September 29, 2012

How Chanda Kochhar managed 2008 crisis ?

Chanda Kochhar 2008—we had to manage situations where customers were questioning our soundness and we saw abnormal deposit withdrawals. In 2008, when the global financial crisis hit, people started saying, “ICICI is a global bank, so if something is going wrong with the global economy, it will go wrong with ICICI.” And the only way to cope with that was for me to get into every little detail. 
We set up a control room, and I was asking very specific questions. 
“What is our strategy for small depositors who come to the branches?” 
“How will we communicate with our employees?” 
“How are we handling the regulators, the large investors, the media?”
There were also the operational things. We had to figure out how much cash we needed to make available in each branch and ATM to make sure we didn’t run out if people wanted to make withdrawals. And that meant getting into very precise mathematical calculations. “If at every ATM everybody were to do a transaction every three minutes and this is the average amount of cash they would withdraw, what is the cash we would need on a daily basis?” “How do we move all that money physically from our cash chest and get it into the ATMs—how many trucks will we need?”
Then we had to think through dealing with the media. “What are the 25 questions we might be asked and how should we answer them?” And we had to remind ourselves to be patient because every media person was going to ask the same 20 questions over and over again.
We went to our branch managers with detailed instructions, saying not just that these are the answers you should give but reminding them that when customers come, managers should be relaxed, ask them to sit, and offer them a glass of water first, before even starting to talk with them. We felt it was really important that managers not seem stressed or confused but project an aura of confidence and composure, so they could give that confidence to the customers.
I was deeply involved in all those issues. These are times when the leader must be prepared to get into that level of detail on execution.

An interview with Chanda Kochhar

September 2012
Chanda Kochhar
Chanda Kochhar
Managing director and CEO, ICICI Bank
Chanda Kochhar, managing director and CEO of India’s ICICI Bank, knows a thing or twoabout leading in a volatile environment. A longtime ICICI executive, Kochhar helped guide the company successfully through a major strategic shift before being tapped to lead India’s second-largest bank in 2009—during the height of the global financial crisis. In this interview, conducted by McKinsey’s Clay Chandler in May 2012, Kochhar describes the mind-set required to make decisions in a crisis, as well as the risks and rewards of embracing two seemingly contradictory roles: the big-picture company strategist who also excels at the nitty-gritty business of execution.

McKinsey: It’s often said that leaders these days must operate in an environment of extreme volatility. Do you agree? How does that affect the way you lead?
Chanda Kochhar: Coping with a more volatile environment is a challenge common to many leaders. At ICICI, we constantly survey the horizon to anticipate that next big change. Scenario planning has always been important, but these days change can come so much more quickly. So we are always asking “what if.” What if the currency moves by 5 percent in two days? What if the stock market moves by 10 percent in two days? What would be the impact on our customers? Our people? What are the steps we would have to take? You have to be ready to react at any moment.
McKinsey: Do you have a formal scenario-planning process?
Chanda Kochhar: We have a team of people who do scenario planning and stress testing. That’s important for any bank. But one can’t just leave everything to the process, because things are changing every day. One day, I might see something that happens to another bank and think, “That could happen to us.” So I call the team. We brainstorm, we discuss. So there’s an institutionalized process but also a constant on-the-fly process that’s much less structured.
McKinsey: You’re still primarily an India-focused operation. How closely do you, as CEO, feel you have to be in touch with what’s happening in Europe or elsewhere in Asia?
Chanda Kochhar: I have to follow events beyond India very closely. In a globalized world, change from almost anywhere can affect us, whether directly or indirectly. At the same time, our organization itself has become far more global. Ten years ago, we were a purely domestic Indian bank. Today, we’re present in 18 countries outside India, and our international operations account for about 25 percent of our assets. While a large part of this is business with Indian clients, their operations are spread all over the world. We have a large number of non-Indian retail customers. And anything that happens in the global economy has the potential to affect our Indian clients.
McKinsey: Do you see your role as more of a big-picture strategist or a hands-on manager?
Chanda Kochhar: Well, of course, I must be both. In today’s world, leaders must have one eye on the broad trends—what is happening in the world? what is the next volatile thing that can hit you?—and at the same time have a very clear view of day-to-day operations. I think one of the big challenges for leaders today is that windows for effective execution have gotten smaller. The world today is so volatile that just about anything you need to implement has to be done in 90 days, and sometimes in 60 days or even 30 days, or it risks becoming irrelevant.
So as CEO I have to be very close to reality while at the same time keeping the big picture in mind. Getting that mix right—thinking strategically and staying close to execution—is the essence of the CEO’s job. You don’t want to micromanage every little thing and constrain the people on your team. But at the same time, you can’t get so preoccupied with a vision or dream that you forget about your next big product launch or technology initiative. It’s essential that I get right into the nitty-gritty of how decisions are being executed and make sure things are moving as fast as I want.
McKinsey: Can you give us an example of something where you’ve been particularly involved with execution?
Chanda Kochhar: On two occasions—once in 2003 and then again in 2008—we had to manage situations where customers were questioning our soundness and we saw abnormal deposit withdrawals. In 2008, when the global financial crisis hit, people started saying, “ICICI is a global bank, so if something is going wrong with the global economy, it will go wrong with ICICI.” And the only way to cope with that was for me to get into every little detail. We set up a control room, and I was asking very specific questions. “What is our strategy for small depositors who come to the branches?” “How will we communicate with our employees?” “How are we handling the regulators, the large investors, the media?”
There were also the operational things. We had to figure out how much cash we needed to make available in each branch and ATM to make sure we didn’t run out if people wanted to make withdrawals. And that meant getting into very precise mathematical calculations. “If at every ATM everybody were to do a transaction every three minutes and this is the average amount of cash they would withdraw, what is the cash we would need on a daily basis?” “How do we move all that money physically from our cash chest and get it into the ATMs—how many trucks will we need?”
Then we had to think through dealing with the media. “What are the 25 questions we might be asked and how should we answer them?” And we had to remind ourselves to be patient because every media person was going to ask the same 20 questions over and over again.
We went to our branch managers with detailed instructions, saying not just that these are the answers you should give but reminding them that when customers come, managers should be relaxed, ask them to sit, and offer them a glass of water first, before even starting to talk with them. We felt it was really important that managers not seem stressed or confused but project an aura of confidence and composure, so they could give that confidence to the customers.
I was deeply involved in all those issues. These are times when the leader must be prepared to get into that level of detail on execution.
McKinsey: Over the years, you have made some big strategic decisions—for example, about how to reallocate the bank’s business portfolio, where you’ve charted a course that diverged from conventional wisdom and even the consensus recommendations of your senior team. How do you do that? How do you have the confidence to know the right choice is to zig when everyone around you is telling you to zag?
Chanda Kochhar: Well, at the end of the day, the decision about where the organization should go has to come down to a single leader. You can’t have ten people making big decisions like that, because they could come up with ten different choices. Someone has to make the final call.
But in making that final decision, you need to be sure you’ve understood what everyone thinks, not just people on your own team, but others outside the organization, too. People often talk about the importance of being a good listener, but I think it’s something more than that. I think you have to not just listen but absorb—to take in everything like a sponge—so that when you do make that final call, it’s not just based on whims and fancies.
And once you’ve made that decision, I think it’s very, very important for leaders to make sure the rest of the team understands your vision and the reasoning behind it. Your communication with your team members has to be such that they actually understand the logic and the benefits of your choice and therefore are with you in execution.
When I decided to rebalance our portfolio, it was a big adjustment for people. We’d been growing at rates of around 30 percent and had invested a lot of energy in that. To suddenly say we needed to step back wasn’t easy for people to understand. I spent several months just communicating with people—explaining why it was the right call in the current circumstances and why it was going to be, in the long term, better for the company’s growth. It was important that they understand that this was a move that would have medium- and long-term benefits for the organization and for them.
McKinsey: And how did you get that message out?
Chanda Kochhar: Well, we have 60,000 employees, so I had to lay down a formal process to reach people at each level of the organization. You start with the senior-management team. I held group meetings and one-on-one meetings with all my top people. In every interaction, you want to build in a discussion not only about the strategy but about how the individual can contribute. I travel a lot to the regional offices and the branches, so as I met with people on those visits I would incorporate the discussion about strategy. And I did a number of communications through our own internal media to reach the larger set of people.
McKinsey: Do you have a formal mechanism for making sure you stay in touch with employees and customers on the organization’s front line?
Chanda Kochhar: I make regular visits to all our branches. I go almost unannounced, and at a branch I make an effort to talk to the people there. And for the past two years I have been holding regularly scheduled employee discussion meetings. These are not performance reviews or meetings with a particular business segment—with a boss and his subordinate and the next subordinate and the next. These are just meetings with different sets of about 20 employees picked on a random basis at various levels of the organization. We do them once a month. I promise people who participate that whatever they say is just for me to absorb and will not go out of the room. Sometimes we talk about the work environment in the branches. Sometimes we talk about what customers are feeling. Sometimes we talk about gender issues. Sometimes we talk about our transfer policies. And over time, people have learned that they can speak to me and they do; no one outside the room knows who spoke.
McKinsey: That’s a big time commitment. What do you get from those interactions?
Chanda Kochhar: I learn a lot. One of my most meaningful encounters was in a branch at a time when we were changing many of our customer processes. I spent an entire day not just visiting the branch but standing in the reception area watching the person who greeted and directed customers as they came through the door. This was supposed to be a fairly junior position, someone who basically just said, “Hello, may I help you?” and steered customers to other counters. But standing behind this person—watching the interactions, hearing for myself what kinds of questions customers had, observing directly the ability of our staff to react—was a very powerful learning experience for me.
I realized that what we had thought was a very simple job that could be left to someone junior was actually a very complicated job that should be done by someone with training and experience. I saw that this person had to know how to deal with all sorts of things. How do you handle cash? How do you handle the sale of a life insurance policy? Now, you might think taking cash deposits—how hard could that be? You send the customer to the cashier. Well, what about a case when the transaction has been prompted by a death in the family and the customer doesn’t know how to file the claims? I realized that not only was this desk getting all the most complicated and unstructured queries but that it was our very first point of interaction with our customers.
McKinsey: It sounds like the visits generate useful insights about your people. Do the interactions ever teach you more about your customers?
Chanda Kochhar: Absolutely. At one of our branches in Goa recently, a loan officer pointed out to me that we still kept a policy in place against making auto loans in a particular part of the state because there had been a lot of defaults on those loans four years earlier. “But now the whole customer profile has changed,” he argued, going on to explain to me exactly how it had changed and how competitors were moving in. “I’m dying here. The other banks have started,” he said. “Why haven’t we?”
It was a fair question. We had been the early movers, but we had a bad experience and stopped. In one sense, it was insignificant for the organization’s business in car loans. It wasn’t the whole Goa State in question; it was a small part of the location.
But it was very significant for the loan officer because for him that’s 100 percent of his area. Why, then, didn’t we listen to this guy? He may not have been the most senior guy, but he was close to reality. He knew his stuff, but he didn’t know how to filter what he knew through our system. Ultimately, stories like his reinforce for me the point that every business is significant because while it may not even be 1 percent of the total business that we are doing in car loans across India, why not add that fraction of a percent?
McKinsey: Your bank must collect oceans of data about customers and various financial products. Why didn’t your data-gathering processes highlight the change in Goa customer profiles observed by your loan officer on the ground?
Chanda Kochhar: I think we do very well with data. I have my own dashboard of daily indicators, things I want to see every morning before I’m at my desk. But having good data isn’t enough. Data can tell you about the things you are doing already. It can’t tell you about things you’re not doing. If this had been a location where we were doing business and things were going badly, we’d have spotted that. Or if it was a location where the business was doing very well, the data would have flagged that too.
McKinsey: How much of your time do you spend developing leaders within your organization?
Chanda Kochhar: I put a lot of time into that because, ultimately, the success of your strategy depends on the ability of your team to execute it. Every leader has certain great qualities, and every leader has some things that need to be worked on. And you can’t just stop at developing the first level of leaders—the ones who report to the CEO. It’s equally important to look at the next few levels down. I also put a premium on teamwork; all my leaders ought to be able to work together.
In India, as leaders and as CEOs, we have to get accustomed to working with young talent. This is a young country. And we all have been young, compared with earlier generations, in moving to various roles. We have to be comfortable with younger leaders and able to believe that those leaders can handle the next level of responsibility and allow them to evolve.
McKinsey: Are there particular challenges that you face as a woman leader in India?
Chanda Kochhar: No, frankly, when it comes to women in leadership roles, I think India is more evolved than is generally recognized. Things have changed substantially here over the last 30 years. When I started my career, I think the whole perspective toward women leaders was definitely different from what it is today. Many Indian corporations, in fact, are going out of their way to attract more and more women in the workforce. And women are becoming much more open and conscious about the fact that they need to have a career of their own. The jury is still out on whether so many women will be able to balance their personal and professional lives through the middle-management stages of their careers and on how many will emerge from that as senior leaders. But I would say that as a whole, the outlook of the Indian corporate sector has improved substantially. ICICI has always been gender neutral and I see that across many more companies today.


Vital statistics
  • Born November 17, 1961, in Jodhpur, Rajasthan
  • Married, with 2 children

  • Graduated with a BA in economics in 1982 from Jai Hind College, in Mumbai
  • Earned an MA in management studies in 1984 from Jamnalal Bajaj Institute of Management Studies, in Mumbai

Career highlights
ICICI (1984–present)
  • Managing director and CEO (2009–present)
  • Joint managing director and CFO (2007–09)
  • Deputy managing director (2006–07)
  • Executive director (2001–06)

Fast facts
  • Member of the Prime Minister’s Council on Trade and Industry, the Board of Trade, the High-Level Committee on Financing Infrastructure, the US–India CEO Forum, and the India–UK CEO Forum
  • Deputy chairperson of the Indian Banks’ Association
  • First woman to be named by Economic Times as “business leader of the year” (2011)
  • Ranked 5th by Fortune in the International list of “50 most powerful women in business” (2011)
  • Ranked by Forbes as 59th among the “the world’s 100 most powerful women” (2011)
  • Named by Bloomberg Markets as one of the “50 most influential people in global finance” (2011)
  • Ranked by Financial Times as 10th in the “top 50 women in world business” (2011)

Leading in the 21st century

Leading in the 21st century

In today’s volatile environment, leaders of global organizations must master a slate of challenges unseen in business history. In this feature, McKinsey talks with seven leaders and Wharton professor Michael Useem about the new fundamentals of leading in the 21st century.

Walmart Prepares Application to Open Stores in India By 24/7 Wall St. That didn’t take long. Two weeks ago the government of India approved legislation that would permit non-Indian majority ownership of multi-brand retail operations. The new legislation has opened the door to foreign investment in the country, and Wal-Mart Stores Inc. (NYSE: WMT) is getting ready to walk in. The Wall Street Journal reports this morning that Walmart will apply for permission in the next 45 to 60 days to establish stores in India. Walmart already has a 50/50 joint venture with Indian retailer Bharti, but look for the U.S. giant to gain control now that it is possible to do so. Bharti/Walmart operates 17 wholesale stores in India. Although the company’s plans are not final, a Walmart executive said last week it would take 12 to 18 months to open stores in India once the company had permission to do so. One restriction in the new regulations gives the individual states the right to approve or deny permission for foreign-controlled stores to operate within the state. So far only 10 of India’s 35 states have indicated that they will accept the foreign retailers. Stores are also required to be located in cities with more than a million population, and are likely to be smaller than the massive stores Walmart operates in the U.S. Walmart’s shares are down 0.1% today at $73.90 in a 52-week range of $51.63 to $75.24. - Paul Ausick

India grinds in the US pivot

The January 2012 Pentagon document on Strategic Guidance, entitled "Sustaining Global Leadership: Priorities for Twenty First Century," has inaugurated a new cold war in the Asia-Pacific region between the United States and China. The document affirms that the United States will of necessity rebalance, or "pivot," towards the Asia-Pacific region. The goal of the rebalancing - American "global leadership" - is a fancy name for empire, maintained by military superiority. 

The document gives a prominent place for India in the US strategy, which came as a surprise to many observers. While India is singled out with specific reference to strategic partnership, long-standing allies such as Japan, Australia, and South Korea are clubbed together under "existing alliances." In his maiden visit to India in the first week of May, US Secretary of Defense Leon Panetta piled on, calling defense cooperation with India "a linchpin in US strategy" in Asia. 

In what may be called cartographic diplomacy, the United States is keen to show that there is geostrategic and even territorial convergence between the United States and India in the region. The January Strategic Guidance document, for example, refers specifically to "the arc extending from the Western Pacific and East Asia into the Indian Ocean and South Asia." In a November 2011 article for Foreign Policy, Secretary of State Hillary Clinton defined the Asia-Pacific as stretching "from the Indian subcontinent to the Western shores of the Americas. 

The region spans two oceans - the Pacific and the Indian - that are increasingly linked by shipping and strategy." It is interesting to note the inclusion of South Asia in the geographic area of the Asia-Pacific pivot. South Asia has generally been considered a distinct strategic sub-region of Asia, one the United States apparently intends to integrate into its strategy for the broader continent. 

The United States has been exhorting India to move from its "Look East" policy to an "Act East" policy. Washington expects India to go beyond forging bilateral relations with countries in the region and to get involved in their critical issues. This, the United States believes, is essential for the integration of the Asia-Pacific region under a US umbrella. 

Towards a military alliance
While India has provided assistance to the United States in Afghanistan and continued defense cooperation on other fronts, the two countries have operated under a formal framework only since 2005. An agreement signed that year proclaimed that the two countries were entering a new era and transforming their relationship to reflect their "common principles and shared national interests". 

It underlined that the countries' defense relationship was the most important component of the larger strategic partnership, entailing new joint military exercises, exchanges, and multinational operations. The major component is an expansion of "defense transactions, not as ends in and of themselves but as a means to strengthen our security, reinforce our strategic partnership, [and] achieve greater interaction between our defense establishments". 

From the outset of this new stage, it was evident that what the United States wanted was a military alliance. Ambassador Robert D Blackwill, at the end of his New Delhi assignment in May 2003, said that the ultimate strategic objective was to have an Indian military that was capable of operating effectively alongside its American counterpart in future joint operations. 

This framework was the basis of the nuclear deal between India and the United States that gave India de facto recognition as a nuclear-armed state, which was announced just weeks afterward. A series of defense-related agreements followed in 2007. 

Although India remains unwilling at this juncture to sign pending defense agreements that might be construed as opening the door for an official military alliance with the United States, there has been considerable progress on US-India arms transactions. The United States has bagged the largest number of arms contracts - about $8 billion worth in the last five years - despite its stringent and intrusive end use monitoring requirements. India has fundamentally reoriented its defense procurement, moving away from its traditional reliance on Russia. In fact, nearly half the value of all Indian defense deals in recent years has been in US transactions alone. 

Naval cooperation
In addition to a booming arms trade, India and the United States have conducted more than 50 joint military exercises in the past seven years. Against this, India's joint exercises with other countries appear to be mere tokens. 

Military-to-military relations have especially deepened in the realm of naval cooperation. The US and Indian navies have cooperated operationally on four separate occasions: in the Strait of Malacca after 9/11, in disaster relief efforts after the Indian Ocean tsunami in 2004-2005, in a non-combative evacuation operation in Lebanon in 2006, and counter-piracy operations in the Gulf of Aden since 2008. 

In December 2001, the two countries reached an agreement on naval cooperation to secure the maritime routes between the Suez Canal and the Malacca Straits known as "chokepoints." During the US invasion of Afghanistan, naval ships were provided by India to safeguard US non-combatant and merchant ships transiting the Straits of Malacca, which freed US naval ships for service off the coast of Pakistan. This has been officially acknowledged by Washington as a contribution by India to the "war on terror". 

India was also one of the very few countries to join the "core group" set up by Washington in the wake of the 2004-2005 Indian Ocean tsunami. The "core group" was actually a Pentagon plan to assess the geo-strategic implications of the tsunami and to gain the US military access to areas where it had not previously been permitted. It was disbanded because of sharp criticism from the United Nations and European nations like France. 

But India is apparently not the only South Asian nation being courted by the United States. The Times of India reported in June that Washington is in the process of stationing a naval base in Chittagong, Bangladesh. "Worried by the increasing presence of Chinese naval bases in the South China Sea," the paper reported, "America now eyes a counter-strategy as it wants an overall presence in Asia - right from Japan to the Diego Garcia base in the Indian Ocean." 

The Bangladeshi government has denied the report, but if it's true, it could cast a shadow on India's own security strategy and on US-Indian naval cooperation. However, such an initiative would be perfectly in tune with Washington's ongoing quest for more naval facilities in the region. 

Problems in the neighborhood
Although Obama administration officials have often stated that the so-called "pivot" is not aimed at any particular country, the Strategic Guidance document admits that it concerns at least in part the growing influence of China. Happy to avail itself of US military technology but reluctant to raise tensions with its sometime rival, India is understandably cautious about aligning too closely with the United States against China. 

That is why, in response to Panetta's overtures, Indian Defense Minister A K Antony emphasized "the need to strengthen multilateral security architecture in Asia and move to a pace comfortable to all countries concerned". 
It did not go unnoticed that on exactly the same dates Panetta was in New Delhi, India's Foreign Minister S M Krishna was in China affirming the Sino-Indian bilateral relationship as a priority for India's foreign policy and expressing India's desire to expand strategic cooperation with China. Likewise, several statements have appeared with claims by US and Chinese leaders that they are committed to collaborating on security in South Asia. 

India has a host of problems with China in South Asia. These include increasingly strident Chinese claims on Indian territory, the lack of any progress in border negotiations, China's nuclear links with Pakistan, and China's support for the Pakistani position on Kashmir. The United States' silence on these matters has given the impression, albeit indirectly, that it supports the Chinese positions. 

Against this background, a strong case can be made for India to remain non-aligned in the new cold war. But there is perceptible resistance from the establishment to such an idea. Although India may not want to be described as the "linchpin" of the US pivot, the present leadership will nonetheless reassure Washington that it broadly supports US policies abroad, including in the Asia-Pacific. 

Ninan Koshy is a contributor to Foreign Policy in Focus. 

China's security boss surveys Hindu Kush

By M K Bhadrakumar

For such a high-level exchange after such a pronounced gap of nearly half a century, Beijing actually said very little indeed about the unannounced four-hour visit to Kabul on Saturday by Zhou Yongkang, the ninth ranking member of the Politburo and China's security boss - although it pointedly took note that the "last [such] visit was made by late Chinese leader Liu Shaoqi in 1966 when he was the President of China". 

Zhou's senior status make Beijing's reticence seem all the more curious, particularly as the Hindu Kush and the adjoining Pamirs and the Central Asian steppes are nowadays teeming with the "foreign devils on the Silk Road". 

An air of suspense hangs around Zhou's visit, especially since his itinerary originally didn't include the stop-over in Kabul. He was to have proceeded to Ashgabat, Turkmenistan, following a two-day visit to Singapore, but diverted to Kabul for a four-hour halt. The detour, of course, makes the visit at once historical and topical. 

The context of the visit needs to be carefully surveyed. From a long-term perspective, a joint declaration between China and Afghanistan on "the establishment of a strategic and cooperative partnership" issued in Beijing after a visit by Afghan President Hamid Karzai in June marked a new step in the development of the bilateral relations. The declaration identified security as one of the "five pillars that will underpin" the Sino-Afghan partnership and affirmed that the two countries would "intensify exchanges and cooperation" in security, including "enhancing intelligence exchanges". 

No 'Apocalypse Now' … 
With the "transition" in Afghanistan set to shift up a gear through 2013 - as the last residues of the United States' "surge" are pulled back from the war theater and as the 2014 deadline approaches for the North Atlantic Treaty Organization (NATO) to withdraw - Beijing seems destined to play a larger role. In terms of China's national priorities over the development of its eastern regions, especially Xinjiang, and the consolidation of its rapidly expanding economic investments in Afghanistan and Central Asia, Beijing has no choice but to project itself as a stakeholder in the stabilization of Afghanistan. In a brief commentary on Zhou's visit to Kabul, Global Times newspaper noted:
Within China, there is also heated debate over the role that China should play … But it is generally agreed that the deterioration of the Afghan domestic situation will benefit nobody; for China, the stability of its northwestern bordering regions will be directly influenced and overseas Chinese in the region will face greater security problems.

Historically, Afghanistan has been a nightmare for many big powers. As a neighbor of Afghanistan, China has a keen interest in the security of this region. How to help Afghanistan walk out of the shadow of long-term wartime chaos poses a big challenge to China's diplomacy.
Zhou underlined in a written statement as he arrived in Kabul, "It is in line with the fundamental interests of the two peoples for China and Afghanistan to strengthen a strategic and cooperative partnership, which is also conducive to regional peace, stability and development." 

Clearly, the accent was on the bilateral cooperation with the assurance held out to any third parties concerned that Sino-Afghan cooperation would be a factor of stability for the region. 

How does China view the Afghan situation? The last major statement on Afghanistan by China was made hardly a week before Zhou's visit to Kabul on Sunday, during the United Nations Security Council discussion in New York on Afghanistan. The striking aspect of the speech by Ambassador Li Baodong was its underlying tone of hope and positive expectations. 

Li said, "The peace and reconstruction process in Afghanistan was achieving positive results, the transfer of security responsibilities to national forces was moving along smoothly, the Afghan economy was improving, and trade and cooperation with other countries was being scaled up." 

However, Li indirectly criticized NATO's strategy in flagging that the transfer of security responsibilities must proceed slowly and saying the international community must continue to help to improve the security situation. Indeed, he put on record China's serious concerns over recent incidents of violence, especially the high number of civilian casualties, and he called on NATO forces to conduct its operations according to international law so as to ensure the safety and protection of civilians. 

The most interesting part of Li's speech was in articulating China's belief that Afghanistan's stabilization needs to be sought through greater integration with the region "in line with the principle of mutual benefit and cooperation" and by "making full use of existing mechanisms" such as the Shanghai Cooperation Organization. 

Evidently, Beijing doesn't subscribe to the inevitability of "Apocalypse Now" in the Hindu Kush in the post-2014 period. Suffice to say, Zhou's visit to Kabul needs to be weighed first and foremost as a strong affirmation of support for Karzai's government. From Beijing's viewpoint, Karzai has been a reliable friend who walked the extra mile to boost Sino-Afghan relations. 

… nor any zero-sum game 
From Karzai's perspective, support from Beijing may already have become irreplaceable, more so at the present juncture when his equations with Washington have again become problematic and uncertain. NATO has summarily suspended the training for the Afghan police force and the Afghan defense ministry has apparently scaled back NATO's involvement in joint operations with the Afghan forces below battalion level. 

There have been several instances in the recent weeks indicative of the poor chemistry between Kabul and Washington. The most glaring instance was the concern voiced by Karzai about the security pacts signed with the US earlier this year. Negotiations over the long-term US military presence in Afghanistan beyond 2014 are due to commence in three weeks time. At such a juncture, Zhou's visit, coming as it did on the eve of Karzai's trip to the US, most certainly helps the Afghan leader gain more negotiating space vis-a-vis Washington. 

Karzai feels particularly agitated over the excessive interest that the US takes in influencing Afghan domestic politics, which is entering a delicate phase even as jockeying has begun in right earnest over the Afghan presidential elections due in end-2014. Karzai told Zhou, "China is a good and honest friend of Afghanistan … We are looking forward to a broader and strong cooperation with China." 

Zhou reciprocated that the Chinese government fully respects the right of the Afghan people to choose their own path of development and will actively participate in Afghanistan's reconstruction. 

Zhou signed three agreements on increased security and economic cooperation, including a Memorandum of Understanding on an "action plan" for the implementation of the joint declaration of June 8, an agreement with the Afghan finance ministry on a US$150 million aid package, and a deal with the Afghan Interior Ministry to "train, fund and equip Afghan police". 

The Global Times said the security agreement aims to "protect the security of China's own projects" in Afghanistan. The state-owned China Metallurgical Group operates the $3 billion Aynak copper mine in the eastern Logar province in Afghanistan, which has been targeted by insurgent groups. 

The three agreements as such didn't warrant a high-level visit, whose main purport seems to have been political. Zhou's visit has most probably sealed an institutional framework of intelligence liaison connecting Beijing and Kabul in real time. Needless to say, this matters a great deal for China. It is following India's example to tap into the excellent "database" of the Afghan intelligence, which has every reason, historically speaking, to be well clued in on a 24x7 basis on the militant groups operating out of Pakistan. 

Without doubt, Karzai has signaled on his part Kabul's political priorities also in the post-2014 period. China's close relationship with Pakistan makes it a valuable ally for Kabul in its despairing efforts to moderate Islamabad's policies. The US used to perform such a role before, but today Washington is barely coping with its own woes involving Pakistan. 

However, as a Russian commentary put it, "Hamid Karzai will have to take some pains in order to put up a good show for his Chinese partners. After all, the Americans are not going to surrender their positions to the Chinese." 

This appears a motivated opinion. On the other hand, the big question is whether what is unfolding could be regarded as a zero-sum game at all - notwithstanding the entire panorama of the US' "rebalancing" in the Asia-Pacific and Beijing's wariness over it. Arguably, when it comes to the stabilization of Afghanistan, China and the US are still on the same side - and persuading Pakistan to cooperate in the search of a durable settlement will also remain a common objective for the two big powers. 

The speeches made by Russian Ambassador Vitaly Churkin and by Chinese UN Ambassador Li Baodong at the UN Security Council last Monday present a study in contrast. Russia is incessantly taunting the US over the futility of the latter's Afghan strategy, poking fun at it, rubbishing it while constantly asking probing questions for which there are of course no easy answers. 

In contrast, Li offered constructive criticism, with a clear cut and purposive political objective in view. Russia is worked up about the issue of the US bases in Afghanistan, whereas China, which could also be sharing Moscow's concerns, is going about the minefield very differently and with great diplomatic aplomb. Yet, at the end of the day, it is Russia - and not China - that is cooperating with NATO in Afghanistan at a practical level by offering efficient, dependable and open-ended transit facilities for NATO to ferry its supplies. 

Actually, China is openly insisting that it isn't involved in a zero sum game with the US and that, on the contrary, the interests of China and the US and its allies mesh as regards the stabilization of Afghanistan, and there is no fundamental contradiction as such. Coincidence or not, just last week, the influential Chinese think tanker Pan Guang, vice chairman of Shanghai Center for International Studies at Shanghai Academy, made an unprecedented presentation before the American strategic community on the topic, "Understanding China's Role in Central Asia and Afghanistan." This happened just four days before Zhou's unannounced trip to Kabul. 

Pan is easily recognizable for strategic analysts as an authoritative voice on Track II. But what makes things quite spicy is that he also happens to be a key adviser to Zhou's ministry in Beijing on Central Asia and Afghanistan (although his area of specialization used to be Israel). 

Pan spoke for over an hour on China's role in Central Asia and Afghanistan. He focused on China's interest in fighting terrorism and extremism in the region as well as China's interests in containing the proliferation of weapons of mass destruction, promoting energy and economic development, and supporting Afghanistan in its post-war reconstruction. The running theme of his presentation was that like the United States, China is interested in tackling issues such as transnational crime, illegal immigration, environmental degradation, water resource shortage, and emerging public health issues. 

Pan acknowledged that Beijing has different views of political reform in Central Asia, the alignment of energy pipelines in the region, and the withdrawal of NATO troops from Afghanistan. At the same time, he concluded that both China and the US are playing an increasingly crucial role in Central Asia, where they have common and divergent interests, cooperation and competition. 

A profound message 
Broadly echoing Pan's thought process, the Global Times summed up Zhou's visit: "China has a good opportunity to boost its global image and fulfill its international obligations. While many Western strategists stick to their mentality of dominating world politics, China is making pragmatic moves to safeguard the interests of not only itself but also the whole region." 

A redeeming feature of Zhou's sudden Kabul trip that may get overlooked in the overall excitement over it but could be of pivotal importance for regional security is that it took place at a period when Afghan-Pakistan tensions have sharply escalated. 

In fact, only last week, Afghan Foreign Minister Zalmay Rassoul warned the UN Security Council that continued Pakistani shelling of Afghanistan's border provinces jeopardized bilateral relations, "with potential negative consequences for necessary bilateral cooperation for peace, security and economic development in our two countries and the wider region". 

Curiously, government-owned China Daily prominently featured a Xinhua report on Sunday - even as Zhou was heading for Kabul - on the Afghan parliament's endorsement of Kabul's latest plan to lodge a formal complaint to the UN Security Council over any Pakistani border shelling. 

The lengthy Xinhua report said, "Pakistan has been occasionally shelling the border areas in the eastern Kunar and Nuristan provinces, forcing locals to flee their houses for shelters, a claim rejected by Pakistan." The curious part was that China Daily highlighted the relevant excerpts of Rassoul's condemnatory references to Pakistan in his speech at the UN Security Council last week. 

Now, a tantalizing question arises: How would Beijing react to a complaint by Kabul to the UN Security Council regarding Pakistan's violation of Afghanistan's territorial integrity? The point is, the Sino-Afghan joint declaration on June 8 commits Beijing and Kabul to "firmly support each other on issues concerning national sovereignty, unity and territorial integrity", and, to "enhance coordination and cooperation under the United Nations ... stay in contact and coordinate positions." 

It would seem that Zhou's visit to Kabul in these troubled times also holds a profound message for the "all-weather friendship" between China and Pakistan. 

Ambassador M K Bhadrakumar was a career diplomat in the Indian Foreign Service. His assignments included the Soviet Union, South Korea, Sri Lanka, Germany, Afghanistan, Pakistan, Uzbekistan, Kuwait and Turkey. 

September 28, 2012




Brajesh Mishra, who was National Security Adviser to ShriAtalBehari Vajpayee between November 1998 and May 2004, passed away on the night of September28,2012. He was 84 and belonged to the 1951 batch of the Indian Foreign Service.

2.He became famous in May 1970 when he was heading the Indian Embassy in Beijing as Charge d'Affaires. At the traditional May Day function at Beijing, Mao Dzedong shook hands with Mishra,  conveyed his greetings to our Prime Minister and President in that order and said:"We cannot go on quarrelling like this. We must become friends again. We will become friends again."

3. Mishra sent a detailed report on it to the Ministry of External Affairs.A few days later, an account of Mao's friendly references to India, which came almost eight years after the Sino-Indian war of 1962, leaked out to the Indian media which added some masala to it while flashing it, saying that Mao smiled at Mishra when he made his observations. This was followed by feverish speculation regarding the significance of Mao's smile.

4. The truth was Mao never smiled at Mishra when he made his observations, but "Mao's famous smile" and its significance became an exciting narrative in the history of India's relations with China and the role of Mishra in it. An authentic account of what happened that day in Beijing was written on December 2,2009, for the web site of the Chennai Centre For China Studies by ShriG.S.Iyer, who was then the only Chinese-knowing member of the staff of the Indian Embassy in Beijing.He subsequently became India's Ambassador to Morocco and Mexico before retiring from the Indian Foreign Service.ShriIyer's authentic account of the meeting is annexed.

5.Shri Mishra again hit the headlines in the beginning of 1980. But under a different context. He had been posted as India's Permanent Representative to the United Nations in New York by the Morarji Desai Government. He was occupying that post when the Soviet troops invaded Afghanistan. There were reports that the Charan Singh Government, which wasthen  in office, had misgivings about the Soviet invasion and was disinclined to support the Soviet action.

6.Indira Gandhi, who returned to office as Prime Minister in January 1980, had NarasimhaRao sent to New York to support the Soviet action.Mishra read out before the UN General Assembly a prepared text not disapproving of the Soviet invasion. During his retirement days, Mishra was reported to have told his close friends that he read out the statement on orders, but was not in agreement with its text.

7. Shortly thereafter, he took premature retirement from the Indian Foreign Service and joined the staff of the UN Secretary-General. He left the job and returned to India in 1987 and joined the BJP in 1991 to help it establish a Foreign Affairs Cell in its headquarters. In that capacity, he used to advise BJP leaders on foreign policy matters and assist them during their meetings with foreign dignitaries.

8.Mishra and Vajpayee came close to each other during this period and Vajpayee developed immense trust in Mishra's judgement and advice. When Vajpayee took over as the Prime Minister in March 1998, he appointed Brajesh Mishra as the Principal Secretary to the Prime Minister. In that capacity, he headed the Prime Minister's Office (PMO) and co-ordinated its functioning.

9. Mishra played an important role in the deliberations that preceded the decision of Vajpayee to authorise India's nuclear tests of May 1998. The credit for maintaining the secrecy of the decision and of the preparations for the tests should go to the political leaders of the BJP who were involved in the decision, Mishra who supervised the execution of the decision and Dr.AbdulKalam and his scientists who carried it out.

10. The USA's Central Intelligence Agency (CIA) was totally taken by surprise by the tests, which led to considerable friction in India's relations inter alia with the US and China. Mishra committed a major faux pas while drafting a letter from Vajpayee to then President Bill Clinton explaining why India carried out the tests. The letter referred to India's fears of a possible threat from China as a reason for the decision. The State Department mischievously leaked that letter to the US media, thereby adding to the friction between India and China.

11.It spoke well of the diplomatic skills of Mishra and the pragmatism of Beijing that they did not allow this aggravation of friction to permanently damage the bilateral relations.

12.Shortly after the nuclear tests, Vajpayee, on the recommendation of a three-member committee on national security headed by ShriK.C.Pant, decided to revamp the national security infrastructure. As part of this revamp, a post of National Security Adviser (NSA) was created. The National Security Council (NSC) created by V.P.Singh, which had become dormant, was revived and a National Security Council Secretariat and a National Security Advisory Board (NSAB) of non-Governmental advisers were set up.

13. Vajpayee asked Mishra to hold additional charge as the NSA. Thus, he wore two hats----as the Principal Secretary to the PM and as his NSA.K.Subramanyam, the strategic affairs expert, was appointed the first Convenor of the NSAB.

14. Even at that time, questions were raised by some regarding the wisdom of one individual, however capable, wearing both these hats. It was reported that the Pant Committee was in favour of an independent NSA. So was K.Subramanyam, who, on two occasions, had publicly expressed his misgivings about combining the two posts of Principal Secretary to the PM and NSA.He felt that as the Principal Secretary, Mishra would be so preoccupied with running the PMO that he would not be able to devote adequate attention to his job as the NSA.

15. Mishra strongly felt that if the same officer held both the posts, he could prevent conflicting advice on national security matters reaching the PM.During this period, I had written a number of articles stressing the need for the revival of the covert action  capability of the R&AW that had been downgraded by ShriI.JK.Gujral when he was the Prime Minister in 1997.Mishra, who had read these articles, sent word to me through his office that I should call on him during one of my visits to New Delhi.

16. I did so in 1999. He referred to what I had been writing on the need for the revival of the covert action capability and said: " You don't have to convince me. I was convinced long before you were, but the Prime Minister is not in favour of it. We have to go by his wishes."

17. Subsequently, I had occasion to meet him three times. The first occasion was alone in his office. On his own, he referred to criticisms being made about Shri Vajpayee's decision to ask him to hold additional charge as the NSA and said: " I do not want any confusion in the advice reaching the PM on national security matters.It is better that all advice on national security goes to the Prime Minister from this office." He was sitting in his office as the Principal Secretary to the PM.

18. My next meeting with him  was as a member of the Special Task Force for the Revamp of the Intelligence Apparatus headed by ShriG.C.Saxena, former chief of the R&AW and then Governor of J&K. He was asked by one of the members about his views regarding the performance of the IntelligenceBureau (IB) and the R&AW.

19.He replied: " I do not see all the reports of the IB. Hence, I cannot comment on its performance. I see all the reports of the R&AW, which works directly under me. When I was in the IFS, I used to think negatively of the R&AW. Now I think  positively of it. I am regularly seeing its work and capabilities. It has been doing very well."

20. His remarks were an indirect confirmation of the speculation then circulating in New Delhi that ShriL.K.Advani, the then Home Minister, had kept him out of any active role in supervising the performance of the IB.

21.My fourth meeting with him was just before the elections of 2004. There was some criticism in sections of the media about his role as the NSA.It was alleged that he had not implemented many of the important recommendations made by the various task forces on national security set up by the Vajpayee Government after the Kargil conflict of 1999.

22. He had invited some of us for a briefing on the recommendations that had already been implemented. The briefing was given by the National Security Council Secretariat (NSCS). He wanted us in our individual capacities to explain to the media and others regarding the action already taken by the Government.

23. Some of the recommendations of the G.C.SaxenaTask Force had related to the State Police and the coordination between the central intelligence agencies and the State Police. Sections of the media were speculating regarding these recommendations. Some State police officers had contacted me and said that the Government of India had not kept the State Governments in the picture regarding these recommendations. I mentioned this to Mishra at this meeting.

24. Mishra replied: " Raman, you don't know what problems I have been having sorting out the quarrels among  the central agencies regarding the implementation.Let me sort them out first. I will then sort out the recommendations relating to the State Police."

25.I consider the brilliant manner in which Mishra handled the diplomatic consequences of the nuclear tests as his greatest achievement as the NSA. The Clinton Administration was very petulant. China was furious. The European Union was not very sympathetic. Only Russia was sympathetic. Many of us feared that India would be confined to the diplomatic dog house.

26. The fact that India was not and that  our relations with these countries again improved spoke very highly of the way Mishra handled the sequel.He also saw to it that a Nuclear Doctrine was drafted, approved and put in place within a year of the tests.

27. He travelled a lot in this connection as a secret emissary of Vajpayee and I was given to understand that the R&AW played an important role in assisting him through its web of liaison relations with the countries which were angry with India over the nuclear tests. I had personally heard Mishra pay high tributes to the assistance from the R&AW in this regard.

28. He handled very creditably the sequel to the Kargil conflict with Pakistan and the sequel to the attack on the Indian Parliament. However, there was some criticism---not invalid in my view--- of what was seen by many as his mishandling of the Kandahar hijacking and the case of Major Rabinder Singh, the CIA's mole in the R&AW, who managed to escape to the US in 2004.

29. He was allegedly totally unaware of the details of the crisis management drill to deal with hijackings that had been laid down in the 1980s when Indira Gandhi and Rajiv Gandhi were Prime Ministers.It was alleged by people in New Delhi, who were not ill disposed to Mishra, that he was confused and did not know how to handle the situation. As a result, the hijacked plane managed to take off from Amritsar airport, leave the Indian airspace and reach Kandahar. We lost control of the situation and had no other option but to concede the demands of the hijackers.

30. There was an inexcusable delay on the part of the R&AW in alerting Mishra that Rabinder Singh was suspected of working as a CIA mole and was undersurveillance. Initially, the R&AW kept not only Mishra, but also the IB in the dark.In fact, the moment they developed suspicion about Rabinder Singh, the R&AW should have alerted the IB and asked it to mount a surveillance on him.

31.When the case was belatedly brought to the notice of Mishra, one would have expected him to lose his temper for not keeping him informed and order that the surveillance be handed over to the IB. He did not do anything of the sort. He seemed to have gone along with the R&AW's decision to keep the IB in the dark and advised the R&AW to be discreet in its surveillance since he was worried that any embarrassment could damage his efforts to develop a strategic partnership with the US.

32. There is no other way of explaining his silence on the R&AW keeping the IB in the dark except to believe that he did not want ShriAdvani toprematurely  know about it lest he complicate matters. Those were the months before the 2004 elections when Mishra's style of national security management had started coming under criticism from some of his usual detractors as well as others. He apparently did not want any premature publicity to add to his difficulties.

33. To quote Shri Amar Bhushan, thethen  head of counter-intelligence and security in the R&AW, who had written an account of the case under the cover of a fiction titled "Escape To Nowhere" : " Coming from a diplomatic background, he (NSA) is naturally apprehensive of the adverse impact of the investigation on bilateral relations. He may be wondering why we make such a fuss about the restrictive security when senior officers routinely talk and exchange ideas among themselves."

34. Amar Bhushan also quotes C.D.Sahay, the then head of the R&AW, as telling him after a meeting with Mishra: " He thinks that the case has been badly handled and its gravity blown out of proportion. He is of the view that we should have dealt with the case administratively as soon as we knew that he (Rabinder) was making conscious efforts to elicit unauthorised information from his colleagues."

35.Right from the beginning since Mishra took over as the NSA,there was an impression  that he  was feeling out of depth in internal security matters. He hardly had any influence over the State Governments. His word and advice  carried little weight in the State corridors of decision-making.

36.R.N.Kao, who shared this impression, had suggested to Shri Vajpayee the creation of a post of Deputy National Security Adviser under Mishra to be filled up by an IAS or IPS officer well-versed in internal security management. According to Kao, Shri Vajpayee appeared to be amenable to accepting the idea. By the time the post was created, Kao was dead. It was filled by another retired IFS officer.

37. There was another reason why Mishra was weak in internal security management. ShriAdvani, who looked upon himself as the internal security Czar, was disinclined to give Mishra any substantive role in it. ( 29-9-12)

(The  writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai, and Associate of the Chennai Centre For China Studies. E-mail:  Twitter @SORBONNE75)







G.S.Iyer, C3S Paper No.413 dated December 2, 2009



The meeting at the Tiananmen rostrum of Mao Dzedong with Mr Brajesh Mishra, the then Indian Charge d'affaires in our Embassy in Peking (as it was called then) on May 1, 1970 is an important historical moment in Indian diplomatic history worthy of correct recollection and recording. The meeting came as the climax of a series of signals from India in the previous years which were being responded to, and was a deliberate and conscious move on the part of the Chinese.


I was working in the Embassy in Peking and was the only Chinese speaking Foreign Service officer of the mission from July 1968, when I succeeded Mr VinodKhanna, till summer of 1970 when Mr Vijay Nambiar joined the mission — the receiving end of 'the receiving end' so to say. I had also accompanied Mr Mishra for some of the meetings with the Chinese Foreign Office in 1970 subsequent to the exchange on the Tiananmen rostrum. With this background, I believe I have some observations to offer on the history of this event.


Despite various signals from our side since 1967, as far as I can recall, there was not much of a chance for a dialogue between the Embassy and the Chinese Foreign Ministry in 1969. I can recollect only two calls by the Head of the Mission in 1969, the initial courtesy visit and the second to protest a particularly vicious attack on Mrs Indira Gandhi in the Xinhua bulletin. Further, in late April 1969, Mr Mishra walked out of a reception given by Zhou Enlai in honour of Air Marshal Nur Khan, the No. 2 in the ruling Pakistani military junta to protest the standard Chinese remark about supporting the people of Jammu and Kashmir in their 'struggle for self-determination'. This was, in a way, a hardening of our line as these remarks were regularly uttered by the Chinese hosts at all receptions and dinners in honour of visiting Pakistani leaders and no Indian Head of Mission had walked out of any Chinese reception between 1962 and 1969 in response to such remarks. Perhaps they should have. The volume and shrillness of propaganda by the Chinese official media against India had only increased in 1969. Indira Gandhi whose name is written with Chinese characters YingdilaGandi was lampooned in the People's Daily as Meidila ('pulled about by American imperialism')! This was when we were one of the few governments to speak publicly against the Vietnam war even to our detriment. That was the year the centenary of the Mahatma's birth was celebrated with solemnity and reverence globally. The only country that ignored that event entirely was China. The Chinese also made a wholesale boycott of the Gandhi Centenary function held in the Embassy on October 2, 1969, without even a token representation. (The Pakistani mission, which obviously knew what the Chinese planned to do sent a Third Secretary, their juniormost diplomat to the function, the only mission not represented by the Ambassador—surely a most disgraceful behaviour.) 1969 was also the year of the Naxalbari events which I will come back to later. Thus 1969 was a very bad year for India-China relations despite some serious efforts by us to get some movement.


A few days before the May Day of 1970, the Chinese Foreign Office called the Embassy to go over and collect the invitation cards for the event which was to take place in the evening. I went to pick up the invitations. In those days before China's recklessly polluting industrialization, May Day could be very cold and the Foreign Office specifically asked us to bring overcoats while watching the function from the steps facing the Tiananmen! Two sets of cards were handed over to me, one for Mr. and Mrs. Mishra to go up the rostrum from where Mao and the other leaders would watch the show, and another for the other diplomats of the embassy to watch from the steps below.


Quite characteristically, the immediate question from Mr. Mishra on my handing over his card was when such an arrangement had occurred earlier. I had the answer ready. I replied promptly that it was on the May Day of 1967 when Mao and several other leaders walked down the ranks of Heads of Missions and shook hands with everybody. Therefore another handshaking was on the cards and both the Mission and Delhi knew what could be expected.


From our perch down below in the steps, we were watching the gradual progress of Mao down the line and noticed his pausing occasionally to talk to somebody or the other but could not make out who they were, even with the help of binoculars. But we knew that our Charge had a chance to meet Mao. Early the next day I knew it was more than that because Mr. Mishra had sent a report of the meeting to the Government on his return from the function. As soon as I reached the Embassy, he called me and gave me the report to read. It was a stunning moment for a young man barely four years into his profession to read the words spoken by one of the giants of that century about relations with his country. Here was Mao saying 'We cannot go on quarrelling like this. We must become friends again. We will become friends again.'


There was much other matter of interest that day. China had launched a satellite a week earlier; and it was inevitable that every ambassador would say his word of congratulation to Mao. The British Charge stood to the right of Mr. Mishra and he too did his bit. Mao acknowledged the congratulations and responded, "We also wish Great Britain great technological successes", a response which left Mr. Denson and his younger colleagues steaming and furious for many many days. They read it correctly as a dig at UK not being the only major power with no satellite program. Mao also conveyed his greetings to our 'Prime Minister and President' conscious of the relative importance of the two leaders in our system of politics. It also showed that Mao was alert and had his wit and capacity for repartee intact. Mao also talked at some length to the Soviet Charge. He held the hands of the Czechoslovak ambassador for an inordinately long time and shook it without saying anything, almost as if he was commiserating with the plight of that hapless country invaded by their allies only a few months earlier!


Mr. Mishra asked for instructions on follow up conversations, but even before they arrived, the story of the meeting was leaked to the Indian press in a twisted and trivialised way, that Mao smiled at Mishra during the May Day event. There was no need to leak that story at all, and if it was thought important to share it with the people of our country, an exact account was what our people were entitled to hear. Matters got only worse when a question was asked in the Parliament about the 'smile' and it was replied to from the government side that we will not be taken in by a mere smile. This distorted version was surely unfair both to the people of our country who our Government is answerable to and to China who valued and respected the fact that something very important was being conveyed at the level of their Chairman. We misled the Indian people and deeply offended and upset the Chinese government in one stroke – another remarkable action of shooting at our own feet in a bit of diplomatic and public relations hamhandedness of which we have more than enough examples in India.


The exchange between Mao and Brajesh Mishra was followed by some exploratory conversations with the Asia Department of the Chinese Foreign Office. The Director who received Mr. Mishra was Yang Kungsu who had then been resurrected from the wherever he was consigned during the Cultural Revolution. Though known as a Tibet expert, he was more than that and was the counterpart of ShriJ.S.Mehta in the joint committee of officials which met in 1960 and agreed to disagree of the report to be submitted to the two governments on solving the border question. The point about his reemergence in the wake of the words of Mao was precisely that an expert on the border was brought in for the dialogue. The dialogue did go on through 1970 and, as with various other initiatives earlier and later, fell victim to non-bilateral developments, because the Chinese let it peter out after the arrest of Sheikh Mujib and the beginning of the liberation struggle in Bangladesh where the Chinese notoriously supported Pakistan and opposed self-determination of Bengali people.


What exactly did Mao say? He said, "We cannot go on quarrelling like this. We must become friends again. We will become friends again." That these are the exact words can be confirmed because these were repeated by Yang Kungsu in Chinese in a meeting with Shri Mishra. I heard Yang Kungsu quote Mao because I was present in the meeting. There is no way anybody could quote Mao other than exactly. In any case, Yang would have been a party to the preparation of words to be spoken by Mao on that occasion. The Chinese words are, 'Women puhuizheiyangchaoxiaqu. Women yingaiyaozuopengyu. Women yidingzuopengyu', confirming that it was an emphatic call to end the mutual distrust.


Some Chinese scholars have claimed recently that Mao also said "Indian nation is a great nation. Indian people are a great people" to Shri Mishra. I do not think so. Let me explain. These sentences came to our attention as a quote from Mao in 1969 in an article in the People's Daily titled 'Spring Thunder over India' which was a review of the Naxalite movement, claiming how that movement was overwhelming the 'reactionary Indian authorities under the inspiration of Chairman Mao's teachings'. It was obligatory for all articles in newspapers to have a quote from Mao. This article concluded with the quote above and an exhortation to the 'Indian people' to seize power Maoist style. I made a diligent but unsuccessful search for the quote in the Collected Works of Chairman Mao. Several weeks later, while rummaging through old bound magazines in the embassy basement I discovered a report in an English publication on the celebration of our Republic Day by the embassy in 1951. Mao, who was the President of the country, broke protocol and attended the reception given by Ambassador Raghavan and personally replied to the toast with the words, 'Indian nation is a great nation and Indian people are a great people' and proceeded to drink to the health of President Rajendra Prasad and prosperity of India. Isn't it remarkable that this lone reference to India to fall from the lips of Mao was preserved and quoted by the People's Daily 18 years later to urge the overthrow of the constitutional government of the very republic Mao was originally toasting! It is even more remarkable that the words used in the context of a report on Naxalite violence are now quoted as a gesture from Mao!


It also shows beyond doubt that Mao did not use these words in his exchange with Brajesh Mishra. Mao really did not need to quote himself; a scholar, writer and poet of his calibre was not that wanting in words as to repeat himself. That is why I believe he did not say them to Shri Mishra in 1970. The Chinese scholars rewriting the quote should also make up their mind which context of the quote they wish to remember today and in the future.


Why the initiative from China at the level of Mao at that moment of time? By 1969, China was amply encircled and had the desperate need to break out of the situation in which they could only count on the ilks of Albania and Pakistan as friends. There was a skirmish along the Sino-Soviet border and there were ominous noises coming from Moscow about an attack on Chinese nuclear facilities, what the American media described then in the gruesome phrase, nuclear castration. We forget now that China was the archetypical destabilizing power then, verbally and materially supporting the overthrow of every established government in South East Asia and had grievously wounded by the failure of the attempted coup in Indonesia and the attack on the Chinese community in the aftermath. The Vietnam war was not ending, which meant they had to find a new way of coping with the USA, other than an open ended confrontation. In late 1969, the contacts between China and the USA resumed in Warsaw. The American table tennis team came to China in 1970, roughly at the same time Mao spoke to us. It was all parts of a plan to break the encirclement.


The arrest of Sheikh Mujib and the Chinese decision to go over to the side of Pakistan in violation of all their professed ideological principles ended forward movement in the initiative with India. On the other hand, the very same event helped US-China relations move forward. Could China have taken a different position on Bangladesh? That they did not do so despite the high level investment in improvement in relations with India an year earlier could be proof of both the weight of Pakistan in China's subcontinent diplomacy and the limits of unorthodox initiatives when faced with entrenched habits of thought and behavior.


(The writer, Mr G.S.Iyer, Indian Foreign Service -Retired, was formerly India's Ambassador to Morocco and Mexico. He also held senior positions in Indian missions in Beijing and