By Liu Zongyi Source: Chinese People's Institute of Foreign Affairs Published: NO. 135, 2020
India, China’s neighbor to the southwest, is a major country in South Asia with a population of more than 1.3 billion and a developing country that is on a fast rise. An important member of many international organizations, India is significant for China’s diplomacy. For historical and realistic reasons, however, China-India relations have all along experienced ups and downs. The 2017 stand-off in Doklam on the border plunged bilateral relations to a trough. At a time when the world is going through changes unseen in a century, how to properly manage its relations with India is a big challenge for China on the diplomatic front. Chinese and Indian leaders had informal meetings in 2018 and 2019, one in Wuhan and another in Chennai. The informal meeting mechanism was thus established. Can such a mechanism ensure stable growth of China-India relations? How should the two countries improve bilateral relations? These questions deserve close scrutiny and in-depth research.
I. How should current China-India relations be evaluated?
China and India are two emerging economies that are rising almost simultaneously. Their relations are crucial for peace, stability, development and prosperity in the Asia-Pacific, the Indian Ocean and the world at large. That said, the relations are extremely complicated, characterized by both cooperation and competition. As important members of BRICS and G20, the two countries have many shared interests on global issues, such as reform of the global financial system, climate change, and international trade negotiations. They are also engaged in close cooperation on regional affairs, including the Shanghai Cooperation Organization (SCO), counter-terrorism, and the Afghanistan issue. China is one of India’s largest trading partners. Two-way trade and Chinese investment in India has delivered a strong boost to the Indian economy.
It should also be admitted that there remain outstanding issues of historical legacy between China and India. The most prominent one is the boundary issue. Disputes have occurred from time to time on the border. As the boundary issue has been often played up by Indian media, causing no small damage to bilateral relations. On top of that, the China-Pakistan relations, Dalai Lama, India’s trade deficit with China, water resources, among others, also stand as impediments to relations between the two countries. In the past one year or so, the first and foremost issue in China-India relations has been trade imbalance, which has been assigned political significance by India.
The growing gap in their national strength and China’s increasing economic activities in South Asia and the Indian Ocean, especially the advance of the Belt and Road Initiative (BRI) in the past few years, have added to the concerns of India’s strategic community. India has seen as threats China’s economic activities and Chinese fleets’ escort missions in South Asia and the Indian Ocean and even China’s scientific investigation activities in the high seas of the Indian Ocean. Many Indian strategists hold the view that the deterioration of China-India relations over the past few years has been purely the result of Chinese actions and that the problems between the two countries are structural ones.
As an observer of international issues, the author believes that the many issues between China and India have to do with the thinking and mentality on the Indian side. First, India has been obsessed with the “scientific boundary” designed by British colonialists. The information and education campaigns pursued by the Indian government since the 1962 border clash has instilled in its people hostility and distrust towards the Chinese. Second, other factors at play include India’s self-perception as a power, its view on spheres of influence, nationalistic sentiments and its understanding of the world situation and China-US relations. The elite strategists in India are deeply worried about their country’s growing gap with China and believe that China, as it is under pressure from the US, should make compromises to India. That’s why after Modi took office in 2014, India has demanded China accept its various requests. On the other hand, China failed to give serious consideration to what India may feel and think when it pursues normal economic cooperation with South Asian and Indian Ocean countries and advances the BRI to help these countries develop their economies and societies. The Doklam standoff can be seen as the culmination of India’s dissatisfaction and distress at China’s South Asia and Indian Ocean policy.
II. How was China and India able to establish the informal meeting mechanism?
The Doklam standoff pushed China and India to the brink of war and plunged their relations to a trough. Such a result is the last thing the two countries want to see. China never sees India as a rival and still less wants to make it an enemy. India, on its part, wouldn’t get practical benefits from other countries if it turned China into an enemy. On the contrary, it may forfeit its position to maintain a balance on the world stage. From another perspective, India’s tough position on China reveals the fact that it is coming close to the US. But closer India-US ties may undermine its relations with Russia. To contain China’s influence in South Asia, India has put pressure on its neighbors, causing backlashes in countries like Nepal and the Maldives. As a result, India’s relations with its neighbors have been under stress. Opposition parties including the Indian National Congress have blamed the foreign policy of the Modi administration and the Bharatiya Janata Party (BJP) for putting India in such an awkward position.
On global and regional issues, India still has much to look to China. As Trump trashed multilateralism, free trade and the global trading system, India wants to work with China to promote globalization and free trade, not to mention their cooperation on climate change, SCO, BRICS, New Development Bank (NDB) and Asian Infrastructure Investment Bank (AIIB). In 2017, China-India bilateral trade totaled US$84.5 billion. Since 2014, China’s direct investment in India has increased substantially, including a significant amount in its business start-ups. A sound economic relationship with China is vital for India. It hopes to get Chinese investment in infrastructure. In the face of the election and downward economic pressure, the Modi administration wanted to improve relations with China. This is the broader context of the informal meeting in Wuhan, which was essentially an ad hoc move for Modi to improve the foreign policy environment, win the election and boost the economy.
After Modi got a landslide victory in the election and before the second informal meeting, some serious disturbances appeared in China-India relations. This has to do with the rising nationalism of the Hindus as well as the the trade war and geopolitical competition between China and the US. India assumes that under enormous pressure from the US, China must get along well with India and other countries in its neighborhood so as to focus on dealing with America. Therefore, India hopes to exploit such dynamics to ask for China’s support to its domestic and foreign policies and accept some of its requests to boost India’s international standing and public morale at the time of a sluggish economy. India unilaterally changed the legal status of the India-controlled Kashmir and turned it and Ladakh into centrally administered regions, which undermined China’s territorial integrity. In the Pangong Tso region, India provoked a standoff with Chinese troops and conducted a large-scale military exercise on the border. The Indian side even went so far as to assign political significance to the issue of trade imbalance.
The international community, especially those in the West, were not optimistic about the second informal meeting between the two leaders. In the run-up to the meeting, many Western and Indian media outlets played up the differences between China and India and threw a damp on the meeting, expecting it to be canceled or delayed. Some even hoped to see another rupture in China-India relations. Much to the surprise of Western media and those in India who do not want to see further growth of China-India relations, the informal meeting between the two top leaders took place as scheduled with a great success. The two leaders agreed to hold the next meeting in China next year. This demonstrates their long-term vision and strategic insight about China-India relations as well as regional and global situation.
There are mainly two reasons for the success of the Chennai meeting. First, Prime Minister Modi appreciates the statement made by President Xi in Wuhan that the world is experiencing changes unseen in a century and his deep insight about the historical juncture of China-India relations. The dialogue between China and India’s top leaders is a dialogue between two modern yet ancient Oriental civilizations that each boast a history of several thousand years. It is also a dialogue between two major emerging economies. To revitalize the two ancient civilizations and Asian civilizations at large is the most important strategy of the two countries. China wants to put its relations with India in the broader context of a community of shared future in Asia and more also a community of shared future for mankind. Both China and India are of the view that they should never fall into the trap as prescribed by the Western logic of geopolitical confrontation. This is a precondition for the success of the second informal meeting in Chennai. Prime Minister Modi particularly wanted to make the Chennai meeting successful. Just like the gathering of 50,000 people in the US, for the Modi administration, the informal meeting between Chinese and Indian leaders is also a symbol of India’s rise as a power.
Moreover, the economy has become Modi’s biggest challenge after he won the re-election. India wants to improve its trade deficit with China and draw in Chinese investment. The two sides accommodated each other’s biggest concerns during the consultations before the meeting. In Wuhan, President Xi made a proposal on “China-India Plus”, which is an indication that China would accommodate India’s interests while pursuing economic cooperation with countries in South Asia and the Indian Ocean. In Chennai, India showed a particular interest in trade imbalance between the two countries. China was sensitive to India’s concerns and made it clear that it hopes to see India’s economic growth and will take all steps possible to reduce trade deficits. China pledged to further open its market to competitive Indian products and industries, establish a China-India high-level economic and trade dialogue, seek greater synergy between the two countries’ development strategies, and explore the establishment of manufacturing partnerships. Ultimately, the two leaders didn’t let historical disputes prevent bilateral relations from going forward. Rather, they chose to look at the larger picture of national development strategies and shifting global dynamics, and explored ways to manage and finally resolve differences through exchanges between institutions and peoples and by strengthening communication and deepening mutual understanding.
III. How important are the informal meetings between Chinese and Indian leaders?
If the informal meeting in Wuhan was more on an ad hoc basis, then the success of the Chennai meeting shows that the mechanism of informal meetings between top Chinese and Indian leaders is operational on a regular basis. Such a mechanism is important in three ways.
First, the mechanism provides an ultimate safeguard and anchor for China-India relations. The Doklam standoff before the Wuhan meeting pushed the relations to low ebbs. After the meeting, the relations not only recovered, but also warmed up a bit. Before the Chennai meeting, tensions emerged in China-India relations because of India’s unilateral action to change the legal status of the part of Kashmir under its control, the standoff between Chinese and Indian troops in Pangong Tso, India’s plan to conduct a large-scale military exercise on the border, and trade deficit, among others. As a result, many thought the Chennai meeting was unlikely to take place. It, however, did happen. President Xi was warmly received in Chennai and Mamallapuram. The meeting was a great success. This proves that the two leaders are steering China-India relations with personal commitment. The informal meeting provides an ultimate safeguard so that even if issues occur, bilateral relations won’t get off track and lead to conflicts between the two countries.
Second, the informal meetings in Wuhan and Chennai point the way forward for China-India relations, which are now driven by the top leaders of the two countries. During their meeting in Wuhan, the two leaders had a thorough exchange of views and reached important consensus on international situation, China-India relations, and cooperation between the two countries across the board. They identified the historic juncture where the world, China and India were in, set out important guiding principles for bilateral relations, and drew the blueprint for cooperation in all areas. In Chennai, the two leaders set the direction for China-India relations, made a strategic and long-term plan for the relations in the 100 years ahead, and injected strong impetus into the relations, so that China and India will work together to revitalize the two civilizations. The two leaders covered confidence-building issues, for example how to view each other’s development and properly resolve their differences. They also set the direction for cooperation in specific areas such as military, economy, trade and culture, and set the priorities for cooperation in regional and international affairs.
Third, the establishment of the mechanism of informal meetings between Chinese and Indian leaders shows that China truly sees India as a power in the same league. In past, many Indian friends complained that China belittled India and did not view it as a power. Such a view will be baseless in the future. Except India, Chinese leaders have never had informal meetings with leaders of other countries. President Xi gave a warm welcome to Prime Minister Modi in an informal format. This is not only a way to show respect to India, but also to give support to Prime Minister Modi and his BJP party before the re-election. President Xi overcame difficulties to attend the second informal meeting in Chennai, which was also to support Prime Minister Modi’s political agenda. After the re-election, Modi worked to create an atmosphere for India’s rise as a power and strengthen the central government’s authority over local governments. It is for this reason that he gathered 50,000 people during his visit to the US. President Xi’s visit to Chennai was a tremendous support to Prime Minister Modi in a way that, as President Xi said, China and India should “light up each other”.
IV. What does the future hold for China-India relations?
The Chinese and Indian leaders’ informal meetings in Wuhan and Chennai pointed the way forward for the two countries’ relations. The two governments, however, must be cool headed that despite the ultimate safeguard, China-India relations are still fragile. To develop the relations, they must overcome obstacles, seek consensus and find new drivers of growth.
There are evident obstacles that hold back China-India relations. First, the relations are driven by the top leaders and must be supported and understood by people of all walks of life in the two countries. There should be support from not only the cultural and economic communities, but also the strategic community. Only with such support can the consensus of the leaders be implemented. That said, many elites in India’s diplomatic and strategic communities still hold on to the patterns of thinking established over the past several decades: the obsession with the “scientific boundary”, the mindset of regional hegemony, the notion of sphere of influence, the so-called democratic values, and the cold war mentality. With a tendency to blow things out of proportion, they often use sensitive issues to apply pressure on the other side. When their demand is not satisfied, they would choose to put bilateral relations on hold. Such a way of diplomacy will invariably impede efforts to deliver what the leaders have agreed on. After the two informal meetings, some elites in India’s strategic community still claim that China didn’t make substantive compromises.
Second, the elites in India’s strategic community believe that China-India relations should be free from the constraint of a third party. In other words, China-India relations should not be put under the broader framework of China-US relations. But in reality, India’s strategic and diplomatic communities try to use third parties, the so-called changing times, and China-US strategic competition to apply pressure on China. India also asks China to give up its normal cooperation with Pakistan and other South Asian counties and takes it as a test of China’s commitment to improve relations with India. Such a way of doing things is hard to change and will bring uncertainties to China-India relations.
Third, the nationalistic sentiment in the Indian society is a negative factor for China-India relations. There have been calls to overtake China economically, take protectionist measures, and boycott Chinese goods. Such manifestations of nationalism are in no way good for bilateral relations. In the meanwhile, many of the nationalistic policies taken by the Indian government are likely to cause negative spillovers, damaging India’s relations with China and other neighbors and jeopardizing peace and stability in the region.
V. How to take forward China-India relations?
In the face of tremendous uncertainties worldwide and the changes that are unseen in a century, China and India should uphold the Wuhan spirit, build a new model of major-country relations, and work together for peace and prosperity in Asia and the world. The last thing they should do is to further complicate the situation in the region.
First, at a time when the US is advancing the militarized Indo-Pacific strategy and building military blocs in the region amid intensifying geopolitical competition, China and India have the responsibility to jointly safeguard regional peace and stability. This is the necessary condition for the two countries to develop. The Pacific and the Indian oceans are international waters and not spheres of influence of any country. All parties should work together to maintain their peace and tranquility. It is necessary for China and India to pursue dialogues on maritime order and security and explore a non-bloc based regional security architecture of openness, inclusiveness, democracy, and equality. Such an architecture can involve outside powers. But regional countries should not work with outside countries to make and impose a set of rules on other countries in the region.
Second, in the face of trade protectionism, anti-globalization and geopolitical competition that hinder regional economic cooperation, China and India should join hands to build a new architecture of open economies and regional economic cooperation. Not joining the Regional Comprehensive Economic Partnership (RCEP) is a wrong decision made by the Indian government, as India will miss out on the last opportunity to get integrated into the globalization process. China’s economic activities in South Asia and the Indian Ocean are warmly welcomed, as these countries want foreign investment to help them with infrastructure and socioeconomic programs.When it comes to the Belt and Road Initiative, countries around the world should cooperate. India’s Security and Growth for All in the Region (SAGAR) can be well aligned with China’s BRI.
Lastly, confronted with non-traditional threats like ethnic and religious conflicts, territorial disputes along the border, as well as climate change and water resource crisis, China and India, two ancient civilizations, should lead by example to jointly tackle these problems. They should show sincerity and resolve the boundary issues through negotiation and consultation, and increase mutual understanding through people-to-people exchanges and inter-civilization dialogues. The two countries should adapt to and accommodate each other, draw the lessons of Western countries, and learn from the spirit of compromise as displayed by Germany and France after the Second World War. China should give serious consideration to India’s feelings and aspirations, though this does not mean it should unconditionally accept all demands from India. India, on its part, should learn to stand in other’s shoes and consider whether its demands are legitimate when developing relations with China. All in all, both China and India should take a measured approach to handle their relations.
Liu Zongyi is an Associate Research Fellow of Shanghai Institutes for International Studies and Visiting Fellow of Chongyang Instituter for Financial Studies at Renmin University of China.
Cause the important role China plays in the world economy, has played and will continue play for some time. And China is one of the first countries to be affected by COVID-19, had also the most brilliant performance. In terms of getting back to work, China is really on the forefront.