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The visit of Chinese premier Xi Jinping to India next week is the most awaited meeting of Prime Minister Narendra Modi’s short tenure so far. Two of Asia’s largest states – in size, population, military, and economy – will discuss issues that affect over a third of humanity. Yet more interesting to observers is that the Xi visit comes between two other heads-of-state meetings that have elicited much attention, between Modi and Japanese prime minister Shinzo Abe a fortnight ago and between Modi and US president Barack Obama next fortnight.

In advance of the arrival of the Chinese diplomatic delegation, the barrage of ostensibly sweet yet meaningless words has already started. Assistant Chinese Foreign Minister Liu Jianchao told reporters, “India is a country with which China has been friendly for thousands of years.” Even Xi stated that when he met Modi for the first time at the BRICS summit in Fortaleza, it felt like he was meeting an old friend. As Sir Humphrey would remind us, “it is necessary to get behind someone before you can stab them in the back.” Nevertheless, to paraphrase the old priest Laocoön’s famous warning to his fellow Trojans, timeo Sinae et dona ferentes.

And come bearing gifts, they do. The Chinese delegation will have over 100 business heads and is expected to invest $100 billion in India over the next five years, thrice the $34 billion that Abe promised Modi a few days ago. The comparison was bluntly underscored by Liu Youfa, Beijing’s consul-general in Bombay. China’s banks hold $4 trillion in foreign currency reserves and are desperately looking for investment opportunities. India’s hungry economy is finally generating international interest and the Chinese, having already dealt with Modi when he was the chief minister of Gujarat, are optimistic about their southwestern neighbour.

India needs massive investment in infrastructure and developing its manufacturing potential. China Inc will be looking at the modernisation of Indian railways, construction of highways, power generation and distribution, irrigation, ports, and manufacturing. Two industrial parks, one in Pune and the other in Gandhinagar, have already been finalised and will make power equipment and automobiles; two more have been planned in Tamil Nadu for textiles and food processing. Orissa expects to be India’s energy gateway on the east coast.

If there is anything that can be foretold about the summit with certainty, it is that the China hawks in India will be sorely disappointed. Modi is far more pragmatic than his supporters or detractors give him credit for and realises that India is a pygmy compared to Chinese economic – and consequently military and diplomatic – wherewithal. The meeting between Modi and Xi will not see Delhi handing Beijing ultimatums on Chinese-occupied Kashmir or China’s activities in Gilgit-Baltistan.

However, international optimism in Modi’s leadership has allowed India to leverage its ties with Japan and the United States to force China to be more sensitive to its concerns. Beijing is well aware that there is no pivot to Asia by anyone without Delhi and it hopes to persuade its neighbour of the virtue of remaining, as it were, non-aligned. Additionally, an unhappy India would open up another flank and divert resources from China’s competition in the Pacific with the United States. Interestingly, India has found itself alongside China on several economic issues such as subsidies and climate change yet with the United States on political issues such as democracy, a larger geopolitical role for India in the region, and Islamism.

Despite the big investments, it remains unclear how much China is willing to pander to India. As much as India needs capital inflows, China is also looking for sound markets to park its money. Even economically, there is some friction between the Asian giants. India is concerned about its trade deficit with China and would like easier access to Chinese markets for its pharmaceutical, agricultural, and information technology products; similarly, China would like to expand in India’s telecom sector but suspicions in Delhi about its neighbour’s intentions and cyber capabilities has so far put the idea on the back burner.

As part of the economic integration of South and Southeast Asia, China has invited India to become part of its Maritime Silk Route (MSR). However, this may well be a strategy to hem India into a Chinese regional order – BRICS and the Shanghai Cooperation Organisation (SCO) are both fora in which Beijing’s superior clout may prevent India from chasing its interests but not vice versa. India’s growing weapons purchases from the United States and the West has irked Russia, and with Western policies pushing it towards China, Delhi might find that it does not have as sympathetic an ear in Moscow anymore either.

The temptations of joining a ready-made mechanism are many, especially when one cannot afford the enormous infrastructural development outlays needed for Southeast or Central Asia. However, Delhi must exercise caution not to be too indebted to Beijing that it restricts political manoeuvrability, a lesson not lost on Laos or Cambodia. India has envisioned its own International North South Trade Corridor (INSTC) that would connect India with Central Asia and the Mediterranean but, not surprisingly, the proposal has been languishing in the doldrums for years.

The root of Sino-Indian tensions, however, lies in their old border dispute over which a war was fought in 1962. The result was the loss of 38,000 km2 by India to China in addition to the 5,180 km2 Pakistan illegally ceded to China a year later, a bruised Indian national ego, and an enduring Sinophobia among many Indians. To make matters worse, China still claims Arunachal Pradesh and border incursions are frequent and serious. India caved in on the question of Tibetan independence and it is not even on the horizon.

China’s hand in its negotiations with India is not as weak as some would portray – the China-in-need-of-an-ally against an aggressive US pivot to Asia image is a myth. For Beijing, a calm southwestern border would be nice but it has already invested strategically in India’s other neighbour Pakistan to keep Delhi off-balance. Islamabad’s nuclear weapons and missiles, both initially gifted by the Chinese, have created a permanent thorn in India’s side. Beijing merely has to be nice enough to India that South Block does not begin to think seriously about an alliance, even an unofficial one, with Japan and the United States and bring Barack Obama’s pivot to fruition.

Indeed, Islamism is a rising menace and has spread in recent months from Xinjiang to all across China. However, Beijing probably reckons that the Uighurs may yet be brought to heel internally via police repression and population migration. In the meantime, economic aid to its -stan neighbours – Afghanistan, Kazakhstan, Kyrgyzstan, and Pakistan – will gain the cooperation of local governments against cross-border terrorism. Pakistan’s jihadist complex and the instability of the state has been of growing concern but China is yet to take concrete measures to rein in its all-weather ally.

A more insidious goal of Beijing is to degrade India’s credibility in the neighbourhood. If India shies away from taking a more proactive role in South and Southeast Asian security, the other states of the region will begin to see Delhi as unreliable and weak rather than as a potential counter-balance to Beijing. Today, Modi is welcomed in Japan, Vietnam, and Australia, in ASEAN and in SAARC; yet if India remained apathetic to Asia’s increasing fears of Chinese dominance today, it would be far more isolated ten years on if it then tried to cobble together an anti-China alliance.

Perhaps it is because of their small stature on the world stage, but Indians are particularly susceptible to flattery. A few words about India’s civilisational greatness will easily substitute for the lack of substance during the talks. So far, Modi has struck the right note – he has indicated that India is open for business but he has also chastised an unnamed country during his visit to Japan for its expansionism.

For all the investment Xi will bring to India, little will be achieved towards solving the geopolitical loggerhead and the Gordian knot at the heart of Asian power politics. Sino-Indian trade will increase and the Chinese and Indian economies will move closer, but contrary to the hopes of those who see economics as the driver of history and believe in the rational actor theory, the two Asian giants will continue to glare at each other across the Himalayas.

This post appeared on Daily News & Analysis on September 15, 2014.