China and the World, Talking Point

A spicy relationship

Why India’s intelligentsia and politicians are starting to see China as more of a threat than an opportunity

A spicy relationship

When the Indian environment minister visited Beijing recently, an unwise gaffe very nearly cost him his job. Venturing off topic, he told an audience of journalists that when it came to China, India was “imagining demons where there are none”. He went on to call the Indian government “paranoid” and “alarmist” in its attitude towards its northern neighbour. China’s influence in India’s backyard is growing rapidly, and with it are fears that the Middle Kingdom is trying to contain the rise of its South Asian rival.

Beijing has invested billions building ports, roads, and other types of infrastructure in India’s backyard – and in the process won several sturdy allies. It recently announced plans for a new nuclear project in Pakistan, and might even build a railway in the country. And Pakistan’s not alone. Sri Lanka, Burma, and Bangladesh are all benefiting from the Chinese construction boom.

The Indian media is known for being highly sceptical of China’s motives in the region, but it’s a view that seems to resonate. A Pew survey last month found that only 34% of Indians held positive views of China, and a majority saw it unfavourably.

“India should treat China more as a trustworthy partner instead of as a potential competitor,” argued a recent China Daily editorial, “a higher degree of political trust is needed to build a healthier economic and trade relationship.” But for now, few are convinced. Both sides agree that there remains a real trust deficit among the Indian public, media and political establishment.

What happened to working together?

“A healthy, stable and dynamic China-India relationship is of far-reaching significance to the two nations, Asia and the whole world,” Premier Wen Jiabao recently told a visiting Indian delegation. And the potential is certainly there – when the two governments have worked together they’ve managed some impressive victories. A classic example is the derailment of the latest round of WTO negotiations. Their cooperation spared Chinese and Indian farmers from lower barriers to subsidised US and EU agriculture.

Their success in upsetting disadvantageous international agreements is celebrated in the two countries. Among Indian political leaders it’s called the ‘spirit of Copenhagen’ (a reference to the failed climate conference). “What we saw in Copenhagen was that it underlined that we have similarities and shared interests,” crowed Dr. S Jaishankar, India’s ambassador to China, “it demonstrates that India and China can actually work very closely together, and if we do that, we protect our interests better.”

But those alliances are starting to look increasingly temporary and based only on convenience. Despite official pronouncements to the contrary, the Sino-Indian relationship is getting frostier by the day. On other issues important to India, it has not found a willing partner. One that particularly frustrates Indian observers is China’s perceived refusal to endorse India’s bid for a permanent seat on the UN Security Council.

“China is not going to support India’s candidature for the Security Council, at least not in the foreseeable future,” according to HV Pant, professor of security studies at King’s College, “every time India asks for China’s support and gets a negative answer it underlines China’s status as the pre-eminent Asian power that reserves the right to grant India the privilege of being in the Security Council.”

Hasn’t booming trade made a difference?

China became India’s largest trade partner two years ago, but that’s been a mixed blessing from India’s point of view. It has a growing trade deficit with its northern neighbour, expected to top $20 billion this year.

What makes matters worse is that it’s the sort of trading relationship India had been committed to avoiding for the first few decades after independence from Britain. “India imports mostly finished goods from China, but 70% of what Indian exports to China are items such as minerals, chemicals and other raw materials,” explains Amit Mitra, secretary general of the Federation of Indian Chambers of Commerce and Industry.

Among the ‘finished goods’ Indians had been importing is telecommunications equipment – but even that has suffered from the lack of trust between the two countries. Chinese firms Huawei and ZTE were effectively banned from selling network equipment to Indian telcos last year over security concerns.

India’s security establishment just isn’t convinced that the two companies are sufficiently independent of the Chinese government. Huawei in particular is viewed with suspicion since it’s a supplier to China’s army and its CEO, Ren Zhengfei, is a former soldier. “At any time we don’t want anyone to be able to pull the plug in terms of a crisis,” explains Utthan Kumar Bansal, India’s internal security chief.

China’s Ministry of Commerce estimates that Huawei and ZTE could potentially lose out on previously agreed contracts worth $5 billion. “It is a fact that telecom gear from Western vendors are expensive when compared to Chinese,” explains Kuldeep Goyal, the head of state-owned telco BSNL, “but a government directive prevents us from placing any orders with telecom gearmakers from China.”

In an effort to get back into one of the world’s fastest-growing telecoms markets, the Chinese equipment makers have said they would try to meet security requirements, and indicated they may build domestic factories. “Huawei is open to government inspection at its Indian [research] facilities and will cooperate,” according to one company executive. Both companies are also exploring whether investing in local factories would ease Indian concerns.

Huawei executives in the country think it can’t hurt to blend in either. They’re not only learning the language (Hindi), but many have adopted Indian names and clothes, and even started celebrating Indian festivals.

What’s the main issue?

Perhaps the biggest worry in India is over Beijing’s support for Pakistan’s nuclear programme. India and Pakistan recently resumed peace talks, but the two countries have fought three wars with each other and deep suspicion remains. Most recently, Home Minister GK Pillai accused Pakistani intelligence of masterminding the 2008 terrorist attacks in Mumbai.

China and Pakistan have had an “all-weather” friendship since the 1950s, and China reportedly played a large part in the development of a Pakistani nuclear bomb. “In their own ways each is using the other to balance India as India’s disputes with Pakistan keep it preoccupied, failing to attain its potential as a major regional and global player,” argues Pant.

China recently agreed to build Pakistan two new nuclear power plants in the town of Chashma. “This is not the first time China has helped Pakistan build nuclear reactors, and since it will be watched by the International Atomic Energy Agency, the deal is not going to have any problems,” predicts Zhai Dequan, deputy secretary-general of the China Arms Control and Disarmament Association.

Indian observers saw the agreement differently, as a direct response to India’s nuclear cooperation with the US. “The reasons [for the deal] are two-fold: one, Beijing is trying to project itself as a power on a par with the US and, secondly, it wants a piece of the global nuclear pie,” explains Srikanth Kondapalli, professor of Chinese studies at Jawahrlal Nehru University. “It’s a lucrative business, running into billions of dollars.”

“New Delhi does not need to fidget each time it sees signs of intimacy between Beijing and Islamabad,” reasons the China Daily, “instead, it should look to the larger picture of India-China relationship and deepen its political trust with Beijing.” But the ‘trust us’ argument isn’t going down too well.

China is a major source of arms and military equipment to most of India’s neighbours. Chinese weapons were a major factor in the Sri Lankan army’s victory over the Tamil Tiger guerillas, and form the bedrock of Bangladesh’s armoury. With Pakistan, China has gone even further, and regularly holds joint training exercises with Pakistan’s army.

Where does the mistrust come from?

Indian suspicion of China can be traced back to a border war the two fought in 1962. It was independent India’s first military defeat, and the humiliation it caused hasn’t been forgotten. The then socialist Indian government was convinced that communist China would never attack, and the country was shocked when it did.

The border remains unresolved, and a source of consternation (and nationalist feelings) in India. “There is a certain assertiveness on part of the Chinese, I don’t fully understand the reasons for it,” explained India’s Prime Minister Manmohan Singh, “that has been a concern.”

Brahma Chellaney, professor of strategic studies at the Centre for Policy Research, thinks he understands. “Diplomatically, China is a contented party, having occupied what it wanted – the Aksai Chin plateau,” he contends, “yet it chooses to press claims on additional Indian territories as part of a grand strategy to gain leverage in bilateral relations and, more importantly, to keep India under military and diplomatic pressure.”

What does the future hold?

The Asian ‘industrial revolution’ has sparked a race for resources that’s increasingly pitting the India and China against each other. Their rapid economic growth has turned the Indian Ocean into a vital strategic asset which both are struggling to control.

In an attempt to get the upper hand, China has built deep-water ports in Bangladesh, Pakistan and Sri Lanka. Many in India see those facilities as part of a ‘string of pearls’ meant to dominate the region. China’s investment in developing a more powerful navy, and even its patrols around the piracy-troubled horn of Africa are viewed with misgiving in India.

“Most Chinese naval facilities in the Indian Ocean are dual use in nature and no serious strategy can discount their future military use,” argues Pant, “[they are] engendering a classic security dilemma between the two Asian giants.”

The main purpose of those ‘pearls’ is energy, according to Indian defense experts. “For China, as for India and Japan, her energy security is intimately linked to keeping the sea lanes open in the Indian Ocean,” explains Shiv Shakar Menon, national security advisor to India’s prime minister. 80% of China’s oil imports are shipped through the Indian Ocean (mainly from Iran and Saudi Arabia).

The same logic lies behind the proposed railway between the port at Gwadar in Pakistan and Kashgar in China. It would offer another way to deliver resources from Afghanistan, Africa and the Middle East.

“Our cooperation is traditionally beneficial and not targeted against any third country,” assures foreign ministry spokesperson Qin Gang, “such cooperation is not only beneficial for the two countries but also great for the peace and prosperity of the region.”

But that’s not the perception in India. If the railway is built, it could be a major blow to Sino-Indian relations. Not only would it pass through a part of Kashmir claimed by India, but there are fears it would make China more likely to interfere with India’s dispute with Pakistan over the province. “It is definitely a matter of concern,” warns Defence Minister MM Pallam Raju, “but we are taking our counter-measures and we are doing our own preparation.”

Perhaps even more vital than energy in the race for resources is the growing lack of water needed to feed India and China’s growing populations. Climate change and rising temperatures are rapidly melting the Himalayan glaciers, an important source of meltwater for most of Asia’s major rivers.

China has announced plans to build a dam the Yarlung Zangbo, the river that becomes the Brahmaputra when it reaches India. Indian ministers say they have been given assurances that China won’t be holding water back.

“There is intimation from China that it will only carry out run-of-the-river projects, which would not affect the flow of water from the Brahmaputra in India,” Pawan Bansal, minister for water resources told the Indo-Asian News Service earlier this month. But that may not be enough to convince a sceptical Indian public.

“The real worry is China’s ambitious plans to divert water from the south to the arid north,” argues Pia Malhotra, researcher at the Institute of Peace and Conflict Studies, “building a dam on the ‘great bend’ of the Brahmaputra… would impact both India and Bangladesh and millions of people who depend on the waters of this river for their livelihood.”

The two sides are still far from a cold war (or a hot one for that matter) – and there’s still a great deal of willingness to cooperate at the official level. But history and conflicting interests mean that overcoming the ‘trust deficit’ will take a very long time.

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