Issues Motivated for Choosing the Study

India conquered and dominated China culturally for 20 centuries without ever having to send a
single soldier across her border.

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— Hu Shih, renowned Chinese philosopher and diplomat

India and China are the two major powers in Asia with global aspirations and some significant
conflicting interests. Cultural and economic relations between China and India date back to
ancient times. The Silk Road not only served as a major trade route between India and China, but
is also credited for facilitating the spread of Buddhism from India to East Asia. Despite growing
economic and strategic ties, there are several hurdles for India and the PRC to overcome. India
faces trade imbalance heavily in favour of China. The two countries failed to resolve their border
dispute and Indian media outlets have repeatedly reported Chinese military incursions into Indian
territory.

These two countries have a complicated relationship that has surpassed many hurdles and more
continue coming. With many issues on the table with China but a huge trade relationship to
handle as well, it is ever difficult to understand how to balance both. I would like to view the
NSG bid veto by China as well as the Doklam Standoff and also put my view forward on how to
tackle issues with China.

2

Origin and Nature

On 1st October 1949, the People’s Liberation Army defeated the Nationalist Party. On 15th
August 1947, India became an independent nation and became a federal, democratic republic
after its constitution came into effect on 26th January 1950.
In the mid-1950s, a slogan “Hindi-Chini Bhai Bhai”, which means the Indian and Chinese people
were brothers, was known to every household.

Jawaharlal Nehru based his vision of “resurgent Asia” on a friendship between the two largest
states of Asia; his vision of an internationalist foreign policy governed by the ethics of the Five
Principles of Peaceful Coexistence, which he initially believed was shared by China. Nehru was
disappointed when it became clear that the two countries had a conflict of interest in Tibet,
where India believed it had inherited special privileges from the British.

Relations between China and India have been characterized by border disputes, resulting in three
major military conflicts — the Sino-Indian War (1962), the Chola incident (1967), and the 1987
Sino-Indian skirmish and the latest being the Doklam standoff in 2017. However, since the late
1980s, both countries have successfully rebuilt diplomatic and economic ties. In 2008, China
became India’s largest trading partner and the two countries also extended their strategic and
military relations.

The emergence of China and more recently, India, has reshaped relations and produced a broader
area of economic integration in Asia. Even in southern Asia, where the strategic triangle of
China, India, and Pakistan has resulted in flashpoints and suspicions, both India and China have
kept their sights on increasing trade and economic growth as a security imperative for the long
term.

The President of the People’s Republic of China, Xi Jinping, was one of the top world leaders to
visit New Delhi after Narendra Modi took over as Prime Minister of India in 2014.
The future of this Asian century will to a large extent depend upon the relationship between the
two regional giants, China and India. As of today, however, the trajectory of the India-China
relationship remains as complex as ever.

3

Literature Review

India is often perceived as a regional power, but a closer look reveals that it is in a
disadvantageous position vis-a?-vis China in South Asia. The reason is that Indian governments
never had the political, economic, and military capacities to pursue their regional power
ambitions with their neighbours in the long run. South Asian countries could always play the
China card in order to evade India’s influence. Wagner, C. (2016)

The dichotomy in India-China relations — on the one hand troops engaged in a two-month long
stare-down, and on the other agreeing to change various facets of global governance — stems
from the principle that the two nations must continue to integrate their economies and societies,
and leave the resolution of bilateral differences for a later date. Soni, S. (2017)

China opposed India’s bid to become a member of the Nuclear Suppliers Group, on the pretext
that only signatories to the Nonproliferation Treaty (NPT) can become members of NSG. Only a
handful of countries had opposed India’s bid, with both the United States and Japan firmly
backing India. Maini, T. (2016)

At the global level, the most significant economic transformation the world has seen is currently
making Asia—once again—the world’s economic centre of gravity. The scale and speed of the
economic rebalancing occurring from the West to the East and South is many times larger than
was witnessed during the Industrial Revolution. By 2060 these China and India will have a little
less than half of world GDP with OECD’s share shrinking to one-quarter. Pant, H. (2016)

India has the capacity for global leadership in developing new pharmaceuticals and crop
varieties, as we are the only country with both extensive endemic biodiversity and a world class
endogenous biotechnology capacity, along with global leadership in software development.
China has developed global leadership in solar energy and information technology hardware.
Together these are the foundation of the knowledge-based economy that will dominate the world
a decade from now. Joint research for the next wave of innovation will be the real win-win
dividend for both – keeping out of the middle income trap. Sanwal, M. (2014)

4

Current Scenario

The past year has seen the India-China relationship exhibiting severe bipolar tendencies.
2017 began with China refusing to support India’s entry into the Nuclear Suppliers Group
(NSG), stating membership to the group “is not something to be given privately between
countries as a farewell gift” referring to the outgoing Obama administration’s strong support for
India.

Chinese veto to India’s NSG membership followed by an Indian boycott to the inaugural Belt
and Road Initiative (BRI) Summit, held in the month of May. Even as 120 countries, including
29 top leaders, attended the Summit, India remained conspicuous by its absence, as the
China-Pakistan Economic Corridor (CPEC), a core component of the BRI, undermined its
sovereignty.

Briefly, the pendulum swung in the other direction as PM Modi attended the 17t h leadership
Summit of the Shanghai Cooperation Organisation (SCO) in Astana in June. The Summit
marked India’s formal entry into the organisation as a full member and the brief meeting
between Chinese President Xi and Indian PM Modi was seen as a step towards ironing out some
of the animosity of the previous months resulting from opposition from India’s entry to NSG.

The hope of better ties was short lived as the two counties found themselves engaged in a
military standoff at the Doklam Plateau — a trijunction separating Bhutan, China and India.
From 16 June to 28 August, armies of the two nuclear powers, with the world’s largest and
second largest populations, were facing-off at Doklam — while China maintained it was building
a road on its side of the border, India argued the road construction was an attempt to alter facts
on the ground.

As the date for the BRICS Summit drew closer, pressure mounted on both sides, (more so on the
Chinese, as they were playing host and could not afford a repeat of BRI Summit) and a
resolution was reached to maintain the pre-construction status-quo.

At 11.2 trillion USD, China no longer prioritises mere integration at an economic level it seeks to
become the sole rulemaker of the global order, and nations both in the developed and developing
world will have to comply with the Beijing playbook. India on the other hand recognises that
with an economy of 2.2 trillion USD and a population of 1.2 billion people, it needs further
integration with the world economy and must build its economic partnerships with all major
countries. India also recognises it cannot alone set the rules of play, but any country or countries
attempting to do so will have to take its concerns on board.

5

Lessons Learned

It is clear then that the obligation of formulating a resolution to outstanding and pending
disputes, and putting the India-China relationship back on track, lies with the country poised to
become the first superpower since the end of the Cold War. China will have to find ways of
taking countries along for the pursuit of common objectives. The constant fall out with India
over the past year, from the NSG to Doklam sheds poor light on a nation with China’s ambitions
and reduces it to a regional actor, unable to resolve differences with Indian neighbour.

The relationship built by the countries between 1988 and 2017 provides a solid foundation for
the partnership, which should be taken to the next level. Neither country would have been able to
attain their economic growth without the other. This also remains true for the objectives of both
nations going forward. India as the smaller economy cannot set the terms of engagement — it
can only be upfront about its national priorities. In the face of conflict, it can only deter and delay
the assertion of Chinese might. China as the ’emerged’ Asian giant must reach out to New Delhi
and resolve long-standing disputes, for a more prosperous regional and international order.

6

Recommendation for the Future

To begin with, India will have to understand that China’s approach to foreign policy based on the
concept of leverage. During Rajiv Gandhi’s seminal 1988 visit, China signaled that it was keen
on developing the relationship without working to resolve the border issue immediately. China
believed that India was keen to resolve the matter, which it gave it leverage. India must do this
with finesse, ensuring it does not spite China directly.

The fact that India and China never tried to evolve a framework to guide their relationship ever
since the 1954 Treaty of Panchsheel became redundant after 1962 remains a deficiency. A good
example to emulate is the top-down waterfall approach, espoused by Russia and China to lower
tensions between them which led to the desired windfall results in the last two decades. In fact,
the old Indo-Soviet model was not a bad sustainable strategic tie, though the context in which it
was framed was different.

A framework is certainly needed and the dialogue process is definitely a good way for trust
building. An honest attempt to build a new paradigm of India-China trust should be grounded on
shared historical and cultural awareness of each other, as also on the collective wisdom of
ordinary citizens on both sides. This may prove to be an effective evolutionary way.

The time has come for India to move beyond notions of balance of power by adopting a vision of
shared prosperity. Developing ASEAN as an economic and diplomatic bloc will enable the Asian
Century, as the region has more than half the global population and the potential to have more
than half the global wealth by 2050, and support a relationship with China based on multilateral
rules.