Living With China

INDIA’S BIGGEST STRATEGIC challenge today is managing its relationship with China and dealing with the consequences of China’s rise. The former has to be done with China; the latter must include other powers that share India’s interests.

Heightened China-U.S. contention should have led both China and the United States to ameliorate points of friction in their other relationships such as that with India, not picking new fights and postponing old ones to concentrate on their primary preoccupation, each other. There were some signs of this in China’s behavior toward India and Japan in the Wuhan summit and the Abe visit in 2018, but China’s behavior on the border in 2020 has changed that fundamentally. India’s goal in the India-U.S.-China triangle should be to be closer to both China and the United States than they are to each other. The question is whether China’s accommodation of some Indian concerns could amount to anything more than a tactical response to an immediate situation. To the extent that medium- to long-term factors drive India-China relations, it is in the interest of both sides to explore and create conditions for a new strategic framework for the relationship, to manage and solve core issues such as the boundary, and to monitor behavior in our common periphery. Both countries use outside balancers in their relationship with each other.

It is in the periphery that India and China most rub up against one another. China’s emerging area of influence in Eurasia is growing not in a nineteenth-century imperialist manner but more subtly. In geopolitical terms the heartland is being consolidated and secured by China with Russian assistance or acquiescence. China’s neighbors wish to have other hedging options to keep China honest, and they have turned to Russia, the United States, and regional powers like Iran and Turkey. There is an opportunity here for India, for instance, to build its own connectivity to central Asia, such as Chabahar port in Iran and the North-South Corridor with Iran and Russia. There is also an opportunity to offer the central Asian oil and gas producers, Turkmenistan and Kazakhstan, an alternative market, swapping on the international market if India cannot organize transport.

There are possible uses for India of Chinese-built connectivity so long as it is open, available, and economically viable. Consider the contrast between the Colombo and Hambantota ports in Sri Lanka, both expanded by China. Most of what goes through Colombo port, which is thriving, is to or from India. Thus, India enjoys the use of infrastructure built by Chinese money and effort in Colombo, and the Sri Lankans are able to pay back the cost of Colombo port expansion. Hambantota, on the other hand, has been unable to pay back the Chinese loans because very few ships berth there. So the Sri Lankan government had no option but to convert the debt into a lease to China, turning the port over to China for ninety-nine years. But frankly, that only converts a Sri Lankan dud into a Chinese one, and I do not see how that improves the situation from Sri Lanka or China’s point of view. Given issues of viability and sustainability for several Belt and Road projects, it seems likely that those with internal rates of return that justify the investment and some of the strategically significant ones like Gwadar with basing for the PLA Navy will be implemented. The rest will labor against their own contradictions. Either way, these projects will fundamentally change the environment in which India operates. The threat of the military use of Hambantota will have to be part of the Indian calculus and provided for, even if that does not come about. The commercial uses of these ports would present India with opportunities for transshipment and competition that should make ports in south India more efficient.

In the broader maritime domain, India’s interest for the present is not in attempting to exclude maritime powers from the Indian Ocean, which is impossible today, but to ensure the safety and security of the sea-lanes that carry its energy and trade, not just in the Indian Ocean but in the seas near China and to its west. To do so India must work with all the maritime powers. To the extent that the larger ones like China, the United States, and Japan share the Indian interest in freedom of navigation in the high seas, it should be possible for India to take the lead in working out a regime, formal or informal, that ensures this in the areas of its primary interest.

It also is in India’s interest to work for an open, inclusive, and plural security order in the Asia-Pacific to replace the one that is no longer working. It would seem logical that as China seeks to play a greater role in the region and the world, it should work with other powers who share a desire to improve the world order and to concentrate on general economic betterment at home. This would require not just the fact of bilateral economic cooperation but addressing the sources of insecurity in the Asia-Pacific. This could be accomplished by integrating China into the political and military order of the region in a cooperative manner, just as China integrated itself into global and regional value and manufacturing chains in the last thirty years. If China chooses to work for an open, inclusive, multipolar concert or architecture in Asia, it would need to work with partners. So far this has not been China’s choice. Given its history, experience, and recent behavior, it also seems unlikely.

Judging by China’s actions in its periphery and with India in 2020, China has instead chosen to build a China-centric hierarchic order in the Asia-Pacific. Clearly, this diminishes India-China convergence on regional and global issues, particularly if China tries to change the global economic and political agenda to suit its particular interests. It is unlikely that globalization with Chinese characteristics will suit India. More abiding shared interests may lie in counterterrorism, maritime security, and other security issues rather than the economic issues that they worked on together in the past. To the extent that a Chinese attempt to build a China-centric order would be opposed by the United States, India would be asked by both sides to choose one side or the other, and each would seek to use India in its own negotiation with the other. Such a Chinese attempt would certainly provoke reactions from other regional powers like Japan, Vietnam, and Indonesia, though each would, like India, seek to work with China while minimizing the damage to its own interests—cooperating and competing at the same time.

If China sees the window of opportunity for its rise to primacy as limited, and if it is also convinced that the world is essential to its future growth and prosperity, we can expect a continuation or even a doubling down on China’s assertive policies. In the short to medium term of five years or so, we will see a China in a hurry, changing facts on the ground in its favor and seeking friendly or pliable regimes in its periphery. It will set up alternative international institutions as its own instruments rather than wait for reform of existing multilateral institutions to be accommodated. PLA deployments and resorts to the threat and use of force abroad will become more frequent. Loyalty tests and demands for public recognition of its status will increase. And China will be demanding of other rising powers, seeing them as obstructions. All in all, China will seek to shape its external environment in more active ways. This would certainly mean that India-China relations are in for a period of turbulence and uncertainty.

The very reasons for China’s haste would mean that such a policy could not be sustained for more than a decade or so. Whether this will indeed happen as described here depends on many imponderables, most significantly the Chinese Communist Party’s primary interest in staying in power, China’s domestic imperatives, and the extent to which Sino-U.S. contention forces a scaling back of Chinese pressure on its neighbors. If at any stage this activist policy is seen as hurting Communist Party rule, it will be abandoned forthwith. However, from what little we know of opinion in China, this activist stance is popular. It has helped the CCP to deal with discontent and to offset its declining legitimacy.

What does the present state of the India-China relationship suggest for India-China relations going forward, when older understandings no longer work, as Doklam has shown, and are inadequate to deal with issues that development and a new situation have thrown up? At the end of 2020, India-China relations are in crisis because of Chinese actions on the border, despite eighteen meetings between Prime Minister Modi and President Xi Jinping as well as the care that the Modi government displayed after 2017 regarding China’s sensitivities about Tibet, the BRI, and the Indo-Pacific.

THE PRESENT PROSPECT is for tenser and more adversarial India-China relations. One consequence of more difficult relations between India and China is the increasing attempt by smaller neighbors to play the two off against each other, getting from each what they can. To several Indians this seems like containment or encirclement of India by China, as they watch a communist coalition supported by China in power in Nepal, as the Maldives entered surreptitiously into a free trade agreement with China and possible basing arrangements for the PLA Navy at Gadu island next to Gan, and as Sri Lanka handed over Hambantota port to China for ninety-nine years. The absence of a commercial or economic rationale for much of what China does in southern Asia fires Indian suspicions that these projects are strategically motivated. Whatever the intent, they are certainly creating infrastructure that could be available to the Chinese military. To that extent, China’s activism in southern Asia will make India’s relations with its smaller neighbors more fraught and contribute to the worsening of India-China relations.

In my opinion, the regional and global situation suggests that the next few years may be more difficult than the last three decades for India-China relations. The more India rises, the more we must expect the balance to shift from cooperation to competition with China. India will have to work with other powers and in the subcontinent to ensure that its interests are protected. The most important thing, for me, is the need for India to rapidly accumulate usable and effective power, even while the macro balance takes time to right itself. Even so, my personal sense is that the bilateral relationship could be managed by the two countries, despite the complications created by an evolving international context and China’s drive for primacy in Asia. But this requires more than a reactive strategy or even just preventive engagement with China. It is hard to think of possible gains from conflict for either side that are not outweighed by large costs. The very uncertainty of the geopolitical situation around them, at a time when they each must undertake major domestic adjustments in their economies and societies, impels them to find a way to manage the relationship in the new situation. The causes that led them to first work out a modus vivendi in the 1980s and to successfully implement it thereafter remain valid, namely, their domestic preoccupations and concerns about their relations with the rest of the world and the sole superpower, the United States.

But the balance of power with India has shifted in China’s favor since the 1980s.

Could India and China evolve a new framework for their relations? Theoretically it would include respect for each other’s core interests; new areas of cooperation like counterterrorism and maritime security and crisis management; a clearer understanding of each other’s sensitivities; settling or at least managing differences; and, a strategic dialogue about actions on the international stage. New security issues, like maritime security which is increasingly important to both India and China, can be positive sum issues, if not looked at territorially. Both have an interest in keeping the sea-lanes open and secure for their trade and energy flows and should be discussing them and cooperating. The hardest part will be coming to a common understanding of each other’s core interests, which, for India would include its security in the subcontinent and the Indian Ocean.

India too will need to adjust to new economic realities. For example, the rise of China and its economic strength make the extent of India’s engagement in RCEP a matter of debate in India, at a time when trade in goods accounts for almost half of India’s GDP. Equally, India now has an interest in freedom of navigation in the South China Sea, since US$66 billion worth of its exports and about 33 percent of its trade passes through that waterway; the nature and manner of safeguarding that interest are still an issue in India. If India stays away from the RCEP, it is much less likely to achieve its own economic goals.
Today, China-U.S. contention—which I think is structural and therefore likely to continue for some time—opens up opportunities and space for other powers. Initially, both China and the United States looked to put other conflicts and tensions on the back burner while they deal with their primary concern, each other. We saw this effect in the April 2018 Wuhan informal meeting between President Xi and Prime Minister Modi and the apparent truce and dialing back of rhetoric by both India and China, even though this did not extend to a new strategic framework or understanding or to a settlement of outstanding issues. Their second informal summit in December 2019 at Mahabalipuram suggested that the truce would continue. These hopes have been belied in 2020.

Therefore, the Chinese attempts in spring 2020 to change the situation on the border by occupying areas on the Indian side of the Line of Actual Control and prevent Indian troops from patrolling where they had before marked a significant change in China’s behavior. It came when India and the world were preoccupied by the COVID-19 pandemic and the economic crash it produced. India’s reaction has naturally been to resist the changes and to increase the deployment of forces on the border. Today, both sides are in a tense military standoff involving several divisions. While both sides seek disengagement, several rounds of talks have so far not resulted in any relaxation. The India-China border is alive again, after many years. Risks are heightened by the fact that both sides are claiming victory in the military confrontation.

More significantly, the political relationship, after several years of sliding toward increasing confrontation, is being reset in a more adversarial frame. Public opinion in India is overwhelmingly critical of China. Though calls to boycott Chinese goods in India have so far not led to economic decoupling, the Indian government has announced a turn to self-reliance, is working to lessen dependencies on China, and is building more secure and resilient supply chains along with Japan and Australia. India is now far more willing to be seen working closely with the United States in the region. The shift from pure balancing between China and the United States to a more aligned posture will not, according to the external affairs minister, extend to an alliance. Neither the United States nor India wishes to enter into the mutual defense commitments that are at the heart of an alliance. Short of an alliance, a further strengthening of India-U.S. defense, security, and intelligence links is now a certainty, thanks to recent Chinese actions.

The international situation and correlation of forces also give India a chance to strengthen its own capacity, to build coalitions of the willing to shape China’s behavior, and to work with other Asians to achieve desired outcomes in India’s issues. These become even more important as a new modus vivendi with China will be even harder to achieve if the power gap between India and China continues to grow.

Will reason prevail in India-China relations and can the two countries manage their bilateral relations successfully after the crisis of 2020? In the midst of the crisis it is hard to see India and China finding a way forward that is better than their recent past. That requires a degree of pragmatism and a strategy of simultaneously balancing and actively engaging with China that enables India to get on with what is really important, creating outcomes that transform India and improve the well-being of its people. It was done once before between 1986 and 1988. But then there was a balance of economic, political, and military power between India and China. That is no longer true. Whether or not India and China are successful will affect not just India’s future prospects, but also the course of Asian geopolitics in years to come.

(This is an edited excerpt from India and Asian Geopolitics: The Past, Present | Allen Lane | 416 pages | Rs 699)

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