India-China Ties: Hype and Reality

The Three Ts of India-China Relations

Brahma Chellaney

Asian Age, January 15, 2008

No Indian prime minister has ever returned from China without the visit being hailed by his spinmeisters as path-breaking. Yet despite all the touted “breakthroughs” over the decades, China has steadily become a bigger strategic challenge for India, opening new fronts by tenaciously pursuing congagement, or engagement with containment. Sardar Patel’s words still ring true: “Even though we regard ourselves as friends of China, the Chinese do not regard us as friends.” The wooden slogans China today mouths on its relations with India are as empty as the ones at home behind which its communist rulers shelter, such as President Hu Jintao’s catchphrase, “harmonious society.”

Just as Beijing is haunted by three Ts domestically — Tiananmen, Taiwan and Tibet — its relationship with New Delhi is defined by three Ts — territorial disputes, Tibet and trade, with the first two issues stuck and the third booming to China’s heavy advantage. Mirroring its exploitative commerce with Africa, Beijing primarily buys iron ore and other raw materials from India and sells industrial goods while reaping a ballooning trade surplus. Yet some in India innocently see this embarrassing and unsustainable pattern of trade as proof of progress in bilateral ties.

If growing trade signified political warmth, Japan and China, with at least eight times higher trade, would be the best of friends. Trade between any two states in today’s market-driven world is not constrained by political differences, unless political barriers have been erected. Flourishing economic ties indeed do not guarantee moderation and restraint in the absence of progress on bridging political differences, as shown by the increasing Chinese military incursions across the border into India and China’s muscular diplomacy toward Japan and Vietnam.

While India and China have built a stake in maintaining the peaceful diplomatic environment on which their continued economic modernization and security depend, they have made little progress in resolving their political differences and building strategic congruence. That is why the proclaimed “India-China strategic and cooperative partnership for peace and prosperity” remains devoid of content. The two sides can only showcase their fast-growing trade and high-level visits, such as President Hu’s November 2006 India tour and Prime Minister Manmohan Singh’s Beijing trip this week.

Yet a careful examination of what is being showcased reveals disconcerting trends.

Let us start with the summit-level meetings. The promises incorporated in the joint declaration signed with much fanfare at the end of each prime ministerial or presidential visit are quickly forgotten. Take the following pledge in the joint declaration that was signed when Hu visited New Delhi: “Along with the talks between the Special Representatives, the Joint Working Group (JWG) on the India-China boundary question shall expedite their work, including on the clarification and confirmation of the line of actual control (LAC) and the implementation of confidence-building measures. It was agreed to complete the process of exchanging maps indicating their respective perceptions of the entire alignment of the LAC on the basis of already agreed parameters as soon as possible.” Nearly 14 months have gone by without any success to revive the dormant JWG, let alone to begin exchanging maps of the eastern sector (Sikkim and Arunachal Pradesh) and the western sector (Jammu and Kashmir).

The harsh reality is that Beijing is loath to clarify the frontline because such an action would relieve military pressure on India. So, despite 27 years of continuous border negotiations, India and China remain the only neighbours in the world not separated even by a mutually defined line of control. Indeed, it took two full decades of negotiations before Beijing exchanged maps with India of just one sector — the least-disputed middle segment (Uttarakhand and Himachal Pradesh). But having done that in 2001, it quickly broke its word to exchange maps of the other two sectors.

A first step to a settlement of any dispute is clarity on a line of control or at least appreciation of the “no go” areas so that provocative or unfriendly actions can be eschewed. Exchanging maps showing each other’s military positions, without prejudice to rival territorial claims, is a preliminary step to first define, then delineate and finally demarcate a frontline. Beijing’s disinclination to trade maps underlines its aversion to clinch an overall border settlement or even to remove the ambiguities plaguing the long, rugged LAC.

In fact, the real reason the two countries are locked in what is already the longest and most-barren negotiating process between any two countries in modern world history is that China — not content with the one-fifth of the original state of J&K it occupies — seeks to further redraw its frontiers with India, coveting above all Tawang, a strategic doorway to the Assam Valley. Seeking to territorially extend the gains from its annexation of Tibet, Beijing unabashedly follows the principle that what it occupies is Chinese territory beyond question and what it claims should be on the negotiating table for barter.

Is it thus any surprise that new strains have appeared in Sino-Indian ties even as the old disputes remain unresolved? The hoopla accompanying Singh’s visit can hardly obscure recent developments that call attention to the underlying tensions between Asia’s two continental-sized powers that are rising at the same time in history.

The developments include about 300 Chinese military incursions across the LAC in the past 24 months alone — or more than three a week; the Chinese military action two months ago in provocatively demolishing some unmanned Indian forward posts near three disputed bunkers at the Bhutan-Sikkim-Sikkim trijunction; and the Chinese foreign minister’s message to his Indian counterpart last May that Beijing no longer felt bound by a 2005 agreement on “guiding principles” that any border-related settlement should not disturb settled populations.

This hard line appears tied to two factors. First, rising economic and military power is encouraging Beijing to pursue a more muscular foreign policy. And second, China has acquired a capability to rapidly deploy forces against India by significantly expanding its infrastructure in Tibet, with roads built right up to the LAC and the new railway to Lhasa being extended southwards.

Now let us turn to the galloping trade, which officially jumped 10-fold from $2.5 billion in 2000-01 to $25 billion in 2006-07, catapulting China in six years from the ninth largest to the second largest trading partner of India. According to provisional figures released by China, the two-way trade actually surpassed $38 billion in calendar 2007.

All that seems very impressive until one looks at the trade pattern, which disturbingly shows India as a raw-material appendage to China’s rising industrial might. At the end of fiscal 2006-07, more than 50 per cent of Indian exports to China comprised just one item — iron ore. When other primary commodities were added, that figure totalled 85 per cent of the exports. In return, India has been importing more and more Chinese processed goods, to the extent that it has become import-dependent on China for steel tubes and pipes.

The fact is that Beijing is conserving its own non-renewable resources by encouraging its industry to meet production needs through imports. China, for example, has substantial reserves of iron ore, yet it has emerged the world’s largest iron importer, accounting for a third of all global imports. A quarter of China’s iron-ore imports come alone from India, to which it then sells finished tubes and pipes.

India’s estimated iron-ore reserves of 18 billion metric tons will last between 30 and 50 years, if the country were to boost its per capita iron-ore consumption from the present 30 kilograms to the developed world’s 300- to 400-kilogram level. China, on the other hand, has estimated iron-ore reserves of 472 billion metric tons, although the average iron content in its deposits is only 32.1 per cent. It was industrialist Ratan Tata who publicly contended that if China, with larger deposits, could treat iron ore as a strategic resource, India ought to do the same.

Add to the inequitable trade pattern the galloping imbalance, with China enjoying a trade surplus of $10.7 billion in calendar 2007, due in part to its cryptic barriers that have left even world-class Indian software and pharmaceutical companies out in the cold. China’s trade surpluses are with the United States, Europe and India. With the rest of the world, it actually has a trade deficit.

Even if China-India trade overtakes US-India trade — a likely scenario — political issues will continue to divide Beijing and New Delhi.

Had China pursued political progress with India even at half the speed at which it has pushed its exports, the relationship today would have looked less unpredictable. Instead, as if to underscore its mercantilist approach, it has sought to enlarge its one-sided advantages by pressing India to enter into a free-trade agreement with it. It is like asking New Delhi to reward it for its political intransigence and muscle-flexing.

China’s growing assertiveness comes at a time when a high-stakes geopolitical competition is sweeping Asia, centred on building new alliances, ensuring power equilibrium, and securing a larger share of energy and mineral resources. That Asia is big enough to accommodate the ambitions of both China and India is a bromide you will hear only from Indian leaders; for Beijing, Asia has to be China-oriented.

The challenge arising from Beijing’s determination to emerge as Asia’s unchallenged power cannot be addressed if India simplistically believes it has just two options: Pursue a feckless policy toward China or brace up for confrontation. That is a false choice that can only stifle the several options India has between those two extremes. While keeping cooperation as the public leitmotif of its relations with Beijing, New Delhi has to start reclaiming lost leverage in order to fashion a more result-oriented, realpolitik policy.

(c) Asian Age, 2008

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