Untangling the Web of China-India Relations

In the wake of U.S. President Barack Obama’s historic visit to India at the end of January, analysts pondered whether New Delhi was seeking to align itself with Washington – against Beijing. The truth, as always, is more complicated.

There are a number of issues that continue to dog China-India relations, including legitimate concerns about what China’s regional ambitions mean for India. At the same time, however, India’s interests are not completely aligned with U.S. priorities. At its core, the U.S. is most worried that China is shaping up to be a revisionist power, with plans to upend the current global order. This is something India might actually welcome, to an extent.

As developing nations, both India and China all too often find themselves frustrated by global institutions that leave little room for their feedback. China in particular feels that the current world order does not do justice to its status as the world’s second largest economy. And both China and India have noticed that current beneficiaries of the system (the U.S. included) have little inclination to change it.

The U.S., for example, has stonewalled long-needed reforms to the International Monetary Fund. In response, the developing world set about creating workarounds – new organizations that provide a voice for countries that have risen to prominence in the 71 years since the Bretton Woods Conference. The most prominent example is the news BRICS Development Bank, which counts both India and China (as well as the other BRICS: Brazil, Russia, and South Africa) as its members. India also joined China’s new Asian Infrastructure Investment Bank (AIIB), another alternative to existing Western financial institutions.

Even on the security front, India and China occasionally join together to call for alternatives to the current system. Indian Prime Minister Narendra Modi, shortly after Obama departed from New Delhi, spoke of the need for China-India cooperation to bring an “Asian Century” to fruition. Around the same time, the Russian, Indian, and Chinese foreign ministers signed a joint statement in which they called for “the development of an open, inclusive, indivisible and transparent security and cooperation architecture in the region.” China clearly envisions this new security architecture as an alternative to the U.S.-based alliance system, making India’s participation telling. Matching deeds to words, India reportedly plans to join the Chinese and Russian-led Shanghai Cooperation Organization in the near future.

All this goes to show that China and India share a crucial ambition: hastening the development of a multipolar world, where their two countries enjoy the status each believes it is due. But here’s  the rub – China and India do not exactly see eye-to-eye on the status their respective countries should be accorded in this brave new world.

Much has already been written about the signs that China is seeking to assert (or, more properly, to re-assert) hegemony in the Asia-Pacific region, a system sometimes referred to as a “neo-tributary system” in reference to the influence imperial China enjoyed throughout the region. Chinese leaders steadfastly deny that Beijing has such an ambition. Nonetheless, these suspicions are deep-rooted in China’s neighbors and unlikely to evaporate any time soon.

Distrust stemming from the 1962 war between China and India continues to color strategic perceptions of Beijing; the fact that the border issue that caused the conflict is still very much in play only complicates the situation. In addition, China’s close relationship with Pakistan is a source of concern for Indian analysts and policymakers, especially as China-Pakistan relations are built upon a solid base of military cooperation. Rumors suggest, for example, that Chinese President Xi Jinping might attend Pakistan’s military parade this year – a possibility that could cast a pall over Modi’s subsequent visit to China in May.

India also remains highly suspicious of China’s bid to increase its influence in the Indian Ocean. As I wrote for last month’s magazine, the Maritime Silk Road represents China’s attempt to gain a strategic foothold in this crucial region – not through military deployments, but through the dominance of a new trade network. India watched as several of its neighbors joined in the initiative, from Sri Lanka and the Maldives to Pakistan and Bangladesh. New Delhi itself has thus far remained unwilling to commit to the Maritime Silk Road project until it has a better understanding China’s intentions. While India is receptive to the need for a new global and regional order, it does not want these new organizations to be dominated by its neighbor.

Meanwhile, in China, there is puzzlement over what India’s role should be. The perception in India is that China does not take New Delhi seriously as a world power. China, for example, does not include India in its formulation of “new type great power relations.” The designation of fellow “great power” is reserved for Russia and the U.S. India is included in the far more prosaic formulation of China’s “neighborhood diplomacy.” 

Worse, from India’s perspective, is China’s ambivalence over India’s bid to join the UN Security Council. China has agreed, in theory, that the council needs to be reformed, but has yet to come down firmly in support of its neighbor being granted that privilege (something Obama did back in 2010). China is generally in favor of reforming the way the Security Council is structured, but reticent when it comes to the specific question of India’s inclusion. To many Indian analysts, this simply means China does not want to accord India the same prestige Beijing already enjoys.

By understanding the frictions and fissures in the China-India relationship, as well as the broad strokes of shared interests, Modi’s current strategy becomes clear. Revamping ties with the U.S. sends a signal that India itself is a mover-and-shaker on the global level and is not overly beholden to Beijing for influence. At the same time, however, India is interested in cooperating with China and other developing powers to create a world order that more closely reflects current and future realities. And, of course, Modi’s basic goal of rejuvenating the Indian economy cannot be achieved without close economic cooperation with both Washington and Beijing.

Those various concerns, combined together, are exactly why we are seeing enthusiastic outreach from India to both the U.S. and China.