Implosion: India’s Tryst with Reality

by John Elliott

  China in Charge

  From 1962, China has left India metaphorically dangling on the end of a rope. ‘It has been their policy since 1962, to restrain India, partly through support for Pakistan – that policy began long before China’s economic opening up but it has been especially hostile in the last two years since the US-India nuclear agreement,’ Brajesh Mishra, a retired diplomat who was national security adviser and principal secretary to Prime Minister Atal Behari Bajpayee from 1998 to 2004, told me in 2009.12 Mishra had been posted to Beijing as charge d’affairs to open a diplomatic mission in 1969 when China was beginning to relax its international isolation. At a diplomatic event in Beijing in May 1970, Mao Zedong unexpectedly turned to Mishra and said, ‘How long are we going to go on quarrelling like this. Let us be friends again’.13 India posted an ambassador in 1975, and Atal Bihari Vajpayee went on a visit as foreign minister in 1979. But there was no real breakthrough till Rajiv Gandhi visited Beijing as prime minister in December 1988. ‘The high point of the visit came when Deng Xiaoping smiled and shook his hand for eight and a half minutes in the Great Hall of the People in full view of the world’s cameras to signal the start of a new era in India-China relations,’14 says Mani Shankar Aiyar, who was with Gandhi. Deng called Gandhi ‘my young friend’.15

  Since then, China has played at alternately confronting and co-operating with India. It teases with friendship, with trade, with border talks that make little progress, and occasionally with international co-operation on multilateral issues such as climate change, banking reform and anti-piracy ship patrolling in the Gulf of Aden. Simultaneously, it taunts with warnings and incursions on the border, tripping India up in international forums such as the Geneva-based Nuclear Suppliers’ Group where India wants to become a member.

  Border Dispute

  The border dispute has been exacerbated by China’s lack of confidence about the security of Tibet. It calls Arunachal Pradesh ‘Southern Tibet’ and basically refuses to settle the border with India unless India hands over Tawang, which it occupied in 1962. Tawang lies in an area that was administered remotely by Buddhist monks from Tibet till it was annexed into British India in 1914. It was here that the Dalai Lama first fied in 1959, and the monastery town has become a focal point of the two countries’ differences.

  Talks in the early 1980s and 1990s did not produce an agreement, despite some optimism at the time though no lives have been lost in confrontations on the border since an Agreement on the Maintenance of Peace and Tranquillity in 1993 that was followed by new ‘confidence building measures’. The mood changed in 2005 when China became far more strident after India’s co-operation agreements with the US that included defence and sales of armaments. China then hardened its demands, claiming in particular that Arunachal Pradesh is not part of India, and objecting when Manmohan Singh visited the state during campaigning for assembly elections in 2009. It has refused visas to Arunachal people, including official visitors, and condemned India’s increased militarization and highway construction activity in the area. In tit-for-tat measures late in 2012, China launched passports with maps showing Arunachal (and Aksai Chin, the second disputed border area in the Ladakh area of Jammu and Kashmir) as part of its territory, and India printed its own version of maps on visas issued to Chinese nationals.

  Throughout these years, China ‘has used Pakistan as a cat’s paw to keep India distracted,’ says Shyam Saran.16 China uses Pakistan as a ‘proxy’ – for example, by helping it to develop a nuclear bomb to counter India’s capability. Pakistan is its primary customer for conventional weapons and the two countries’ defence and industrial co-operation includes co-production of fighter aircraft and jet trainers, air-to-air and other missiles, frigates and battle tanks according to a US Pentagon report in May 2013.17

  China’s support for Pakistan runs alongside assistance from the US, which has its own Afghanistan-oriented reasons for helping. Between 1982 and 2011, the US provided $13.5 bn in economic aid and $17 bn in military assistance to Pakistan which included fighter aircraft and other weaponry.18 The US is in effect therefore condoning the nuclear and military supplies that China gives to Pakistan – it has sometimes told Beijing that it knows about Chinese missile companies’ sales (revealed by WikiLeaks19), but has apparently done nothing to stop the trade. There are however limits to how far China will go. It surprised Pakistan by not being supportive during its Kargil near-war with India in 1999, presumably realizing that to have done so would have upset the equilibrium with the US, and may have escalated the confrontation into an unnecessary crisis. China is also wary of Pakistan-based terrorists’ possible links with Muslims in its restive western Xingjian province.

  The messages from China come from different sources which often conflict with each other. In August 2009, a Chinese strategic issues website was claiming China could ‘dismember the so-called “Indian Union” with one little move’.20 It said that ‘there cannot be two suns in the sky – China and India cannot really deal with each other harmoniously’.21 The following March, a westernized Beijing adviser called at a Delhi conference for China and India to see their disputed Himalayan mountain border ‘not as an insurmountable barrier’ but as a ‘bridge linking these two ancient civilizations together, for mutual benefit, and for mutual enrichment’.22 In April 2012, after India launch-tested an AGNI V missile with a 5,000-km range that could strike Beijing or Shanghai, China’s Communist Party-owned Global Times newspaper warned aggressively that India ‘would stand no chance in an overall arms race with China’.23

  China knows that India will not over-react to whatever happens because Delhi realizes it is unlikely to win an argument, and is also aware it might have problems gaining diplomatic support from other countries in a dispute. ‘Overt tensions with China only constrain our foreign policy choices vis-à-vis other powers,’ wrote Kanwal Sibal, former foreign secretary, in December 2012.24

  India Encircled

  China has encircled India with a ‘string of pearls’25 by establishing its presence in neighbouring countries – not just its traditional targets of Pakistan, Nepal, Bangladesh and Myanmar, but also Sri Lanka and the Maldives archipelago in the Indian Ocean. Activities range from military, infrastructure and economic aid to intelligence cooperation and encouraging anti-India activities (as it has also done, directly or indirectly, in India’s north-eastern states).26 In Nepal, a key buffer country, there is constant rivalry for internal political and economic influence, and China is reported to be making territorial inroads across its border in the north of the country.

  Problems possibly created, or at least accentuated, by China have emerged in the Maldives. This tiny nation of some 1,200 islands is generally regarded internationally as a serene tourist destination, but it is facing a tide of Islamic conservatism that is creating social and political instability and makes it open to diplomatic meddling. China opened a mission in Male, the capital, in March 2012, and the country’s president, Mohamed Waheed, met Wen Jiabao in China a month later, when $500m aid was agreed. Towards the end of 2012, the government cancelled a long-term build-and-operate airport contract with GMR, the Indian infrastructure company.27 That happened just after China’s defence minister, Liang Guangli, visited the islands. Mohammed Nazim, the Maldives minister for defence, national security and transport, who handled the airport, had also just been to Beijing. This showed a distinct pro-China tilt by the Maldives following a change of its government. Previously the islands had relied on Indian assistance, as was well illustrated in 1988 when Indian troops quickly quelled a coup attempt by Sri Lankan Tamil mercenaries.28 Unsurprisingly India, which is rarely adept at handling its neighbours, failed to deal smartly with the airport situation and the contract was lost, which was widely seen as a gain for China.

  In neighbouring Sri Lanka, where India has had an uneasy relationship for decades because of links between the Tamil communities in both countries, China has become an increasingly good friend and large financial donor at a time when the cou
ntry is desperately short of international support. The island’s government has been widely condemned in the United Nations and elsewhere for alleged human rights violations and mass killings in 2009, when it was fighting a guerrilla war that had been running for 26 years over a separate homeland for its minority Tamil community. Chinese companies have built infrastructure contracts worth some $4bn including the island’s second international airport, opened in March 2013, a port and highways, all funded with Chinese soft loans.29 That makes China a more valuable ally than India, which also helps with a variety of projects30 but whose relations with the island are complicated by the politics of Tamil Nadu.

  Bhutan’s Happiness

  The remote kingdom of Bhutan squeezed in the Himalayas between India and China is Beijing’s latest target. With a tiny population of fewer than 700,000, Bhutan has been a virtual protectorate of India since September 1958 when Nehru rode there on a horse and yak through high mountain passes for a prime ministerial visit. It remains the only totally pro-India country on the subcontinent, though India’s de facto control of its external links, especially of communications, has weakened in the past 25 years or so. In the mid-1980s, when I first went there,31 air flights and even telex messages were routed via Calcutta. Now Bhutan has air links to other nearby countries, as well as internet and satellite television, but the economy is still heavily dependent on exports to India, dominated by sales of hydroelectric power.

  China wants to settle 4,500 sq km of land on disputed sections of its 470-km border, and is using that to persuade Bhutan to let it open formal diplomatic links and an embassy in the capital of Thimpu. Only a few countries, ranging from Bangladesh to Finland and Switzerland, have embassies and consulates in Thimpu and, till recently, Bhutan firmly resisted China’s approaches with India’s encouragement. China’s main aim is to extend its territory in the Chumbi Valley, a strategically important ‘v’ shaped area of Tibet between the Indian state of Sikkim to the west and Bhutan to the east.32 This would be extremely sensitive for India because the 3,000 m (9,500 ft) high valley juts down towards a strip of Indian territory called the Siliguri Corridor, which is the only land route – known as the ‘chicken’s neck’ – from the broad mass of India to its northeastern states.33

  So sensitive is India about China’s links that the word went round that I was possibly a British spy when I was in Thimpu for a literature festival in early 2011.34 I thought it was natural for a foreign correspondent making a rare visit to Bhutan to ask about China’s diplomatic activities and its access and incursions on the northern and western borders. India’s diplomats, however, seemed to think differently. The spy rumour was circulating by about the second or third day of my visit – I heard it (unofficially) when I went to a dinner in the garden of India’s resident army general.

  Bhutan’s royal family and officials did not seem to have the same worry. I am credited there as the first foreign correspondent to be told (for the FT in 1987) by the then King Jigme Singye Wangchuck about his plans for Gross National Happiness or GNH. ‘We are convinced we must aim for contentment and happiness,’ he said when I interviewed him in 1987 at his Dechencholing Palace in Thimphu. He put this above more usual targets of economic growth and GNP, and listed the parameters: ‘Whether we take five years or ten to raise the per capita income and increase prosperity is not going to guarantee that happiness, which includes political stability, social harmony, and the Bhutanese culture and way of life,’ he said.35

  He had been working on the idea since the mid-1970s and this was the first time that he had opened up on the theme to a foreign reporter. ‘Independence through an independent culture’ was one of the aims, he said. ‘We are fortunate in developing late at a time when other countries, which went through our present stage of development 30 or 40 years ago, are becoming aware of what they have done wrong. Many have developed a modern society but none has kept its strong traditions and culture which we want to do’. For example, he added, ‘corruption began when development started in 1961, maybe not seriously compared with other countries, but serious by our standards.’ That led on to the four principles of GNH: fair socio-economic development including education and health, conservation and promotion of the country’s culture, environmental protection, and good governance.36

  In 2006, having just introduced democratically elected governments, King Jigme Singye Wangchuck (or K4 as he is often known) abdicated in favour of one of his sons, 28-year-old Oxford-educated Jigme Khesar Namgyel Wangchuck, who was crowned in 2008. Here was a dynasty that was protecting the country’s heritage while also looking for ways to encourage economic growth. The idea of GNH caught the world’s imagination and Bhutan’s first elected government, which came to office in 2008, tried to quantify and measure various indicators. It also pushed the topic internationally at the UN with a resolution titled ‘Happiness: towards a holistic approach to development.’37 A new government, elected in August 2013, took a more measured approach. When he visited Delhi, the new prime minister Tshering Tobgay and his officials told me that, while it was good for academics to study GNH, he would personally adopt a simpler approach and test every decision against the original basic aims.

  China achieved a breakthrough on the fringes of a UN conference in Rio de Janeiro in June 2012 when Wen Jiabao secured his first meeting with Jigme Yoser Thinley, then the prime minister. This was followed by other contacts. Thinley’s nationalist views made him less India-centric, and therefore more open to flattery and proposals from China than the Bhutanese monarchy which was traditionally India-oriented. King Jigme Khesar Namgyal (K5), is also believed to be more open-minded on the subject than his father, whom he succeeded in 2006 but who still has influence on international affairs.

  Both King Jigme and the prime minister discussed China and the border issues during visits to Delhi early in 2013, but the urgency eased later in the year when Tshering Tobgay adopted a more pro-India stance38. Indian officials say privately that they recognize that China will gain increased diplomatic access in Thimpu, and possibly full recognition, some time in the future. When that happens, it will increase India’s sense of encirclement, and will test its questionable ability to move from hegemony to partnership.

  Business Security Risks

  There are security risks in China’s growing economic involvement with India because its companies are supplying telecom networks and power generation and other infrastructure equipment. Bilateral trade totalling $70bn is heavily weighted in China’s favour. Indian manufacturers do not find it easy to break into the market, whereas Chinese goods, from cheap toys to heavy engineering equipment, sell well. In May 2013, the total value of Chinese companies’ completed contracts and those in progress was $55 bn.39 Some experts argue that such economic activity makes war between the two countries less likely because they would have too much to lose, but that is surely as realistic as Nehru thinking that China and India could become partners. If China decided a war was essential for some greater purpose, it would surely not be put off by the economic links.

  Substantial trading ties did not, for example, stop it dangerously escalating a confrontation with Japan in 2013 over possession of disputed islands in the East China Sea, though the counter view is that China would not eventually allow such a row to escalate too far.

  Telecom imports from China in 2010–11 totalled $6.7bn, ranging from phones and attachments to networks, with two Chinese companies, Huawei and ZTE, becoming major suppliers of low-cost networks and other equipment.40 Huawei was founded in 1998 by Ren Zhengfei, a former officer in the People’s Liberation Army, and it is hard to believe that he can now have a totally independent existence, even though he has said he has cut ties. The company has a five-year $2bn investment plan in India and is the second biggest provider of networks after Ericsson, with a 25–30 per cent market share. It supplies all of the country’s top telecom operators and individual companies and also has a substantial share of the market for devices such as data cards and phones. Huawe
i is also active in the Maldives, Nepal and other neighbouring countries. I have asked various Indian officials and policy pundits about the extent of the national security risks of such a Chinese presence in India’s communications. Most have ducked the issue, offering no solution and taking the same line as India’s telecom operators – that the products are irresistible. Huawei says, for example, that its total costs of ownership (purchase prices plus maintenance) are 25–30 per cent lower than rival companies such Alcatel-Lucent, Ericsson and Nokia Siemens41.

  The potential international threat was highlighted in October 2012 by a US Congress intelligence committee, which warned that companies such as Huawei and GTE could disrupt America’s information networks and send sensitive data secretly back to China.42 Huawei and others denied the allegations and explained how they co-operate with governments and other users to screen and secure their equipment. Huawei responded in 2013 by suggesting it might be cutting back on its US business plans, but also suggested that the US view was a protectionist ploy encouraged by its telecom companies. Other countries such as Canada, Australia and the UK are also worried and there have been some blocks on the companies obtaining government network contracts.43

  China also has orders for potentially sensitive power plant equipment exceeding 44,000 MW44 and is backing up its contracts with financing deals, sometimes with financially vulnerable companies that urgently need help. The debt-strapped Reliance Group controlled by Anil Ambani, for example, placed two orders totalling $10bn for power equipment from Shanghai Electric Group in 2010 and raised $2bn financing from Chinese banks for that order and for some refinancing of its telecoms business. There are also security concerns about Chinese bids for Indian power transmission grids. The State Grid Corporation of China has been looking for contracts in India.45 Other areas include engineering and construction projects.