China-India Brief #137

Guest Column

China-India Relations in the Future

By Liu Zongyi     

Photo from pmindia.gov.in

China and India are rising almost simultaneously. Their bilateral relationship is of critical significance to regional and global stability. However, the relationship remains extremely complex. China and India share extensive common interests over issues such as climate change, energy, international trade negotiation, reform of the international financial system, etc. In the face of unprecedented global change and growing uncertainty and instability in the current international order, it has become necessary for the two countries to pursue enhanced cooperation. This has gained particular significance against the backdrop of rising protectionism in the West, reflected most strikingly in the ‘America First’ doctrine championed by the Trump administration. Both countries have indeed cooperated on several issues, including regional economic integration, peace efforts in Afghanistan, and counter-terrorism. China is one of India's largest trading partners, and greater economic collaboration would be a strong stimulus to the Indian economy.

Admittedly, there remain many unresolved issues between China and India, among which the border dispute represents perhaps the biggest obstacle to improving the relationship. The China-India border issue is a very complex and long-running dispute that goes back to the era of British imperialism in India. It resulted in a military conflict between the two sides in 1962. Yet, beyond the boundary problem, other issues have hindered the advancement of China-India relations. These include China’s strong ties with Pakistan, India’s support for the Dalai Lama, India’s huge bilateral trade deficit, and trans-boundary water resource problem. These issues encourage the continuation of mutual distrust between the two sides. Another emerging problem is the growing economic gap between China and India, which has raised concerns in the latter. This is reflected in the ‘Chinese incursion’ and ‘China threat’ narrative which has been frequently evoked in the Indian media and even among some Indian strategic scholars. Distrust among the two countries could be exploited by some Western countries to disrupt China-India relations.

Moreover, with the increase in China's economic activity in South Asia and the Indian Ocean, particularly with the advancement of the Belt and Road Initiative (BRI), India's strategic suspicions of China have intensified. Unfortunately, certain misconceptions have only served to encourage strategic competition and distrust between China and India. One notion, encouraged by Western powers in the form of the ‘string of pearls’ argument, is that China is pursuing a strategy to ‘contain’ India within the Indian Ocean. This view seems to have gained a certain level of traction within India.

Managing relations with China is one of the core issues of Indian diplomacy. As the Nonalignment 2.0 report of 2012 warned, India’s China strategy must strike a careful balance between cooperation and competition, economic and political interests, and bilateral and regional contexts. The report notes that “Given India's current and future asymmetries in strength and influence, India must grasp the essence of this balance. This may be the most important challenge for India's strategy in the future”. Nevertheless, the Modi government has failed to achieve this balance in its first four years. Its failure led to a 73-day border standoff in Donglang (Doklam) in 2017 and brought India and China to the brink of military conflict.

It is difficult to predict whether New Delhi will achieve a balance in the future. At the 2018 Shangri-La Dialogue, Prime Minister Modi's remarks about India's role in the Indo-Pacific region and its maritime strategy have shown an ambition to expand India's maritime power. Although Modi did not mention the Quad at the summit, its members – the US, Japan, Australia, and India – will continue to hold talks and discuss further cooperation. The four-nation military alliance is the core of the Indo-Pacific strategy. On September 6, 2018, the inaugural ‘2+2 ministerial dialogue’ between the US and India was launched in New Delhi. India will continue its efforts to expand its Indo-Pacific strategy, from a security network to include economic cooperation, and to strengthen ties with Japan, Australia, Singapore, the UK, France, and other countries. The Indian government has rejected China’s invitation to participate in the Belt and Road Forum for International Cooperation twice. Instead, it has begun promoting its own infrastructure connectivity initiatives like the Asia-Africa Growth Corridor (AAGC), the International North-South Transport Corridor (INSTC), seemingly to compete with China’s BRI.

President Xi and PM Modi reached a consensus on several issues during their informal meeting at Wuhan in 2018, including enhancing cooperation under the framework of the Bangladesh–China–India–Myanmar Forum for Regional Cooperation (BCIM) and “China-India plus” cooperation plan. But putting the consensus into practice remains a big challenge for Modi. Among some of India’s diplomatic and strategic elites for instance, the continued adherence to a ‘zero-sum’ view of bilateral relations would make them less willing to compromise. Even among some Indian politicians, anti-China rhetoric has been used to draw public attention away from domestic problems, bolster national morale, to pull in votes, and even to justify greater military spending. At the international level, India’s perceived role as the regional bulwark against China has allowed it to obtain advanced weaponry and technologies from other countries. Therefore, the barrier to implementing the Wuhan consensus remains formidable.

Furthermore, India’s adjustment of policy towards China after the Wuhan summit seems to represent a tactical rather than strategic change.[1]  As former Indian Foreign Secretary Shyam Saran noted after the summit, the “Modi-Xi summit gives India the chance to expand its diplomatic options in the neighbourhood and beyond”. Most tellingly, he stated his belief that “[t]he only effective instrument for managing India-China relations will be a significant, sustained and rapid development of India’s economic and security capabilities, thus narrowing the power gap between the two Asian giants”.[2] 

Regardless of the outcome of the ongoing general elections, the most urgent task for India’s next Prime Minister will be economic development and managing other social issues. The direction of China-India relations seems stable in the short to medium term at least. While the border issue remains a yoke in bilateral relations, the positive border talks between Indian national security advisor Ajit Doval and the Chinese state councillor and foreign minister Wang Yi in late 2018 showed that both sides are eager to resolve the issue.[3] The 1962 conflict created a deep trust deficit between China and India. Its aftermath saw different narratives and interpretations of the events leading up to the conflict. A positive step towards a peaceful resolution of the China-India border problem would be to agree upon a single historic narrative of the 1962 war. This would help to dispel longstanding misconceptions and allow both sides to begin moving away from the past. This could be achieved by facilitating joint research by Chinese and Indian scholars and by the Indian government releasing the Henderson Brooks Report to the public.

Today, the top leadership of both countries plays a major role in the management of bilateral relations. Both sides have started to discuss the next informal summit to be held in India later this year. In the future, different levels of people-to-people exchanges will be key to improving the relationship. But in China’s view, a change in the mind-set of India’s strategic elites will be necessary. There remains a long road ahead for China and India.

Liu Zongyi is Senior Fellow and Secretary General of China and South Asia Cooperation Research Center, Shanghai Institutes for International Studies (SIIS).

[1] Liu Zongyi, “India’s revised China policy tactical adjustment, not strategic change,” Global Times, April 18, 2018, http://www.globaltimes.cn/content/1098606.shtml

[2] Shyam Saran, “The Wuhan window,” The Indian Express, May 3, 2018, https://indianexpress.com/article/opinion/columns/narendra-modi-xi-jinping-wuhan-summit-india-china-relations-doklam-5160656/ 

[3] Aishwarya Kumar, “Ajit Doval, Wang Yi Hold India-China Border Talks During Special Representatives’ Meet,” News 18, November 24, 2018, https://www.news18.com/news/india/ajit-doval-wang-yi-hold-india-china-border-talks-at-special-representatives-meet-1949411.html

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

CDAC helps in understanding, bringing each other closer: Indian scholar
Xinhua, May 13

The upcoming Conference on Dialogue of Asian Civilizations (CDAC) “is very much necessary” as it helps in understanding each other's cultural and civilizational diversities and brings all closer to each other, an India scholar has said.

China-India translation project facilitates sharing of ancient ideas
CGTN, May 10

Based on a Memorandum of Understanding (MoU) signed in 2013, China and India's national authorities in publication and foreign affairs are collaborating on an ambitious translation project where each country will translate 25 titles of the other's ancient classics and contemporary literature.

China removes maps showing J&K, Arunachal as part of India from BRI website: Report
Money Control, April 28

China reportedly wiped out maps depicting Jammu and Kashmir (J&K) and Arunachal Pradesh as part of India from the BRI website as the second Belt and Road Initiative (BRI) Summit was underway in Beijing.

News Reports

China and India in the Region

Baloch group warns China against its presence in the region
The Times of India, May 13

Members of the Balochistan Liberation Army (BLA) have claimed that scores of families in Balochistan have “suffered at the hands of Pakistan’s military” due to China’s ambitious infrastructure project – China-Pakistan Economic Corridor (CPEC).

US banding together with India, like-minded nations to protect sovereignty of Indo-Pacific: Mike Pompeo 
The Economic Times, May 12

The US is “banding together” with nations like India, Australia, Japan and South Korea to ensure that the sovereignty of Indo-Pacific nations are protected and that they are not subjected to any coercion, Secretary of State Mike Pompeo has said. 

U.S., Japan, India and Philippines challenge Beijing with naval drills in the South China Sea
Reuters, May 9

In fresh show of naval force in the contested South China Sea, a U.S. guided missile destroyer conducted drills with a Japanese aircraft carrier, two Indian naval ships and a Philippine patrol vessel in the waterway claimed by China, the U.S. Navy said.

China and Nepal sign off on ports deal to ease Kathmandu’s dependence on India for trade
South China Morning Post, May 2

China and Nepal have signed a deal sealing a 2016 agreement to grant the landlocked Himalayan country access to Chinese seaports and land facilities for trade.

Chinese President Xi meets Imran Khan, calls for improvement of India-Pak relations
The Times of India, April 28

Chinese President Xi Jinping met Pakistan Prime Minister Imran Khan on Sunday and expressed hope that Pakistan and India can meet each other halfway to improve their strained relations following the Pulwama terror attack.

News Reports

Trade and Economy

China, South Africa keen on India's WTO proposal
The Economic Times, May 12

China and South Africa have expressed keen interest in India’s proposal to safeguard the right of special provisions for developing countries, which have been challenged by the US.

India signs protocol for export of chilli meal to China; discusses market access for farm products
The Hindu Business Line, May 9

India and China on Thursday (May 9) signed a protocol for the export of Indian chilli meal to China. This is the fourth protocol signed between the two nations over the past year allowing the export of farm commodities from India.

India's boycott of BRI not to affect trade ties with China: Indian envoy
The Economic Times, May 3

India had also boycotted the first BRF held in 2017. New Delhi's reluctance to join the BRI has become a major irritant in the relations between the two countries.

Bangladesh-China-India-Myanmar (BCIM) Economic Corridor no longer listed under BRI umbrella
The Hindu, April 28

India’s decision to skip the Belt and Road Forum (BRF) may have led to the exclusion of the Bangladesh- China- India- Myanmar (BCIM) Economic corridor from the list of projects covered by the China-led Belt and Road Initiative (BRI) umbrella.

India Slips Further Behind China During First Five Years of Modi
Bloomberg, April 28

Over the last five years, Beijing has continued to outspend India on defense, implemented sweeping reforms in its military and diplomatic structures, and built strategic infrastructure in India’s backyard, not to mention providing arch-rival Pakistan with defense technology.

News Reports

Energy and Environment

India becomes fastest-growing energy market in the world
ET Energyworld, May 14

India has finally acquired the long-awaited tag of the fastest growing energy market in the world. The country's investment in the energy sector grew at a rate of 12 per cent in 2018 -- the highest growth rate as compared to any other country, according to the International Energy Agency (IEA).

Indians are addicted to cheap coal power and it’s killing them
The Economic Times, May 9

In India, cheap energy is paramount, and that means coal. Prime Minister Narendra Modi has won plaudits from the United Nations for promoting solar power and signing the landmark Paris climate accord, but India’s use of damaging fossil fuels has grown under his tenure.

China unlikely to follow US oil sanctions on Iran
Global Times, May 4

To maintain its relations with Iran, a key partner on energy and the Belt and Road Initiative (BRI), China is unlikely to submit to unilateral sanctions by the US on Iranian oil exports, Chinese analysts said on Saturday (May 4), though some Chinese companies doing business with Iran feel the pressure.

India apprehensive Iran sanctions could boost oil, inflation
Reuters, May 1

U.S. sanctions on Iran could boost oil prices and inflation to a point that hurts the common person in India, the country’s ambassador to the United States said on Tuesday (April 30), after the Trump administration said it would end waivers for Iran’s oil buyers.

India, China set to form a working group on energy
Livemint, April 28

China and India’s proposed arrangement to form a buyers’ bloc to bargain collectively for oil supplies has acquired an institutional character with the two strategic rivals moving ahead to set up a joint working group (JWG) on energy.

Analyses

China’s role in the India–Pakistan nuclear equation
The Strategist, May 7

By Ramesh Thakur, Former UN Assistant Secretary-General; currently Emeritus Professor at the Australian National University and Director of its Centre for Nuclear Non-Proliferation and Disarmament.

The danger of a nuclear war, with catastrophic consequences for life as we know it, may be higher today than it was during the Cold War.

Ending terrorism India’s and Pakistan’s goal
Global Times, May 7

By Ding Gang, Senior Fellow, Chongyang Institute for Financial Studies, Renmin University of China

India has blamed China for favoring Pakistan because the Security Council failed to pass the resolution previously. This is due to India's misunderstanding of the primary position of China's counter-terrorism policy. China has always insisted on supporting anti-terrorism in its surrounding areas including South Asia because it is related to China's stability.

I believe connectivity is the key to addressing the India-China trade deficit
Hindustan Times, May 5

By Luo Zhaohui, Ambassador Extraordinary and Plenipotentiary of the People’s Republic of China in India

The main theme of the BRI is to achieve win-win cooperation. We expect India to be part of the initiative.

Listing of Masood Azhar can open a new phase in India-China relations
The Indian Express, May 3

By Sanjaya Baru, Director for Geoeconomics and Strategy, International Institute for Strategic Studies; Honorary Senior Fellow, Centre for Policy Research.

Radical Islam keeps raising its head in newer places across Asia, as it recently did in Sri Lanka, and now poses as much a challenge to China’s rise as it does to India’s. Both countries must work together towards a win-win strategy on over-powering it.

Books and Journals

Thirsty Cities: Social contracts and public goods provision in China and India
Cambridge University Press, January 2019

By Selina Ho, Assistant Professor, Lee Kuan Yew School of Public Policy (LKYSPP), National University of Singapore (NUS).

Why does authoritarian China provide a higher level of public goods than democratic India? Studies based on regime type have shown that the level of public goods provision is higher in democratic systems than in authoritarian forms of government. However, public goods provision in China and India contradicts these findings. Whether in terms of access to education, healthcare, public transportation, and basic necessities, such as drinking water and electricity, China does consistently better than India. This book argues that regime type does not determine public goods outcomes. Using empirical evidence from the Chinese and Indian municipal water sectors, the study explains and demonstrates how a social contract, an informal institution, influences formal institutional design, which in turn accounts for the variations in public goods provision.