Can ties with China improve?

It’s the great question that Indian foreign policymakers have to confront: Is the India-China relationship going from bad to worse? That’s the issue the Modi government has to face now that it has won another election — albeit with a smaller majority. It has sent out one signal by announcing that we are going to rename 30 places in Tibet. For its part, China’s President Xi Jinping hasn’t congratulated Prime Minister Narendra Modi on his election victory. That’s obviously a signal of sorts. But Xi did take a month to wish Joe Biden after his election.

The Chinese are very clear about India. It’s the largest of the Asian powers — except possibly Japan — but it shouldn’t aspire to play in the same league as China. We can hold innumerable rounds of border talks but shouldn’t expect them to move back even an inch in regions like the Depsang Plains and Demchok. If they aren’t going to budge on the border should we cave in to their demand to separate the military stand-off from relations on all other subjects? That definitely isn’t about to happen in the near future. So India-China relations look stalemated for the foreseeable future. Says one China expert: “The Chinese keep saying the border dispute should be kept in its proper place. What we have occupied you should take it that it is ours. And you should not say anything about it.”

How could that change in the coming years? India’s efforts to stop buying Chinese products have been unsuccessful and imports from China have climbed to $101.7 billion in fiscal 2024, making it our top trading partner, even ahead of the US. Still the Chinese recognise that India could be a huge market and, if we show signs of rapid growth, they’d like to be in the game.

China and Xi Jinping see the world as a troubled place in which the US is trying to maintain its hegemony above everyone else. All other countries like India are bit players in the titanic battle between the two giants. A small set of Chinese scholars reckon that India has tried to steer a neutral course in the past but they are in a tiny minority.

In a world where the US is determined to maintain its hegemony, China must also flex its muscles to show that it means business. From 2013 onwards Xi instructed the People’s Liberation Army (PLA) that it should take an aggressive stand in every theatre. For India that meant an increasing number of stand-offs between the PLA and Indian troops. At Galwan in 2020 that finally turned into a full-fledged battle with casualties even though no shots were fired.

Since then, India-China relations have been down in the dumps. In the border regions both sides have been building their capability. China has built hundreds of xiaokang or model villages near the Indian border. These could serve a military purpose in case of conflict. Also, it has been upgrading its air defences in Tibet. India too is upgrading its strength and currently building a second parallel runway at its Leh airbase.

Action in neighbourhood

But the greater battle between India and China is possibly in the Indian Ocean and also surrounding countries like Pakistan, the Maldives, Sri Lanka and Bangladesh. India has been flexing its muscles to prevent China’s survey ships from docking in Sri Lanka. In the Maldives, these survey ships have only docked but not conducted any research in Maldivian territorial waters.

China’s economic slowdown has also meant that it’s throwing much less money into the Belt and Road Initiative (BRI). Work on the Colombo Port is still ongoing but many other projects in South Asia have slowed or even halted. China has a 99-year lease on Sri Lanka’s Hambantota Port but very few ships dock there. It’s strategically placed near India but brings in hardly any revenues. And when Sri Lanka was in dire economic straits it was India which stumped up about $4 billion in cash and commodities. The Chinese declined to ease up on its debts.

Pakistan’s debts to China have also climbed steeply and it’s clear the China-Pakistan Economic Corridor projects won’t generate much revenue. Pakistan had hoped to turn Gwadar Port into a ‘mini-Dubai’ but that was obviously pie-in-the-sky wishful thinking. Gwadar will basically only benefit the Chinese.

The fact is that China also has its own economic issues to deal with and rising youth unemployment. Under these circumstances will we see a slightly less fire-breathing dragon? That’s an outcome that India can only hope for.

China has built hundreds of xiaokang or model villages near the Indian border. These could serve a military purpose in case of conflict.