China-India Brief #183

The past decade has witnessed periods of both confrontation and cooperation between India and China. In the realm of confrontation, hand-to-hand combat between Chinese and Indian army units resulted in multiple fatalities in the summer of 2020. Shadowing these events, New Delhi has actively sought to counter Chinese ambitions in South Asia and the greater Indian Ocean Region (IOR). Such a strategy can be seen in India’s approaches to states ranging from the Maldives, to Bangladesh, and to the Indian Navy’s Mission Based Deployments in the greater IOR. This emerging Indian response to China is well known to scholars and analysts of South Asian security.

However, a key question is how is Beijing responding to New Delhi? Do we find evidence that China is actively engaging in a form of competition for regional influence with India in the IOR? Or, is China too distracted with its rivalry with the US to pay significant attention to India? Relying on numerous Chinese and non-Chinese language sources, I argue there is some evidence that Beijing is starting to counter India in the IOR; but, this is largely an asymmetric rivalry and it is difficult to decouple China’s response to India from China’s response to the US. In addition, the evidence presents no ‘smoking gun’ that Beijing is clearly engaged in a form of competitive tit-for-tat with India.

The essay is divided into three key sections. First, I analyze how the Chinese view India in terms of Chinese activities in South Asia. Second, I analyze data on Chinese arms exports and investment in South Asia. If China is attempting to outmaneuver India in the IOR, we should see a sustained increase in both activities. Finally, I provide a brief assessment of how China’s rivalry with the US factors into its real or perceived response to India.

India and an Emerging Chinese Grand Strategy

Despite contesting sovereignty over an area of 125,000 square kilometers and fighting a brief, but bloody war with India on their common border in 1962, China does not perceive India as a critical threat to its national security. Many China based strategists do not see India as a priority in China’s foreign strategy, and see South Asia in general as a region of secondary strategic importance. Conversely, relations and concerns with the US are of paramount concern. Multiple Chinese security scholars argue that it is India that views China as its main opponent and that India seeks to “restrict China’s peaceful use of the IOR.” Others argue that by expanding its ties with other IOR states, India is seeking to eliminate Chinese influence in the region. Professor Pu Xiaoyu of the University of Nevada, Reno, has written that the power gap between India and China produces an asymmetry that makes India more sensitive to China and prevents China from fully understanding Indian concerns about Chinese behaviour in the IOR. Chinese commentators are quick to point out what they perceive to be aggressive American behaviour in East Asia directed at China but do not appear to understand how India views Chinese actions in India’s backyard.

Some Chinese commentators have argued that India has overreacted to the Belt and Road Initiative (BRI). Hu Shisheng and Wang Jue write, “India’s tendency to overreact with respect to China’s South Asia policy has become the most significant external factor that incurs domestic political unrest in India’s neighboring countries”. The authors cite recent events in Nepal, Bhutan and the Maldives as evidence. In terms of the BRI, there was hope in Beijing that the China-Pakistan Economic Corridor (CPEC) could be sold to New Delhi as an opportunity to instill some form of stability in Pakistan. Chinese Premier Li Keqiang reportedly told Prime Minister Narendra Modi that the package could “wean the populace from fundamentalism”. Perhaps the biggest challenge for Beijing on CPEC was that it crossed into territory that India claimed, thus making any Indian acquiescence to the project a political non-starter.

Evidence of a Chinese response to India: What should we be looking for?

Although India does not feature prominently in Chinese strategic calculations, this does not mean that Beijing is not responding in some way to New Delhi. Significant methodological hurdles exist in our ability to ascertain if, and how, Chinese decision makers may be playing a game of competitive tit-for-tat with India. For example, Beijing is unlikely to openly state that it is attempting to counter India in South Asia. Perhaps of greater importance, how do we disentangle the complex web of Chinese commercial deals in the IOR, many of which are of questionable economic and strategic value from activities that may be specifically targeted at India? While the BRI and other Chinese activities may be perceived as a Chinese attempt to encircle India with Chinese outposts and possible bases, in reality, as Professor Zhao Suisheng has pointed out, the BRI is poorly coordinated and often pays scant attention to economic and strategic risks. There are two important areas we can examine for evidence of a Chinese response towards India: arms deals with India’s neighbours; and Chinese government-led investments in the region.

Arms Deals

Arms deals provide an interesting look into how a country views another state or region. They should not be viewed as simply another business transaction, but instead represent a calculated approach towards a specific state. Importantly, if China is seeking to increase its influence in South Asia to the detriment of India, we should expect Beijing to actively promote arms sales in states that border India. This would not only increase military influence for Beijing, but it could also create a form of dependency on China for regional states. As Chart 1 demonstrates, the data does not suggest that China is going all out to curry favour with India’s neighbors (with the obvious exception of Pakistan, which is a related, but different topic) through the sale of arms. Importantly, the value of Chinese arms sales in South Asia (including Pakistan) have in general declined over the past eight years.

Chart 1

Source: Tabulated by author with data from the Stockholm International Peace Research Institute

The cases of Sri Lanka, Bangladesh and Nepal are interesting. Much has been made of Chinese inroads in Sri Lanka, but based on the publicly available data, with the notable exception of 2019, Chinese arms sales have been almost non-existent over the past 8 years. In fact, India has been the largest supplier of arms to Colombo over the same period. The same applies to Nepal where discussions over increases in Chinese influence need to take into account that for the past 20 years, India has been the largest supplier of arms to Kathmandu. A case for expanding Chinese influence can be made in Bangladesh, where since 2013, China has made up 73 percent of the value in weapons sold to Dhaka. However, with the major exception of 2019, the trend in Chinese arms deals to Bangladesh has actually been in decline, and not on the rise as one would expect to see if Beijing was actively competing with India, which did not have any arms trade with Bangladesh over the same period. The Chinese Ming-class submarines sold to Dhaka (1970s technology), does provide some evidence that China seeks influence through arms deals. Had Beijing sold the more advanced Yuan-class, instead, this would have allowed India to help train the Bangladeshi submarine crews as the Yuan is based on the Russian Kilo-class, of which India has nine vessels—thus perhaps allowing India to negate Chinese influence.

Investments and Contracts

Chinese investments and contracts are another measure of potential influence in the IOR. Considering the direct links between Chinese state owned enterprises and banks, such as the China Development Bank, and the Communist Party and the very close relations between private/hybrid Chinese companies and the CCP, if China were seeking to expand its influence in the IOR, we should see high and increasing levels of Chinese investment in India’s neighbourhood. As the data in Chart 2 demonstrates, China has invested substantially in the region. However, in no country, including Pakistan, has it steadily increased over the period under review. Investment in Bangladesh has fallen significantly since 2018, and investment in Sri Lanka has fallen sharply from its high in 2014. The same is true in Myanmar, where it peaked in 2016. Interestingly, Chinese investment in India steadily increased from 2014–2019. It is worth mentioning that Hambantota, the Chinese-built port which has been frequently cited as evidence of Chinese strategic ambitions, was in fact first offered to Indian and American investors who declined to take on the project, leading the Rajapaksa government to turn to the Chinese. Furthermore, Colombo has stated that the port will not be used for military purposes.

Chart 2

Source: Tabulated by author with data from the China Global Investment Tracker

The data on arms deals and investment provide, at best, limited evidence that China is actively attempting to counter India in the IOR. These measures are not comprehensive, and analysts can pick and choose specific data points to support arguments from multiple sides. There is a strong possibility that many of these deals are more related to perceived economic opportunity than to geostrategic planning. While these may be linked, given the structure of China’s political economy with its increasingly deep pockets, apart from arms sales, Beijing is conducting steady increases in its military influence in the region. However, the expansion of China’s military footprint is more of a response to the US, than to India.

A Response to the USA?

One area many Chinese scholars and commentators agree on is that China is responding to the US and this is spilling over into the IOR. For years, Chinese leaders have been concerned about the protection of China’s sea lanes of communication in the IOR where 80 percent of China’s imported oil and 95 percent of its trade with Europe, the Middle East and Africa, transits. Control over this area is dominated by the American navy, which is increasingly coordinating activities with India. Song Dexing of the Nanjing Institute for International Relations has argued that the real challenge for China is the US and India seeking to jointly control the Indian Ocean; and therefore, China needs to develop a blue water navy that can ensure Chinese security interests. Chinese Major General Ji Mingkui from China’s National Defence University has argued that the BRI and the Asian Infrastructure Bank are key areas for China to break away from American containment. Other Chinese scholars view the American presence in the IOR as an attempt to set up an alliance directed against China and argue that China must guard against the US and adopt a missile-centric strategy for the US. Finally, the foundational defence agreements between India and the US are a cause of concern to China, as is the increasing importance of the ‘Quad’ (comprising Japan, Australia, India and the US). While China originally derided the Quad, and viewed India as its “weakest link”, it now views it as a greater concern, with Zhang Jie of the Chinese Academy of Social Science calling it the “pillar mechanism of the American Indo-Pacific strategy”. In fact, China’s Ambassador to Dhaka, Li Jiming, recently warned Bangladesh not to take part in the Quad, as this would “damage” relations with China.

Conclusion                                                                 

Perceptions that China is actively responding to India in the IOR may be true, but so far the evidence is not overwhelming. Reports that claim it is doing so do not provide powerful evidence. There is a possibility that Chinese activities are, for the time being, more concerned with commercial deals under the banner of the BRI and are of secondary strategic importance. While it is true that China’s economic footprint and arms sales have expanded over the past two decades, the reality is that with many IOR states, these contacts have actually decreased over the past half-decade. Furthermore, expansion of Chinese arms deals and investment have surged the world over, with the latter including some states that are rivals of China. Overall, Beijing may have a strategic approach to India, but so far, Chinese leaders are more concerned with other developments such as domestic concerns and the rivalry with the US.

Christopher K. Colley is an Assistant Professor of Security Studies at the National Defense College of the UAE. The opinions expressed in this article are those of the author and do not reflect the views of the National Defense College or the United Arab Emirates government.