Prime Minister Narendra Modi’s first genuine foreign policy encounter proved bruising. Chinese President Xi Jinping’s airplane touched down in India even as a few hundred of his soldiers pushed across the Line of Actual Control. Modi spent much of his time wagging a finger at Xi about this. The Chinese leader was unperturbed: He had invited these gate-crashers to the party. And the buzz about a $100 billion in investments disappeared soon after.
Until now, Modi has found handling the overseas world easier and more fun than he had expected. His first port of call was Bhutan. His last was Japan. Not exactly countries plotting India’s downfall. His sparring partner in Pakistan was Nawaz Sharif, a man lately struggling to keep unwanteds out of his own residence. Xi was the real world, not a decorative swing on the banks of the Sabarmati.
China was always going to be tough as nails. It has a leadership who rise through a brutal, take-no-prisoners system of internal succession that makes the politics of Uttar Pradesh’s badlands look fairly tame. Their school of negotiations has always been about power relations and barrels of guns.
So what, you may ask? Doesn’t Modi have a similar view of the world? One suspects he fell for the illusion that 21st century China can be fobbed off with money and markets. Anyone who thinks allowing yuan-funded railway stations will ensure Beijing won’t push the envelope is smoking an opium war. Japan has invested around $100 billion in China and the return gift is a demand for the Senkaku Islands. Vietnam and China trade $50 billion a year and it hasn’t done much good for their relations either.
This doesn’t mean India and China can’t do more on the economic front. Both sides have built artificial barriers in a foolish attempt to isolate the other. India’s pharma and software firms do well everywhere in the world — except in China. China, the world’s second largest economy and an exporter of billions of dollars in investment, has only $400 million in FDI in India. Neither side is welcoming to the other, and doubly so in India.
Beijing is not incorrect in saying its trade surplus is largely India’s creation: India blocked iron ore exports, it disallows Chinese firms to make stuff in India, thus ensuring everything is imported. Of course, there is the issue of successive Indian governments, including the UPA, having kneecapped their own manufacturing sector. The $20 billion of MoUs are welcome and hopefully more will follow.
What needs to be understood is all these billions swilling back and forth will have no impact on China’s foreign policy towards India. Money can’t buy you love. And it won’t buy you geopolitical peace with the Middle Kingdom.
One, the Chinese are very hierarchical, perpetually looking at lists and seeing how they rank compared to others. One thing they are pretty certain: India is nowhere in the same league as they are. The Chinese are privately often quite irritated at Western writers who lump them with India. Does anyone compare the United States to Mexico? Beijing sees only Washington as its peer. This sense has only been strengthened by the relative decline of Russia and Japan. India barely makes it to the third tier of nations in China’s rankings.
New Delhi wants powerful countries to treat it as an ‘equal partner’. The Americans nod politely when they hear this. The Chinese roll their eyes.
Two, as Indian officials who negotiate with the Chinese will tell you, the only time Beijing takes us seriously is when we are close to the US. India’s economy is one-fifth the size of China’s. This is about the same magnitude of difference between Pakistan’s economy and India’s. And today’s Indians treat Pakistan as the neighbourhood drunk. What do you think Beijing thinks of us?
It is the combination of India and the US that persuaded the Chinese negotiate a generous boundary agreement nearly a decade ago. As the Indo-US relationship went off the tracks, the Chinese began to walk back from the agreement. The Indo-Japanese relationship may have a similar sobering impact on China, but it’s still too early to tell.
It would be very nice to have China respect India but New Delhi will have to earn it the hard way. If India sustains an economic growth rate greater than China’s while maintaining its democracy, then the game changes. This may not happen yet. For now, don’t be surprised that Beijing treats India as the mouse that roars.
Xi’s big (non-American) dreams revolve around his various Silk Routes. He wants to build infrastructure and commercial corridors through two land routes, running through Pakistan and Myanmar, and a maritime one all around the Indian Ocean. Modi sensibly didn’t endorse them and is apparently wiggling out of Manmohan Singh’s ill-conceived support for a Bangladesh-India-China-Myanmar corridor. India’s refusal may be a reason the $100 billion investment figure evaporated.
The Chinese watch for signs of weakness. Modi may have contributed to a perception of Indian weakness by speaking in Hindi. Jiang Zemin, the former Chinese leader, once reportedly told President KR Narayanan matter-of-factly, “China is beating India in everything, except software. You are good in that only because of your superior English.” Having officially surrendered that advantage, unsurprisingly Beijing is tweaking India’s tail.