China on Monday rejected suggestions of any competition with India for strategic space in the neighbourhood, affirming that it was both “happy” with Modi’s visit to Bhutan and “full of confidence” over the future of relations with India.

Asked about perceptions among some analysts that Modi’s decision to make Bhutan his first overseas visit may have been prompted in some measure by Beijing’s recent overtures to Thimphu – with which it does not yet have formal diplomatic relations – Chinese Foreign Ministry spokesperson Hua Chunying told reporters here that China was “happy to see the development of friendly, cooperative, mutually beneficial relations between our other neighbours”.

China and Bhutan do not have formal diplomatic relations, although both sides regularly exchange political, trade and cultural delegations. The two countries have also been engaged in talks to settle their disputed border, holding more than 19 rounds of negotiations.

While India has had traditionally close historical relations with Bhutan, that Beijing and Thimphu were willing to take ties to a higher level was made evident in June 2012 when former Bhutan Prime Minister Jigmi Thinley, who ended his term in July last year, held a first ever meeting with then Chinese Premier Wen Jiabao, on the sidelines of a United Nations conference in Brazil. Thinley then told Wen that his government “wishes to forge formal diplomatic ties with China as soon as possible” – a declaration that generated much interest in India at the time – while the Chinese leader said Beijing was willing to settle the boundary dispute “at an early date” and step up cooperation in all fields.

Some analysts in Beijing have the view that India has since sought to block Bhutan from establishing diplomatic ties with China.

A commentary in the Communist Party-run tabloid Global Times last year accused India of influencing domestic elections in Bhutan and treating the country “like a protectorate” by withdrawing petroleum subsidies. The move was seen by some in Thimphu as a response to its warming ties with Beijing, although New Delhi rejected those suggestions.

“The withdrawal of subsidies before Bhutan’s elections reflected that India never gives up its power politics where it doesn’t need to,” the commentary said, describing “Indian influence on Bhutan’s elections” as “a tragedy for Thimphu”.

Since the change in government in Thimphu last year, talk of moves to establish diplomatic ties with Beijing has cooled. Hua, the Foreign Ministry spokesperson, downplayed suggestions of strategic competition with India, reiterating that Beijing was looking forward to deepening ties with the new government in New Delhi under Prime Minister Modi.

“We have not established diplomatic relations but our two countries maintain friendly exchanges and visits,” she said.

“We respect the independence, sovereignty and territorial integrity of Bhutan and are willing to further develop good neighbourly relations with Bhutan based on the five principles of peaceful coexistence,” she said.

China has been keen to quickly establish contact with the Modi government. Modi’s electoral victory has been seen by many analysts in Beijing and by Chinese industry representatives as providing a platform to deepen economic ties, with Gujarat emerging as a popular destination for Chinese investment during Modi’s tenure as Chief Minister. Modi has visited China four times.

President Xi Jinping asked Foreign Minister Wang Yi to visit New Delhi on June 8 – one of the first senior officials from outside South Asia to visit India following the election – as his “special envoy” to underline his intent of building closer ties. Xi will visit India later this year. Both sides had “agreed to maintain momentum of high-level visits and press ahead with the development of China India strategic cooperative partnership” following Wang’s visit, Hua said.

“Generally speaking,” she added, we are full of confidence in the further development of China India relations in the future”.

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