Now’s the time to reach out to China

The visit of the Chinese foreign minister Wang Yi marks the launch of a season of hectic diplomacy between India and China. The alacrity with which President Xi Jinping dispatched a special envoy to the new Indian Government underscores the opportunities that lie ahead. In exploring these opportunities, it would be useful to keep in mind the changing context of India-China relations.

At one level, it is clear that the Chinese have been as surprised as other countries at the political turn in India. For some years now, they have tended to view India as a cacophonic — even chaotic — democracy that is slow in getting its act together and that performs considerably below its potential.

The advent in New Delhi of a government with a clear political mandate led by a prime minister who projects the aura of a decisive moderniser is seen as an important shift. In Prime Minister Narendra Modi, the Chinese leadership evidently sees a kindred spirit.

Equally important is the wider strategic backdrop against which India-China relations will play out. China is currently embroiled in maritime disputes with several countries in the East and South China Seas — disputes that are steadily escalating in their intensity. Beijing’s assertive stance on these disputes has led to countervailing response from countries such as Japan and Vietnam.

What’s more, it has led to a rejuvenation of US’ alliances, even if this is more political than military in character. The tough note struck by American, Japanese and Chinese leaders at the recent Shangri La dialogue is indicative of the thick tension that is enveloping the region.

The juxtaposition of these two factors explains why the Chinese have been swift in reaching out to the new government.Beijing seems to perceive both opportunities and risks. On the one hand, Modi’s economic agenda could open up several avenues for cooperation. On the other hand, the Chinese are mindful of the fact that in the prevailing strategic environment India will look to deepen its security relations with other Asian countries as well as the US.

Even as Beijing seeks to calibrate its relations with India, New Delhi should look to press ahead on both economic and strategic fronts. At $31 billion, the trade deficit with China bulks large in the Indian official mind. So far, India has had little success in gaining market access in China for its pharma and IT companies. Although the Chinese leadership has averred that they are cognizant of this problem, non-tariff barriers continue to impede Indian exports to China. For instance, the Chinese have for the last 15 years prevented the import of basmati rice from India on the grounds that phyto-sanitary tests have not yet been completed.

That said, in correcting this imbalance the Government should look beyond boosting exports to China. Inviting capital inflows from China is equally important.

Discussions are already under way to facilitate Chinese investment in infrastructure and industrial parks. To do so, the Government will not only have to put in place enabling policy frameworks but also ignore the naysayers in the security establishment and elsewhere. Few countries have such deep pockets as China — and the need to find avenues for investment beyond US treasury bonds.

On the strategic side, too, there is an opening to tackle difficult issues. The Government will, of course, have to focus on reducing the military imbalance along India’s borders with China. This will entail efforts both at internal and external balancing. At the same time, New Delhi should make a determined push to resolve the longstanding boundary dispute.

The assumption in India is that it is the Chinese who are not interested in an early resolution. This is only partially true. For one thing, China’s record in tackling boundary disputes suggests that Beijing has shown considerable flexibility depending on the overall strategic context. In 2005, the Chinese made important concessions on agreement on the political parameters and guidelines for settling the dispute. They did so because New Delhi was able to leverage its growing proximity with the US. As China’s neighbours in maritime Asia circle their wagons behind the US, there may be another window of opportunity for India.

Further, the Chinese are aware that no Indian government has been ready to make the necessary concessions to strike a deal. Even an agreement that freezes the status quo on the border will need New Delhi to write off its claims to territory under Chinese control. Any such accord will need a constitutional amendment with two-thirds majority in both houses of Parliament and the approval of at least 50 per cent of the state legislatures.

No government to date has had the confidence to sell a boundary accord on the political marketplace. In principle, Modi is certainly better positioned than anyone since Rajiv Gandhi to attempt such a breakthrough with China. If he moves boldly, there will be rich strategic pay-offs.

Whether or not the Government decides to play for big stakes, the challenge of stabilising the disputed border remains an important one. The issue of Chinese “incursions” across the Line of Actual Control (LAC) leads to periodic hubbubs in India. In the past, New Delhi has sought to damp down these criticisms and prevent any fallout on ties with China. The Government could do better than this. For a start, it could present the facts: that there is no agreed LAC, that our own troops undertake “incursions” beyond the Chinese definition of the LAC, and that this situation will persist till a boundary agreement is reached.

Modi has set the tone for his government by actively communicating via the social media. This practice could be usefully extended to dispel some of the myths that swaddle our ties with China. By so doing, he could lay a solid foundation on which to build a dynamic relationship with China.

The writer is a senior fellow with the Centre for Policy Research, New Delhi

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