Five major factors are transforming the India-China relationship. One, bilateral trade is at an all-time high, with the Federation of Indian Export Organisations (FIEO) targeting $100 billion in exports to China by 2018. FIEO predicts that in four years, total two-way trade is set to cross $250 billion — no small beer, especially in the backdrop of shrinking western markets.
Second, with the US shifting the bulk of its navy into the Pacific, the heat is on Beijing. Heavily armed US warships, attack submarines and stealth fighters based in Guam and Australia now pose a real threat to the Chinese Navy. In June alone, the US Pacific Command conducted 30 military exercises — a number that will only increase in the coming years — with countries of the Asia-Pacific. Under these circumstances, the last thing Beijing wants is to take on a resurgent — and heavily armed — India.
Thirdly, if the rise of US military power close to its shores wasn’t bad enough, China finds its old enemy Japan also rising. Under Prime Minister Shinzo Abe, Tokyo has given the boot to its American-drafted constitution that has long kept its military shackled. On 1 July, in one of the biggest changes to its security policy since World War II, Japan approved a reinterpretation of its constitution on military affairs, allowing use of force overseas.
It is said the modern Chinese hate the West, mock India and fear Japan. With the Japanese Army — which invaded China in the 1930s — now released from its US-imposed straitjacket, Beijing has to deal with another threat close to its shores.
Fourthly, Islamic terrorism is swooping on China’s Muslim-majority Xinjiang province. Beijing has realised belatedly that the Faustian bargain it struck with Pakistan is coming to haunt it. “We have to fend off extreme Islamic terrorism from getting into China from Pakistan,” Wang Jisi, the dean of the School of International Studies, Peking University, said in November 2012, ahead of a once-in- a-decade leadership change in China. According to him, after decades of trying to contain India and having failed, China now wants a reset with India.
Finally, after decades of being deferential towards the Chinese, India has developed some cojones. In 2012, it tested the 5,800-km range Agni V missile, giving India’s military the ability to nuke any Chinese city at will. (The Chinese, who understand the language of nuclear deterrence, are witnessing a massive Indian nuclear build-up targeted at their mainland. It is enough for any Chinese leader to sober up.)
More recently, in July, India pushed back hard during the final round of the negotiations at the BRICS summit in Fortaleza, Brazil. The BRICS bank had been delayed for two years because India and Brazil had fended off China’s attempts to get a bigger share — than other members — in the bank’s shareholding. In the final hours of the summit, it was decided to have equal shareholding. India got the first presidency for six years, followed by five-year terms for Brazil, Russia and South Africa. China may have bagged the headquarters, but it will not preside over the bank for 21 years. Plus, the new outfit will be called the New Development Bank, a name suggested by Prime Minister Narendra Modi.
India: Tough customer
The Chinese, who gave the world Sun Tzu’s Art of War, realise they are now dealing with a different kind of India — not Jawaharlal Nehru’s India that was constantly babbling about peace without having the ability to wage war. China is, therefore, calibrating its India policy keeping this in mind.
The first hint that Beijing’s attitude was softening became evident in a pathbreaking editorial in China Daily (5 December 2012). “The boundary question is just a tiny part of China-India relations,” it said. The daily, which reflects official policy in China, went on to say the two nations are “cooperative partners, not competitive rivals, as they have far more common ground than differences”.
Again, on 23 October 2013, Chinese PM Li Keqiang said at a meeting with the then PM, Manmohan Singh, in Beijing that the India-China relationship is the “most important bilateral friendship in the world”. Coming from the normally inscrutable Chinese leadership, that was a significant statement.
At the BRICS summit, Chinese President Xi Jinping said the two countries should join hands in setting global rules and invited Modi to attend the November meeting of the 21-nation Asia-Pacific Economic Cooperation (APEC) in Beijing. India has never attended an APEC summit, and has been trying for membership for more than a decade. China seems keen on a fellow BRICS member inside APEC that can help it counter the influence of the US and its friends in the trading bloc. It may be China’s weakness that is behind the move, but Indians need to remember that is how strategic partnerships are forged.