Better Thinking for Better Ties in 2023

In 2022, the COVID-19 pandemic continued to wreak havoc on the global economy. The international community has been weak in both action and institutionalized cooperation to address the pandemic. These failures shined light on the limitations of neo-liberal institutionalism, and intensified economic conflict between countries. Economic conflict makes the already-fragile political relations between countries even worse, which has given rise to nationalism and power politics. Moreover, the ongoing Russia-Ukraine conflict that broke out in February 2022 has led to a sharp rise in the prices of commodities such as oil, food, and chemical fertilizers around the world, adding to the pressure on the recovery of the global economy and intensifying the geopolitical game between major countries.

But opportunities always accompany challenges. As the pandemic continues to threaten the health and safety of people around the world, China and India, as neighbors and the world’s two most populous developing countries, should strengthen cooperation and work together to address the international public health emergency. Some even recognized that the Russia-Ukraine conflict could act as a positive factor to improve China-India ties to a certain extent. Because both countries adopted a neutral stance towards the conflict and have a strong desire for the crisis to end as soon as possible. Unfortunately, despite so many agreements, China and India failed to move closer together in 2022. And due to the adverse effects of the COVID-19 pandemic, both countries have adopted international travel restrictions to varying degrees, which has reduced governmental and non-governmental exchange.

In 2023, India will host the G20 summit and the annual summit of the Shanghai Cooperation Organization (SCO), both major international events. Whether China and India can seize the opportunities to bring bilateral relations back to the normal track depends on a few factors. It depends on whether they can break the inertial perceptions of each other and foster a strong desire to meet each other halfway. After all, efforts from only one side produce nothing.

2022 CHINA-INDIA TIES: THE RELATIONSHIP THAT DOESN’T ADVANCE FALLS BACKWARD

Last year didn’t witness the thawing of relations between China and India that many expected. A lack of momentum for cooperation persisted, and in accordance with the general rule of “a relationship which doesn’t advance falls backward,” it seems that negative factors in bilateral relations have even accumulated. Broadly speaking, China-India relations in 2022 mainly showed the following characteristics:

First, although tension in the border areas has eased, differences remained. In recent years, friction between China and India in the border areas has occurred from time to time. Since the clash at the Galwan Valley in May 2020, the Indian government has been quite tough on China, a result of combined factors including provocations committed by the Indian side, as well as Indian and Western media hype.

Second, India and the U.S. have been working even closer to contain China under the framework of the “Indo-Pacific Strategy,” propelling India to adopt uncooperative or even offensive positions towards China. Defense cooperation has been the most effective driving force for elevating the relations between India and the U.S. to the next level. For this strategy to work, it is imperative to build a “common threat” and find “reasonable excuses.” As many are starting to realize, plenty of India’s current strategies and policies in relevant areas including defense spending, arms importing, national defense modernization, maritime security are based on the “China threat theory.”

For the U.S., its strategic intention is clearly to replace Russia to become India’s largest arms supplier. In doing so, the U.S. and India will forge ever deeper bonds. Nowadays, with Russia trapped in its conflict with Ukraine, India has accelerated its cooperation with the U.S. in the field of national defense, which will further drive India away from China.

Third, the increased bilateral trade volume between China and India has failed to produce positive shifts in Sino-Indian political relations. Instead, a trend of politicizing economic issues became even more glaring. In 2021, bilateral trade between China and India stood at US$125.6 billion, exceeding the US$100 billion mark for the first time. However, this did not serve as a driving force for India to deepen trade cooperation with China in 2022. As India’s imports from China reached US$97.5 billion in 2022, it became increasingly concerned with the widening trade deficit with China. It blamed China for this problem, ignoring the impact of its own development stage and industrial structure on trade imbalance to externally politicize economic issues. Thus, the Indian media has continued to advocate reducing dependence on Chinese imports, and the Indian government has sought to set barriers for Chinese investments and suppress Chinese enterprises by abusing the concept of national security

In recent years, the U.S. has been lobbying for India to decouple with China. India hopes to replace China’s position in the global industrial chain and supply chain with the help of the U.S. Thus, some Indian media outlets have hyped up the negative impact of Sino-Indian economic interdependence and called it a “threat” to India’s national security. They advocated detrimental moves disguised as “self-reliance,” “bringing back industry,” and “reducing dependence.” Some Indian media outlets are trying to sell the zero-sum game mentality to the public. Such moves inevitably exert a negative impact on China-India cooperation.

FACTORS AFFECTING INDIA’S POLICY TOWARDS CHINA

At present, there are still insufficient factors conducive to stabilizing China-India ties. In 2023, India’s policy towards China may likely still be affected by the following factors:

First, India’s China policy will always be influenced by international factors. The White House announced the U.S.-India initiative on Critical and Emerging Technology (iCET), which aimed to elevate and expand the strategic technology partnership between the two countries. The initiative kindled India’s ambition to replace China’s position in the global supply chain and become a global power.

India does not want to act as a pawn for antiChina forces in the U.S., but it lacks momentum and desire to improve its ties with China for various reasons. In the face of both pressures and opportunities brought by changes in the international landscape, India is committed to making good use of a favorable international environment and to maximizing its relative gains, with the aim to pursue its desired international status and world influence, including getting the permanent membership of the UN Security Council with the help of the U.S.

Second, India’s China policy is restricted by its domestic political factors. At present, the Modi administration’s tough attitude towards China is partly because of a “China threat” it deliberately created to help fuel rising Hindu nationalism at home. According to Indian media reports, about 70 percent of Indians now believe that Indian armed forces can defeat China. Such biased policies and public opinion have become invisible obstacles impeding the betterment of Sino-Indian relations.

Third, India’s China policy is affected by how the Modi government and Indian political elites perceive China. Today, India has become the world’s fifth-largest economy and will soon become the most populous country in the world. Although a gap in strength between China and India remains, the latter’s comparative strength has been on the rise in recent years. And the U.S. courtship of India has certainly increased the latter’s confidence in its own capabilities. Some Indian political elites have claimed that China’s growing power and regional influence are hurting India’s interests in South Asia and the Indian Ocean region. Their logic seems to be that one country’s loss is another country’s gain. Influenced by such misconceptions, New Delhi is sensitive to any activities China conducts in the Indian Ocean region including economic activities between China and other countries in the region.

PROSPECTS OF CHINA-INDIA TIES IN 2023

However, good things for China-India relations could still happen in 2023. It’s clear that both sides have the desire to improve bilateral ties. India assumed the G20 presidency on December 1, 2022. It will also hold the meeting of the Council of Heads of State of the SCO this year. These two events provide opportunities for China and India to improve their relations.

In recent years, we have discovered that the wide strategic differences between the two countries are rooted in dramatically different perceptions of each other. Changing concepts is key to breaking the deadlock and overcoming the difficulties. Many structural problems between the two sides cause friction, such as the boundary question and trade disputes. But these problems don’t affect the survival and security of the two peoples and pose no real threats to the national security interests of either side. There are no unconquerable obstacles to cooperation. At least, China and India are not a threat to each other. The move to build up imaginary threats could only increase suspicions and corrupt political trust between the two countries, and further create negative impact on economic cooperation and people-to-people exchanges. If the two sides look at the situation from the other’s perspective and begin to change their modes of thinking, their ideas will change. They will start considering each other’s concerns and making strategic choices conducive to the improvement of China-India ties.

China and India are neighbors that cannot move away from each other. Even if the two countries fail to work as partners towards mutual success, they should never behave adversarially or foster mutual attrition. In particular, they should not peg the state of bilateral relations to the historical boundary question, which will cost both dearly. Only by changing views can the two sides send positive signals to each other and work together to create an atmosphere conducive to improving bilateral relations.

The current strategic environment may be more favorable to India. However, the U.S. aims to reshape the international order and enforce rules that are beneficial to its own interests, which ultimately hurts the interests of developing countries, including China and India. Thus, the two countries face both common challenges and opportunities for cooperation. As the two largest developing countries and representatives of emerging economies, China and India shoulder the responsibility of making better use of multilateral platforms such as the G20, the SCO, and BRICS to help developing countries have a louder voice in global political and economic affairs.

Considering the rapidly changing international landscape and the rising uncertainty these days, if India follows the U.S. and magnifies the so-called “security threat,” it will only intensify strategic competition and increase strategic suspicion. Arms races in the region may get intense and further worsen the regional security situation, which is the opposite direction of development goals of both China and India. Realizing the goal of sustainable domestic economic development depends on a stable surrounding environment.

We have always stressed that the significance of China-India cooperation transcends bilateral relations and exerts regional and global significance. Only when China and India develop together will the Asian Century arrive. No one doubts the great potential of Sino-Indian cooperation. It is in the fundamental interests of the two countries to stabilize bilateral relations and avoid major conflicts. Furthermore, developing a relationship between major powers is essentially a process of mutual adaptation and understanding. China and India should meet halfway to promote peace and stability in the Indo-Pacific region and foster a favorable international environment for the development of both countries. Eventually, the two countries will weigh the pros and cons and make the correct choice that is most beneficial to each other and the development of bilateral relations.

The author is a professor at Yunnan University of Finance and Economics and the director of the university’s Research Institute for Indian Ocean Economies.