The Pakistan Railways is reportedly facing a crisis because of the unserviceability of 32 of the 69 locomotives bought from a Chinese company. It has been alleged that the Railways were forced to buy these locomotives by President Asif Ali Zardari and his advisers even though expert opinion in the Railways was against buying locomotives from a Chinese company, which turned out to be sub-standard. It has been reported that to keep the Railways going, they are thinking of ordering 75 new locomotives from non-Chinese sources. The text of a report on this subject carried by “The News” of Pakistan on May 15, 2010, is attached.
A point made by the Chinese companies is that while India has suspended the procurement of mobile telephone network equipment and technology from China on security grounds, it continues to import similar equipment and technology from Western countries.
This has an important lesson for India, which has been developing a dependence on Chinese equipment and technology in key sectors of the economy such as electricity production and mobile telephone networks. Procurement of mobile telephone network equipment and technology from Chinese companies by Indian private companies on which there were no major restrictions till last year, has now been slowed down following concerns reportedly voiced by the Indian intelligence agencies over the security implications of a growing dependence on Chinese equipment and technology in this sensitive sector. It has been reported that the Government has not cleared any proposal for fresh procurement during the last four months and has undertaken a study of the concerns voiced by the intelligence agencies. In the meanwhile, pressure has been mounted on the Government to reverse its curbs by the Chinese authorities through their Embassy in New Delhi and by officials of the Chinese companies.
A point made by the Chinese companies is that while India has suspended the procurement of mobile telephone network equipment and technology from China on security grounds, it continues to import similar equipment and technology from Western countries. The question posed by them is: If similar Western equipment and technology do not pose a security threat, why should Chinese equipment and technology pose a threat? An insinuation made is that the real reason for the suspension of the procurement from China is not secuity, but concealed commercial motives to favour Western companies.
Even if what the Chinese companies say is correct, the Government’s caution in buying similar equipment and technology from China, even at much lower prices, is understandable because China is still perceived in India as a possible adversary. India and China had fought a war in 1962 and one should factor into our decision-making the possibility that there could be another military conflict if the border dispute is not satisfactoily settled.When the intelligence agencies talk of the security implications, they keep in view not only the circumstances of today, but also what could happen in future if the bilateral relations deteriorate.
While the Chinese and their supporters in India are unhappy over the curbs imposed by India on security grounds, they tend to play down the fact that the Chinese themselves had imposed similar restrictions on security grounds on Indian information technology companies in China. Mr.Zhu Rongji, the former Chinese Prime Minister, had allowed Indian IT companies to open branches in Shanghai. But for many years, they were not allowed to have a presence in Beijing. Chinese Governmental and non-Governmental entities were secretly advised not to give any contracts to the Indian companies. The Indian companies survived in Shanghai with the contracts won by them from the local offices of Western multinationals. Only now the Chinese have allowed Indian IT companies to have a presence in Beijing and other cities and permitted some of their banks to award contracts to the Indian companies. Even now, will the Chinese authorities allow Indian IT companies to operate in Tibet and Xinjiang?
Before deciding to order any equipment and technology from the West, an important question considered by us is: What are the chances of the Western Governments suspending the supply of spare parts in future to exercise political pressure on India?
While security is and ought to be an important consideration in the case of telecommunication equipment, serviceability of the equipment and assured future supplies of spare parts should be equally important considerations in sectors relating to key segments of our economy such as power production. The Pakistan Railways developed an unhealthy dependence on Chinese equipment and it is now threatened with serious dislocation despite the excellent state-to-state relations between the two countries.
We have been developing a dependence on the Chinese for our thermal power stations because the Chinese power equipment like their telecommunication equipment is much cheaper as compared to Western and Japanese equipment and the Chinese have a reputation of completing their projects in time. Other important considerations such as the quality and serviceability of the equipment and the guarantee of future supplies of spare parts are not given the attention they deserve.
Before deciding to order any equipment and technology from the West, an important question considered by us is: What are the chances of the Western Governments suspending the supply of spare parts in future to exercise political pressure on India? The US had not hesitated to use this weapon on some occasions in the past. If tomorrow there is a military conflict between India and Pakistan and the Chinese authorities, to help out Pakistan, suspend the supply of spare parts for our power projects set up with their assistance, what will happen to our power production and the economy as a whole?
Are such questions carefully considered before allowing the procurement of Chinese equipment and technology? One has the impression that in our keenness to improve bilateral trade with China, which is racing towards the annual target of US $ 60 billion with China being the main beneficiary with a big trade surplus in its favour, we are not paying attention to important questions such as what I have explained above. Let us by all means allow a free hand in India to Chinese manufacturers of consumer goods, but in respect of other goods of a sensitive nature which could affect our national security or future economic stability, we have to be more careful.
Since India and China will continue to be potential adversaries so long as the border dispute is not settled, the argument that we should treat the Chinese companies in the same way we treat the Western companies does not hold good. Security and guarantee of future supplies should be important considerations in the case of Western companies too, but certain risks which we can afford to take in the case of Western companies, we cannot in the case of Chinese companies.
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