BY: SAHEJ KAPOOR
China–India relations, also called Sino–Indo relations or Indian–Chinese relations, refers to the bilateral relationship between the People’s Republic of China and the Republic of India. Although the relationship has been cordial, there have been border disputes. The modern relationship began in 1950 when India was among the first countries to end formal ties with the Republic of China (Taiwan) and recognize the People’s Republic of China as the legitimate government of Mainland China. China and India are the two of the major regional powers in Asia, and are two of the most populous countries and fastest growing major economies in the world. Growth in diplomatic and economic influence has increased the significance of their bilateral relationship.
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. During the 19th century, China’s growing opium trade with the British East India Company triggered the First and Second Opium Wars. During World War II, British-occupied India and China both played a crucial role in halting the progress of Imperial Japan.
Despite growing economic and strategic ties, there are a lot of 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. Both countries have steadily established military infrastructure along border areas. Additionally, India remains wary about China’s strong strategic bilateral relations with Pakistan, while China has expressed concerns about Indian military and economic activities in the disputed South China Sea.
In June 2012, China stated its position that “Sino-Indian ties” could be the most “important bilateral partnership of the century”. That month Wen Jiabao, the Premier of China and Manmohan Singh, the Prime Minister of India set a goal to increase bilateral trade between the two countries to US$100 billion by 2015.
Flowering relations between India and China in the early 1950s were based on peaceful co‐existence. But these withered and faded in an atmosphere of mutual hostility following the 1962 war between the two countries. A new phase of improved ties began with Indian Prime Minister Rajiv Gandhi’s visit to China in December 1988, resulting in the setting up of a Joint Working Group to defuse tension and ensure peace and tranquillity on the borders. Since the end of the Cold War and the demise of the Soviet Union, India–China relations have not only steadily improved, but have strengthened in diverse fields of mutual interest. Apart from this, the contentious boundary issue has registered substantial progress, although uncertainty looms large as to when it will be finally resolved.
Despite divergences in the perceptions and approaches of New Delhi and Beijing on issues such as Sino‐Pakistani military and strategic ties and India’s Tibet policy, both countries have enormous potential and opportunities to expand and deepen their economic and trade ties in their mutual interest. Emerging trends indicate that both India and China would remain highly competitive in the global and regional trade and economic domain, and would continue to compete for status and influence in the Asian region in general, and in South Asia in particular.
China and India are separated by the Himalayas. China and India today share a border with Nepal and Bhutan acting as buffer states. Parts of the disputed Kashmir region claimed by India are claimed and administered by either Pakistan (Azad Kashmir and Gilgit and Baltistan) or by the PRC (Aksai Chin). The Government of Pakistan on its maps shows the Aksai Chin area as mostly within China and labels the boundary “Frontier Undefined” while India holds that Aksai Chin is illegally occupied by the PRC. Chinese Communist Party Chairman Mao Zedong viewed Tibet as an integral part of the People’s Republic of China. The preceding government of the Republic of China under Chiang Kai-shek also claimed Tibet as Chinese territory, however was unable to re-assert control. Chairman Mao saw Indian concern over Tibet as a manifestation of interference in the internal affairs of the PRC. The PRC reasserted control over Tibet and to end Lamaism (Tibetan Buddhism) and feudalism, which it did by force of arms in 1950. To avoid antagonizing the PRC, Nehru informed Chinese leaders that India had no political ambitions or territorial ambitions and did not seek special privileges in Tibet but that traditional trading rights must continue. With Indian support, Tibetan delegates signed an agreement in May 1951 recognizing PRC sovereignty but guaranteeing that the existing political and social system of Tibet would continue. During the Sino-Indian border conflict, the India’s Communist Party was accused by the Indian government of being pro-PRC, and many of its political leaders were jailed. Subsequently, the Communist Party of India (CPI) split with the leftist section forming the Communist Party of India (Marxist) in 1964. CPI(M) held some contacts with the Chinese Communist Party (CCP) for some time after the split but did not fully embrace the political line of Mao Zedong.
Relations between the PRC and India deteriorated during the rest of the 1960s and the early 1970s while the China–Pakistan relations improved and Sino-Soviet relations worsened. The PRC backed Pakistan in its 1965 war with India. Between 1967 and 1971, an all-weather road was built across territory claimed by India, linking PRC’s Xinjiang Uyghur Autonomous Region with Pakistan; India could do no more than protest.
While flourishing trade has brought with it all the advantages such as the availability of low-priced items in India, it has also led to the biggest single trade deficit we are running with any country. Our trade deficit concerns are two-pronged. One is the actual size of the deficit. Two is the fact that the imbalance has continuously been widening year after year to reach USD 58.04 billion in 2018.
The growth of trade deficit with China could be attributed to two factors: a narrow basket of commodities, mostly primary, that we export to China and market access impediments for most of our agricultural products and the sectors where we are competitive in, such as pharmaceuticals, IT/ITeS, etc. Our predominant exports have consisted of cotton, copper and diamonds/ natural gems. Over time, these raw material-based commodities have been overshadowed by Chinese exports of machinery, power-related equipment, telecom, organic chemicals, and fertilizers.
Growth in bilateral investment has not kept pace with the expansion in trading volumes between the two countries. While both countries have emerged as top investment destinations for the rest of the world, mutual investment flows are yet to catch up. According to the Ministry of Commerce of China, Chinese investments in India between January-September 2019 were to the tune of US$0.19 billion and Cumulative Chinese investment in India till the end of September 2019 amounted to US$5.08 billion. Cumulative Indian investment in China until September 2019 is US$ 0.92 billion. However, these figures do not capture investment routed through third countries like Singapore, Hong Kong, etc. especially in sectors such as start-ups etc. which has seen significant growth in Chinese investment.
The military-technological balance between India and China is vast and rapidly growing. China outproduces, out-innovates and out-strategizes India on a daily basis. Consider the state of China’s preparedness on the Tibetan Plateau, and the lateness of India’s establishment of a Mountain Strike Corps. Consider the pearl of threats that China has tried to place around India’s neck through relationship building everywhere from Bangladesh (extensive financing) to Sri Lanka (100 year lease of a naval base) to Pakistan ($60 billion sovereignty transfer) and even the Maldives. Consider the size and sophistication of China’s nuclear arsenal and its missile defence technologies.
The solution between India and China seems quite far-fetched. There is no hiding the fact that China openly supports India’s historical enemy Pakistan, in fact Pakistan might only be present in the global economy because of China. Openly banning several Chinese applications clearly signifies India is not interested in having another diplomatic contract with China. The 2 Asian superpowers have had a very perplexed relationship throughout the 20th century, with wars and peace treaties being conducted simultaneously.