India-China ties: Forging a new idiom of major powers relations

It’s a transformational moment in the history of India-China relations, marked by an infusion of fresh energy, dynamism and creativity in the way the two neighbours engage with each other. This is the first time the leaders of the two Asian giants have visited each other’s country within nine months, signalling their resolve to proactively cooperate in fashioning an emerging Asian century. Prime Minister Narendra Modi’s May 14-16 visit to three cities in China – Xian, Beijing and Shanghai – was unique in many ways and cohered multiple strands of variegated relationship between the two Asian juggernauts that comprise one-third of the world’s population and boast of a collective GDP of over $12 trillion.

Prime Minister Modi’s visit to China consolidated the momentum generated by President Xi Jinping’s maiden visit to India in September 2014. Put together, these twin visits, and initiatives taken during the tenure of the previous government in Delhi, crystallize the emerging alphabet of India-China relations: A for Asia; B for Business; C for Culture; and D for Diplomacy and Development. This new vocabulary and semantics is set to script afresh new pathways of cooperation between the two neighbours, which are often portrayed as rivals and competitors in the Asian hemisphere, but are incrementally forging an ambitious and all-encompassing cooperative partnership straddling diverse areas.

Hometown Diplomacy

Coalescing diplomacy, culture, business and geopolitics, Prime Minister Modi’s visit scored high on both symbolism and substantive outcomes, which signalled new trends and notations in this crucial transforming relationship. In a first-of-its-kind gesture, Chinese President Xi Jinping welcomed Prime Minister Modi at a majestic government guest house in Xi’an, the capital of Shaanxi province, home of the president’s family. In his warm-up meeting, President Xi projected a resolutely upbeat picture for India-China relations. China-India relations “are experiencing stable development and facing broad prospects,” President Xi told the Indian prime minister. PM Modi’s visit to Terra Cotta Warriors Museum and a Buddhist temple housing works translated from Sanskrit underscored centuries of civilizational links between the two giant Asian neighbours. This was the first time President Xi was hosting a visiting foreign leader in his ancestral home, underscoring his personal commitment to scale up India-China relations to new heights.

The warmth and personalised hospitality shown by President Xi to the Indian leader reciprocated Mr Modi’s reception for the Chinese leader in Ahmedabad. This was the first time the Indian and Chinese leaders began their visits to each other’s country not from national capitals, but from state capitals, thereby creating a new template of hometown diplomacy in the burgeoning India-China engagement. It underlined a new emphasis on taking bilateral relations beyond the confines of routine diplomacy to forging lasting personal relationships and connections of the heart and mind. “Am very glad to see the enthusiasm among the people of China. People-to-people ties are always special,” Mr Modi tweeted after a rapturous crowd greeted him in Xian.

New narrative of major powers: Asian Century

Gestures are important in diplomacy, but they can’t substitute for substance. The emerging narrative of India-China relations has, therefore, deftly blended symbolism, gestures and substance, with a long-term overarching vision of this critical relationship that can directly impinge on the lives and destinies of the 2.6 billion people of the two countries. In an important theoretical construct, the May 15 joint statement envisaged India and China as “two major powers in the region” that will shape the Asian century and the geopolitical-economic landscape of the 21^st century.

“The leaders agreed that simultaneous re-emergence of India and China as two major powers in the region and the world offers a momentous opportunity for realisation of the Asian Century,” said the statement. “They noted that India-China bilateral relations are poised to play a defining role in the 21st Century in Asia and indeed, globally.” Placing the relationship in a larger global context, the joint statement said: “This constructive model of relationship between the two largest developing countries, the biggest emerging economies and two major poles in the global architecture provides a new basis for pursuing state-to-state relations to strengthen the international system.”

Red Lines

This grand construction was, however, hedged with all-important caveats – the fructification of the potential of the India-China relations and the promise of a harmonious Asian century is possible only if the two sides show “mutual respect and sensitivity to each other’s concerns, interests and aspirations.” These are crucial red lines that need to be adhered to scrupulously by both countries if they seek to partner each other’s resurgence on the global stage, without strategic distrust and perceptions of rivalry.

During his May visit to China, Mr Modi reminded his Chinese hosts of these red lines when he urged them to reconsider their stand on issues that hold the two countries back from realising the full potential of this relationship. “I stressed the need for China to reconsider its approach on some of the issues that hold us back from realising the full potential of our partnership,” Mr Modi said at a joint media statement with Premier Li. The fact that he said this in front of the Chinese premier at a joint press conference in Beijing conveyed the intensity of India’s objections at some of Beijing’s actions and practices which New Delhi regards as unacceptable. These include the issuing of stapled visas by China to residents of Jammu and Kashmir and Arunachal Pradesh, repeated incursions by Chinese troops into the Indian territory and the proposed construction of the China-Pakistan Economic Corridor through the disputed region of Kashmir. These issues have been long-standing irritants in the India-China relationship and have tended to adversely impact the image of China in the public mindscape in India and accentuate strategic distrust in New Delhi about Beijing’s intentions and motives.

Economics-first approach

Airing openly differences on these issues would have endangered and soured the relationship, but it was a sign of new maturity and candour in the India-China engagement that despite these divergences that remain founts of discord, the two countries chose to focus on the positives and the inescapable economic opportunity to widen the arc of win-win cooperative partnership. This was reflected in the signing of 24 agreements in diverse areas, ranging from infrastructure, smart cities and railways to culture, skill development, space and climate change. The two sides decided to intensify their diplomatic engagement across the spectrum with the decision to hold regular summit meetings and opening of new consulates in Chengdu and Chennai. In a defining step, the two countries launched the first-of-its kind State/Provincial Leaders’ Forum that will spur greater interaction between their states and provinces. The first meeting of the Forum was held in Beijing on May 15, 2015 in the presence of Prime Minister Modi. Maharashtra Chief Minister Devendra Fadnavis and Gujarat Chief Minister Anandiben Patel were among those who participated in it from the Indian side.

Above all, the May 2015 summit meeting between the leaders of India and China underscored and reinforced the economics-first approach to the relationship that has been in the making across successive governments in New Delhi and Beijing. In all fairness, both geopolitics and geo-economics will shape the contours of the India-China relationship in the coming months and decades, but for now it’s the economic imperative that is driving Asia’s leading economies to come closer in a realm of co-prosperity through intensified trade and investment. And here, the potential is huge, and the sky is virtually the limit, provided mutual respect and sensitivity is shown to each other’s core interests.

Make in India

It was in this spirit that PM Modi said in Beijing: “We have set a high level of ambition for our economic partnership. We see enormous bilateral opportunities and many similar challenges, like urbanization.” Alluding to his talks with President Xi and Premier Li, Mr Modi said: “Both leaders were very supportive about increased Chinese participation in our Make in India mission and infrastructure sector.”

In the economic arena, the outcomes have been substantial and remain a work in progress. Building on China’s pledge of $20 billion investment in India for the next five years, which was unveiled during the Chinese president’s visit to India in September 2014, the business entities of the two sides signed business deals worth $22 billion in Shanghai on May 16.

In his address at the India-China CEOs forum, Mr Modi made a strong pitch for increased trade and investments between the two countries. And the response from the Chines business community was quite positive, reflecting the changing narrative of the India Story in China. Weeks after Mr Modi’s visit, China’s ambassador to India Le Yucheng underlined an emerging synergy between ‘Make in India’ and ‘Made in China’, and projected a new template of “Make in Chindia”, which envisages closer collaboration in manufacturing and businesses between the two Asian giants.

Speaking at the China-India Industrial Cooperation Seminar, organised by the Federation of Chambers of Commerce and Industry of India (FICCI) in New Delhi on June 10, Mr Le said that China has recently rolled out “Made in China 2025” campaign, featuring innovation and high-end manufacturing among others, which he said was compatible and complementary with India’s Prime Minister Modi-led “Make in India” strategy.

The Chinese envoy stressed that that the Chinese business community was appreciative of the steps taken by the new India government to enhance the ease of doing business in India and added that Chinese companies were looking to invest in India in a range of projects, including manufacturing, human-resource, real estate and infrastructure development, smart city projects and railways.

While enhanced trade and investment linkages are no guarantee against frictions or deterioration in bilateral relations, as the case of China-Japan relations shows, the economic drive will reduce possibilities of conflict and keep the attention of the two countries more focused on myriad benefits that can accrue through deepening the economic content of the relationship. That’s why the story of transforming ties between India and China is going to be increasingly underpinned by economic initiatives and ongoing efforts to firm up a viable long-term architecture for spurring economic engagement across the spectrum. In this regard, the latest decisions and initiatives include holding of the Strategic Economic Dialogue, co-chaired by Vice Chairman of NITI Aayog of India and Chairman of NDRC of China, during the second half of 2015, in India; and the forging of five-year trade and development plan between commerce ministries of the two countries.

Development Partnership

The forging of closer development partnership is another unfolding narrative that should illuminate new pathways of cooperation between the two Asian countries. In this context, the Modi government has successfully built on some good work done by the previous government. The May summit meeting culminated in a host of important steps. These included: I) Setting up of two industrial parks in Gujarat and Maharashtra by China II) Cooperation on railway projects, including speed raising on the Chennai-Bengaluru-Mysore line, feasibility studies for the Delhi-Nagpur section of high speed rail link; and setting up of a railway university III) Forging of friendly relationship between Guangdong Province of China and Gujarat, and sister cities between Guangzhou City and Ahmedabad. IV) Pilot Smart city project between GIFT City in India and Shenzhen in China V) Setting up sister city relations between Mumbai and Shanghai, and Ahmadabad and Guangzhou, Hyderabad-Qingdao, Aurangabad-Dunhuang, Chennai-Chongqing and Sister State/Province relations between Gujarat-Guangdong and Karnataka-Sichuan.

The Long View: Global Cooperation

Taking a global view of their relationship, India and China have expanded their canvas of engagement on a host of global and cross-cutting issues that range from climate change, terrorism and multilateral trade negotiations to intensified regional cooperation in Afghanistan and crises in West Asia. The increasing congruence of perspectives on combating terrorism is specially significant, with Chin backing long-standing advocacy by India for an early conclusion of negotiations on the Comprehensive Convention on International Terrorism. The cooperation in Afghanistan, which was initiated during the tenure of the Manmohan Singh government, will be watched closely in the region and the world. The two Asian powers are also intensifying cooperation and coordination in multilateral and plurilateral organisations, including the UN, BRICS, G20 and SCO.

A separate joint statement on closer cooperation to combat climate change during Mr Modi’s visit to China illustrates how the two countries have learnt to manage their bilateral differences to shape ongoing efforts for a global deal at the international summit on climate change at CoP 21 in Paris in December 2015. This focus on partnership in sustainable development was also reflected in the signing of MOUs in the renewable energy sector. “They underscored the importance of working together and with other countries to conclude an ambitious, comprehensive, universal, balanced and equitable climate agreement at the forthcoming CoP 21 to UNFCCC to be held in Paris later this year that will also encourage genuine technology transfer, collaboration for adaptation and mitigation and financial support in meeting this common global challenge,” said the joint statement.

The signing of the 2015-2020 space cooperation programme has opened new vistas of cooperation between the two Asian giants. In a significant development, China for the first time has also taken note of India’s aspiration to join the Nuclear Suppliers Group. China has reiterated its support for India’s global aspirations, but is still hedging on declaring explicit support for India’s candidature for a permanent seat in the UN Security Council. China’s declaration of support for India’s UNSC seat could be a big breakthrough in transforming bilateral relations and help bridge the trust gap that tend to mar interactions between the two countries.

Looking ahead, one can expect the two Asian giants to transcend the bilateral dimension and enlarge the arc of convergence to shape regional and global agenda by proactive consultations on “developments affecting international peace, security and development.” The new narrative of “major powers” engagement, which was articulated during PM Modi’s visit to China, will frame this critical partnership as the two Asian juggernauts leverage their growing economic weight and international profile to carry along the entire region to fructify the promise of an Asian century.

There are, however, many pitfalls on the way – the unresolved boundary dispute remains the source of off-and-on tensions and trust deficit, which needs to be resolved expeditiously by taking a long-range view of this critical relationship. The widening trust deficit, if it continues at this pace, could derail the expanding economic relationship. China needs to deliver on its long-standing promise of greater market access to Indian companies, especially in IT, pharma and food sectors. The fruition of China’s plans for long-term investments and the setting up of industrial parks is critical to the long-term vitality of the burgeoning economic relationship.

The two Asian heavyweights also need to square up their concerns and anxieties about their relationship with third countries. The continued transformation of India-China relations, therefore, has to reckon into account creative ways and out-of-box solutions to address these festering issues. A journey of a thousand miles, as a Chinese proverb says, begins with a small step. Many small steps have already been taken, and it’s time now for the leaders of the two countries to raise the bar, show flexibility and imagination to take large strides to pitchfork the India-China relationship into another dimension and insulate it from pulls and pressures of competitive ambitions and geopolitics.

(Manish Chand is Founder-CEO and Editor-in-Chief of India Writes Network, www.indiawrites.org, an online magazine-journal focused on international relations, emerging powers and China. He has travelled to China many times and participated in the India-China Media Forum, an initiative to bridge information gap and promote greater interaction between media professionals of the two countries. A foreign affairs analyst, his key research areas include India-China relations, India-Africa relations, India-US relations and emerging powers.)

-This article was first published in Yojana, a prestigious journal focused on planning, development and international affairs.

Author Profile

Manish Chand

Manish Chand is Founder-CEO and Editor-in-Chief of India Writes Network (www.indiawrites.org) and India and World, a pioneering magazine focused on international affairs. He is CEO/Director of TGII Media Private Limited, an India-based media, publishing, research and consultancy company.