Authors: Santosh Sharma Poudel and Stefanie Kam, RSIS
The border dispute between China and India has come to the fore once again despite an exponential increase in bilateral trade between the two countries. The border dispute highlights the growing strategic competition and lack of trust between them. But it is better left dormant while both governments focus on more immediate issues.
Beijing recently unveiled an official map which showed the whole disputed area with India on both sides of the Line of Actual Control (LAC) in Ladakh and Arunachal Pradesh as Chinese territory. This has raised important questions about China’s intentions and strategic direction. At the same time, the new Indian government under Prime Minister Narendra Modi has vowed to establish dozens of additional outposts and encourage settlement close to the LAC by investing in infrastructure. India’s government is also considering providing military training to locals in border areas to improve overall vigilance and security.
India and China are geographically proximate countries, which makes it impossible for them to ignore each other. A sense of strategic competition can be seen between them, and the border dispute has provided a clearer avenue for this. China has spent billions of dollars on infrastructure development on its western front. While the rationale is economic, India believes China’s road and rail networks — which now reach close to the Indian border — would provide the Chinese military with the strategic capability to easily move troops and weapons. On its part, India sees its own investment in improving security along the border as a decision long overdue.
Strategic competition has also manifested itself regionally and globally. Regionally, China has increased bilateral trade relations with countries such as Bangladesh, Sri Lanka and Pakistan, and recently expanded its navy’s operational deployments in the Indian Ocean. China was not impressed when the head of the exiled Tibetan government in India was invited to Modi’s swearing-in ceremony. India has also taken an interest in the South China Sea, where China has staked territorial claims.
Modi is looking to court further investment from Japan, China’s arch-rival. He holds Japan in high regard — his first overseas trip as prime minister after neighbouring Bhutan is to Japan. Observers are watching China’s approach to relations with India, as Japan has also made overtures to bolster ties with New Delhi. Globally, the talk of forming a stronger democratic diamond comprising the US, Japan, India and Australia has gained more currency.
Yet trade between China and India has been increasing exponentially. According to the Indian Department of Commerce, China became India’s largest trading partner in 2012 with trade exceeding US$73 billion and a trade balance of US$37 billion in China’s favour. While China sees India as a major market for manufactured goods, India views China as a source of investment and market for services. Modi toured China several times as chief minister of Gujarat and noted the infrastructure development in China over the years.
Given India’s economic woes in the last few years, Modi fought the elections on the platform of development and economic growth. He has promised to revamp India’s ailing infrastructure and increase foreign direct investment to spur economic growth. In this respect, improving economic relations with China would be crucial. Increasing trade would not only help the Indian economy but also secure Chinese know-how and investment capability in building infrastructure, which can be crucial to overcome the infrastructure bottleneck in India. For this, India hardly needs a new dispute with China.
Meanwhile, China is involved in a bitter territorial dispute in the East and South China Seas, where tensions have been boiling. China needs to spend considerable military and political resources to address its maritime disputes. So, igniting a dormant frontier territorial dispute with India is not in China’s interest.
While there is strategic competition, and India has lagged behind China in securing the border in disputed areas, the border dispute is better left dormant for both countries. India needs China to help bring back the era of high economic growth. Meanwhile, China hardly needs another active border dispute. Both countries’ interests would be better served if tensions along the border were downplayed and handled prudently. Neither side should use the border dispute as a tactical pressure point against the other or put a nationalistic tinge to it.
This, however, does not mean ‘not doing anything’. As the economies of China and India grow, the demand for energy and resources will also increase, and this increases the areas where these two countries have to interact. To this end, joint infrastructure development closer to the border will not only aid security but will also increase domestic GDP and the connectivity of China and India. This will spur positive economic relations between the two countries.
It is important for both nations to avoid falling into the security dilemma trap. The border dispute is better left dormant, with due respect given to Line of Actual Control — this would help both governments to focus on issues of more immediate importance.
Santosh Sharma Poudel is a PhD candidate at the S. Rajaratnam School of International Studies.
Stefanie Kam is an Associate Research Fellow at the International Center for Political Violence and Terrorism Research, S. Rajaratnam School of International Studies
A version of this article was first published here on 16 July 2014.