INDIA’S relations with China are amongst its important diplomatic and security ties. Over the past two years the relationship has been constantly in the news, foregrounded by reports of increasing Chinese troop incursions across the Line of Actual Control (LAC) and a hardening of Beijing’s stance on the status of Arunachal Pradesh. India and China face two sets of issues, broadly. The first are the historical legacies – the shadow of the past. These include the border quarrel, the fear of internal interference by the other side, and the problem of Pakistan. The second are new areas of competition including a possible arms race, the desire for international status, and the demand for food, water and energy – the shadow of the future. How the relationship shapes will depend on both the shadow of the past and of the future. There are grounds for thinking that India-China relations will remain cooperative but that new institutional forms may be required in order for collaboration to trump conflict in the years to come.

First, after fourteen rounds of border talks, the two countries have not significantly reduced their differences. Having said that, the 2005 document titled ‘Political Parameters and Guiding Principles for the Settlement of the India-China Boundary Question’ sets out the broad criteria or understandings on the norms that will frame a solution to the border conflict.

The agreement made six crucial points: the two sides would seek a ‘political settlement’; they would give ‘due consideration to each other’s strategic and reasonable interests’; in reaching a settlement, they would take into account ‘historical evidence, national sentiments, practical difficulties and reasonable concerns and sensitivities of both sides, and the actual state of the border’; the final boundary should be ‘along well-defined and easily identifiable natural geographical features’; they would ‘safeguard due interests of their settled populations in the border areas’; and there would be a ‘delineation and demarcation’ by civil and military officials and surveyors.

This is the most explicit statement regarding the nature of a settlement, and though it does not represent a breakthrough, it begins to prepare public opinion for a final agreement. With these six caveats, it is clear that the two governments have given themselves plenty of room for manoeuvre in relation to their publics – virtually any criticism of a future settlement can be fended off by recourse to one or more of the six.

 

The second point about the present state of the border is that there are signs of military instability after two decades of relative quiet. Chinese incursions across the LAC have apparently increased in the past two or three years. One view is that they are deliberate and part of Chinese pressure tactics. Another view is that the intrusions are largely unintended. Chinese units stray across the LAC because the line has never been clearly defined. As General V.K. Singh, Chief of the Army, is quoted to have said:

‘I think at times things get unnecessarily blown up. There are no intrusions. There are transgressions. Transgressions are in areas where a certain alignment is disputed between the two countries. You feel that the alignment should be at a particular place and you go up to that place. They feel that the alignment should be at a particular place, so he comes up to that place... There is nothing very alarming about it.’

A similar but not identical view is that the intrusions are probes designed to test the other side’s reconnaissance capabilities, alacrity of response, and willpower. They are peacock-strutting exercises, not the build up to a firefight or war. This does not mean that escalation can be ruled out – there is always a chance that a local commander will misjudge the situation and overreact. It does mean, though, that there is no grand plan on either side to attack the other and that violence can be avoided and controlled with careful border management.

Third, both sides have boosted their forces along the LAC in the eastern sector. China, with its huge new infrastructure in Tibet, can reportedly move over 30 divisions to the LAC. It has also transferred its CSS-5 missiles to Tibet. In response, India is modernizing its road infrastructure, planning to place an additional 90,000 troops over the next three to four years as well as two squadrons of Su-30s into the eastern sector, and has reportedly moved its Agni II and Prithvi III missiles to the border areas. China’s build-up is worrying, but we should remember that the Chinese need forces to hold down Tibet. Also, a military assault by China will encounter serious difficulties because it is easier to defend than to attack in this region.

 

Two other historical legacies continue to press in on India and China: the fear that the other side might interfere in one’s internal affairs, and China’s friendship with Pakistan.

At various points, India has feared that China would interfere in its internal politics to support Indian communists or separatists in the northeastern states. On the Chinese side, there has been the persistent worry that with the Dalai Lama’s presence in Dharamshala, New Delhi holds a dagger aimed at China’s southern underbelly.

Indian fears were in some measure confirmed. While Chinese help to the original Naxalite movement of the 1960s was very limited, Beijing did provide aid and refuge to some northeastern separatists until the mid-1970s. As for Chinese fears of the Dalai Lama in India, the Indian government has acted with great prudence in dealing with him and the Tibetans. What is striking, therefore, is that whereas the two countries could have interfered a good deal in each other’s affairs, they chose not to do so.

 

This posture of restraint is likely to persist. India has been extremely careful in its handling of the Dalai. New Delhi will not depart from its cautious policy, even though there are those who want to complicate China’s security. As an open society, India is more vulnerable to interference. It is, therefore, not in its interest to provoke its neighbours by aiding and abetting their internal enemies. China is not a democratic and open society, but Beijing has held off interfering in other countries’ affairs since the mid-1970s, for at least three reasons – to curb the Maoist radicals within China, to reassure the rest of the world about China’s intentions, and to concentrate on economic development. There is no reason to suppose that China in its ‘peaceful rise’ wants to change its policy of restraint.

The other great historical burden that India and China carry is the problem of Pakistan. The Pakistan problem grew partly out of the India-China quarrel. Historically, though, there were other reasons for China’s closeness to Pakistan, which we in India often fail to appreciate. Pakistan stands located at the mouth of the energy-rich Gulf. It is also a partner for China in the Islamic world. In 1971, it acted as the intermediary for the US-China rapprochement. After 1979, it was a key ally against the Soviet presence in Afghanistan. There is evidence that Pakistan shared its centrifuge technology with China and may have allowed Chinese technicians access to its American military equipment. Pakistan is also a potential threat to China. Islamic extremists operating from Pakistan are a threat to the stability of Xinjiang. This also requires closeness to Islamabad.

 

While Beijing’s quasi-alliance with Pakistan has been a thorn in India’s side, we often exaggerate Chinese contributions to Pakistani security. Until recently, China’s conventional arms transfers to it were modest compared to America’s. As for missile technology and nuclear know-how, surely Pakistan would have eventually obtained these through its own efforts or acquired them from elsewhere. Meantime, Chinese economic aid to Pakistan has been small in comparison to the bilateral and multilateral aid that our neighbour has received from other sources, particularly the US. Most importantly, though, it is worth remembering that China has never actually come to Pakistan’s rescue militarily, with 1971 being the crucial instance.

Over the years Beijing has also adopted a more equidistant stand on Kashmir. It has more or less stuck to the view that Kashmir is disputed, that the dispute should be solved peacefully, and that it is a bilateral matter between India and Pakistan. While it would be wonderful if Beijing did not refer to Kashmir as disputed territory, we cannot expect that much grace from China. During the Kargil war, Beijing took a rather sharp view of Pakistan’s violation of the Line of Control. It has also largely endorsed the idea that the dispute should be settled bilaterally, and it no longer insists on UN action.

China is uneasy about its quasially. It has not condemned Pakistan publicly for harbouring terrorists, but privately it is increasingly worried about the country’s role in promoting terrorism and Islamic extremism. With the US’ departure from Afghanistan, China’s anxieties could well increase. Beijing fears that Pakistan could become more radicalized and fragmented. In 30 years, Pakistan will be a country of 250-335 million people, armed with nuclear weapons, and perhaps even more radical and divided than it is today. That is an alarming prospect for China.

If China’s views of Pakistan are changing, so are India’s. New Delhi recognizes that the survival of Pakistan as a moderate Islamic state is crucial for Indian security and that terrorism notwithstanding it must be engaged in a long-term comprehensive dialogue. Interestingly, when military-to-military contacts between India and China were resumed in 2011, the Indian delegation went not just to Beijing but also to Xinjiang province where the Uighur problem is brewing. This was the first foreign military delegation publicly invited to Xinjiang after the Sino-Soviet split of the 1950s.

 

What is the future of India-China relations? Thanks to globalization, India and China are both rising powers. Three consequences would seem to follow. First, since economic power will translate into military power, the two countries could find themselves in an arms race. Second, with growing economic and military power comes increasing international ambition and a desire for greater status. Third, economic growth implies growing demand for at least three scarce resources – food, water and energy. At some point, India and China could be in competition over them.

With economic growth, both India and China have bolstered their militaries. They have imported more arms than any other country in the world. China also has a fairly vibrant domestic arms industry. India may have spent as much as US$ 50 billion on arms imports since 1999; China’s overall defence expenditures amount to three times India’s. As rising powers, India and China are all set to stake a bigger claim on the international system. China already is a global player. India, powered by its economic growth, is gaining recognition. Its membership in the G-20, the East Asian Summit, and growing support for India’s UN Permanent Membership of the Security Council are the clearest indications of its greater salience. India may also become a member of APEC and the Shanghai Cooperation Organization (SCO). Both countries are using their aid programmes but also their cultural influence to elevate their status.

If we look at food, China is expected to account for one-half the increase in the global demand for cereals. While India was more or less self-sufficient in cereals, by 2020 it will import up to 30 million metric tons. China will also consume 40 per cent of the increasing demand for meat. China’s agricultural trade deficit is expected to increase to US$ 33.5 billion, while India’s will increase to US$ 9.1 billion by 2020.

 

Water contention could grow. The supply of water is falling in both countries, and demand is growing sharply. China’s supply has fallen by about 15% and India’s by over 25%. China has massive water inequality: northern China has 35% of the population and only 7% of the country’s water resources. All of South Asia’s major northern rivers originate in Tibet. China has plans to generate hydroelectricity but also to divert river waters, particularly to its north.

The energy picture also suggests that India and China could come into conflict. Global energy needs will rise by 50% by 2030, half of it from India and China. China is already the world’s largest energy consumer. Per capita energy use in India will grow by 56-67% and in China by 60-67%. Oil accounts for about 25% of India’s total energy use. This will rise to 35% in 2030. Over 60% of India’s oil comes from the Gulf, Iran, and other Middle Eastern sources. India’s reliance on coal is 42% of its total energy use. Its shortfall of coal is likely to be 100 million metric tons by 2012. Oil accounts for roughly 20% of China’s total energy use. This is expected to rise to 24% in 2030. Its reliance on coal is nearly 70% of its total energy use. Demand for coal in China is growing rapidly and will be six billion tons in 2025. Natural gas use will also increase substantially in both cases.

 

The key point here is that the two countries will increasingly import their oil, coal, and natural gas requirements. India and China are already foraging for energy in Africa, the Gulf, Central Asia and Latin America. They have even begun to look at the vast tar sands in Alberta, Canada, which may have the second largest reserves of oil after Saudi Arabia.

Does all this add up to unending conflict between India and China? Not quite. First of all, India and China’s arms acquisitions are not necessarily aimed at the other country. China has more land and sea neighbours than any other major power in the world except Russia. Three of its neighbours are nuclear powers; in addition, Japan and South Korea could easily go nuclear. Most importantly, there is the United States’ military presence in Asia. India has a simpler strategic environment, but it must worry about China and Pakistan, both of which pose a conventional military and nuclear threat.

As for India and China’s international ambitions, at the moment there is no great competition between them: China’s influence is far greater. In addition, China has made gestures towards India’s growing status and has attempted to dampen the sense of competition. For instance, on India’s UN Security Council ambitions, Beijing has softened. It has not supported India outright, but in 2005, it said: ‘India is an important developing country’ which has ‘an increasingly important influence in the international arena.’ China ‘attaches great importance to the status of India in international affairs’ and ‘understands and supports India’s aspirations to play an active role in the UN and international affairs.’ In addition, it noted that China would consult and cooperate with India on UN reforms. It has made roughly similar statements since then, including in 2010 after Obama’s support of India’s Security Council candidacy. China has also welcomed India’s presence in the East Asian Summit and will likely support India’s full membership in the Shanghai Cooperation Organization.

 

On food, water and energy, too, competition may not be as severe as one might expect. So, while both sides are looking to import food and could come into competition, they could postpone the day of rivalry by increasing domestic output. While China is more efficient in farming its land, India has more farmland. Both can improve their agricultural systems considerably.

On water, China, as the upper riparian, has a special responsibility towards its downstream neighbours including India. It could do much more than it is presently doing to cooperate with them. India faces an even more serious water shortage than China and is doing less. It can continue to berate China, but a huge proportion of the problem is at home. As for China’s plans to divert rivers, there are at least two constraints – the engineering challenges of water diversion and the growing opposition within China. The latter should not be laughed off: massive diversion works will have potentially huge social and ecological effects, as some parts of the country lose water to other parts.

Energy too could be a battlefield, but even here we should be cautious. For one thing, China’s energy policies are extremely decentralized, and many Chinese entities are operating in the energy market as private players. The global energy field is still a market-led field, and Indian companies are competing not just with Chinese state enterprises but also with private and other state-owned enterprises from other parts of the world. In short, the India-China competition for energy is part of a global scramble for energy with many players, and India-China may not be the primary axis of competition.

In addition, energy supplies may increase as a result of new discoveries and technologies. The tar sands of Alberta is one example. With new technologies, oil extraction there is becoming economically more viable. Also, the mix of energy sources of the two countries is different. India is and will be more reliant on oil, and China is and will be more dependent on coal. This also may dampen their competition. Lastly, India and China may be in a position to cooperate on energy. China has perhaps the leading clean coal technology in the world, which India needs; and China has invested massively in alternative energies, which again India needs – and could get at cheaper rates than from anywhere else.

 

There have been a number of alarmist stories in India about China launching a 1962-type of war to settle the border issue and prevent India’s rise as well. While war is always a possibility in the international system, it seems unlikely between India and China, for at least four reasons.

 

The first reason is nuclear weapons. China may have up to 200, and India has about 100. That induces extreme caution on both sides, even if India’s delivery capabilities at present are largely dependent on long-range aircraft. Conventional war under the shadow of nuclear weapons may still be a temptation; but as India has discovered vis-a-vis Pakistan, even the side with superior conventional capabilities must be extremely careful given that conventional war could escalate to nuclear confrontation. The recent success of the Agni IV missile test, reports of an ICBM in the making, and the development of an SLBM suggest that the Indian deterrent will only be strengthened.

Second, both sides have air-power that will make a conventional war of any duration and decisiveness very difficult. China’s long supply lines, essentially from Chengdu, are vulnerable to air interdiction – the trip is over 4000 kilometres by train and over 2000 kilometres by road. Any attempt by China to disable the Indian Air Force (IAF) in the northeast and West Bengal in a first strike will be a challenge, as the IAF is thickly deployed there and will be ready for the fight.

Third, while China has the advantage of the heights on the Tibetan plateau, its ability to send large forces into India in this sector is limited by geographical constraints – the routes down into India are narrow and winding, and the PLA will find itself vulnerable to air attack if it breaches Indian ground defences. In addition, of course, its supply lines will be enormously long, while India will have the advantage of interior supply lines.

Fourth, Chinese forces will have to take account of possible Tibetan instabilities behind them. It is hard to know if Tibetan underground militias exist and, if so, whether or not they would harass the PLA during wartime, but this is an additional complication for China.

One could make a largely parallel analysis of the western sector. In short, war between the two countries is not very likely unless one or the other engages in highly provocative behaviour – and even then, with nuclear weapons and air power, it would be very risky to go to war.

 

India-China relations rest on four pillars: high-level summitry, the border negotiations, confidence-building measures (including the various strategic, defence and economic dialogues), and trade. These have helped stabilize the relationship since Rajiv Gandhi’s breakthrough visit of 1988. The problem is that they are probably not adequate to the challenges ahead.

Cooperation between the giants of Asia needs a larger institutional architecture. Professor Huang Jing, the China expert at the Lee Kuan Yew School of Public Policy in Singapore, has argued that nothing less than an Asian G-2 consisting of India and China will suffice. A G-2 will help the two to work out the kind of strategic trade-offs that might allow them to barter benefits in one area against losses in another and to identify win-win solutions to bilateral problems set against the constraints and opportunities facing them internally, regionally, and globally across a range of issues. A G-2 will also help India and China address challenges that might arise in third areas where their involvements are growing – in the South China Sea, other regions in Asia, Africa, Latin America, and perhaps even Europe. G-2 or not, New Delhi and Beijing must consider the next phase of constructive engagement.