2019: What’s in Store for India-China Relations?

India-China relations went through a year of relative calm in 2018. This was the result of the so-called ‘Wuhan Spirit’ – after Indian Prime Minister Narendra Modi and Chinese President Xi Jinping met in the Chinese city in April to attempt to sort out tensions in the relationship following the several months-long standoff in Doklam (Dolam) in Bhutan middle of last year. However, this respite must be considered unusual for the goal that China under Xi has set itself is of racing to the top of the global hierarchy at the apparent expense of the United States and India certainly is seen only as a bit player in this story.

The respite came about only because of a confluence of interests on both sides – the Chinese were under pressure from the trade war initiated by the US and in India, Modi needed to focus on domestic politics including the recently-concluded state elections and general elections next year. While the 90-day truce called by the US and China may or may not be extended, what is certain is that Beijing will eventually find its balance again and attempt to put its neighbours back under pressure. For India, the ability to counter will depend really on both sustained economic growth, including jobs growth as well as domestic political stability in the wake of the general elections.

The first half of 2019 is a period of sensitive anniversaries in China, which should also keep the Communist Party’s (CPC) focus firmly at home. One, it is the 100th anniversary of the May 4th Movement of 1919 led by students in Beijing against the Chinese government’s acceding to the terms of the Treaty of Versailles and giving up territory to the Japanese. Among other things, it encouraged the rise of Chinese nationalism and played midwife to the eventual birth of the CPC in 1921. The other anniversary is the 30th anniversary of the June 4th Tiananmen Square massacre of 1989.

These anniversaries are likely to invite an additional tightening of political control of Chinese citizens, including weeks-long shutdowns of universities in Beijing the epicentre of both movements, and in particular, of Peking University. The latter is the older equivalent of India’s own Jawaharlal Nehru University (JNU) in New Delhi in terms of prestige and role model at the national level. It is therefore, not a little ironic that the authorities have been at work slowly strangling JNU’s spirit and freedoms in ways that would make the Chinese proud.

2019 is also likely to see the second edition of the Belt and Road Forum. After India dramatically refused to attend the inaugural Forum in May 2017 and set the ball rolling on the blowback to BRI projects around the region, Beijing is hopeful that the ‘Wuhan Spirit’ will ensure New Delhi’s participation this time around. While this looks unlikely, the fact remains that India’s entrepreneurs and its manufacturing industry need the volume and the risk-taking that marks Chinese capital out from Western capital. This capital will not flow without the say-so of the CPC and that in turn depends on the nature of the relationship between India and China.

Not all sunshine ahead

For the moment, India’s absence of the necessary military reforms and modernization as well as its grossly understaffed diplomatic corps suggest to Beijing that New Delhi’s bark is likely to be worse than its bite for the foreseeable future. This means that once the sensitive anniversaries are out of the way, and either the truce with the US continues or President Donald Trump likely runs into his own series of problems at home distracting him from China, the latter is likely to return to familiar tactics aimed at keeping India off balance. This will mean continuing transgressions along the Line of Actual Control as well as sticking to and even expanding the BRI in India’s immediate neighbours and greater involvement in their domestic politics.

What is worse, India’s lack of economic takeoff – the conflict between the central government and the central bank have not gone unnoticed by China’s fund managers and financial analysts – and the meandering pace of its own regional infrastructure projects suggest that India’s hands remain tied in terms of mounting a substantial and sustained challenge to China’s economic preeminence in Asia.

That said, 40 years since the launch of its economic reforms and opening up in 1978, China finds itself at a crossroads requiring still more market reforms as well as political opening up, neither of which appear to be on the anvil under Xi. Rather, things appear to be headed in the opposite direction with an emphasis on state corporatism and a practically mercantilist approach to foreign economic relations despite the ‘win-win’ talk of the BRI.

While this offers India the chance to promote itself as an alternative to China, it also shows up India’s lack of preparedness for such a role.

This is a longer version of an article originally published as Jabin T. Jacob, In 2019, is India prepared to promote itself as an alternative to China?’, Moneycontrol.com, 28 December 2018.

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