India and China in an Indo-Pacific order
IN October 2019, Chinese President Xi Jinping came to the temple city of Mamallapuram in Tamil Nadu for an ‘informal’ summit meeting with Prime Minister Modi. This was a return visit to a similar informal summit with Mr Modi that President Xi hosted in the Central Chinese city of Wuhan in April 2018. The Wuhan summit was projected by the two governments as a landmark event, when the two leaders agreed that the bilateral relationship was too important to be jolted by the kind of military confrontation that occurred in mid-2017 on the Doklam plateau, near the India-Bhutan-China trijunction.
The two leaders also agreed that both sides will ‘prudently manage their differences’ and not allow differences on any issue to become disputes. The Ministry of External Affairs press release on the Mamallapuram summit said the leaders reaffirmed this ‘Wuhan spirit’ and discussed ‘strategic issues of global and regional importance’ in a friendly atmosphere. Over the last two years, the two leaders have had cordial meetings on the margins of almost every multilateral summit they have attended.
This bonhomie has not restrained China from opposing India’s membership of the multilateral Nuclear Suppliers’ Group or trying to get the issue of Jammu and Kashmir discussed in the UN Security Council at Pakistan’s behest (the last such occasion being in December 2019). These and other Chinese actions indicate why China will remain a critical foreign policy and national security challenge for India in the coming decades.
Divisions between India and China appeared soon after a brief honeymoon following India’s independence in 1947. India’s decision in 1959 to grant refuge to the Dalai Lama, the India-China military conflict of 1962, the 1963 China-Pakistan agreement (by which Pakistan ceded to China the trans-Karakoram tract of Pakistan-Occupied Kashmir) and a strong China-Pakistan political and military nexus ensured continued tensions. Disputes over the alignment in many sectors of the 4000-km India-China border created recurring irritants.
China extended significant assistance to Pakistan’s missile and nuclear weapons programmes from the 1960s onwards. It helped Pakistan, bilaterally and in multilateral forums, to keep the ‘Kashmir dispute’ in international focus, also shielding Pakistan from international criticism of its support for terrorist groups acting against India. Over the years, various insurgent groups in India’s North East have sought, and obtained, shelter, training and arms from China. India’s assessment has been that these and other Chinese activities in our neighbourhood are motivated by the objective of circumscribing India’s global out-reach, by keeping it bogged down in the subcontinent.
There have been periods when both countries sought to repair relations and establish mutually beneficial cooperation. Efforts were made in 1979 and 1988, but were not followed through for internal and external reasons. But two important agreements were reached in 1993 and 1996, by which India and China agreed to maintain peace and tranquillity in their border areas, with each side agreeing that it would not seek to militarily change the status quo, without prejudice to its territorial claims. Together with these agreements, the two countries decided that, even while working to resolve the differences over the boundary, they would progress other areas of cooperation.
Remarkably, Chinese President Jiang Zemin, in an address to the Pakistani Senate in 1996, commended this approach to Pakistan, in respect of its issues with India – address differences through consultations and negotiations, ‘shelving’ disputes. A further breakthrough was made in 2003, when the leaders of the two countries appointed their Special Representatives to bring a political approach to the resolution of border disputes. This initiative yielded some immediate results: in 2005, the Special Representatives agreed on political parameters to govern the settlement of the boundary question, which included an important provision that India interpreted as upholding its position on Arunachal Pradesh.
These developments provided an impetus to trade, investment, cultural and educational cooperation between the two countries. China rapidly became India’s largest trade partner and a significant investor. India and China found common ground in multilateral negotiations on climate change and efforts to secure greater participation in global financial and economic decision-making bodies. In their aspirations for a greater political and economic role in the post-Cold War world order, India and China, together with Russia, shared some political perspectives, which were different from those of the western countries.
While the India-China economic engagement intensified progressively, the quality of the relationship in other areas deteriorated. There was little progress in applying the political parameters to settling the India-China boundary. On the contrary, China started to stridently press its claim to Arunachal Pradesh (which it calls South Tibet), including by refusing to stamp Chinese visas on passports of Indian visitors from that state – the visas were stapled to their passports to distinguish them from other Indian citizens. A similar practice was started for visitors to China from Jammu and Kashmir.
China’s inclusion, in its ambitious Belt and Road Initiative (BRI), of the China-Pakistan Economic Corridor (CPEC) – a US$ 62 billion transport and infrastructure corridor from western China, passing through Pakistan-Occupied Kashmir to Pakistan’s Arabian Sea coastline – became a more recent bilateral irritant. The Indian government rebuffed a Chinese invitation to a BRI summit in Beijing in 2017. Then followed the lowest point in India-China relations in recent decades – the nearly two month-long India-China military stand-off near the India-Bhutan-China trijunction in Doklam in mid-2017.
The fluctuations in India-China relations have coincided with changes in their other external relationships. In the early 2000s, India-US relations saw a remarkable transformation, emerging from the frictions of the Cold War years and the more recent shadow of US-led sanctions after India’s nuclear tests of 1998. US business eyed opportunities in India’s expanding economy; its arms industry was looking for a share of India’s weapons acquisitions; and its nuclear industry was excited by India’s requirement of technology and fuel for its ambitious nuclear energy expansion.
Equally, India wanted to strengthen economic relations with the sole global superpower, attract American investments and technologies, including for nuclear energy, and diversify its military acquisitions from the near-monopoly of Russia. The relationship progressed rapidly to a strategic partnership, based on these and other shared interests, including education, culture and the bonds created by the Indian diaspora in the US.
The strategic underpinning to the new India-US partnership, reinforcing the other motivations, was a complementarity in perspectives on China. Even in the early 2000s, the US perceived China as a potential challenger to its position as the world’s sole superpower. It saw a strong, democratic India as a useful partner, while dealing with a rising China. While not stating this formally, US officials were frank in background briefings. India was equally careful not to project the India-US partnership as a strategy to balance China, but, given its difficult recent history with China, it welcomed the US support for enhancement of India’s military power in its region.
China closely monitored the growing momentum in India-US relations. Its own efforts to engage India, including through positive signals on a boundary settlement and on balancing its relations with India and Pakistan, were probably based on the assessment there was still a window of opportunity to forge a mutually beneficial economic partnership with India and create a political climate in which China and India could work together on the international arena, dissuading India from joining a US strategy to contain or balance China. With the India-US nuclear deal (announced in 2005 and operationalized in 2008), the Chinese obviously assessed that this window was decisively shut. In addition, as the author Andrew Small notes in The China-Pakistan Axis, the Chinese decision-making echelons were increasingly being occupied by officials who believed that China was now powerful enough to take a more forceful stance on territorial and other bilateral disputes.1
This forceful stance has been in evidence, particularly after the global financial crisis of 2008. Its aftermath provided China the opportunity to expand its global economic footprint, with corresponding increase in political clout. In its own region, it set about unilaterally enforcing its territorial claims on islands in the South China Sea (claimed by various Southeast Asian countries and Taiwan), brushing aside a 2016 decision of the Permanent Court of Arbitration in The Hague, which dismissed the historical basis for Chinese claims to these islands.
When Japan and China clashed in 2010 over a disputed island in the East China Sea, China effectively shut off rare earths exports to Japan, setting off a crisis in the consumer electronics industry. Korea was similarly punished, in 2017, with a Chinese tourism embargo, that cost its economy an estimated US$ 7 billion, for its decision to host an American air defence system. A Chinese economic embargo devastated Mongolia’s economy in 2016, when the latter had the temerity to invite the Dalai Lama, who is revered as a spiritual leader in that country.
China’s BRI has domestic drivers of addressing industrial overcapacity and developing its northwest, but it also aims at expanding China’ economic and geopolitical influence to Southeast, South, Central and West Asia, and further to Europe. Its maritime leg (the Maritime Silk Road) aims to develop port infrastructure and connectivity in the Indian Ocean, from Thailand and Myanmar to Djibouti and Kenya on the African coast. BRI projects have been widely criticized as promoting Chinese economic and political interests, rather than host country priorities. They are largely funded by Chinese loans, executed by Chinese companies, using Chinese labour. As in the case of the Sri Lankan port of Hambantota, when the projects prove unviable and the host government is unable to repay the loans, China swaps the debt for equity and/or management control, thereby acquiring a strategic asset.
In recent years, China has strengthened its economic and military cooperation with other South Asian countries – Bangladesh, Nepal, Sri Lanka, Maldives – trying to undermine India’s influence with them. CPEC marks a qualitatively new level of engagement with Pakistan. India has been vocal about its violation of India’s sovereignty but, if it progresses as designed, it would have serious implications.
Pakistan’s Gwadar port on the Arabian Sea has been leased to China until 2059. Chinese companies are reportedly developing a 1000-hectare Special Economic Zone and building an international airport nearby with a grant of $230 million. In its most expansive form, as per a Chinese draft plan published in a Pakistani newspaper, the corridor envisages road and rail links, energy infrastructure, a national fibre optic network, surveillance systems in major Pakistani cities, thousands of hectares of land leased to Chinese enterprises for farming and Chinese manufacturing presence across Pakistan. Even if only a part of this ambitious Chinese vision is realized, the outcome would be a formidable Chinese political, economic, security and military presence in Pakistan, with obvious strategic implications extending well beyond India.
The Chinese economic outreach has also extended to Europe, where its companies have moved aggressively to acquire high-technology companies in strategic sectors of the economy. China exploited the economic crises and political divisions in Europe to establish new linkages. A prime example is the ‘16+1’ format, established in 2012 to promote Chinese economic cooperation with a group of 16 European countries (11 Central European states of the European Union and five Balkan countries). According to an analysis by the Centre for Strategic and International Studies of the US, China has invested over $15 billion in infrastructure and advanced technologies in the 16 countries.
China’s aggressive actions in its region and its expansive global ambition should have set off alarm bells in the US and European strategic communities. Most reactions, however, did not go beyond largely symbolic statements and gestures. The US Administration was more engrossed in the challenges in Afghanistan and Syria. With its own political, economic and social issues, the European Union also underestimated the political and strategic implications. The Trump Administration has now signalled a much stronger line on China, openly confronting it on its ‘predatory economics’, ‘technology theft’ and military overreach, and describing the US Indo-Pacific strategy as a ‘geopolitical rivalry between free and repressive world order visions’. The EU’s new China strategy, unveiled in 2016, recognizes the need to balance the challenges and opportunities of the relationship and cautions against undermining EU unity in platforms like the ‘16+1’.
India’s approach to China has to factor in these regional and global realities, as well as the bilateral challenges. The un-demarcated 4000 km border is an obvious cautionary reality: though no headway has been made in recent years, a door has to be kept open for an amicable resolution when another opportunity presents itself. China is India’s largest trade partner and a significant investor. It is a major supplier of pharmaceutical raw materials to India. Chinese smartphones now have got two-thirds of the Indian market. India’s transition from internal combustion to electric vehicles has to contend with the fact that China dominates the global production of lithium and lithiumion batteries. It is also a major manufacturer of rare earth metals, which go into a wide spectrum of products from smartphones to cruise missiles. These are only a few examples of the economic interlinkages that coexist with the strategic challenges.
Over the last four decades, the asymmetry in economic and military strength has sharpened. India’s domestic policies and actions have to be geared to narrowing this asymmetry in the shortest possible timeframe. External strategies have to work towards building balancing coalitions to help blunt the impact of the asymmetry. Of course, even in adverse asymmetric relationships, there are levers which can be used, quietly and outside the public gaze, to protect vital interests. The resolution of the Doklam stand-off illustrated this.
China’s actions in the Indo-Pacific region, and especially the Indian Ocean, have economic, security and strategic implications for India. The geographical and political circumstances on India’s land borders limit the movement of goods and people across them. The bulk of India’s foreign trade (including vital energy supplies) is, therefore, carried by the Indian Ocean. Its marine resources are important for the economies of the littoral Indian states. Piracy, smuggling of arms, drugs and humans, territorial disputes and contestation of global commons, threaten India’s interests. Protection of Indian Ocean sea lanes is, therefore, high on India’s agenda. India’s ambitious plans for upgrading its naval capabilities in the Indian Ocean is therefore driven primarily by its security interest. This means also opposing political, economic and military domination of this region by any other country.
In addition, India’s ‘Act East’ policy aims to strengthen partnerships in the Eurasian region, which are based on the shared objective (publicly unstated) of resisting potential Chinese domination of the Indo-Pacific space. This includes strengthening cooperation with Southeast Asian countries, Japan, Korea and Australia, and promoting multilateral initiatives with ASEAN (Association of Southeast Asian Nations) and the Bay of Bengal littorals for a common approach on connectivity, trade and security.
The renewed engagement of the US in the region has given impetus to these efforts. It has led to a resurrection of the India-US-Japan ‘MALABAR’ naval exercises in the Indian Ocean, promoting interoperability in anti-piracy and maritime security operations. The India-US-Japan-Australia Quadrilateral Security Dialogue (Quad) has also been revived. While it normally meets at the level of senior officials of these countries, a Quad dialogue of the four foreign ministers in New York in September last year discussed (as per the US State Department) ‘collective efforts to advance a free and open Indo-Pacific’, as well as counterterrorism, humanitarian assistance and disaster relief, maritime security cooperation, development finance, and cyber security.
India has made strenuous efforts to draw Russia into discussions on Indo-Pacific cooperation. This was discussed during Prime Minister Modi’s visit to Vladivostok in September 2019, when a US$ 1 billion line of credit was announced for projects in the Russian Fareast and the operationalization of a Vladivostok-Chennai maritime corridor. Russia has a Pacific naval fleet and, given its global ambitions, should be interested in an Indo-Pacific order that is not dominated by China. Indeed, it is the core of President Putin’s vision for a Greater Eurasia, which has been elaborated by Russian academics as a community of nations in which China would be drawn into ‘a web of ties, institutions and balances’ that would restrain it from seeking hegemony.
It is important to separate the rhetoric from the reality in evaluating these initiatives. Collectively, they signal a broad-based unease about the Chinese attitude of asserting its interests and rejecting those of others. However, countries are conscious of China’s military strength and their economic interdependence. They do not, therefore, seek to confront China. Thus, while there is widespread support for the idea of a free and open Indo-Pacific – entailing respect for sovereignty and independence of all nations, peaceful resolution of disputes; free and fair trade and investment, freedom of navigation and overflight – even allies of the US hesitate to endorse its concept of the Free and Open Indo-Pacific (FOIP), because it is framed in terms of a geopolitical rivalry (as mentioned above) and incorporates ‘a lethal… combat-effective Indo-Pacific force posture.’
At the same time, there is widespread recognition that the Cold War construct of a US security cover for the region against a Soviet threat is obsolete. The rise of China and the Russia-China strategic partnership have undermined its credibility. It follows that more regional powers have to develop credible military capability, since the present asymmetry in military strength is not conducive to a security equilibrium.
What is, therefore, a realistically achievable outcome of these diplomatic and security manoeuvres? The ideal is an equilibrium of forces that would safeguard the interests of all countries. It is an elusive goal, because of the complex interrelationship of forces and a range of differing perspectives about the ingredients of a sustainable security architecture in the region. There is as yet no blueprint. An eminent former Indian diplomat recently questioned (at a closed-door event) whether such a European construct is viable in a region so heterogenous and crowded, with too many proximate powers jostling for influence, and whose history indicates a greater likelihood of a continuous flux in the balance of power.
The prospects of getting China to be more accommodative of the interests of Eurasian countries depend on a number of variables. One question is to what extent China’s domestic political and economic situation would enable it to defy external pressures and sustain its present assertive posture. A second is whether the US will display continued staying power in challenging China on its excesses.
The answers will determine the scope for countries to collectively press China for more equitable cooperation mechanisms, withstanding efforts to disrupt their unity. The ongoing negotiations between ASEAN and China for a Code of Conduct in the South China Sea is one litmus test: whether ASEAN countries can present a united front and the interests of non-ASEAN countries recognized in this international waterway. The course of US-Russia relations is another important determinant: a reduction in their acrimony could help decouple Russian perspectives on the Indo-Pacific from those of China.
The larger picture is that the search for an Indo-Pacific order is part of a post-Cold War churn, in which multiple powers are jostling for geo-political advantage, as the sole superpower struggles to retain its pole position, while at the same time recalibrating its leadership style. The rise of China as a global economic, technological and military powerhouse is not only inevitable; it is a reality. The other established and aspiring great powers seek to temper Chinese behaviour and, through effective coalitions, acquire sufficient influence in the world order to prevent a new global bipolarity. This may suit American strategic interests, at least in the immediate term. It accords with India’s aspirations for a multipolar world order.
* The views expressed are personal.
1. Andrew Small, The China-Pakistan Axis: Asia’s New Geopolitics. Oxford University Press, New York, 2015.