Prime Minister Manmohan Singh is likely to take strong exception to Beijing?s growing influence in Pakistan Occupied Kashmir (PoK) in talks with his Chinese counterpart Wen Jiabao in Hanoi later this week. The two leaders are scheduled to meet on the sidelines of the East Asia Summit, on the last leg of Singh?s three-nation visit that began on Sunday.
According to highly placed sources, while Beijing continues to officially maintain that there is no change in its policy towards PoK, New Delhi has reasons to believe otherwise. ?In practice, we see a change in situation. We have taken it up strongly with China,? said a source. ?We are still in the process of assessing their movements (economic and military) in PoK.?
India has already pressed the pause button on high-level defence exchanges with China. It has, however, not cut all military links with the country. The defence interaction between the countries stands reduced to nominal meetings after China refused to provide a normal visa to a senior Indian Army officer.
?China says it has not denied a visa. But a separate sheet (as offered by Beijing) is not acceptable to us,? the source said.??Both countries have, nevertheless, said they want to resume full range of defence exchanges.?
On the economic front, the PM may not take that hard a line with Jiabao on currency issues. China has been under tremendous pressure from the US and multilateral institutions to let the yuan appreciate in the larger interest of addressing global structural imbalances. An undervalued Chinese currency gives us cheaper imports, sources said. India is a big importer of Chinese power equipment, having already sourced equipment for adding 13,200 mega watts.
At the G20 finance ministers? meeting that concluded on Saturday, Pranab Mukherjee spoke against any competitive devaluation of major currencies. While he did say that countries should cooperate in making their exchange rates reflect economic fundamentals, he emphasised that the world could not afford to have sudden movements or complete standstills on this front, as both would be disruptive.
?We are not convinced that a revalued yuan will solve the structural problems faced by the global economy. Yes, it does affect our export competitiveness. But we will deal with the currency issue?whether it requires adjustment or not?within the larger global economic recovery debate. What we need more is market access and will protest the various forms of non-tariff barriers that China imposes on pharmaceutical, IT services and engineering exports from India,? a source said.