China-India relations assume “global and strategic significance” beyond just the bilateral dimension. Only two major developing countries with a population of over one billion and important representatives of emerging economies, China-India relations transcend the bilateral dimension and assume global and strategic significance.

General Issues:

• China and India continue to compete and have a contradictory outlook on many strategic and civilisational issues.
• Doklam and the disputed border between the two countries remains an issue of concern. The China-India boundary question is a complex and sensitive issue. Need to promote the settlement of the boundary question and maintaining peace and tranquility in the border areas. The key is to properly handle differences and find a solution through dialogue and consultation. Over the past decades, not a single bullet has been fired at the China-India border area and peace and tranquility has been maintained.
• The nature of Asian security, regional stability and the role of the U.S. in the region remains a concern.
• India’s efforts to ‘dumb down’ the Dalai Lama will have appeased China to an extent, other events in Ladakh and Arunachal Pradesh, where it takes a keen interest, will be seen as a provocation at this juncture. For example, the recent announcement by India of an “all arms integrated” exercise ‘codenamed Changthang Prahar (assault)’ in a “super high altitude” area near Chushul in eastern Ladakh, featuring tanks, artillery guns, drones, helicopters and troops, as well as para-drops, is almost certain to be read suspiciously by China. Simultaneously, the reopening of the Advance Landing Ground at Vijoynagar in Arunachal Pradesh for the use of military aircraft and a proposed major combat exercise, also in Arunachal Pradesh, in which the new Integrated Battle Groups will be seen in operation will add to, and aggravate, China’s concerns.

Specific Issues –

• India-Afghanistan-China trilateral – The hopes of two countries raised at the Wuhan summit of working together on a joint economic project in Afghanistan have not materialized. As the political situation in Afghanistan deteriorates, any actions in the region by India are checked by the joint efforts of Pakistan and China.
• The China-Pakistan axis – has further strengthened — the UN designating Jaish-e-Mohammad chief Masood Azhar as a global terrorist after a prolonged delay due to China. The Chinese investments in Pakistan and no clear stand on the revocation of Article 370 point in this direction. China maintains that the question of Jammu and Kashmir should be settled on the basis of the UN Charter, UN Security Council resolutions and bilateral agreements. What is of note is that its boundary agreement with Pakistan of March 2, 1963 and the China-Pakistan Economic Corridor (CPEC) have de facto altered the status quo and violated the spirit of the very UN Security Council Resolutions that China cites in support of Pakistan. China holds approximately 38,000 sq km of land in Aksai Chin and a further 5,180 sq km illegally ceded by Pakistan to China under the 1963 agreement. The latter agreement recognises under Article 6 that the settlement is an interim arrangement under which China would reopen negotiations with the concerned sovereign authority once the question of Kashmir is settled. China’s endorsement of the CPEC has been rejected by India as it passes through Pakistan Occupied Kashmir
• NSG – China has been resisting India’s entry into the Nuclear Supplier Group.
• China – US relations – Relations between China and the U.S. have sharply deteriorated.
• Internal Challenges – China’s 70th anniversary celebrations of communist party rule on October 1 were marred by continuing protests in Hong Kong, raising questions about the realisation of the “China Dream” by 2049 through the full reintegration of the Hong Kong Special Administrative Region. Further, the ‘One Country Two Systems’ applied to Hong Kong, meant to be a model for Taiwan’s return to the fold, could be viewed with scepticism.
• China’s Belt and Road Initiative (BRI) – The BRI has also come under increasing attack due to the fears relating to debt trap by China. China’s lack of adherence to global standards and disregard for the environment and labour rules is another concern in respect of the BRI.
• India’s relations with other powers – India’s relations with the U.S. have attained a new high. Relations with Russia have acquired a fresh dimension, incorporating economics alongside a longstanding military relationship. India’s line of credit to develop Russia’s Far East has fundamentally changed the nature of India-Russia relations. India’s relations with Japan have greatly strengthened. The Quadrilateral (the U.S., India, Japan and Australia) has gained a new lease of life.
• Trade – China has never pursued a trade surplus, and the trade imbalance between China and India is largely the result of differences in their industrial structures. China has taken active measures to increase imports from India, including lowering tariffs on some Indian imports to China, sending purchasing delegations to India, and assisting in the export of Indian agricultural products and pharmaceuticals to China. Over the past five years, China’s imports from India have increased by 15%. In the first half of this year, India’s trade deficit with China fell by 13.5% year-on-year, and its agricultural export to China doubled over the same period last year. The box office of Indian films is twice as much in China as in India. These figures have shown China’s efforts and sincerity in addressing the trade imbalance. China welcomes more exports of marketable and competitive Indian products to the Chinese market.

Way ahead:

• Need for more summits like the Wuhan Summit aimed at ensuring “higher levels of strategic communications.
• China’s efforts are more than likely to be directed towards ‘disruption’, primarily concentrating on disrupting the strategic alliances that India has forged, or strengthened, recently. India needs to be cautious in this direction.
• Maintain close high-level exchanges. There is a need to view China and India as each other’s development opportunities rather than threats.
• Make progress in aligning development strategies in areas like policy coordination, infrastructure, energy conservation and environmental protection, high technology, energy and medicine.
• Step up coordination in global governance. China and India are both members of multilateral mechanisms such as the China-Russia-India Trilateral, BRICS, SCO and G20, and share common interests in promoting globalisation and opposing trade protectionism.
• The uncertainty of the international situation poses common challenges to both China and India. Strengthening solidarity and cooperation between us is an opportunity for our respective development and the world at large.
• China and India should strengthen communication and coordination on international and regional affairs. We jointly advocated the Five Principles of Peaceful Coexistence, which have become the basic norms of international relations. We should stick to these principles.
• At the international level, we should firmly uphold the international system with the UN at its core and make the international order more just and equitable. We need to steadily advance reform of the World Trade Organization, promote South-South cooperation, and adhere to the core values and principles of the WTO, promote trade and investment liberalisation and facilitation, and build an open world economy that is conducive to the further development of developing countries and emerging markets.
• Carry out ‘China-India plus’ cooperation, promote free trade, infrastructure development and regional cooperation initiatives like the BCIM cooperation, harmonise policies and development strategies of all countries, strengthen cooperation in the fields of energy conservation, poverty alleviation, environmental protection and climate change, and achieve common prosperity.
• There must be certainty regarding the other side’s policies and intentions thus checking tension, mistrust, and competition characterised the relationship.
• With the West’s declining capacity and inclination to responsibly manage international and Asian affairs, India, China and other re-emerging powers are being thrust into new order building roles that would require coordination and cooperation to preserve global stability and co-develop new governance institutions and norms.
• In the backdrop of an emerging multipolarity, uncertainty on the future of globalisation, and, the still long journey towards social and high-tech rejuvenation of their economies, a lessening of regional tension is in the national interest of both countries.
• Both sides must recognise the “importance of respecting each other’s sensitivities, concerns and aspirations”; provide “strategic guidance to their respective militaries” to manage the border peacefully and strive for “greater consultation on all matters of common interest”, which includes building a real “developmental partnership”.
• Going forward, India’s China policy should be guided by three grand strategic goals: an inclusive security architecture in Asia that facilitates a non-violent transition to multipolarity without disrupting economic interdependence; a fair and rules-based open international order to better reflect Indian and developing economy interests; and, geopolitical peace and sustainable economic development in the neighbourhood.
• There is a need to address overarching issues of bilateral, regional and global importance and to exchange views on deepening India-China Closer Development Partnership.
• PM Modi’s vision of an inclusive Indo-Pacific region outlined at Shangri La event in Singaport must be given shape to.
• General points – Enhancing trade, resolving the boundary dispute and possible new Confidence Building Measures (CBM), regional issues including Afghanistan, Indo-Pacific policy, terrorism and other global and bilateral trade issues.
• India and China must work together to forge stable relations in which competition does not lead to conflict nor differences to disputes. India and China will always have to co-exist cheek by jowl, as they have done for millennia. It is in the larger interests of the two peoples that there be greater trust and cooperation and that there be deeper friendship at all levels.
• Helpful steps that can contribute to better relations include firewalling the bilateral track from third-party considerations, fighting stereotypes through objective media coverage, encouraging high level and other exchanges, especially among the youth, enhancing confidence building measures between the armed forces, balancing India’s trade deficit of $58 billion and injecting greater transparency in China’s growing presence in South Asia.
• Pave the way for furthering cooperation under the India-China Plus framework.
• There is a need to set up more robust communication in order to address each other’s concerns in a timely manner.