India needs to find a new equilibrium with China

finding equilibrium will depend on how quickly the narrative of india’s rise regains traction and how strong india’s growth trajectory will be in the post Covid-19 era.

The so-called equilibrium and understanding between India and China was built on the premise that both were at the same level of development, and hence needed to give full play to their complementarities and potentialities. It was on such a basis that both countries signed a series of confidence building measures to stabilize the border and security environment in the vicinity. Both came together on various issues of common concern and were instrumental in initiating multilateral mechanisms such as BRICS, the AIIB, the NDB, SCO, etc. It was a golden period of their bonhomie as both advocated that there was enough space for them to develop and rise simultaneously. This equilibrium has visibly been lost after three decades of its inception.

The reason for the collapse is China’s massive economic growth in the last four decades. The last decade is particularly worth noting as China’s 2010 GDP of US $6 trillion catapulted to US $14 trillion, whereas India’s US $1.7 trillion rose only to US $2.8 trillion. This also resulted in China bridging its technological and economic asymmetries with the US, while India’s asymmetrical relationship with China widened drastically. The loss in equilibrium and understanding is due to a visible shift in the balance of power favouring China.

Though analysts on both sides have attributed it to India forging closer security ties with the United States, the creation of a “mini NATO” in the Indopacific, the abrogation of Article 370 and bifurcation of Jammu and Kashmir into two union territories, have, according to China, posed a “challenge to the sovereignty of Pakistan and China” and “dramatically increased the difficulty in resolving the border issue”; apart from India’s rebuff to China’s Belt and Road Initiative, and India beefing up border infrastructure, in particular roads like Durban-shyok-dbo and Dharchula-lipulekh etc., issues. Undoubtedly, these could be considered as some of the triggers for the Galwan, Pangong Tso, Hot Spring and Naku La standoffs. However, the border standoffs are not one-off incidents, had it been the case, incidents like Dbo-depsang (2013), Chumar/demchok (2014) and Doklam (2017) would not have happened at all; the number of incursions along the entire Line of Actual Control (LAC) would not have jumped to such a proportion. Therefore, more than anything else, it is the power shift that has disrupted the equilibrium, and is the fundamental reason for China’s behaviour along the LAC, the region and beyond.

This has also been aided by the United States’ retrenchment from global governance as well as the narrative of “emerging India” entering a state of unpredictability. The narrative was based on India’s robust economic growth, demographic dividend, and capacity to handle domestic and global challenges pragmatically. Therefore, China’s assertiveness that has been witnessed in reclamation of the islands, reefs and rocks in the South China Sea, China crossing the median line in Taiwan Straits, changing the status quo on the LAC along the India-china border, and its “wolf-warrior” diplomacy will continue in one form or another. In the face of such a scenario, is a new equilibrium possible?

Finding new equilibrium and understanding with China will depend on a number of factors. At the outset, it will depend on how quickly the narrative of India’s rise regains traction and how strong India’s growth trajectory will be in the post Covid-19 era. In this context, India must incessantly create and ameliorate business environment so as to become one of the top investment destinations, for the cost of doing business in India is still very high. India needs to unfold a workable connectivity strategy within and with our neighbouring countries. China unfolding a strategy of economic corridors across its borders is not difficult to understand if we peep into the kind of corridors and a network of roads, rails and waterways it has created within its territories. Our own new initiatives such as Bharat Mala, a network of 5,000 kilometres of roads connecting all the Himalayan states of India with a capital of $2.2 billion needs to be carried out in letter and spirit and on a war footing. In the same vein, the Sagar Mala project, whereby all coastal cities in India would be interconnected through road, rail, ports and airports through a special development package needs to be speeded up. Simultaneously, the nodes of these projects need to be extended to our immediate and extended neighbourhood and aligned with the SAGAR and IORA vision. It is necessary that neighbours see an economic opportunity in

India and integrate their development strategies with those of India’s.

Secondly, the connectivity will pave way for strategic and economic partnership with various regional entities such as BIMSTEC and ASEAN. The RCEP is an opportunity to integrate Indian economy with the region. In fact, the Quad and the Indo-pacific Strategy will gain momentum if India’s economic integration with the region and beyond is realised.

Thirdly, India’s relationship with major and middle powers needs to be strategically crafted. The same would be tested by the kind of partnership India is able to build with them in the field of trade and investment, technology and defence. Going by the recently declassified “U.S. Strategic Framework for the Indopacific” it is clear that the United States has made its strategic choices clear, i.e., cooperate with India and other likeminded countries to “counterbalance China”. To this end, the US is willing to “accelerate India’s rise and capacity to serve as a net provider of security and major defence partner.” Though India has forged closer security cooperation with the US, however, has she made the choice to contain China, even if China believes so? India’s relationship with Russia, which the classified report labels as “marginal player in the Indo-pacific” will remain a concern as was pointed out by the outgoing US ambassador, Kenneth Juster.

Fourthly, decoupling from China, as has been expected around the world is a far cry. Even if it happens, Southeast Asia is a better destination as has been proved by the investment flows to Vietnam, Thailand, Myanmar etc. countries. Undoubtedly, some decoupling will happen in the field of new technologies, where the West fears China’s dominance. As regards the relocation of labour-intensive supply chains from China, India must not shy away from attracting Chinese investment, especially manufacturing, infrastructure and food processing to name a few. The US$78 billion bilateral trade between India and China from Januarynovember 2020 amidst the Covid-19 and Galwan clashes proves decoupling and boycott-china theories to be totally wrong. In fact, owing to price advantage, some of the Chinese companies have bagged lucrative infrastructure projects, even as the military standoff continues between the two. India needs to engage with China constructively by identifying certain sectors where trade and investment can be realised and stand against it when it comes to protecting India’s core interest.

Finally, all the above factors together with India’s capacities to handle domestic and external challenges will enable her to establish a new equilibrium and understanding with China, and possibly the resolution of unsettled border too. Interestingly, another report titled “Global Britain, Global Broker” released by the Chatham House, UK on 11 January, puts India in a very bad light and clubs it with illiberal democracies, which it says are difficult to deal with. Therefore, as long as India’s growth trajectory remains weak, social cohesion and communal harmony remain in disarray, the kind of understanding India seeks from China will be impossible. B.R. Deepak is Professor, Center of Chinese and Southeast Asian Studies, Jawaharlal Nehru University.

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