Formulating a policy towards China that finds the right balance between engagement and resistance is not easy. We are obliged to engage with China as it is fast on the road to becoming the world's number two power. The balance of power in Asia has already shifted towards it in significant measure in the last couple of decades. Its inroads into the Gulf area, Africa and Latin America is now giving it a higher global profile. It has become the world's biggest exporting country; it has accumulated huge financial surpluses which it is using to secure access to raw materials across the globe, those that it needs to fuel its future needs. Its spectacular economic growth continues even as the advanced industrial countries are in the throes of a serious economic depression, tilting global financial power in its favour, especially as US's financial health has become unduly dependent on China's investment of its surpluses in US securities. It is not surprising that China's position as a global manufacturing hub and its export over-drive have had a sizable impact on neighbouring India too as China has become India's largest trading partner in goods, with the two way trade expected to increase to $60 billion this year.
China is also India's adversary, even if at government level we avoid characterizing our relations with our powerful neighbour in these terms. On the face of it India has all the attributes to be in the same league as China, whether it is physical or demographic size, skills or civilizational depth. But China has outstripped India as a rising power, and the gap already existing between us will continue to grow in at least in the decade and a half ahead. China is better organized, more puposeful in formulating policies and implementing them, and much less constrained by domestic public opinion. Militarily, China has developed capacities that we will find difficult to match. China has rivalry with the US in mind, and the sinews it develops to pursue that will take care of any developing Indian challenge. No doubt China does not currently have access to western conventional defence technology because af an arms embargo imposed by western countries on it after the Tian An Men events. It is not able to secure from Russia the kind of platforms and weaponry that Russia readily supplies to us. But it has developed an indigenous defence production base that is impressive. In ballistic missile and nuclear weapon technologies China has forged ahead of India decisively.
Even if China has a head start over India, and in terms of "national power" is much more potent than us, India's steady economic rise, its human resource, the dynamism of its corporate sector and the size of its domestic market are elements playing in our favour. India too has weathered the current global slump well. Indeed, India and China are seen as two countries that the global economy counts on for easing the strains of the ongoing economic depression by their continued growth. India is planning to spend huge amounts in the coming years on infrastructure development, an area in which it has been deficient so far. This will erode the advantage China has at present with its highly modern infrastructure. As labour costs in China go up, and other aspects of doing business in China begin to weigh more in the calculus of foreign investors such as absence of a well defined legal system, violation of IPRs, lack of sufficient access to China's domestic market etc. attention will move increasingly towards India, especially if India begins to address those physical and procedural deficiencies that discourage the inflow of foreign investment in large volumes. Countries like Japan, which are the biggest foreign investors in China are now looking at India. China's export led growth model is considered unsustainable in the long run. The question is to what extent China can control the transition to a different model without serious internal disruptions. China's mercantilist approach does not endear it to other competing countries. The West has begun to see China's rise with mounting concern. These international sentiments play in India's favour. As a democratic country, with ways of doing business the West finds more congenial, and with financial and managerial experts ensconced in western corporations, banks and financial institutions who can mediate business and investment between India and these countries, India's growth is seen with less trepidation. In certain sectors of the knowledge economy we have a head start over China and this advantage we will enjoy for some time. Experts are generally agreed that by about 2025, as China's economic growth slows down and ours accelerates, the existing gap between the two economies will get very substantially reduced. At the same time, India's hunger for raw materials, especially energy resources, will pit it increasingly against Chinese competition in the years ahead. Our political leadership tries to minimize the prospects for such future rivalry by stating diplomatically that there is enough space for both India and China to grow without treading on each others' toes.
A good argument can be made that India should be able to leverage to its advantage the emergence of an economic giant next door. Complementarities can be exploited to mutual advantage. After all, China and the US have many strategic differences between them, but their economic ties have flourished. In many areas of manufacturing, China can now provide world class equipment- in the power and telecommunication sectors for instance- at much lower prices compared to western equipment. But there are security concerns about sourcing telecommunication equipment from China, though the pro-China business lobby in India feels that such security concerns are exaggerated. There is wariness about allowing Chinese companies to operate in "sensitive" areas, whether those close to our borders or near military centres and installations. China's practice of using its unskilled and semi-skilled labour to undertake projects abroad has run into problems in India. The mounting trade deficit with China is becoming unsustainable, more so as China restricts opportunities for our IT and pharmaceutical companies in its domestic market. China's dumping practices is another source of irritation in relations. China's effort to corner a sizable chunk of the Indian market through artificially low priced products is threatening competition and endangering domestic industry. China's interest in a Free Trade Agreement with India is not looked at positively by us. China's strategy of integrating its provincial economies with neighbouring regional economies, and creating the infrastructure to make this possible, presents problems for us. China can strengthen its market presence in our neighbourhood at our cost, besides becoming a magnet for our own border regions. At the international level it is easier to work out cooperative strategies in Climate Change or WTO negotiations, for instance, because there is no direct clash of interests- on the contrary both countries can exert their joint weight to counter pressures from advanced industrial economies. But such cooperation in specific areas should not make us lose perspective on the total content of our relations.
Underlying the complexity of forging mutually beneficial ties with China even where there is a community of interest, or where this is worth exploring, are some fundamentally hostile Chinese policies towards India. China does not want to settle the border issue with India, which if it did, would open doors wide for an across the board cooperation between the two countries. China obviously does not see the need for such marrying of our respective strengths to alter the global landscape to our liking. China wants to keep India under pressure, give itself space to brow beat it when required and put it in a position where it has to appeal to Chinese goodwill for securing an advantage as was the case when India sought China's support in the NSG for international civilian nuclear cooperation and for its bid for permanent membership of the UN Security Council. The demand that India should cede Tawang as a price for a border deal shows that China wants to set an unreasonable condition and thereby try to shift the responsibilty for not moving towards a solution to the Indian side. The insidious argument given is that India does not have the political will to settle the border issue which China has it. Its arguments for claiming Tawang have no real foundation, especially the reason that a previous Dalai Lama was born there ( why does it then object if the present Dalai Lama visits the place?) and that it has to be sensitive to Tibetan public opinion. It seems to want to delay a settlement until the Dalai Lama passes away and India no longer possesses what it sees is a tool to influence the internal situation in Tibet. China sees India as a future rival; it wants to be the dominant power in Asia. It wants to slow down as much as possible India's rise to regional and global status.
Pakistan has been a useful pawn in its hands to thwart India's ambitions, and keep it boxed in South Asia. Without being seen as confronting India directly and creating an atmosphere of hostility- which does not suit its strategy of presenting its rise as peaceful- it lets Pakistan do this. By making Pakistan nuclear and giving it weapon delivery capability, China has neutralized India strategically within South Asia itself. Pakistan has been given the means to continue its politics of confronting India without India being able to retaliate militarily even though it enjoys conventional military superiority. By building up a countervailing military power in India's neighbourhood, China has used Pakistan to prevent India from exerting its leadership role even within South Asia. China had no valid reason to oppose the India-US nuclear deal, which it accused of being discriminatory towards Pakistan. The depth of its strategic commitment to Pakistan is demonstrated by the fact that contrary to its NSG obligations it intends to build two additional nuclear power plants in Pakistan. It wants to give Pakistan the benefit of international civilian nuclear cooperation wothout going through the NSG process and without imposition of non-proliferation conditions on it, even though that country has become the hot-bed of terrorism, Islamic extremism and clandestine nuclear proliferation in which China itself has been fully involved. It is widely suspected that civilian nuclear cooperation with Pakistan is a convenient cover to continue to assist it in its weapons-related programme.
China has stepped up its claims to Arunachal Pradesh in recent years in an offensive and provocative manner. It has in the recent past allowed the publication of commentaries in its official press warning of a repetition of 1962 if India continues to provoke China in asserting its sovereignty over Arunachal Pradesh. It has even advocated the break-up of India into several states. It is issuing visas to Kashmiris on separate pieces of paper and not on their Indian passports, implying a repudiation of Indian sovereignty over Jammu and Kashmir. While it sought to block last year a small ADB loan for an irrigation project in Arunachal Pradesh, it is ready to undertake big infrastructural projects in POK. The water issue between India and China looms as a major point of contention in the future given China's plans to build dams on the Brahmaputra in Tibet and divert its waters to the water deficit northern part of the country in what will be a major engineering feat. China's forays into the Indian Ocean, its efforts to establish port facilities in key strategic points there, which later can be upgraded to naval facilities, its plans to obtain access to the sea through Myanmar and Pakistan in order to partially resolve its "Malacca dilemma", are all issues with a bearing on India's security.
Lately the atmosphere in India-China relations has improved. But this is tactical on China's part. Until China changes its policies on the big issues that divide us, the change in atmospherics is of limited import. China can go back to its bullying and aggressive behaviour any time it judges it necessary to do so. At times it appears that China feels concerned about India and the US drawing closer strategically with a view to contain the Chinese challenge. This disposes it to make some conciliatory moves towards India. It is possible that there may be some differences in thinking about India in the PLA and other centres of power in China, with the PLA being tougher in approach. This may account for fluctuations in China's temper towards India. Be that as it may, all told there is a basic hardening of approach to India notwithstanding its latest emollient posture.
China is following a policy of engagement and containment towards India in which Pakistan plays a pivotal role. We have no reciprocal poicy of this nature. We are engaging China but lack the resolve to look for options for containing it. We cannot seek to contain China alone. We can of course build up our military strength, especially our strategic capability against China. This in time will help to "contain" Chinese ambitions. But we need others who too fear China's rise marked by a resurgence of nationalism in the country. China reacted strongly to the attempt to build a qadrilateral arrangement between Asian democracies- India, Japan, Australia- along with the US, with Singapore thrown in. Australia retreated quickly, followed by Japan. The Republicans in the US favour a revival of such a grouping; the Democrats seem less sure about ideas like the G-2 and are beginning to see a China problem. President Obama has begun to talk of a better geo-political balance in Asia. India has to play a sophisiticated game of hedging its bets against China in a pragmatic manner. Apart from strenghtening relations with Japan, South Korea and Vietnam, India has to reinforce its Look East Policy as much as possible. Increased cooperation with the US Navy in the Indian Ocean would be part of containing the disruptive consequences of a rising China that is territorially expansionist and one that is at times accused of having a 19th century balance of power outlook.
The writer is a former Foreign Secretary
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.
PREV
