The State of Indian-Sino Relations

04/13/2010 05:12 am ET | Updated May 25, 2011
  • Daniel Wagner CEO of Country Risk Solutions / co-author of the book "Global Risk Agility and Decision Making".
  • Subhash Agrawal New Delhi-based political analyst and founder of India Focus

As recently as a year ago, few would have believed that Indian-Sino relations would have become acrimonious. The timing of this friction is rather odd. Despite the trigger of the Dalai Lama's visit to Arunachal a few months ago, both countries had been trying hard, and treading past each other carefully, in an effort to find common ground.

In recent years the two countries had in fact found that they had similar views on a host of issues: climate change, the Doha round of WTO talks, and bilateral trade expansion. What makes the deterioration in bilateral relations even more inexplicable is the China's willingness to publicly air its disputes with India, and the sharp rhetoric that has accompanied its discontent.

To some degree, India's hyper-active media has perpetuated the friction through its sensational reporting. India's young and inexperienced TV media anchors are full of jingoistic drumbeat and are adept at prompting unwary Indian officials into giving statements they later regret. Examples of irresponsible reporting by Indian media include the "growing evidence" of China's unfriendly support of insurgent groups in the North East (an old story), Chinese plans to restrict the flows of the Brahmaputra river (not proven), and China's "changing stand" on Kashmir (which is not true -- the Chinese position, like that of most other countries in the world, has long been that Kashmir is disputed territory).

Despite the Indian media's faults, it is also true that China has in recent months been much less friendly to India and less accommodating to many of its sensibilities. The new Chinese hard line over territorial claims in Arunachal Pradesh and to the visit there by the Dalai Lama surprised many China experts in India. These experts attribute China's over-reaction to deep frustration at not being able to keep a lid on the Tibet issue, and at the continuing high-profile treatment of the Dalai Lama by the global press and the majority of the world's leaders.

An Asymmetrical Relationship

The truth is that India-China relations have been asymmetrical for a long time. There is greater awe, fear and even benchmarking in India over what China has achieved -- than the other way around -- and a natural competition between the only two billion-plus person countries on the planet. But China is finally beginning to take note of India's economic success in a variety of sectors (not just in IT, but also in the production of small cars, for example) and India's own growing sense of confidence.

There is, consequently, evidence - based on official Chinese statements and the attitude displayed by Chinese delegations recently visiting India -- that China has finally begun to shed its earlier dismissive attitude towards India and to accept it as a growing regional power. Perhaps because of its own self-perception as the emerging world's leading power, China still does not see India as a principal rival. What China is most wary of is India's increasingly close orientation to the U.S. (noting in particular U.S. concessions to India on the nuclear deal), India's rising defense budget, and the embryonic defense cooperation between U.S., India, Australia, and Japan.

In other words, even if it is not perceived as a direct threat to China, India complicates China's relations with other major powers. China knows that India is an important element of any "China containment" policy of the U.S. India's own rise on to the world stage, though slower and less pronounced than China's, has prompted some pundits to question whether the 21st century belongs solely to China.

The Foundation of Future Friction

Indian/Sino friction will continue in the coming decade and is likely will be based on three primary issues:

1) The disputed border: Having never formally resolved their lingering border dispute, both countries will continue to find the absence of a resolution an irritant that will underlay and influence the health of bilateral relations;

2) Naval rivalry in the Indian Ocean: As China seeks to project its power regionally, India's navy will continue to be the only regional impediment to China's blue water ambitions. Other countries in the region may object to China's projection of sea power, but only India has the ability to challenge it; and

3) Pakistan: China's continuing support of Pakistan's military, and by extension its ability to remain an irritant on the subject of Kashmir, will remain a point of contention for India.

India is of course aware that China has deftly spread its diplomatic influence globally in a very short span of time, largely through the disbursement of overseas aid (to African and Latin American nations) and through careful nurturing of its political connections in the West. Indian business, more than Indian diplomats, look longingly at the list of former U.S. government officials who have at some point in the past two decades acted as intermediaries and lobbyists for Chinese business interests -- from Henry Kissinger to Alexander Haig to Cyrus Vance.

India also knows that Chinese ascendancy is much more than economic. Part of the future competition between India and China will be based on whether India can develop its military hardware and rebuild its naval muscle faster than Chinese attempts to build cultural and diplomatic sophistication. But neither China nor India have an interest in overt or uncontrolled hostility. Both will work for their respective long-term interests within the rules of the present global order, with China having greater deliberation and speed than India.

It is most unlikely that China will attack India, even in the Northeast. Any military action by China towards any of its neighbors, especially a democracy like India, will erode the carefully crafted image of its "peaceful rise" and will only serve to reignite the Tibet issue. It would also provide a diplomatic opportunity for the U.S. to justify its continued militarily presence in Asia, as well as prompt Japan to want to expand its own military presence in the region.

The Bottom Line

The deterioration in Indian-Sino relations is ill-timed for India because of renewed security concerns with Pakistan and the Taliban's ascendancy in the Afpak region. Despite this, ironically, China stands to lose more than India in any limited military confrontation or diplomatic escalation because Chinese rise and claims to global power are louder than India's - China risks losing more in terms of global respect, investor confidence and trust from its Asian neighbors, as well as punching holes in its self-proclaimed "peaceful" character in the process.

While India probably has very few positive options in the event of open military hostility with China, it is also true that as long as the Dalai Lama is alive and living in India, and Tibet remains a burning issue for global NGOs, China would risk diplomatic hara-kiri by attacking India. The unresolved issue of Tibet, and the presence of more than 125,000 Tibetan refugees in India, gives India a special place in any Chinese calculus. In any event, the U.S. would surely use an attack by China on India as an opportunity to come to India's aid (if asked) in a time of need, bringing the U.S. military to China's doorstep - something China will clearly want to avoid.

Many Indian analysts and diplomats are not happy that India always seems to end up falling between two benches (China and Pakistan) when it comes to the U.S. But there is also recognition that the U.S. in reality has little ability to maneuver with any of the three nations at the present time, given the Afghan war, fragile state of U.S. economy, and uncertainty surrounding next steps on Iran. India is hoping that in time, when the US is finally back on its feet after having extricated itself from its internal and external crises, it will recognize India as its most steadfast friend in Asia. Surely, with Japan presently questioning the very foundation of its bilateral relationship with America, India's position can only be strengthened.

It may be that China's recent shift in its public stance toward India is a proxy for what the rest of the world can expect as China asserts itself in global affairs. As has been the case vis-à-vis the exercise of China's economic power (such as strong arming iron ore producers to lower their price), the manner in which China is asserting its newly found political power has been equally unsubtle. While great powers do not become great by meekly spreading their wings, China seems not to be bothered by how others perceive its actions. It is beginning to act as a smug neighborhood bully that knows it has the biggest bat at the baseball game. China risks losing its smart power -- which it has tried, somewhat successfully, to build -- by reverting to its traditional, maximalist and non-compromising stance on geopolitical disputes.

Daniel Wagner is Managing Director of Country Risk Solutions, a Connecticut-based political and economic risk consultancy.

Subhash Agrawal is a New Delhi-based political analyst and founder of India Focus, a private think-tank.