must contribute in a reasonable way to the principal of common but differentiated responsibilities. But the past cannot be ignored; the developed countries which have the resource must be willing to invest in a rational way and should implement what they have committed (to reduce their emissions) and this is the real challenge. The Kyoto Protocol is a protocol which mandates one to reduce the emissions, and except a few countries, no other countries have actually reduced its emission which is a complete travesty of the Kyoto Protocol. Countries with emerging economies like India, China, South Africa, Brazil, are part of it and that is what matters and they are doing everything which is possible within their given limited resource. Domestically we have taken a number of actions; we have our National Action Plan on Climate Change. Along with that, we are doing so many things in different sectors and are an example for others. In fact, there are several international studies that have highlighted the Indian policy efforts on climate change and have concluded that our national voluntary action and its impact are more significant than April 2012  India-China Chronicle |7|

INFOCUS | INDIA-CHINA | INTERVIEW

the developed countries. But this does not mean that we should take a legally binding commitment even before 2020 or before the developed countries have made their commitments as we are the ones who are affected most by climate change and our interest should be seen by the global communities before anyone else. The Least Developed Countries (LDC) and island nations feel that India is not in a position to lead them due to its alliance with the BASIC countries. Do you think India is going to be looked upon as a leader for other countries? I think this classification of countries is not motivated by very noble reasons. The present negotiations are more on political and economical issues rather than being environmental in nature. And every attempt is being made to divide countries, particularly those who are in the developing world. We are all equally vulnerable. For instance if the small island developing countries are going to go under water in 20-50 years, so are a large number of coastal communities in India. This makes us all the more conscious of our responsibility. And instead of quarreling among ourselves we should remain united and put pressure on the developed countries to meet their commitments. On the other hand, the developed countries are trying to create a notion that the final agreement is legally binding in nature. So, the solution for this lies in actions taken by the developed countries to meet their responsibility and thereby allowing the developing countries to take action within the reach of their resources. No developing country is running away from its responsibility. The problem is that of lack of confidence which has been created because of most of the obligations under the convention have not been fulfilled. And the basic reason for non fulfillment of goals is lack of funds and technology. Even in terms of |8| India-China Chronicle  April 2012

coal, the most dominant source of energy today, the clean coal technology and the coal gassification technology are not available commercially. And the super critical technology and the ultra super critical technology require large investments for implementation and there is no global mechanism for their funding and implementation. When it comes to India, we are certainly not demanding money, but ample resources and technologies to use efficiently. In Durban it was hoped that India would be closer to the EU stand but ultimately the EU and the US came together, and India was standing alone in terms of the statement. Is this in the right spirit?

I don’t think it happens by design; it so happens that the fundamental interest of USA and EU are same -They are both a part of the developed world, both of them would not like to meet the obligation, both of them would not like to discharge their historical responsibility. But EU has been traditionally more environment conscious, since they are the one who actually piloted the initial discussions (on climate change). But as far as the Durban outcomes are concerned, I would say that India was against the EU and in fact it was the only country which was against the EU for a legally binding agreement. And finally it was a mutual dialogue between India and EU which resolved the issue, so I would certainly not agree with the view that we were together with the EU. The EU was trying to force a deci-

sion on something which was not required in Durban. What they should have done is that, they should have agreed to the second commitment period of Kyoto Protocol as required under the obligations of the convention. Does the Kyoto Protocol stop here and make way for a new regime that the world would want to come up with? No, the Kyoto Protocol does not stop here because the second commitment period decision has been taken. So till 2017 or 2020 depending on the final negotiation, the Kyoto Protocol will continue to exist. In case we come up with this soft agreement, are we in a position to commit to bring down our emission? The requirements of compliance don’t state that we should bring down our emissions. India has made it very clear that we would not bring down our own emissions in the near future because it is our development requirement and our emissions are bound to rise. But we will be able to bring down the emission intensity of our GDP and that is not only required for the purpose of addressing climate change and but also for the energy security of our country, as our energy resources are limited and they are required to be used in an efficient way. And to add to that, we have certainly made progress in a direction where we use less energy for producing the same amount of goods by mainly improving our technology but we cannot say that we will use absolutely less energy than required as it is simply not possible given that we are a huge population with huge energy needs. We also face a lot of challenges mainly due to our growth; 50% of our population still does not have commercial electricity. And a government would not like its people to live in poverty and without basic needs when the developed part of the world is fulfilling its needs at the cost of natural resources

(consuming more than 20 tonnes/year of carbon). Therefore an inequality issue like this has to be addressed. Do you think that the coordination and reporting machinery among the various ministries and the Ministry of Environment and Forest are lacking in any way? It is not fully correct that there is no coordination, there is a coordination mechanism functioning in this ministry and we have a dedicated coordination committee in the ministry (MOEF). Several inter ministry meeting of all the ministries in-charge of the different environmental missions and action plans of the government are conducted by the committee. Here the progress (of various ministries) is seen and the possible outcomes are then determined and the future actions are coordinated accordingly. Let me put it in perspective, there are two aspects where one might feel that the coordination mechanism needs to be further strengthened; legal and developmental. For instance, in our country climate change is seen by us (MOEF) as a nodal ministry but it is not only an environment issue, but also a social and developmental issue. And development and social aspects of the issue are not handled by Ministry of Environment and Forest, but by the respective ministries. And we should not go over their role in these matters

THE PRESENT NEGOTIATIONS ARE MORE ON POLITICAL AND ECONOMICAL ISSUES RATHER THAN BEING ENVIRONMENTAL IN NATURE. AND EVERY ATTEMPT IS BEING MADE TO DIVIDE COUNTRIES, PARTICULARLY THOSE WHO ARE IN THE DEVELOPING WORLD. WE ARE ALL EQUALLY VULNERABLE as there exist no environment law that says it is our job to lay down the targets for each ministry. Do we have a mechanism where we create a different institution in a ministry and put forward various questions and challenges to another ministry? Even in Parliament it happens that one ministry answers on behalf of the entire government. So it’s not one ministry’s responsibility, it’s the Central government’s. If there are bottlenecks those have to be resolved. It is an administrative issue.

India and China are bilaterally related countries on climate change and environment. Is there a possibility of an exchange of idea especially in the technology sector? We have a MoU with China on climate change, under which we have had two workshops. First, it was exchange of ideas on the national action plan and the second, was an exchange on water and mountain ecosystems (Himalayas Ecosystem Mission). And we are planning to hold a third one in the near future. Is there anything else that we can gain from China? We can learn from China in terms of market mechanism; as to what kind of strategy China is employing to decrease its Carbon-dioxide intensity. Which maybe in terms of law on carbon or any other strategy; such an exchange of idea would be beneficial to both countries. We have a huge amount trade from China, is it environmentally safe? As we have to deal with the disposal issues of the goods that are imported and that impinges a cost on us. We would not like to bring in the linkage between environmental challenges and trade either in context of China or any other country as it is in the interest of environment as well as trade.  April 2012  India-China Chronicle |9|

INFOCUS | CHINA-INDIA IT SECTOR | REPORT

Two Degrees of Separation POLITICS OF CLIMATE

Archana Vaidya

limate Politics has yet another time not let the science dictate the quantum of action, in terms of emission reduction needed from the rich developed world. It is extremely unfortunate that despite scientific evidence and the fact that the international community knows the solutions there is little ‘real progress’ in the UN climate talks regarding the manner in which these objectives are to be achieved. In the words of Michael Jacobs, visiting professor at the Grantham Research Institute on Climate Change and the Environment in London, the Durban agreement has not in itself taken us off the 4C path we are on but by forcing countries for the first time to admit that their current policies are inadequate and must be strengthened by 2015, it has snatched 2C from the jaws of impossibility.

Current emission trends, cost of adaptation, mitigation

The Climate Action Tracker estimates that global mean warming would reach about 3.5°C by 2100 with the current reduction proposals on the table. Approximate estimates indicate that the most extreme costs will be felt in West Africa and South Asia, with residual damage of 3.5% of regional GDP for 2°C warming and 5-6% for 3°C warming. There are still no new pledges on the table and the process agreed in Durban towards raising the ambition and increasing emission reductions is uncertain in its outcome. Unfortunately only rich countries have the wherewithal in terms of resources both financial and technological to help developing countries deal with and meet the expense of adaptation and mitigation. The costs for adaptation and the residual damages from climate change will increase rapidly with warming. With a 2°C warming, adaptation costs would be half those associated with a 3°C temperature rise.

‘Collective but differentiated responsibility’ does not warrant unequals to be treated equally

There is no denying the fact that historical as well as current polluters will

have to cut down emission significantly if we are serious about keeping the rise in global average temperatures since pre-industrial times below 2C (3.6F), the internationally-agreed threshold. The basic premise of UNFCCC is “collective but differentiated responsibility” thereby allowing scope for different mitigation responsibility for different countries depending upon where a particular country is at this point in time in its journey towards development. How do we expect countries with different level of development, having huge difference in per capita green house gas emission, and different financial resources thus different capa-

THE DURBAN AGREEMENT HAS NOT IN ITSELF TAKEN US OFF THE 4C PATH WE ARE ON BUT BY FORCING COUNTRIES FOR THE FIRST TIME TO ADMIT THAT THEIR CURRENT POLICIES ARE INADEQUATE AND MUST BE STRENGTHENED BY 2015, IT HAS SNATCHED 2C FROM THE JAWS OF IMPOSSIBILITY

bilities to have same responsibility and to be governed by the same rigours of legally binding emission reduction regime? The fact of ‘ecological debt’ that a country has incurred, due to historical emissions and thereby having taken much bigger ecological space than it is entitled to, will have to be kept in mind while deciding legal obligations of these countries. Climate change is a global problem and has only global solutions but unfortunately it does have local impacts. How well prepared one is to adapt and to mitigate the ill effects of rising atmospheric temperature is directly proportional to one’s financial muscles. It is a double whammy for developing and poor countries as they are brought to the brink of global tipping point largely by indiscriminate historical and current emissions of rich, industrialized and developed world, and now they are being pushed by global climate politics which is solely dictated by safeguarding self interests, to pay for the sins not committed by them. Developing countries and the least developed countries still have a long way to go and it would definitely not be in the interest of equity, fair play and justice to have restrictions imposed in their path and curb their ‘right to development’ because someone else has already occupied the ecological space that was rightfully theirs. The developed world April 2012  India-China Chronicle |11|

INFOCUS | INDIA-CHINA | ENVIRONMENT | REPORT

help developing countries adapt or adjust to the effects of climate change) and “mitigation” (money needed by developing countries to eliminate or significantly reduce greenhouse gasses). Therefore the two top big political issues at Durban were to ensure operationalisation of the Green Climate Fund (GCF), and to have post-2012 arrangements in place apart from many practical decisions that needed to be taken. As a long shot, delegates in Durban could also agree to a global target for GHG emissions for 2050, and a “peaking year” for global emission (by 2020 if there’s a serious chance of limiting warming to 2 degrees Centigrade). An ambitious scheme to protect tropical forests in return for money generated mostly by carbon credits could also be finalized during Durban talks.

What did Durban deliver?

wants the growth of developing world to be fettered by mandatory emission reduction regime and have succeeded to some extent as the same has been agreed upon and would be in force from the year 2020. However having said this if there are finances available to pursue the more capital intensive carbon benign growth path then these countries are not encumbered unnecessarily and will willingly follow the sustainable growth path. Durban has been able to extend the Kyoto Protocol beyond 2012 and it has created a fund to deal with adaptation and mitigation of developing countries but on both accounts a lot still needs to be done to make them deliver. We are trapped in the midst of doing too little too late. |12| India-China Chronicle  April 2012

HOW DO WE EXPECT COUNTRIES WITH DIFFERENT LEVEL OF DEVELOPMENT, HAVING HUGE DIFFERENCE IN PER CAPITA GREEN HOUSE GAS EMISSION, AND DIFFERENT FINANCIAL RESOURCES THUS DIFFERENT CAPABILITIES TO HAVE SAME RESPONSIBILITY AND TO BE GOVERNED BY THE SAME RIGOURS OF LEGALLY BINDING EMISSION REDUCTION REGIME?

What was expected of Durban?

The discussions at Durban was expected to advance, in a balanced fashion, the implementation of the Convention and the Kyoto Protocol, as well as the Bali Action plan, agreed at COP 13 in 2007, and the Cancun agreements, reached at COP 16 last December. In view of the successive failure of the international community at both Copenhagen and Cancun to have any agreement on post 2012 emission reduction regime, COP 17 was looked upon as the last chance before the expiration of the Kyoto Protocol to get a new agreement in place to reduce greenhouse gases emissions. COP17 was also expected to witness protracted negotiations to ramp up the financial resources required by developing countries for “adaptation” (money to

Before negotiations formally started it was made clear by Japan, Russia, Canada and Australia, that they did not want a second commitment period and backed American plans for a system of “pledge and review”. The EU and most rich countries including the US were determined to get China and developing countries to commit to deeper cuts which were being strongly opposed by more than 100 developing countries including India. Finally two weeks of hectic parleys and roughly 20,000 delegates representing divergent interests and views, struggling to arrive at a workable solution, finally yielded some results. Following are the main outcomes of the Durban meet The delegates agreed to establish a new body called “Ad Hoc Working Group on the Durban Platform for Enhanced Action” to negotiate a global agreement which would develop a new protocol, “another legal instrument or agreed outcome” with “legal force” that will be applicable to all Parties to the UN climate convention. This new legally binding instrument is to be decided by 2015 and to come into force by 2020. The exact nature of this “legal instrument” or “agreed outcome” has not yet been decided. The next three years till 2015 are crucial as during this pe-

A MAJOR CONCERN RELATED TO THE SOURCES OF FUNDING FOR THE GCF IS THAT IT IS PREDOMINATELY FROM PRIVATE SOURCES THAT ARE LIKELY TO VIEW CLIMATE CHANGE MORE AS A BUSINESS OPPORTUNITY THAN A SOCIAL RESPONSIBILITY

riod country wise emission reductions will be decided based on review of the pledges of the rich nations, voluntary mitigation action of the developing world and of fifth assessment report of UN’s scientific body, the Intergovernmental Panel on Climate Change. Durban managed to extend Kyoto, whose first phase of emissions cuts run from 2008 to the end of 2012. The second commitment period will run from January 1, 2013 until the end of either 2017 or 2020 as both are under consideration. However in the bonhomie of this new global deal and a fresh lease of life that Kyoto got, little attention was given to enhancing the current emission targets for the Annex 1 countries for the second commitment period. So a second commitment period surely has been secured but its adequacy leaves a lot to desire for. European Union, the 27-nation bloc, which already has its own internal target of lowering greenhouse gases by 20 per cent below 1990 levels by 2020, will place its current emission-cutting pledges inside the legally-binding Kyoto Protocol. EU is also open to raising its mitigation targets to 30 per cent if other countries follow suit. All the parties to Kyoto Protocol will submit their voluntary QELRO by 1 May 2012 in a “pledge and translate” exercise for the second commitment periods. However unlike Kyoto, these emission targets will not be derived, for now, by an overall aggregate level of ambition. Parties’ unilateral pledges will be converted to QELROs without April 2012  India-China Chronicle |13|

INFOCUS | INDIA-CHINA | ENVIRONMENT | REPORT

reducing emissions from deforestation and forest degradation, paving the way for billions of dollars of private investment. Details will be discussed in the course of next year and it may still take years until the programme takes off at a big scale. Delegates agreed to delay a decision on whether to decouple the future of JI from that of Kyoto until next year’s talks.

India’s role, stand at Durban

reference to an overall global mitigation target, not to mention one that is evidence-based. At the request of the EU and the Alliance of Small Island States (AOSIS), the delegates agreed to launch a work plan to identify options for closing the “ambition gap” between countries’ current emissions reduction pledges for 2020 and the goal of keeping global warming below 2 degrees Celsius. The Durban negotiations did not manage to extend the emissions cut pledges made in both Copenhagen in 2009 and 2010 in Cancun. The Durban Package brings into operation new arrangements for making more transparent, the actions taken by both developed and developing countries, to address their emissions. This is a key measure for building trust between parties. The Durban talks made headway on agreeing the design of Green Climate Fund (GCF) to channel up to $100 billion a year by 2020 to poorer nations, but achieved little on establishing where the money will come from to fill it. |14| India-China Chronicle  April 2012

As structured, resources for the GCF will be from voluntary contributions it is important that these funds come in the form of grants and not loans and these should be additional grants committed to by the developed world above and beyond official development assistance (ODA). If funds were to come in the form of loans it is likely to increase the indebtedness of developing countries. Developed countries are committed to mobilise the promised funds through various

IT IS HOWEVER AMPLY CLEAR FROM DURBAN YET ANOTHER TIME THAT IN THIS UNEQUAL WORLD TO CURB EMISSION IN THE COMING YEARS EFFECTIVELY WILL BE AN UPHILL TASK. INDIA’S PER CAPITA EMISSION EVEN IN 2030 WILL BE LESS THAN THE DEVELOPED WORLD’S AVERAGE PER CAPITA GREEN HOUSE GASES EMISSION AND TODAY ALSO OUR PER CAPITA EMISSION IS HALF THAT OF PER CAPITA EMISSION OF CHINA

means, which include carbon trading (the real benefits of which to the environment are as yet unproven), private equities, and investments in cleaner development mechanisms. Thus, a major concern related to the sources of funding for the GCF is that it is predominately from private sources that are likely to view climate change more as a business opportunity than a social responsibility. Another fact that makes this promised amount look puny is the estimated cost given by United Nations World Economic and Social Survey in 2009, which is needed annually for adaptation and mitigation in developing countries, is between US$500-US$600 billion. The Durban talks ended six years of debate over whether and how the technology of carbon capture and storage could qualify for carbon offsets under the Clean Development Mechanism. The Kyoto scheme rewards governments or companies who invest in clean energy projects in developing countries with carbon credits, which they can trade and sell for profit. The new rules force project developers to put five per cent of the carbon credits earned in a reserve, to be awarded to them only after site monitors have proved that no carbon dioxide has leaked from the underground store 20 years after the end of the crediting period. Delegates agreed to consider private funding and market-based mechanisms as options to finance the programme on

India, as a resource-rich country, with its economy growing at a hectic pace still has to alleviate poverty for millions and at the same time deal with the consequences of climate change. The bedrock of India’s arguments in climate change negotiations right from the beginning has been equity to ensure that the developed world is made accountable for its historical ecological debt and developing countries like India get some window for unfettered growth without any legally binding emissions cuts. India is also acutely aware of the need to adopt the benign green growth path as far as possible for a sustainable future. As a country therefore it had a lot at stake getting involved in these climate change negotiations and along with other developing countries it had a challenging task to ensure that developed countries come good on their promise for providing money to combat climate change. India did register a moral victory of sorts by ensuring that equity would be central for any future climate negotiations. It would not be an exaggeration to say that to ignore equity in these negotiations would mean

Indian Environment Minister Jayanthi Natarajan in Durban

THE BEDROCK OF INDIA’S ARGUMENTS IN CLIMATE CHANGE NEGOTIATIONS RIGHT FROM THE BEGINNING HAS BEEN EQUITY TO ENSURE THAT THE DEVELOPED WORLD IS MADE ACCOUNTABLE FOR ITS HISTORICAL ECOLOGICAL DEBT AND DEVELOPING COUNTRIES LIKE INDIA GET SOME WINDOW FOR UNFETTERED GROWTH WITHOUT ANY LEGALLY BINDING EMISSIONS CUTS

South Africa Foreign Minister Maite Nkoana-Mashabane in Durban

signing the death warrant for millions of people across the developing and the LDC world living in subhuman conditions. It is a fight between “right to life” versus “right to maintain a lifestyle” and India with the support of other developing world has managed to enlarge that window for unfettered growth at least outside of mandatory emission reduction till 2020. COP17 has also shown the need to combine the UN approach with country driven climate efforts and the slow pace here should not be an excuse for inaction at the local level. It is however amply clear from Durban yet another time that in this unequal world to curb emission in the coming years effectively will be an uphill task. India’s per capita emission even in 2030 will be less than the developed world’s average per capita green house gases emission and today also our per capita emission is half that of per capita emission of China. It would be very challenging in this scenario to ensure that principles of equity are adhered to and the target of 2oC temperature increase is anywhere within reach. 

Archana Vaidya is an advocate and managing partner in Indian Environment Law Offices (IELO), a natural resource management and environment law firm based out of New Delhi, India.

April 2012  India-China Chronicle |15|

INFOCUS | ENERGY EFFICIENCY | INTERVIEW

Need to make consumers aware of energy efficiency The Government of India set up the Bureau of Energy Efficiency (BEE) on 1 March 2002 under the provisions of the Energy Conservation Act, 2001. The mission of the Bureau of Energy Efficiency is to assist in developing policies and strategies with a thrust on self-regulation and market principles, within the overall framework of the Energy Conservation Act, 2001 with the primary objective of reducing energy intensity of the Indian economy. This will be achieved with active participation of all stakeholders, resulting in accelerated and sustained adoption of energy efficiency in all sectors. Towards this the BEE co-ordinates with designated consumers, designated agencies and other organizations to recognize, identify and utilize the existing resources and infrastructure in performing the functions assigned to it under the Energy Conservation Act. Irfan Alam spoke with Abha Shukla, Secretary, BEE on the bureau’s journey so far. |16| India-China Chronicle  April 2012

ICC: The Energy Conservation Act was introduced in 2001 and the BEE was launched in 2002. What has been the experience over the last 10 years? In the beginning initiatives were slow. Work really started in 2007 and most schemes got sanctioned in 2007-08. In the past 3-4 years we have worked in four major areas. Our focus was on demand side management and small and medium scale enterprise as well as in the agriculture sector. We have also started schemes like the Bachat Lamp Yojana (BLY), which was the part of the demand side management and we wanted to leverage the Clean Development Mechanism (CDM). We have arrived at a huge target for ourselves. Then the third was the standard and labelling scheme for application, energy consuming appliances. For now 40 major applications are covered and out of which four appliances are in the mandatory phase. These are PC, Distribution Transformers, Refrigerators and Tubelights. Then another area which we wanted to tap was the commercial building; along with commercial buildings we have also tried to look at the option of electro-fitting old buildings, but our main focus remains on the new commercial buildings. These are the major areas where we have really focused our efforts. Last year we started a brand new scheme for industries. Until then we hardly had announced anyone as designated consumers. Because the Energy Efficiency Act says that we can designate energy consumers as designated consumers and we can put some condition on them. If we designate them as designated consumers then they have to file compulsory energy data and undertake energy audits. We have identified 477 major industrial units and eight major industries. Like power plants, cement, iron and steel, aluminum are all energy inclusive units. We conduct a baseline survey and accordingly we decide energy saving targets for them. This eventually will be mandatory for all industries. Till now the targets have not been made applicable to industries and we are yet to notify those targets.

This remains our prime concern and will be completed as soon as possible. What is the Conservation Scenario? The target of 10,000 Mega-Watt in the 11th five year plan has almost been achieved; we have already crossed 89-90 per cent mark. It is about two months behind but we are about to achieve the planned year target. This in nutshell is what we have achieved so far.

very similar to the general SMEs and is not secondary in any way; it has to be treated equal. Because efficiency is something which at least the domestic sector cannot regulate, you have to promote it. This is true that the approach for both things is entirely different. Because when we talk of new and renewable energy we talk about the development of that area. So it is necessary to tap that energy.

How does the coordination with line agencies at the state or district levels take place since there is no dedicated agency at these levels?

But somewhere I don’t think that margin or distinction between conservation and energy has been brought about very clearly. What do you think?

The Act says that at the state level we can designate any agency which will coordinate with different line agencies. And we accordingly have designated different departments, some were probably state regulatory commissions and in some places energy departments were designated. Actually they have overburdened themselves. The Ministry of New and Renewable Energy (MNRE) has more targets with larger budgets. They are already overburdening with whatever the MNRE has given them. There are two missions under the same plan that is the enhance efficiency plan – it is

I agree with you, but the point is, if a thing becomes too diversified in itself then it becomes difficult to handle. Conservation and efficiency are the two similar kinds of things which are equally diversified in nature. Because when we talk about only energy efficiency, then there are buildings, there are appliances, there are industries and many more things. Similarly when we talk of MNRE again they have got the world out there. So, I think the agency which is handling all these things are already overburden with targets because ultimately we only talk in terms of targets. It is also supposed to be acApril 2012  India-China Chronicle |17|

INFOCUS | ENERGY EFFICIENCY | INTERVIEW

business for a long time whereas for starters like us it will take some time.

cording to some budget. So, it is fine they can empathize with our sensitivity store energy efficiency. I think there are a few states were officers have been very dynamic and could bring about a few changes. But then it depends on the individual – you will find that in the same state they are doing very well where they are taking a personal interest, but in some states they are taking more interest in energy efficiency rather than in new renewable energy, whereas in others they are more interested in new and renewable rather than energy efficiency. Where does the country stand in terms of energy efﬁciency achievement targets? Are we placed at par with other developed countries in terms of achieving what we set out to achieve? It depends. What do you compare yourself with? There has to be a reference point which is very important. I have stayed in some countries where they have been into energy efficiency

for a long time, almost three to four decades. And that is why they are well ahead of us. Like the US, they have a standardization agency for a long time. When we talk about buildings, Switzerland has done a lot. Similarly Norway, Germany and Sweden are much ahead of us. It is just because they are in this

Do laws or policies actually matter? Energy conservation or any resource conservation law is something you can promote rather than regulate. I don’t think that in each household you can ensure that some amount of energy will be conserved or bring about efficiency. You can only promote it. But you all are silent on the promotional aspect your voice is very clear on conservation aspect. As far as the policies which were put in place by BEE or Government of India they are not directly doing it, we are assisting them (government). They are basically promotional in nature. For example, the standards and labelling scheme is market driven; we opened this idea to the consumers and by and by it was accepted by the consumers and markets were developed over a period of time for targeting products. I think people are getting more and more aware about energy efficiency. What needs to be done about consumer behaviour and markets? Consumers actually don‘t care: If you have two products in the market, one with four star rating and other without any label, consumers will go for the product which costs less. The majority of consumers go for price, only a small number of consumers who are aware opt for star rating. In developed countries where consumers are more aware they will replace old appliances with the new labelled ones for efficiency as per the new standards. Energy efficiency develops with the passage of time. The sense of energy efficiency will develop only when people become aware of energy efficiency. So, you cannot put it on the consumer, or cannot make it mandatory. Ultimately if the consumer has money, he will buy the star rated product. For such a

|18| India-China Chronicle  April 2012

shift, there has to be awareness which will take time. And for awareness to spread education is essential. Standards are getting better every year, and so the EER (Energy Efficiency Ratio) is changing every year or two. Is there any specific programme aimed at SME clusters? SME is the only area where we have adopted this approach of clusters. We have identified 25 clusters and we have conducted energy audits report which has been shared with associations of the small scale industry. A number of them have been implemented because there is one component of energy efficiency, which is called low cost measures. And by implementing these low cost measures, around 15-20 per cent of energy efficiency can be achieved. For that matter we have been coordinating with a Japanese agency which is our counterpart in energy efficiency. They have been imparting training to our SMEs for the past of four years. Do you think there is any connectivity between water and energy efficiency? Something called watery or water use efficiency as it is termed, and whether you are doing some-

thing about it. Is there any connect between National Water Mission’s objectives of achieving 20 per cent enhanced water efﬁciency and targets under the EE Mission. Yes, there are close links between water and energy use especially when we talk about the sector. And last year we conducted a study that shows how these two things can be linked together. Even if go for energy efficiency farms the water table and water output are the major factors affecting our schemes. We have to take into account that these two things must go together. I think we have conducted one study, but right now I will not be able to tell about it because it still has to take shape. These are initial thoughts but we realize that these are very important and need to work out ways to formalize central training, to coordinate with different agencies, because coordination is the biggest issue for any modern machinery. Because everyone has their own goal, targets, rules and regulation, coordination at times becomes very difficult. But then everyone is realizing that this needs to be done. There is definitely a link between the two age and it was discussed in our meeting with the Planning Commission.  April 2012  India-China Chronicle |19|

INFOCUS | INDIA-CHINA | ENVIRONMENT

ENVIRONMENTAL CONSULTANCY IN INDIA

Open Sesame

The scope for environment consultancy is opening up in India with more and more businesses realizing the importance of doing ecologically sound business. Rajeev Betne

ndia’s Environment Protection Act 1986 is one of the most stringent Acts in India’s independent history that gives sweeping powers to the government(s) with regards to clearing business proposals as well as providing a composite framework within which these businesses must operate. The laws under this Act are coming fast, and along with lots of teeth. Processes such as the Corporate Social Responsibility (CSR), the Extended Producers Responsibility (EPR) and value contributions to end-of-life management of their products are progressively becoming the norm. Thus increasingly, and rightly so, India is getting strict on allowing business here. Additionally, the global environment and health regime is also moving towards creating a Globally Harmonized Policy and Institutional Framework that countries need to adhere to (this is inclusive of international charters and conventions on such issues). Hence, not adhering to the global environment norms in the coming future would also mean losing huge market share and thus unviable. However, the business conditions here are not the same as in the western world and a lot of dots need to be joined in this sphere beginning business and development is approached to resource-use minimization, waste minimization and conducting operations in environmentally sound man|20| India-China Chronicle  April 2012

ner. This provides scope for environment consultancy in a gainful and ethical manner. Situations in the rest of South Asia is not bright either providing supplementary or multiple options for improving business ambience in the region, including space for policy consultancy and advocacy. The following areas present opportunities for green consultancy in India: A. Environment Clearance B. Environment Compliance C. Environment Consultancy for waste managing business/ certified recyclers D. End of life management (EPR modeling) E. Policy Engagements F. Third party audit/ certification G. Environment education, training and capacity building H. Advisory services for industrial financing houses A. Environment Clearance India’s Environment Ministry had issued the Environmental Impact Assessment Notification in the year 2006, which makes environmental clearance mandatory for development activities for industries listed in its schedule. Most of the sectors fall under this

schedule. The proponents need to prepare them in advance and in full details to get the environment clearance for their business activities. While some of the big players and proponents might not find it difficult to form a team to specifically look into such issues of environment clearance and compliance, many would like to outsource for various reasons, capital and working cost for such a professional team being the primary one. With the ‘environment clearance’ domain in India getting tougher by the day, and bridging gaps between business clients and regulatory enforcement agencies reaching critical levels, there is enormous opportunity for engaging in environment consultancy. In this domain a consultant would need to do the following:  Keep track of the latest environmental regulation and their clauses applicable to business. Through a certain mechanism (it could be a paid one) this information could be made available to prospective clients, especially new proponents. For example, if a small proponent likes to start a plastic recycling operation in region ‘x’, what are his/her environmental obligations to get started with, whom should s/he approach for clearance, what information would be needed for business clearance etc. This can be sort of knowledge manage-

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ment and extension service;  For the above purpose a simple and user-friendly model for environmental clearance could be built for preparing report/s needed to get business clearance. Such models could be made available on paid basis;  The third level could be consultancy for preparing required stages and documents/ reports, essential for environment clearance and getting the NOCs from the MoEF under various rules;  Designing sustainable longterm environmental plan and plan document for clients based on compliance requirements;  A consultant could also assist representing clients during clearance processes. Here, the Environment Impact Assessment (EIA) needs a special mention. An environmental impact assessment is an assessment of the possible impacts (positive as well as negative) that a proposed project may have on the environment, the society and the livelihood, especially locals. As a thumb rule EIAs need to be conducted independently and in an open and transparent manner. The EIAs require multiple skills based team and are considered one of the most prolific consulting areas. Further, public hearing process for projects is a must; project proponents need assistance in which a consultant could provide help to get the projects going. This is part of the overall clearance process. Interestingly, environment clearance is also a stage where long-term relations with clients could be built for future gainful engagement. B. Environment Compliance Industrial facilities generally choose not to dedicate existing staff or hire new staff to manage environmental compliance activities. Reasons include substantial cost associated with having dedicated staff and its associated liabilities. Also, compliance is a specialized job. Hence, the common trend is to |22| India-China Chronicle  April 2012

outsource compliance services. It is like companies outsourcing services such as financial audits, website development and maintenance, logistics, event management, housekeep etc. Following are the areas of profitable consultancy one could think of in the Indian context:  Providing advisory services on compliance and regulatory requirements – for example production ambience, product specification and content, labelling and product information, information compliance, waste management, production efficiency etc;  Assisting companies to reduce compliance costs by prioritizing and streamlining compliance requirements;  Preparing compliance reports, environment audit reports for clients;  Develop internal environment reporting and self tracking mechanism for clients;  Environment data management for clients (this can be a huge business in future for consultants);  Remediation consultancy,

specialty and emerging technology services could be thought of as a profitable model;  Referral services based on expertise of different consulting firms in India. There is huge opportunity with clients in the chemical industry, healthcare sector and waste-generating sector such as tourism (hotels etc), electrical and electronics, big malls, construction etc. C. Environment Consultancy for waste managers/ certiﬁed recyclers The global waste market is estimated to be approximately USD 410 billion annually. This is a conservative estimate of what the worldwide waste is worth as many nations still do not have proper inventory in place. However, even this conservative estimate provides for a ripe opportunity for waste-business in developing countries, including India. Nonetheless, this business due to its very nature of handling potentially (and ecologically as well) unsafe materials (Table1) would require even more rigorous mechanism for clearance and operation and is ultimately an open field for prospective consultants. D. End of life management (EPR modeling) A lot of firms struggle to find solutions for end of life management of their products. Till date many have not even thought of integrating this in their business model. However, the new environment and health regulation norms progressively talk of Extended Producers Responsibility and other kinds of contribution towards end of life management of consumer products which ultimately enter into the waste stream. A lot of opportunities lie in designing cost effective and eco-friendly models for such entities (electrical manufacturers such as CFL and batteries, healthcare facilities generating bio-medical waste, hotels generating food waste, electronic manufacturers etc.)

Table1: The OECD Environment Outlook 2030 for Waste Management

[Yellow Light]

[Green Light]

Waste & hazardous chemicals

 Waste management in OECD countries  OECD country emissions of CFCs

E. Policy Engagements A consultancy establishment could think of the following service for ministries and government bodies:  Consultancy on best policies  Consultancy on institutional reforms for better compliance rate  Implementation of existing policies is a bottleneck in India because the infrastructure, financial mechanism and monitoring mechanism are not in place. Here is the opportunity for policy level engagements with the governments to design suitable plan for implementing regulations  Regulators training and capacity building (at central and state level) in improving compliance  Compliance reports preparation on different sectors for ministries/ government agencies.  Research advisory services for frontier areas such as nanotechnology F. Third party audit/ certiﬁcation This is going to be one of the mandates for industries in the future. The state of Gujarat for example has already initiated this and the industries need to submit third party audit to the Pollution Control Board within prescribed time schedule. Further, in this age of globalization, most firms like to go for international certifications such as ISO certifications. These are very specialized and high-end jobs requiring dedication and specialized skills. One could develop the required capacity to render third party audit/ certification services.

 Municipal waste generation  Developing country emissions of CFCs

THE GLOBAL WASTE MARKET IS ESTIMATED TO BE APPROXIMATELY USD 410 BILLION ANNUALLY. THIS IS A CONSERVATIVE ESTIMATE OF WHAT THE WORLDWIDE WASTE IS WORTH AS MANY NATIONS STILL DO NOT HAVE PROPER INVENTORY IN PLACE G. Environment education, training and capacity building This is needed along the complete business chain including major stakeholders such as governments, industries, recyclers and even educational bodies. This opportunity could be harnessed by consultancies by designing tailored training manuals and modules including workshops, presentations, talks, technical guidance, visits etc. H. Advisory services for industrial ﬁnancing houses In the coming days India would see surge of green financing and the donor/ financial houses would stick to putting money in ventures that are environment compliant. Because, putting money elsewhere would mean both, (a) loss of worth of money financed in case of the proponent getting blacklisted on ecological grounds and / or (b)

[Red Light]  Hazardous waste management and transportation  Waste management in developing countries  Chemicals in the environment and in products

the financial house getting a bad name in the market for financing ecologically irresponsible business proponent. Here a consultant could assist the financers/donors for ecologically responsible financing. With the looming global environmental crisis, the world is progressively moving towards enforcing green modules of development. There is no second chosen path. India, aspiring to become a major global power, can’t afford to lag behind and thus has initiated steps to massively improve its business ambience and has taken relevant policy measures. From being a mere concern, ecological spillover of human endeavours (especially commercial ones) has become a critical thematic area of the development paradigm; with the constant lookout for better alternatives. The situation calls for specialized intervention and hence unwrap a pack full of opportunity for green consultancy. It is hoped that entrepreneurs would harness the maximum out of the given situation and contribute towards creating an ecologically just and globally competitive business ambience. 

Rajeev Betne is a development professional with over 15 years of experience. He has worked extensively in the field of environment research and advocacy. He heads the Chemicals and Health Programme at Toxics Link, a New Delhi based environment policy group.

April 2012  India-China Chronicle |23|

INFOCUS | INDIA-CHINA | ENVIRONMENT | COVER STORY

Caught in DEVELOPED & DEVELOPING WORLDS

semantics

efore the Climate Talks began at Durban in December, 2011, it was speculated that the country groupings will have a major role to play towards a constructive outcome at the seventeenth Conference of Parties (Cop 17). It was understood that the Durban outcome would largely depend on the interplay among the BASIC (Brazil, South Africa, India and China), the EU and the much larger group of developed countries led by the US and comprising Russia, Japan, Canada, Australia and others who have been historically been opposing legally binding carbon reduction commitments. The BASIC group has always maintained that it cannot be treated on an equal footing with the developed countries on emission cuts because of its ‘developing world’ status. At the same time it would not let go off the US and others to share a greater responsibility for their historic emissions responsible for the current climate crisis. However, post Cancun, the EU and others in the developed country groups have been increasingly asserting that ‘all emerging economies’ should take legally binding emission cuts. With green house gas emissions increasing five times faster in China, making its per capita emissions close to Western Europe, South Africa’s emissions being even higher than China, and India and Brazil having low emissions comparable to the world’s poorest countries but rising at an accelerated

five times higher than its earlier emission rates, BASIC represents a group where its emissions, put together, are growing much faster than the world’s. Based on such statistics, the pressure on BASIC has been to accept obligations identical to those imposed on the North. Those in the group, especially India and China, have been resisting this pressure on the principles of equity and Common but differentiated liability (CBDR). Brazil and South Africa howevr were ready to accept binding obligations in return for finance. But China and India responded to such pressures by adopting voluntary measures and country specific Climate Action Plans for reducing carbon emissions intensity of their GDP by 40-45 per cent and 20-25 per cent respectively by 2020.

Shawahiq Siddiqui Advocate in the Supreme Court and is part of the team drafting the Renewable Energy Law

Of Kyoto and Climate Debt The Kyoto Protocol is the world’s only effective document that provides for binding emission cuts. Kyoto differentiates between the North and South’s responsibility for climate change and mandates that the North, responsible for 75 per cent accumulated emissions, repay its climate debt. It imposes a modest five per cent cut of its 1990 level on the global north. Kyoto’s effective early phase—‘first commitment period’—that imposed mandatory emission cuts ends in 2012. The Annex 1 countries

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INFOCUS | INDIA-CHINA | ENVIRONMENT | COVER STORY

have been resisting the extension of Kyoto. The US never ratified it but still had been making attempts to kill Kyoto and replace it with a ‘new climate regime’ until the survival of Kyoto was made central to the success of the climate talks at Durban.If the stand on the North’s historical liability for climate change has to be sustained, extension for the second commitment period of Kyoto is necessary. The European Union, though positive in the earlier stages of climate negotiations during Bali and Copenhagen had somewhat weakened the Kyoto’s fundamental premise of the North’s obligation for a more responsible action by asking for similar binding cuts for the emerging economies, without which it would not support the second commitment period of Kyoto. On the other hand developing countries had been sticking to their stand on ‘common but differentiated liability’ and had made the second commitment period a precondition for Durban’s success. Durban even before its start had feared to become another Copenhagen, where all major claimants and perpetrators of climate change colluded to write an atrocious deal to adopt voluntary national pledges that were founded on dubious economics and have come to reveal as massive scandals, replete with over-ambitious emission cuts, misreporting, loss of valuable public subsidy and |26| India-China Chronicle  April 2012

fictitious projects. Therefore, Durban was likely to fall in any of the following three options: (1) Carrying forward the previous framework developed in Copenhagen and Cancun without any significant political breakthroughs and legal pledges; (2) Moving to a more voluntary ‘non legally binding’ commitment period under the Kyoto Protocol; and a scenario where the EU would not move a step forward with a legally binding outcome, (3) The agreement to a Kyoto Protocol’s second commitment period for developed countries as already provided under Kyoto as well as initiating a new mandate for all major developing economies.

the next year. Though the Durban talks agreed unanimously on extending the KP period which was considered crucial for any future viable climate deal, there are exceptions to it. The Annex I countries namely Japan, Russia and Canada will not take any emission reduction targets for the second commitment period of KP. This will have a potential impact on the total global emission reductions which were targeted to be less than 20 per cent. The role of India and China in the Durban negotiations assumes significant role as both countries have significant emission rates but have been playing the developing country card to which the EU was not willing to agree. Though China agreed to consider the legally binding agreement, India took affront to any such commitment on the grounds that agreeing to any such legally binding climate deal would mean to sign away the livelihood of millions of poor people in the country and that issues of equity could not be put away by the Durban Process. Though both countries constructively engaged on the issue of a legally binding outcome and stood together at times in the face of strong opposition to the demands of the “EU Road Map,” they were supported by developing countries from the Alliance of Small Island States (AOSIS) and Least Developed Countries. The EU had offered a second commitment period of the Kyoto Protocol but only under the condition that a new global agreement including all countries would be needed to be agreed upon as well. EU’s Formula The EU initially played a very positive role in the climate talks but since Cancun, has turned

conservative. The EU had been maintaining that it would support second commitment period only if the Durban summit agrees to binding cuts for emerging economies. The developing countries were very annoyed with this stand of EU as it meant obliterating the North’s historical responsibility for climate change and therefore had made Kyoto second period a precondition for Durban’s success. However, the EU could achieve a change in the semantics of the Durban Outcome. Instead of a ‘legally binding outcome,’ it agreed for an “agreed outcome with legal force,” suggested by Brazil’s chief negotiator, Ambassador Luis Figueiredo Machado.After EU, India, China and other countries agreed on the choice of words which would lead the course for different legal options for a global climate agreement. However, the exact form of outcome with legal force is still to be discussed in future negotiations which will conclude in 2015. The Scientific Perspective From a scientific perspective, the current 2020 mitigation targets are not ambitious enough and the global mean warming would reach about 3.5°C by 2100 with the current reduction proposals on the table. As reported in the recently published UNEP emissions gap report, current pledges by developed and developing countries will mean that by 2020 global emissions will be 6-11 Gigatonnes of CO2 equivalent, higher than a 2°C emissions trajectory. Current pledges by developed countries fall far short of what is needed as they add up to no more than 12-18% reductions below 1990 by 2020. What environmental groups as well as the Intergovernmental Panel on Climate Change (IPCC) require is

IF CLIMATE CHANGE HAS TO BE SUSTAINED, EXTENSION FOR THE SECOND COMMITMENT PERIOD OF KYOTO IS NECESSARY. THE EUROPEAN UNION, THOUGH POSITIVE IN THE EARLIER STAGES OF CLIMATE NEGOTIATIONS DURING BALI AND COPENHAGEN HAD SOMEWHAT WEAKENED THE KYOTO’S FUNDAMENTAL PREMISE OF THE NORTH’S OBLIGATION FOR A MORE RESPONSIBLE ACTION BY ASKING FOR SIMILAR BINDING CUTS FOR THE EMERGING ECONOMIES, WITHOUT WHICH IT WOULD NOT SUPPORT THE SECOND COMMITMENT PERIOD OF KYOTO

What Transpired The Durban climate negotiations spanned for 16 days, longest in the history of the United Nations Framework Convention on Climate Change (UNFCCC). The parties adopted a “package” which included as its main elements an amendment to the Kyoto Protocol (KP), the decision to negotiate a global climate change agreement by 2015 and operationalizing the Green Climate Fund.The amendment to KP is an agreement for a second commitment period, starting in 2013. Whether the duration of the second commitment period will be five years or eight years will be decided over the course of |27|

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that developed countries move into the 25-40% range, as a first step, and subsequently to more than 40% below 1990 by 2020.

THOUGH CHINA AGREED TO CONSIDER THE LEGALLY BINDING AGREEMENT, INDIA TOOK AFFRONT TO ANY SUCH COMMITMENT ON THE GROUNDS THAT AGREEING TO ANY SUCH LEGALLY BINDING CLIMATE DEAL WOULD MEAN TO SIGN AWAY THE LIVELIHOOD OF MILLIONS OF POOR PEOPLE IN THE COUNTRY

An Agreed Outcome or a Green Wash The Durban outcome is referred to as “an agreed outcome with a legal force.” However, the legal nature of this outcome has been left undefined. The final broad component of the COP 17 decision, the Durban Mandate constitutes the following: (i) the Second Commitment Period (SCP) for emissions reduction by Annex-I countries under the Kyoto Protocol; (ii) a decision on the work of the Ad Hoc Working Group on Longterm Cooperative Action (AWG-LCA); (iii) a decision on the Green Climate Fund (GCF); and (iv) an agreement on the Durban Platform. This agreed outcome will be developed by an Ad Hoc Working Group on the Durban Platform for Enhanced Action (AWG), which will begin work in the first half of 2012. The AWG will formalize the legal regime not later than 2015, the year in which it will be adopted. As stated that the Durban conference was most likely to fall within the three possible scenarios viz moving on with business as usual with Copenhagen and Cancun framework, defying Kyoto by agreeing to non legally binding nature of the commitment for its second phase and the third and most unlikely one being agreeing to extending Kyoto and bringing all major economies to an agreement for a legally binding mandate. Various climate gurus have interpreted the Durban outcome as very close to the third scenario i.e. an in-principle agreement by all for a legally binding regime for carbon emission cuts. For the triumph of optimism, if this is construed to be the best positive interpretation of COP 17 then in doing so did the global community put the planet at risk? This is a question that only science can answer. However, science seems to have lost to the complexities of legal interpretation on ‘legal outcome’ and ‘agreed outcome with legal force’. Whatever may be the phrase, the substantive outcome is the delaying of any concrete action with commitment and responsibility by the developed and developing world. All that the nation states agreed in Durban is to launch a new negotiating process to develop a “protocol, another legal instrument, or agreed outcome with legal force,” that will address the post-2020 period and will be “applicable to all parties.” In addition to this Kyoto Protocol is extended by another 5-8 years without any clarity on emission targets for its second commitment period, thus rendering it only a basic political decision. In addition to this, parties agreed to establish a Green Climate Fund and transparency rules for the developed and developing countries.

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Role Played by China, India The outcome seemed unlikely because there was little indication that China and India would agree to negotiate a new agreement to limit their emissions. Without any agreement from China and India, the United States had said that it would not agree to a new round of negotiations. And without agreement by the United States, China, and India, the European Union would not agree to a second commitment period under the Kyoto Protocol. What allowed the Durban outcome was a careful compromise that gave BASIC countries, on one side, a 2020 start date for the new agreement and some ambiguity about its legal character (about which more below), and gave the EU, small island states and least-developed states, on the other side, early start and end dates for the negotiations (the negotiations will begin next year and conclude in 2015) and language that the outcome of the new negotiations will have “legal force.” Interestingly, the United States apparently played something of an intermediary role, since it had some flexibility about the issues of both dates and legal form. In the end game of Durban, India was unwilling to accept a mandate to negotiate a “protocol or another legal instrument,” and preferred the formulation of a “legal outcome.” The United States suggested “outcome with legal force,” India added “agreed,” and the EU said ok. Thus the deal was done. Uniting US, China, India on climate Durban resulted in new country groupings with the EU, coalition of small island states and LDC’s on one side and the US, China and India on the other. The European Union was successful in pushing through an outcome about which the United States, China and India were, at best, lukewarm. “The most significant outcome in Durban is that the US, China and India have agreed to be included in a legal framework after 2020. Relationship between the US and China had hampered the progress of global climate talks for several years because neither party had been willing to be the first to move. Now, however, for the first time, they are moving ahead together towards legally-binding reduction targets for all major emitters from 2020. How ambitious those targets will be remains to be seen, but the fact that all countries have agreed to this process is a major leap forward. No Precedent in International Law The Durban Platform is also pretty thin gruel as a negotiating mandate. In terms of its actual language, it is arguably weaker than the 1990 UN

Climate change activists demonstrate their support for a global climate change treaty in Durban

General Assembly Resolution that initiated the UN climate change negotiations and led to the development of the UN Framework Convention on Climate Change. The 1990 UN General Assembly resolution called clearly for the negotiation of a “convention” (albeit a “framework” agreement) “containing appropriate commitments.” In contrast, the Durban meeting was unable to agree on a mandate to negotiate a legal agreement and contains no language about commitments. The Durban platform could be satisfied by an “outcome with legal force” — a formulation that as far as I am aware does not have any precedent in international law. Arguably, “legal force” means the same thing as “legally-binding,” and the addition of “with legal force” to “agreed outcome” (the Bali Action Plan language) means that the outcome is something more than what Bali contemplated (which included COP decisions). But the inability to reach agreement on “legally-binding” suggests that at least some parties thought “legal force” might mean something less.Moreover, the Durban Platform does not specify anything about the content of the new “protocol, another legal instrument or legal outcome with legal force.” The assumption is that it will set forth emissions limitation commitments, but the Durban decision does not say so explicitly. So, in theory, the Durban Platform negotiations could be satisfied by another framework-style agreement. In Durban, the issue was often framed as whether the BASIC countries would agree to negotiate a legally-binding agreement for the post-2020 pe-

riod. But, of course, the BASIC countries are already parties to two climate change agreements, the UNFCCC and the Kyoto Protocol, one of which (the UNFCCC) already imposes general mitigation obligations on all parties, including the BASICs. So the issue is not whether China, India and the other BASIC countries are willing to become party to a legally-binding agreement, even one that imposes mitigation commitments on them. Rather, the question is whether the BASIC countries are willing to accept specific obligations to limit their emissions. The Outcome Overall, it is understood that in Durban the multilateral process was strengthened and more clarity on the legal form of the future agreement exists. However, despite the positive outcomes of the Durban conference, there are still concerns from developing countries that too much burden has been shifted onto their shoulders. Furthermore, the last-minute compromise on legal form was a missed opportunity to clearly establish equity as a basis for the coming negotiations, and the principle of common but differentiated responsibilities (CBDR) has been undermined to some degree, rather than strengthened, as asserted by India during the response to EU’s formula on the last day.The agreement reached in Durban though represents a step forward for the multilateral process. However, the agreement will not affect the emissions outlook for 2020 and has postponed decisions on further emission reductions. 

THE MOST SIGNIFICANT OUTCOME IN DURBAN IS THAT THE US, CHINA AND INDIA HAVE AGREED TO BE INCLUDED IN A LEGAL FRAMEWORK AFTER 2020. RELATIONSHIP BETWEEN THE US AND CHINA HAD HAMPERED THE PROGRESS OF GLOBAL CLIMATE TALKS FOR SEVERAL YEARS BECAUSE NEITHER PARTY HAD BEEN WILLING TO BE THE FIRST TO MOVE. NOW, HOWEVER, FOR THE FIRST TIME, THEY ARE MOVING AHEAD TOGETHER TOWARDS LEGALLY-BINDING REDUCTION TARGETS FOR ALL MAJOR EMITTERS FROM 2020

April 2012  India-China Chronicle |29|

INFOCUS | INDIA-CHINA | REPORT

Rolling the ball in Durban The Durban conference’s greatest achievement was acknowledging the fact that current policies were not enough and that it was time for a change in how we viewed climate change and green energy. Safaan Syed

n 28 November 2011, countries gathered in Durban to hold the 2011 United Nations Climate Change Conference. For almost two weeks delegates threw themselves into the chaotic subject of climate change, trying to devise a solution that would be fair to all. The German media would go on to say that the Durban Climate Agreement was “almost useless” having neither concrete pledges nor a speedy timeline. But this is an extremely shallow way to judge the conference, for it did something crucial that had to be done: it got the ball rolling. Climate change has always been a sensitive issue and this sensitivity has led to a hesitance to even broach the subject. The conference marks a beginning to serious government action against global warming and a step forward in the pursuit of clean energy. Previous conferences, while providing important groundwork, were mostly spent arguing semantics and laying out an even base to begin building on. Now, with the Durban conference, we are finally beginning to reap the fruits of the previous conferences and the countries of the world are now in a position to making a decision on the future of climate change and green energy. Evaluating Past Efforts Past efforts to combat climate change have been fraught with error and ineffective. The best effort made so

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far has been the Kyoto Protocol, which called for plans to reduce carbon dioxide, created an adaption fund for developing countries, and established a Compliance Committee to enforce the plans. The Achilles’ heel of the Kyoto Protocol was that one of the major nations involved in climate change, the United States of America, has yet to ratify it. Without its signature the Protocol remains ineffective. The conference marks the end of the first commitment period of the Kyoto Protocol and with it nations are working towards an agreement on solving the pressing issue of climate change. Climate change, earlier introduced as global warming by the world’s scientific community, is a phenomenon in which the natural greenhouse gases of the earth, which trap the heat from the sun and release the excess, are supple-

mented by the various gases released by modern industrial processes. These gases force more heat to be trapped from the sun than usual; this causes a sharp increase in the temperature of the planet, leading to changing weather patterns, ice cap melting, and other such environmental problems. Carbon dioxide emissions are reaching a record high, with an almost 50 per cent increase since 1990, due to the conventions of technology. Everyday conventions such as cars, factories, and coal-fueled power plants release gas into the air, resulting in more and more carbon dioxide, which leads to more and more climate change. Unless a change in approach and attitude occurs, climate change will continue to grow unchecked, causing unimaginable damage to the earth’s environment. Role of clean energy Climate change is not an inevitable fate and technology offers many sources of alternative energy in the future. Solar, wind, and geothermal systems are already being pioneered around the world and such energies the key to cracking the climate change problem. These green energies are meant to reduce the amount of carbon dioxide in the atmosphere, thereby minimizing the change in the greenhouse effect and climate change. Solar energy is harnessed in many ways and is a very broad field of green energy. The first form is through photovoltaic panels. Photovoltaic panels are the plates positioned on rooftops that are often associated with solar energy. This system was once written off as too costly, but is now making a comeback due to reduced manufacturing costs resulting in cheaper panels. Another form of solar energy is what is called “concentrated solar power” in which panels jointly reflect their rays into one point, creating tremendous heat, powering an engine and producing electricity. Yet another style of solar energy is Solar Thermal Energy which uses sun rays to heat a liquid into a gas, which then goes to an engine and generates electricity. Of all these methods, the photovoltaic system seems to be the most popular and the best “value” being both efficient and

economically practical. Wind energy is another form of environmental energy that is becoming increasingly prevalent. In contrast to the various methods of harnessing solar energy, wind energy is generated in primarily one form, that of turbines. Turbines are the image usually associated with wind energy, giant wind-powered fans. Wind turbines take up minimal space and have a high efficiency rate in addition to being good for the environment. Unfortunately, wind turbines are also highly expensive and have various capacities depending on how hard the wind is blowing. While they are still an extremely viable energy source and particularly effective, turbines must be approached with a measure of caution. Yet another type of green energy is geothermal. Geothermal energy is the use of heat in the earth for energy purposes. It’s not as common as solar or wind, but it still has a fair amount of potential and viability. The main disadvantages are its initial cost and, more importantly, the scarcity of building sites. Geothermal energy requires very specific conditions which are a huge impediment to mainstream construction. Because of this major problem, geothermal energy is not yet as effective as solar or wind. Obviously, no change can occur instantly and switching to green energy will require a massive lifestyle change in society. To ease this transition a “hybrid” approach is being applied, making use of both mainstream and alternative energy simultaneously while gradually phasing out the former. This same philosophy applies to transportation with hybrid vehicles already in the market. The clear reduction of carbon dioxide from these technologies will decrease the greenhouse effect and limit global warming. Scenario in India and China Despite having an optimum environment for solar energy, India has yet to fully tap into its vast potential for renewable energy. India happens to have an extremely well-made programme for supporting renewable energy and this could lead to India becoming a leader in the field of renewable energy. The Indian Solar Loan Programme has won the Energy Globe World award

for its commitment to green energy, and India is the first nation to set up a ministry for non-conventional energy. India has all the capability to make use of solar and wind energy to cause a business sensation; all that is necessary is to activate it. Launched in 2003, the four-year Indian Solar Loan Programme is a partnership between United Nations Environmental Programme and two of India’s largest banking groups to establish a consumer credit market for financing solar homes in parts of India where the conventional electricity grid is absent or unreliable. The innovative financing arrangement involves an interest rate reduction, market development support, and a process to qualify solar suppliers. India is poised for a solar economic boom with the launch of the Jawaharlal Nehru National Solar Mission, a comprehensive plan to combat climate change with solar energy. The plan aims to establish India as the premier global leader in solar energy through a three phase approach the first of which is to commission 1000MW worth of solar projects by 2013. With all these supports in place, India is on the brink of a solar revolution, the future of which is entirely dependent on the Indian people. China, on the other hand, already has a burgeoning renewable energy economy, growing exponentially. China’s wind resources are the largest in the world and it is the fourth largest producer of wind power. In addition, China is the world’s largest maker of wind turbines, and because of all these factors, the Chinese wind industry has appeared impervious to the widespread recession. China’s solar industry is also quite prolific, producing over 30 per cent of the world’s photovoltaic solar panels. Solar energy is being supplemented with the Golden Sun plan which provides subsidies and technological aid for countries developing solar power. On top of that, China has an unusually large number of geothermal hotspots, which makes the energy form effective and viable. China’s environmental energy situation is growing to the level that experts at Harvard University and Tsinghua University speculate that by 2030 China could

meet all of its energy demand through wind power. The Road ahead So why the slight detour into environmental energy? Because it is at the crux of the global warming issue and was the principal concern of the Durban conference. Debates raged on about how green energy should be employed to combat it and some controversial plans came up. One example came from Russia, to redefine which countries were “rich” and “poor” so as to distribute responsibilities toward green energy. This idea was met with hostility by nations that would be recategorized even though they are still developing countries (countries like India and China). Both China and India reaffirmed their continued commitment to the cause, but asked the other nations to recognize that they are still economically developing and will need more concrete terms before making concrete vows. They further emphasized that they had each done a large share of the work in combating climate change and demanded fair treatment for their work. In the midst of all this, it became apparent that some real progress was finally being made in areas like the equity of responsibility between countries and future plans such as the Green Fund for developing countries. The Durban conference made many lasting contributions to the reduction of climate change, but ultimately its greatest was its acceptance that current policies were not enough and that it is time for a change in how we view climate change and how we view green energy. The Durban conference is an indicator that the energy industry is going to change dramatically and that after years of inconclusive results it is finally occurring. The ball is finally rolling. 

Safaan Syed is a student with an avid interest in environment and development issues.

April 2012  India-China Chronicle |31|

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MANAGEMENT & DELIVERY OF WATER SERVICES

OurWater OurLife

such as, due to climate changes caused by global warming, the depletion of fossil water as a result of extraction of more fossil water, mainly for irrigation purposes, than the rate of its natural replacement and every day misuse of our potable water. Moreover, excessive extraction of fossil water also deteriorates the quality of remaining ground water as the low quality water flows towards

increase in world population, dramatic increase in the rate of urbanization, and industrialization has made this renewable but fragile resource inaccessible to a large number of populations. Acknowledging the significance of adequate water services, since 1977, when the issue of the right to have adequate access to drinking water was addressed at the international level for the

first time in Mar Del Plata Action Plan a number of efforts have been made both in terms of awareness and reforms in technology, policy and institutional arrangements. Following the recommendations of the Mar Del Plata Action Plan, the 1980s was declared the decade of International Drinking Water Supply and Sanitation (IDWSSD) with a target of achieving 100 per cent

the same aquifers due to depression (as a result of excessive extraction of water) in those aquifers. This precious resource is also becoming scarce because of the degradation of water quality. This is due to physical, chemical and biological pollution (both from point or non point sources of pollution) of fresh water resources (both ground water as well as of surface water resources) as a result of agricultural, industrial effluent and domestic sewage, especially in highly populated and industrially developed regions. This ultimately makes water resources unsuitable for potable use. Along with this, the rapid

ACCORDING TO THE WORLD HEALTH ORGANISATION, MORE THAN 1.1 BILLION PEOPLE DO NOT HAVE ACCESS TO SAFE WATER SUPPLIES. THE WATER SUPPLY STATISTICS REVEAL THAT THE MAJORITY OF PEOPLE WHO DO NOT HAVE ACCESS TO SAFE WATER SUPPLIES BELONG TO THE LESS DEVELOPED COUNTRIES AND, PRIMARILY, TO LOW INCOME HOUSEHOLDS

coverage in water supply and sanitation within the decade. In 2000, the United Nations Millennium Development Goals addressed the issue of water by setting a goal “to halve, by 2015, the proportion of people without sustainable access to safe drinking water and sanitation.” (United Nations 2001, MDGs: Goal7; Target 10). Although, these attempts have contributed much towards the ongoing efforts to improve water services, nevertheless, despite these efforts, there still remain a large number of people who do not have access to adequate water services. According to the World Health Organisation, more

ater is crucial to sustain life and a key element for socioeconomic development. Access to adequate water services has a direct relation to the significant aspects of the socio-economic development such as elevation of poverty, enhancing quality of life, improvement in health and environment. Ironically, human beings have been exploiting water, the most precious gift of nature and a basic necessity to sustain life on this planet, for centuries in their own desired way. Today, we are concerned about this precious resource which is being increasingly depleted in many ways,

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than 1.1 billion people do not have access to safe water supplies. The water supply statistics reveal that the majority of people who do not have access to safe water supplies belong to the less developed countries and, primarily, to low income households. In general, ‘water crisis’ is often understood as the reduction in the global water quantity on earth. However, this crisis is of ‘water governance’ i.e. mismanagement of water resources or services which makes this precious resource either inaccessible or unfit to consume. In recent years, it has been acknowledged that this failure of inaccessibility to adequate water services is not primarily a technical problem; it is more an institutional problem. Throughout the world, there is a diversity of formal and informal institutional arrangements existing in the provision of water services such as public sector water provision, private sector water provision, a variety of publicprivate partnerships and public-public partnerships, small-scale entrepreneur arrangements and community-based water provisions. These arrangements are primarily based on macro level policy-driven approaches. The underpinning ideological debate among these approaches is with respect to the question of ‘management by whom?’ i.e. whether water should be managed by the state under the public sector or managed by private enterprises under the private sector. Therefore, the basic debate is whether water should be treated as a social good and a basic human right or as a commercial commodity. The proponents of water as a

THE BASIC DEBATE IS WHETHER WATER SHOULD BE TREATED AS A SOCIAL GOOD AND A BASIC HUMAN RIGHT OR AS A COMMERCIAL COMMODITY. THE PROPONENTS OF WATER AS A SOCIAL GOOD AND A BASIC HUMAN RIGHT ARGUE THAT AS WATER IS A FUNDAMENTAL NECESSITY OF LIFE, THEREFORE, IT SHOULD BE ACCESSIBLE TO EVERY INDIVIDUAL WITHOUT ANY CONDITION social good and a basic human right argue that as water is a fundamental necessity of life, therefore, it should be accessible to every individual without any condition. On the other hand, the proponents of water as a commercial commodity believe that it is necessary to price water to manage it efficiently and to achieve its true value. These proponents support the market model of development where prices can become the mechanism for its allocation, distribution and consumption.

Existing Management and Delivery of Water Services Public Sector Historically, throughout the world, water has been considered as a public good and managed by local governments. Although, from time-to-time, some other forms of arrangements also appeared for a short span of time, |34| India-China Chronicle  april 2012

however, for decades the public sector water provision, administered through the municipalities, has remained a dominant and most favoured option. To date, public sector is still the primary provision for water services in most parts of the world. The acknowledgement of water as a social or public good makes water provision a responsibility of the public sector. Therefore, one of the key arguments for the case of public sector water provision is that as water provision provides public benefits, it must be controlled and managed by the public sector. Following the acknowledgment of water as a human right and social good, it is suggested that water services must be managed under the public sector. However, to some extent, the public sector water provision has failed in practice to deliver the results in relation to its theoretical base as evident by the fact that there still exist a large number of people that are without access to adequate water services, especially in the less developed countries. This suggests that, in practice, the public sector water delivery arrangement has some serious limitations. One of the major limitations of this arrangement is its top-down approach and the lack of decentralization and a single independent authority responsible for the water sector, especially in the context of developing countries. Private Sector Provision It was during the 1980s, when the market-led private sector water provision initially replaced the public

sector water provision in many parts of the world. With this institutional change, a variety of arrangements focused on market approach have been introduced in the delivery and management of water services. The proponents of the private sector arrangements argue that by involving the private sector in water provision, it will better assist in gaining investment needed for the required infrastructure and enhance the operating efficiency of the provision through introducing a high level of technical and management skills. The private sector, in the water delivery sector, is introduced in a variety of forms depending upon the level of participation of the involved actors. In the context of water delivery, privatization (full divestiture), lease, concession and B.O.T. contracts are different forms of this institutional arrangement, which are based on the principle of competition and prices. Some of these forms are also known as ‘joint ventures’ or ‘Public Private Partnerships’. At the lowest end of this arrangement lies the management support contracts where the private sector is involved only in specific tasks and paid by the public authority. At the other end lies the ‘divestiture’ or ‘full privatization’. Only England and Wales have a full divestiture of water services when talking about the scale of its implementation.

Small-Scale Entrepreneur Arrangements Another type of institutional arrangement in the water sector, generally known as ‘informal arrangements’, is the small-scale entrepreneur arrangements. In many developing countries, the small-scale entrepreneurs are filling the gaps left by the government and the formal private sector in delivering water, especially to the poor. These small-scale entrepreneurs include private independent and NGO providers, which range from water vendors to community based water provisions. It has been found that 25% of residents in Latin America and 50% of residents in Africa depend on these small-scale en-

PROPONENTS OF THE PRIVATE SECTOR ARRANGEMENTS ARGUE THAT BY INVOLVING THE PRIVATE SECTOR IN WATER PROVISION, IT WILL BETTER ASSIST IN GAINING INVESTMENT NEEDED FOR THE REQUIRED INFRASTRUCTURE AND ENHANCE THE OPERATING EFFICIENCY OF THE PROVISION THROUGH INTRODUCING A HIGH LEVEL OF TECHNICAL AND MANAGEMENT SKILLS

trepreneurs for their water supply. Initially, this arrangement was considered irregular and illegal as it operates outside the official framework. It has also been criticized as an expensive arrangement as studies pointed out that often the poor spend much more on buying water from the vendor than those connected to the direct water supply. Recently, however, there has been a shift in opinion regarding the effectiveness of this arrangement because of recent findings of its contribution in complementing the formal water provision. Hence, as discussed above, there are a variety of institutional arrangements (with their own strengths and limitations) available for the management and delivery of water services. However, in order to manage and deliver sustainable and effective water services, it is immensely important that an institutional arrangement should be based on an appropriate understanding and acknowledgement of the socioeconomic, political and institutional capabilities under which the system will be operating. 

Amandeep Kang is a researcher with expertise in water governance and institutional arrangements

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INFOCUS | INDIA-CHINA | DOING BUSINESS

DOING BUSINESS IN CHINA

objectives in China, you can establish a Joint Venture ( JV). However, there are significant risks and pitfalls associated with this structure. This does not mean you should not form a JV. It can be a successful endeavour if you understand whether your Chinese partner is capable of fulfilling your business objectives and each side’s goals, contributions and responsibilities are mutual and understood. A JV could be an Equity Joint Venture or a Co-operative Joint Venture also known as Contractual Joint Venture (CJV). In EJV mode, the foreign investment in the project must be 25% and partners share profits, losses and risks in proportion to their contribution to the registered capital. But in CJV mode, partners share profit on an agreed basis, not necessarily in pro-

The First Step

China is not the easiest places to do business in. A guide to overcome hurdles across the Great Wall. Anchit Goel

he bilateral trade between India and China touched a new milestone of USD 73.9 billion in 2011 as against USD 61.7 billion in 2010. China has become a hot favourite among many Indian companies who either want to source their products and raw materials from China or want to offshore their production facilities to a cheaper location and/or sell their products in China. Despite this attractive quality, the country is not an easy place to do business in. It is a complex market with its unique culture, difficult language and its own style of doing business. Businesses need to consider a wide range of strategies, evaluate the advantages and disadvantages before setting shop in China. The World Bank ranks China 91 (out of 183 countries) in its annual ‘Ease of Doing Business’ rankings for 2012. At the same time, there is a shortage of skilled and stable consulting professionals with rich practical experience of working in China and knowledge of

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the financial, regulatory and market environment in China, who can provide right guidance to those interested in China. Therefore, many companies find it very challenging to do business with China. Here we will attempt to address this challenge through a series of articles on various aspects of doing business in China. This will include how to enter the China market, choosing the right location for your business, establishing relationships (Guanxi), recruiting staff, sourcing, manufacturing and selling in China. In this article we deal with the various modes of entering the China market – the different forms of business organization and which form should you choose for your business. The structures typically used by foreign investors in China are:  Representative Office (RO)  Foreign Invested Enterprise (FIE)  Joint Venture ( JV)  Wholly Foreign Owned Enterprise (WFOE) – usually pronounced as woofie Each organization structure has

its benefits and drawbacks. The table shows the differences between a RO and FIE. If you are planning to do an initial feasibility study, understand the market, network, research about the opportunities for your products/service then establishing a Representative Office (RO) would be the right step for you. It is also faster, cheaper and easier. Once you feel that you have understood the market well and see a demand for your offerings in China or would like to establish a manufacturing plant, you can establish a WFOE or convert your existing RO to a WFOE. With WFOE status you can formally carry out your business, issue invoices, receive RMB revenues and convert your RMB profits into US dollars. If you feel that you do not have the required financial capacity and expertise of the China market and would like to partner with a Chinese company to further your business

THE WORLD BANK RANKS CHINA 91 (OUT OF 183 COUNTRIES) IN ITS ANNUAL ‘EASE OF DOING BUSINESS’ RANKINGS FOR 2012. portion to capital contributed. The foreign investor can obtain the desired level of control by negotiating management, voting, and staffing in advance with the Chinese partner. This mode is more convenient and flexible. Therefore it is easier to find a co-operative partner and reach an agreement. But at the same time a CJV could be time consuming and involve difficult negotiations in the beginning. Whether you choose a JV or a WFOE, you can incorporate your company in China in two ways – Limited Liability Company (LLCs) or a Joint Stock Company. Most FIEs in China are set up as LLCs as in this case your personal liability is limited to the amount of money you invest. An LLC cannot issue shares and has a specified life of 30 years, which can be extended. Joint stock companies are more complex in nature as their capital is divided into shares and any legal entity or individual can invest in the company in exchange for the

Representative Ofﬁce Setting up requirements

FIE (JV or WFOE)

Prior approval required from Ministry of Commerce (MOFCOM) No registered capital required Parent company must be in operation for at least 2 years in its home country

Prior approval required from MOFCOM Minimum paid up registered capital required depending on the industry

Permitted activities

Can do profit making activities, Can do non-profit communication, issue invoices, receive RMB market research, relation building, exhibit products or services, liaison payments and earn profits. and coordination activities; Cannot do any direct profit making activities, sign contracts or bill customers. Additional rules for business sectors such as banks, insurance institutions, securities organizations, accounting and law firms.

Prohibited Industries

Certain business activities in the farming, animal husbandry, mining and quarrying, telecommunications, postal, manufacturing, scientiﬁc research, power, irrigation and education sectors are prohibited from foreign investment.

Funding of local operations

Through money sent by parent company

Through money sent by foreign company and proﬁts generated by business operations

Cost and Time USD 1,000 to USD 5,000; 2-3 months for Setting to set up

Hiring of Employees

Cannot hire local Chinese staff; can hire foreign nationals (one Chief Representative and maximum 3 ordinary representatives)

Can hire Chinese employees after signing contract as per requirements of Labour Contract Law

Compliance Submit an annual report to the Requirements registration authority between 1 March and 30 June Principal Applicable Laws

Regulations on Administration of Registration of Resident Ofﬁces of Foreign Enterprises; some local provincial governments have their own requirements

Tax Generally 10% tax on the Gross Requirements Expenses of the ofﬁce

proportional amount of shares. There isn’t one single structure which is the best. Each has its own benefits and drawbacks. Your choice should depend on your business objectives and how much time and financial resources you are ready to invest in pursuing those objectives. I would strongly advise you to first seek expert legal advice before setting up office in China. The India China Economic & Cultural Council (ICEC) has a panel of eminent lawyers/ law firms with expertise in the Chinese market to help you understand each organization structure in detail, its

Registered capital could vary from USD 10,000 to over USD 1,00,000 depending on the industry and location; 3-4 months to set up

Annual audit reports (balance sheet and income statements) to be submitted to relevant authorities Company Law, Law of the People's Republic of China on Wholly Foreign- Owned Enterprises and Law of the People's Republic of China on Chinese-Foreign Joint Ventures, Sino-Foreign Equity Joint Venture Law, Sino-Foreign Cooperative Joint Venture Law Depends on place of registration and industry; begins with 25% although some industries enjoy a lower rate of 15%

requirements and procedures. It can also find a suitable partner for your JV in China.  For any queries you may have please email me at anchit@icec-council.org.

Anchit Goel is based in Shanghai. (This article is for information only and not a legal advice)

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China market is not a cash cow |38| India-China Chronicle  APRIL 2012

Ravi Shankar Bose is the Director of Fugumobile Ltd, a successful Shanghai based company started by Indians. Bose possesses a rare quality that most marketers aspire for: A grounding in technology combined with a deep understanding of brands. Following stints in the IT industry in India, Bose has spent the last nine years working in the mobile marketing and gaming business in China and has grown with the nascent digital marketing industry from basic to ever evolving platforms for consumer engagement. Proﬁcient with both online and mobile platforms, Bose is a ﬁrm believer in the convergence of digital media and spends his free time reading about the latest technologies. He speaks with Anchit Goel about his experiences in China.

ICC: Fugumobile is a marketing solutions provider for many leading consumer brands in China. Could you tell us more about your business and the products/services you provide? Bose: Fugumobile is a mobile marketing and advertising agency, doing business in China for the past 10 years. Rather than being on the traditional side of advertising we are more on the digital side, which includes both internet as well as mobile advertising. We are working with many leading brands creating marketing solutions and advertisement strategy for the mobile platform. Three-four years ago there were no smart phones or tablets. That time the dominating source of advertising on mobile was through targeted text SMS with no visuals. Now with the advent of technology and rapidly increasing number of mobile users, digital advertising has become more interactive and with a wider reach. So more and more brands are using mobile phones as a medium to reach and retain consumers. We provide such clients with complete end-to-end services (from concept to execution) across all mobile platforms including SMS, MMS, WAP, QR Codes, Bluecasting, and multiple app environments. What is the proﬁle of your clients? Are they only Chinese or also include MNCs? Many of our clients are MNCs brands. The campaigns are done mostly for the Chinese market as well as for other markets including India, Europe, US, Southeast Asia and many more. As China has a big automobile industry, our biggest clients are some of the automobile companies, such as Mercedes and BMW. For Mercedes AMG, the high end cars, we developed a mobile application providing a 360 degree view of the car and its features. Same was also done for BMW with some more features like the history of the car, videos and wallpapers. Last year during the cricket World Cup, we developed an ad campaign for Reebok shoes in India, developing wallpapers, 360 degree view of the

shoes and some gaming applications targeting the young generation. Have you faced any competition in China, especially from local Chinese companies, when reaching out to your customers? Fugumobile is technology as well as creativity focused company. The creativity part includes understanding of the brand and what kind of solutions suit that brand. After branding comes the tough part of inserting technology into creativity. In China, we have faced competition from technology as well as creativity oriented companies. On technology side are many local Chinese companies and on the creativity side are many traditional advertising agencies. But what makes us unique is that we are able to combine these two – technology and creativity. If the brand goes to a technology company then they are not able to come out with creative mobile concepts and strategy. Similarly, creative companies don’t have the technical talent to execute solutions. In the last 4-5 years, we have observed that many creative companies come to us to develop these solutions as they find it difficult to incorporate creativity with technology. What is the biggest challenge you have faced, both in terms of your business and the general Chinese business environment? We did not face any major challenge in setting up the business in China. But we did in terms of the services we provide. The biggest challenge was to convince the brands for advertising on the mobile platform. There was no one to take the first step as this was a very new concept in the advertising world. China has over 800 million mobile users but still it was difficult to convince brands on how effective the mobile campaign will be. Luckily brands like Coca-Cola and Nike, which are very innovative in their advertisement campaigns, were willing to trust us and take the first step. Now more and more brands are willing to have such advertisements APRIL 2012  India-China Chronicle |39|

INFOCUS | INDIA-CHINA | INTERVIEW

and the challenge has reduced to some extent. What still remains a challenge is the need to be understand on how big mobile advertising can be. As far as the Chinese business environment is concerned, we faced challenges with the local companies as they are very cost competitive and concerned about quality and creativity. Now there is no measuring scale for creativity, so lot of the challenge is faced in the process of project management and costing of these elements. They differ in terms of the process they follow and the way they define the scope of work. There is lot of talk about the need for Guanxi (relationships) when doing business in China. What has been your experience? Guanxi is followed in some extent in China. But then if you provide good service and quality products, you do not need Guanxi for your business development. The Chinese like anywhere else always want good services and quality products. If you provide them with that they will look forward to doing business with you. The key to doing good business in China is to provide a unique product or service which will certainly add lot of credibility to your business. And at the same time you have to maintain the balance between foreign and local culture, follow a blend of both cultures. What is the mindset of the Chinese regarding Indian companies? What we have seen generally is that the Chinese see Indian companies from the digital side, as the Indian software industry is very famous. There are no specific issues with Indian companies. They consider us like any other foreign company doing business in China. There are no issues with the staff also, which includes Chinese, Indians and some others from abroad. As a marketing and advertising expert, what differences do you see between Chinese and Indian consumers? |40| India-China Chronicle  APRIL 2012

The basic outlook of consumers is price. Indian consumers are more price conscious than Chinese consumers. Chinese consumers have a taste for uniqueness, they try to purchase new things with some unique value attached to it. In China, gadgets are more preferred especially in the digital segment. Chinese are always trying to change and buy something new from the market. The same trend has also started picking up among Indian consumers. At the same time, Chinese consumers are very brand conscious and look for branded product. If they think of getting some particular brand they will either buy it or if it is not affordable they will purchase the counterfeit of the product.

INDIAN CONSUMERS ARE MORE PRICE CONSCIOUS THAN CHINESE CONSUMERS. CHINESE CONSUMERS HAVE A TASTE FOR UNIQUENESS, THEY TRY TO PURCHASE NEW THINGS WITH SOME UNIQUE VALUE ATTACHED TO IT. What do you think about Made in China products? Basically there are two kinds of made in China products. One includes your high range products for MNC brands such as Sony, Nokia and Apple. Most of the big brands have their manufacturing units based in China. When people buy products of these brands, they go by the brand name and are not concerned whether the product is made in China or not. This is one perception of consumers. Then there are low priced products manufactured by local Chinese brands such as TLC, Haier and Hisense etc. When consumers buy low price products, their general perception is that this product is made in China. But then it provides the consumers with a lot of options and flexibility. So there no reason to complain about made in China products. Basically the high end products are used worldwide and the low end product face this made in China concept.

In India there is a lot of negative perception about China. What do you feel about it and how do you think it can be minimized? The negative perception of Indians towards China is mainly due to the media, which is very biased in nature. Most of the time they do not have first hand news about China and it is taken from other sources. Only one or two Indian reporters are based in China. But slowly things are changing. There is huge trade happening between the two countries. More and more Indian traders, professionals are coming to China to do business and once they come here, their perception changes. One of the other things is that there is limited cultural exchange between India and China. The existing efforts are all government linked and not well coordinated. Chinese here earlier used to watch Hindi movies and still remember Raj Kapoor in Awara. Because of some political issues also there is a negative perception about China in India. And lot of this is coming from the Indian media, for which Chinese media has started to hit back. This certainly is not a good thing in improving the relations. What suggestion would you like to give to those Indians interested in setting up business in China? First and foremost, the Chinese market is available for local as well as foreign companies. Before starting any business in China, you need to have good market knowledge through market research. Enter into China after having a good understanding of the available opportunities and the Chinese consumers. Then it will be easy to start your business in China. Secondly, China is not an easy market to survive. It is not a cash cow where you can start earning immediately. Many companies have come and failed to even establish themselves. You need to have a long term approach. Important is to break even and keep your costs low. Start with a small base, see how your Chinese counterparts operate and keep the cost low and understand your customers well. 

The Brave New G2 World CHINA-INDIA AS TRANSFORMATIVE FORCE

he two countries that will dominate the 21st century in many ways, China and India, face a very challenging situation, but also very inspiring opportunity. On the one hand they need to ensure that they can lift people out of poverty and do so in an environmentally sustainable way. On the other hand they need to design a global governance system that can help the world to move beyond the industrial society with a single-minded focus on economic growth and embark on the next chapter in human history. These are two very big challenges,

maybe the biggest challenges humanity have ever faced and they will take place during a time when the phase of change is higher than it has ever been through history. Collaboration between China and India will be complicated, but is necessary to ensure robustness, to avoid conflicts and ensure that wisdom from both cultures is embedded in the new governance system. The financial crisis in the world has brought the western superpowers to their knees and they now understand that the emerging economies must be given a more important role when global economic policy is being developed. Unfortunately so far China and India have not taken the opportunity

to formulate a proactive policy and instead large corporations, with business models that are based on great income differences and consumption patterns that are destroying the planet, are setting the agenda. But the different financial problems are however getting worse and instead of ad-hoc solutions it is time to launch initiatives that look beyond shortterm fixes. Below the surface we have a number of trends that require a dramatic change in how the current global governing system works, including the Bretton Woods institutions that were created after World War II. The firm action that the current financial crisis requires is a perfect April 2012  India-China Chronicle |41|

INFOCUS | INDIA-CHINA | GLOBAL ORDER

opportunity to begin looking toward a new global architecture. At the very center of this architecture are two different G2’s that will play a very important role. The first G2 is the one that has been discussed in media since the beginning of the financial crisis, that of China and the United States. This is the G2 that follows the logic of the current system. Few would disagree that the G8 that exists today is increasingly outdated and that something new is needed. The G8 was a response to the oil crisis in 1973 and when it was formed in France in 1975 it was the major western countries that came together. That time is gone and we have a different situation today. The two major economies on the planet should have a special relationship and the “strategic and economic dialogue” mechanism that was launched during the G20 meeting in London provides a great opportunity. It is important that China is clear and does not allow the old, polarized agenda to dominate, so that G2 becomes a smaller, more effective version of G8. China’s global role so far has been a breath of fresh air as it does not seek global leadership, but instead wants to work in collaboration with all countries and on all levels. With the US as a major consumer and China as a major producer, we can hope for a “global collaboration” initiative. This could focus on the major challenges we face and how China and the US could together, with other countries, to find solutions for them. These solutions could range from major initiatives with incentives that support sustainable innovation and standards that ensure future buildings are the net producers of energy. Instead of being the largest problem for climate change and resource use, the buildings of the world could become the epicenter for climate-smart and resourceefficient solutions. For this to happen, China and the US must cooperate. India could play an important role as a credible mediator in these discussions. Strategic collaboration in trade, investments and finance, as well as in security |42| India-China Chronicle  April 2012

policy and other important areas should be encouraged. In order to identify the second, and more important, G2 we must take a step back to the macro level. It is easy to see that the centre of the global economy is moving east. The need to find long-term solutions for a financial system where the money can move at the speed of light will require new regulations and new institutions. But there are other issues that are harder to see, issues that will not hit the headlines before it is too late, as they happen slower. These include issues such as the demographic crunch with an ageing global population, the increased population pressure as the world moves toward 10 billion people, growing inequalities within and between countries, and finally an accelerated development of new technologies. All these can bring humanity fantastic gifts if they are met with the right framework, but they could

THE FINANCIAL CRISIS IN THE WORLD HAS BROUGHT THE WESTERN SUPERPOWERS TO THEIR KNEES AND THEY NOW UNDERSTAND THAT THE EMERGING ECONOMIES MUST BE GIVEN A MORE IMPORTANT ROLE WHEN GLOBAL ECONOMIC POLICY IS BEING DEVELOPED

also drive the world into conflict and problems beyond imagination. Especially since natural resources on the planet are not enough to provide everyone with a “G8 lifestyle”. This brings us to what I think is the more interesting, and less discussed, G2 – China and India. I was fortunate to be in Delhi during President Hu Jintao’s visit in 2006. During this trip, a number of initiatives were started and it is clear that the two billionplus population countries share many challenges and opportunities. Cynical observers have focused on the differences between the countries and many western observers seem to view China and India as pawns in the power play between the G8 countries. But anyone who can do the math and look at the history of these two countries will realize that there will be a very interesting G2, whether we like to call it that or not. By ensuring closer and more strategic ties between China and India, the world will get two countries with long, proud histories that are a welcome balance to the dominating Western narrative in most of today’s global institutions. The world would also get two countries that are reflections of how the world as a whole looks like, with a mix of rich and poor people and different development paths. The most interesting aspect of the “Chindia G2” would probably be the end of the idea of material and economicgrowth as the goal of ”development”. We could also get a discussion about where the world can and should go next. We need a global circular economy for that and the two countries that probably have the best opportunity to provide guidance on how this can be done in a practical way are China and India. Every time I visit China and India, I see more and more similarities when it comes to the major challenges. With their roles as global economic engines, it becomes very important what direction those engines will move and what fuel they will use. If China and India start collaborating in a way that shows the world

the two countries – which together contain about 40 per cent of the world’s population – can develop joint innovative strategies for global sustainability, it will be a very good step forward for this current crisis. This Chindia G2 understands the need for innovative solutions that deliver more than incremental improvements, as this is necessary to lift people out of poverty and deliver solutions that do not result in conflict over natural resources a few years from now. So while most people are looking for a US-China G2 along the lines of the old school, the most important G2 could be that of China and India. We should see these two in a relationship that is mutually beneficial. With a global agenda that delivers global benefits, China would start building a global governance culture beyond narrow self-interest that also includes scientific consideration for the planet in a way that the current economic system has failed to do. This would be a very good start for the 21st century and a way to turn the current economic crisis into something that will benefit both the people and the planet in a way that we have never done before, but something we urgently need. Deng Xiaoping once said that a real Asian century will arrive only when China and India are developed – the time is now emerging and for it to deliver a positive outcome, the two G2s could play a crucial role. China and India are in a position where small investments and initiatives today can determine structures and rules during the coming decades. In order to ensure a positive outcome strategic collaboration in three areas is necessary:  Education/ research  Technology development  Urbanization For these three areas Chindia could collaborate to ensure the following: A 10 billion ﬁlter In order to ensure that we can eradicate poverty and ensure environmental sustainability we need to focus on transformative solutions,

not just incremental improvements in current systems. By introducing students from all disciplines to think about what solutions that can be used by 10 billion people without harming nature and resulting in conflicts over natural resources. Extremely resource efficient solutions, using renewable energy and supportive of a global circular economy should be encouraged in all areas. At the end of 2011 during COP17 in Durban the BASIC expert group presented their first joint research report about sustainable development and equity. This is the kind of initiative that should be further developed and provided more resources in order for it to also be able to develop concrete policy recommendations. China and India could challenge themselves and the rest of the world to begin reporting how public procurement can be used to encourage transformative solutions that can be used by 10 billion people in a sustainable way. If China and India could get the EU, the US and Japan on board more than 5 trillion dollars would begin to support poverty reduction and true sustainability. A global research initiative Global collaboration, rather than international collaboration, should be initiated where major scientific breakthroughs with global benefits are to be expected. Nano-technology and cognitive research are likely to be two areas that will redefine how our societies look this century. The opportunities are almost limitless, but so are the potential dangers. A council of independent and non-commercially connected stakeholders should be provided with the task to set up an open source and transparent forum where strategies to guide this research and implementation in a way that is beneficial to humanity as a whole. For the first time it could be possible to have a technological revolution based on collaboration instead of competition, where many that are engaged would identify themselves as global citizens rather than from a specific

country. Hopefully many in the first generation of global citizens would come from China and India. A global collaboration platform could be launched during 2012 to encourage researchers and entrepreneurs from all over the world and from different disciplines to collaborate in order to address poverty and resource scarcity in a limited number of areas to start with. Besides becoming a key collaboration platform it could also reward those delivering solutions and become a Nobel prize for the 21st century. Use global forum to launch global initiatives In 2012 India, with Manmohan Singh as the host, will arrange the second BRICS meeting. This would be a perfect time to launch initiatives for the 21st century. One of the most difficult challenges will be to develop frameworks that support transparency and ensure that citizens all over the world can use it. A good first step would be to support an initiative that would allow citizens all around the world to understand the consequences of their consumptions. By developing an application for smart mobile phones that could be used to scan different products people could see in real time if people are helped out of poverty though the value chain, if the company making the product is lobbying for smarter regulation, what goals for poverty reduction and resource savings the company have, etc. In short a world that western industrialization made invisible would be made visible and the birth of this transparency that can drive sustainable innovation and poverty reduction could happen in Delhi in just a few months. 

Dennis Pamlin is an entrepreneur and founder of 21st Century Frontiers. He works with companies, governments and NGOs as a strategic economic, technology and innovation advisor.

April 2012  India-China Chronicle |43|

INFOCUS | INDIA-CHINA RELATIONS | EXCLUSIVE

Linked like two wings of a bird INDIA-CHINA STRATEGIC RELATIONS

oday India-China relations attract attention beyond our two countries.International developments and achievements in domestic construction by our peoples in the last few decades have given our relationship wider significance.Relations between India and China and their new equilibrium holds an important key to the emerging economic and strategic landscape of Asia and, to a certain extent, the world. Let us look briefly at the context within which we conduct our relations and then look at the content of our relations today.

|44| India-China Chronicle  April 2012

The Context The basic facts are evident and well known. India and China are the two most populous nations on earth, are the two largest developing countries,and are among the societies and economies in the world that are transforming themselves most rapidly. They are the largest and the third biggest economies in Asia. China has the distinction of being the second largest economy in the world. The two countries are building a strong domestic economic base and rapidly training scientific and technical manpower. When much of the world is reeling under recession or grappling with political turmoil, our two countries have managed to register

reasonably healthy rates of growth and maintain stability. We share a common geopolitical space and similar socioeconomic aspirations for ourselves. The future is less certain or evident. Uncertainty in the international system is at unprecedented levels. The economic and security situation facing both India and China has become far more complicated in the last few years. On the positive side, thanks to sustained growth rates, high savings rates and a prudent financial approach, Asia and the developing world have witnessed a greater accretion of relative economic power following the financial crisis of 2008. In Asia, larger economies like China, Japan, India, South

Korea and Indonesia, all members of the G-20, have increased their ability to influence economic outcomes. The BRICS process has also gained ground. These are welcome developments. At the same time, risks remain for economies which are still developing. An early return to robust growth and spending in the developed world are necessary for world economic recovery. The US, Europe and Japan still account for approximately $20 trillion of consumption expenditure, as against about $2.5 trillion by China and India together. A re-balancing of economic structures in our countries in the face of such differences could be difficult. More generally speaking, the relatively benign external environment in the last two decades is changing negatively and is threatened by protectionism in the developed world. World politics also faces new challenges. The balance of power is in flux in Asia and the world. As uncertainty rises, powers follow hedging strategies. The mechanisms of strategic communication and consultationand a common security outlook are evolving slower than the changes in objective reality. Besides, both India and China are increasingly linked to the rest of the world through trade, investment and their Diasporas. The impact of changes in West Asia on our energy security, for instance, is an example of how developments further away from our shores also affect India and China more and more profoundly. It is therefore natural for us to take ever greater interest on global issues. Equally, global issues like climate

change, nuclear proliferation and cyber and space security matter more to both India and China in this globalised world as they influence our development, peace and prosperity. India-China relations What does this context imply for India-China relations? Both India and China currently give the highest priority to their domestic transformation, which will take time. A peaceful periphery, a stable and benign world environment and continued prosperity among our economic partners are of utmost importance to both of us. This will remain so for quite some time. It is in our mutual interest to work together, bilaterally and with other partners, to reduce uncertainty and create an international environment that is supportive to our domestic transformation efforts. Economics and

INDIA AND CHINA ARE THE LARGEST AND THE THIRD BIGGEST ECONOMIES IN ASIA. CHINA HAS THE DISTINCTION OF BEING THE SECOND LARGEST ECONOMY IN THE WORLD. THE TWO COUNTRIES ARE BUILDING A STRONG DOMESTIC ECONOMIC BASE AND RAPIDLY TRAINING SCIENTIFIC AND TECHNICAL MANPOWER

development are not zero-sum games. It is for this reason that we believe that there is enough space for both India and China to realise their development aspirations. Economically, we are already integrated with each other to an unprecedented extent. Our bilateral trade reached over US$67 billion in the first 11months of last year, and China has consistently remained our largest trading partner in goods for several years. However, investment flows between us have not kept pace with trade. Indian investment in China worth a total of US$ 433million is spread over 676 projects, while Chinese investment in India is worth nearly US$ 300 million. There are several opportunities for cooperation in developing infrastructure. India is already one of China’s most important markets for project exports, with a cumulative value of contracted projects at US$ 53.5 billion and turnover realized at US$ 24.6 billion. What is less noticed is the range of contact between our two societies. For instance, over 7,000 Indian students are studying in China today. This scale of interaction never occurred before in history. Naturally, the corollaries of such an intensification of economic and social engagement are issues of trade imbalance, diversifying the trade basket and commercial disputes. The two governments have taken several initiatives to make our trade more balanced and harmonious, and to facilitate and streamline our business engagement. More remains to be done and we will learn by doing. For instance in Septem-

April 2012  India-China Chronicle |45|

INFOCUS | INDIA-CHINA RELATIONS | EXCLUSIVE

WHAT IS LESS NOTICED IS THE RANGE OF CONTACT BETWEEN OUR TWO SOCIETIES. FOR INSTANCE, OVER 7,000 INDIAN STUDENTS ARE STUDYING IN CHINA TODAY. THIS SCALE OF INTERACTION NEVER OCCURRED BEFORE IN HISTORY. ber last year we held the first Strategic Economic Dialogue between India and China which identified several areas of promise for the future. Equally the business communities and their Chambers need to take advantage of growing opportunities while sharpening competitive edge. I am convinced that our business and economic engagement with each other and with other countries will intensify as we seek to overcome the prospect of sluggish recovery in the traditional engines of growth in the world economy. Our Governments have common or similar positions on the global development agenda, in WTO and on climate change, which has made it possible for us to work together internationally. A few vocal experts in our two countries and elsewhere argue that notwithstanding the numerous cooperative elements in our economic relations and approach to international issues, India and China are bound to be strategic adversaries. I find such determinism misplaced. It ignores the successful experience and demonstrated expertise of both governments in managing differences and building on commonalities for over three decades and particularly since the Rajiv Gandhi visit to China in 1988. It also ignores the wisdom of the leaders of the two coun|46| India-China Chronicle  April 2012

ECONOMICALLY, WE ARE ALREADY INTEGRATED WITH EACH OTHER TO AN UNPRECEDENTED EXTENT. OUR BILATERAL TRADE REACHED OVER US$67 BILLION IN THE FIRST 11MONTHS OF LAST YEAR, AND CHINA HAS CONSISTENTLY REMAINED OUR LARGEST TRADING PARTNER IN GOODS FOR SEVERAL YEARS.

tries, who have consistently worked to ensure that problems are managed in a mature manner. The issue is whether we can continue to manage the elements of competition within an agreed strategic framework which permits both of us to pursue our core interests. I see no reason why that should not be so. Indeed I would go further and say that the rapid changes in the international situation today also create an opportunity for India and China to work with others to shape benign international outcomes. The boundary question remains unresolved, and there is no denying that it is a difficult issue. However, a number of mechanisms have been put in place to ensure that the border stays peaceful while we seek a settlement of the boundary question. On the settlement itself, we are in the second stage of the three stage process of agreeing principles, a framework and finally aboundary line. Similarly, on other bilateral issues of potential difference there exist mechanisms of dialogue and communication to address them. We appreciate China’s assistance to us in tackling floods and natural disasters in the downstream areas of our shared rivers. There is a need to widen the scope and deepen the level of our communication in some areas.These include new challenges and

new issues in the changing context of our relations. I am confident that we will do so. Indeed, some security challenges, especially of the non-traditional variety, are common to India and China, and offer an opportunity to work together. Both India and China face the challenge of terrorism in our shared neighbourhood. It requires common effort by all members of the international community to tackle terrorism. Energy is the key to domestic transformation in both India and China which is why both of us have a common stake in energy security and in the freedom and security of transportation on the global commons. We both have an interest in global public goods like a peaceful order, freedom of the seas and open sea lanes. We similarly need to address issues of piracy with common resolve. As important maritime nations, we can contribute to each other’s maritime security by coordinating approaches. Asia’s security is interlinked across this great continent. India has therefore argued for an open, inclusive Asian security architecture. India and China will have key roles to play in forging a new compact for common and collective security for Asia. We should also contribute within our capacity to the global public goods that are increas-

THE BOUNDARY QUESTION REMAINS UNRESOLVED, AND THERE IS NO DENYING THAT IT IS A DIFFICULT ISSUE. HOWEVER, A NUMBER OF MECHANISMS HAVE BEEN PUT IN PLACE TO ENSURE THAT THE BORDER STAYS PEACEFUL WHILE WE SEEK A SETTLEMENT OF THE BOUNDARY QUESTION. ingly important to our well being. The robustness of our bilateral relation will depend on dialogue and communication so that the potential for misunderstanding and miscalculation is limited. This dialogue process must not be limited to the two Governments. Today, there are multiple stakeholders in our relations as also multiple determinants of these relations. Each of them, be it businessmen, media or scholars of the two countries, has a responsibility to take our relations to the desired level of equilibrium. It is therefore absolutely essential that they acquire an informed understanding of their neighbour.Today, as both India

and China change fast, our understanding of each other needs to keep pace. Both the quality and the scale of our interactions have also grown so rapidly that we need to learn new ways of dealing with therelationship. Conclusion To conclude, India and China have demonstrated an ability to deal with difficult issues and to build a cooperative partnership based on common interests. Its regional and global impact, and its long term significance to our own development, is what makes the IndiaChina relationship strategic in the true sense of the term. I do hope that I have been successful in giving you some idea of why I am confident that by working together India and China will be able to successfully face the challenges that the new geopolitics are throwing up, and would best serve their own national interests by further deepening their strategic cooperative relationship. 

This is the speech delivered by Mr. Shiv Shankar Menon (National Security Advisor, Govt. of India) at a lecture on China-India relations

April 2012  India-China Chronicle |47|

INFOCUS | INDIA-CHINA RELATIONS | EXCLUSIVE

Minister Manmohan Singh respectively during BRICS Summit in China and the East Asia Leaders Meetings in Indonesia. Two sides had in-depth discussions on issues of mutual interest and reaffirmed commitments to deepening the strategic and cooperative partnership.

MUST SHED HISTORICAL BURDEN, MUST COOPERATE

No force in the world can stop China, India from rising together Zhang Yan

o begin with, I would like to have a glimpse of the past year first. 2011 is no ordinary year for China-India relation. In spite of the complicated international and regional situation, our bilateral relations |48| India-China Chronicle  April 2012

maintained a sound and steady growth with cooperation and interactions unfolding in an all-round manner. We have also successfully concluded the Year of China-India Exchange announced by two sides during the Chinese Premier Wen Jiabao’s visit to India in December, 2010. To take stock of the year, we have seen a

cluster of positive developments in our bilateral relations.

FIRST

Active high level interactions have visibly enhanced our mutual understanding and trust. Last year, Chinese President Hu Jintao and Premier Wen Jiabao had fruitful meetings with Indian Prime

SECOND

Provincial and state level exchanges have become new highlights of bilateral relation. Successful visits by Governors of Sichuan, Guangdong and Gansu provinces and Chairman of Xinjiang Autonomous Region of China to India and Chief Ministers of Bihar and Gujarat of India to China produced positive results in economic and cultural cooperation, bringing the local governmental cooperation into the overall picture.

THIRD

Economic and trade cooperation maintained a robust growth and becomes a salient feature of our bilateral ties. China-India two-way trade in 2011 has touched new height. According to the estimation, during the 11 months of this year the trade volume reaches 67 billion USD, up 21.8 per cent year on year and is expected to exceed 70 billion USD for the whole year. The first branch office of Industrial and Commercial Bank of China opened in Mumbai last year, marking a new milestone in financial cooperation. To settle the trade account in RMB and Rupee is another important move by two coun-

tries to facilitate bilateral economic cooperation. Mutual investments are also gaining new momentum. One recent example is TBEA Corporation, the largest special transformer producer of China, has signed a 400-million USD agreement with an Indian company to invest in Gujarat to put up a factory for manufacturing transformers for power projects in India.

FOURTH

New headway has been made in institutionalization of bilateral cooperation. The newly established China-India Strategic Economic Dialogue held its first round meeting in Beijing September last year. China-India CEO Forum

I HAVE SENSED A GROWING CONSENSUS VIEW IN FAVOUR OF DEVELOPING A SOUND AND MUTUALLY BENEFICIAL RELATION WITH CHINA AMONG ALL POLITICAL PARTIES AND GENERAL PUBLIC IN INDIA. FROM THE CHINESE SIDE, TO BUILD A STABLE AND MUTUALLY BENEFICIAL RELATIONSHIP WITH INDIA IS THE SET POLICY OF THE CHINESE GOVERNMENT.

is also in the making. At the same time, the existing mechanisms such as the fifth China-India Financial Dialogue, the fourth China-India Defense and Security Talks and consultation on counter terrorism were successfully held in Delhi and Beijing last year. These new and old mechanisms have helped to enhance mutual trust and deepen economic cooperation between two countries.

FIFTH

Cooperation on international and regional issues has acquired new momentum. Two countries maintained close consultation and worked vigorously within the framework of UN, WTO, G20 and BRICS on issues such as climate change, reform of international financial institutions, Doha Round Trade Talks as well as issues related to the situation in West Asia and North Africa. Two countries have played constructive role in the proper settlement of relevant issues and defending the interests of developing countries.

SIXTH

People-to-people exchange has added new vitality to our relation. The 500-member Indian Youth delegation visited China last September and was warmly received by Premier Wen Jiabao in the Great Hall of People. The Year of Exchange was successful and colourful. Events like “Treasures of Ancient China” exhibition, Sichuan Week, Yunan Acrobatics Troup performance and cultural activities like “A Grand Stage April 2012  India-China Chronicle |49|

INFOCUS | INDIA-CHINA RELATIONS | EXCLUSIVE

for China-India Youth Traditional Culture Exchange” were organized in India and China respectively, creating cross-culture dialogues between two ancient civilizations. China has also provided financial support to the reconstruction of Nalando University.

The performance of our relationship in the year 2011 is impressive and fruitful. More importantly, it has demonstrated the following salient features.

FIRST

China-India relation is anchored on a more solid political base than before. It is encouraging to see that the leaders of two countries have viewed our relations from a long-term and strategic perspective. They have given increasing importance and attention to our relationship which provides strong political foundation for the development of our bilateral relations. Furthermore, I have sensed a growing consensus view in favour of developing a sound and mutually beneficial relation with China among all political parties and general public in India. From the Chinese side, to build a stable Chinese Premier Wen Jiabao during the India-China Business Co-operation Summit in New Delhi

|50| India-China Chronicle  April 2012

FACING WITH SIMILAR CHALLENGES AND HISTORICAL TASKS, CHINA AND INDIA ARE COMPLIMENTARY TO EACH OTHER AND ENJOY CERTAIN DEGREE OF SYNERGY. THE TWO COUNTRIES ARE PARTNERS OF COOPERATION, AND PARTNERS FOR GROWTH AND PROSPERITY. CHINA’S DEVELOPMENT PROVIDES OPPORTUNITY TO INDIA, SO DOES INDIA’S DEVELOPMENT TO CHINA. and mutually beneficial relationship with India is the set policy of the Chinese government. President Hu Jintao stated on many occasions that India is an important neighbour of China. China is ready to work with India to maintain the sound momentum for further advancement of the China-India Strategic and Cooperative Partnership and for the common interests of two countries.

SECOND

China-India relation has become more substantive. Both countries pursue an independent foreign policy and share growing common interests. Today, China-India relation is developing in a comprehensive manner and has acquired strategic significance. Both countries not only enjoy growing cooperation in economic field, but also work closely in political and security fields, brining tangible benefits to our people. On issues directly affecting our interests as well as global situation, such as climate change and issues related to the West Asia and North Africa, two countries worked constructively and effectively to defend the interests and rights of our two countries as well as that of all developing countries.

THIRD

China-India relation holds great potential. As two fast growing economies, China and India provide opportunities to each other. In spite of the financial and debt crisis in US and Europe, China and India enjoy stability domestically and boast a relatively rapid economic growth. With 2.5 billion populations, huge markets and rich human resources, China and India are regarded by the international community as powerhouse for world economy and are expected to play a bigger role in the

reform of international economic and financial governance as well as in the global economic recovery. Facing with similar challenges and historical tasks, China and India are complimentary to each other and enjoy certain degree of synergy. The two countries are partners of cooperation, and partners for growth and prosperity. China’s development provides opportunity to India, so does India’s development to China.

FOURTH

China-India relation has matured. We are fully aware of the fact that there are differences and challenges left over by history. But we know much better how to manage them. We are keenly aware that cooperation between the two countries benefits both and confrontation only hurts each other. As two Asian neighbours and fast growing economies, China and India share more common interests than difference. Both have adopted a “looking forward” approach and are trying their best not to let the historical burdens to stand in the way of our cooperation. When we are facing problems, we are now more than willing to engage each other in dialogue and consultation to diffuse the risk. As to the perceived competition between the two countries, so long as it is a fair and friendly one, we also look at it in a positive way. As Indian Prime Minister

Mamnohan Singh and Chinese Premier Wen Jabao pointed out that the world is large enough for both China and India to develop and prosper. And there is enough room for two countries to cooperate. Here I must point out that not every country in the world is happy to see China and India getting closer and prospering together. Some even try to drive a wedge between us. I must point out again, that China and India’s rising together is an irreversible historical trend that no force in the world can stop. In spite of all kinds of prophecies

AS TWO ASIAN NEIGHBOURS AND FAST GROWING ECONOMIES, CHINA AND INDIA SHARE MORE COMMON INTERESTS THAN DIFFERENCE. BOTH HAVE ADOPTED A “LOOKING FORWARD” APPROACH AND ARE TRYING THEIR BEST NOT TO LET THE HISTORICAL BURDENS TO STAND IN THE WAY OF OUR COOPERATION.

with ill-intention, China-India relation takes its own course and moves ahead because the two countries know where their national interests lie and how to handle their relations. Our cooperative relation poses no threat to others and is not developed at the expense of other countries’ interests.

2012 has arrived and the traditional Chinese New Year, the year of dragon will come soon. In Chinese culture, it is the most auspicious time to plan. As the Chinese saying goes, a good beginning is crucial to a successful year. In order to push the bilateral relations forward, we should join hands and work in the following areas.

FIRST

efforts should be made to further increase political trust and enhance strategic cooperation. Political trust is the very foundation of any bilateral relation. To achieve this, two sides should maintain the sound

Prime Minister Manmohan Singh speaks at the BRIC Summit in Brasilia, Brazil. President of Russian Republic Dmitry Medvedev (R), President of Brazil Luiz Inacio Lula Da Silva and President of China Hu Jintao look on

April 2012  India-China Chronicle |51|

INFOCUS | INDIA-CHINA RELATIONS | EXCLUSIVE

momentum of high-level exchanges and interaction. Fully utilizing all existing mechanisms to enhance the confidence and minimize the suspicion and distrust. This year India will play host to the BRICS’ Summit. We should do our utmost to make the best preparation to ensure a successful and fruitful summit, thus giving positive impetus to the cooperation of five countries as well as to China and India relation. I can assure you that China will closely coordinate and cooperate with India to ensure its success.

actively considered. FTA and RTA are useful instruments to facilitate and boost bilateral trade in a bigger way. As a first step, the two countries can work on a regional trade arrangement and at the same time prepare the ground for a fullfledged FTA. 5. Efforts should be made to increase tourism cooperation. With a large population and rich tourist resources, the two countries possess great potential to become major tourist destination for each other. Regrettably, last year altogether only 600 thousand tourists travelled between the two countries. Compared with 16.5 million between China, Japan and Korea, the figure between China and India is too small. I am of the view that more Chinese tourists to India can also help narrow the trade gap of our two countries.

SECOND

more work should be done to upgrade our economic cooperation. The global economy will remain uncertain at least for some time. China and India should optimize our own potentials and ensure healthy development of our respective economy. We should strive to meet the trade target of 100 billion USD by 2015 set by our leaders. The Chinese side is fully aware of the necessity to narrow the trade gap between the two sides in order to ensure the sustainability of bilateral trade cooperation. China will take measures to increase the import of Indian products which have market demand in China. But our cooperation should not be limited in trade only. To deepen our economic cooperation, there is much room for us to explore. Here I will just provide some food for thought. 1. China and India should diversify trade structure, expand the scope and items, and increase the technical content and added value to the products. At the same time, cooperation should be expanded into financial, service and investment sectors. 2. China and India should initiate policy dialogue and coordinate our economic development strategy in order to ensure steady growth of our respective economy. China started its 12th Five Year plan last year. This year India will launch its 12th Five Year plan. We should exchange our experience and methods in changing the mould of development, readjusting the |52| India-China Chronicle  April 2012

THIRD

I MUST POINT OUT THAT CHINA AND INDIA’S RISING TOGETHER IS AN IRREVERSIBLE HISTORICAL TREND THAT NO FORCE IN THE WORLD CAN STOP. IN SPITE OF ALL KINDS OF PROPHECIES WITH ILLINTENTION, CHINA-INDIA RELATION TAKES ITS OWN COURSE AND MOVES AHEAD BECAUSE THE TWO COUNTRIES KNOW WHERE THEIR NATIONAL INTERESTS LIE AND HOW TO HANDLE THEIR RELATIONS.

economic structure and building an environmentally friendly and inclusive economy, with a view to achieving the best results in our economic development. 3. Mutual investments should be encouraged. China welcomes Indian companies to invest in China and is willing to encourage more Chinese companies, especially private companies to come and invest in India. We hope the Indian side will make additional efforts to create more conducive environment for foreign investors, especially the visa service. Two countries also can explore the possibility of jointly investing in third countries. 4. Free trade agreement or regional trade arrangement should be

Emphasis should be placed on expanding people and culture exchanges. People-to-people exchange serves as a cornerstone of state-to-state relations and can play crucial role in minimizing the so-called “trust deficit”. The Chinese side will work with the Indian side to continue the annual youth exchange programme and expand the exchanges of journalists, media and think-tanks. Cross-cultural exchanges can enrich the knowledge of each other and foster closer ties among peoples. We are ready to provide assistance in Chinese language teaching in Indian secondary schools. And Indian students are most welcome to study in China. We will continue to lend our support to the revival of the Nalanda University.

FOURTH

efforts should be made to enhance our regional and international cooperation to promote common interests. We should step up our coordination and cooperation on regional and international issues and work together to address the challenges of global implications such as climate change, food security, energy security, reform of global financial system, counter terrorism etc. to ensure those issues will be handled

EFFORTS SHALL BE MADE FOR A GOOD PREPARATION FOR THE 15TH SPECIAL REPRESENTATIVES MEETING ON THE CHINA-INDIA BOUNDARY ISSUE. IN ORDER TO MAINTAIN THE PEACE AND TRANQUILITY OF THE BORDER AREA BEFORE THE FINAL SETTLEMENT OF THE ISSUES IS FOUND, IT IS NECESSARY FOR TWO SIDES TO WORK OUT A NEW MECHANISM TO SERVE THAT PURPOSE. WE ARE WILLING TO WORK WITH INDIAN SIDE TO ACHIEVE THAT IN THE NEAR FUTURE. in line with the interests of developing countries and in a fair and equitable manner. China and India also should promote the rights and increase the say of developing countries in the global decision-making process.

FIFTH

properly manage sensitive issues and differences. Mutual understanding and mutual accommodation are crucial in dealing with differences and disagreements in our relations. We should handle them from a long-term and strategic perspective. So long as we follow the spirit of equality and mutual respect, we will be able to ensure a stable and healthy bilateral relation. It is China’s policy to maintain good neighbourly relations with all its neighbours, including India. We welcome India to play a more active role in international and regional affairs. We are happy to see the recent improvement of relations between India and its neighbours. A stable South Asia is not only a blessing to China and India, but also a great contribution to the region and the world at large. With the joint efforts of our two countries, the situation along the China and India border area is on the whole peaceful. Efforts shall be made for a good preparation

for the 15th Special Representatives Meeting on the China-India boundary issue. In order to maintain the peace and tranquility of the border area before the final settlement of the issues is found, it is necessary for two sides to work out a new mechanism to serve that purpose. We are willing to work with Indian side to achieve that in the near future. China has also declared to the rest of the world on many occasions that it takes the path of peaceful development and is committed to upholding world peace and promoting common development and prosperity for all countries. To this end, China has stuck to an independent foreign policy of peace. As President Hu Jintao reaffirmed in his New Year address few days ago, that China will continue to advance our opening-up drive for winwin results, and will unswervingly stick to the path of peaceful development and independent foreign policy of peace. We will develop our friendly relations and mutually beneficial cooperation with various countries in the world following the Five Principle of Peaceful Coexistence. An open and harmonious China of prosperity and stability will make an even greater contribution to the whole world. Mr Deng Xiaoping and Prime Minister Rajiv Gandhi, two great visionary leaders of China and India, shared a consensus view during their historical meeting in 1988 that China and India together can give the world new perspectives on a new international order and that the Asian age will arrive only when both China and India developed. Today the evolution of the world situation has proved their far-sightedness and outstanding vision. China and India are on their way to translating their vision into reality. What shall we do now? The answer is clear and simple. That is to cooperate. With the joint efforts of China and India, we will not only create a brighter future for our two countries and two peoples, but also make fresh contribution to the world peace and prosperity.  (This is a speech by HE Zhang Yan, Ambassador of the People’s Republic of China at a lecture on China-India relations)

April 2012  India-China Chronicle |53|

PHOTO FEATURE

REPUBLIC DAY & CHINESE NEW YEAR

Ringing in the New I

t was a unique celebration – the combining of two joyous occasions finding expression in one. In Gujarat, the 26th day of this year was celebrated as not only the Republic Day of India but also the Chinese New Year to strengthen India-China relations. The celebrations were jointly organized by the India China Economic & Cultural Council (ICEC), Gujarat Chapter, and the Culture department of the Embassy of China in India and CCTV. The Chief Minister of Gujarat, Mr Narendra Modi, wished the gathering “A Happy Chinese New Year” via video message. The celebrations were inaugurated by Mr Zhang Zhihong, Cultural Counselor, Embassy of China, Ms Fang Wen, cultural officer, Embassy of China, Mr Bakul Bakshi Retd Chief Commissioner Customs & Central Excise and Mr Jagat Shah, Chairman ICEC, Gujarat. The Karnavati Club was the venue where a photo exhibition on the Beijing Opera, an authentic Chinese food festival, a quiz on India and China, trade & culture information, kite festival and a demo of Chinese language learning were held to mark the occasion. People from all over Gujarat – Ahmedabad, Baroda, Surat, Rajkot, Junagadh, Bhuj and Jamnagar gathered to take part in the celebrations. Several government officials also attended. All visitors were greeted with the traditional red Chinese welcome scarf and handed a red envelope with a gift which are an integral part of the Chinese New Year. A “laughing Budha” was also gifted to

|54| India-China Chronicle  april 2012

all for good luck & fortune. More than 400 people took part and left with an awareness of the many similarities that the two great countries had in common. A quiz on China was also held and the Chinese were surprised by the knowledge exhibited by the Indians present who won all the prizes. “We must find more difficult questions for these Gujarati brains,” Mr Zhang Zhihong, Cultural Counselor, joked in a lighter vein. Several Chinese visitors and exchange students from China in Gujarat also attended and participated in a quiz on India’s Republic Day. They too won several prizes. The usual lion dance and dragon dances to mark the Chinese New Year were screened. Two popular Chinese films were also screened – Let’s Fall in Love and Forever Enthralled. Some quick and easy tips were also shared with the audience on: How to use chopsticks, the traditional method of

making Chinese tea, and How to cook authentic Chinese haka noodles etc. As part of the celebrations, the Chinese delegation visited many historic sites in Gujarat such as the Adalaj step wells, the Sardar Patel memorial, Akshardham temple, Sarkhej Roza, Jhulta minar, Sidi Saiyed ni jali, Hutheesing Jain temple and the Sabarmati ashram. There were also exchanges on Indian & Chinese culture with students from PDP University. Ms Fang Wen showed interest in organising opera shows, lion dances and dragon dances during Diwali later this year and during Vibrant Gujarat in January 2013. Mr Zhang Zhihong too expressed interest in facilitating sports trainers for the sports university mooted by Chief Minister Narendra Modi. The entire celebrations were covered by CCTV, China’s national TV . 

april 2012  India-China Chronicle |55|

Shows

Exhibitions&Trade EXHIBITION

DATE

VENUE

EVENT PROFILE

CONTACT PERSON

NSIC Trade Centre - ECIL, Hyderabad, Andhra Pradesh, India

It is one of the most professionally organized healthcare sector trade events in Paramount Exhibitors India. The show focuses on the overall development of the domestic medical Mr. Harish Arora industry and a diverse range of biomedical supplies, catheters, laser surgery Tel: +91-172-2274801 tools, imaging machinery, blood transfusion sets and other highly useful pharmaceutical systems and accessories are exhibited here.

Greentech Fire 17- 18Safety & Security MAY-12 Global Conference & Expo

TBA, Visakhapatnam, Andhra Pradesh, India

This event offers the best place for buyers & sellers and opportunities for :Joint ventures and collaborations, Sourcing requirements, Transfer of technology, research & development, Investment opportunities, Supply of plant, machinery, process control equipments, projects, services etc.

Greentech Trade Fairs Private Limited Mr. Kamaleshwar Sharan Tel: +91-11-25593846

FUTURE NOW

18- 20MAY-12

Bombay Exhibition Center(BEC), Mumbai, Maharashtra, India

FUTURE NOW is a stellar event bringing together the best brains and top experts in the information technology industry in discussion over the current trends in the profession as well what the future direction might be

India-Tech Foundation Mr. Sanjay Mishra Tel:+(91)-(22)26605550

Cloud Connect Bengaluru

24- 25MAY-12

Nimhans Convention Centre, Bengaluru, Karnataka, India

This show will provide the perfect platform for the exhibitors to establish new business relationships with a number of prospective clients at the same time nourish old business contacts. Large number of national and international buyers along with foreign delegates will attend this business fair and will purchase products according to their requirement and budget.

UBM India Pvt. Ltd. Mr. Anees Ahmed Tel: +91-11-23765551

Gayathri Vihar Palace Ground, Bengaluru, Karnataka, India

This is India’s premier platform for the textile value chain. The 8th Edition of this show will provide manufacturers and suppliers of apparel, fabrics, trimmings, embellishments and related services to showcase their merchandise to discerning buyers from across the world. F & A Trade Show has emerged as the most important international sourcing platform in India, which is used by big buyers.

SS Textile Media Private Limited Ms. Kavita Tel: +91-80-25544711 / 41151841

01- 03JUN-12

Fabrics & Accessories Trade Show

The Wedding & 13-13Lifestyle Fair Worli JUN-12

Blue Sea, Mumbai, Maharashtra, India

This fair has raised the expectations of Mumbai residents as the event is going Marriage Mantra to be a promising show of luxurious wedding trousseaus, services and lifestyle Mr. Aanal Mehta products without which a wedding is never complete. Addressing various Tel: +91-022-26469120 requirements of visitors, planning to get married in the upcoming season, this event will showcase some of the finest collections from eminent designers having loads of expertise in wedding couture.

Electrical, Electronics And Energy Expo And Conferences Coimbatore

15-17JUN-12

Codissia Intec Technology Centre, Coimbatore, Tamil Nadu, India

Electrical, Electronics And Energy Expo And Conferences Coimbatore will explore a whole new world of electronics and energy. This event will be showcasing a wide range of products, services and technologies that pertain to these respective sectors.

Paramount Exhibitors Mr. Harish Arora Tel: +91-172-2274801 Mob: +91-9814211848

Food & HospitalityWorld

21-23JUN-12

Palace Grounds, Bengaluru, Karnataka, India

Over the span of last 8 years since its inception in 2000, Food & HospitalityWorld has established itself as India’s most comprehensive hospitality tradeshow. The event is organised under the banner of ‘The Express Groups’ premier hospitality trade publication - Express Hospitality - a publication that enjoys the status of Indian hospitality industry’s favorite business magazine.

The Indian Express Ltd. Ms. Darshana Chauhan Tel: +91-22-67440000

Baicon is one of the most reputed trade shows for the construction industry. This event will be an extensive display of the latest and the most advanced equipments, machinery, technologies and materials that are related to the construction sector. Leading companies will be exhibiting their most innovative products and services that are related to the concerned sector.

Smart Expos Tel: +91-44-22501986 / 22501987

The Photo Today is characterized as an international exposition for tapping global opportunities of photography, videography, digital imaging frame & album making industrial sector. The place proves to be an ideal optimum choice for bringing all premiere companies under 1 roof.

Buysell Interactions Private Limited Ms. Karthika Ravi Tel: +91-44-28353739 Mob: +91-9884348473

India International Travel Exhibition (IITE) is the leading organizer of Travel and Tourism events in the fastest growing tier two cities of Central India. IITE has successfully completed its events at Indore, Aurangabad, Raipur, Nagpur & Vijayawada.

Global Trade Fairs & Conventions (GTFC) Mr. Anurag Gupta Tel:+(91)-(80)41483066

Baicon

29 Jun- 1 Jul 2012

Chennai Trade Centre Chennai, Tamil Nadu, India

Photo Today Bangalore

29-JUN-to Palace Grounds, 01-JUL-12 Bengaluru, Karnataka, India

India International 29-jun TBA, Aurangabad, Travel Exhibition - 01-JUL-12 Bihar, India Aurangabad

|56| India-China Chronicle  April 2012

DATE

VENUE

EVENT PROFILE

CONTACT PERSON

China (Qingdao) Garments & Textiles Export Fair

04 -06 May-12

Qingdao International Convention & Exhibition Center, Qingdao, China

China (Qingdao) Garments & Textiles Export Fair (Autumn) and 2012 China (Qingdao) Home Textiles & Fabrics Export Fair are the most important textiles & garment export fair in North China and to be held from 04 to 06 May 2012 at Qingdao International Convention & Exhibition Center in the China

Mr. Wan Jifei Tel: +86-532-82772668

Nuclear Power Industry Exhibition

07- 09MAY-12

TBA, Shenzhen, Guangdong, China

Nuclear Power Industry Exhibition is a specialized event demonstrating industrial potential of foreign enterprises for manufacture of complex industrial products as well as a wide range of technologies and services for providing fullscale radiation safety of the states.

China Nuclear Energy Association, CNEA

Biotech China is the only international exhibition in China that focuses on biomedicine, gene technology and life science. Biotech China has become the well known and highly professional expo in this particular field with widely acknowledged fame in both China and the whole Asia region.

Shanghai Modern International Exhibition Co. Limited

Shanghai New International Expo Centre(SNIEC), Shanghai, China

International Photovoltaic Power Generation Conference & Expo is characterized as one of the definite show for Photovoltaic Power Generation. For 3 days, it will showcase world’s largest Photovoltaic industry. A conference will also be held along with the event which will give a complete snapshot of the sector.

Shanghai New Energy Industry Association

Shanxi Province Exhibition Hall, Taiyuan, Shanxi, China

The trade fair will aim at catering to the requirements of the industry members as well as the commercial and non commercial visitors about the latest developments and advancements in the fields of international travel and tourism with focus on the role of real estate investment.

Shanxi Sanjin Exhibition Service Co., Ltd

In India  In China

India International 04- 06Medical MAY-12 Equipment Expo Hyderabad

EXHIBITION

Biotech China

09- 11MAY-12

Shanghai World Expo Theme Pavilion, Shanghai, China

Tel: +(86)-(10)-88305809

Ms. Alfred Wang Tel: +86-21-63288899

International Photovoltaic Power Generation Conference & Expo

16- 18MAY-12

China International Tourism & Investment Real Estate Trade Fair

25- 27MAY-12

Rail & Metro China Expo

30- 01JUN-12

Shanghai New International Expo Centre(SNIEC), Shanghai, China

Metro China is the premier international trade event in the urban rail industry in China, which has been successfully held since its first launch in 2002. It serves as an ideal platform for companies in the industry to collect market information, establish business contacts, to take advantage of the great opportunity offered by one of the most vigorous economies in the world.

IMAG, Germany Tel:+(49)-(89)-94922121

Green Processing China

06- 08JUN-12

Shanghai New International Expo Centre(SNIEC), Shanghai, China

The Green Processing China 2012 event will be the renowned exhibition which will focus on the key elements which is intended to a cleaner environment. It will offer a vast horizon with excellent business platform for scrap metal dealers.

Reed Exhibitions China Head Office Mr. Ken Xu Tel: +86-10-59339317

China Auto Parts and 12-15Service Show JUN-12

Shanghai New International Expo Centre(SNIEC) Shanghai, China

China Auto Parts and Service Show is one of the most professionally organized automobile sector trade shows in China. Organized at the Shanghai New International Expo Center, the show serves as an ideal platform for leading industrial experts from this sector to deliberate upon the latest developments and innovations from this sector.

Shanghai International Exhibition Co Limited Tel: +(86)-(21)-62792828

NEPCON West China

19- 21JUN-12

Chengdu New International Convention & Exposition Center, Chengdu, Sichuan, China

Reed Exhibitions NEPCON West China is an event dedicated to the sector Mr. Mike Deng of electronics manufacturing. This event will be extremely Tel: +86-21-51535100 beneficial for the exhibitors as it is in this event that they will be provided with excellent marketing opportunities by being able to introduce their latest products and services to the attendees

Global Sourcing Fair : Electronics & Components Shanghai

26- 28JUN-12

Shanghai World Expo Exhibition And Convention Center, Shanghai, China

Electronics & Components Shanghai is a fabulous event bringing together the experts and decision makers from the electronics and components industries in to contact with the consumer businesses as they look to expand their trading options further along with a better professional understanding of the discipline itself.

Global Sources Tel:+(65)-(6547)-2800

China(Shenzhen) International Touch Screen Exhibition

28- 30JUN-12

Shenzhen Convention & Exhibition Center, Shenzhen, Guangdong, China

The Huiduo Touch-Screen Exhibition will attract over 200 manufacturers to join in. Besides, the number of booths will be up to more than 500 and the area of exhibition will exceed 10 thousand square meters.

Huiduo Exhibition Co. Limited Mr. Anna Yu Tel: +86-20-85556058

Mr. James Jiang Tel: +86-21-13651766051

Mr. Jason Yang Tel: +86-351-5249513

April 2012  India-China Chronicle |57|

INFOCUS | INDIA-CHINA TOURISM | REPORT

10 places to see in China that aren’t the Great Wall

The Tibetan towers of Western Sichuan

hese mysterious towers pepper the Tribal Corridor of Western Sichuan province. Hundreds still stand—some 50 meters high with as many as 13 star-like points—and the oldest are thought to be 1,200 years old. Nobody knows why they’re there or what they’re for, but some say they were defensive structures used for observing the lawless valleys that surround them. Others suggest they could have been used as status symbols, or storehouses, or both. Regardless, these secret towers of the Himalayas are one of China’s best kept secrets.

Glacier lakes, mountain forests, sandy beaches and more. Here’s a list of some dramatic destinations that you may not have yet considered for your trip to China: There’s a whole lot more to China than an expo, cheap food and a big wall. Book a train or some plane tickets and check out some of these other Chinese spectacles.

Karakul Lake, Xinjiang

China’s wild rivers

hina is home to some of the mightiest rivers in Asia— the Yellow, the Yangtze, the Mekong—and for many, the country’s massive damming projects are a tragedy. But China is still home to some unspoiled waterways that can offer glimpses of the country rarely seen. Last Descents River Expedition, run by a young American trying to protect China’s river heritage, can lead the way. The company organizes trips to rivers in Western China—including Tibet, Qinghai and Yunnan—that combine tourism with a social and environmental purpose.

Heaven Lake, home to China’s Nessie

arakul, a glacier lake 3,600 meters above sea level tucked in the Pamir Mountains, feels like the edge of the Earth. Along the Karakorum highway and a stone’s throw from the Tajikistan border, Karakul is home to camels, yaks, Kyrgyz herders and not much else. The walk around the lake (Karakul means “black lake” in Kyrgyz) takes about three hours and offers a spectacular view of the 7,500 meter high Muztagh Ata Mountain. Many visitors spend the night in a yurt belonging to a local family. For about US$10 a night, you’ll be fed rice, vegetables and yak meat and sleep in a collective bed heated by a small fire pit. Dress warm.

|58| India-China Chronicle  April 2012

ince the beginning of last century the Heaven Lake Monster has made several alleged ‘appearances’. In 2003, a group of soldiers claimed to have spotted a black and green animal with scales on its back and horns on its head. In 2007, a TV cameraman supposedly caught video and stills of three pairs of finned, seal-like creatures that “could swim as fast as yachts.” Monster or not, Heaven Lake is a marvel. The volcanic lake in Jilin province was considered holy land during the Qing dynasty. From the top, catch a rare glimpse of North Korea just across the border. April 2012  India-China Chronicle |59|

INFOCUS | INDIA-CHINA TOURISM | REPORT

Gulangyu Island

Burma Road, Yunnan

very visitor to China has a car story—or several (see Peter Hessler’s Country Driving)—and rarely are they positive. Gulangyu, an island off the coast of Xiamen, might be the only place of true calm left in today’s autoobsessed China. Gulangyu, home to 16,000 people on one square kilometer of land, famously has no motorized vehicle (with a few exceptions). Not even bicycles. No honking, no traffic jams, no near-death experiences. Can this place even be called China? The hilly island is part Old Havana, part Hawaii – a pedestrian’s dream.

he Burma Road once ran from Mandalay to Kunming and was the scene of bloody battles during World War 2. On the Chinese side, start in Riuli, once known as a Golden Triangle hub, today home to several jade markets. Pass by spectacular valleys and terraced rice plantations on the way to Tongsheng, which is home to the Museum of Yunnan-Burmese Anti-Japanese War. Before heading to Dali, spend a few days hiking through unspoiled villages along the southern portions of the Nu River. Once in Dali relax in one of the Old City’s myriad cafes before heading to Kunming, Yunnan’s capital and one of China’s coolest cities.

Guangzhou’s Little Africa

ucked into the heart of Guangzhou’s Old City is one of the most fascinating corners of China you didn’t know existed: A community of some 20,000 traders hailing from Nigeria, Senegal, Ghana and elsewhere in Africa. Situated near Canaan Export Clothes Wholesale Trading Center, Little Africa, or “Chocolate City,” as some politically incorrect locals sometimes call it, arose in the 1990s as traders flocked to the southern Chinese province nicknamed ‘the world’s factory.’ Vibrant social and religious communities have developed and many traders will gladly talk with visitors about their lives—both the good and bad—in Guangzhou.

Cuandixia village, Beijing

eijing is great, but sometimes you just need to escape. It’s not hard. Just outside the city are some charming villages tucked in the lovely hills to the west, many in the shadow of the Great Wall. Cuandixia village, about 90 kilometers from downtown Beijing, is more than 400 years old and is home to more than 70 preserved courtyard homes built during the Ming (1368-1644) and Qing (1644-1911) Dynasties. It’s often a stand-in for ancient China in films and TV shows. The nearby hills are green and lush, a contrast to the dusty landscape that surrounds the capital. Cuandixia makes for a good day trip and home stays can also be arranged.

Get Naked in the Moganshan Hills

arly last century, wealthy foreigners living in Shanghai came to Moganshan to lounge away the summer in stone villas, play tennis and swim in the municipal pool. Today, Moganshan is making a comeback, thanks in part to Naked Retreats, a collection of restored farmhouses. (Don’t be fooled by the name – any nudity should probably be confined to your bungalow.) Upon arrival, guests are taken on a ‘decompression walk’ and encouraged to spend a few minutes in awe of the scenery. Activities include cycling, bass fishing and mountain hikes. Visitors can wander through dewy tea plantations and bamboo forests, or swim in a reservoir to the buzz of cicadas. Accommodations are basic— the wooden floors creak and there’s no air-conditioning—but bungalows come with Western-style kitchens, flat-screen TVs and wireless Internet. |60| India-China Chronicle  April 2012

Surf in Hainan

ainan Island, sometimes called, perhaps generously, “China’s Hawaii,” is a growing tourist destination off the country’s southern coast, just east of Vietnam. It’s famous for hosting Chinese beauty pageants, but is also home to a small but growing community of surfers – both Chinese and foreign. Each November, Sanya, the island’s capital, hosts the second annual Surfing Hainan Open. Check out Hainan Adventures for surf lessons and travel packages.

April 2012  India-China Chronicle |61|

F I L M R E V I E W

The Flowers of War Directed by: ZHANG YIMOU’S

he horrendous assault of Japanese troops in late 1937, which came to be known as the Rape of Nanking, caused the deaths of over 200,000 Chinese. The list of atrocities is endless and no film to date presents them in more harrowing fashion than director Zhang Yimou’s The Flowers of War. Its opening sequence, in which an outmanned Chinese unit fights rifles-against-tanks to save a few endangered women, is as blunt as it is brutal. Hard-drinking American mortician John Miller (Christian Bale) is introduced, fleeing the same Japanese units and, through some miraculous accidents, finding his way to a battered but still-standing cathedral whose Red Cross flag theoretically protects the inhabitants. Adapted by Liu Heng from the novel by Yan Geling, The Flowers of War offers two distinct species of “flowers”: One group consists of beautiful

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courtesans on the run, while the other encompasses cloistered schoolgirls who sing in the church choir and who deeply mourn the recent death of their Catholic priest. To save both the prostitutes and the adolescent girls—who recoil from any association with fallen angels—Miller must put on the Father’s black robes and emulate priestly behavior. Gradually, he acquires a new dignity and compassion. He stops trying to bed the sultry leader of the courtesans, Yo Mo (Ni Ni), and begins to treat her like the clever, formidable survivor that she is. In the second act, momentum slows and sections of dialogue seem incongruously sentimental. However, if one is willing to extend imagination and allow that centuries of Chinese tradition permit raw emotions to be expressed in the midst of blunt catastrophe, then these speeches may be accepted as part of ancient Chinese mores surviving to present day. Considering Zhang’s profound understanding of his country’s national characteristics, the lyrical passages have a legitimate place. Contrasting with them are ruthless military sequences—especially a scene in which a single Chinese soldier wipes out an entire Japanese squad. This should be reality enough for most viewers. Audiences should be dazzled by Zhang’s skill and inventiveness. Still, The Flowers of War’s primary concern is first and foremost brutality against women in wartime. Saving as many of them as possible is the thrust of the action. The motivation for Miller to become a better man—in

spite of Bale’s yeoman efforts—is not always clear, largely the result of the script’s weakness. If there are too many plot contrivances, there are also a number of startling surprises that render the film theatrically potent. Overall, cinematographer Zhao Xiaoding’s vision is simply magnificent; costume designer William Chang Suk-Ping’s work is impeccable; and Tao Jing’s sound design makes a major contribution to the film’s undeniable impact. The Flowers of War will likely be remembered as a triumph of the genre. The film, set during the Japanese invasion of China, is told from a young girl’s point of view, not as a history lesson, but as an intimate, elemental and paradoxically universal celebration of the human spirit. Bale stars as a dissolute Westerner who seeks refuge in a Catholic Church. There he meets a beautiful Chinese courtesan who helps him rescue a group of schoolgirls from a terrible fate at the hands of the Japanese. The film represents one of China’s most ambitious productions, involving the recreation of 1937 Nanking built from scratch over a one-year period and the collaboration of one of Hollywood’s most sought after leading men (Christian Bale). 

Have a dragon year!

ecember is the month China starts decorating itself. Every shop, office building, public site starts putting up Christmas trees, ‘Santa’s and reindeers. Surprisingly, not many Chinese celebrate Christmas as a festival in the way Christians would do; but the spirit is there everywhere – at least in the big cities. Much like in India I suppose, where people like an extended period of festive spirit (Navratri to Diwali can be taken as an example), the Chinese seem to like the festive mood that starts right from December and goes up to the spring festival in January/February. I have written about the spring festival earlier, when last year I had visited my friend at her Gansu province home to spend the Spring Festival with her and her family. This year, I asked my friends and colleagues about how they see customs changing with time. My colleague Jacob Jiang, university educated at Nottingham and a native of Dalian in the north, says that certain northern customs have remained unchanged such as the tradition of not getting a haircut in the month of the Spring Festival for fear of causing death to one’s maternal uncle. Irene, another colleague of mine who along with Jacob represents China’s new brigade of confident, fluent in English, Western-educated youth, says that with the advent of social networking, younger people are tending to celebrate Spring Festival ‘online’ with constant updates and greetings on media such as Weibo, QQ groups– as Spring Festival is celebrated mostly with family, social networking sites have provided an effective way of keeping in touch with friends made during university and work-life. Younger people are also getting less and less interested in watching the annual ‘CCTV Chinese New Year Gala’ broadcast by the Chinese national TV channel, CCTV, which was much anticipated every Spring Festival evening

and had become a custom since it started in 1983. With changes in society, it is but a given that the way Spring Festival is celebrated will continue to evolve. As young people go back to their hometowns, it is time not just for a re-union with families but also with old friends from school and the neighborhood. Many a strong friendship is re-affirmed and many lost romances are relived. If somebody is unable to make it back home, friends go to his/her parents instead to “bainian” or pay respects for the New Year. There is a custom to drink Chinese rice wine while paying New Year respects. This is a sort of a coming of age ceremony for young people when parents themselves offer the extremely strong rice wine to their children. Boys are even offered a smoke by the father when he is considered “grown-up.” Like in India, family is also very important in China. Chun Jie or Spring Festival is the time when the family cherishes some happy memories, eats sumptuous food and forgets its sorrows to welcome the New Year with great happiness, fire crackers and the colour red. To all my Chinese friends – zhu nimen chunjie kuai le!! And to my Indian ones – Naye saal ki shubhkamnaayen! And a very happy and prosperous New Year to you all!!! 

SUMELIKA BHATTACHARYYA Chronicle Bureau, Shanghai

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