No other international relationship holds so much promise, as well as concern for the world, as does India's ties with China. As the two Asian nations emerge as world powers, manage disruptions, bend the fluid regional geometrics and shape global issues as they rise (albeit at different paces of progress), a key component of the relationship, especially for India, is fixing the power imbalance. China's assertiveness adds one more level of difficulty to this dynamic.
Tanvi Madan, fellow and director of India Project on International Order and Strategy in the Foreign Policy program at the Washington DC-based Brookings Institution, spoke to Firstpost on China and relations with India on the sidelines of Raisina Dialogue. Her work explores Indian foreign policy, focusing particularly on India's relations with China and the US.
Here are the edited excerpts from the interview
Is there an element of under-balancing China going on in India-Pacific? Would you agree?
We all think of balancing as a very traditional realist, balance-of-power way. The challenge for everybody is: how do you balance China in a globalised world? Where it’s not just engagement but your entire supply chain and economies are linked to it? So, there are countries that really don’t want to decouple from China. There’s a second thing. Particularly in the last couple of years, people (states) have become a little more careful (about balancing) because there is a bit of uncertainty about the US. That is creating a certain kind of behavioral change in China. For instance, Beijing has reached out to India and Japan because it is concerned about Donald Trump. This has also created an opportunity for these countries. That said, however, ‘balancing’ is still going on. India and Japan haven’t really stopped doing anything… Maybe they have grown a little quieter about it.
Is India's reluctance to militarise the 'Quad' or adopt a more overt containment strategy borne out of a fear of provoking China?
These things go step by step. When China was being more assertive in 2008-09, India, Japan and the US started the trilateral. It didn’t immediately get militarised. They started discussions, consultations… slowly it built up and did get militarised in the form of Malabar (trilateral naval exercise). Sometimes there’s a question of different speeds. The fact that not just a Quad was restarted, but it exists and has met three times between November 2017 and November 2018 indicates balancing. Quad’s existence upsets China a lot. Some of it is about signaling but just as we saw the trilateral which has now gone from being at the under-secretary/joint secretary/assistant secretary level to the ministerial level when John Kerry, Sushma Swaraj and the Japanese foreign minister met a few years ago, these things don’t happen overnight.
What will be the trajectory of India-China relationship? Do you foresee another Doklam?
We could ask the reverse. Are we going to see more improvement in ties? It all depends on what China decides. A strategic Chinese government, for instance, may want to drive a wedge between India and the US by appearing to be more generous. We are now at a situation where even if we solve the border issue tomorrow there will still be concerns over the Indian Ocean etc. Could it worse? Always. The challenge for policymakers is to make sure that it doesn’t escalate. But avoiding escalation with China shouldn’t be the goal. If China challenges India and if it means New Delhi has to show resolve (as it did not just during Doklam but also in 2013) it needs to do what needs to be done. Not say that we won’t show resolve because it might lead to escalation.
If we think about the World War II or even the Cold War, do increasingly integrated economies in a globalised world preclude nations from going to open war with each other?
I think the jury is out. That was the theory. That a globalized, integrated China in an interconnected world could lead to a more open, transparent, and potentially even a democratised China. But that has not been the case. Paul Staniland of the University of Chicago has said why not look at the 1870s… the rise of Germany… and there might be more of an analogy because it was an integrated Europe and yet they went to First World War. But the threshold for war now is higher. Doesn’t mean you can’t rule it out. Threshold is higher because we don’t know the counterfactual. Potentially had the integration not existed would we have seen caution on all sides? There is another aspect. Integration itself is setting up certain tensions — trade frictions, market access frictions etc. The key question for countries to consider is whether integration is benefiting or harming them more. Some of the reactions and the response that you are seeing in the US… Some people have made the judgement that everybody else have opened up more to China, but it hasn’t opened itself up to others.
How far can the pressure being applied by Trump work with China?
There are two different things. President Trump is very focused on things like trade deficits. Beyond the US president, there is a broader concern over things like market access issues that analysts and officials are more concerned about. It’s not about the trade deficit number but the broader ecosystem. The way China behaves, the preference it gives to its state-owned enterprises, the IT theft issues.
But there are complaints against India too as far as market access is concerned…
India and the US and a lot of European countries have similar problems with China, while the US has some issues with India. But the US-India trade deficit is one-tenth of that of China. So, the scale is different. India doesn’t have the same IT theft or forced transfer of technology issues. Plus, as a democracy India is going to have these debates very openly. That is not the case with China. There is a larger conversation and concern about the way the Chinese economy is operating and what China is doing with its economic power including buying strategic infrastructure. Will the pressure work? To some extent, arguably, it already has. US pressure has resulted in increased opportunities for India and Japan with China. Had India not been in election mode and made itself more attractive to foreign investment, it could have benefitted more. Is it going to work in terms of changing Chinese behavior? I think that is an answer we don’t have yet.
A trade war with the US should impact China more because it enjoys a surplus. Can we conclude that given the fact that data coming out of China isn’t very reliable?
And that’s the issue, right? We have articles in newspapers that soybean farmers in Iowa are hurt. That is a key political state. We don’t have that kind of data from China. People were expecting economic headwinds in China. The question is, if that is going to hurt enough to force a change in behavior. There are a lot of people who are skeptical. Beijing also has another problem. Most people don’t believe it when it agrees to do something because in many cases it has said that we will do ‘x’, and then didn’t follow through.
Since you mention upcoming elections, has it affected India’s foreign policy approach in any way, particularly with reference to China?
People often tie the Wuhan ‘reset’ with elections. No Indian prime minister going into an election wants to have a potential border flare-up with China. Unlike Pakistan, it is a bigger power… things can get out of control… You also might not have that sense of confidence. So, it might be a factor. But I don’t think that toning down is election-related. It started after Doklam. We saw signs of it. But we also signs of it as early as December 2017 when Chinese officials came to Delhi and also restarted the Russia-China-India trilateral. China’s concern with President Trump created an opportunity for India and it suited Indian interest to also bring the temperature down. To some extent there remains a capability gap. With the elections coming, you don’t want a crisis, because you will then end up having high-level leadership makes these decisions with one eye on the elections.
Can China use border dispute as a tool to achieve some sort of objectives during the Indian election season?
Even they wouldn’t know how that plays, right? Not just this prime minister but it would be harder for any Indian prime minister to back down if there’s an election. We assume that the Chinese want escalation but actually what they want is to be able to do these things (incursions or salami-slicing of territory) without anybody pushing back. We see an example of this in South China Sea. But China, too, perhaps realizes that in an election situation there is very little incentive for an Indian politician to back down.
Some analysts feel that India’s current trade deficit with China is so huge that we have ended up funding China’s containment strategy of India. What's your take?
I wouldn’t go that far because the volume of trade is nowhere near China’s trade with the US, for instance. (India-China bilateral trade hit a historic high of $84.44 billion in 2017, compared to US-China trade worth $710.4 billion in the same year). China has other ways to fund its containment strategy. The more serious issue is the India-China trade deficit ($51.75 billion in 2017, growth of 8.55% year-on-year) because it basically says this is not an interdependent relationship but a dependent one. We shouldn’t make it all about the trade deficit though. It’s not just the number. You want to reduce that but there are some underlying realities… India is not producing some things that it needs. The second and more problematic aspect is Chinese behavior. What needs to be fixed is not so much the trade deficit number but the behavior. China has in the past (and even now) not opening up its market in areas where India’s export strength lies. Whether its pharmaceuticals, IT, or even films, for example… there is a quota. For the last 10 years, Indian governments has been saying that it is not in Chinese interest to have such a big trade deficit because it means that it won’t be sustainable. There has to be a more balanced relationship.
Does China’s market-distorting behavior harm Indian manufacturing sector? Many Indian manufactures have moved from manufacturing to trading inexpensive Chinese products…
There is obviously an aspect of Chinese behavior but it is also true that Indian companies haven’t been competitive. The government needs to stop constantly trying to protect them. Indian companies have done well when they had to compete. You can tackle the Chinese cases where you think they are indulging in market-distorting behavior but Indian companies also need to be efficient. So there are two aspects. One, China’s market-distorting behavior and Indian competitiveness.
So, India needs to open up more. But there will be an inevitable political backlash. Is there any scenario that the two co-exist?
That’s a serious discussion that needs to be had. India is a democracy. Politicians say it is to protect the small and medium enterprises, but some SMEs may benefit from the opening up because they get greater access. The world has taught us that opening up alone without figuring how people benefit isn’t the solution. Globalisation does need to be more inclusive. But we also have the reality that since India has opened up it has taken more Indians out of poverty. If India truly needs to build capacity, it needs to look at China. Not the China of today that’s closing up but the China of 1980s that opened up. Invited companies and then used those expertise and networks to build global companies.
So does India’s political system interferes with its long-term planning?
You are trying to get me to say that democracy is bad. I am not going to. In a democracy, things are slower, but the speed and ability to do big things isn’t going to be the same. It is tough but building consensus at every stage means that it will be more sustainable over time. We know why Air India privatization isn’t happening. There are political-economic reasons. But China has problems too. That’s why it hasn’t been able to reform its state-owned enterprises. They have the same issues with SOEs. Point is, democracy is used by politicians as an excuse to say, ‘oh, we can’t do this’. In the recent past, China has made the argument that ‘look, India as a democracy is messy’. But the reason why so many democracies around the world are invested in India’s success is, this is the country that potentially can show that democracies can develop. We see the ugliness in democracies because they are transparent. We don’t know what’s going on in China, Saudi Arabia.
How do you rate Narendra Modi for his decisions on foreign policy? Is political continuity good for India?
I don’t give grades or numbers. As far as continuity is concerned, anything that cannot be continued, even if there is a different government… indicates there is something wrong with the policy. Whoever is in power, the challenges will remain, so will the opportunities. India won’t fall apart if there is a different government. As far as Modi’s performance is concerned, these judgements are better made with passage of time, based on outcomes. And right at this stage these outcomes are not necessarily clear. I do think that the perception of India in 2013 as a market, etc., that has improved. I do think the government should worry that it is turning the other way. The narrative abroad is starting to go back to that ‘disappointment, disillusionment’. The government has done well in building partnerships, now it must use these partnerships to build capacities.
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Updated Date: Jan 17, 2019 16:05:53 IST