How India can crack open the Chinese fortune cookie
India and China are destined to have a complex relationship combining competition with cooperation and friendship with suspicion
New Delhi: Indians had a romanticized view of China in the years immediately after independence, influenced largely by Prime Minister Jawaharlal Nehru’s thinking and the writings of Chinese travellers Fa Hien and Hiuen Tsang, who visited India in the 4th and 7th centuries AD, respectively. Both Chinese visitors were deeply impressed by what they saw in India and by the warmth with which they were received.
The spread of Buddhist influence to China, which now has a Buddhist population of around 240 million, followed these visits. There were also visits to India and its Indian Ocean neighbourhood, in the 15th century, by a Chinese fleet headed by Admiral Zheng He. The Admiral, a Mongolian eunuch, ever ready to use coercion, dealt cruelly with a Sri Lankan ruler whom he took as prisoner to China, along with the holy “tooth relic” of Lord Buddha.
This romanticized view of China continued till Indians were shocked by the conflict in 1962. This brought the Chinese to India’s doorstep, from across the high Himalayan passes. The scars of that conflict still remain raw in India. There is, however, a more realistic recognition now that differences over the border and even over regional developments can ultimately be settled, only through negotiations. That said, China’s ambitions to dominate Asia are unlikely to change anytime soon. China, after all, proudly proclaimed that it invaded Vietnam in 1979, to teach its smaller, but gutsy neighbour a “lesson”!
China has obviously performed better than India in the past seven decades, when it comes to economic development. While China’s share of world trade was less than ours, a mere 1% in the 1940s, our share of world trade today remains around 2%.
Our total exports of goods amounts to around $ 300 billion annually, while China is today the world’s largest exporter, with nearly 14% of world exports, amounting to $2,157 billion annually. Finally, India’s GDP and per capita income are barely 25% of China’s figures.
The differences in relative positions are similar on defence spending— China has far more potent, modern and sizeable defence production capabilities than India.
While both India and China experienced four decades of socialistic economic stagnation, China embarked on a path of near double-digit growth for over two decades, thanks to the leadership of Deng Xiaoping, which resulted in it becoming a formidable global economic power. This growth was engineered by Beijing developing incredible technological skills and surplus capacities, in highly efficient infrastructure development. With the pace of domestic construction activity falling in recent years, China’s surplus construction capacities are now being deployed for building bridges, roads, ports and cities across the world and particularly across the Eurasian land mass.
Growing Chinese chauvinism
China seeks to promote its strategic objectives through infrastructure projects like the Silk Road Economic Belt, which links it with Central Asia, Pakistan Occupied Kashmir, the Persian Gulf states, Russia and the Baltic States. Beijing’s 21st century Maritime Silk Route, in turn, extends from China’s coastal areas to Europe, through the Indian Ocean and the Mediterranean.
These projects have been accompanied by a readiness of China to use coercion and force to enforce its maritime boundary claims, by seizing and building on the occupied territory, in violation of International Law and the UN Convention on the Law of the Seas (UNCLOS).
China’s claims on its maritime boundaries in the South China Sea, its attempts to browbeat neighbours into accepting its claims, its attempts to even challenge international civil aviation norms (by declaring an Air Defence Identification Zones across disputed maritime boundaries) manifest Beijing’s growing national chauvinism.
This has raised concerns all across China’s maritime boundaries. China today has maritime boundary disputes with Japan, South Korea, Taiwan, Vietnam, Philippines, Brunei, Malaysia and Indonesia.
India, on the other hand, is largely viewed across its eastern neighbourhood as a benign and friendly power, which has resolved all its maritime boundary issues with all eastern neighbours—Sri Lanka, Bangladesh, Thailand, Myanmar and Indonesia—by strictly abiding to the tenets of International Law.
India’s position on its eastern shores in the Bay of Bengal is now relatively more comfortable than earlier, not only because it has resolved virtually all its maritime boundary issues, but also because its economic and strategic partnership with Association of Southeast Asian Nations (ASEAN) countries. Moreover, the BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) forum is reinforcing regional cooperation across the Bay of Bengal. It is bringing together SAARC members—India, Bangladesh Sri Lanka, Bhutan and Nepal—with ASEAN members, Myanmar and Thailand.
In India’s neighbourhood
China’s diplomacy, however, has been aggressive and even clumsy in many ASEAN countries. China has also sullied its image in Myanmar by its less than discreet support for armed Myanmar insurgent groups in the bordering Shan State and the Kachin State, which is located on the tri-junction of India, Myanmar and China. Myanmar, however, requires China’s support in the face of proposed western sanctions on the Rohingya issue in the UN Security Council, and remains sullenly silent on these Chinese transgressions.
Malaysia’s Prime Minister Mahathir Mohammed has been highly critical of Chinese connectivity projects in Malaysia and even indicated that he would cancel a $20 billion Chinese funded Rail Link and a natural gas project. China has ambitions of building an “economic corridor” in Myanmar, linking the Bay of Bengal port of Kyaukpyu that it has built, with its landlocked Yunnan Province. The Myanmar government has reduced China’s total investments by over 60% in the Kyaukpyu projects, after severe criticism of extravagant Chinese project plans.
Similar criticism has followed the Chinese investment in and takeover of the Hambantota Port Sri Lanka, which turned out to be a Chinese white elephant.
There are also other such infrastructure projects in Southern Sri Lanka, like a commercial airport where hardly any flight ever landed. The government in Maldives has been drawn into a similar debt trap, where it has been forced to hand over land to the Chinese, which can be used for military bases, because of Maldives inability to make exorbitant debt repayments.
Even China’s “all weather friend” Pakistan has taken courage to reduce the size of Chinese investments in a railway project by $2 billion. Eminent Pakistani economists warn of a looming “debt trap” emerging from Chinese infrastructure projects across the country. But China has succeeded in taking control of the strategic Gwadar Port in Baluchistan and is determined to augment Pakistan’s maritime strength by supply of submarines and frigates.
India also faces a situation where China has not only provided Pakistan with designs and equipment for manufacturing nuclear weapons, but has also given Pakistan the knowhow and materials for manufacturing missiles capable of carrying nuclear weapons to every part of India, including the Andaman Islands. American nuclear analyst Gary Milhollin has perceptively noted: “If you subtract China’s help from Pakistan’s nuclear programme, there is no Pakistani nuclear weapons programme”.
The fortune cookie
India has to realistically remember that China’s GDP is five times the size of its economy. Beijing has also developed a sophisticated defence industry and is a major arms supplier across the world. India, however, lacks the capabilities, to provide essential defence equipment to even key strategic allies like Afghanistan and Vietnam, because of the limitations in its indigenous defence production capabilities. It would, likewise, be foolish of India to seek to quantitatively match China in economic assistance and investment in areas like infrastructure development in Asia and Africa. Our emphasis has to be on developing Human Resource Capital in partners, while getting involved only in projects where we enjoy comparative advantages of location and political acceptability. Our foreign economic assistance should be closely coordinated with policies of partners like Japan, South Korea, Indonesia, the US and its European partners. It is only realistic for India to seek to expand its bilateral economic and investment partnership with China, while working out measures that ensure the balance of trade becomes manageable.
Chinese investment in manufacturing in India should be encouraged and welcomed. There is also potential for cooperation with Beijing in forums like the G 20 and BRICS. At the same time, India needs to be careful of the possible implications of joining China in a larger Asia Free Trade Area (RCEP), which also includes ten ASEAN members, together with China, Japan, Australia, South Korea, and New Zealand. We are already feeling the adverse impact of huge trade deficits with most of these countries.
After the Wuhan meeting between Chinese President Xi Jinping and Prime Minister Modi, China and India have embarked on an effort to strengthen contacts and confidence building measures between their militaries and border security forces. Strengthening these measures is essential to ensure that tensions do not get out of hand, because of differing perceptions of where precisely the presently un-demarcated border/Line of Actual Control lies.
It is also evident that there is going to be no early settlement with China to fully resolve differences on the border issue. The “Guiding Principles” for resolving differences on the border issue were agreed to between then Prime Minister Manmohan Singh and his Chinese counterpart Wen Jiabao in 2005.
Prime Minister Modi has reiterated India’s commitment to these principles. The determination shown by India recently in dealing with the Chinese intrusion in Doklam has demonstrated that it will stand firm on defending its borders, while being ready to work with China, to not let differences on the border get out of hand. India should learn to deal with China realistically and rationally, without indulging in the Hindi-Chini bhai bhai euphoria that preceded the 1962 conflict.
It should not view every interaction with China in primarily adversarial terms. The two most populous countries in the world are destined to have a complex relationship that combines competition with cooperation and friendship with suspicion. Good sense will hopefully prevail, to ensure that conflict is definitely avoided. There will be no winners in a conflict.
G.Parthasarathy is a former diplomat. He served as India’s high commissioner to Pakistan and Myanmar. This is the second part of a series on India’s extended neighbourhood.
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