Chinese President Xi Jinping (left) and Indian Prime Minister Narendra Modi attend the group photo session during the BRICS Summit at the Xiamen International Conference and Exhibition Center in Xiamen, southeastern China's Fujian province on September 4, 2017. File Photo: Reuters / Kenzaburo Fukuhara / Pool
Chinese President Xi Jinping and Indian Prime Minister Narendra Modi. The countries' ports will be neighbors in Sri Lanka. Photo: AFP

Given their relationship, as Asia’s two rising powers who share a disputed border and a relationship that has long been troubled, there are multiple reasons India and China are reaching out to each other, and the leaders of the two countries, Prime Minister Narendra Modi and President Xi Jinping, will hold an unprecedented informal summit this week in Wuhan, in central China’s Hubei province.

Given the recent sequence of events, which famously included New Delhi throwing the Dalai Lama under the bus and assuring Beijing that it will not intervene in Maldives, it would appear that the outreach has been initiated by India and reciprocated by China.

Given the many-layered relationship between the two countries, India’s reasons are also manifold. But at this juncture, it would appear that Modi is reaching out to China to remove possible risks to his re-election campaign next year. His advisers believe that a confrontation with China in the border region always has the chance of going against India. Such a development would have grave political consequences for a leader who has thrived on the image of being a tough guy.

The Doklam issue has led to the People’s Liberation Army building up its forces along the entire Line of Actual Control (LAC) that marks the Sino-Indian border. New Delhi is aware that the outcome to the Doklam standoff being favorable to India last year was in great measure because of the overwhelming military advantage its forces had over the Chinese in the locality of Doka La Pass. But such a situation may not obtain elsewhere along the 4,000-kilometer LAC. As it is, there is some unease that the Doklam crisis has shaken the elite circles in Bhutan and if Thimphu throws in the towel, India doesn’t have a legal leg to stand on.

Modi now agrees with some of his senior advisers that India was wrong to handle China the way it did through 2016 by publicly hectoring it over the Nuclear Supplier Group and Masood Azhar issues. So there is an effort now to put diplomacy in command when dealing with them,  rather than using them to score propaganda points.

Likewise, Modi and his team believe that they may have erred in going out of their way to use the so-called Tibet card. This has only served to get China’s back up and in realistic terms, there is little to be gained by encouraging the Tibetans in exile in India, since China has firm control of Tibet. The Dalai Lama has been ready to make a deal with them, but it’s only the Chinese hard line that prevents such a development.

Before he came to power, Modi was a known admirer of the Chinese economic miracle, and his visit to China in 2011 was described as “historic” by his supporters. As candidate, though, he attacked the incumbent United Progressive Alliance government for having failed to secure India’s borders with China and Pakistan.

China looks like a good prospect for an economic partnership that could see investment in infrastructure, improving manufacturing capability and skill development. Indeed, despite the two countries’ political difficulties, Sino-Indian trade is booming, as is Chinese investment in India

Today, as the Indian economy continues to be troubled by niggling issues such as a declining investment rate in recent years, China looks like a good prospect for an economic partnership that could see investment in infrastructure, improving manufacturing capability and skill development. Indeed, despite the two countries’ political difficulties, Sino-Indian trade is booming, as is Chinese investment in India.

Though India has joined the Quadrilateral Security Dialogue, or Quad, and has emerged as a major element in the US Indo-Pacific strategy, the government does not see any immediate payoffs from this. Modi is also worried about the risks of tying India’s policies to the erratic administration of US President Donald Trump. On the other hand, along with China, it could be targeted by the US on trade and currency issues. Reaching out to China helps moderate some of these risks.

The Modi team realizes that as of now India cannot compete with China in Southeast Asia  and must focus its attention in the Indian Ocean region and work out ways to ensure that the two largest Asian countries are not played off against each other by the smaller nations of South Asia and the Indian Ocean Region (SA-IOR).

What are China’s aims in reciprocating India’s moves towards détente?

The very obvious one is that it is seeking to shore up its flanks to protect itself against a political and commercial attack from the United States. India may not be a significant economic player, but it is an important political actor and its neutrality in the event of any US-China clash would be useful.

As China’s economy slows down and India’s picks up pace, Beijing may have realized that it is at that cusp of history where its bargaining power with India is at its maximum and as the decades unfold, India’s comprehensive national power will grow and the Chinese advantage will become progressively less. This is therefore a good time to alter the trajectory of its relationship with India, which has so far been dominated by their conflicts arising out of their border issue and China’s use of Pakistan as a foil against India.

So these questions beg another one: What can India offer China and what can the latter offer India? At a broad level we know that China has its core interests – the primacy of the Communist Party, and the recognition that Taiwan, Tibet and Xinjiang as inalienable parts of China, now along with the Diayou/Senkaku islands, and the South China Sea.

As for India, it has never quite spelled out its core interests like the Chinese, but certainly national sovereignty and territorial integrity are central. This, of course, includes Jammu and Kashmir and Arunachal Pradesh, which brings it into collision with China and Pakistan.

Naturally, neither side is expected to offer up its core interests in any bilateral bargain. But better strategic communication can lead, first, to a modus vivendi on potential areas of concern, such as expanding China’s forays into South Asia and the Indian Ocean Region, or India’s interest in joining the US, Australia and Japan in the Quadrilateral grouping.

Second, better political understanding can unlock the economic complementarities of their huge economies. India is looking to prop up its declining rate of investment and build its infrastructure, and China is in a position to provide both; indeed, Chinese companies are very eager to do business in India. The Chinese are not unaware of their enormous export dependence on the US.

Third, it could open up a more sustainable path toward cooperation if China and India could settle their border dispute. The 20 rounds of border talks between the two Special Representatives have more or less completed the technical aspects of a border settlement. What remains is the political push, which can only be given by Modi and Xi. Are they up to it?

In 2014, there were expectations that there could be swift movement in this area given that both were strong leaders, capable of pushing a compromise in their respective domestic constituencies. Now that does not appear any longer to be the case.

Usually in such summits, detailing these issues and working out solutions and options are done well in advance. So have the two sides worked out a deal in advance, or are they truly going into an informal and unstructured summit? If the latter is the case, there could be hazards for India, considering the existing asymmetry of economic and military power between the two countries.

The writer is a Distinguished Fellow, Observer Research Foundation, New Delhi.

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