INDIA AND SOUTH ASIA

China and India have much in common. They are both hugely populous countries, demographic superpowers, which are in the process of dramatic economic transformation. Between them they account for almost 40 per cent of the world’s population. They are both continental giants, China a dominating presence in East Asia and India similarly in South Asia. By the mid twenty-first century, they could both be major global powers. Together they threaten to redraw the shape of the world, tilting it massively towards Asia while at the same time projecting a new kind of nation-state of continental proportions in terms of both territory and population, a very different kind of global order from when the world was dominated by a handful of small- and medium-sized European nation-states. It is hardly surprising, then, that China and India are frequently bracketed together. Despite these similarities, however, in many respects the differences between them could hardly be greater, as symbolized by their long border running through the Himalayas, the greatest natural land barrier in the world, which serves to mark out what can only be described as a political and cultural chasm between the two countries. China has the longest continuous history of any country while India is a much more recent creation, only acquiring something like its present territory, or at least two-thirds of it, during the later period of the British Raj. [1119] Chinese civilization is defined by its relationship to the state whereas India ’s is inseparable from its caste society. India is the world’s largest democracy while in China democracy remains a largely alien concept. China has a powerful sense of identity and homogeneity, in contrast to India, which is blessed with a remarkable pluralism embracing many different races, languages and religions. These cultural differences have served to create a sense of otherness and distance and an underlying lack of understanding and empathy. It is true that India gave China Buddhism, and that there were many other intellectual exchanges between the two countries during the first millennium and beyond, but these are now largely forgotten. [1120]

For over fifty years relations between the two countries have been at best distant and suspicious, at worst antagonistic, even conflictual. After 1988 they took a turn somewhat for the better, but despite the warmer diplomatic words, there remains an underlying antipathy. There are two main causes. First, notwithstanding joint working groups and commissions, the two countries have failed to reach agreement on their border. And it was conflict over the border which led directly to the Sino-Indian War in 1962 when China inflicted a heavy military defeat on India which still rankles to this day. [1121] Second, far from exercising unchallenged hegemony in South Asia, India finds itself confronted by Pakistan, Bangladesh, Nepal and Myanmar, all of which China has deliberately befriended as a means of balancing against India, with these countries embracing China as a way of offsetting India ’s dominant position in South Asia. Of these relationships, the most important is that between China and India ’s sworn foe Pakistan, which, thanks largely to China, possesses nuclear weapons. China ’s shrewd diplomacy has meant that India has constantly been on the back foot in South Asia, unable to assert itself in the manner which its size would justify. India has proved much less diplomatically adept, failing to establish its hegemony over South Asia and not even trying to develop a serious influence in East Asia, notwithstanding the large Indian diaspora in South-East Asia, with which it has singularly failed to establish any meaningful kind of relationship. [1122]

There are two possible outcomes in terms of their future relationship. First, China could accept that South Asia is, in effect, India ’s rightful sphere of influence. In practice, this seems rather unlikely. Chinese influence in the region is too extensive and too well established for it to be rolled back or for China to concede that this should happen. It is an outcome which both China and its formal and informal allies in the region would resist. Furthermore, given China ’s growing strength relative to India, it is probably less likely than at any time in the last half-century. Second, India could accept that China ’s presence in South Asia is permanent and resolve to accommodate itself to this reality by, for example, conceding that an Indian- Chinese partnership is necessary for handling security problems in the region. In the longer run, this could even mean that India acquiesces in China ’s pre-eminence in South Asia as well as in East Asia. [1123] In this context, a major Chinese objective is to prevent the creation of any barriers which might impede the long-term growth of its presence, role and influence in Asia; other examples of this are its resistance to the widening of the US-Japan alliance and its refusal to accept any multilateral approaches or solutions to the sovereignty of the disputed islands in the South China Sea. [1124] The latter scenario — Indian acceptance of China ’s role in South Asia — would be consonant with this objective. In reality, of course, India has been obliged over many years to adapt — de facto at least — to the growing power of China in South Asia, so elements of this scenario already exist in tacit form. [1125]

China ’s rapid economic growth has underpinned its growing strength in South Asia. In 1950 the per capita income of India was around 40 per cent greater than that of China; by 1978 they were roughly on a par. By 1999, however, China ’s was not far short of being twice that of India ’s. [1126] Furthermore, although India ’s growth rate has steadily risen in recent years, it still remains significantly below that of China: in other words, China is continuing to extend its economic lead over India. Although India enjoys some economic advantages over China, notably its prowess in software, the software industry only accounts for a very small proportion of its labour force. Manufacturing accounted for a little over a fifth of India’s GDP in 2003 compared with over a half of China’s, while 59 per cent of India’s population was still employed in agriculture in 2001 compared with less than half in China. [1127] China ’s economy is now three times as large as that of India, [1128] with the gap extending. Even if India ’s growth rate overtakes that of China, it would take a very long time for the Indian economy to become as large as the Chinese. In short, China ’s economic power is likely to overshadow that of India at least in the medium term, if not much longer.

This makes the second scenario — India being obliged to live with and adapt to China ’s power and presence in South Asia — rather more probable. It also increases the likelihood that China will emerge over time not only as the dominant power in East Asia but in South Asia as well. There is, however, an important rider to this, as the rules of the game appear to be chang-ing in a significant way. During the second term of the Clinton administration, the United States established a strategic partnership with India which was extended in 2006 by the Bush administration to include nuclear cooperation, an agreement which was eventually approved by the Indian parliament in 2008. [1129] The agreement violated previous American policy by accepting India ’s status as a nuclear power, even though it was not a signatory to the Non-Proliferation Treaty. This was a pointed reminder that US policy on nuclear proliferation is a matter of interest and convenience rather than principle, as the contrasting cases of Iran and Israel in the Middle East also illustrate. The reason for the American volte-face was geopolitical, the desire to promote India as a global power and establish a new US- India axis in South Asia as a counter to the rise of China. [1130] During the Cold War relations between India and the US were distant and distrustful, and even after 1989 they improved little, with the US pursuing an even-handed approach to India and Pakistan and imposing sanctions on India after its nuclear tests in 1998. It is testimony to the growing American concern about China that the US was persuaded to engage in such a U-turn. For its part, India ’s position had previously been characterized by its relative isolation: apart from its long-standing alliance with the former Soviet Union, its determinedly non-aligned status had led it to resist forming strategic partnerships with the major powers or even second-tier ones. [1131] But there is unease amongst sections of the Indian establishment, especially the military, about China ’s growing power. [1132] Depending on how the US- India partnership evolves, it could dramatically change the balance of power between China and India in South Asia, persuading China to act more cautiously while at the same time emboldening India. [1133] The US-India partnership raises many questions and introduces numerous uncertainties. If it proves effective and durable, then it could act as a significant regional and global counter to China. How China will respond remains to be seen: the most obvious move might be a closer relationship with Pakistan, but it is not inconceivable that China might decide to seek a strategic rapprochement with India as a means of fending off the United States and denying it a major presence in South Asia.