UNIT 7 INDIA’S POLICY TOWARDS CHINA

Structure
7.0 Objectives

7.1. Introduction

7.2. India‘s China Policy

7.3. Issue of Tibet

7.4. Border Dispute

7.5. Negotiations and Agreements

7.6. India-China Economic Relations

7.7. Belt and Road Initiative

7.8. Let Us Sum Up

7.9. Some Useful References

7.10 Answers to Check Your Progress Exercises

7.0 OBJECTIVES
In this Unit, you will be reading about India‘s policy towards the Peoples‘ Republic of China (PRC).
After going through this Unit, you would enable you to understand:

 Importance of neighbourhood and dynamics of India-China bilateral relations;

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7.1 INTRODUCTION

India and China are civilizational nations. The two nations share more than 5000 years of unbroken
history, cultural and economic exchanges over millennia, and have been among the main sources of
world‘s heritage and culture. Separated by the Himalayas, they share a 3488 kilometres long border.
The two countries share a border with Bhutan and Nepal. India maintains that Aksai Chin is illegally
occupied by the PRC. China and India also dispute most of Arunachal Pradesh. Nevertheless, both
countries have agreed to respect the Line of Actual Control (LAC). Though the relationship has been
generally cordial, there are border disputes and an economic rivalry between them that have
sometimes led to strained relations. The modern relationship began in 1950 when India decided to
end formal ties with the Republic of China (Taiwan) and recognized the PRC as the legitimate
government. China and India are the two highly populated and fast growing significant economies in
the world. Improvement in quality of diplomatic and economic influence has only increased the
significance of their bilateral relationship.

Cultural and economic relations between China and India began centuries ago. Spread of Buddhism
and trade was facilitated through the Silk Route. China's growing opium trade with the East India
Company during the19th century led to I and II Opium Wars. Both India and China played a crucial
role in checking the military expansion of Imperial Japan during the II world war.

Jawaharlal Nehru based his vision of ‗resurgent Asia‘ on friendship between India and China. He
initially believed his vision of an internationalist foreign policy governed by the ethics of the
Panchsheel (five principles of peaceful coexistence), was shared by China. Nehru was disappointed
when it became clear that the two countries had a conflict of interest in Tibet

Most noticeable features of relations between India and China since World War II are border issue
that caused three military disputes – the Sino-Indian war of 1962, the Chola incident in 1967, and
the 1987 Sino-Indian skirmish. There was a clash at the Doklam in 2017 (the disputed Sino-
Bhutanese border). Nevertheless, there is visible improvement in diplomatic and economic relations
between the two countries since 1980s. China became India's largest trading partner in 2008. In
recent years, there is also a noticeable extension of their strategic and military relations. Besides trade
and commerce, there are other issues of mutual interest like climate change and reform of the global
financial order, in which both India and China are cooperating.

The two countries have not resolved their border dispute and India has experienced Chinese military
incursions into Indian territory. Both countries have steadily established military infrastructure along

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border areas. India remains concerned about China's strong strategic bilateral relations with
Pakistan.

In June 2012, China stated that "Sino-Indian ties could be the most important bilateral partnership of
the century.‖ Bilateral trade between China and India touched US$89.6 billion in 2017-18, with the
trade deficit widening to US$62.9 billion in China's favour. In 2017, the volume of bilateral trade
between India and China stood at US$84.5 billion. This excludes bilateral trade between India &
Hong Kong.

7.2 INDIA’S CHINA POLICY

India primarily perceives China as an authoritarian, communist legacy that continues to progress as a
strong and powerful country in its neighbourhood. In India‘s consideration, China is a strong
‗neighboring‘ country and already arriving on the global political stage as a superpower.

The Tibet episode, the 1962 war and the contrasting developmental paths over the decades have
contributed to India's changed outlook. Essentially, India's current perception of China is that it is
more of a powerful neighbour than a reliable partner. Many Indian opinion leaders feel India needs to
come out with a China policy with a ‗multiple‘ prism of competition, cooperation, correlation,
coexistence, collaboration and conflict. But there needs to be reciprocation. Given India‘s increasing
global stakes, it is expected that China acknowledges that India is also a power to be reckoned with.

China has emerged as a strong military and political power. Indian business community perceives
China more as an opportunity; whereas the think-tanks and the media visualize China more as a
strategic concern. Further the Indian government maintains a safe middle course. China currently is
too strong, both politically and militarily, compared to India. Given the two countries‘ identical
strategic interests in regional and global domains, the Indian policy appears to remain cautious and
watchful of Chinese moves. Both countries heavily depend on resources for development which to a
fair extent shapes their mutual perception. For India, China is still a security concern, especially on
territorial and maritime domains. Thus, China poses multiple concerns and challenges to India
politically, economically and strategically besides militarily.

The People's Liberation Army inflicted the final defeat on Kuomintang (Nationalist Party) in October
1949 and PRC was born as a socialist republic some two years after India had gained independence.
India‘s first Prime Minister Jawaharlal Nehru had based his vision of a ‗resurgent Asia‘ on friendship
between India and China; and his vision of India‘s foreign policy was governed by the ethics of the

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Panchsheel (Five Principles of Peaceful Coexistence)) which, he initially believed, was also shared
by China. Nehru was disappointed when it was realized that the two countries had a conflict of
interest in Tibet.

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7.3 ISSUE OF TIBET

India established diplomatic relations with PRC on 1 January 1950. Chinese Communist Party
(CCP) Chairman Mao Zedong considered Tibet as an integral part of the PRC. Chairman Mao saw
Indian concern over Tibet as a manifestation of interference in the internal affairs of the PRC. The
PRC reasserted control over Tibet and to end Lamaism (Tibetan Buddhism) and feudalism, which it
did by force of arms in 1950. To avoid antagonizing the PRC, Nehru informed Chinese leaders that
India had no political and territorial ambitions, except that traditional trading rights must be
continued. With Indian support, Tibetan delegates signed an agreement in May 1951 recognizing
PRC sovereignty but guaranteeing that the existing political and social system of Tibet would
continue. Nehru considered that India's best guarantee of security was to establish a psychological
buffer zone in place of the lost physical buffer of Tibet.

India published new maps in 1954 that included the Aksai Chin region within the boundaries of
India. When India discovered that China had built a road through the region, border clashes and
Indian protests became common. In January 1959, PRC premier Zhou Enlai wrote to Nehru
emphasizing that no government in China had accepted as legal the McMahon Line, which the
1914 Simla Convention had defined as the eastern section of the border between India and Tibet.

In March 1959, Dalai Lama, the spiritual and temporal head of Tibet, sought sanctuary
in Dharamsala, Himachal Pradesh where he established the Tibetan Government-in-Exile. Thousands
of Tibetan refugees settled in Himachal Pradesh and Karnataka. Later, the PRC accused India
of expansionism and imperialism in Tibet and throughout the Himalayan region. China claimed
104,000 km of territory over which India's maps showed clear sovereignty, and demanded
‗rectification‘ of the entire border.

Check Your Progress Exercise 1

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7.4 BORDER ISSUE

Border dispute resulted in a short border war between China and India on 20 October 1962, resulting
in Indian defeat as the PRC pushed the Indian forces to within forty-eight kilometres of
the Assam plains in the northeast. It also occupied strategic points in the Aksai Chin and Demchok
regions of Ladakh, before declaring a unilateral cease fire on 21 November. China claimed that it
withdrew to twenty kilometers behind its contended line of control. India disagreed with the claim.

Relations between the PRC and India deteriorated during the rest of the 1960s and the early 1970s
while the China-Pakistan relations improved and the Sino-Soviet relations worsened. The PRC
backed Pakistan in its 1965 war with India. Between 1967 and 1971, a road to withstand all weather
was built across territory claimed by India, linking PRC's Xinjiang Uyghur Autonomous Region with
Pakistan; India could do nothing except protest.

An active propaganda campaign was continued by PRC against India; China in cahoot with Pakistan
provided financial and other assistance to insurgent groups in northeastern India. The PRC accused
India of assisting the Khampa rebels in Tibet. Sri Lanka played the role of chief negotiator for the
withdrawal of Chinese troops from the Indian territory. Both India and China agreed to Colombo's
proposals.

There were two more conflicts in 1967 between Indian and Chinese forces at their contested border
in Sikkim. While the first conflict was dubbed the "Nathu La Incident", and the other one was called
the "Cho La Incident". In September 1967, Chinese and Indian forces clashed at Nathu La. On 11
September, Chinese troops opened fire on a detachment of Indian soldiers tasked with protecting an
engineering company that was fencing the Northern part of Nathu La. This escalated over the next

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five days to an exchange of heavy artillery and mortar fire between the Indian and Chinese forces. It
was reported that 62 Indian soldiers were killed. Soon afterwards, Indian and Chinese forces clashed
again. In the Chola incident on 10 October 1967, both sides exchanged heavy fire. Both sides
suffered loss of lives besides many being injured.

In August 1971, India signed its Treaty of Peace, Friendship and Cooperation with the Soviet Union.
The PRC sided with Pakistan in its 1971 war with India. Though China strongly condemned India, it
did not carry out any threat to intervene on Pakistan's behalf. In subsequent years both India and
China progressed in economic and military areas, and met regularly to discuss and resolve the
bilateral issues including the important border issue.

Check Your Progress Exercise 2

1. Describe the border issue in India-China relations.

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7.5 NEGOTIATIONS AND AGREEMENTS

India and the PRC renewed efforts to improve relations in 1977 with Prime Minister Morarji Desai
heading the Janata Party government. In 1978, the Indian Minister of External Affairs Atal Bihari
Vajapayee made a landmark visit to Beijing, and both countries officially re-established diplomatic
relations in 1979. The PRC leaders agreed to discuss the boundary issue – it being India's priority –

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as the first step to a broadening of relations. The two countries hosted each other's news agencies.
The holy sites of Mount Kailash and Manasasarovar Lake in Tibet were opened for annual Indian
pilgrimages.

In 1980, Indira Gandhi approved a plan to upgrade the deployment of forces around the Line of
Actual Control. India also undertook infrastructural development in disputed areas. Chinese troops
could not move any further into the valley and instead were forced to withdraw from the valley. A
long dialogue process started in 1981 after the visit of Chinese Foreign Minister Huang Hua – the
first Chinese leader to visit India since Zhou Enlai‘s 1960s visit – to India. India and the PRC held
eight rounds of border negotiations between December 1981 and November 1987. In 1985 the PRC
insisted on mutual concessions without defining the exact terms of its "package proposal" or where
the actual line of control lay. Thus the negotiations of 1986 and 1987 achieved nothing.

A warming trend in relations was facilitated by Rajiv Gandhi 's historic visit to China in December
1988. The two sides stressed in the joint statement the need to restore friendly relations on the basis
of Panchsheel. India and China agreed to achieve a ‗fair and reasonable settlement while seeking a
mutually acceptable solution‘ to the border dispute. The statement also expressed China's concern
about agitation by Tibetan Separatists in India and reiterated that anti-China political activities by
expatriate Tibetans would not be tolerated. Rajiv Gandhi signed bilateral agreements on science and
technology cooperation, establish direct air links, and on cultural exchanges. The two sides also
agreed to hold annual diplomatic consultations between foreign ministers, set up a joint committee on
economic and scientific cooperation, and a joint working group on the boundary issue.

Top-level dialogue continued with the December 1991 visit of PRC Premier Li Peng to India and the
May 1992 visit to China of Indian President R Venkataraman. Six rounds of talks of the Indian-
Chinese Joint Working Group on the Border Issue were held between December 1988 and June
1993. Progress was also made in reducing tensions on the border via mutual troop reductions, regular
meetings of local military commanders. In 1993, the sixth-round of the joint working group talks was
held in New Delhi but resulted in only minor developments. Prime Minister P V Narasimha Rao and
Premier Li Peng signed a border agreement dealing with cross-border trade, cooperation on
environmental issues and radio and television broadcasting.

Beijing announced in January 1994 that it not only favoured a negotiated solution on Kashmir, but
also opposed any form of independence for the region. Talks were held in New Delhi in February
aimed at confirming established "confidence-building measures", discussing clarification of the "line
of actual control", reduction of armed forces along the line, and prior information about forthcoming

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military exercises. China's hope for settlement of the boundary issue was reiterated.

In April 1995 The Taipei Economic and Cultural Centre was opened in New Delhi in April 1995.
The Centre serves as the representative office of the Republic of China (Taiwan) and is the
counterpart of the India-Taipei Association located in Taiwan. Both institutions share the goal of
improving India-ROC relations that were strained since India‘s recognition of Beijing in 1950.

Sino-Indian relations hit a low point in 1998 due to India's nuclear tests. In 1998, China was one of
the strongest international critics of India's nuclear tests and entry into the nuclear club.

In the South Asian Association for Regional Cooperation (SAARC) Summit in 2005, China was
granted an observer status. While other countries in the region were ready to consider China for
permanent membership in the SAARC, India appeared reluctant.

Issues surrounding energy have acquired significance of late. Both countries have growing energy
need to sustain continued economic growth. Both countries signed an agreement in 2006 to envisage
ONGC Videsh Limited (OVL) and the China National Petroleum Corporation (CNPC) to placing
joint bids for promising projects.

China and India re-opened Nathu La pass for trading in 2006. Nathu La was closed 44 years prior to
2006. Re-opening of border trade is helping ease the economic isolation of the region. In November
2006, China and India had a verbal spat over claim of the north-east Indian state of Arunachal
Pradesh. India claimed that China was occupying 38,000 square kms of its territory in Kashmir,
while China claimed the whole of Arunachal Pradesh as its own.

In October 2009, Asian Development Bank formally acknowledging Arunachal Pradesh as part of
India approved a loan to India for a development project there. Earlier China had exercised pressure
on ADB to cease the loan, however India succeeded in securing the loan with the help of the United
States and Japan. China expressed displeasure at ADB.

In the 2012, BRICS Summit in New Delhi, Chinese President Hu Jintao told Indian Prime
Minister Manmohan Singh that "it is China's unswerving policy to develop Sino-Indian friendship,
deepen strategic cooperation and seek common development" and "China hopes to see a peaceful,
prosperous and continually developing India and is committed to building more dynamic China-India
relationship". In response to India's test of Agni-V missile, capable of carrying a nuclear warhead to
Beijing, the PRC called for the two countries to "cherish the hard-earned momentum of cooperation".

On 16 June 2017, Chinese troops with construction vehicles and road-building equipment began
extending an existing road southward in Doklam, a territory which is claimed by both China and

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Bhutan. On 18 June 2017, around 270 Indian troops, with weapons and two bulldozers, entered
Doklam to stop the Chinese troops from constructing the road. Among other charges, China accused
India of illegal intrusion into its territory, across what it called the mutually agreed China-India
boundary, and violation of its territorial sovereignty and UN Charter. India accused China of
changing the status quo in violation of a 2012 understanding between the two governments regarding
the tri-junction boundary points and causing "security concerns", which were widely understood as
its concerns with the strategic Siliguri Corridor. The Minister of External Affairs of India Sushma
Swaraj said that if China unilaterally changed the status-quo of the tri-junction point between China-
India and Bhutan then it posed a challenge to the security of India.

On 24 July 2017, Chinese Foreign Minister Wang Yi claimed that Chinese troops had not intruded
into Indian territory by its own admission. The US expressed concern in mid July 2017. China
repeatedly said that India's withdrawal was a prerequisite for meaningful dialogue. On 21 July 2017,
Sushma Swaraj said that for dialogue, both India and China must withdraw their troops.

On 28 August 2017, China and India reached a consensus to put an end to the border stand-off. Both
agreed to disengage from the standoff in Doklam. In February 2019 China made two reported
comments: one, objecting PM Modi‘s visit to Arunachal Pradesh; and secondly, India must sign NPT
if it wanted entry to Nuclear Suppliers Group (NSG).

Recent terrorist attack in Pulwama and India striking at Pakistan‘s Balakot received global attention
on Pakistan promoting terrorism and calls for action against Pakistan. China stands by Pakistan‘s
position and even blocked UN resolution to designate Jaish-e-Mohammad leader an international
terrorist and place a ban. This is a difficult situation for India to deal with.

7.6 INDIA-CHINA ECONOMIC RELATIONS

The trade and economic relationship between India and China has seen a rapid growth in the last few
years. Trade volume between the two countries in 2000, stood at US$ 3 billion. In 2008, the deficit
reached US$ 51.8 billion with China replacing the United States as India‘s largest ‗goods trading
partner‘. In 2011 bilateral trade reached an all-time high of US$ 73.9 billion. Further, the Indian trade
deficit with China increased to US$ 47.68 billion. In 2016, India was the 7th largest export
destination for Chinese products, and the 27th largest exporter to China. India-China trade in the first
eight months of 2017was US$ 55.11 billion.

India‘s trade deficit of $61 billion with China refuses to shrink as India is unable to export
more manufactured goods.

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India is welcoming Chinese investments which have a huge potential even though it was a
mere $2 billion of Chinese FDI in 2017. India and China are natural trade partners as they
complement each other. India is specializing in software and pharma and IT services while
China is specializing in manufacture of electronic hardware and infrastructure building.

China is India's largest trading partner with bilateral trade reaching almost $72 billion in 2016-17,
from $38 billion in 2007-08. Bilateral trade between April 2017 and January 2018 was reported to be
more than $73 billion. India's total trade with China for the financial year 2017–18 was $84.4 billion
and deficit was $ 51.72 billion.

Check Your Progress Exercise 3

1. Describe and discuss India-China trade relations.

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7.7 BELT AND ROAD INITIATIVE (BRI)

At its first convening in 2017, President Xi Jinping proclaimed China‘s Belt and Road Initiative
(BRI) as ―the project of the century‖. The Belt and Road Initiative is an informal coalition with the
objective of actualizing trillions of dollars for infrastructure investment across more than 60
countries.

China‘s grand strategic motivation for the BRI is as much defensive as offensive. China has become

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the world‘s largest commodities importer as well as largest exporter of finished goods. Today‘s
world features deterrence and sovereignty, democracy and transparency that minimize China‘s ability
to dictate matters and terms. The more the BRI becomes a multilateral exercise, the more it connects
Asian countries to China as well as rest of Asians to each other. From Russia and Turkey to Iran and
Iran to Myanmar and Thailand, the resurrection of multidirectional Silk Roads with no dominant
power symbolizes the return of Asia‘s past, one characterized by deference, not dominance. Asia has
nearly 5 billion people, of which about 3.5 billion are not Chinese. Other Asians aspire not to live in
a Chinese-dominated world order.

Many feel India should have signed on BRI. But the overwhelming consideration for India at the
time of the BRI initiative in 2017 was that China Pakistan Economic Corridor (CPEC) goes through
Pakistan-Occupied Kashmir (POK).

India could have also agreed to the recent proposal from China to have the trilateral economic
corridor between Nepal, China and India. While Nepal has signed the trilateral agreement, India has
abstained. It fears that China might dump its goods on India via Nepal. Similarly India also hesitated
signing the RCEP mega trade treaty involving 16 countries including both India and China for the
same reason.

Check Your Progress Exercise 3

1. What is Belt and Road Initiative? Explain.

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7.8 LET US SUM UP
India established diplomatic relations with PRC in April 1950. Prime Minister Nehru visited China in
October 1954. While the India-China border conflict in 1962 was a serious setback to ties, Prime
Minister Rajiv Gandhi‘s landmark visit in 1988 began a new phase of improvement in bilateral
relations.

Focus in India-China tensions is the dispute over territory in the Aksai Chin area, and Tawang in the
Indian state of Arunachal Pradesh, which China claims as a part of southern Tibet.

India realizes that any war with China would not be in its interests, as the Chinese military is far
stronger. China also recognizes that a conflict with India would adversely affect its multifaceted
investments made in India‘s neighbourhood and that the best way forward would be to maintain
peace along the border. Further, India has emerged as an important destination for Chinese goods.

In 1993, the signing of an Agreement on the Maintenance of Peace and Tranquility along the Line of
Actual Control (LAC) on the India-China Border Areas during Prime Minister Narasimha Rao‘s visit
reflected the growing stability and substance in bilateral ties.

Both India and China are engaged bilaterally, regionally and globally and this approach is expected
to continue for years to come. In June 2012, China stated its position that "Sino-Indian ties" could be
the most "important bilateral partnership of the century". Indian PM Modi‘s words ―Asia and the
world will have a better future when India and China work together with trust and confidence‖.

Nevertheless trust deficit and a ‗security dilemma‘ still remains an irritant in the bilateral relationship
between India and China. India understands that any war with China would not be in its interests
since the Chinese military is far more superior and stronger. Similarly, it is equally clear to China
that a conflict with India would adversely impact its huge investment in India‘s neighbourhood and
the best way ahead would be to maintain peace. China certainly has excess manufacturing capacity
and is looking for dumping its products in huge Indian market.

Thus, while evolving India‘s approach to China has recently shifted from a hard line to a conciliatory
approach, one needs to watch how the differences play out regionally and globally in the coming
times.

7.9 SOME USEFUL REFERENCES

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 De, B. W. T. (2011). The Buddhist tradition in India, China & Japan. New York: Vintage
Books.
 Chellaney, Brahma, "Rising Powers, Rising Tensions: The Troubled China-India
Relationship," SAIS Review (2012) 32#2 pp. 99–108 in Project MUSE
 Frankel, Francine R., and Harry Harding. The India-China Relationship: What the United
States Needs to Know. Columbia University Press: 2004. ISBN 0-231-13237-9.
 Garver, John W. Protracted Contest: Sino-Indian Rivalry in the Twentieth
Century. University of Washington Press: 2002. ISBN 0-295-98074-5.
 Hellström, Jerker and Korkmaz, Kaan "Managing Mutual Mistrust: Understanding Chinese
Perspectives on Sino-Indian Relations", Swedish Defence Research Agency (September 2011)
 Strategic Asia 2011-12: Asia Responds to Its Rising Powers - China and India, edited by
Ashley J. Tellis, Travis Tanner, and Jessica Keough (National Bureau of Asian Research, 2011)
 Deepak, BR & Tripathi, D P "India China Relations - Future Perspectives", Vij Books, July
2012
 Hongyu Wang, ‗Sino-Indian Relations: Present and Future‘, Asian Survey 35:6, June 1995.
 Srikant Kondapalli, Emi Mifune (ed), Dragon Looks South: Current Drives in China's South
Asian Neighbourhood Policy, in China and its neighbours (ed. Srikant Kondapalli, Emi Mifune),
Pentagon Press, New Delhi 2010.
 Parag Khanna, The Future is Asian: Commerce, Conflict, and Culture in the 21st Century,
Simon & Schuster, New York. 2019.
WEBSITES:
 www.indianembassy.org.cn
https:mea.gov.in/portal/Foreign
Relations/china.October_2017.pdf
 Jayashree Sengupta, Modi‘s China Policy (https:/www.orfonline.org/research/modis-new-
china-policy)

 Parag Khanna, China Could not Dominate Asia if It Wanted to

 Venkatachalam, K.S. Tibet and India‘s China Policy: Is India Sacrificing Tibet to Improve A
Frosty Relationship With China? March 20, 2018
(https://THEDIPLOMAT.COM/2018/03/Tibet-and-Indias-China Policy)
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  Panda, J. India‘s China Policy Go Beyond Competition and Cooperation,
thedailypioneer.com/2015 (HTTPS://WWW.DAILYPIONEER.COM/2015/INDIAS-CHINA-
POLICY-GO-BEYOND-COMPETITION-AND-COOPERATION-PRISM.HTML)

7.10 ANSWERS TO CHECK YOUR PROGRESS EXERCISES

Check Your Progress Exercise 1

1) Your answer should be based on Section 7.3. Highlight the differences in perception of India
and China over Tibet, and India‘s conciliatory approach.

Check Your Progress Exercise 2

1) Your answer should be based on Section 7.4. Describe the 1962 border war and deterioration
in bilateral relations during the 1960s and 70s.

Check Your Progress Exercise 3

1) Your answer should be based on Section 7.6. Explain the dynamics of bilateral trade; and its
impact on the overall relation between the two countries.

Check Your Progress Exercise 4

1) Your answer should be based on Section 7.7. Describe in details the BRI – its economic and
strategic importance; and why India objects to BRI.

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