Indo-China Ties:
Pakistan Will Continue to be a Constraint
By
Pramit Mitra
THE JULY 2003 state visit to China by Prime Minister Atal Bihari
Vajpayee of India, the first by an Indian prime minister in a
decade, represented a major step forward in New Delhi’s
relations with its giant neighbor and competitor.
Dramatic
increases in bilateral trade set the stage for nine bilateral
agreements covering trade, education, easing of visa regulations,
and development projects. The artful language of the agreements
suggested progress on the long-standing Sino-Indian border dispute.
More substantial relations between
India and China are good news for regional stability, although
this relationship will remain wary, and China’s strong interest
in Pakistan will continue to be a constraint.
Old
animosities show signs of easing: Relations between India
and China, divided by the Himalayas and contrasting cultures and
customs, have remained frosty since India’s humiliating
defeat in the border war of 1962. Even before the war, tension
had surfaced between the two countries when India gave sanctuary
in 1959 to the Dalai Lama and his followers as they fled China’s
crackdown on the uprising in Tibet. That conflict ended the dreams
of Hindi-Chini Bhai Bhai,
Sino-Indian
brotherhood, promoted by India’s first prime minister, Jawaharlal
Nehru, and signed into a treaty in 1954. Disputes about the delineation
of the 2,200-mile common border, aggravated by China’s open
military and covert nuclear assistance to Pakistan, kept Sino-Indian
relations tense. It took nearly a quarter of a century for relations
to return to something like normal with the visit of then–Prime
Minister Rajiv Gandhi to China in 1988.
Since then there have been 14 meetings
of the joint working group set up to settle the border disputes.
These negotiations have prevented the situation from aggravating,
but have moved at a snail’s pace. Relations once again deteriorated
in 1998 with India’s nuclear tests, which the Indian defense
minister said were motivated by the long-term security threat
from China. Since then, relations have started to improve once
again.
Last year Zhu Rongji, then the Chinese
prime minister, visited India. The two countries have adopted
similar positions on a number of international issues such as
terrorism and the war in Iraq. China Eastern Airlines started
flights between Beijing and New Delhi earlier this year, the first
direct air link between the two countries. But most importantly
for India, China has shifted its position on the Kashmir dispute
toward a more neutral formulation.
Progress
on border issues:In agreements signed during the visit,
India for the first time referred to Tibet as the Tibet Autonomous
Region, China’s name for it. At the same time, China tacitly
recognized India’s claim to the Himalayan state of Sikkim
by agreeing to a border trade regime with adjoining areas of China.
Predictably, both countries claimed that their fundamental positions
were unchanged.
The border dispute is far from being
resolved, however. India claims part of Chinese-controlled northern
Kashmir, ceded to China by Pakistan, and the remote Aksai Chin
area. China claims large parts of the northeastern India. Even
while Vajpayee was in China, Chinese military patrols had detained
Indian surveillance teams in disputed border areas.
The two countries have appointed
envoys to settle these unresolved disputes. Neither country’s
leadership seems in a hurry to withdraw any part of its contested
territorial claims. But the mutual policy adjustment is unmistakable
and points toward continued slow and pragmatic progress.
India-China
security rivalry: Pragmatic diplomacy aside, India sees
China as a long-term strategic rival, the benchmark for its nuclear
arsenal, and the standard for the great power status it wants.
At present, India’s fledgling nuclear and missile capability
is no match for China’s arsenal, but that gap is decreasing.
According to intelligence reports,
India is expected soon to test its Agni III missile, which will
be able to target major Chinese cities. In addition, India is
developing a submarine-launched missile, dubbed Sagarika. India
is also modernizing its conventional capabilities by importing
advanced early-warning systems such as the Phalcon airborne warning
and control system (AWACS) from Israel, which is similar to the
version used by the U.S. Air Force.
Beijing
officials regard India as a lesser power on the other side of
the Himalayas and focus most of their attention on the United
States, Japan, and Europe, but they have taken note of these developments,
coupled with the nuclear tests. India’s support for President
George Bush’s missile defense plan, which China vehemently
opposes, also irked the Communist leadership. One of the key considerations
for Indian defense planners is how China responds to the U.S.
missile defense proposals.
Two
systems, one grand rivalry. Beyond the security field, Indians
suffer from a national inferiority complex when it comes to China.
It is not hard to see why. In 1980, living standards and other
social and economic indicators in the two countries were roughly
the same. But by 2001, China, fueled by 22 years of dynamic economic
reforms, had overtaken India in almost all major development indicators.
Economic reforms in India began only in the early 1990s and have
moved forward fitfully, beset by political and bureaucratic inertia.
Indian Exports: India’s performance is
no match for its rival’s. According to UNESCO and the World
Bank, 18.8 percent of Chinese were living on less than $1 a day
in 2001, compared with 44.2 percent of Indians. Although poverty
figures in India and growth figures in China are disputed, the
contrast is clear. India’s GDP growth and especially foreign
direct investment are nowhere near China’s. India has also
fallen behind in other important areas.
The personal computer penetration
in China, for instance, was 15.9 per 1,000 people in 2001, compared
to India’s 4.5. Foreign cellular companies have found China
far easier to navigate than India. India’s 6 million mobile
phone population is tiny compared to China’s 150 million.
At the same time, the size of India’s population continues
to grow and, if present trends continue, will overtake China’s
by 2050.
Trade,
a new area for cooperation? Observers expect the most
promising news to come from expanding trade between the two countries.
Vajpayee during his stopover in Shanghai made it a point to stress
the need to improve trade ties between the two countries, especially
in areas of software and services where India leads. India is
hoping that bilateral trade with China will rise to $10 billion
within five years. Most analysts believe this figure is realistic
if relations continue to improve.
Already, cheap Chinese toys, televisions,
clothes, and other consumer goods have started to flood the Indian
markets. Indian companies, while apprehensive about the Chinese
economic juggernaut, have begun to fight back by setting up plants
in China to manufacture products from tires to microwave ovens.
The
Federation of Indian Chambers of Commerce and Industry (FICCI)
and the Confederation of Indian Industry (CII), the two major
business associations, have sent exploratory investment delegations
to China. But the most promising areas for cooperation are software
and related services. China is a leader in manufacturing, while
Indian companies continue to move up the value chain in the global
software business, earning about $10 billion a year in exports,
according to industry estimates. Some Indian software companies
dread the competition from China.
However,
India’s leading software and services companies, like Wipro
and Infosys, view China not as a threat, but as a springboard
to new markets in East Asia, notably Japan. Indian companies expect
entry into Japan to be easier through China based subsidiaries
since Chinese characters form the basis of Japanese script. Some,
like NIIT and Infosys, have set up subsidiaries in China and plan
to expand their operations aggressively in the coming years. Nasscom,
an association of Indian software companies, expects more joint
ventures with China and is hoping to secure a large share of software
services jobs for India in the 2008 Beijing Olympics.
China’s
special relationship with Pakistan: Pakistan was one
of the first countries to establish diplomatic ties with China
in 1951, but it was in 1961, when it voted at the UN General Assembly
for the motion to restore China’s legal status in the United
Nations, that relations between the two countries took off.
Clandestine nuclear Chinese assistance
to Pakistan has been a major concern for Indian authorities. According
to various news and intelligence reports, China supplied Pakistan
with weapons-grade uranium and the nuclear-capable M-11 missiles.
Indian
leaders no doubt hope that further progress in India-China relations
will act as a brake on the transfer of weapons to Pakistan. Analysts
expect China’s strong support for Pakistan to continue,
albeit more discreetly. No major transfer of weapon systems or
related technologies, conventional or nuclear, has been reported
in the media since 2000.
China still sees Pakistan as an important
ally to keep India off balance. China’s opposition to Pakistan’s
incursions into Indian-controlled Kashmir in the summer of 1999
show that there are limits to its support for Pakistan. China
has a strong interest in Pakistan’s internal stability,
however. They see the Musharraf government as the best bet to
prevent Pakistan-based Islamist terrorist groups from becoming
active in Xinjiang.
A
“soft” balance of power: Vajpayee’s
accomplishments in China suggest that India and China are headed
toward greater pragmatic cooperation, but not toward any broader
alignment on foreign policy or national strategy. This is good
news for regional peace and stability. Both countries’ strong
relations with the United States, interestingly, are likely to
reinforce this process. The result should ideally be a kind of
“soft” balance of power between the three countries,
where each country will try to protect its own interests by aligning
with each country individually on an issue-by-issue basis.
Courtesy
- South Asia Monitor, published by the Center for Strategic and
International Studies (CSIS).
