Wildcards may trump India–China relations

Author: Sandy Gordon, ANU

Commentators have generally assumed that the Obama administration’s wrong-footedness over Modi’s US visa, along with the latter’s pragmatic approach to Chinese investment in Gujarat, has prompted a new tilt by the BJP away from the United States and toward China.

A masked man is seen during a battle in Kashmir where two militants from the Lashkar-e-Taiba outfit, responsible for the 2008 Mumbai terrorist attacks, were killed, 13 April 2014. Kashmir and India’s strained relationship with Pakistan is one of a number of wildcards in Sino-India relations. (Photo: AAP)

India would certainly favour a thaw in relations with China so it can get on with the urgent task of developing infrastructure and stoking economic growth, with Chinese investment playing a role in an otherwise etiolated international investment climate.

But in the long term, there are wildcards that could complicate relations between India and China.

Astute observers of Indian security policy in New Delhi will be concerned that China’s friendship is merely a tactical move in the wider strategic game of China’s rise as an East Asian and Pacific power. They would assess that China is adopting the classic divide-and-rule tactic. In other words, once China is truly powerful in East Asia and the Pacific, it will turn its attention to its border and other claims against India from a position of strength. In the meantime, it will keep India happy by doling out investment money.

This realisation may not stop the Modi government attempting to ‘play both ends against the middle’, especially since this approach has been a classic feature of Indian foreign policy for many decades. Under this scenario, India would seek the best deal it can from China, both economically and in terms of a possible border settlement, while attempting to maintain its hedge against a possible difficult rise of China with other major powers such as the US and Japan. But this is a complicated game. And is India’s security policy integrated and sophisticated enough to carry it off?

A second wildcard is Pakistan. The Pakistan–China relationship has until recently appeared to all intents and purposes to be ‘rusted on’. So long as the India–Pakistan relationship remains as troubled as it has been in the years following the Mumbai attacks of November 2008, it will be difficult for India to set aside its differences with Pakistan. And so long as Beijing continues to offer economic and strategic support to Pakistan, the relationship between China and India will be negatively affected.

There are two possibilities for breaking this logjam. India and Pakistan may be able to repair their relationship, thus freeing up space for improved relations between India and China. Or, Beijing may decide that China has more to gain by friendship with India and distance itself from Pakistan.

Although Modi has made an important overture to Pakistan by inviting Prime Minister Nawaz Sharif to his swearing in, essentially the ball will be in Pakistan’s court in terms of any significant rapprochement with India. Certainly, there are those in Pakistan, including perhaps Sharif himself, who would favour such a deal.

But there are other players in Pakistan who are less approving of such an outcome. Extremists in Pakistan such as Lashkar-e-Taiba, the perpetrators of the Mumbai terrorist attacks of 2008, stridently condemned Sharif’s decision to go to New Delhi. The attack on the Indian consulate in Herat on 23 May could also be interpreted as an attempt to derail any rapprochement. Extremists in Pakistan will be working overtime to forestall attempts to improve relations, including through significant terrorist attacks on India.

In order to achieve a meaningful improvement in relations, Pakistan would need to agree to India’s approach, which is to set aside the Kashmir issue while other matters, such as trade, are dealt with first. But Kashmir remains a fundamental commitment for religiously conservative Pakistanis and the army’s attitude to setting the issue aside is unclear. The economy, already struggling at the time Sharif entered office, has not moved ahead since. The moribund energy sector remains paralysed. The country is still wracked by violence and highly divided. What the political leadership wants may prove difficult to deliver.

This raises the possibility that China may choose to trade its relationship with Pakistan for a better one with India.

William Dalrymple maintains that Chinese concern about connections between Uyghur separatists and extremists in Pakistan is already causing Beijing to reconsider its relationship with Pakistan and seek common cause with India against the extremist threat.

A far more likely scenario is that China will seek to pursue friendly relations with both Pakistan and India. Pakistan offers important strategic options in relation to oil and China’s vital sea lanes of communication into the Persian Gulf and future interests in Afghanistan. Friendship with Pakistan provides a possible lever in relation to India and the Chinese border claims, which are significant to its position in Tibet and, increasingly, in terms of competition over water.

For its part, New Delhi may consider that it can put Chinese support for Pakistan aside while it attempts to improve relations with Beijing. But should relations between India and Pakistan again deteriorate, perhaps as a result of a new terrorist attack, China will be forced to choose between the two — just as it chose to support Pakistan in 2008, being one of the very few countries to do so.

The final wildcard is economic relations between the two Asian giants.

What India really needs from a cashed-up China is investment and technical support in infrastructure development. But under the previous government this was limited by strategic considerations, such as the large number of state-owned enterprises investing out of China; ongoing concerns about Chinese investment in strategic sectors like ports, space technology and IT; evidence of serious Chinese cyber-attacks on India; and concern about Chinese investment in sensitive regions like the Indian North East.

Moreover, while bilateral trade has bourgeoned to over US$70 billion, it is overwhelmingly in China’s favour.

India’s response has been not just to limit Chinese investment but also to raise a raft of non-tariff barriers, especially anti-dumping provisions under WTO rules. Modi is close to business and will have an incentive to continue this thrust to limit Chinese economic opportunity and rectify the trade imbalance.

So, the ambiguous, at times troubled India–China relationship will likely continue in that vein. Cooler heads in New Delhi will also no doubt seek to maintain good relations with Washington as a possible hedge against a difficult rise of China.

Finally, there is no saying that China won’t ‘shoot itself in the foot’ when it comes to its activities in East Asia. New Delhi will be watching China’s approach to its friend Vietnam especially carefully, and India is moving increasingly closer to Abe’s Japan. The Modi government will be watching events in East Asia as an indication of how Sino–Indian relations might unfold over the longer term.

Sandy Gordon is a Visiting Fellow at the Asia-Pacific College of Diplomacy, College of Asia & the Pacific, The Australian National University.

A version of this piece first appeared here in South Asia Masala.