The New Adjustment of China-India Relations against

Wang Lipeng Li Jiasheng

the Backdrop of the Indo-Pacific Strategy of the United States

Center for International Studies, Xian Jiaotong University

DOI: 10.19422/j.cnki.cn10-1398/d.2019.04.010

Since the beginning of 2018 when Trump Administration initiated a trade war against China, the strategic rivalry between China and the US has been intensifying. Against the backdrop of Trump Administrations economic and trade pressure on China and its Indo-Pacific Strategy aiming at containing China, to properly handle China-India relations will help ease the strategic pressure China faces and expand Chinese diplomatic space.

The transition of China-US

relations and the introduction

of the US Indo-Pacific Strategy

At present, economic globalization is undergoing profound changes, a new round of power competition and rule-making is gathering steam, and populism and economic nationalism is re-emerging, making the evolution of the world order confusing and complicated. Yet, its plain to see that the reform of international governance system has become an unstoppable trend.

First, global situation is always subject to the evolution of big power relations, and the on-going shift in China-US relations has become a key variable affecting global situation. The balance of strength between China and the US has changed significantly since the early aftermath of the cold war. In terms of economic aggregate, Chinas economy in 2018 surpassed 65% by that of the US and accounted for about 16% of the world in total. In terms of military strength, although China still lags behind the US considerably in the absolute term, China has made breakthroughs in the sea trials and service of large destroyers, nuclear submarines and home-made aircraft carriers. The US now considers China as the only big power that can possibly threaten its hegemony. As a hegemonic power, the basic rationale of Americas foreign strategy follows the pattern of making the best use of a whole set of economic and security systems to maintain and expand its hegemony. When a hegemon believes the existing system working against its status, it then seeks to change such; when it identifies the next challenger, it will spare no effort to forestall challenges. This explains why Trump Administration tends to withdraw from some international mechanisms as well as launching a trade war against China.

Second, the changing world will increasingly be subject to the collision and confrontation of the two orders that China and the US advocates respectively. Since the 2008 financial crisis, the world situation has changed markedly, making the US believe that the established world order cannot continue to safeguard its hegemony and thus seek unilateral change instead. Especially during Trump Administration, in order to realize “making the US great again" and “America first” policy objectives, Trump on the one hand requires traditional allies to shoulder more international responsibility, on the other hand pursues the so-called “fair and mutually beneficial” trade by renegotiating the North American free trade agreement and launching a “trade war” against China. He establishes China as a strategic rival, aims for absolute security by relying on allies and partners, and hopes to squeeze his rivals survival and development space by maneuvering economic rules to the US advantage.

Unlike the US, China has always pursued a strategy of peaceful development, and its security and foreign policies have provided new possibilities for the development of world order. In the field of security, China has formulated a national defense strategy commensurate with the level of its economic development and actively promoted the modernization of national defense military equipment. However, Chinas military development is not for external expansion, but to maintain peace and security of itself and the region. The white paper on Chinas National Defense Strategy for a New Era released in July 2019 clearly states that China will unswervingly pursue a national defense policy that is defensive in nature and will never seek hegemony, expansion or sphere of influence. At global, regional and bilateral levels, China has always upheld the UN-based international order, advocated a regional security concept with common, comprehensive, cooperative and sustainable security at its core, and a new type of international relations based on partnership. In the economic field, China has not only achieved leapfrog development since Reform and Opening up, but also actively pushed for common development with other countries in the world. At present, the Belt and Road international cooperation, initiated by China and with over 150 countries and international organizations on board by signing Belt and Road cooperation agreements with China, has become an important platform to address the imbalanced international development.

Third, in the context of the shifting power balance between China and the US and the transformation of the world order, the Trump Administration launched the Indo-Pacific Strategy in order to maintain hegemony and vested interests. This is not fundamentally different from the Obama administrations Asia-Pacific Rebalance Strategy, as both are about containing Chinas rise. On June 1, 2019, the US Department of Defense officially released the Indo-Pacific Strategy report, explained by the then Secretary of Defense Patrick Shanahan at the Shangri-la Dialogue in Singapore. The report identifies four principles that the US believes in: respect for the sovereignty and independence of all nations; peaceful settlement of disputes; free, fair and reciprocal trade based on open investment, transparent agreements and connectivity; adherence to international rules and norms including freedom of navigation and freedom of overflight. Moreover, China, Russia, the DPRK and other transnational threats are openly pointed as challenges to the Indo-Pacific region in the report. To meet these threats or challenges, the US will continue to strengthen and expand alliances and partnerships, and integrate new and modern regional alliances network. The report suggests that the US Indo-Pacific Strategy has been upgraded to a global strategy that comprehensively targets at China, Russia, the DPRK and other regional security threats.

With the narrowing strength gap between China and the US and the advance of the Indo-Pacific Strategy of the US, the regional order will change before the global order does. The most likely change is that many small and medium-sized countries that once “turn to the US for security protection, and to China for economic development” may take side, leading to the reorganization of regional economic and security landscape. For China and the US, major or medium-sized regional countries like Japan, the ROK, Australia and India will be the key to their contention. Among them only India is not a formal ally of the US. Therefore, Indias take on the Indo-Pacific Strategy and the situation of China-India relations will become a key variable affecting the US Indo-Pacific Strategy.

Indias take on the Indo-Pacific Strategy

India accepts Americas Indo-Pacific Strategy on such basic principles as maintaining Indo-Pacific regional freedom and openness, respect for state sovereignty and independence, but emphasizes more on the centrality of the ASEAN in the Indo-Pacific Region. It tries to put in a harmony the US Indo-Pacific strategy and its Act East strategy to expand its economic and strategic interests in Southeast Asia.

1. India puts more weight on the Indian Ocean and Southeast Asia

From a historical point of view, India has put more weight on its land security. Even when it later has developed its maritime strategy, it takes the Indian Ocean as the area of its primary interest area and the Pacific the secondary. Admiral Nirmal Verma, chief of the Indian navy, said in 2012 that “at the moment, the Pacific and the South China Sea are the focus of international security, but in terms of Indias deployment, they are not the cards we want to play. Our primary interest concerns should extend from the Persian Gulf to the Strait of Malacca, and south to the Cape of Good Hope, and we should now do more in this region”. Indias cautious welcome to the Indo-Pacific Strategy is more out of the need of its Act East strategy, which is to draw closer economic and security ties with and expand its strategic sway to Southeast Asian countries, and to thus restrict Chinas influence in South Asia. Therefore, India has utilized and redefined the Indo-Pacific Strategy based on its own strategic needs.

2. India focuses on strategic autonomy

India welcomes the Indo-Pacific Strategy, but often hesitates to act on it out of its focus on its own strategic autonomy. In January 2015, the then US President Barack Obama visited India and jointly issued with India the Joint Strategic Vision for the Asia-Pacific and Indian Ocean Region, stressing the importance of maritime security and freedom of navigation. But India has never conducted joint patrols with the US in the South China Sea. In November 2017, the US, Japan, India and Australia held their first director-level dialogue, after which the four countries issued their respective declaration, instead of a joint one. By comparison, Indias version of the declaration can be found obviously different, as it made no mention of “rules-based order”, “freedom of navigation and maritime safety”, “international law” and their likes, nor promised to continue to deepen security dialogue among the four.

For now, India is unlikely to build a conventional alliance with the US to deal with security threats, despite the relatively elevated level of US-India relations. In February 2012, India pointed out in the Non-alignment 2.0: Indias Foreign Strategy in the 21st Century that, non-alignment is the basic principle that will guide Indias foreign strategy in the next 10 years, the core concept of which is strategic autonomy, namely India enjoys the maximum level of autonomy in handling relations with the world; the core objective of which is to ensure that India defines its national interests not based on ideology or any other purpose, but on the judgment that India can have maximum autonomy to achieve its development goals, promote national development and build a fair and just world order.

3. India pays attention to great power balance

India doesnt see the Indo-Pacific Strategy as an exclusive club for antagonizing certain countries, but will continue to strike a balance among China and Russia and the US and Japan. Despite a new wave of developments in India-US relations since Modis BJP government came to power, the possibility of an India-US alliance remains remote. This is mainly because India has no need to take sides now, since the current international situation is far from as grim as that of the cold war; judging from his first term in office, Modi is extremely adept at charging from both sides to secure greater gains while maintaining strategic autonomy. Since taking office in May 2014, Modi has visited the US six times and met with Obama and Trump several times. But at the same time, India and Russia still maintain close military cooperation, such as the signing of a $5.43 billion purchase agreement for S-400 missile defense system during Russian President Vladimir Putins visit to India in October 2018. In June 2017, India officially joined the Shanghai Cooperation Organization. At the G20 Buenos Aires summit in December 2018 and the G20 Osaka summit in June 2019, leaders of China, Russia and India held informal meetings. Modi pointed out at the Shangri-la Dialogue in Singapore in June 2018 that, the Indo-Pacific region is full of opportunities and challenges, and the ASEAN sits at the core of the Indo-Pacific region; India will not see the Indo-Pacific as a strategic or an exclusive club, nor as a means to antagonize certain countries, nor allow certain group to pursue dominance. This was a far cry from what the US has always expected, highlighting Indias intention to distance itself from the Indo-Pacific Strategy and the four-side dialogue. India sees cooperation with other countries as a means to maintain its strategic autonomy, not an end. To achieve that, India seeks cautious balance in its cooperation with Indo-Pacific countries.

The trend of China-India relations against the backdrop of

the Indo-Pacific Strategy

Because India pays more attention to its strategic investment in the Indian Ocean and Southeast Asia, and strategic autonomy and power balance its foreign policy, it will continue to tread a balanced line between China and the US according to its own interests in the future to come, and expand its economic and strategic interests in the region. For China, a proper handling of China-India relations will be the key to ease the pressure from Indo-Pacific Strategy.

On April 27, 2018, Chinese President Xi Jinping and Indian Prime Minister Modi held their first informal meeting in Wuhan. During their walk along East Lake, the two leaders had strategic communications on the major changes in the world that are unseen in a century and exchanged in-depth views on the overall, long-term and strategic issues for the future development of China-India relations. In May 2019, the BJP won the general election and Modi was re-elected as Indian Prime Minister. Although the bilateral differences between China and India cannot be completely resolved in the short term, China-India relations will keep moving forward in the process of mutual adjustment, facilitated by leaders of the two countries.

First, with the advance of US Indo-Pacific Strategy, the India-US relations will continue to deepen while China-India relations also have room for further improvement as India strives to maintain its strategic autonomy. With the BRICS Summit in Xiamen in September 2017 and the informal meeting in Wuhan in April 2018, China-India relations have risen from the bottom and reached a new starting point. During this period, not only the China-Russia-India Foreign Minister meeting mechanism has played a stabilizing role, but also an informal meeting mechanism has been established between leaders of China and India, which is beneficial for difference management and steady and sound development of bilateral relations. Since Donglang confrontation, the two countries leaders have met on bilateral and multilateral occasions for 7 times; the Ministry of Foreign Affairs, Commerce and Defense, and Law Enforcement agencies from both sides have held ministerial meeting; the two countries have successively held border affairs consultation and coordination meeting, business meeting, arms control negotiation, strategic dialogue, maritime cooperation dialogue, meeting of special representatives on border issue, high level meeting on law enforcement and security and high-level meeting on cultural exchange, with the last two being the first of its kind.

Second, in the context of the US advancing its Indo-Pacific Strategy, India adopts major power balance diplomacy, thus expanding space for cooperation between China and India in global economic governance and regional security. President Xi Jinping pointed out during his meeting with Prime Minister Modi that “as important representatives of developing countries and emerging market economies, China and India should jointly uphold free trade and multilateralism, and safeguard the legitimate right of developing countries to development.” In June 2019, President Trump announced the termination of Indias GSP status as a developing country. And immediately before the US Secretary of State Mike Pompeos visit to India, Indian government also announced retaliatory tariffs on 29 kinds of US imports. At the regional security level, as the Iranian nuclear issue continues to ferment, the US has tightened sanctions on Iran, whereas China and India have important common interests in maintaining security in the Persian Gulf region and stability of oil market. In addition, as India is a full member of the Shanghai Cooperation Organization, China and India have great space for cooperation in maintaining security in Indo-Pacific region, combating terrorism and strengthening maritime cooperation.

Third, the Trump Administrations “America first” policy has brought many uncertainties to the current world situation. As on major task of Modis new term of office is to promote economic growth, China-India economic and trade relations will continue to develop steadily and cultural exchanges will become more frequent. Even in 2017 when confrontation happened between the two, the bilateral trade volume reached a record high of US$84.4 billion. China remains to be Indias largest trading partner, with the bilateral trade volume continuing to grow in 2018 and reaching US$95.5 billion, which is expected to exceed US$100 billion in 2019. Investment cooperation is also on the rise. Chinese companies have invested accumulatively over US$8 billion in India, and Indian companies' investment in China has grown at an average annual rate of 18.5% in the past three years. India will focus on cooperation on industrial park projects and welcomes Chinese enterprises to invest in India and expand their market share in India. The two sides support multilateral trading regime, have strengthened communication and coordination under multilateral and regional trade frameworks such as the WTO and the Regional Comprehensive Economic Partnership (RCEP), and maintained and promoted the development of regional and global trade. People-to-people and cultural exchanges between China and India have improved in the past two years. Currently, there are 14 pairs of sister provinces and cities and over one million personnel visits between the two countries, with over 20,000 Indian students studying in China. Considering the fact that both countries have a population of more than 1 billion, there is still huge room for cultural and people-to-people exchanges.

Finally, as the existing bilateral differences between China and India cannot be completely resolved in the short term, the Indo-Pacific Strategy of the US may lead to regional tension, and minor frictions between China and India will still be inevitable. Most of the differences between China and India, such as border dispute, Dalai Lamas exile in India, and the close China-Pakistan relations, are carried over from history and prone to erupt when international situation becomes tense. China and India need to clear up doubts and deepen trust, manage differences and ensure that bilateral differences shall not affect the overall development and stability of bilateral relations. Differences will continue to exist for the foreseeable future, but the exchange mechanisms already established between the two countries at various levels can provide a platform for deepening cooperation. Compared with the Indo-Pacific Strategy, it is the building of a community with a shared future for humanity that will help safeguard world peace and development. China and India working together will not only help each others development, but also contribute to peace, stability and prosperity of Asia and the world at large.