China and India are rising almost simultaneously. Their bilateral relationship is of critical significance to regional and global stability. However, the relationship remains extremely complex. China and India share extensive common interests over issues such as climate change, energy, international trade negotiation, reform of the international financial system, etc. In the face of unprecedented global change and growing uncertainty and instability in the current international order, it has become necessary for the two countries to pursue enhanced cooperation. This has gained particular significance against the backdrop of rising protectionism in the West, reflected most strikingly in the ‘America First’ doctrine championed by the Trump administration. Both countries have indeed cooperated on several issues, including regional economic integration, peace efforts in Afghanistan, and counter-terrorism. China is one of India's largest trading partners, and greater economic collaboration would be a strong stimulus to the Indian economy.

Admittedly, there remain many unresolved issues between China and India, among which the border dispute represents perhaps the biggest obstacle to improving the relationship. The China-India border issue is a very complex and long-running dispute that goes back to the era of British imperialism in India. It resulted in a military conflict between the two sides in 1962. Yet, beyond the boundary problem, other issues have hindered the advancement of China-India relations. These include China’s strong ties with Pakistan, India’s support for the Dalai Lama, India’s huge bilateral trade deficit, and trans-boundary water resource problem. These issues encourage the continuation of mutual distrust between the two sides. Another emerging problem is the growing economic gap between China and India, which has raised concerns in the latter. This is reflected in the ‘Chinese incursion’ and ‘China threat’ narrative which has been frequently evoked in the Indian media and even among some Indian strategic scholars. Distrust among the two countries could be exploited by some Western countries to disrupt China-India relations.

Moreover, with the increase in China's economic activity in South Asia and the Indian Ocean, particularly with the advancement of the Belt and Road Initiative (BRI), India's strategic suspicions of China have intensified. Unfortunately, certain misconceptions have only served to encourage strategic competition and distrust between China and India. One notion, encouraged by Western powers in the form of the ‘string of pearls’ argument, is that China is pursuing a strategy to ‘contain’ India within the Indian Ocean. This view seems to have gained a certain level of traction within India.

Managing relations with China is one of the core issues of Indian diplomacy. As the Nonalignment 2.0 report of 2012 warned, India’s China strategy must strike a careful balance between cooperation and competition, economic and political interests, and bilateral and regional contexts. The report notes that “Given India's current and future asymmetries in strength and influence, India must grasp the essence of this balance. This may be the most important challenge for India's strategy in the future”. Nevertheless, the Modi government has failed to achieve this balance in its first four years. Its failure led to a 73-day border standoff in Donglang (Doklam) in 2017 and brought India and China to the brink of military conflict.

It is difficult to predict whether New Delhi will achieve a balance in the future. At the 2018 Shangri-La Dialogue, Prime Minister Modi's remarks about India's role in the Indo-Pacific region and its maritime strategy have shown an ambition to expand India's maritime power. Although Modi did not mention the Quad at the summit, its members – the US, Japan, Australia, and India – will continue to hold talks and discuss further cooperation. The four-nation military alliance is the core of the Indo-Pacific strategy. On September 6, 2018, the inaugural ‘2 2 ministerial dialogue’ between the US and India was launched in New Delhi. India will continue its efforts to expand its Indo-Pacific strategy, from a security network to include economic cooperation, and to strengthen ties with Japan, Australia, Singapore, the UK, France, and other countries. The Indian government has rejected China’s invitation to participate in the Belt and Road Forum for International Cooperation twice. Instead, it has begun promoting its own infrastructure connectivity initiatives like the Asia-Africa Growth Corridor (AAGC), the International North-South Transport Corridor (INSTC), seemingly to compete with China’s BRI.

President Xi and PM Modi reached a consensus on several issues during their informal meeting at Wuhan in 2018, including enhancing cooperation under the framework of the Bangladesh–China–India–Myanmar Forum for Regional Cooperation (BCIM) and “China-India plus” cooperation plan. But putting the consensus into practice remains a big challenge for Modi. Among some of India’s diplomatic and strategic elites for instance, the continued adherence to a ‘zero-sum’ view of bilateral relations would make them less willing to compromise. Even among some Indian politicians, anti-China rhetoric has been used to draw public attention away from domestic problems, bolster national morale, to pull in votes, and even to justify greater military spending. At the international level, India’s perceived role as the regional bulwark against China has allowed it to obtain advanced weaponry and technologies from other countries. Therefore, the barrier to implementing the Wuhan consensus remains formidable.

Furthermore, India’s adjustment of policy towards China after the Wuhan summit seems to represent a tactical rather than strategic change.[1]  As former Indian Foreign Secretary Shyam Saran noted after the summit, the “Modi-Xi summit gives India the chance to expand its diplomatic options in the neighbourhood and beyond”. Most tellingly, he stated his belief that “[t]he only effective instrument for managing India-China relations will be a significant, sustained and rapid development of India’s economic and security capabilities, thus narrowing the power gap between the two Asian giants”.[2]

Regardless of the outcome of the ongoing general elections, the most urgent task for India’s next Prime Minister will be economic development and managing other social issues. The direction of China-India relations seems stable in the short to medium term at least. While the border issue remains a yoke in bilateral relations, the positive border talks between Indian national security advisor Ajit Doval and the Chinese state councillor and foreign minister Wang Yi in late 2018 showed that both sides are eager to resolve the issue.[3] The 1962 conflict created a deep trust deficit between China and India. Its aftermath saw different narratives and interpretations of the events leading up to the conflict. A positive step towards a peaceful resolution of the China-India border problem would be to agree upon a single historic narrative of the 1962 war. This would help to dispel longstanding misconceptions and allow both sides to begin moving away from the past. This could be achieved by facilitating joint research by Chinese and Indian scholars and by the Indian government releasing the Henderson Brooks Report to the public.

Today, the top leadership of both countries plays a major role in the management of bilateral relations. Both sides have started to discuss the next informal summit to be held in India later this year. In the future, different levels of people-to-people exchanges will be key to improving the relationship. But in China’s view, a change in the mind-set of India’s strategic elites will be necessary. There remains a long road ahead for China and India.

[1] Liu Zongyi, “India’s revised China policy tactical adjustment, not strategic change,” Global Times, April 18, 2018, http://www.globaltimes.cn/content/1098606.shtml

[2] Shyam Saran, “The Wuhan window,” The Indian Express, May 3, 2018, https://indianexpress.com/article/opinion/columns/narendra-modi-xi-jinping-wuhan-summit-india-china-relations-doklam-5160656/

[3] Aishwarya Kumar, “Ajit Doval, Wang Yi Hold India-China Border Talks During Special Representatives’ Meet,” News 18, November 24, 2018, https://www.news18.com/news/india/ajit-doval-wang-yi-hold-india-china-border-talks-at-special-representatives-meet-1949411.html

Source of documents：Centre on Asia and Globalisation, May 15