Taking the long view with China

Introduction

• India and China remained committed to a multipolar world, they should recognise that a “multipolar Asia” was one of its essential constituents.
• The Year End Review of the Ministry of Defence pertinently refers to the “sanctity of our claims in Eastern Ladakh” instead of the term “border” used since 1954, opening space for a settlement.
• We are now confidently moving out of the predicament that Jawaharlal Nehru placed us in Kashmir, fully integrating it into the Indian Union and consolidating our claim line.

India’s balance of ties between Russia and USA

• We have a “special and privileged strategic partnership” with Russia, which provides more than three-quarter of India’s military equipment, and a “comprehensive global strategic partnership” with the U.S. despite the United States Strategic Framework for the Indo-Pacific, 2018, wishing that India sees the U.S. as its preferred partner on security issues.
• India’s relationship with the U.S.-led Quadrilateral Security Dialogue (Quad), where the others are military allies, has rightly been cautious, as U.S. President Joe Biden sees China as a ‘strategic competitor’ rather than a ‘strategic rival’.
• Realism dictates that India does not need to compromise on its strategic autonomy.

Diplomatic challenge

• The foreign policy challenge for India is really two sides of the China conundrum: defining engagement with its neighbour which is consolidating an expanding Belt and Road Initiative (BRI) while remaining involved with the strategic, security and technological concerns of the U.S. located across the vast Pacific Ocean.

Failures of US policies to contain China

• The U.S. ‘Annual Report to Congress: Military and Security Developments involving the People’s Republic of China’ cautions that U.S. aircraft carriers, symbols of the country’s military hegemony, may not enjoy unquestioned dominance for much longer.
• Former President Barack Obama’s military pivot to Asia failed to overawe China in the South China Sea and the costs of former President Donald Trump’s trade tariffs were borne by American consumers and companies.
• In the financial sphere, there is the real possibility of the Chinese renminbi becoming a global reserve currency or e-yuan becoming the currency of the digital payment.
• China is the world’s largest trading economy.
• It could soon become the world’s largest economy — the Fortune Global 500 list of the world’s largest companies by revenue for the first time contains more companies based in China, including Hong Kong, than in the U.S.
• The BRI countries are using the renminbi in financial transactions with China, and can be expected to use it in transactions with each other.
• Even the European Union, smarting under Mr. Trump’s sanctions, created its own cross-border clearing mechanism for trade.
• China has signed an investment agreement with the EU and with most of Asia.

Policy elements

• Some form of the EU’s China policy of seeing the emerging superpower as a partner, competitor, and economic rival depending on the policy area in question is going to be the global norm.
• The EU’s reaching out to China despite misgivings of the U.S. means the West has given up on containing the rise of China.
• This broad perspective is also reflected in India’s participation in both the Shanghai Cooperation Organisation, led by Beijing and Moscow and designed to resist the spread of Western interests, and in the U.S.-led Quad, with its anti-China stance.
• Within the United Nations, India’s interests have greater congruence with China’s interests rather than the U.S.’s and the EU’s.
• The congruence between India and the U.S. lies in the U.S.’s declared strategic objective of promoting an integrated economic development model in the Indo-Pacific as a credible alternative to the BRI, but with a caveat.
  • China opening new opportunities for countries in the Eurasian landmass means that ASEAN will not easily move out of the BRI infrastructure, digital, finance and trade linkages; Sri Lanka is a recent example.
• The China-led Asian Infrastructure Investment Bank has increased its membership to 100 countries.
• China is now the second-biggest financial contributor to the UN and has published more high-impact research papers than the U.S. did in 23 out of 30 “hot” research fields and enhancing its ‘soft power’ nearly to levels achieved by the U.S. earlier.

Policy evolution

• President Xi Jinping’s “community with shared future for mankind”, and Prime Minister Narendra Modi’s “climate justice” and asking how long India will be excluded from the UN Security Council, challenge the frame of the liberal order without providing specific alternatives.
• The steps to a $5 trillion economy, shift to indigenous capital military equipment, and a new Science, Technology and Innovation Policy underline impact, capacity and interests.
• ASEAN remains keen India re-join its trade pact to balance China. It is being recognised that India’s software development prowess could shape a sustainable post-industrial state different to the U.S. and China model.

Conclusion

• As in the historical past, Asia is big enough for both Asian giants to have complementary roles, share prosperity and be independent of each other and of the West.