Published Twice a Month
April 25, 2018 – May 8, 2018

Centre on Asia and Globalisation
Lee Kuan Yew School of Public Policy

Guest Column

Reset and Realism in India-China Relations

By Deepa M. Ollapally


Following a season of diplomatic tensions and a military face-off in Doklam, China and India seem to have embarked on a different path in Wuhan. Many observers have called the surprise informal summit in April 2018 between Prime Minister Narendra Modi and President Xi Jinping in the Chinese city a “reset” in India-China relations. With this, the American practice of the “reset” idea with Russia and China has now arrived in South Asia. It has been met with both criticism and praise, with international relations analysts of the realist ilk most critical of India. Why is the concept of “reset” so highly popularized, and conversely, how well does the realist critique hold up in the case of India-China relations?

Reset and Great Power Relations

It is hardly surprising that the idea of a reset in great power relations captures the popular imagination. A deteriorating trend in relations between major rival states is unsettling. When it happens between large and important territorial foes, it is even more so. When contentious behaviour begins to lead to a clear downward spiral, the biggest challenge for state leaders is how to change course; a reset seems to have become a choice diplomatic tool in recent years. US Secretary of State Hillary Clinton even gave her Russian counterpart an actual red reset button in 2009 after a particularly fraught year.

But for those whose thinking is shaped by the realist theory of international relations (especially as postulated by John Mearsheimer), showing any sign of weakness is even more dangerous than correcting course. In the case of India and China, they argue that the competition between the adversaries is structural in nature, something that a simple reset cannot fix. Further, realists assert that the benefits of a reset right now will only go in favour of China—five times richer and three times more militarily powerful than India. They criticize the Indian government for not holding out for real moves by Beijing to settle their disputed border and even more importantly, taking into account India’s huge discomfiture with the China-Pakistan Economic Corridor (CPEC) section of the Belt and Road Initiative (BRI). Most of all, they lament the reset as an indication of India caving in or appeasing China despite having shown signs of willingness to finally “stand up” to its rival in 2017—militarily in Doklam and diplomatically by boycotting the BRI Summit.

While the realist argument has a certain intuitive persuasiveness, on closer inspection it has several shortcomings that need to be kept in mind when looking at the India-China “reset.” First of all, realism takes away leadership agency and suggests that structural factors have to be determining at all costs. Secondly, it downplays the balance of interests between India and China that may dominate balance of power considerations at this particular conjuncture. And thirdly, it does not sufficiently take into account the global uncertainty unleashed by President Donald Trump and its impact on Indian strategic options.

Realism and its Shortcomings on the Reset

The underlying pessimism of conventional realist theory is rooted in the importance given to international power structure and, by extension, the lack of capacity on the part of individual leaders to determine outcomes. President Richard Nixon’s historic reset with China in 1972 most graphically calls into question this assertion. Not only that, Nixon managed to effectively confer great power status on a country that was not much different from other developing countries in Asia, with high rates of poverty and resource scarcity and no global economic position to speak of. Constructivists would suggest that the meaning of particular structures can be shaped or interpreted by leaders in different ways . In other words, leaders are not doomed to be prisoners of structure or pessimistic realist thinking for that matter. Xi is in an especially powerful position to make major policy changes after consolidating his position with the lifting of term limits. Given the ruling Bharatiya Janata Party (BJP)’s image as being tough on foreign policy, Modi may be in the unique position of being able to engineer closer ties to China even after Doklam and CPEC. And when Xi gives “strategic guidance” to the military to maintain peace on the Himalayan border where China has some advantage, and Modi agrees to a joint economic project in Afghanistan where India has great credibility, it could portend real change.

Realism’s emphasis on balance of power variables invariably overlooks the possibility that balance of interests on other issues can be as important or even more important. For both countries, reaching developed country status in a comprehensive manner is an enduring objective. This is especially important for India, and under both Congress and BJP governments since 1991, the strategic edge of India’s engagement with Southeast and East Asia has remained economic. The widening trade deficit with China has dampened Indian enthusiasm on the economic front. Realists will point out that growing economic ties have not translated into more cooperative strategic behavior by China and that the logic of military competition is more compelling. At the same time, it could be countered that the only viable way to address this is through dialogue, not stand offs as the hard realists would have it. A downward spiraling military competition is certainly not going to solve the economic imbalances, and it could very well derail India’s development priority.

Finally, the role of the United States in Asia’s regional security environment is highly uncertain under President Donald Trump. The so-called structural factors that realists like to see as fixed, with inevitable US-China geopolitical competition and a resulting US-India security partnership, could experience flux along the way. The latest US National Security Strategy has termed China “revisionist,” but it is certainly not beyond Trump to do his own reset of US-China relations in the future. A certain extent of de-coupling of the India-US and India-China relations may be in order to keep India’s strategic options open. At the global multilateral level, India and China have their own strong reasons for cooperation, from climate change to trading regimes to non-interventionism.

Ultimately, realists do not have an attractive strategy for India if it wants to stop the downward slide in relations with its next-door neighbor. The option of a dangerous spiral is apparently not acceptable to the leaders of the two states, whatever risks the realists are willing to take. With a reset, Xi and Modi might just have created an opportunity to change the terms of engagement between their two countries, even if Modi cannot change India’s structural power gap with China any time soon.

Deepa M. Ollapally is Research Professor of International Affairs and Associate Director of the Sigur Center for Asian Studies, George Washington University, Washington DC.

The views expressed in the article are solely those of the author and do not necessarily reflect the position or policy of the Lee Kuan Yew School of Public Policy or the National University of Singapore.

News Reports

Bilateral relations

India asks troops along China border to not be aggressive, follow procedure
India Today, May 2
The Indian Army has told all its formations deployed along the 3,488 km-long Line of Actual Control (LAC) – de facto boundary between India and China – not to be aggressive when guarding the border.

China and India push to improve strained ties
Financial Times, April 29
China’s President Xi Jinping and Indian prime minister Narendra Modi agreed to maintain “peace and tranquillity” along their disputed border and enhance “strategic communication” to prevent tension from escalating, during a summit intended to improve fraught relations between the Asian neighbours.

China will not push India on BRI: Vice foreign minister
The Times of India, April 28
China on Saturday said there is no fundamental difference with India on the issue of “inter-connectivity” and Beijing will “not be too hard” with New Delhi on the issue of the Belt and Road Initiative (BRI). The BRI, a multi-billion-dollar initiative launched by President Xi Jinping when he came to power in 2013, has become a major sticking point in the bilateral ties. The BRI also includes the China-Pakistan Economic Corridor (CPEC) which India opposes as it goes through Pakistan-occupied Kashmir.

China ramping up air power in Tibet bordering India: IAF chief
The Times of India, April 26
Indian Air Force chief BS Dhanoa on Thursday said China has been ramping up its aerial prowess in the Tibetan Autonomous Region bordering India and that the neighbouring country has a “credible mix” of multi-role fighter and strike aircraft. In an address at a think-tank, the Air Chief Marshal, while talking about requirement of his force, said it needs 42 squadrons of fighter jets to carry out “full spectrum of operations in all contingencies”. At present, the IAF has only 31 squadrons of fighters.

News Reports

China and India in the Regions

ADB chief warns of Belt and Road debt trap
Nikkei Asian Review, May 3
The head of the Asian Development Bank on Thursday (May 3) warned countries against unsustainable borrowing to fund infrastructure projects, which could leave them stuck in a debt trap. ADB President Takehiko Nakao told reporters that China’s Belt and Road Initiative is a key program to connect regions and broaden integration and cooperation across Asia, and that the ADB would cooperate with China when appropriate. But he cautioned against excessive borrowing to cover infrastructure gaps.

India and Japan increase military spending, ‘driven by China tension’
South China Morning Post, May 2
Tensions with China have pushed Asian nations including India and Japan to boost military spending, according to a global arms spending report. India’s defence spending rose by 5.5 per cent to US$63.9 billion in 2017, overtaking that of France as it became one of the world’s top five military spenders, the Stockholm International Peace Research Institute (SIPRI) said in a report released on Wednesday (May 2).

Indo-Pacific region in focus of India-US maritime talks
Livemint, May 2
India and the US on Wednesday (May 2) held their third maritime security dialogue focussing on cooperation and developments in the Indo-Pacific region, a statement from the Indian foreign ministry said. The Indian delegation was led by Pankaj Sharma, joint secretary (disarmament) and Munu Mahawar, joint secretary (Americas division) in the foreign ministry besides Richa Misra, joint secretary (navy), ministry of defence.

ASEAN to work closely with China, India to counter protectionism: Singapore
Livemint, April 28
Southeast Asian countries will work more closely with new powers China and India to counter the pressure of protectionism and ensure continued growth, Singapore’s prime minister said Saturday (April 28). Addressing the summit of the 10-nation Association of Southeast Asian Nations, Prime Minister Lee Hsien Loong said that regional economic growth was under threat because the political mood in many countries had turned against free trade. He said recent trade tensions between the US and China in particular are worrying.

News Reports

Trade and Economy

China removes import duties on 28 medicines; India to get boost
The Times of India, May 4
China on Thursday (May 3) said it has removed import duties on as many as 28 medicines, including all cancer drugs, from May 1, a move which would help India to export these pharmaceuticals to the neighbouring country. “China has exempted import tariffs (duties) for 28 drugs, including all cancer drugs, from May 1st. Good news for India’s pharmaceutical industry and medicine export to China. I believe this will help reduce trade imbalance between China and India in the future,” Chinese Ambassador to India Luo Zhaohui said in a tweet.

China-India border trade via Nathu La resumes
The Indian Express, April 17
The bilateral trade for the year 2018 between the traders of India and China through the Nathu La border started today with traders and government officials from both sides exchanging gifts and greetings. Last year, the trade was disrupted following the Doklam standoff.

China-India trade volume grows 15% in Q1
The Hindu Business Line, April 26
After hitting historic high of USD 84.44 billion last year, China’s trade with India saw a robust growth in the first quarter this year, with bilateral trade netting USD 22.1 billion, up 15.4 per cent year-on-year, a top Chinese official said today (April 26).

WTO: India, China warn US on ‘unilateral’ trade moves
Livemint, April 29
India joined China and several other countries on Friday at the World Trade Organization (WTO) to warn the US about its “unilateral” trade measures imposed under Section 301 of the US Trade Act of 1974, saying it risks provoking “a full-blown trade war”, people familiar with the development said.

China seeks FTA with India to boost trade opportunities
Livemint, April 28
China on Saturday (April 28) said that a Free Trade Agreement (FTA) with India would facilitate more commerce between the two countries. “I hear… that there are certain barriers to trade and investments in both the countries. A Free Trade Agreement (FTA) will help facilitate more commercial exchanges between the two countries,” Chinese consul general in Kolkata Ma Zhanwu said in Kolkata. He was speaking at an interactive session organised by the Bharat Chamber of Commerce.

News Reports

Energy and Environment

Indian Solar Sector Funding Fell 65% Last Quarter
The Quint, May 5
India’s solar energy sector appears to have hit a road bump. Corporate funding in the solar sector fell by 65% to USD 2 billion in the three months ended March 31 from the USD 5.7 billion raised in the fourth quarter of 2017, according to Mercom Capital Group, a clean energy consultancy.

India tops list of fastest growing economies for coming decade: Harvard study
ET Energy World, May 4
India tops the list of the fastest growing economies in the world for the coming decade and is projected to grow at 7.9 per cent annually, ahead of China and the US, according to a Harvard University report. The Centre for International Development at Harvard University (CID) said in new growth projections yesterday that countries that have diversified their economies into more complex sectors, like India and Vietnam, are those that will grow the fastest in the coming decade.

India can learn from China’s efforts, says WHO
The Straits Times, May 3
India should follow China’s example and clean up the air in its cities, which are among the world’s worst for outdoor pollution, the World Health Organisation (WHO) said yesterday (May 2). The organisation’s database of more than 4,300 cities showed that Indian cities such as New Delhi, Varanasi and Patna were among the most polluted, based on the amount of particulate matter under 2.5 micrograms found in every cubic metre of air.

Asia leads the charge in growth of renewable energy
Nikkei Asian Review, May 1
In 2017, Asia accounted for nearly two-thirds of the worldwide increase in renewable energy generating capacity, according to a report published in April by the International Renewable Energy Agency. As the economies of Asia develop, demand for energy is rising. Governments have focused more attention recently on renewable energy — wind, solar, bioenergy, geothermal and hydropower — due to concerns over security of supply, price volatility and environmental issues.

India Calls For A Regional Oil Buyers’ Group Against Asian Premium
Bloomberg, April 26
Oil producers’ cartel charges Asian nations a premium on every barrel of crude over the price for western buyers. India, the world’s third largest oil consumer, says its regional peers must come together to negotiate better terms. “I see bigger cooperation between four major economies of Asia — India, China, Japan and Korea. India will try to create a network among these four economies,” said Dharmendra Pradhan, minister for petroleum and natural gas, on the sidelines of an event in New Delhi on Thursday (April 26).


When India and China meet
The Hindu, May 3
By Nirupama Rao – Former Foreign Secretary of India and Ambassador to the United States and to China

The path of India-China relations is strewn with the ghosts of summits past. The leaders of the two countries have met, expressed the loftiest of sentiments, gone their separate ways. No doubt, summits are good, nobody has a quarrel with them, the media at least loves them. The relationship has often benefited from such meetings.

A Lesson for India in Japan’s Approach to China’s Belt and Road Initiative
The Diplomat, May 2
By Tridivesh Singh Maini – Policy Analyst, Jindal School of International Affairs, OP Jindal Global University

U.S. President Donald Trump’s lukewarm approach toward Japan has compelled the latter to explore the possibility of improving ties with Beijing. Of late, there seems to be a desire on both sides to work jointly on a number of important issues — strategic and economic — such as North Korea and the impact of Trump’s tariffs on both economies.

Why India is crucial to RCEP trade pact
The Straits Times, May 1
By James Crabtree & Blake Harley Berger

James Crabtree – Associate Professor of Practice, Lee Kuan Yew School of Public Policy, and Senior Fellow, Centre on Asia and Globalisation

Blake Harley Berger – Research Associate, Centre on Asia and Globalisation

Asean’s leaders have issued a stark warning about rising protectionism at their latest summit, promising “to exert all efforts to resolve outstanding issues” delaying the critical Regional Comprehensive Economic Partnership (RCEP) trade agreement. It is no secret that India is the biggest stumbling block, leading some to worry that India may be left out of the trade pact entirely. This would be a mistake. RCEP negotiators meeting in Singapore this week would be wise to think of new concessions, not just to keep India at the table but to persuade it to sign the deal itself.

India-China summit highlights Modi’s hope vs Xi’s strategy
Nikkei Asian Review, May 1
By Brahma Chellaney – Professor of Strategic Studies, Centre for Policy Research

Chinese President Xi Jinping’s “informal” summit meeting with Indian Prime Minister Narendra Modi in the central Chinese city of Wuhan, significantly, began on the same day as the inter-Korean summit on April 27. That Xi chose the same date for the two-day summit might not have been a mere coincidence, given that the historic meeting between the leaders of North and South Korea left China on the sidelines, with little influence over those proceedings.

A new beginning for China-India relations could transform Asia
South China Morning Post, May 1
By Patrick Mendis – Associate-in-research, Fairbank Center for Chinese Studies, Harvard University and a commissioner to the United States National Commission for UNESCO at the State Department

Although the most inescapable news recently was the historic summit between North and South Korea on April 27, a less covered “informal summit” across the Yellow Sea, and one likely to be of equal consequence, is the meeting between Chinese President Xi Jinping and Indian Prime Minister Narendra Modi. This summit could reset the Sino-Indian relationship, one that goes back centuries.

Books and Journals

China’s ‘regionalism foreign policy’ and China-India relations in South Asia
Contemporary Politics, Vol 24, 2018

By Carla P. Freeman

Carla P. Freeman is Associate Research Professor in China Studies and Executive Director of the School of Advanced International Studies (SAIS) Foreign Policy Institute at John Hopkins University.

This article focuses on relations between China and India in South Asia, the two major powers’ ‘shared neighborhood’. Assessing the objectives underlying Beijing’s interest in engaging in regional groupings with India and other South Asian states, it finds that Beijing’s pursuit of a ‘regionalism foreign policy’ reflects a ‘comprehensive’ approach to international security. China’s regionalism foreign policy creates potential nexuses for regional cooperation between China and India. Against the backdrop of strategic insecurity between the two countries, however, Chinese policies, including a burgeoning paymaster role, galvanize New Delhi to buttress its traditional regional dominance. The discussion concludes that to avert worsening tensions with India and win Indian participation in its regional vision, Beijing must rethink its current approach, taking into account how New Delhi perceives its behaviour. The article suggests areas for further research concerning how regional institutions as forums for major power interaction might facilitate cooperation between rivals.

Compiled and sent to you by Centre on Asia and Globalisation and
the Lee Kuan Yew School of Public Policy, National University of Singapore