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Wednesday, May 18, 2005

India and China: Neither friends nor foes

SPEAKING FREELY
India and China: Neither friends nor foes
By Manjeet Singh Pardesi
Asia Times

The only two civilization-states in the contemporary international system - India and China - are at the beginning of a new epoch in their more than two millennia-old relations. When Chinese Premier Wen Jiabao visited India in April, the two countries signed numerous accords, including a pact on "Guiding Principles" for the peaceful settlement of their 4,000 kilometer-long boundary dispute. China is set to replace the United States as India's single largest trading partner over the next few years. Bilateral trade between Asia's two giants increased by leaps and bounds to US$13.6 billion last year from a lowly figure of $1.9 billion in 1999-2000. Asia's two rising economies hope to increase this figure to $30 billion by 2010. India and China are discussing the possibility of a free-trade agreement that would represent 40% of humanity if successfully implemented. The two countries also wish to expand their links in cultural, tourism, and civil aviation sectors.

During his recent trip, Wen promoted the idea of "marrying" India's software expertise with China's superb hardware capabilities and mentioned that cooperation would signify "the coming of the Asian century in the IT [information technology] industry". Indian Prime Minister Manmohan Singh said, "India and China could reshape the world order."

What does this seismic reordering of relations between Asia's rising economic heavyweights mean for the international system? Many analysts have concluded that the so-called Sino-Indian entente that received a major boost during Wen's trip heralds the end of Western dominance. While the "East" is definitely rising, the reality of the Sino-Indian relationship is far more complicated and has significant consequences for the international system.

Shared civilizational past
Historically speaking, China and India have very ancient ties. India exported Buddhism to China in the first millennium. So deep and permanent was Buddhism's impact on every aspect of China's culture, including Confucianism and Taoism, that Chinese literature described India as "Xitian", or "Western Heaven", in its conception of world order. As a result of the links established by Buddhism, many Indian Buddhist scholars visited China in the first millennium. An Indian Buddhist scholar named Kumarajiva, who visited China in the late 4th century, is credited with laying a strong theoretical foundation for the development of Buddhism in China by translating Buddhist texts into Chinese. In turn, many Chinese scholars/pilgrims such as Fa Hsien and Hsuan Tsang visited India to study Buddhism.

The impact of their interaction went far beyond religion to several secular and intellectual pursuits. Through Buddhism, India impacted every aspect of China's culture from the arts and literature to astronomy and mathematics. Because of the links developed due to Buddhism, an Indian astronomer named Gautama Siddhartha became the president of the Board of Astronomy in China in the 8th century and produced the then Chinese scientific classic of astronomy, Kaiyvan Zhanjing. Ideas of mathematics and sciences moved in both directions, and more importantly, the priceless records left by visiting Chinese scholars like Fa Hsien and Hsuan Tsang are invaluable even today for Indian historians studying the state and society of their land during that period.

Contacts between these two civilizations reduced and almost ceased in the first half of the second millennium. For a number of reasons, Buddhism disappeared from the land of its birth - though the core features of its philosophy were permanently imbibed by Indian culture, including what later came to be known as Hinduism. At the same time, Confucianism and Taoism made a comeback in China, although after permanently absorbing Buddhist influences. In the second half of the second millennium, both India and China were subjected to different degrees of imperial control, and the interaction between the two was limited to trade under imperial powers. These two civilizations co-existed peacefully for over two millennia. After their emergence as modern states in the 1940s, newly independent India was the first non-communist and democratic country to establish diplomatic relations with communist China in 1950.

Economic competition
In their latest incarnation, India and China began at more or less similar levels of economic development. The crucial question in the 1950s was whether democratic India or communist China would be more successful. After dismal performances in their first few decades as modern states, China implemented structural reforms in the late 1970s and emerged as the world's fastest growing economy and has maintained an average growth rate of 8-9% a year for over 20 years now. India implemented reforms in fits and starts in the 1980s (followed by significant structural reforms in the early 1990s) and has grown at an average rate of 5-6% a year since. In spite of a significant differential in their growth rates, the question today is not one that pits India against China. Instead, it centers on which of the two states offers a more sustainable growth environment in the long term.

China has developed world-class physical infrastructure, is emerging as the world's manufacturing powerhouse, and attracted more foreign investment in 2004 alone than India has since 1991. On the other hand, India is emerging as a major outsourcing and business processing destination as well as the research and development laboratory of the world, has a reasonably developed banking and financial system, and has near world-class multi-national corporations in information technology and pharmaceuticals, with no comparable Chinese firms. However, both economies have similar shortcomings - inefficiencies in terms of resource consumption, corruption, growing regional disparities, and massive disparity between the rich and poor (especially in India). As each tries to emulate the other to learn from the best practices of the other, competition however is bound to ensue.

Security competition
Although healthy economic competition is likely to be beneficial, the two countries' security relationship complicates matters. After the Chinese occupation of Tibet in the 1950s and the 1959 Lhasa revolt, India granted refuge to the Dalai Lama as well as a large Tibetan community. This strained Sino-Indian relations and in 1962, the two states fought a short but bitter border war. After their brief border war, the Chinese gained control of almost 38,000 square kilometers of territory in Kashmir and laid claims to India's northeastern state of Arunachal Pradesh.

Soon after this war, China established politico-military links with India's subcontinental rival, Pakistan. India's security environment further deteriorated after China became a nuclear weapons state in 1964. China also threatened to open a second front during the 1965 and 1971 Indo-Pak wars. In the 1960s and 70s, India accused China of supporting separatist movements in its troubled northeastern regions.

In 1975 India assimilated the Himalayan kingdom of Sikkim after the India-backed assembly of Sikkim passed a resolution calling for participation in India's political and economic institutions. China did not accept India's absorption of Sikkim and charged it with attempting regional hegemony in South Asia. However, with Wen's recent visit to New Delhi, Sikkim ceased to be an irritant in their bilateral relations. The "Guiding Principles" document signed by the India and China refers to "the Sikkim State of the Republic of India".

A perceived threat from China was one of the factors behind India's first nuclear test in 1974. China has provided Pakistan considerable help with its nuclear and missile programs since the 1980s and has also contributed significantly to its conventional arsenal. India justified its May 1998 nuclear tests by citing China and the Sino-Pakistani nexus as the chief threats to its security. As India's economy grows, it is likely to expand its nuclear and missile capabilities to have a robust deterrent vis-a-vis China's more advanced capabilities.

China is worried about India's growing blue-water naval capabilities and is expanding its own naval presence in the Arabian Sea/Persian Gulf region by financing a major port at Gwadar in Pakistan. China is also increasing its naval presence in the Indian Ocean by cultivating ties with Myanmar and Bangladesh. Although these Chinese moves are significantly motivated by its increasing dependency on sea-borne trade and energy supplies, they raised alarm bells in New Delhi. India views China's moves in these states as Beijing's strategy to contain India in South Asia. Signaling that closer relations with India will not dilute China's close ties with India's neighbors, Wen visited India at the end of his four-nation South Asia tour that included visits to Pakistan, Bangladesh, and Sri Lanka. The two countries are also likely to engage in a competition for influence in Central Asia and Southeast Asia.

Their thirst for oil and gas has added a new dimension to their relationship. India wants to collaborate with China in its pursuit for oil and gas abroad and recently floated the idea of extending a proposed Iran-Pakistan-India gas pipeline to China (via Myanmar) in order to create a pan-Asian energy grid. Beijing has been lukewarm about India's proposals as it enjoys a considerable lead over New Delhi in its quest for energy security. India and China are likely to compete for scarce energy resources to power their energy-deficient but growing economies.

Conclusion
Chinese leaders are wary of India's growing strategic ties with the US. Last month, the Chinese noted American overtures toward India with great anxiety when the George W Bush administration announced its intention "to help India become a major world power in the 21st century". Even though some Indians found this statement condescending, the fact that India is slowly but surely emerging as a power to reckon with is not lost on the Chinese. By all major estimates, including those of Goldman Sachs and the US National Intelligence Council, India and China together with the US will be the three largest economies in the world in two to three decades time.

It is a tragedy of the modern-state system that in spite of sharing a glorious civilizational past and having never fought a single war until their emergence as modern states, security competition between India and China is inevitable as their economies grow. However, the good news is that this security competition does not have to be conflictual. A rising India will surely expand and intensify its relations with the US. However, with its strong desire for strategic autonomy, India is unlikely to overtly ally with the US to contain a rising China. To this extent, a good beginning has been made by Wen's recent trip to India and through his attempts to engage India politically and economically. We are witnessing the contours of an important US-India-China strategic triangle that will shape the course of history in the 21st century.

Manjeet Singh Pardesi is an associate research fellow with the Institute of Defence and Strategic Studies, Singapore.

(Copyright 2005 Manjeet Singh Pardesi)

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