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India and China: The Need for Radical Strategic Realignment
Udayan
CHATTOPADHYAY Introduction "Enemy Number One" was how India Defense Minister George Fernandes described China in May 1998, a few days before India shocked the world with a series of nuclear tests [1]. This was a disturbing reminder of the state of bilateral relations after a war in 1962 and several bloody border skirmishes in 1967, 1986 and 1987. [2] Cold relations between the two Asian giants, however, stand in the way of addressing major threats from common elements, such as foreign-sponsored terrorism in Kashmir and Xinjiang. Though largely ignored, there are other areas of aligned interest as India and China, among the fastest growing economies in the world, seek to enter a global trade environment where the rules have already been set. A radical rethink of each country's strategic focus is essential to address critical political, military and economic issues facing the two Asian giants in the 21st century. A history of mutual suspicion George
Fernandes' identification of China as India's primary security
threat seems to be well founded. China does not recognize
the incorporation of landlocked Sikkim into India and some
150,000 square -kilometers of land are still disputed between
the two countries; meetings between Chinese and Indian delegations
break down the moment differing versions of border maps are
produced. The PRC also periodically issues statements against
Indian "regional hegemonism that presumes to block the
natural and rightful expansion of China's relations with India's
neighbors."[3] Much of Pakistan's nuclear program, targeted
at India, was allegedly developed and financed by China [4]
and the perception of a Sino-Pakistani umbrella over India's
land borders sends shivers down the spines of Indian military
strategists and ordinary citizens alike. India, for its part,
hosts the Dalai Lama and the Tibetan government-in-exile a
mere 200 miles from the Chinese border. Increased military
and naval cooperation between India and countries such as
the USA and Australia also makes China uneasy, [5] many observers
suspect that the increasing warmth between India and Western
powers has less to do with an overdue recognition of India's
increasing stature and more with a policy of containing China. The oft-stated Chinese opposition to a unipolar world order has implications for the options which both countries may have available in dealing with the major strategic issues facing them. A key example is the problem of terrorism influenced by religious fundamentalism and separatism. Kashmir and Xinjiang are regions where foreign-backed terrorist groups have attempted to build separatist movements with varying degrees of success. Though events in Kashmir are better publicized, it is apparent that Chinese authorities will have to deal with separatist groups that are becoming more militant. An estimated 1,000 terrorists from Xinjiang fought with the Taliban in Afghanistan,[6] and the porous mountainous borders converging between Afghanistan, Pakistan, India and China make for a security nightmare. Both India and China are lobbying the same group of countries to curb support for these groups and a united front would be a key step towards fighting terror in that part of the world, not to mention addressing major domestic security concerns. The UN's addition of the East Turkestan Islamic Movement (ETIM) to their list of banned terrorist organizations [7] was a hard won victory for China. India, similarly, had lobbied extensively to highlight the activities of specific terrorist groups long before several of them were directly linked to the events of September 2001. A combined lobbying effort, based on common recognition of the dangers of separatism and terrorism in the region, would no doubt have made the process easier for both countries. In the specific instance of Xinjiang, China may benefit considerably from Indian assistance, given the latter's long experience with Islamist insurgency and the diplomatic tightrope that involves. A coordinated diplomatic policy could also be extended to the 100 million or so "overseas" Chinese and Indians. This may not seem to be an obvious area of common interest; however similar historical circumstances triggered both diasporas, and as a result, many countries around the world have vibrant Indian and Chinese communities that share neighborhoods. In countries such as Indonesia and Malaysia, where Indians and Chinese are economically influential though politically weak and increasingly jittery, a far-sighted and coordinated policy from Beijing and Delhi could safeguard the interests of the overseas communities and prevent repetitions of "sons of the soil" movements. At an extreme, mass emigration (e.g., of the Indians from Fiji and Uganda, and the Chinese from Vietnam) and the subsequent horrors of displaced populations, may be prevented. In areas like Silicon Valley and British Columbia where overseas communities have become important, coordinated Sino-Indian lobbying could leverage the strength of local populations and influence key policy makers on areas of common concern, such as the plight of laid-off H1B tech workers. India recently appointed an "Ambassador-at-Large" to represent the 40 million "overseas Indians", and success of this venture could provide the foundation for similar institutions for China. As well as the frequently highlighted success of the Jewish-American lobby, the increasing coordination between governments and their diaspora populations presents a model to follow. A case in point is the recent success of Mexican-American lobbying on immigration and trade issues. Converging economic interests India and China also share interests on many key trade issues. At first glance, there may appear little in the way of Sino-Indian complimentarily as exists with US capital and comparatively cheaper Chinese labor. However, while areas of bilateral interest may not exist at present between the two countries, the growing importance of India in international trade as well as the existing strength of the Chinese economy suggests that the two countries together could form a powerful lobby to address shared external interests. Tariff barriers, access to developed markets, environmental policy and patent protection are major irritants in both countries' relations with the G8. India's extensive lobbying efforts in this regard have already started to yield positive responses, particularly in the field of pharmaceuticals. Coordinated efforts between the two countries could generate greater tangible success, with significant economic implications. Lessons to learn from each other The two countries also have much to learn from each other as a result of the different development strategies followed over the past fifty years. The spectacular turnaround in corporate culture in China serves as a powerful reminder of the need to emulate successful models in other emerging markets. The sluggish banking and insurance sectors are perhaps the biggest impediments to foreign investment in India and comparative rates of foreign investment in the two countries ($2bn in India compared to $40bn in China in 2001)[8] suggest the scale of difference in perception by the global investment community. The swadeshi ("India first") economic model of import substitution and quota driven domestic production is still popular among politicians; while the slow pace of liberalization has prevented large-scale shocks, it has not done much to convince investors that the so-called "Hindu rate of growth" has given way to a corporate mindset where "to get rich is glorious." China's record on poverty reduction and urban development presents a powerful model which India would do well to follow; infrastructure in cities such as Calcutta and Mumbai is hopelessly inadequate for a country with India's declared ambitions. There is growing recognition in India of the need to study China: in July 2002, the establishment of a think tank to investigate potential lessons from China's economic success was announced in New Delhi.[9] Similarly, India's powerful educated workforce includes many hundreds of thousands of potential teachers for China, in the fields of IT, telecom and biotech, not to mention the English language. India's strong diplomatic relations across the continents and increasingly in North America and Europe would provide a missing link for China in her global ambitions, just as China's position on the UN Security Council would for India. The need for greater mutual trust Before trade and political relations can truly develop between the two Asian giants, however, there have to be steps toward laying the foundations for greater mutual awareness and respect. "Hindi Chini Bhai Bhai" (Indians and Chinese are brothers) was a popular slogan in the 1950s when India was one of the first and only countries to recognize the PRC. "Hindi Chini Bye Bye" ran the joke following India's defeat in the 1962 war, an event still etched in the Indian national psyche. Given the legacy of the past fifty years, it is unsurprising that Indians are more obsessed with China than vice-versa; recently, there was talk of China being responsible for flooding in the northern states of India.[10] The People's Daily remarked in a recent editorial, "India needs to get over its China phobia."[11] The lack of mutual awareness It is not unfair to assert that both sides are relatively uninterested in each other. It is easier, for example, to fly from Calcutta to Europe or America, than to anywhere in China, even though the Chinese border is less than 600 miles away. There is little interest in either country to study the other's history, culture or languages. This is a relatively recent trend; historically, interaction was strong, with pilgrims, explorers and traders from both countries crossing the Himalayas for centuries. Huien Tsang, a Chinese monk revered in India, traveled extensively through the subcontinent in the seventh century and references to him litter mediaeval Indian and European texts. Through Buddhist missionaries, there was extensive contact between the two societies, expanding into trade. Interaction started dwindling with the onset of the Mughal Empire as India's new Muslim rulers directed external interaction towards their coreligionists in the Middle East. Once the British replaced the Mughals as rulers of India, colonial rivalries led to increasingly closed borders; buffer states such as Nepal, Sikkim and Bhutan were maintained as a result. In recent years, there have been some major steps taken to reduce tension and improve relations. Border troops on both sides have been reduced by almost 80%, with an agreement to respect the status quo until formal demarcation occurs. The first regularly scheduled direct flight between the two countries was inaugurated in January 2002, and visa regulations have eased on both sides. Growing economic interaction Economic interaction has grown, albeit slowly. Delegations of Indian software, pharmaceutical and telecom representatives have toured extensively across China; and Indian companies such as Ranbaxy have already set up joint ventures in cities such as Shanghai and Guangdong. On a recent visit to Delhi, Prime Minister Zhu declared that trade relations between India and China were not "commensurate with respective strengths and status."[12] Trade is currently modest, last year totaling only $3 billion. [13] By comparison, trade between China and Russia was almost seven times greater, even though Russia's economy is a third smaller than India's.[14] Prime Minister Zhu declared a target of $10 billion in bilateral trade for the coming year, but much remains to be done both to build trust and to take practical steps to encourage contact. Opposition to closer Sino-Indian ties Closer ties between India and China will not be achieved without opposition, both at home and abroad. Pakistan, for one, would not be happy with closer ties between its "most important friend"[15] and its "nemesis."[16] The United States and other Western powers may also become uneasy with an alliance between two nuclear powers whose joint armed forces would in effect become the largest in the world. As noted earlier, the United States has embarked on a series of joint military and naval exercises with India and many observers have noted how China may have been a calculation in American motives. Domestically, for many influential lobbies on both sides of the Himalayas, any arrangement that smacks of compromise on the core contentious issues would be unacceptable. However, a key indicator that suggests optimism in seeking greater Sino-Indian ties is that the contentious issues between India and China, though serious, do not arouse the same passions among Indian policy makers or ordinary citizens that similar issues with Pakistan and Bangladesh do. In China, perceptions of India at a civilian level, where they exist at all, are primarily as a potential trade partner. There does not appear to be anything like the same degree of suspicion of India's motives among the population or in the media as is the case in reverse, suggesting that closer ties will not be blocked by the need to build domestic Chinese opinion. The potential for negotiated compromise on existing disputes and subsequent cooperation therefore seems much greater. One only needs to look at the current state of Franco-German relations to observe that powerful neighbors and former enemies can, indeed, be friends. Conclusion Both India and China would have the responsibility to reassure their allies and observers that strategic realignment could do more to enhance peace and economic growth than to destabilize the region or pose new global threats. The recent agreement between NATO and Russia is an indicator of the radical shifts in alliances that can emerge in the post-9/11 global geopolitical environment. The potential upside from a formal alliance between two countries representing between them a third of humanity would be enormous, for India and China, and indeed, for the rest of the world. (The author is an associate at McKinsey & Company. The views expressed here are only the author's and should not be associated with McKinsey & Company.) Notes: |