By Liu Zongyi Source:Global Times Published: 2018-4-18
The Doklam standoff between China and India last summer has set bilateral relations at a low ebb. The standoff has prompted the two countries to more seriously review each other and figure out each other`s strategic intentions.
Since the end of last year, there have been frequent exchanges between high-level officials of both sides. In December, Chinese Foreign Minister Wang Yi and State Councilor Yang Jiechi visited India within half a month of each other. In February, Indian Foreign Secretary Vijay Gokhale visited China. External affairs Minister Sushma Swaraj will visit China later this week to participate in the foreign ministers meeting of the Shanghai Cooperation Organization (SCO) during which she will also hold talks with her Chinese counterpart Wang Yi. Such exchanges between China and India indicate that bilateral ties are gradually warming.
There are three reasons why India has changed its China policy. First, given the series of diplomatic setbacks of the administration of Indian Prime Minister Narendra Modi, debates are going on within the country about its foreign policies, the core of which is its China policy.
At regional and global levels, India has made unprecedented moves by getting closer to Western countries such as the US and Japan, which not only violates its non-alignment principle, but also worsens its ties with China and Russia.
As for the Indo-Pacific strategy, India is dissatisfied with the US definition of the strategy and disappointed with the strategy`s lack of financial support. It has also noticed China`s concern about the strategy. India has realized the huge gap between China and India and worries that China will take even tougher measures against India which may hinder India`s domestic development.
Second, the most important task for Modi in the coming two years is the next general election. Regional stability and diplomatic achievements are vital for his reelection. Improving India`s relations with China and Russia, and even bargaining with China over the Belt and Road initiative will garner diplomatic points for Modi.
On global and regional issues, India has to rely on China. Against the backdrop of the US` abandonment of multilateralism, opposition to free trade and breach of the global trade system, India hopes that it can cooperate with China on globalization and free trade and strengthen cooperation on climate change, the SCO and the Asian Infrastructure Investment Bank.
Last, India faces economic dilemmas. The Indian economy has become more closely connected with the global economy. Rising interest rates of the Federal Reserve and anti-deflationary measures of developed economies will obstruct India`s currency and financial policies, affect the stability of the financial market and hinder the development of foreign trade.
India worries that it may be affected by the trade war launched by US President Donald Trump and his America First doctrine.
It is also concerned about global capital flowing back to the US. The Indian government lacks funds. New Delhi carried out a deficit financing policy to promote economic growth. The rising deficit has made the market worry about the financial condition of the Indian government.
With challenges from within and without, India`s economic development will not be smooth. India has been expecting China`s investment to help with its infrastructure. Some in India`s strategic and economic circles hope that India can join the Belt and Road initiative and believe China`s development is an opportunity for India. But the changes of India`s China policy are only tactical, not strategic, as India`s traditional hegemonic and Cold War mentality has not changed. The Modi government thinks that India should become a leading country rather than simply a balancer. India believes that China is India`s geopolitical rival.
India has been striving to balance or even contain China`s rise and pushing forward the so-called Indo-Pacific strategy with the US, Japan and Australia. It has always been unsettled about China`s economic cooperation with the Maldives, Sri Lanka, Nepal and Pakistan.
But India has changed its understanding of its strength gap with China. In the past few years, India had believed its hardline stance would propel China to compromise and it engaged with China by wooing the US. It also provoked China on the Taiwan and Tibet questions. Whether these diplomatic moves will change remains to be seen.
The warming of ties between China and India is out of the needs of both sides. In the short term, India hopes to have better relations with China so as to solve its domestic issues and develop its economy. In the long run, it wants to catch up with China in strength. China needs to watch India`s words and deeds closely.
Liu Zongyi is a a visiting fellow of the Chongyang Institute for Financial Studies, Renmin University of China.