India and China: The Way Forward

India and China: The Way Forward


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India and China: The Way Forward by D. S. Rajan

The book marks the publication of papers presented at a National Seminar on 'India and China: The way Forward', organised, by the Chennai Centre for China Studies (C3S),at Chennai on March16, 2012. The participants included eminent Sinologists in the country representing the academic community, former bureaucrats who covered China as part of their duties, and experts with security and military background. The book is being brought out with the objective of ensuring wider dissemination of their views.

Product Details

ISBN-13: 9789381904695
Publisher: K W Publishers Pvt Ltd
Publication date: 03/15/2013
Pages: 98
Product dimensions: 6.00(w) x 9.00(h) x 0.23(d)

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India and China

The Way Forward

By D.S. Rajan

KW Publishers Pvt Ltd

Copyright © 2013 Chennai Centre for China Studies
All rights reserved.
ISBN: 978-93-81904-69-5


India and China: The Way Forward

S. Menon

Shri. D.S. Rajan, Director C3S, Shri. B.S. Raghavan, Patron CCCS, Distinguished participants, Ladies and Gentlemen,

Thank you for asking me to address this national seminar on 'India and China: The Way Forward', to mark the 4th anniversary of the founding of the Chennai Centre for Chinese Studies (C3S). This is indeed a happy occasion, a chance to recognise and thank you for the remarkable work that the Centre has done in these 4 years. You have hit the ground running, and established an enviable reputation for the Centre in a very short period.

Your choice of topic for the anniversary seminar is also most appropriate, coming as it does when both India and China are undergoing rapid domestic transformations, when the relationship between the two countries has assumed new forms, and when the international environment in which we operate seems to be undergoing a fundamental phase change.

As you have an exhaustive agenda covering all these aspects of the relationship, and a most impressive list of speakers to address them, I would like to confine myself to a few general points about the relationship and its future, which may be relevant to your consideration of the issue.

We have come a long way

Those of us who have been involved in the relationship for some time, like Rajan, know that we have come a long way from the days in the 1960s and the early 1970s when it was an adversarial relationship, dominated by a single issue, and when communication between the two states and societies was minimal. Today, India and China have a full spectrum relationship, which includes elements of cooperation and competition, and which is significant not only for our the two countries but for the region and the world. It also holds promise of an even better future.

This might appear self-evident but is worth remembering when the din and bustle of preoccupation with daily events and the noise in the media, obscures or shortens our vision. Today, India has few relationships, which can match that with China for its range, significance, and the variety of emotions that it evokes in both countries.

It may be worth asking how we have come to this stage in our relationship, and how we have made this progress. We have managed to move forward in this relationship because the highest leadership in both countries recognised that it is the interest of both countries that it should be so, that the costs of sterile confrontation were borne by our two countries and benefitted others, and by the fact that both countries are engaged in mammoth tasks of domestic transformation, which must take priority over external entanglements and complications.

What has been achieved since the 1980s or more precisely since Foreign Minister Vajpayee's 1979 visit and Prime Minister Rajiv Gandhi's visit in 1988? The border is relatively peaceful, and we have made progress in our discussions on a boundary settlement. The rest of the relationship has developed rapidly, while we address the boundary question. Our trading and economic relationship is one of the most important that India has. India and China work together on several international issues to find that our interests coincide in several global aspects.

We regularly consult with each other on matters of regional and global significance. We have structured dialogue with China on climate change issues and counter-terrorism matters. In our term as non-permanent member of the UN Security Council, we have started a mechanism of consultation with China on the UN issues. We also have frequent and vibrant consultations with China in multilateral forums, such as WTO, G-20 and BRICS, and on matters, such as food security, energy security, and restructuring of the world economic architecture as part of our structured dialogues.

People to People links have grown to the point where there are, by one count, over 7,000 Indian students in China. China is our largest trading partner in goods, and a major source of equipment for important industrial sectors.

What about the future?

I think that there are several objective reasons for both the countries to be able to keep the relations on the positive trajectory of the last three decades. At the same time, we are also at an inflexion point where we will have to deal with a new set of issues, and learn new ways of working together, as a consequence of the changes in India and China, and of the fundamental changes in the world around us.

India and China are both young and ambitious societies undergoing rapid change. We want more. After some centuries of introversion, we are both looking out and engaging with the world. Each of us has a development experience that has proved its validity and relevance in our domestic conditions. But as we step out into the world, neither of us is very clearly articulating the sort of power that we wish to be. And, what we say is often over-analysed, discounted, and subjected to strange readings by the powers that be.

For a considerable time to come, India and China's primary focus must remain on their internal development. For China, the issue is whether its people will grow old before they grow rich, and whether it can make the structural and social adjustments that a move to domestic demand-led growth require. It is already a middle-income society and is considering how to avoid the middle-income trap. For India, reaping the demographic dividend that we expect to provide demand and manpower for our development will require the rapid creation of jobs, and spread of new skills among our youth at rates unknown in human history, except in China. Each country probably can learn much from the other's development experience. But the short point is that both countries will have overwhelming internal preoccupations for quite some time to come.

At the same time, the very process of rapid growth that is required for internal transformation also leads naturally to the accumulation of power, improvements in the instruments of state power, and increasing dependence, and therefore, interests abroad. This arouses the attention of other countries, and raises questions about the role that India and China will choose to play in the international system.

For the last thirty years or so, both India and China have been tactically cautious, concentrating on enhancing those factors that will enhance their domestic transformation. They have worked separately, in parallel, and now together in forums, such as the Brazil, Russia, India, China and South Africa (BRICS) and G-20.

Objective reality

There are also objective reasons in the international situation for India and China to learn to work together.

We are faced with an increasingly turbulent world. Issues like energy security, safety of sea-lanes, food security, and the world economy after the financial crisis need cooperative solutions rather than zero-sum approaches. In several of these areas, particularly on new and emerging issues, India and China have congruent interests. Over the last thirty years, we have learnt to work together on these issues in the international arena, and have achieved some success. We have also recently agreed to begin a bilateral India-China dialogue on maritime issues. To the extent that one can predict the future, this commonality will grow in the years to come.

Secondly, while we both need a peaceful periphery, our peripheries overlap. In these areas, it is natural that we both share our interest in peace even while we compete peacefully in trade, economic, and other ways to build our relationships and seek influence. Our presence in the shared zone that forms our peripheries is a fact of geography that we cannot deny. This is also that part of the world, which is changing rapidly for the better in terms of economic development and political stability, and where new cooperative institutions and security architectures, like the East Asian (EAS) or ASEAN Regional Forum (ARF), are evolving or being built. In the process, all the powers concerned will have to find new ways of cooperating, which reflect the present balance of forces in the region. This is still a work in progress, and is something that India and China should address as they move forward.

And in regions of increasing turbulence, as in West Asia, both India and China have a common interest in terms of stability, maintaining energy security, and preventing radicalisation, which could affect each of our societies. Here again, it would be logical for us to consult on the political and other aspects of developments in the region.

We are today in a world where the very nature of power is changing, where regional hotspots are growing in number, and the relatively benign international economy, which assisted the rapid development of India; China is being replaced by a much grimmer international economic outlook.

In other words, the international situation makes it even more important that India and China consult and learn to work together.

Managing Differences

In saying this, I am not minimising the differences that exist between the two countries.

We are still divided by the world's largest boundary dispute in terms of area but have shown an ability to manage differences. In 2005, we agreed the Guiding Principles and Political Parameters for a boundary settlement. We are now engaged in the second stage of a three stage process — agreeing a framework for a boundary settlement. The third stage will be translating the principles and the framework into an actual delineated and demarcated boundary.

While this process continues, the growing relationship throws up new issues. Perhaps the one with the most immediate significance is the very nature of the bilateral economic relationship, one symptom of which is the growing trade imbalance, and the limited Indian export basket. We have begun to address these larger issues in a Strategic Economic Dialogue (SED), which began last September in Beijing and showed some useful results in terms of directions for future cooperation.

Both sides have also begun to use defence diplomacy but this is a relatively underdeveloped part of the relationship that needs considerable work.

The important point is that we have shown an ability to manage differences in the past, and that there is no reason to doubt our ability to do so in the future. To argue otherwise suggests a lack of self-confidence, which I find unjustified by our past history.


I trust that I have been able to suggest to you what I consider the main issues for India and China to address as we move forward in an increasingly complicated world.

As you can see, this is a relationship of considerable significance to us in India, and I daresay, of increasing significance to China as well.

It is also clear that India-China relations have recently acquired strategic significance in a world of uncertainty, which is moving towards but is still far from multi-polarity.

So, my short answer to the question implicit in the title of your conference about the way forward is that there is a constructive and positive way forward, which I am confident both India and China are wise enough to take.

I wish you success in your deliberations.


China's Military Modernisation: Regional Implications

Srikanth Kondapalli


Since China had become the second largest economy in the world in 2011, its regional influence had substantially increased. Rise in China's Gross Domestic Product (GDP) in the last two decades is reflected in near-double digit growth in the official defence allocations (with 2012 budget allocation at US$ 110 billion), making China the 2nd largest defence spender in the world after the US. Higher defence allocations have direct implications to defence platform acquisitions and modernisation efforts in the fields of military training, exercises, and revamping tactical and operational principles. These are reflected in newer platforms emerging, including J-20 stealth fighter, aircraft carrier programme, anti-ship ballistic missiles, land attack cruise missiles, anti-satellite missions, etc. in addition to the changes in defence strategy geared towards anti-access and area denial, revolution in military affairs, and the likes. While China's sights are increasingly set at the global and strategic levels, all the above are impacting on the region in terms of regional security order, security dilemmas, and potential arms race.

"China is a big country, and other countries are small countries and that is just a fact."

— Yang Jiechi, China's foreign minister at Hanoi ASEAN Regional Forum meeting July 2010

[In a global survey of strategic elites] in 10 years time, "38 percent considered China the biggest threat, with North Korea the second greatest threat with 21 percent and the United States third with 12.9 percent."

— Center for Strategic and International Studies survey in February 2009

China's rise in the last decade has been a major event in the Asian region and beyond with implications for several countries. Some have seen China as an opportunity in economic, trade and investment aspects, while others have mixed responses of either being challenged or concerned about China's stress on resolving sovereignty related disputes through military means or coercive diplomatic means. China had become the 2nd largest economy in the world, displacing Japan, with GDP of about US$ 7 trillion in 2011. Trade, investments, and technological up-gradation and transfers are one of the main factors contributing to the rise of China in the recent period. With several countries in the world, China is engaged in mutually beneficial trade and investment relations, although some have been critical of the imbalance in trade figures. Exports of China to several countries have surged and brought in huge foreign exchange reserves (of more than US$ 3 trillion). Higher economic growth rates, export of manufactured goods and import of raw materials on the high seas, technology up-gradation, and foreign exchange reserves have all contributed to China's active role in the global affairs today. These have also led to increasing allocations to the defence budget and revamping and transformation of the armed forces of the country.

China's People's Liberation Army (PLA — cumulatively including army, navy, air force, and strategic forces) has been transforming rapidly in conjunction with the economic growth rates of the country. Although its primary loyalty is towards the ruling communist party, protecting the perceived sovereignty and territorial integrity issues of the country is its main responsibility. The latter role had led to concerns among the neighbouring states as the PLA was engaged in skirmishes in Korean peninsula, India, the then Soviet Union and Vietnam, while its military operations on Taiwan threatened to draw other countries (such as the US) into war. Also, traditional or revised sovereignty and territorial integrity disputes with Japan, Southeast Asia, India, and other countries have led to concerns in the region. Resource exploration and acquisition, for the burgeoning economic growth rates, is also another factor in the increasing tensions for many a country in the region. The PLA forces are active in all of the above, and many a country is expressing concern in the recent period.

This article briefly looks at the increasing defence allocations for the PLA forces, transformation of the PLA in terms of hard and software modernisation, and the security dilemmas that these are generating in the region, specifically in the Yellow Sea (with South Korea), East China Sea (with Japan), South China Sea (with several Southeast Asian countries), and with India. It is argued here that due to the spirals of tension in the region due to the PLA's growth, many a country in the region is concerned about the PLA and China, and making preparations for 'self-help' measures or working with an arbiter for stability in the region.

Defence Allocations

One of the most expanding, if relatively unfathomable, sectors in China is that of the defence allocations. Many a study on the subject by several authors at best could provide some inputs in estimating the real allocations to the defence sector in China due to the pervasive opaqueness of the system.


Excerpted from India and China by D.S. Rajan. Copyright © 2013 Chennai Centre for China Studies. Excerpted by permission of KW Publishers Pvt Ltd.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Table of Contents


1. India and China: The Way Forward S. Menon,
2. China's Military Modernisation: Regional Implications Srikanth Kondapalli,
3. Role of China and India in Regional Maritime Security and Stability R.S. Vasan,
4. India-China: Economic Cooperation K. Subramanian,
5. India and China: One Train, Two Locomotives Ravi Bhoothalingam,
6. India and China: Cultural and Academic Exchanges Indira Ravindran,
7. Valedictory Session: Introductory Remarks by the Chair Saurabh Kumar,
8. Valedictory Address 'India and China: The Way Forward' Jayadeva Ranade,

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