The Chinese economy has already outgrown the U.S. economy. India has also replaced France and is now the sixth largest economy in the world. Both countries are also major political and military powers with growing regional and global stakes, respectively.
However, they have opposite political systems and divergent views on most global issues. While India takes pride in being the world’s largest democracy, China adheres to the socialist values. India is strategically aligned with the United States, who sees India as a potential counter-weight to China. Therefore, India and China are not only economic competitors but also military rivals due to their border disputes, respective strategic visions and India’s efforts to achieve strategic parity with China. However, despite these issues, there is growing cooperation between them in the realms of economy and trade. Both states are also careful about managing their conflict short of major military confrontation.
Issues between India and China emanate from their border disputes. They include, Aksai Chin – which is governed by China but also claimed by India; Arunachal Pradesh – governed by India and claimed by China and Doklam – the area disputed between China and Bhutan where they had a two-month-long standoff. Border intrusions have occurred several times between the two sides owing to unresolved border issues. Both countries, therefore, have to maintain a military presence in the disputed areas even though these disputes are not hot or active. However, chances of small border clashes may not be ruled out. Both countries are engaged in a competition to further their influence in border areas and countries situated between them, Nepal and Bhutan.
China realises that the closer Indo-U.S. partnership is aimed at the containment of China. India also enjoys warm relationships with Vietnam and Japan who also oppose the Chinese position on the South China Sea. Tibet’s spiritual leader, the Dalai Lama, is in exile and resides in India which angers the Chinese. India supports the U.S. policies of a heavy-handed approach in Afghanistan. China, on the other hand, favors political reconciliation as long-term instability in Afghanistan may also affect China. India has tested missiles capable of hitting the Chinese mainland, the Agni-V missile is noteworthy in this regard.
A major area of competition in future between India and China is likely to be in the Indian Ocean. Both powers want to militarily dominate the ocean. India regards the Chinese policy in the Indian Ocean as one of military dominance rather than economic interests. India also sees the Chinese high-profile Belt and Road Initiative (BRI) project as Chinese strategy to encircle it. India is not supportive of the growing Sino-Pakistani relations. It opposes the BRI and CPEC initiatives. In its view, Sino-Pakistan cooperation is aimed at hurting Indian interests and perceives that it may have to confront the two-front war in future from China and Pakistan.
A dispute over the water issues can also not be ruled out due to the fact that China is upper riparian country and India is dependent on China for water flowing in the Brahmaputra River. India blames China for constructing dams on rivers and diverting the water flow. China has blocked India’s attempt to become a permanent member of UNSC and NSG.
India and China are also engaged in an economic competition. China is a huge economy and India is a growing economic power. In 2017 trade volume between the two was approximately $84.44 billion but this is tilted heavily in China’s favor with a trade surplus of at $51.75 billion.
Both India and China are not taking the competition to a level that adversely affects their political relationships. India is balancing its relationship with China vis-a-vis U.S. A neutral India, even if it is not pro-China, places China in an advantageous position vis-à-vis the United States.
There have been many developments in this regard. To address the issues emanating from territorial disputes, both the countries have set-up five Border Personnel Meeting (BPM) points to quickly address the local level disputes on the spot.
The Chinese President Xi Jinping and Indian Prime Minister Modi met in the Chinese city, Wuhan in an informal summit. The ‘heart-to-heart’ talk between the two leaders is being heralded as an effort to rebuild trust and improve ties that were hit by the 73-days long Doklam standoff, last year. Both sides agreed to improve communication between their militaries to maintain peace at the border, handle all their differences peacefully through talks and work on a joint economic project in Afghanistan.
Subsequent to the Modi-Xi meeting, there has also been an exchange of positive statements from both sides. Xi described China and India as the backbone of the world’s multi-polarization and economic globalization. Indian Defence Minister, Nirmala Sitharaman, responding to a question on May 08, said today that there was no tension between the navies of India and China in the strategic Indian Ocean region. Referring to PM Modi’s visit to China she said, “We [India and China] are talking and meeting each other. That is a big change.”
To decrease the trust deficit, India stopped the Tibetans from joining Dalai Lama for the 60th anniversary of the failed uprising. After this, the Tibetan ‘government in exile’ shifted major programs slotted for New Delhi to Dharamsala in Himachal Pradesh. Recently, India and China also signed an internal security cooperation agreement that among other areas of cooperation, will involve intelligence sharing between the two sides on terrorism and transnational crimes. Chinese Defence Ministry has also announced joint military drills between the Chinese and Indian armies later this year.
China has repeatedly offered India to join its Belt and Road Initiative. Bilateral trade between China and India amounts to $84 billion in 2017, increasing by 18.63 percent from the previous year. The people to people contacts have also been increasing. There are more than forty direct flights between India and China every week. Thousands of Indian students are studying in Chinese universities. Lately, Indian movies have also being becoming popular among the Chinese cinemagoers. Therefore, Indian soft-power in China is at work in bringing the two sides closer. In future, Indian and Chinese trade and the cultural relationships are poised to grow further. In future one might see the space growing for political moves that can further enhance their cooperative relationship. Considering these developments, Indian and Chinese bilateral relationship is likely to grow in future and we may see more cooperation than competition between the two.
Samran Ali is an Assistant Research Officer at the Center for International Strategic Studies, Islamabad.