China: High stakes geopolitics of Belt Road - II
by G B Reddy on 23 May 2017 5 Comments

By abstaining from participating in the recently concluded Belt Road Initiative (BRI) summit in Beijing, India, in a highly calculated and bold move, has made its postures abundantly clear to China. China cannot have a ‘free run” in its “Grand Design – China Dream” without addressing India’s outstanding security concerns.


Of course, Xi Jinping seeks friendly relations with India: “If we speak with one voice, the whole world will listen.” China believes that the interests of both countries are mutually intertwined, and hence “mutual respect” is important. Like with the USA, China wants India to respect each other’s core interests, concerns and choice of the path of development.


Indian Prime Minister Modi stated in reply to a question from a Chinese journalist, “Successful revival of the ancient trade routes require not only physical connectivity and requisite infrastructure, but more important, a climate of peace, stability, mutual trust and respect, support for mutual prosperity and free flow of commerce and ideas.” If China wants to resolve the border dispute in a give and take spirit reminiscent of Deng Xiaoping’s offer in the 1980s, it presents an opportunity for India to reciprocate.


Chinese ambassador Luo Zhaohui recently made a 4-point proposal to improve ties with India by delinking sovereignty disputes. His proposal includes: starting negotiations on a ‘China-India Treaty of Good Neighborliness and Friendly Cooperation’; prioritising early resolution of the border dispute between the two countries; restarting negotiations on a free trade pact; and aligning China’s ‘One Belt One Road’ project with India’s ‘Act East Policy’. Luo also offered to mediate to resolve differences between India and Pakistan if both sides accepted it.


Ipso facto, strategic détente or deadlock is real. Some irrefutable facts will be reviewed; but judgments and predictions are left to individual perceptions.


If Xi Jinping wants to realize his “China Dream”, he must secure India’s cooperation in the matter for reaping the full benefit out of BRI-21 MSR initiatives. China cannot impose its will by muscle flexing on and off. India too must realize that it has neither the economic clout nor the internal political cohesion to stake claims to regional power status against an emerging superpower.


Geo-strategically, India believes that China is denying her dominant power status in South Asia.  In reality, China has ‘hemmed in’ India from all sides: all weather strategic partnership with Pakistan towards the West, quite often referring to Pakistan as its “iron brother”; driven a wedge with Nepal in the North, Myanmar and Bangladesh towards the East; Sri Lanka in the South and the “String of Pearls” in the Indian Ocean Region (IOR), and strong foothold on the East African Coast.


However, historically and culturally India never played second fiddle to China. Both nations suffer from siege mentality. India sees its own actions like QUAD (Quadrilateral Security Dialogue between Asia’s maritime democracies: Australia, India, Japan, and the United States) or Federated Defense partnership with China’s rivals as self-defensive; but, China thinks otherwise. So, mutual suspicion and distrust prevails.


India’s trust deficit is not without valid reasons. India views China border aggression in 1962 as the “Great Betrayal”. After all, India was among the first countries to recognise the People’s Republic of China as the legitimate government and established diplomatic relations on April 1, 1950. India facilitated Tibetan delegates to sign an agreement in May 1951 recognising PRC sovereignty. It also mediated with China to bring an end to the Korean War in 1953. In April 1954, India and the PRC signed the Panchsheel Agreement.


Subsequently, the Chola incident in 1967, the 1987 Sino-Indian skirmish and the ongoing border face-offs further consolidated the “trust deficit”. In 2013, during Li Keqiang’s visit to India, there was a confrontation between Indian and Chinese patrols in the Daulat Beg Oldi area. In 2014, Indian and Chinese patrols in were in confrontation in Chumar area during Xi Jinping’s visit.


Aside from the outstanding border dispute, the list of key contentious issues includes: the Sino-Pak strategic alliance, particularly the CPEC; the “String of Pearls” in IOR; blocking of India’s UN Security Council and Nuclear Suppliers Group (NSG) membership; fight against terrorism including blocking declaration of JeM Chief Masood Azhar as “global terrorist” in the UN; renewed support to ethnic separatist groups in the Northeast, among many others; construction of “dams” in Tibet on the Brahmaputra River; trade imbalance and quest for natural resources. For example, Iran purportedly rejected India’s offer to develop Farzad B gas field under China’s pressure.


Broadly, there are two schools of Indian thought – pessimists and optimists. Some pessimists say Chinese strategic thought rests on sound philosophical moorings and Xi’s “China Dream”. A Chinese saying goes, “one mountain cannot accommodate two tigers.” When China is staking parity with USA, how can it allow opposition to its status as the Asia-Pacific’s sole regional power? Even the presence of Dalai Lama in India is an irritant, particularly his recent visit to Tawang (birth place of the sixth Dalai Lama). Until Beijing succeeds in totally pacifying and sinicizing Tibet, China will not give up the “bargaining chip” that an unsettled boundary provides it.


In reality, China views the boundary dispute as a “legacy of history.” India does not accept de facto administration of China in Aksai Chin and territories ceded by Pakistan in 1964. There are currently 14 areas under dispute - eight in the Western sector and six in the Eastern sector. China’s position on solving the border dispute has changed from “immediately” when talks began to “ultimately” in 1982-83, stating that it is a complicated issue and would be solved by the next generation. In a dramatic shift from its position in the past, China claims Tawang alongside most of Arunachal Pradesh.


On the economy front, the BRI-21MSR presents major risks for India. With even fewer barriers to trade in the region, Chinese goods could adversely stall Modi’s “Make in India” plans. As a caution, the use of domestic steel in state infrastructure projects has been passed.


In the prevailing strategic stalemate, Chinese future intentions remain an enigma. Perhaps the comment of a Singapore official is apt: “The Chinese charm you when they want to charm you, and squeeze you when they want to squeeze you, and they do it quite systematically.”


In fact, the two Asian ‘Giants’ – China and India – are locked in a clash of values, interests and ideologies. Ideological imperatives, overlapping spheres of influences and interests and protracted simmering tensions on un-demarcated borders portend prolonged and renewed confrontation over Tibet, Kashmir, Myanmar, or in the IOR.


Militarily, China may be strong on the Himalayan frontier; India is strong in the IOR region and enjoys a unique advantage by virtue of its geostrategic location, like a ‘dagger’ jetting into the heart of IOR. So, rivalry in the IOR may well be a dominant feature of future geopolitics of the 21st century. 


India’s worst case scenario therefore, is that China may impose its strategic will to redraw borders in Ladakh and Tawang sectors by “creeping incrementalism and extended coercion” strategy as and when it acquires more power and capabilities in mid and long term contexts.  


In contrast, optimists believe that the relationship may be confrontationist, particularly border disputes, but simultaneously cooperative and competitive in other sectors. Both countries want to improve relations in the economic domain, particularly in keeping sea lanes of communication (SLOCs) open in the IOR. China also appreciates that India offers prospects for its goods due to growing middle class and youth bulge.


In the short term, China wants India on ‘board’ the BRI-21 MSR. In fact, the success of the Bangladesh-China-India-Myanmar Economic Corridor (BCIM-EC), originally proposed in 1999, depends on India’s involvement. By adding India to BRI, China hopes to dovetail with the Act East Policy.


The optimists’ school believes that various diplomatic breakthroughs since the mid-1980s are beacons of hope to forge mutually beneficial and inclusive strategic partnership. They cite the Peace and Tranquility Agreement of 1993, the CBM Agreement of 1996, recognition of Indian sovereignty over Sikkim; agreement on the guiding principles for settlement concluded in 2005; establishment of an Annual Defense Dialogue followed by conducting three bilateral defense exercises; Special Representatives working mechanism for consultation and coordination over border affairs; new Border Defense Cooperation Agreement (BDCA) in 2013, border flag meetings etc., as significant diplomatic breakthroughs.


Furthermore, they cite cooperative diplomatic breakthroughs achieved at international and bilateral levels as lending hope for future resolution of contentious key issues. For example, the climate talks, anti piracy operations, defense cooperation, establishment of additional Consulate General offices at Chengdu and Chennai, annual exchange of visits between neighboring military commands, exchanges between Border Commanders at Meeting Points - Spanggur, Nathula, Bumla and Kibithu, enhanced people-to-people contact and youth exchange programs, think tanks and high level media forums, opening of the route to Mansroavar through Nathula etc., as harbingers for peaceful resolution of differences in posterity.


Chinese and Indian economies are more competitive than complementary. Two decades ago, trade between China and India was just $300 million per year. In 2015, bilateral trade was just over $71 billion with India’s trade deficit being around $45 billion. Bilateral trade is expected to touch the $100 billion mark soon. BRICS Bank and Asia Infrastructure Investment Bank have been established by close economic cooperation between both countries. Indian concern over trade imbalance is real.


Xi promised investments worth $20 billion in 2015. 12 agreements were signed on trade and economic cooperation, covering fields like industrial parks, railways, and credit and leasing, with cumulative amount of investment and financing of US$ 13 billion dollars. Hardly any have been grounded. So far, Chinese investments in India do not exceed $1.1 billion mostly on consultative fee to own agencies. Chinese are not fools to provide ‘freebie’ aid grants to rival recipient nations.


India and China are working together in areas of common interests, whether on climate change and WTO issues, in BRICS and the Russia-India-China format, at the G20 and SCO. Both countries have interests in reforming the international financial institutions. Over 11,000 Indian students study in China.


Be that as it may, even after 18 rounds of talks over three decades, China has not exchanged its maps. While Chinese insist on the return of Tawang (birthplace of the sixth Dalai Lama) on religious grounds, Indians seek the return of the sacred Mount Kailash-Mansarovar in Tibet.


Viewed in the above strategic framework, the window of opportunity to settle the ‘border’ issue is now or never. If China wants enduring strategic partnership with India in pursuit of neutralising USA in the IOR and the South China Sea region, it must resolve the “Border Dispute” on quid pro quo basis.


In short to medium term, neither New Delhi nor Beijing may do anything that destabilises their relations. After all, China and India have “shared interests” in maintaining regional stability, exploiting economic opportunities, maintaining access to energy sources and markets, and enhancing regional cooperation. 


As part of his “Make in India” campaign to boost manufacturing, Modi has introduced the “Neighborhood First” policy to strengthen trade ties with neighboring countries. Interregional trade accounts for just 5 percent of total economic activity in the SAARC bloc. In contrast, trade with the members of the ASEAN accounts for 25 percent of the organization’s trade, and EU members conduct 60 percent of their trade within the bloc.


Some analysts suggest that India must offer a plan for a direct India-China Silk Route Corridor (ICSRC) that could run along the traditional Ladakh-Xinjiang axis. The ICSRC could provide an alternate transport, energy, trade, fiber optics and communication highway that could originate from a port in Gujarat run across northern India to connect with Kashgar in western China through the Indus Valley in Ladakh. The initiative would have multiple advantages for both India and China, without compromising on their respective security concerns.


To sum up, the present day Sino-Indian relations are extraordinarily complex. On one hand, military confrontation on borders continues and on the other side competition for natural resources and markets is real. Alongside, there is also cooperation on global issues.


India’s stand to abstain from the OBOR/BRI should not be viewed as a “bold” move but a pragmatic strategic compulsion. With Xi Jinping and Narendra Modi at the helm of affairs, it offers the best opportunity to reconcile differences through dialogue and consultation and resolve border disputes instead of rigidly persisting with obdurate stands.



The views expressed are personal

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