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Subject: Bilateral Relations

1. Major World Events
2. India’s Interests in neighbourhood
3. Effects of our Policies

  • Making sense of moves of China

    The role played by intelligence and emphasis on Summit diplomacy in relation with China are the two issues discussed in this article. So, what went wrong in Galwan incident from the intelligence point of view? And what are the perils of Summit diplomacy? Read to know...

    Galwan-New and fractious phase

    • What occurred in the Galwan heights on June 15, must not be viewed as an aberration.
    • It would be more judicious to view it as signifying a new and fractious phase in China-India relations.
    • Even if the situation reverts to what existed in mid-April India-China relations appear set to witness a “new and different normal”.
    • China’s reaction has been consistent — India must move out of Galwan.
    • This is something that India cannot ignore any longer.
    • Galwan incident cannot be viewed as a mere replay of what took place in Depsang (2013), Chumar (2014) and Doklam (2017).
    • This is a new and different situation and India must not shrink from addressing the core issue that relations between India and China are in a perilous state.

    Close and careful analysis of China’s claim is necessary

    • China’s assertion of its claim to the whole of the Galwan Valley needs close and careful analysis for following reasons-
    • 1) Point 14 gives China a virtual stranglehold over the newly completed, and strategically significant, Darbuk-Shyok-Daulat Beg Oldie Road, which leads on to the Karakoram Pass.
    • 2) The strategic implications for India of China’s insistence on keeping the whole of the Galwan Valley are serious as it fundamentally changes the status quo.
    • 3) By laying claim to the Galwan Valley, China has reopened some of the issues left over from the 1962 conflict.
    • And this demonstrates that it is willing to embark on a new confrontation.

    LAC and claim line of China

    • Ambiguity has existed regarding the Line of Actual Control (LAC) in this sector.
    • The Chinese “claim line” is that of November 1959.
    • For India the LAC is that of September 1962.
    • In recent years, both sides had refrained from reopening the issue, but China has never given up its claims.
    • By its unilateral declaration now, China is seeking to settle the matter in its favour. India needs to measure up to this challenge.

    Importance of Aksai Chin

    • The importance of Aksai Chin for China has greatly increased of late, as it provides direct connectivity between two of the most troubled regions of China, viz., Xinjiang and Tibet.
    • This does not seem to have been adequately factored in our calculations.
    • While Indian policymakers saw the reclassification of Ladakh as purely an internal matter.
    • They overlooked the fact that for China’s military planners it posited a threat to China’s peace and tranquillity.

    Intelligence capabilities

    • Admittedly, the timing and nature of China’s actions should have aroused keen interest in intelligence circles about China’s strategic calculations.
    • The Chinese build-up in the Galwan Valley, Pangong Tso and Hotsprings-Gogra did not require any great intelligence effort, since there was little attempt at concealment by the Chinese.
    • India also possesses high-quality imagery intelligence (IMINT) and signals intelligence (SIGINT) capabilities.
    • These capabilities are distributed between the National Technical Research Organisation, the Directorate of Signals Intelligence of the Ministry of Defence and other agencies.
    • Which made it possible to track Chinese movement.
    • Where intelligence can be faulted is with regard to inadequate appreciation of what the build-up meant, and what it portended for India.
    • This is indicative of a weakness in interpretation and analysis of the intelligence available.
    • And also of inability to provide a coherent assessment of China’s real intentions.
    • Intelligence assessment of China’s intentions, clearly fell short of what was required.
    • While India’s technological capabilities for intelligence collection have vastly increased in recent years, the capacity for interpretation and analysis has not kept pace with this.
    • Advances in technology, specially Artificial Intelligence have, across the world, greatly augmented efforts at intelligence analysis.

    Who has the responsibility of intelligence assessment and analysis

    • The principal responsibility for intelligence assessment and analysis concerning China, rests with the National Security Council Secretariat (NSCS) and India’s external intelligence agency, the Research and Analysis Wing (R&AW).
    • To a lesser extent, it remains with the Defence Intelligence Agency.
    • The decision of the NSCS to dismantle the Joint Intelligence Committee has contributed to a weakening of the intelligence assessment system.
    • In the case of the R&AW, lack of domain expertise, and an inadequacy of China specialists might also have been a contributory factor.

    Adverse impact of certain policy measures

    •  The preference given recently to Summit diplomacy over traditional foreign policy making structures proved to be a severe handicap.
    • Summit diplomacy cannot be a substitute for carefully structured foreign office policy making.
    • Currently, India’s Summit diplomacy has tended to marginalise the External Affairs Ministry with regard to policy making, and we are probably paying a price for it.
    • As it is, the Ministry of External Affairs’s (MEA) stock of China experts seems to be dwindling.
    • And MEA’s general tilt towards the U.S. in most matters, has resulted in an imbalance in the way the MEA perceives problems and situations.

    Conclusion

    Along with the other factors, India should also focus on intelligence analysis and interpretation and make sure there are enough China experts in the MEA.

  • Will banning Chinese imports hurt India’s exports?

    • Following the recent clashes with Chinese troops in Ladakh, there has been a growing clamour in the country to boycott goods from the neighbouring country.
    • However, the development has caused an alarm among various industry bodies that are concerned about the adverse impact in the event of a blanket ban on exports in several sectors.

    Practice question for mains:

    Q.“Curbing Chinese imports to India will do more harm than any good”. Analyse.

    How dependent is India on Chinese imports?

    China accounts for a sizable portion of India’s top imports, especially where intermediate products or components and raw materials are concerned.  Electronics: The neighbouring country also accounts for 45 per cent of India’s total electronics imports.

    • A third of machinery and almost two-fifths of organic chemicals that India purchases from the world come from China.
    • Automotive parts and fertilizers are other items where China’s share in India’s import is more than 25 per cent.
    • Several of these products are used by Indian manufacturers in the production of finished goods, thus thoroughly integrating China in India’s manufacturing supply chain.
    • For instance India sources close to 90 per cent of certain mobile phone parts from China.

    India’s export to China

    • Even as an export market, China is a major partner for India. At $15.5 billion, it is the third-largest destination for Indian shipments.
    • At the same time, India only accounts for a little over two per cent of China’s total exports, according to the Federation of Indian Export Organisation (FIEO).

    How could a blanket ban on Chinese imports hit India’s exports?

    • Across sectors from pharmaceuticals to telecommunications and automobiles, industry associations have been speaking up against a complete boycott of Chinese imports.
    • A “blanket ban” may not be feasible because of India’s dependence on the country for crucial raw materials.
    • Banning the imports of raw materials from China without which products over here cannot be manufactured will make things difficult.
    • If China takes any retaliatory measures, it would impact India more negatively.

    Most crucial: The Pharma sector could be worst hit

    • For instance, of the nearly $3.6 billion worth of ingredients that Indian drug-makers import to manufacture several essential medicines, China catered to around 68 per cent.
    • India is considered one of the largest pharma industries in the world and accounts for a considerable portion of imports of finished formulations by other large economies like the US.
    • While pharma consignments from China have unofficially been stopped at ports in India, and are expected to be cleared after thorough checks,
    • A ban could create shortages of medicines both for India’s domestic and export markets.

    Are there any alternatives in this situation?

    • The decision to boycott non-essential products made in China can be left to the individuals.
    • However, trade-related measures like raising duties on cheaper raw materials imported from China would be better than an outright embargo.
    • This would still allow access to crucial ingredients in the short-term while India looks to build self-reliance or maybe switch to alternate trade partners.
    • It would be better to maybe raise duties on cheaper raw materials instead of going in for a blanket ban.

    Alternatives to Chinese imports

    • Countries like the US, Vietnam, Japan, Mexico and certain European countries could be tapped as alternate import sources for some critical electronic, vehicular and pharmaceutical components as well.
    • It is likely that the costs of the raw materials from these alternate sources will be higher and may get passed on to consumers if the manufacturers cannot absorb them.
    • India will need to look into the totality of its trade with China and Hong Kong and implement certain short- to long-term plans to reduce its dependence on them, according to FIEO.

    Way forward

    • The government’s “Atmanirbhar” focus is expected to help ministries handhold industries where self-reliance needs to be built.
    • Some measures, like the decision to push bulk drug parks in India, have to be executed.
    • While an increase in tariff can be one way to achieve import substitution, the more effective strategy would be to provide an ecosystem that addresses the cost disability of Indian manufacturing leading to such imports.

  • Why China is being aggressive along the LAC

    Despite India’s careful approach which involved not upsetting China’s domestic and geopolitical sensitivities, Galwan happened. What explains the Chinese aggression? There could be many factors. This article delves into these factors. 

    Not upsetting China

    • The India government has been very careful not to upset China’s domestic and geopolitical sensitivities.
    • Barring occasional joint statements issued with leaders from the U.S. and Asia-Pacific countries, reasserting India’s commitment to “freedom of navigation”  India has stayed away from criticising China on controversial topics,
    • On issues such as “de-radicalisation” camps in Xinjiang, crackdown on protests in Hong Kong, or disputes with Taiwan India India didn’t criticise China.

    Yet China chose to increase tensions along the LAC. Why?

    1. China wants to reorient global order

    • Unlike the Soviet Union of the 1940s China is not an ideological state that intends to export communism to other countries.
    • When it was rising, China had adopted different tactical positions — “hide your capacity and bide your time”, “peaceful rise” or “peaceful development”.
    • That era is over.
    • Under President Xi Jinping, the Chinese think they have arrived.
    • With the global economy in the doldrums, globalisation in a crisis and the U.S. under an isolationist President hostile towards China Beijing believes the global order is at a breaking point.
    • It is fighting back through what game theorists call “salami tactics” — where a dominant power attempts to establish its hegemony piece by piece.
    • India is one slice in this salami slice strategy.

    2. India: An ally-in-progress of the US

    • It sees India as an ally-in-progress of the U.S.
    •  So, China actions are a result of the strategic loss [India] that has already happened.
    • If India is what many in the West call the “counterweight” to China’s rise, Beijing’s definite message is that it is not deterred by the counterweight.
    • This is a message not just to India, but to a host of China’s rivals that are teaming up and eager to recruit India to the club.

    Factors that could explain China’s move

    Global factors

    • Europe has been devastated by the virus.
    • The U.S. is battling in an election year the COVID-19 outbreak.
    • It is also battling the deepest economic meltdown since the Great Depression.
    • Its global leadership is unravelling fast.

    Regional and local factors

    • The Indian economy was in trouble even before COVID-19 struck the country, slowing down its rise.
    • Social upheaval over the Citizenship (Amendment) Act (CAA), 2019, and the National Register of Citizens had weakened the Indian polity.
    • India’s traditional clout in its neighbourhood was slipping.
    • Tensions with Pakistan have been high keeping the troops occupied in the border areas.
    • Nepal raised boundary issues with India.
    • Sri Lanka is diversifying its foreign policy.and China is making deep inroads into that region.
    • Bangladesh was deeply miffed with the CAA.
    • Even in Afghanistan, where Pakistan, China, Russia and the U.S. are involved in the transition process, India is out.
    •  A confluence of all these factors, which point to a decline in the country’s smart power, allowed China to make aggressive moves on the LAC.

    Consider the question “At the time when relations reached a nadir with China, India needs to focus on its neighbourhood and mend win back the friendly neighbours. Comment”

    Conclusion

    What India needs is a national security strategy that’s decoupled from the compulsions of domestic politics and anchored in neighbourhood realism. It should stand up to China’s bullying on the border now, with a long-term focus on enhancing capacities and winning back its friendly neighbours. There are no quick fixes this time.

  • India will have to manage its conflict on its own

    The Galwan incident marked the new low in the India-China relations. Following it, there have been talks of a closer alliance with the U.S. This article analyses the utility, potential and the limitations of this approach.

    Exploring the strategic options

    • As the border stand-off with China deepens, India will have to think of all possible strategic options that gives it leverage.
    • One of the options is new arrangements with other powers.
    • This is the right moment to mobilise international opinion on China.
    • But can this be translated into concerted global action to exert real pressure on China?

    Things India should consider while forming alliance with the US

    • International relations are formed in the context of a country’s development paradigm.
    • India’s primary aim should be to preserve the maximum space for its development model, if it can actually formulate one.
    • India is not unique in this respect.
    •  The question for India is not just whether the US has a stake in India’s development, which it might.
    • But it is, rather, to ask whether India’s development needs will fit into the emerging US development paradigm.
    • Will the very same political economy forces that create a disengagement with China also come in the way of a closer relationship with India?
    • Some sections of American big business might favour India.
    • But the underlying political economy dynamics in the US are less favourable.
    • Will the US give India the room it needs on trade, intellectual property, regulation, agriculture, labour mobility, the very areas where freedom is vital for India’s economy?
    • Will a US hell-bent on bringing manufacturing jobs back to the US, easily gel with an “atma nirbhar” Bharat?
    • To see what is at stake, we just need to look how the development paradigm is driving tensions on trade, taxation and regulatory issues between the US and EU.

    Why India avoided alignment with the US in the past

    •  But the drivers of this have often been legitimate differences over development, including climate change.
    • It has also been that, at various points, that alignment was against India’s other strategic commitments.
    • India was wise to stay out of the war in Iraq, it was wise not to upset Russia.
    • It is wise not to throw its weight behind the US’s Iran policy.
    • There is more maturity in the US to understand India’s position.

    Global reluctance in collective action against China

    • It is an odd moment in global affairs, where there is recognition of a common challenge emanating from China.
    • But there is no global appetite to take concerted action.
    • An interesting example might be the global response to the BRI.
    • Many countries are struggling to meet their BRI debt obligations.
    • But it is difficult to see the rest of the international community helping all these countries to wean their regimes away from dependence on Chinese finance.
    • Similarly, there are now great concerns over frontier areas of conflict like cyber security and space.
    • It is difficult to imagine concerted global action to create rules in these area, partly because Great Powers like the US and Russia will always want to maintain their exceptionalism.

    Limitations of global alliance and public opinion in solving local conflicts

    • 1) The international community has not been very effective in neutralising
    •  exercised by some powers.
    • This is the tactic Pakistan has used.
    • 2) Don’t count on the fact that the world will support an Indian escalation beyond a point.
    • The efforts of the international community, in the final analysis, will be to try and throw cold water on the conflict.
    • No one has a serious stake in the fate of the terrain India and China are disputing.
    • At the end of the day, India has to manage China and Pakistan largely on its own.

    Conclusion

    Even as we deal with the military situation on the border, the test of India’s resolve will be its ability to return to some first principle thinking about its own power.

  • Three pronged strategy to deal with China

    The LAC has been exploited by China as leverage against India. And failure on our part to understand long-term strategic aims and objective of China makes the problem hard to solve. This article suggests a three-pronged approach to deal with China.

    Incomprehension of aims and objectives

    •  There is incomprehension among our decision-makers of the long-term strategic aims and objectives that underpin China’s belligerent conduct.
    • We have not devoted adequate intellectual capital, intelligence resources and political attention to acquisition of a clear insight into China and its motivations.
    • Even when intelligence is available, analysis and dissemination have fallen short.

    What China’s Defence White Papers suggest

    • These thematic public documents articulate China’s national security aims, objectives and vital interests and also address the “ends-ways-means” issues related to its armed forces.
    • The 11 DWPs issued so far are a model of clarity and vision, and provide many clues to current developments.
    • No Indian government since Independence has deemed it necessary to issue a defence white paper, order a defence review or publish a national security strategy.
    • Had we done so, it may have prepared us for the unexpected and brought order and alacrity to our crisis-response.

    China uses LAC as strategic leverage

    • In order to show India its place, China had administered it a “lesson” in 1962.
    • And it may, perhaps, be contemplating another one in 2020, with the objective of preventing the rise of a peer competitor.
    • For China, the line of actual control or LAC, representing an unsettled border, provides strategic leverage.
    • Leverage it can use to keep India on tenterhooks about its next move while repeatedly exposing the latter’s vulnerabilities.

    1993 Agreement didn’t benefit India

    • Our diplomats derive considerable satisfaction from the 1993 Border Peace & Tranquility Agreement.
    • This agreement, according to former foreign secretary, Shivshankar Menon, “…effectively delinked settlement of the boundary from the rest of the relationship”.
    • But by failing to use available leverage for 27 years, and not insisting on bilateral exchange of LAC maps, we have created a ticking time-bomb, with the trigger in China’s hands.
    • While “disengagement” may soon take place between troops in contact, it is most unlikely that the PLA will pull back or vacate any occupied position in Ladakh or elsewhere.
    • In which case, India needs to consider a three-pronged strategy.

    What should be India’s three-pronged strategy?

    1. Reinforce at ground level

    • At the ground-level, we need to visibly reinforce our positions, and move forward to the LAC all along.
    • We should enhance the operational-tempo of the three services as a measure of deterrence.
    • Indian warships should show heightened presence at the Indian Ocean choke-points.
    • Cyber emergency response teams country-wide should remain on high alert.
    • We should build-up stocks of weapons, ammunition and spares.
    • The Ministry of Defence should seize this opportunity to urgently launch some long-term “atma-nirbharta” schemes in defence-production.

    2. At strategic level: Modus vivendi

    • At the strategic level, the government should consider sustained process of engagement with China at the highest politico-diplomatic echelons.
    • The negotiations should seek multi-dimensional Sino-Indian modus-vivendi; encompassing the full gamut of bilateral issues like trade, territorial disputes, border-management and security.
    • Simultaneously, at the grand-strategic level, India should initiate a dialogue for the formation of an “Indo-Pacific Concord for Peace and Tranquility”.
    • This Concord should involve inviting four members of the Quad as well as Vietnam, Indonesia, Philippines and Malaysia.

    3. Political pragmatism

    • As a nation, we need to be pragmatic enough to realise that neither conquest nor re-conquest of territory is possible in the 21st century.
    • Parliament should, now, resolve to ask the government, “to establish stable, viable and peaceful national boundaries”.

    Consider the question “With changing relations with China, India needs to overhaul its strategy on the ground, strategic and political levels in dealing with China”

    Conclusion

    This three-pronged approach while comprehending the Chines objectives and goals can help India in dealing successfully with the challenge posed by China.

  • Future of relations with China

    This article calibrates the changes our future engagement with China will experience following the Galwan incident. The first casualty has been the trust between the two countries. And next could be strategic communications between the two countries. So, India’s response to the incident should be based on these changes.

    What explains China’s aggression

    • Hubris, internal insecurities in China, the COVID-19 pandemic and the complex and confused external environment explains it.
    • Challenge posed by India from the ideological, strategic and economic points of view can be the other factor.

    Violation of many agreements

    • China’s recent military actions in Ladakh clearly violate the signed agreements of 1993, 1996, 2005, etc on maintaining peace and tranquillity along the LAC.
    • These actions are in violation also of other signed agreements, including at the highest level.
    • It also contradict positions taken by Xi himself at the informal Wuhan and Chennai summits in 2018 and 2019.
    • In 2003, two countries signed a Declaration on Principles for Relations and Constructive Cooperation between our two countries.
    • The third principle states: “The two countries are not a threat to each other. Neither side shall use or threaten to use force against the other.”
    •  This was more than reiterated in the agreement signed in April 2005 on the Political Parameters and Guiding Principles for settlement of the India China boundary question.
    • . Article 1 states, inter alia: “Neither side shall use or threaten to use force against the other by any means.”

    Doklam and informal summits

    • .A qualitative change though occurred in Chinese perceptions after the Doklam face-off.
    • That necessitated the first informal summit at Wuhan in April 2018.
    • One important outcome of that summit was the agreement to continue to meet at the highest level and to enhance trust and strengthen strategic communication.
    • The second informal summit took place between Xi and Narendra Modi in Chennai in October 2019.
    • It was in the aftermath of the revocation of Article 370 by India and China’s unnecessary and unsuccessful attempt to raise the issue in the UN Security Council.
    • By then, many other developments — both internal and external — had added pressure on China.
    • At Chennai, the Chinese undoubtedly drew some red lines.

    Which red lines does China feel India has crossed

    • One fundamental red line is China’s long-held and strategic interest in parts of Jammu and Kashmir.
    • Jammu and Kashmir border Xinjiang and Tibet and allow connectivity between the two.
    • It is wrongly argued that it is Pakistan that is the issue in J&K.
    • China is as big an issue but has quietly hidden behind Pakistan’s cover.
    • That is no longer feasible as democratic India becomes economically and otherwise stronger.

    Future of Special Representative process

    • The Special Representatives process to address the boundary question seems stalemated and its usefulness needs review.
    • The 2005 agreement contains the necessary parameters for a boundary settlement but there is obviously not adequate common ground.
    • Some positivity can, however, be brought in if the LAC clarification process is revived and completed in a time-bound manner.
    • But this is easier said than done in the prevailing circumstances.
    • Patrolling procedures will need to be revised, preferably by mutual agreement.

    Unsustainable economic partnership

    • The current nature of the economic partnership between India and China is not sustainable.
    • India’s annual trade deficit with China in recent years virtually finances a CPEC a year!
    • China has still not fulfilled all its commitments to India on joining the WTO in 2001.

    What should be our trade policy

    • Indian business and industry must stop taking the easy option.
    • Some costs will no doubt go up but there can be environmental advantages of switching to other sources of technology and equipment.
    • There is more than one available source of financial investments in Indian ventures.

    What will be the nature of bilateral dialogue

    • Bilateral dialogue mechanisms will continue their desultory course.
    • On issues of interest to India such as terrorism, we get no support from China.
    • Cooperation on river waters has not evolved.
    • On the global agenda, on issues such as climate change, dialogue and cooperation will continue in multilateral fora depending on mutual interest.

    What should be the nature of governments response

    • The response to China’s recent actions in Ladakh must be an all-of-government one, indeed an all-India one.
    • It should be covering all sectors including heightened security and be coordinated, consistent.
    • This is not a question of nationalism or patriotism but of self-esteem and self-respect.

    Consider the question “What should be the basis of India’s evolving policy response to China’s new approach to the border dispute?”

    Conclusion

    Bilateral relations between India and China cannot progress unless there is peace on the borders and China recognises that India too has non-negotiable core concerns, aspirations and interests.

  • Faults in our China policy

    This article tracks the faultline in India’s China policy that makes it an enduring tragedy. China never bought into India’s narratives of Asian unity and untied Asian front against the West. Instead, China cultivated its relations with the West and leveraged that for furthering its interests.

    Enduring tragedy: India’s China policy

    • That tragedy is rooted in persistent political fantasies.
    • Refusal to learn from past mistakes.
    • And the belief that the US and the West are at the source of India’s problems with China.
    • The problem predates independence.
    • Each generation has been reluctant to discard the illusions that India’s China policy has nurtured over the last century.

    Historical background

    •  Tagore went to China in 1924 with the ambition of developing a shared Asian spiritual civilisation.
    • He was accused by Chines of diverting Chins’s attention away from the imperatives of modernisation and, yes, westernisation.
    •  Jawaharlal Nehru approached China as a modernist and nationalist.
    • He met a delegation of Chinese nationalists at Brussels in 1927.
    • There he issued a ringing statement on defeating western imperialism and shaping a new Asian and global order.
    •  But in Second World War, Congress was unwilling to join hands with China in defeating Japanese imperialism.
    • Indian and Chinese nationalists could not come together for they were fighting different imperial powers.

    Relations after independence

    • As India’s first PM, Nehru campaigned against the western attempt to isolate China.
    • Afro-Asian conference in Bandung, Indonesia in 1955 was attended by both.
    • Within five years war broke out in 1962.
    • Atal Bihari Vajpayee travelled to China in February 1979 to re-engage Beijing.
    • Before he could head home, Beijing had launched a war against a fellow communist regime in Vietnam.
    • That was an end of hope for Asian solidarity.
    • Rajiv Gandhi in 1988 sought to normalise relations with China while continuing to negotiate on the boundary dispute.

    Other issues: Trade entanglement

    • Amid border dispute, other issues have taken a life of their own.
    • For example, the massive annual trade deficits.
    • India’s hope that economic cooperation will improve mutual trust will help resolve other issues was also dashed.
    • India’s massive trade deficit with China is now a little over half of its total trade deficit.
    • India is finding it hard to disentangle the deep economic dependence on imports from China.

    Story of political cooperation: From unipolar to bipolar world

    • As the Cold War ended, India began political cooperation with China on global issues.
    • It was hoped that such cooperation will provide the basis for better bilateral relations.
    • It could not have been more wrong.
    • P V Narasimha Rao and his successors joined China and Russia in promoting a “multipolar world” [remember the US dominance].
    • Delhi is now struggling to cope with the emergence of a “unipolar Asia” — with Beijing as its dominant centre.
    • China’s rapid rise has also paved the way for the potential emergence of a “bipolar world” dominated by Washington and Beijing.

    Engagement with West

    • China never worked with Indian on the ideas of building coalitions against the West.
    • While India never stopped arguing with the West, China developed a sustained engagement with the US, Europe and Japan.
    • Mao broke with Communist Russia to join forces with the US in the early 1970s.
    • Deng Xiaoping promoted massive economic cooperation with the US to transform China and lay the foundations for its rise.

    Will staying away from West lead to good relations with China

    • China has leveraged the deep relationship with the West to elevate itself in the international system.
    • Delhi continues to think that staying away from America is the answer for good relations with Beijing.
    • Beijing sees the world through the lens of power.
    • Delhi tends to resist that realist prism.
    • India has consistently misread China’s interests and ambitions.
    • The longer India takes to shed that strategic lassitude, the greater will be its China trouble.

    Facts that India needs to come to terms with

    • India must also recognise that China, like the great powers before it, wants to redeem its territorial claims.
    • China also has the ambition to bend the neighbourhood to its will, reshape the global order to suit its interests.
    • China has not hidden these goals and interests, but India has refused to see what is in plain sight.

    Consider the question “Acknowledging Beijing’s rise, scale of challenge it presents, are first steps in crafting a new China policy” Comment.

    Conclusion

    Acknowledging China’s dramatic rise and recognising the scale of the challenge it presents is essential for Delhi in crafting a new China policy.

  • Explained: In India-China, the Russia role

    Russia has emerged, all of a sudden, as a key diplomatic player amid the tension between India and China. It is set to host the Russia-India-China (RIC) trilateral foreign ministers’ meeting.

    Practice question for mains:

    Q. In pursuit of a ‘Special Strategic Partnership’ with the US, India has compromised its ties with Russia. Discuss.

    Raksha Mantri stepping in at RIC

    • Tensions being at the peak, India will discuss supply and purchase of new defence systems — like the S-400 missile defence system — with the Russian top brass in the military and government.
    • India has made this decision to reach out to Russia not just out of choice, but also out of necessity.
    • Moscow has leverage and influence to shape and change Beijing’s hard stance on the border issue.

    Russia: A mediator for both

    • While India and China have been talking at each other — and not to each other — the outreach to Moscow is noteworthy.
    • It is widely known that Russia and China have grown their relationship in the past few years.
    • The Moscow-Beijing axis is crucial, especially since Washington has been at loggerheads with China in recent months and Russia much more calibrated, even in its response on the Covid-19 outbreak.

    Sino-Russian ties: A response to US

    • Russia and China have had a rocky start to their relationship after Mao Zedong founded the People’s Republic of China.
    • When Mao made his first visit to Moscow after winning control of China, in 1949, he was made to wait for weeks for a meeting with the Soviet leader.
    • During the Cold War, China and the USSR were rivals after the Sino-Soviet split in 1961, competing for control of the worldwide Communist movement.
    • There was a serious possibility of a major war in the early 1960s and a brief border war took place in 1969.
    • This enmity began to reduce following Mao’s death in 1976, but relations were not very good until the fall of the Soviet Union in 1991.

    India and Russia

    • India has a historical relationship with Russia, spanning over seven decades.
    • While the relationship has grown in some areas and atrophied in some others, the strongest pillar of the strategic partnership is of the defence basket.
    • Although New Delhi has consciously diversified its new purchases from other countries, the bulk of its defence equipment is from Russia.
    • Estimates say 60 to 70 per cent of India’s supplies are from Russia, and New Delhi needs a regular and reliable supply of spare parts from the Russian defence industry.
    • In fact, Prime Minister Modi has held informal summits with only two leaders — Xi and Putin.

    Russia position: then & now

    • During the Doklam crisis in 2017, Russian diplomats in Beijing were among the few briefed by the Chinese government.
    • While Russia’s position during the 1962 war was not particularly supportive of India, New Delhi takes comfort in Moscow’s support during the 1971 war.
    • On the events in Galwan, Moscow responded in a much-calibrated manner.
    • Kremlin has expressed its concerns over a clash between the military on the border between China and India but believes that the two countries could resolve this conflict themselves.

  • What is lacking in our China policy

    While formulating our response to China’s aggressive policies in Ladakh, we should first understand their objectives. This article explains these objective and suggests the steps to deal with China’s policies.

    Statements on Aksai Chin and Pakistan

    • Statements over Aksai Chin and Pakistan-occupied Kashmir (PoK) by India have painted the image of India as a revanchist power in utter disregard of the country’s capabilities.
    • These statements also gave the impression that India precludes any attempt at changing the status quo on either front.
    • Though these statements were justifiable in terms of India’s legal rights to these territories, were ill-timed.

    How these statements were perceived by China

    • They were made when Beijing was feeling alarmed at the Indian government’s decision to separate Ladakh from Jammu and Kashmir.
    • The move augmented its perception that it was a prelude to India’s attempt to change the status quo in Aksai Chin.
    • India’s assertion of its claims on PoK that in China’s perception threatened the China-Pakistan Economic Corridor project.

    China’s 4 strategic objectives

    1. India and China are not equals

    • China wants India to understand that it is not in the same league as China.
    • China resorts to periodic assaults across the Line of Actual Control (LAC) if India tries to assume a position of equality.

    2. Keep India away from interfering in Indo-Pacific

    • China wants India not to actively oppose Chinese designs to dominate the Indo-Pacific region.
    • Also, China wants Indias to refrain from aligning with the U.S. and its allies — Japan and Australia, in particular — in an attempt to contain China.

    3. Keeping India preoccupied with problems

    • China’s strategy also includes keeping India preoccupied with problems in its immediate neighbourhood.
    • So with these problems, India cannot act as an alternative pole of power to China in the broader Asian region.

    4. Supporting Pakistan to neutralise India

    • As part of the last objective, China supports  Pakistan economically and militarily, including the sharing of nuclear weapons designs.
    • China uses Pakistan to neutralise India’s conventional power superiority vis-à-vis that country.

    An understanding of these objectives is essential to fashioning a realistic Indian response to China’s aggressive policies in Ladakh and elsewhere along the LAC.

    But, what about Pakistan?

    • Pakistan is at best an irritant for India. (so, focus on China)
    • Pakistan can be managed with the use of diplomatic tools, international opprobrium, and superior military force.
    • In fact, the Pakistani challenge to India has become magnified because of its nexus with China.

    What India should do?

    • India’s main strategic goal should be the adoption of carefully calculated policies that neutralise China’s diplomatic and military clout in the Asia-Pacific region.
    • While doing so, India should not appear as a surrogate for other powers.
    • And India should also ensure that in making alliances it in not sacrificing the autonomy of decision-making in foreign policy. 

    Consider the question “Understanding of China’s objective is essential to formulate a realistic response to its aggressive policies in Ladakh.” Comment.

    Conclusion

    Understanding the greater threat posed by China vis-a-vis Pakistan should be the basis of India’s policy towards China.

  • Why China trade ban is bad idea

    After the Galwan Valley skirmish, the popular idea resonating in Indian streets is that Indians should boycott Chinese goods and thus “teach China a lesson”.

    Practice question for mains:

    Q. India’s quest for self-reliance is still a distant dream. Critically comment in light of the popular sentiment against the Chinese imports in India.

    There are several reasons why the #Boycott_China is an ill-advised move:

    A. Trade deficits are not necessarily bad

    • Trade deficits/surpluses are just accounting exercises and having a trade deficit against a country doesn’t make the domestic economy weaker or worse off.
    • Example: If one looks at the top 25 countries with whom India trades, it has a trade surplus with the US, the UK and the Netherlands. But this does not make Indian economy better than them.

    What does this deficit indicate?

    • Both Indian consumers and Chinese producers are gainer through trading.
    • One gets the market other cheap price. Thus, both are better off than what they would have been without trade.

    So, having a trade deficit is good?

    • Of course, running persistent trade deficits across all countries raises two main issues.
    • One, availability of foreign exchange reserves to “buy” the imports.
    • Today, India has more than $500 billion of forex — good enough to cover imports for 12 months.
    • Two, lack of domestic capacity to produce in the most efficient manner.

    B. Will hurt the Indian poor the most

    • This is because poor are more price-sensitive.
    • For instance, if Chinese TVs were replaced by either costlier Indian TVs or less efficient ones, unlike poor, richer Indians may buy the costlier option.
    • Similarly, the Chinese products that are in India are already paid for. By banning their sale or avoiding them, Indians will be hurting fellow Indian retailers.
    • Again, this would hit poorest retailers more due to inability to cope with the unexpected losses.

    C. Will punish Indian producers and exporters

    • Several businesses in India import intermediate goods and raw materials, which, in turn, are used to create final goods — both for the domestic Indian market as well as the global market (as Indian exports).
    • An overwhelming proportion of Chinese imports are in the form of intermediate goods such as electrical machinery, nuclear reactors, fertilizers, optical and photographic measuring equipment organic chemicals etc.
    • Such imports are used to produce final goods which are then either sold in India or exported.
    • A blanket ban on Chinese imports will hurt all these businesses at a time when they are already struggling to survive, apart from hitting India’s ability to produce finished goods.

    D. Will barely hurt China

    • While China accounts for 5% of India’s exports and 14% of India’s imports — in US$ value terms — India’s imports from China are just 3% of China’s total exports.
    • More importantly, China’s imports from India are less than 1% of its total imports.
    • The point is that if India and China stop trading then — on the face of it — China would lose only 3% of its exports and less than 1% of its imports.
    • However, India will lose 5% of its exports and 14% of its imports.

    Issues

    • On the whole, it is much easier for China to replace India than for India to replace China.
    • Ban can also seize Chinese funding to many Indian businesses (the start-ups with billion-dollar valuations).
    • In short term, replacing Chinese products with Japan or Germany, will only increase our total trade deficit.
    • If on the other hand, we decide to use Indian products, that too would cost us more — albeit just internally.

    E. India will lose policy credibility

    • It has also been suggested that India should renege on existing contracts with China.
    • This can be detrimental for India’s effort to attract foreign investment.
    • As one of the first things an investor — especially foreign — tracks is the policy credibility and certainty.
    • If policies can be changed overnight or if the government itself reneges on contracts, investor will either not invest or demand higher returns for the increased risk.

    F. Raising tariffs is mutually assured destruction

    • Many argue that India should just slap higher import duties on Chinese goods or apply prohibitive tariffs on final goods.
    • By doing this, firstly India would be violating rules of the World Trade Organization.
    • Secondly, it would make China and many others to reciprocate in the same way.

    Equating border dispute with trade is no panacea

    • The first thing to understand is that turning a border dispute into a trade war is unlikely to solve the border dispute.
    • Worse, given India and China’s position in both global trade as well as relative to each other, this trade war will hurt India far more than China.
    • Thirdly, these measures will be most poorly timed since the Indian economy is already at its weakest point ever — facing a sharp GDP contraction.

    Way forward

    • In long term, under the banner of self reliance, India must develop its domestic capabilities and acquire a higher share of global trade by raising its competitiveness.
    • But no country is completely self-sufficient and that is why trade is such a fantastic idea.
    • It allows countries to specialize in what they can do most efficiently and export that good while importing whatever some other country does more efficiently.
    • Need of hour is well thought and balanced approach.