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China-India Relations: A
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Complexity of Competitiveness
with Cooperation
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Maryam Azam
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Pakistan Study Centre
University of the Punjab
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Lahore, Pakistan
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3/1/2010
China-India Relations: A Complexity of Competitiveness with Cooperation
March 1, 2010
Pakistan Study Centre
University of the Punjab
Lahore, Pakistan
Research Panel:



Professor Dr. Massarrat Abid, Director
Professor Dr. Syed Farooq Hasnat
Ahmad Ejaz
Policy Report
February 2010
China-India Relations: A Complexity of
Competitiveness with Cooperation
By
Maryam Azam
Lecturer, Department of International Relations
Lahore College for Women University, Lahore
Introduction
Recent Indian relations with China have twin factors of emphasis. On the one hand,
border irritants reemerged and on the other, the question of Dalai Lama became a
source of added tensions between the two countries. Later, the Tibet question became a
China-India Relations: A Complexity of Competitiveness with Cooperation
March 1, 2010
main cause of annoyance, as well. These developments became a definite source of
departure from the cordial relations that these two countries are striving to have in
economic field.
In the past, the Indo-China relations remained strained, ever since the 1962 border war.
China claimed Tibet as an integral part of china, which it “liberated” in 1950.On the
other hand, India pursued the policy of goodwill, as at that time India was not in a
position to opt for any military action against China. Pakistan’s alignment with the west
and its joining of the defensive pacts in 1954 and 1955 also paved the way for India to
seek closer arrangement with China. Thus, when United States signed South East Asian
Treaty Organization (SEATO) in 1954 with Pakistan, India signed an agreement with
China on Tibet on April 29, 1954, in which India formally recognized Chinese claim over
Tibet, for the main purpose of securing its northern and north eastern borders. Dr.
Keskar, the Indian Deputy Minister of External Affairs, explained: “(The Indian)
government feels that the best way of protecting the frontiers is to have a friendly Tibet
and friendly China”1. The preamble of the treaty contained Panch Sheel (five principles),
which called for respect for each other’s territorial integrity, noninterference,
nonaggression and relations based on mutual coordination and peaceful co existence2.
The watchword of Hindi- Chini Bhai Bhai became a household slogan in India, but in real
politick the dynamics of power politics cannot be ignored. India’s support for the Tibetan
nationalist to wage anti-Chinese movement, Nepal-China treaty on Tibet in 1956 and
Chinese built up of road through Aksai China, a part of Indian Ladakh, connecting Tibet
and Sinkiang aggravated the situation. In this respect Prime Minister Nehru approached
Chou-En-Lai but it was retained by China that border issue was not the part of 1954
agreement and that it was still unresolved.
The Tibetan revolt of 1959 resulted in the flight of Dalai Lama, with thousands of his
followers to India, where they were granted political asylum. For nearly 50 years India
has hosted the Tibetan spiritual leader, which becomes a major cause of distrust
between the two neighbouring nations. The recent visit of the disputed north-eastern
Indian State of Arunachal Pradesh by Dalai Lama was condemned by the Chinese
officials. According to the spokesmen of the Chinese Foreign Ministry, Ma Zhaoxu the
China-India Relations: A Complexity of Competitiveness with Cooperation
March 1, 2010
visit “further exposes the anti-China and separatist nature of the Dalai clique”3. India has
used the Dalai Lama card to keep the issue of Tibet alive. Moreover, the presence of
Dalai Lama on the Indian soil is symbolic in a sense that it reflects the anti-Chinese
stance of India on the unsettled areas.
Ever since the beginning of 2000, the world has undergone tremendous transformations.
The emergence of regional powers centers and the rapid development of some societies
has been a hallmark of the prevailing global system and culture. These centres are
competing with each other to play a leading role in the international economic and
strategic systems. The Indians are being prompted by the United States, through
various defense and economic arrangements. U.S. civilian nuclear deal with India in
March 2006 has positioned India as a regional counter against China.
Presently, the India- china relations can be observed within the framework of at least
three dimensions. These dimensions of China-India Relations can be categorized as,
Strategic; Political; and Economic:
Strategic
As mentioned in the first part on this paper, both the states were in intense rivalry, as a
result of the Sino Indian border war in 1962 over the 3,500 km border. Indo-China
border known as MacMillan line was demarcated between the British rulers of India and
the Chinese and Tibet rulers in 1913 and 1914 as the result of Simla accords4. The
Chinese view is that the boundary was drawn by an arbitral act of the British, which was
the dominant power of its time.
During the 1962 war, China seized much of the Himalayas high ground, thus creating
strategic vulnerability for India. Apart from that, China claims Arunachal Pradesh as its
territory, which is one of the states of India. It borders with Chinese controlled area of
Tibet. Aksai Chin is another bone of contention between the two populous states of
Asia. It is administrated by China and claimed by India as a part of Kashmir. Its strategic
China-India Relations: A Complexity of Competitiveness with Cooperation
March 1, 2010
importance lies in the fact that it connects Xinjiang and Tibet. Xinjiang has vast natural
resources and is China’s largest oil producing region.
The decade of 1970s and 1980s saw continued strained relations between the two
states. However, in 1990s a series of Confidence Building Measures (CBMs) were taken
by these two countries, thus paving the way for the resuming of dialogue between India
and China. This process of rapprochement facilitated for establishing the agreements
on maintaining peace and tranquility in 1993 and 1996 along with talks between the
special representatives and sharing of maps. These helped to ease tensions between the
two countries. The high level exchange of visits was also important part of the CBMs. In
September of 1993, Prime Minister Narsima Rao visited China and signed an agreement
on the maintenance of Border Peace and Tranquility (BPTA). In a reciprocal gesture, in
December 1996 Chinese President Jiang Zemin visited India and assured the
permanence in the ongoing confidence building measures between the two states.
Moreover, an agreement on guiding principles on settling of disputes was signed in
2005. This agreement called for:

The resolution of border dispute through bilateral consultations in
accordance with the five principles of co-existence

Use of force must be avoided at all costs

Give due consideration to each other’s strategic and security dynamics

Historical evidences and national sentiments must be taken into account
during the consultations regarding border dispute

Strictly respect and observe the line of actual control

The India -china joint working group and India-China diplomatic and
military expert group to continue their work under the agreements of
1993 and 1996 which aims to clarify the matters related to the line of
control and confidence building measures5.
The 2006 talks between the Prime Ministers of India Manmohan Singh and Chinese
President Hu Jintao resulted in a ten-pronged strategy, to enhance co-operation and
mutual ties. Both the states decided to improve their ties on the following guidelines.
China-India Relations: A Complexity of Competitiveness with Cooperation
March 1, 2010

Sustainable strategic and co-operative partnership

Settlement of territorial issues

Enhancing assistance in the sectors of science and technology and civilian
nuclear programme

Strengthening institutional contacts by regular summit meetings6

Promoting bilateral investment in trade and commerce

Cooperation in industry, agriculture, energy, environment and tourism

Enlarging the canvas of people to people contact.
But trust deficit, competition to maintain strategic edge and to attain regional
imminence in the region, are the main impediments for a sustainable better relations
between the two neighbouring nations. The tensions in 2009, as a consequence of a
border dispute resulted in the Indian buildup of troops and the Chinese responded by
building roads and increased patrolling. This derailed the already agreed series of
confidence building measures, which had aimed at greater cooperation in terms of
trade, investment, and energy, in order to solidify industrial and economic cooperation.
The strategic partnership of India with the United States and US-India civilian nuclear
deal made the regional dynamics more complex. Bush administration perceived India as
a potential regional balancer. This move was seen with suspicion by China, which saw
this new developing alliance as an attempt to “encircle” China and to challenge its
growing economic influence, in the region and at global level.
Political
Chinese ambassador to India Zhang Yan stated that “2010 will be an important year for
China India relations”7 thus reflecting the significance of their relationship. A series of
military exchanges also took place in 2009. A five year agreement was also signed to
deal with the climate change8. This diversity in relationship reflects that both the states
have realized that despite some basic reservations, working on shared interest becomes
desirable.
China-India Relations: A Complexity of Competitiveness with Cooperation
March 1, 2010
The growing strategic partnership of India with the United States and China’s unique
friendship with Pakistan adds a variety of dicey dimensions in the South Asian region.
The increasing nexus between Pakistan and China in the military sphere is seen with
suspicion by India, while China and Pakistan are highly apprehensive about the
American increasing rapprochement with India, on a variety of issues, including that of
providing India with a wider role in Afghanistan.
India has also expanded its naval buildup in the Indian Ocean, to contain the growing
influence of the Chinese navy, in the area. This policy of strategic retribution, along with
the growing economic cooperation makes the India-China relationship more complex
and challenging.
Economic
In 1984 both the states provided the most favored nation (MFN) status to each other. It
was in the era of 1990s that saw a new beginning of bilateral economic relations. The
Double Tax Avoidance agreement in 1994 is one example which escalated the economic
cooperation, by providing investment opportunities. In 2003 Bangkok agreement, both
the states offer trade preferences. India provided dispensation on 187 products and
China on 217.9 An agreement on opening trade through silk route was also initiated. It is
evident that both the states are keen to cooperative in international trade. In June 2006
the re-opening of Nathu Lal pass in the Himalayas as trade route was a breakthrough
event, as it been closed ever since the Sino-Indian border war of 196210. In 2008
bilateral trade between the two Asian markets exceeded $51 billion, with an increase of
34 percent over 200711.It is expected that trade would boost up to $ 60 billion in 2010,
as China being the biggest trade partner. Though, it is small as compared to China’s
$425 billion trade with European Union and $333 billion with United States12, but this
cooperation can act as a catalyst in the normalization of relations between the two
growing economies of the world. Increasing interdependence in economic sector can
pave the way for reduction in the gravity of confrontation. In 2009 China-India trade
volume reached 44.38 billion dollars. In this respect the Chinese ambassador to India,
China-India Relations: A Complexity of Competitiveness with Cooperation
March 1, 2010
Zhang Dang stated that the two emerging powers, India and china have emphasized on
cooperation and have therefore met global challenges, hand in hand.
On the regional front, in Shanghai cooperation organization (SCO) India got the
observer status in 2005. China being a member of SCO embraced the Indian decision
but on the other hand India’s active lobbying for keeping China out of SAARC expose
their respective divergent interests. Both the states are also a dialogue partner in
ASEAN. On the contrary, India heavily financed the Iranian Chabahar sea port, as a
countermove to the Chinese investments and interests in the Arabian Sea Gwadar port
in Pakistan.
Conclusion
India-china relations not only affect the regional political nexus but have some bearing
on the international system, especially in context to the U.S. policies in the Asian
hemisphere. Although, in recent times China and India have not allowed their
differences to go beyond a certain limit but the compulsions for influence in the region
and Indian Ocean remains as strong as ever.
Besides the competitive engagement between India and China for strategic and political
prominence, the increasing economic cooperation reflects that both the states are trying
to reach an arrangement – a kind of a balance, in which they could pursue their mutual
economic interests, separating it from the competitiveness in the strategic and political
fields.
Jonathan Holslag, the author of “China and India: Prospects for Peace”,
(published in January 2010) is of the view that China-India relations are much more
complicated than imagined. In his observation there remains a wide gap in the views, as
they see each other. The author writes,
India is full of voluble politicians, academics, diplomats and ordinary people with
fiercely held views on China. Across the border, however, fewer Chinese regard
China-India Relations: A Complexity of Competitiveness with Cooperation
March 1, 2010
India as an issue of immediate importance and debate on the relationship is far
more circumscribed. Cyberspace may be the exception, but it is largely ignored
in this account. A consequence of this—and it is something many Indians are
painfully aware of—is that Indian policy often appears fragile, contradictory and
self-defeating, whereas China’s seems coherent, single-minded and effective. Yet
it is hard to imagine that China can have a higher foreign-policy goal in South
Asia than keeping relations with India on a fairly even keel.13
Because of the negative public image of each other, the author argues that “strategic
cooperation is harder”, to come. No matter the “much-discussed bilateral free-trade
agreement were signed and the border issues settled”, these two competitive
neighbours would remain to be rivals of each other, in every sense of the word. 14
China-India Relations: A Complexity of Competitiveness with Cooperation
March 1, 2010
References
1. V Longer, The Defence and Foreign Policies of India, (New Delhi: Sterling publishers, 1988)
p. 52.
2. Devint Hagerty, South Asia in World Politics, (New York: Oxford University Press, 2005) p.
24.
3. http://www.sinodaily.com/reports/Dalai_Lama_trip_strains_IndiaChina_ties_999.htmlDawn, September 18, 2009.
4. www.wekipedia.com
5. http://www.hinduonnet.com/thehindu/nic/0041/indiachinatxt.
6. www.chinadaily.com, November 22, 2006.
7. http://www.chinadaily.net/cndy/2010-02/17/content_9471798.htm
8. Ibid.
9. http://www.economywatch.com/international-economic-relations/china's-economicrelations-with-india.html
10. Nicklas Norling and Niklas Swanstrom, Monthly Current Affairs, The Shanghai cooperation
organization, trade and the roles of Iran, India and Pakistan; Book 168, August 2008.
11. Dawn, April 10, 2009.
China-India Relations: A Complexity of Competitiveness with Cooperation
March 1, 2010
12. Op.cit, www.chinadaily.com, November 22, 2006.
13. http://www.economist.com/culture/displaystory.cfm?story_id=15450482
14. http://www.foreignaffairs.com/articles/66139/jonathan-holslag/china-and-indiaprospects-for-peace
China-India Relations: A Complexity of Competitiveness with Cooperation
March 1, 2010
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