India-China relations may be a reset or recast in a new direction in the months to come if the think-tank circles in Delhi are to be believed. The chatter around the capital is abuzz about this possibility and some of the recent indications do point in that direction. Prime Minister Narendra Modi is going to visit China for the summit meeting of the Shanghai Cooperation Organization (SCO) and may even have a quick bilateral meeting with President Xi Jinping before that. While this reset is possible, a thought on why it may be required and how it may work out, is useful.
One cursory look at the recent history of India-China relations would attest to the fact that it is stuck in a recurring pattern of ups and downs. There were visits and agreements and promises and wish-lists for sure. However, there was no fundamental shifting of the premise of distrust that was only building up. From the Indian perspective it was the China-Pakistan friendship and China’s denial in acknowledging India as a major power and on the other hand, India’s recognition by initiatives like the Indo-US nuclear deal and the subsequent discussions on the NSG membership was not liked by China. Moreover, the various track 1.5 and track 2 meetings between representatives and academics from the two countries did have a jaded look; one got the feeling that the two sides did talk at each other rather than talk to each other. There was and is no easy way for fixing the trade deficit as investment promises have not materialised and market-access questions remain unanswered. However, the delays were also not unintentional. Both sides do have substantial disagreements on priorities. If one takes example of railways cooperation for example, India is keen on upgrading existing networks and China wants a stake in the high-speed railway pie which is obviously more lucrative.
The reason for all of this is that the India-China relations are not substantive yet and are still stuck in the old paradigm. This is not to say that there are not enough leaders with foresight and optimism on the two sides but the fact remains that we have not reached the level of complex interdependence that brings an intrinsic logic to the process of dialogues and trade. Unless the complex bit is coupled with interdependence, that logic is unlikely to be driven home.
What the leaders might need at this moment is this paradigm shifting agreement that could initiate the process once again. The last time India and China had such an agreement was in 1993. The Agreement on the Maintenance of Peace and Tranquility along the Line of Actual Control in the India-China Border Areas, signed on 7 September 1993, is the foundational agreement between India and China that has driven all the successive confidence building initiatives. A similar initiative is needed now simply because the circumstances have changed with the rise of China and growth of India.
At the same time, one can also see why 2018 looks more like 1992-93 and imagine how a new agreement is possible and helpful for both the countries and its leaders. In 1992 China was still recovering from the 1989 Tiananmen Square protests and the massacre/murders that followed. Domestically, the party conservatives were against market reforms. The economic debate was still not settled yet until the famous Deng Xiaoping's southern tour of 1992. China’s economy was at its slowest in reform era. Various other countries, including most of its democratic neighbours had criticised its hard stand on Tiananmen and it was also staring at the unipolar moment as the only major communist country after the collapse of the Soviet Union. It needed a way out to normalize its relations with the external world and India also seized the moment even as India itself was taking baby steps in the new liberal world.
In 2018 a similar picture exists. China’s economy is projected to grow at 6.5 per cent. This is a managed slowdown to avoid overheating. However, they also need it to consistently fire at this rate in order to avoid the middle income trap. At the same time, Xi’s domestic reforms are not going anywhere. Xi the reform crusader of 2012 has been replaced by one who is unable to get his reforms wish-list into action as provinces and state-owned enterprise ignore his warnings. His statements after the 19th Party congress read more like tasks unfinished rather than glories achieved. Xi being declared “core” is a sign of political weakness in the Chinese Communist Party (CCP), if not his own. Incidentally, the last time this phrase was used was in the aftermath of 1989 Tiananmen when the party was staring at a debacle. So that tells something about the state of affairs in the CCP. Xi needs more access to the fastest growing economy in the world as Trump threatens trade war. It is no coincidence that Xi is championing globalisation since the Trump election. His distrust with his other neighbours, except for Russia, is also at the highest level as countries like Japan may push for larger militarization, fearing the withdrawal of the American security umbrella. That is why China has expedited its dialogue with Japan. With a slowing economy, the Chinese army has to do with lesser budget too and China needs to reduce tensions with the country with which it has last disputed land border.
A similar picture may be painted about Prime Minister Modi vis-à-vis his reforms rhetoric and failure to deliver. India’s neighbourhood policy is not yielding results, Pakistan remains unmoved on the issue of cross-border terror and domestically, job-growth picture remains grim. India does need an investment boost and China has the purse for it. China may help Modi establish his legacy in a better way.
China is not entirely comfortable with India’s rise as it fears a democratic encirclement in the Indo-Pacific. However, keen Chinese leaders and scholar would have also noticed that India was the only country out of the QUAD dialogue partners to have mentioned seeking an inclusive order in the Indo-Pacific. And that enough is a signal of India’s openness to dialogue. 2018 provides a similar opportunity like 1993 to break out of the pattern and recast the relations. One has to wait and see if the leaders do cross that line to bring out a paradigm shifting framework in the summer of 2018.
The author is an Assistant Professor at Jindal Global University
Disclaimer: The views expressed in this article are solely those of the author and do not necessarily represent the views of the publication.