international analysis and commentary

Sino-Indian relations after Wen Jiabao’s state visit

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When Beijing wishes to show a benign face to a country, it dispatchs Premier Wen Jiabao. When what had originally been touted earlier in the year as a President Hu Jintao visit to India metamorphosed into a Wen trip, it was understood that China wanted to soften a relationship that had become increasingly prickly and contentious.

The two Asian giants had seen relations deteriorate over a number of issues over the past two years. China had escalated rhetoric over territorial disputes in the eastern Himalaya border areas. India was infuriated at Chinese tariff barriers to manufactured goods and non-tariff ones regarding services. There were concerns about China building dams in the Tibetan region that would affect the flow of water in India.

Finally, and most important in New Delhi’s eyes, was a Chinese policy shift on Kashmir, the source of a long-standing territorial dispute between India and Pakistan. For decades Beijing had simply said Kashmir was a matter between India and Pakistan. But starting early last year it began stapling visas for Indian passport holders from Kashmir and otherwise symbolically questioning India’s sovereignty over its portion of Kashmir.    

India’s response to all this was hard-nosed.

It increased its military presence along the border, announcing the induction of two new divisions into its army. It severed high-level military exchanges and openly sought closer military relations with other countries concerned about China’s foreign policy assertiveness. More than 25,000 Chinese businessmen and workers were expelled from India last year and New Delhi blocked billions of dollars of imports by well-known Chinese telecom and power equipment companies like Huawei and Dongfeng. Perhaps most potently, India signaled that if China was prepared to play around with India’s “core interest” of Kashmir, India could do the same regarding China’s “core interests” of Tibet and Taiwan.

There had been some debate in New Delhi as to how Beijing would respond to all this. Some parts of Indian officialdom worried India was bearding the dragon in its lair – at a time when the dragon was at the height of its belligerence. The decision to send Wen confirmed that China had decided it was better off trying to soothe the feathers it had ruffled along it southern flank.  

This is being seen as relatively unusual. In recent times Beijing has shown little interest in trying to reassure any other country about its rising power trajectory and global influence. With most countries, it has preferred to wag fingers, if not diplomatically body slam them, to warn them they were now dealing with the world’s number two power. In India’s case, Beijing was more worried about repairing bridges. The Chinese Ambassador to India, Zhang Yan, admitted before Wen’s arrival that relations with India were “fragile” and needed attention. 

Why did China decide to soft-pedal?

India and most of China’s neighbors believe that Beijing is flexing its muscles because it believes the US’s muscles are wasting away. This, more than anything else, lies behind China’s increasing assertiveness. Indian officials say China has a far more extreme view of US decline than they do. Thus Beijing is pushing the envelope with South Korea, Japan and Vietnam. The message being sent across the region: deal with Beijing first, Washington second or not at all.

This year Beijing believes it has bitten off more than it can chew – and settling with India is a way to make life more manageable.

One, India is not seen as a headache. Beijing and Shanghai foreign policy think tanks say that China’s disputes with India are relatively mild in comparison with the degree of friction it has with, say, Japan. India shows “maturity” in its relations, its leaders like to say, presumably a reference to India’s relatively measured diplomatic statements regarding China. Prime Minister Manmohan Singh has repeatedly stated his view that Asia is big enough for the aspirations of both countries.  

Two, both Chinese analysts and Indian officials say Beijing wants to improve ties with India to compensate for the friction that has been building up in its relations with South Korea over Pyongyang’s military belligerence, with Vietnam over island disputes and with the US and Japan over the yuan, naval rivalry and pretty much everything under the sun. Shi Yinhong, Director of the Centre for American Relations at the Renmin University, was quoted in the Hindustan Times saying, “China is facing an overall difficult strategic situation in Asia. These difficulties with the US and its neighbors are pushing China to do something it should already have done [with India].’’

However, Beijing does have two long-term concerns in the back of its mind.

One is a long-standing concern that the more India feels threatened by China, the closer it will move to the US. India, a chaotic democracy with an economy one-fifth the size of China’s, is not seen as a rival by Beijing. However, in alliance with the US and even Japan, India becomes a greater strategic concern. 

The other is a new phenomenon: anti-Indian sentiment among China’s online community. The stridency of the Indian media against China over the past two years has fed into an anti-Indian sentiment among the online community.

Because its mainstream media is so tightly controlled, say Chinese journalists privately, the ruling Chinese Communist Party sees bloggers and their online ilk as a window on Chinese popular opinion. There is some evidence that Beijing has sought to manipulate this online sentiment to divert domestic attention away from internal social problems.

However, this is a tiger the party may find hard to ride. The party is pleased if the Chinese public is incensed about Japan – this is seen to add to the party’s legitimacy. It sees no political or strategic gain in arousing the same sentiments against India, a country mainly known among Chinese as the source of Buddhism. Yet online jingoism was taking place as a backlash to the Indian media’s savage criticism of China over the past two years. Wen alluded to this during his visit, complaining about Indian journalism and the damage it was doing to relations with India.   

The future of Sino-Indian relations will remain difficult because of what Prime Minister Singh called “the information gap” between the two countries.

Beijing remains largely baffled by India as a whole. Its officials cannot understand why New Delhi doesn’t control its media more tightly. They are amazed at how a country as seemingly disorganized as India is able to maintain such a high economic growth rate, according to Indian officials, but as of yet this is seen as a curiosity rather than a matter of concern. Asia-Pacific and Pakistan are a quantum jump higher in importance for China than India. Sources say Beijing seems to have been genuinely surprised at India’s anger over the Kashmir issue. But Pakistan is too important to China for the Wen visit to do more than see some official waffling on this point. Chinese civilian analysts in the run up to the visit were clear: Beijing wants closer ties with India but only so far as this does not upset Islamabad. Wen made it a point to fly to Pakistan right after he left India. China is one of the few major countries that refuses to “de-hyphenate” India from Pakistan.

The Sino-Indian economic relationship is only a marginal influence in the bilateral relationship. The $16 billion trade surplus China runs with India is a drop in its trade bucket. Chinese cumulative foreign direct investment in India is barely $250 million. In any case, Beijing is happy to trade with its worst political enemies like Taiwan and wage ferocious political battles with its biggest economic investors like Japan.

What matters in Beijing are strategic concerns and, increasingly, their influence on Chinese domestic politics. For now, Beijing prefers to try and ease the strategic and security strains it has in its relations with India. New Delhi is leveraging this as much as possible, pushing for trade concessions, some sort of resolution on Kashmir, stability on the border, and a dialogue on issues like riverine water and United Nations reform.

Wen’s visit to India was about trying to enforce a truce between the two largest Asian countries. It was noticeable how little was actually resolved between the two countries: Kashmir, trade and so on were effectively put up for future discussions. India pointedly declined to iterate its traditional support for a one China policy in the joint statement. It is demanding a similar “one India” line from China. China, in deference to Pakistan, refused to allow a line on the Mumbai 26/11 terror attack. What there was agreement on was that these were niggling concerns and both countries have other priorities besides getting into conflict with each other.