The 'undercurrents' in India-China relations

Reconciliation and calculations

After a clash last month that left at least 20 soldiers dead in the Galwan Valley, China and India have agreed to disengage troops along their disputed border, following conciliatory talks between the two countries’ military commanders.

Notably, after the July 5 meeting between Chinese Foreign Minister Wang Yi and Indian National Security Advisor Ajit Doval, the two sides reached an agreement to withdraw troops from the border and "fully restore" peace and tranquility in the eastern region of the Ladakh federal territory (India).

An Indian army convoy moves out of Ladakh. Photo: Reuters

This is considered a timely move to defuse the conflict that threatens to turn into a devastating war. Of course, with a complicated territorial dispute that has lasted for decades, the recent de-escalation is only a temporary solution, not a radical solution to the core contradictions that have led to border conflicts in recent years. In this case, perhaps the reconciliation is based on pragmatic calculations rather than a consensus of views.

Both India and China understand the “price” to pay if a direct war breaks out at this time. Both countries are prioritizing their efforts to deal with the common enemy, the Covid-19 pandemic. The pandemic has not only claimed the lives of hundreds of thousands of people but also put both economies at risk of recession. Although they have never stopped competing, the two most populous countries in the world cannot be separated because of their ties in many areas, especially economic and trade. If war breaks out, all cooperation will have to be cut off. Not to mention that the balance of power between India and China is far different from half a century ago - when the two countries went to war in 1962.

Many may argue that China appears to have a huge military advantage over India. But recent studies by the Belfer Center at the Harvard Kennedy School of Government in Boston and the Center for a New American Security in Washington suggest that India still has its own advantages.

Experts also cannot ignore the fact that both China and India are nuclear powers when assessing the balance of power. In addition, in terms of air and land forces, both have “equal strength and equal talent” strengths. That means that if a war breaks out, it will be difficult to determine the winner, and losses will come to both sides.

India signs deal to buy Russian air defense system. Photo: AP

Most importantly, the current governments of both countries have sent out messages that they do not want tensions to escalate into a full-scale, direct war. Although Beijing has not repeatedly spoken out about the conflict, its recent actions at the border have shown its determination and its ability to demonstrate its power.

As for India, Prime Minister Narendra Modi’s speech when visiting troops in the Ladakh region on June 3, in which he emphasized that “The era of expansionism is over,” seemed to be a message aimed at Beijing and at the same time affirming India’s determination in the face of territorial disputes. So, it can be said that withdrawing troops at a time when both sides seem to have clearly expressed their views on the matter is an appropriate tactic. Only, that is not the end of everything!

Simmering confrontation

Although the defuse in the border area has been removed, this move cannot end the confrontation between the two countries. China is said to continue to consolidate key positions or upgrade infrastructure right in the border area. Meanwhile, India is also promoting the equipment of new weapons and equipment. Notably, New Dehli has approved procurement projects worth up to 5.55 billion USD, mainly for the army and air force.

India also plans to invite Australia to participate in the annual Malabar naval exercise along with the US and Japan. With this move, India seems to want to convey a hidden message that the “quad” group will create a solid security foundation for the region, preventing any country from expanding its influence.

87% of Indians say they are ready to boycott Chinese goods, according to a survey by Local Circles. Photo: Times of India

On the other hand, India-China tensions are also spilling over into technology and trade. The Indian government recently decided to ban 50 Chinese apps, including popular consumer apps like WeChat, TikTok and Yahoo Maps.

India’s move is a major blow to China’s ambitions to become a digital superpower and could cost Chinese companies millions of dollars, experts say. It could also pave the way for other countries to boycott Chinese apps.

Apart from technology, the Indian government also said that the country has decided not to participate in any trade agreement with China due to the problems it is facing related to China. Accordingly, India decided to withdraw from the negotiations on the Regional Comprehensive Economic Partnership (RCEP) in 2019.

The Indian government is asking e-commerce companies like Flipkart and Amazon India to clearly state the country of origin of products sold online to curb Chinese goods, a source told the Economic Times. Indian companies will have to comply with this regulation by August 1.

Indian Prime Minister Narendra Modi and Chinese President Xi Jinping. Photo: AP

Indian industry has also taken drastic action. Recently, JSW Group, one of India's leading steel manufacturers, announced last week that it would cut imports from China from $400 million last year to $0 in the next two years. According to a survey by LocalCircles, up to 87% of Indians said they are ready to boycott Chinese goods or stop using products from Chinese companies such as Xiaomi, Huawei, TikTok, WeChat, etc. for at least a year.

Although many experts believe that calls from India to boycott Chinese products will be short-lived, given India’s heavy reliance on Chinese imports, the recent Sino-Indian border conflict has clearly awakened nationalist sentiments in India. Just one more “tiny spark” could ignite a fire of anger that threatens the stability of the relationship between the two neighbors.