 "India and China are inching closer due to Trump, but trust Beijing to still play the game of strategic deception")
Is India and China inching closer? The answer is complicated, and at least some of the clues behind their recent moves may lie in the capricious behaviour of a maverick US president who is rewriting all rules of politics and foreign policy.
In international relations, the term that defines India and China’s recent tentative, incremental steps towards a stabler equilibrium is ‘hedging’, a strategy that states employ to manage risks and mitigate potential negative repercussions of severe turbulence in world order.
That turbulence is being caused by Donald Trump, flying defiantly on the fumes of unilateralism. As of now, America is still airborne, but not for long. Until that moment arrives, the POTUS is the emperor of the world, determined to whip countries into submission with punishing tariffs and bullying them into negotiation to extract terms that he deems are more favourable to the US.
Across Asia, Africa, Latin America and the Middle East, including major trading partners of the US such as the European Union, South Korea and Japan, more than 20 countries have received formal warning from Trump, promising steep tariffs if they don’t sign a trade deal by August 1.
Trump’s ‘America First’ economic agenda is unleashing an unprecedented geopolitical and geoeconomic volatility. The instability is causing all of America’s foes, friends or partners to run for cover. And the resultant chaos is bringing even disparate actors together.
One such is the three-member bloc called the RIC, consisting of Russia, India and China, an almost forgotten framework that seems to have got a sudden wind. The trilateral strategic dialogue, conceived in the 1990s, among three of the largest and most influential countries on the Eurasian landmass was lying dormant till now. Trump’s tantrums may wake it up from hibernation.
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View AllTrump hasn’t declared unilateral tariff war on India or China, yet. The Trump team is engaged in prolonged negotiation with India, but a deal is proving elusive even after five rounds of talks. With China, a rudimentary arrangement has been reached that’s more of a tactical understanding than an exhaustive agreement, and most of the provisions remain unclear.
Meanwhile, Trump has given Vladimir Putin 50 days to sign a peace deal with Ukraine, failing which he has threatened 100% “secondary tariffs” on Russia, which may end up implicating India and China as Asia’s two biggest economies import around 85% to 90% of Russian crude and hydrocarbon products at a discount. Moscow has also increased supply of mineral fertilizers to New Delhi recently by threefold, and any secondary sanctions would severely hit India’s agricultural output.
Trump is also regularly berating BRICS, the non-western framework of Brazil, Russia, India, China, and South Africa (that expanded last year to include Egypt, Ethiopia, Indonesia, Iran, Saudi Arabia, and the UAE) that he calls a “little group” and accuses it, without evidence, of trying to erode the dominance of dollar.
On July 6, Trump threatened 10% additional tariff on any country aligning themselves with “the Anti-American policies of BRICS” – without explaining what those policies are – and on Friday, he mocked the group as “fading out fast” and repeated his threat at a White House event.
“When I heard about this group from BRICS, six countries, basically, I hit them very, very hard. And if they ever really form in a meaningful way, it will end very quickly… We can never let anyone play games with us.”
Trump’s paranoia is inexplicable because none of the BRICS members have announced any plans of a common currency to replace the US dollar, though there has been some talk of trading with national currencies, and India has on more than one occasion denied any interest to undermine the USD. What Trump’s unhinged rhetoric and bullying tactics have done, however, is create uncertainty over America’s behaviour and nudge the countries at the sharp end of his stick towards a deeper engagement.
The irony is, the more Trump indulges in thuggery out of a sense of imagined victimhood; the more he subjects global trading system to a withering assault, the more he creates universal resentment and undermines his own cause. The solidifying dissent is creating new opportunities for greater multilateralism and a truer multipolar order. In Asia, it is authoring a tactical thaw between India and China despite their fundamental strategic divergences and lingering mistrust.
Much of this owes to the shifting power dynamics of the Trump era, out of a need to tackle the uncertainties triggered by a psychotic US president, but the motivation for India and China to usher in a degree of normalcy in relationship is multifarious.
China is struggling with its own demons – of an irreversible economic slowdown, youth unemployment, burgeoning inequality, a demographic decline, production overcapacity, geopolitical headwinds, the self-imposed Taiwan crisis and a tense domestic political climate where the extent of Xi Jinping’s control within the party has come under some scrutiny.
China’s working-age population is shrinking and ageing, and Chinese youth are increasingly feeling disillusioned with the system. Chinese media group Caixin quotes a recent sociological study to report that “a rising number of young people in China are not just struggling to find jobs — they are giving up on the job hunt completely.”
The study by Su Lifeng, a researcher at the University of International Business and Economics in Beijing, looks at labour force participation data for Chinese youth aged 16 to 34 from 2018 to 2022, to find that it has fallen from 93.3% to 86.1%, leading to the surge of a “phenomenon that sociologists call ‘NEETs’ — young people Not in Education, Employment, or Training.”
In the report, Su attributes it to “a complex mix of factors, including overall pressure on the labor market, a structural mismatch between skills and available jobs, institutional barriers, and shifting attitudes toward work.”
It ties with other indicators emerging even from China’s tightly controlled social media. Frustrated with lack of employment opportunities with scarcity of good jobs Chinese youth are venting it online and targeting the “priviledged”.
BBC reports of a “growing list” of people who are at the receiving end of online ire from youth for their perceived headstarts in life as millions of freshly graduated youngsters struggle with “rising unemployment, slowing economy,” while “more and more young Chinese people feel that connections, or guanxi, pay off more than hard work.” Consequently, to put a lid on the anger, Chinese authorities are banning “excessive displays of wealth by celebrities and influencers”.
Inequality has added a further layer of complexity to downsizing, job cuts and hiring freezes, and those from modest backgrounds are finding that their opportunities for upward mobility are scarce despite education and hard work. Children of the ‘priviledged’ few are bagging the cushier opportunities through connections and networking.
New York Times reports how “disillusionment is being captured sarcastically online. One buzzword is ‘Pindie,’ a biting term for nepotism that means ‘competing through one’s father.’ Another is ‘county Brahmins,’ which lampoons small-town elites who gain status by monopolizing connections and jobs.”
The development could be damning for a society based on cut-throat competition and meritocracy. Lack of equality in opportunities strikes at the very root of a social contract and erodes confidence in a system where Chinese people have traded political freedom in lieu of prosperity. The Party, as the all-powerful organ that permeates every stratum of Chinese society, must own responsibility for it. That’s an added challenge for Xi at an already challenging time.
As Trump upends the trading system with punishing tariffs, China desperately needs export destinations for commodities such as steel, cement, aluminium where production has far outstripped domestic demand. Beijing, therefore, can ill afford to alienate the vast and lucrative Indian market.
India is faced with a different set of challenges. Trump pivots on a dime, and his administration seems to have abruptly reversed course on China, abandoning aggression in favour of a more collaborative approach bordering on courtship.
Trump came to power promising to arrest China’s technological and military prowess that depends on Beijing’s access to high-end computer chips but in a stunning reversal, the Trump administration has allowed US-based Nvidia, the world’s leader in chips for artificial intelligence, “to begin selling a lower-level but still coveted chip known as H20 to China” overturning Trump’s own, three month old policy. New York Times reports that not only has Trump gone back on countering Beijing, but he is also planning to travel to China later this year along with a business delegation to meet Xi and engage in “face to face” negotiation.
Whether Trump sees personal profit in this policy reversal or gave in to Wall Street’s lobbying efforts is irrelevant. What’s relevant from India’s point of view is that it adds to America’s unpredictability and unreliability as a strategic partner. Trump cutting deals with Xi is India’s worst nightmare.
It challenges a key Indian foreign policy notion – that America and China are on an irreversible course of military and economic conflict – and subsequently, it squeezes India’s space as a realist middle power that hopes to benefit from the contest. It also amplifies the already considerable geopolitical threat from China.
India would have noted, with some sense of injury and concern, that not only did the American president gloss over China’s active military and intelligence support of Pakistan during Operation Sindoor, Trump seemed hell bent on claiming undue acclaim for the conflict’s ending and even invited Asim Munir to the White House.
While India has been forced to publicly contradict the American president’s claim of “stopping a nuclear war”, an eventuality New Delhi desperately wanted to avoid, an undeterred Trump has been claiming fake credit at every opportunity, his speculations on loss of fighter jets pushing New Delhi into an embarrassing corner.
On trade, despite a burgeoning deficit, New Delhi cannot decouple from Chinese economy because its economic progress and objective in becoming the world’s next manufacturing powerhouse are incumbent on a steady supply of Chinese high-end components, capital-intensive and intermediate goods, pharmaceuticals, renewable energy technologies and industrial equipment including critical minerals and rare earths.
This interdependence has been brought into sharper focus due to Trumpian turbulence. Alongside, ties have seen renewed diplomatic engagements, attempts at restoration of strategic trust, resumption of high-level visits – all centred around key progress on de-escalation at the border since late 2024 when troops disengaged from the last two friction points at Depsang and Demchok.
The centrality of border dispute in bilateral ties has meant that with the reduction in risk of immediate confrontation, both countries have been taking gingerly steps. Trade is inching towards normalization, reinforcing the imbalance, economic cooperation is trying to avoid pitfalls and people-to-people ties are showing signs of easing with restoration of direct flights and renewal of Kailash Mansarovar Yatra.
There is a palpable sense in New Delhi that the moment is opportune for a positive trajectory in ties, towards an incremental improvement even if firmly within structural constraints. Accordingly, Special Representative-level talks have resumed, and the Indian defence and foreign ministers have gone on a back-to-back trip to Beijing to take part in major SCO-related events.
I’ve been poring over the official readouts released by both sides during Rajnath Singh’s meeting with Chinese counterpart Admiral Dong Jun on the sidelines of SCO Defence Ministers’ meeting in Qingdao on June 26, and external affairs minister S Jaishankar’s meeting with CPC Politburo member and foreign minister Wang Yi on 14 July in Beijing, and the texts of the statements reveal crucial signals.
This was Singh’s first visit to China since the 2020 Galwan clash – indicating the depth to which ties have fallen – and while the SCO defence ministers’ meeting failed to produce a joint communique because China and Pakistan teamed up to ambush India on Pahalgam terror attack, Singh’s one-on-one with Dong gives a clear signal on India’s hedging attempt.
According to the statement released by India, Singh “acknowledged the work being undertaken by both sides to bring back semblance of normalcy in the bilateral relations. He highlighted the necessity of solving the complex issues through a structured roadmap of permanent engagement and de-escalation.” He also “stressed on border management and to have a permanent solution of border demarcation by rejuvenating the established mechanism on the issue.”
Evidently, India appears keen on shifting the dispute framework from “management” to “resolution” while actively engaging in handling status quo. While India is showing cautious optimism in moving towards demarcation, Beijing is showing a marked disinterest.
I couldn’t locate any readout released by the Chinese side on this meeting, but a Global Times report quotes a so-called “expert” – a well-known ploy by Chinese media to push state-approved narratives – in saying that “Singh’s participation sends a positive signal. It shows India’s recognition of the SCO as a valuable platform for dialogue and reflects respect for the host country, while also signaling India’s willingness to continue improving relations with China.”
The attempt is to show that India is more interested in the détente, and that it has realised its folly of antagonising China. It also shows that Beijing prefers status quo management over comprehensive resolution and is happy to let structural challenges persist.
Similarly, if we take a close look at the readouts released by India and China post Jaishankar’s meeting with Wang – India’s foreign minister also met CPC chairman and Chinese president Xi, vice-president Han Zheng and Liu Jianchao, minister of CPC’s international department – the Chinese deception is evident.
Jaishankar, according to the MEA statement, “highlighted the positive impact of peace and tranquility in the border for the smooth development in bilateral relations and supported continued efforts towards de-escalation and border management. He underlined the need for cooperation on trans-border rivers, including resumption of provision of hydrological data by the Chinese side. He also took up restrictive trade measures and roadblocks to economic cooperation.”
The issues from India’s side are clear. The importance of resolution of the border dispute is stressed, and the minister focused on the need for China to remove export restrictions on critical minerals and rare earths.
The Chinese statement sets the international paradigm at the earliest, blaming the disruption in world order on American “unilateralism, protectionism, power politics and bullying” that are “posing serious challenges to the world”, and from that point the statement employs grandiloquence and hyperbole to define the state of bilateral ties.
“The two sides should aim high, plan for the long term, stay committed to good-neighborliness and friendship, realize the ‘Dragon-Elephant Tango’, and find a way for mutual respect and trust, peaceful coexistence, common development and win-win cooperation.”
India’s more sincere and direct framing is contrasted with China’s lofty rhetoric that indicates strategic deception. China is also compelled to hedge its bets owing to Trumpian instability but, while India feels compelled to create a new modus vivendi and is betting on pushing the envelope towards a more structured resolution of the border dispute, Beijing remains inflexible and manipulative on the border question.
It is telling India to cope with the fact that there remains a power differential in favour of China that’s widening, and it will never give up the border leverage – the only option for New Delhi is the one that Beijing is offering, fait accompli.
The writer is Deputy Executive Editor, Firstpost. He tweets as @sreemoytalukdar. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect Firstpost’s views.
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