Why India-China ties are under strain

A new global threat assessment by the US intelligence community predicts a difficult year for India-China relations. “We expect relations between India and China to remain tense and possibly to deteriorate further,” according to US National Intelligence Director Dan Coats.
Ties between Asia’s two rising powers are indeed fraught, and will probably remain so. At the same time, relations are unlikely to plunge into crisis.
Several years ago, the outlook was rosier. Indian Prime Minister Narendra Modi and Chinese President Xi Jinping enjoyed some warm meetings, including a photogenic encounter in 2014 when the two men sat on a swing along a river in the Indian state of Gujarat. 
It’s a different story today. China is going full speed ahead with its Belt and Road Initiative (BRI), a mammoth transport corridor project meant to facilitate access to markets far and wide. It entails extensive Chinese outreach, deal making, and ultimately infrastructure projects across South Asia, India’s broader backyard, and especially Pakistan, India’s bitter enemy. Beijing plans to pour $62 billion into Pakistan, which is eager to play host to its long-time ally. 
In a foreign ministry statement last year, India registered its formal objection to BRI. For New Delhi, the problem is less about China’s expanding influence in India’s backyard and more about a territorial dispute. The Pakistan component of BRI, the China-Pakistan Economic Corridor (CPEC), will run through Gilgit-Baltistan, a Pakistani-administered area of Kashmir that India claims as its own.
That said, Beijing’s growing investments across South Asia — including Bangladesh, Sri Lanka, and Myanmar — certainly worry New Delhi as well, and play into longstanding fears harbored by China hawks in India that Beijing is trying to “encircle” India by deepening its footprint on India’s periphery. Rumors that China may build a naval base off Gwadar, a port that Beijing is developing as part of CPEC in southern Pakistan, only exacerbate these fears.

Growing tension is a certainty this year, but both countries have too much at stake to let disagreements spiral out of control.

Michael Kugelman

Last year’s India-China border standoff highlights how Beijing is trying to scale up efforts to broaden its footprint in South Asia. The standoff took place when Chinese troops began building a road on territory that China regards as its own, and that India — and Bhutan regard as Bhutanese. Bhutan is one of the few South Asian countries with warm, uninterrupted ties to New Delhi. Beijing probably wanted to indicate that it’s willing to extend its presence anywhere in the region, even in areas with deep Indian influence.
More broadly, India resents China’s support for Pakistan in global forums. Beijing continues to stymie efforts by New Delhi to have Masood Azhar, the leader of an anti-Indian Pakistani militant group, designated by the UN as a global terrorist. Beijing also continues to use its veto to block India from joining the prestigious Nuclear Suppliers Group.  
All of these trends will remain in place in 2018, suggesting continued tension. 
However, we should not overstate India-China tensions and their potential to deteriorate into something more dangerous.
First, both sides have a strong incentive to avoid escalation because neither can afford another security conflict. China is already dealing with the North Korean nuclear threat and the South China Sea dispute. India has its hands full with Pakistan.
Second, China and India enjoy a productive economic partnership that includes one of the world’s most robust trade relationships (albeit one weighed heavily in China’s favor) and also, increasingly, wider economic cooperation. They are the two biggest stakeholders in the Asian Infrastructure Investment Bank and aspiring members in the Regional Partnership for Economic Cooperation, an under-negotiation trade accord. Conflict could squander the gains of this extensive economic diplomacy, and consequently work against the interests of both.
Third, beyond these very real economic collaborations, there is scope for more cooperation that would be badly undercut if the two nations were to fall into conflict. Given the high stakes for Beijing of CPEC, it has an increasingly strong interest in a stable Pakistan — and that entails the dismantling of all terror groups there, including India-focused ones such as Lashkar-e-Taiba and Jaish-e-Mohammed. Strikingly, in a precedent, China signed off on declarations issued at two regional summits last year that explicitly referred to the threat posed by those two groups. 
For reasons linked to BRI, Beijing — like New Delhi — also has a strong interest in a more stable Afghanistan. In this regard, China’s recent participation in attempts to launch a reconciliation process with the Taliban — though perhaps not its offer to build a military base in northeastern Afghanistan — will presumably be welcomed in India. 
In effect, India-China tensions are all but assured this year, but they’re unlikely to completely spiral out of control. And that’s good news for a world already convulsed by too much conflict in too many places.
Michael Kugelman is deputy director of the Asia Program and senior associate for South Asia at the Woodrow Wilson International Center for Scholars.
Twitter: @michaelkugelman