Home / Opinion / India and China: taking the right steps

The articulation of Prime Minister Narendra Modi and President Xi Jinping of China to push ahead with deepening of economic ties is a crucial investment in the bilateral relationship. The big tangibles from the meeting between the two in New Delhi recently, are a set of Memoranda of Understanding (MoU) on railway cooperation, industrial parks, city twinning, and an investment target of $20 billion over five years. On the political front, except for the reference by Modi for the need to clarify the Line of Actual Control (LAC) and Xi’s remark on border non-demarcation, there was no additional actionable protocol laid out, especially in the context of the recent standoff in the western sector on the LAC.

Taken together, the outcomes, desirable as they are, continue to bear the markings of routine increments more than any major breakthroughs. On the face of it, it can be interpreted that existing institutional mechanisms embedded in the 2013 Border Defence Cooperation Agreement will continue to be strengthened, while the strategic economic dialogue (now in its third year) will remain the primary vehicle for steering the economic partnership.

Where the Modi-Xi meeting succeeded was in cementing personal cordiality in engagement between the two leaders, which lends promise to the future of the bilateral relationship. Another positive outcome has been the drawing out of a five-year trade and economic development plan. Past agreements, whether concerning city twinning (Kunming-Kolkata, Delhi-Beijing and Bengaluru-Chengdu), Chinese language teaching in India, or even institutional MoUs (between Reserve Bank of India and the China Banking Regulatory Commission), have not really stood the test of evaluation. A time-bound approach thus allows for course correction based on actual performance indicators on achievement of stated objectives and gives meaning to the talk of reciprocity and progress.

However, to take the relationship to the next level will require confronting the vexed boundary question, which at present is often couched in an erroneous understanding that there is a minor difference of perception on some mutually agreed LAC, which is vitiated whenever Chinese troops cross over into India. The hard truth is that there has historically been no mutually arrived at definition and delimitation (on maps) for the boundary of this area (the 1842 peace agreement between Ladakh and Tibet and the host of British alignments, notwithstanding). The eastern sector, likewise, has the McMahon line which was the last mutually attempted definition of the boundary in that sector, but which is not accepted by China. How the issue of agreeing to a common LAC in the western sector is broached, and how the boundary in the eastern sector is formalized is the key to resolving the boundary question ultimately.

It is empirically established that China’s economic growth has created growth spillovers in other countries, a phenomenon that, incidentally, decreases with distance. The proximity of the two countries and the rapport between the leadership now presents great opportunities for mutual benefit. To that extent, why the maritime silk route proposal that could allow further enmeshment of economic ties was dropped, or why expansion of border trade was not taken up at the Modi-Xi meeting is curious. Currently the economic costs of “exit" for either state from the bilateral relationship are not high enough to abate conflict-inducing strategies. Engendering greater economic interdependence is crucial, as that alone can ultimately ensure that the spillovers from the economic and social processes subsequently transform societal preferences in both countries, to cushion the ground for the leadership to broach tougher outstanding political issues.

Joe Thomas Karackattu is an assistant professor at the China Studies Centre at the Indian Institute of Technology, Madras.

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