India and China: Building Strategic Trust

By the early 21st century with the rise of China economies of East Asia and India, the prognosis of a strong Asia showed promise. The Indo - Pacific Region (essentially Western Pacific and the Indian Ocean) deservedly came to be recognised as the new 'Centre of Gravity' in the evolving world economic order. Asian states have exhibited leadership in a range of significant areas, such as economics, diplomacy, military power, science & technology, innovation, and soft power thus adding traction to the notion of 'Asia Century' of shared prosperity and common destiny.
Under this overarching geo-strategic environment, it is imperative that the two most populous and growing economic powers, India and China, move towards achieving consensus, co-operation and strategic trust rather than compete and contest. However, since the tumultuous border war of 1962, there exists a deep distrust of each other's motives across the Himalayan barriers. To achieve this India and China ought to share their perspectives on the key drivers of divergences and work towards mitigating the same to build strategic trust.
This book seeks to assess the causes of strategic mistrust in Sino – India relations and recommend measures for building trust and improving bilateral relations. Towards that end, the ten divergences have been taken as individual chapters, with both Indian and Chinese scholars providing respective perspectives.

• Language: English
• Publisher: VIJ Books (India) Pty Ltd
• Release date: Jun 18, 2020
• ISBN: 9789389620023

Book preview

INTRODUCTION

From the dawn of history Asia has been prominent due to its great civilizational history, rich heritage, abundant resources and minerals, and oriental values. The Industrial revolution in the West and Asia’s richness in resources attracted the western powers to colonise Asian countries, plunder their resources and embroil the whole continent in bloody wars and vitriolic conflicts. Post decolonisation, Asia’s robust economic performance since 1980s, compared to the rest of the world, ushered a new era of hope and optimism of ‘Asian Century’ in the third millennia. By the early 21st century with the rise of China, economies of East Asia and India, the prognosis of a strong Asia showed promise. The Indo – Pacific Region (essentially Western Pacific and the Indian Ocean) deservedly came to be recognised as the new ‘centre of gravity’ in the evolving world order.

Asian states have exhibited leadership in a range of significant areas, such as economics, diplomacy, military power, science and technology, innovation, and soft power thus adding traction to the notion of ‘Asian Century’ of shared prosperity and common destiny. However, transition of Asia is characterised by overlapping elements of cooperation, competition and conflicts. One of the most formidable challenges that Asia would face is how to establish a balance of power vis-a-vis the US led West in a paradigm that is bereft of zero sum game and cold war mentality. To this end, it is imperative to affect a strategic shift in inter se relations between India, China, Japan, South Korea, South East Asia and other Asian states. Unless there is entente cordiale in Asia, the lofty idea of ‘An Asian Century’ will remain a dream.

Under this overarching need for an Asia to achieve an Asian Century, it is imperative that the two most populous and growing economic powers move towards achieving consensus, co-operation and strategic trust rather than compete and contest. Former Indian Prime Minister Manmohan Singh during his address to the Central Party School, Beijing on 24 th October 2013 had stated that the world is large enough to accommodate the development aspirations of both India and China. Xi Jinping had also stated that the Chinese and Indian dreams for becoming strong, developed and prosperous nations are inter-connected and mutually compatible. Towards this end, India and China ought to share their perspectives on the concept of ‘Asian Century’ and critically examine their respective outlooks and strategic endeavours for making Asia secure and prosperous.

Since the dawn of history, India and China have been civilizational neighbours and enjoyed good relations barring a brief period around the 1962 war. In the mid-80s visionary leadership of Deng Xiaoping and Rajiv Gandhi led to significant improvement in Sino – Indian relations in all domains. India and China have shown remarkable cooperation at the International level on Climate Change, WTO, SCO, BRICS, AIIB, NDB, RCEP and many other areas. However, on the flipside, geopolitical development since 2013 have caused stress in the bilateral relations and widened strategic mistrust between the two countries. Apart from the differing perspectives on the Asian Century’, the other drivers of strategic mistrust are enumerated in the succeeding paragraphs.

(a) Border Dispute . China has settled border disputes with all its neighbours, except Bhutan and India. Despite 21 rounds of talks between the Special Representatives, no tangible results have been achieved in delineating the LAC, or reaching an understanding over disputed areas. Since last few years, a series of agreements and mechanisms have been signed to maintain peace and tranquillity on the Border. In fact, the Border Defence Cooperation Agreement signed in October 2013, following the Depsang Incident in July was a hallmark of bringing a nuanced thaw on the border issue. These initiatives notwithstanding, the border transgressions have continued, Chumar in 2014 and the (in)famous Doklam incident in 2017, bringing troops from both sides to precarious stand offs, with potential to escalate into a conflict. There is a growing public perception in India that China is deliberately delaying resolution of border dispute and using it as leverage against India. Enduring peace and tranquillity and steady progress on resolution of border dispute are critical for building trust between the two countries.

(b) Tibet Dilemma . The presence of Dalai Lama, Tibetan Government-in Exile and a large diaspora in India is deemed inimical by China to its interests. In future, the issue of succession of Dalai Lama could be a tipping point and potentially exacerbate tensions in the bilateral relations. From our perspective, providing refugee to Dalai Lama and his supporters, when they escaped from Tibet, is part of India’s traditional ethos to accommodate people of other faiths and religions. India supports ‘One China policy’ and does not encourage Tibetan activists to indulge in China bashing. Indian strategic community believes that solution to Tibetan dilemma lies entirely in the Chinese hands and that rapprochement between China and Dalai Lama will pave the way for early resolution of the Border issue.

(c) Water Issue . India is a strong exponent of just sharing of global commons as per the international laws and treaties. Despite facing chronic hostility from Pakistan, India as an upper riparian state has abided by the Indus Water Treaty, signed between the two nations in 1960. India does not favour the use of water resources as a tool of strategic coercion. Tibet is known as the water tower of Asia. Reports about diversion of Brahmaputra River by China, its effect on flow of water into India and resultant ecological risks are a cause of concern for India. China is averse to signing any agreement on sharing of waters or sharing data on water with India. Lack of transparency in regard to building of dams or diversion of water resources by China, breeds strategic mistrust in bilateral relations. This issue merits a detailed examination to allay misperception and build trust.

(d) Growing Trade Imbalance . China is India’s largest trading partner, with a bilateral trade of $ 95.54billion with the trade deficit, which stood at $37.2 billion a few years ago, at a whopping 57.86 billion for the year 2018, according to Chinese official data. However, Trade numbers for 2019 showed India-China trade deficit falling by a significant $10 billion, mainly because of a sizeable increase in exports by India. There is probably a big catch, though, to this difference. It is now apparent that during the same period, there was a sharp rise in Hong Kong’s export to India of the same goods that New Delhi buys from Beijing. This has now given rise to serious doubts that China may have begun using Hong Kong to camouflage the real size of its sale to India. There is also a growing concern that China only imports raw material from India and due to its protectionist policy, does not permit finished goods, including much in demand pharmaceuticals, into the Chinese markets. China, on the other hand, has criticised India for imposing anti-dumping duties on more than 93 Chinese products. The growing trade imbalance between the two countries and associated trade embargoes are preventing realisation of great trade potential between the two countries. Interdependence and complementarity in trade is a strategic imperative to build trust and deepen the strategic engagement between the two countries.

(e) Pakistan Factor in Sino-Indian Relations . As per Indian perception, the biggest stumbling block in Sino – Indian relations is China building and leveraging Pakistan as countervail to India. Pakistan – China strategic nexus and its possible manifestation as a collusive hybrid threat plays heavily in India’s strategic calculus. China’s delay in accepting the UN Resolution 1267, on declaration of Masood Azhar as a terrorist is deemed to have emboldened Pakistan to use jihadist as strategic assets to undertake cross- border terrorism. Pakistan-China-Taliban nexus reinforces the perception that China has a selective approach in dealing with the scourge of terrorism. Further, while China insists that its territorial integrity must be respected by others, not respecting India’s territory and creating CPEC as the flagship of the Belt and Road Initiative, wherein a number of projects pass through Indian Territory illegally occupied by Pakistan, leads to strategic mistrust about China’s intentions. The recent push by China to discuss the abrogation of Article 370 of the Indian Constitution, an internal affair of India, in the UN Security Council at the behest of Pakistan despite India’s Minister for External Affair’s personal briefing to the Chinese Foreign Minister, has not been well received by the Indian Government. It has led to a strong perception that the Wuhan Spirit that China speaks about is dead and buried. New Delhi is also intrigued with China’s persistent opposition on India’s entry into the NSG while seeking similar status for Pakistan, a known nuclear proliferator. There is a need for a sustained dialogue to address these issues in pursuance of building mutual trust.

(f) US Factor . The US perceives China as a major challenger to its superpower status and seeks alliances and partnership with other countries to balance China. Beijing, on the other hand, perceives that Washington is weaving a grand encirclement design to stymie China’s legitimate rise in the global order. In this backdrop, China remains apprehensive of the growing India – US strategic partnership, thinking that it is aimed at containing China. Emergence of QUAD, signing of LEMOA (Logistics Exchange Memorandum of Understanding), COMCASA (Communications Compatibility and Security Agreement) MALABAR military exercises and other facets of defence cooperation are viewed by China with scepticism. India on the other hand is concerned, with China – Pakistan collusivity and its creeping assertiveness on the border. India is opposed to any security alliances and seeks a multi – vector engagement with all stakeholders towards creating a poly- centric world and Asia.

(g) South Asia . Geopolitical imperatives make India a major stakeholder in the socio- political and economic landscape of South Asia. These sovereign states and China are welcome to develop close relation albeit with due regard to Indian sensitivities. China’s strategic forays in South Asia, huge investments in the critical infrastructure and its supping with some authoritarian regimes and non-state actors in India’s immediate neighbourhood, rings alarm bells in India and fuels mistrust. China, is also perceived as portraying India as a rising hegemon in South Asia, prone to arm twisting its smaller neighbours. A sustained and transparent dialogue between all stakeholders is essential to harmonise efforts and allay apprehensions.

(h) Indian Ocean Region (IOR) . IOR is increasingly seen as part of larger Indo- Pacific construct in terms of global trade and security. India Ocean is the confluence of continental and maritime components of China’s Belt and Road Initiative. Operationalization of China – Nepal Economic Corridor, China – Myanmar Economic Corridor and China’s stakes in a string of ports in Kyaukpyu, Gwadar, Jiwani, Colombo, Hambantotta, Djibouti, Lamu, leasing of islands in Maldives and development of critical infrastructure in littoral states have become topics of hot debate in regard to evolving strategic balance in India’s immediate neighbourhood. China’s increased maritime footprints in the IOR are perceived to be in sync with its ‘Two Ocean Strategy’. India is a strong exponent of IOR as a zone of peace and the aggressive posturing by China in the region with its predatory economics leaves its motives open to question. Hence a strategic dialogue between India, China, and other stakeholders will go a long way in maintaining peace and tranquillity in the region

(j) Global Governance . While there are convergences in the views of India and China on some policies concerning global governance, yet divergences abound. China considers the current global institutions as Western imposed and is keen to either change it in concert with its own policies or create a new set of institutions under its leadership. China appears to have assessed that these initial decades of the 21 st

Century are a period of strategic opportunity that it needs to grasp to achieve greater influence and geo-economic and diplomatic leverages, thereby ensuring that China can achieve its Dream of surpassing USA and the West. The economic crash of 2008 that resulted in the weakened economies of USA and the West is seen by China as a golden opportunity to seek for itself a major role at the World Stage. Chinese leaders since Jiang Zhemin have worked systematically towards a future realignment of the World Order by establishing parallel structures to a wide range of US led international institutions, like BRICS (to counter G7/8), AIIB & NDB (to counter ADB & WB), SCO (to counter NATO), etc. China plays a key role in financing these alternative mechanisms that are designed to increase China’s autonomy vis-à-vis US dominated institutions and to expand its international sphere of influence. With such a network of China-centred organizations and mechanisms, China has strategically targeted gaps within established intergovernmental structures. While India is a part of both sets of Institutions, it does not look at either as a zero-sum game. A strategic dialogue between India, China, and other stakeholders will go a long way in maintaining a balance between these systems and avoid conflicts of interests.

This book seeks to assess the causes of strategic mistrust in Sino – India relations and recommend measures in the near to medium term for taking initial steps to build strategic trust and improving bilateral relations. Towards that end the divergences discussed above have been taken as individual chapters with both Indian and Chinese scholars providing respective perspectives. The Indian scholars are a mix of retired Ambassadors and Defence Service officers, and scholars, while the Chinese scholars are all academics.

Comprehending each other’s point of view provides an ideal platform for a step-by-step approach to build strategic trust after decades of being suspicious of intentions and motives. Based on these papers, a set of policy recommendations have been listed that could form the basic building blocks towards achieving some semblance of strategic trust between the two countries.

CHAPTER – I

VISION FOR THE ASIAN CENTURY

THE ASIAN CENTURY: AN INDIAN

PERSPECTIVE

Ambassador Sanjay Singh, IFS (Retd)

Introduction

The Indian perspective of Asia, post-independence, was first articulated to a global audience at the Asian Relations Conference (ARC) ¹, which took place in New Delhi in March-April 1947 just four months before India had achieved its independence. It brought together many leaders of the independence movements in Asia and represented a first attempt to assert Asian unity. ²

In his welcome address ³, Jawaharlal Nehru, placing India at the centre of the continent, described Asia as consisting of West Asia, Central Asia, South Asia, South East Asia and East Asia each equally important in their own way, with different specificities. In welcoming observers from Australia and New Zealand and referring to the many problems in common on which co-operation was required in the Pacific and in the Southeast region of Asia, Nehru perhaps anticipated the Indo-Pacific region. It is the contention of this paper that developments in this part of Asia will be central to the progress of the Asian Century. It concentrates accordingly on this region. In his welcome address Nehru’s first reference was to China, indicative of the Indian acknowledgement of the significant role it was expected to play in the future of Asia. Even at that point of time, it was clear to an Indian mind that relations between India and China would play an important role in the overall progress and development of Asia. India therefore paid considerable attention to this relationship and continues to do so. This paper focuses on this aspect in detail.

Mahatma Gandhi and Jawaharlal Nehru, both of whom led India’s struggle for independence, each had their unique vision of Asia in relation to its role in the world. Nehru in his speech ⁴ at the ARC expressed the hope that Asia, which had played a great role in the affairs of mankind would begin anew. Speaking at the same Conference, Mahatma Gandhi noted that Asia had been the fount of wisdom which had given mankind the message of love, truth and that the world was one ⁵.

Nehru also spelt out in his speech ⁶ the course that Asia should now follow. He stated that connectivity within Asia, which had been disrupted by European colonialism, would once again be restored. Asia would stand on its own feet and play a crucial role in world affairs in promoting peace, essential in the new ‘atomic age’. He also supported the emerging United Nation structure and emphasized that the world should not be divided into groupings.

Chinese leaders also expressed similar feelings about the future of Asia. In his speech ⁷ at the Plenary Session of the Asian-African Conference on April 19, 1955 at Bandung, Premier Zhou En Lai stated that Asia, the cradle of great civilisations, had been subject to colonial depredations which had resulted in poverty and underdevelopment. But Asia was now awake and demanded political and economic independence and fundamental human rights and would oppose racial discrimination. It would defend its territorial integrity and sovereignty, essential for peace. Principles of mutual respect, nonaggression and non-interference were required for peaceful coexistence. Asian nations must follow this course. Bandung also underlined both the Indian and the Chinese expectation of good relations and cooperation between India and China, which would be greatly beneficial in the construction of a new Asia.

These two similar world views synthesised into the doctrine of Panchsheel, with its roots in the cultural traditions of India and China, two of the oldest civilisations in the world, brought together by Buddhism. Panchsheel or the Five Principles of Peaceful Coexistence were first formally enunciated by India and China in an Agreement on Trade signed on April 29, 1954, which stated, in its preamble, that the two Governments "have resolved to enter into the present Agreement based on the following principles.

i. Mutual respect for each other’s territorial integrity and sovereignty,

ii. Mutual non-aggression,

iii. Mutual non-interference,

iv. Equality and mutual benefit, and

v. Peaceful coexistence;" ⁸

The vision that had propelled Asia in its post-colonial journey did not exactly traverse the course set out by its founding fathers. It could not avoid falling into the traps of nationalism or avoid great power interference, both of which have hindered its journey. In some regions like South Asia, partition, also a legacy of colonialism, disrupted historical connectivities. A deficit in governance was evident in many parts of the great continent. Differences between India and China grew, resulting in the border war of 1962. Thereafter, the two countries have not lived up, for many decades, to the hope expressed in Bandung. Mutual suspicion still exists. While many parts of Asia have progressed well, others have not done so well and yet others have actually regressed.

This paper will cover West Asia and Central Asia in brief before coming to the Indo-Pacific encompassing South Asia, South-East Asia, East Asia and Australasia.

West Asia

West Asia has a number of countries which have leveraged their oil and gas resources to achieve remarkable economic development. However, the region today suffers from violent conflicts in several parts such as in Syria and Yemen and between the Palestinians and Israelis. It suffers from sectarian conflict, extremism, terrorism and external interference and is marked by a deepening divide between regional powers, especially between Saudi Arabia and Iran. The US has a pervasive presence all over the region and a history of intervention, not always beneficial. Russia has re-entered the region forcefully in Syria, and its influence is spreading beyond, rekindling US-Russia competition in the region. All this is affecting the overall growth and progress of the region. Owing to their heavy dependence on West Asia for their energy supplies, the major Asian economies view the growing instability in this region with concern. Any disruption in West Asia’s economy and energy supplies will have major consequences for the rest of Asia and the progress of the ‘Asian Century’. ⁹

China’s presence in the region has been growing rapidly, underpinned by increasing imports of oil and gas and expanding trade and economic relations. The Central belt of its Belt and Road Initiative (BRI) traverses the region, which is witnessing China’s increasing maritime presence and acquisition of naval facilities in the Red Sea and Indian Ocean Region. China’s steady strengthening of its engagement with the region, is also leading it to begin to play a more active political role in West Asia.

India too has considerable interest in the Gulf and the broader West Asian region, with which it shares civilizational ties. Over 8 million Indians live and work in the region. The region provides around 70% of India’s oil and gas requirements as well as phosphatic fertilizers and urea, essential for agriculture. It is India’s largest economic partner, with trade exceeding $100 billion annually and a growing investment partnership. India, in its interactions with the countries of the region, has been non-prescriptive and non-interfering, and has sought to promote dialogue and moderation.

Central Asia

Central Asia, often called the Heart of Asia, was part of the Soviet Union till its break-up in 1991. It is a region, which though blessed with enormous natural endowment, has not lived up to its potential. It is here that the construction of a new Eurasia is taking place. This development is led in the economic sphere by China through its BRI, and Russia through its creation of the Eurasian Economic Union. Russia plays the major political role. The US, through its presence in Afghanistan as well as in other countries of the region, also wields considerable influence. The issues of particular concern to the region are extremism and terrorism, with developments in Afghanistan being the main fount of such instability. These scourges also pose a serious threat to the rest of Asia. The SCO (Shanghai Cooperation Organisation) is the main regional forum which brings together major powers of the region to collectively address this issue.

The growing Chinese economic engagement with Central Asia and other parts of Asia has been formalised by the BRIlaunched in 2013. BRI is supported by the Chinese government financial institutions, like the Silk Road Fund, Exim Bank and China Development Bank and their four big banks – China Construction Bank, Bank of China, Industrial and Commercial Bank and Agricultural Bank ¹⁰. It is also supported by Trade agreements and exclusive trading arrangements that China has fashioned with individual countries as well as regional Associations. In order to protect its assets in Central Asia and the Af-Pak regions, China is also engaged with Central Asian countries and the SCO towards the objective of meeting threats from terrorists and extremists.

Indian engagement with Central Asia spans millennia and is civilisational. Historically the Silk Route forged deep and abiding cultural links between India and Central Asia. A close economic relationship was established with the region during the Soviet period. Post-1991 with the Central Asian countries gaining independence, this close relationship has been further strengthened. This is but natural given that Central Asia is part of India’s extended neighbourhood and of strategic importance to it. India shares two major interests with countries of the region – security and counter terrorism on the one hand, and on the other mutually beneficial economic interactions, including in energy and natural resources. India is a member of the SCO and is in discussion towards entering into arrangements with the Customs Union of Russia, Kazakhstan and Belarus and the Eurasian Economic Union (EEU). ¹¹

The Indo-Pacific

The Indo-Pacific is the term now used to describe the composite region comprising South Asia, South East Asia, East Asia and Australasia. While this is a relatively new term, India has historically had centuries of deep connect with East Asia and South East Asia, through trade, through the exchange of ideas and especially through the spread of Buddhism. Yet Asia-Pacific and South Asia are traditionally defined two separate regions. It is the growth of India, a major economy at the meeting point of these two regions that has now coupled them. This was first recognised by Prime Minister Abe, who when speaking at the Indian Parliament in August 2007 noted, "---We are now at a point at which the Confluence of the Two Seas is coming into being. The Pacific and the Indian Oceans are now bringing about a dynamic coupling as seas of freedom and of prosperity----." This confluence in the region, with ASEAN being both its physical as well as institutional fulcrum today, has been brought about by accelerated growth, increased trade, connectivity and regional interaction, a consequence of Globalisation. ¹²

While all parts of Asia are important, each in its own way, it is developments in the Indo-Pacific region, a region which contains both India and China, the two most populous nations and projected to be along with the US, the three largest economies in 2050, that will be the most significant in determining the future of Asia and the world. The Indo-Pacific contains 38 countries and covers 45% of the world’s surface area. It hosts over 4 billion people and nearly 60% of the global population. It has a combined GDP today of over $27 trillion, nearly 62% of global GDP in PPP terms, and represents around 46% of global trade. The rapid growth in the Indo-Pacific region over the past half century, aided by globalisation, has led to a steady shift of the global economic and political centre of gravity towards Asia. As this trend gets increasingly pronounced, Asian perspectives and ideas will play a greater role in determining the global discourse on all issues.

This development according to Investopedia "has led to the coining of the term Asian Century, which refers to the dominant role that Asia is expected to play in the 21st century because of its burgeoning economy and its increasingly wealthy middle class….Many market experts and analysts are speculating that the 21st century will become the Asian Century, dominated by Indonesia, India and China." ¹³ India broadly shares this view. Besides India and China, the ASEAN region with a population of around 700 million, is also witnessing significant growth. Indonesia itself is projected to be the 4th largest economy by 2050. This too plays an important part in the construction of the ‘Asian Century’. While this process will not be without disruptions, the overall trend is clear. However, its pace will depend on whether the region is able to construct an enabling architecture for itself.

Looking at the region in a historical context over the last two centuries, the turn of the 19th century witnessed rapid economic development in Japan, the first Asian country to modernise itself. Following its devastation in the Second World War, Japan rose from the ashes to rebuild itself (with help from USA). The Japanese miracle was emulated by South Korea, Taiwan, Singapore, and Malaysia – the Asian Tigers. China and other ASEAN (Association of South East Asian nations) countries followed. Finally, India also became part of the growth story. Today the Indo-Pacific contains six of the world’s largest economies and members of the G-20 -China, Japan, India, South Korea, Australia and Indonesia.

Globalisation, and the stability provided by the order and rules put in place by the US and its Western Allies aided Asian growth. These rules covered conduct in global commons, trade and finance as well as relations between nation states, and were made largely to serve the interests of the Western powers. These rules are today being challenged by the new powers emerging in Asia after decades of rapid economic growth, leading to increasing competition around the world and in the Indo-Pacific, for rule setting and creation of new norms, and the consequent re-ordering of global economic and security architecture. The new order coming into being is weakening Western control of global institutions and governance, creating in the West a backlash against globalisation and greater recourse to nationalism and unilateral behaviour.

Japan could be said to be the initial catalyst for the Asian growth story. Its own growth, investments, financial assistance and growth chains have had enormous effect on Asia. Japan today, under Prime Minister Abe, has adopted a more robust posture in regional affairs. Its Constitution now allows its forces to act abroad under certain conditions. Its navy is exhibiting a greater visibility. The new developments on the Korean peninsula and US-North Korea interactions under President Trump-Kim may lead it to focus more on enhancing its own defence capabilities. Developments in its neighbourhood have added fresh urgency to the logic of strengthening ties with other regional powers.

China, the largest economy in the region, is today also the largest investment and trading partner of nearly every Indo-Pacific economy. It is a critically important member of regional and global value and supply chains. The South Belt of the BRI, running from Southern China to Indonesia; and the Maritime Silk Road, running from the Chinese coast through South China Sea and the Indian ocean to the Mediterranean, have greatly enhanced its connectivity with the entire region. While partnering with China has considerable advantages for countries in its neighbourhood and beyond, it has lately also been facing criticism for its business model. China’s enormous investments in Science and Technology will soon make it a global technological hub. China’s aspirations have been spelt out in detail at the 19th Party Congress in 2017. The basic objective being to develop China, by the middle of the century, into a great modern socialist country that is prosperous, strong, democratic, culturally advanced, harmonious, and beautiful. However, with the US identifying China as its strategic competitor, there may be some bumps in the linearity of its growth. Developments around Huawei are a case in point.

India on its part has witnessed rapidly accelerated growth since it launched its economic reforms in 1991. By 2030, it is projected to be the 3rd largest economy in the world after China and the US. Its engagement with the Indo-Pacific is guided by its ‘Act East’ policy. There is a significant degree of understanding now between India and the US as well as Japan, over the future architecture of the Indo-Pacific. This may not be exactly to the liking of China.

Russia, under President Putin, has been expanding its presence in the Indo-Pacific, deploying its energy resources and military strength in this pursuit. Its growing energy relationship with China is a new factor in regional dynamics. As technology makes the oil and gas resources of Siberia more accessible and opens up the Arctic route, the logic of geography will accelerate this process.

The rapid growth in the Indo-Pacific has been sequential and at different rates, leading to a reordering of economic and political power. There is increasing competition between Asian powers, especially for resources and markets. Economic growth in the region has been accompanied by rising defence expenditures, and acquisition of arms, China’s being the largest. Increased Chinese defence spending coupled with a new assertiveness in Chinese behaviour has had its effect on the stability of the region. There has been increasing stress on regional fault-lines, boundary tensions, such as between China-India, China-Vietnam, China-Japan in the East China Sea and China-US/Taiwan, as well as disputes in the South China Sea. The activities of DPRK-North Korea continue to be worrisome. Regional differences and disputes could have adverse effects on SLOCs and consequently on trade and maritime security.

Coming to the US, President Donald Trump has been abandoning the principles that have hitherto guided US actions in the economic and security domains. His stated focus is on ‘Making America Great Again’. His interactions with North Korea, Syria etc. do not give a clear idea of what precisely are his objectives apart from his belief that the US should not act as a global policeman any longer. He is resorting to unilateralism and rolling back on the post-Cold War globalisation process. The US under him has initiated a trade war with many other nations of the world, and especially with China. The US reluctance to carry the weight of supporting the regional order is creating a vacuum in the Indo-Pacific, which a rising China with its growing economic, military and maritime power is attempting to fill and other powers of the region are trying to grapple with.

While US behaviour under President Trump has been somewhat erratic and transactional, the US continues to maintain the largest security presence in the region. It has recently announced the setting up of a base in Papua-New Guinea and has been conducting Freedom of Navigation Operations (FONOPs) along the islands developed by China in the South China Sea. In response to the economic challenge of China, in October 2018 the U.S. brought into being the Better Utilization of Investment Leading to Development Act (BUILD), creating the U.S. International Development Finance Corporation (USIDFC), with a cap for investments up to $60 billion. All this is indicative of the increasing strategic competition in the region between the US and China. Consequently, the order which obtained in the region for the last three decades, based to a large extent on the US being the only hegemon present, is coming under increasing stress. A reordering of the economic and security architecture is required to ensure stability in the region.

In June 2013, Chinese President Xi Jinping had put forward the suggestion for a ‘new model of Great power relations’ with the US, stating that ‘both countries must accommodate each other’s core interests, avoid strategic miscalculations and properly manage differences’. While a positive US response to this had not been forthcoming, it should be noted that a mere bilateral accommodation between US and China, even if it were to materialise will not meet the requirements of the other powers in the region. President Xi’s proposal is perhaps indicative of a certain arrogance that had crept into the Chinese world-view, eschewing its earlier preference for a multi-polar world and exhibiting a certain disregard for other powers in the region.

China’s growing military capabilities and reach have raised the threat perceptions of other countries in the region. That China desires to change the status quo is indicated on multiple fronts – its attitude towards ASEAN countries, its conduct in the South China Sea and its island building and fortification activities. Similarly, its BRI is perceived as China’s attempt to dominate its periphery and the region, especially the economic space. Other regional powers see this as a threat to their own interests and are responding with hedging strategies. This is especially true of the Indo-Pacific members of the ‘Quad’, India, Japan and Australia.

All this brings us to the need to create mechanisms to help bridge differences and create architecture in the region which would be inclusive and promote regional peace and stability and economic prosperity. It would not be in the interest of the region to be divided into groupings arrayed with the objective of obtaining a balance of power. The effort should be towards bringing countries together with the objective of creating an open, inclusive and rule-based structure in the region.

Centrality of ASEAN

Several such platforms already exist and could be further built on towards this objective. India is of the view that ASEAN platforms meet these requirements. ASEAN today has become the nucleus for confidence building economic and security structures and institutions in the region such as the East Asian Summit (EAS), the ASEAN Regional Forum (ARF), the ASEAN Defence Ministers Meeting plus (ADMM+) and in the negotiations for the creation of a region wide free economic space – RCEP (Regional Comprehensive Economic Partnership). Such cooperation would also be well placed to address Non-traditional threats, from Narcotics, Terrorism, Pandemics, Natural Disasters, etc. which afflict the region, to provide security to SLOCs crisscrossing the ocean and protect global commons from piracy.

India is in the process of further strengthening its strategic partnership with ASEAN towards this end. It supports the concept of ASEAN centrality in the evolving economic and political architecture of the region and would like to participate in efforts towards building open, inclusive, rule-based structures that safeguard peace and security, respects international law, UNCLOS (United Nations Convention on Law of the Sea), freedom of passage in high seas and global commons. Sitting atop the Indian Ocean as it does and possessing one of the largest Navies in the region, India seeks to create a collective community to deal with contemporary challenges and promote cooperation, both bilaterally with other likeminded countries as well as through organisations such as IORA (Indian Ocean Regional Organisation) and IONS (Indian Ocean Naval Symposium).

This vision was iterated at the Shangri-La Conference in Singapore on June 1st, 2018 by Prime Minister Modi in his Keynote Address. ¹⁴ He stated that India stood for a free, open and inclusive region, with ASEAN central to its future. He stressed the requirement for a rules-based-order respecting sovereignty and territorial integrity and evolved through dialogue and consensus. This should also ensure freedom of navigation and apply to the global commons, to which all must have equal access. Underlining the advantages of globalization, he spoke out against protectionism and for an open, balanced and stable trade regime, which is India’s expectation from RCEP. Emphasising connectivity, he stressed that this should be based on respect for sovereignty and territorial integrity, consultation, good governance, transparency, viability and sustainability. This should empower nations, not place them under impossible debt burden. He spoke against great power rivalry and for cooperation and a democratic and rules-based international order, an open economy and sustainable future.

Building India-China Trust and Confidence

In keeping with its ‘Act East’ policy, strengthening its engagement with the countries of the region and its efforts to build a collective community based on consensus, India has reached out to China. It realises that the relationship between India and China, will to a large measure define the future of Asia. The vision which guides the leaders of these two most populous countries of the world could be gleaned from their public speeches. President Xi Jinping in his address ¹⁵ at the Indian Council of World Affairs in New Delhi, on 18 September 2014 entitled "In Joint Pursuit of a Dream of National Renewal " quoted Deng Xiaoping: only when India and China are developed will there be an Asian century. Their coming together will be historic and they share the responsibility to maintain peace and stability in Asia and achieve its prosperity and rejuvenation. Referring to profound changes in the international landscape, Xi noted that Asia’s rise is a major trend. China and India were major players in the shaping of a multi polar word and that their relations had broad regional and global significance. Their cooperation would benefit Asia and the world at large. With this objective, "China and India should become;

(i) Closer partners for development who will jointly pursue their respective national renewal;

(ii) Cooperative partners for growth and jointly promote Asia’s prosperity and revitalization;

(iii) Global partners for strategic coordination and work for a more just and equitable international order." He added that they should seek fair and mutually acceptable solutions to problems between them, including the boundary condition through peaceful consultation.

At the India-China Informal Summit at Wuhan on April 28, 2018 Prime Minister Modi and President Xi laid out their broad vision for future relations between the two countries. As per the Indian foreign secretary’s briefing on the subject ¹⁶, the two leaders noted that that the emergence of India and China had regional and global significance and that peaceful and stable and balanced relations between them would be a positive factor for stability. Proper management of the bilateral relationship would be conducive for the development and prosperity of the region and will create the conditions for the Asian Century. They stressed the importance of building an open, multipolar, pluralist and participatory global economic order, following sustainable solutions for global challenges which their two countries could jointly offer, and sought reform of multilateral financial and political institutions to make them more responsive to the needs of developing countries. They also condemned terrorism. The conclusions arrived at by the President Xi and PM Modi at Wuhan in April 2018, are important and follow the basic vision enunciated by their predecessors who led their two nations when they reclaimed independence from foreign domination.

Yet it also true that there has been a general lack of trust between the two countries, especially since their border war in 1962, the continued uncertainty on the border, and also on account of Chinese actions in South Asia and relations with Pakistan, a country hostile to India. China has aided Pakistan in developing its nuclear weapons programme, continues to supply it with arms and shields Pakistani support to terrorism. Linked to BRI is the CPEC (China Pakistan Economic Corridor) running from Western China through Pakistan, which China has built through Pakistan occupied Kashmir with disregard to Indian sovereignty. CPEC links China’s maritime and overland silk roads at the Pakistani port of Gwadar on the Arabian sea. China is also developing a number of ports along the Indian Ocean littoral, where its navy could be deployed to ostensibly support and protect its maritime trade. But these could also be used to project its power. This development of ports starts from the South China Sea which it has converted into its own pond, and continues along the ‘string of pearls’, the Coco Islands off Myanmar, Hambantota in Sri Lanka, Gwadar in Pakistan and now Djibouti. It also has arrangements with Bangladesh – Chittagong, Oman- Duqm, Kenya- Mombasa and Lamu and with the Maldives and Seychelles. China has also aggressively tried to limit Indian influence in its periphery. All this increases Indian threat perceptions.

Two prominent Indian commentators have written authoritatively about the relationship between China and India in the recent past. India’s former Foreign Secretary, Shyam Saran, writes ¹⁷ that the emergence of China as a united communist state, and its moves to consolidate its control over Xinjiang and Tibet, brought the two Asian giants to each other’s doorstep.’ --- ‘The confrontation