the china threat to india

Deng Xiaoping was given to one liners. He famously said that "you should cross the river by feeling for the pebbles" To take the analogy further, the river, or rather the gulf, between a rising belligerent China and an insecure India is a fast flowing torrent and the pebbles are sharp. The relationship between the two countries as they rise from a colonial past to a future as emerging giants is the biggest story of the 21st century.

It is a story of new global competition and old deep seated bilateral suspicions, of economic growth yet diplomatic distance. Of dangerous unsettled borders and a potent arms race. It is a tale of international alliances diplomacy trying to off set regional intrigues.

In other words, a great game with Chinese characteristics is playing out. It is apparent in China's encirclement through military aid and diplomatic support to in India's littoral. It is visible in remote and inhospitable Oil fields and bauxites mines in Africa where both compete. It is even there in the Silicon Valley as India cedes ground to a newly computer literate China. It is present in India's own high street where China floods cheap toys and electronic goods on the back of a mighty manufacturing machine and an artificially cheap currency.

India has a legitimate fear of this rising giant but from its economic policy and diplomatic maneuvering very little it seems by the way of strategy. A rising China, on the other hand, just does not see India in the same league. It has tried to undercut India every where. Says Bharat Karnad security expert at the center for Policy research a Delhi think tank, "India is suffering from strategic myopia. China is a nation which recognizes only the language of power. After the nuclear blasts of Pokhran II we had a window of opportunity to come level with China. However out timidity has come n our way. India must asses the complexity and scope of Chinese power they compete with us on all levels and this has to be recognized."

The latest example of that rivalry was the NSG waiver where China tried till the very end to scupper Indian entry and the fact that this came as a surprise to Indians underlines how little India knows about China. Says a diplomat, who was closely related to the negotiations in Vienna, "We fell yet again for the verbal trap. The Chinese assurances to our leaders counted for nothing on the table."

However this has been the pattern ever since the 1962 war. China believes that if India can be isolated globally it will leave the field free from the Asian super power play.

This new great game has four parameters - economic, military, diplomatic and bilateral relations particularly the vexed border question. There is also need to look at India's space for maneuver. To articulate and define what options India has and how can they be calibrated.

1. Here comes the hot stepper - The Chinese economic Threat

The great leap ahead of India that China has now taken is a relatively recent phenomenon. As recently as the 1980's, both countries were at par with extremely low per capita incomes and little integration with the global economy. Control on capital, on investment and trade characterized both countries economic profiles according two World Bank statistics.

However beginning from the mid 1980's dramatic change unfolded in China. It has changed the world. The economic rise of China is the phenomena with perhaps no equal in world history. China by any reckoning is the original 800 pound gorilla. China is the world's third largest economy with a gross domestic product of US$3.4 trillion in exchange rate terms. This is nearly four times India's economy which is just under $ 1 trillion billion. The reason why you see all those grand cities, the great roads, the train to Tibet and other obvious signs of China emerging greatness is the fact that an unusually large percentage - a full 40 percent of its gross GDP is used as investment.

Foreign direct investment in China in the year 2007 was a staggering $ 699billion. China holds the world largest cache of foreign reserves at $1.4 trillion India's is about one fifth at $295 billion. Chinese exports to the world are the greatest example of its robust global engagement. To put China's exports in perspective it is interesting to know that they are larger then India's GDP and stood in 2007 at $1.2 trillion.

Many optimists believe that the growth of trade between China and India will mitigate the differences between the two Asian giants While it is true that trade has indeed grown from just $2 billion in 2000 to over $ 25 billion in 2007, an annual growth rate of about 45 % it has not been all positive for India.

A closer examination of numbers provides a grimmer picture. India's terms of trade with China are alarmingly classic neo colonial. India's major exports include iron ore, minerals, and cotton and other commodities. On the other India's imports include finished goods, electronic machinery, electric goods, Light engineering and appliances. Says Ajay Sahai, the director general of the federation of Indian exporter's organization, "The devil is in the details. The Sino India trade is skewed in China's favor. In the first nine months of 2008 we had a trade deficit with China to the order of $9 billion. What are most of our exports are raw materials such as iron ore and cotton while almost all of our exports are finished goods. Without value add this trade deficit and its quality can only worsen. Commodities exports may be a short term gain but it can turn out to be long terms dependence on China."

The other reason why India Inc finds it difficult to deal with China is the opaque nature of the Chinese subsidies regime and the fact that China deliberately keeps its currency undervalued. Comments Chennai based Rafeeque Ahmed MD of the 580 crore leather exports house Farida "China is a threat because their legendry productivity has an opaque origin. The Chinese currency is still undervalued; the labor laws in India are restrictive, where as in China, there is very little restriction on hire and fire. We also do not have access to cheap capital where as state owned and quasi state owned enterprises in China get loan write off as a matter of course. India's competitiveness is definitely hamstrung by China. "

In the economic sphere there are two other dimensions India and China compete for the same set of energy resources across the world. You are a race on to secure oil gas and mineral assets to feed the blistering growth in the two courtiers inevitably China beats India at most bids.

No where is this more in play then Africa. China does $ 40 billion of trade with the continent most of that is in buying raw Materials and fossil fuels. In Sudan, India and China have a rare partnership in the greater Nile exploration firm an oil venture where China has 40 % stake and an Indian firm ONGC ands 25 %. However china has 4000 troops and support infrastructure on the ground and used its diplomatic clout in defeating worldwide pretest against the Drafur crisis, India did nothing of the sort.

So what should India do when faced with the might of the Chinese economy worldwide? Says Barry Bosworth, of Brookings Institute, a Washington think tank and an expert on Sino Indian economic relations, "India lacks the ready availability of domestic and foreign capital that is available in China. It moves very slowly to strengthen the infrastructure, and lags behind in creating opportunities for low-skilled labor. Both services and those parts of manufacturing where India does well tend to rely on high-skilled labor inputs. India needs expand the financial resources to improve the infrastructure and reduce the public sector borrowing that limits the funds available for private investment. The development of industrial demand for low-skilled labor is vital to spreading the benefits of growth more broadly throughout society. In the longer term, there is a need to fix a dysfunctional public education system."

The other great competition where India fears the rise of China is its core competence –Information technology exports. While currently China exports just about $1 billion of the stuff, this is changing. And India is taking note. A 20078 white paper on the Chinese IT challenge by NASSCOM a premier India IT lobby SAYS "IT in China is witnessing growth: Leading Chinese firms have reported above average growth rates of 40-50 per cent over the past few years. Venture capital investors have also announced significant Investments demonstrating their conviction in the China ITBPO Story. Chinese firms are beginning to receive a steady stream of business Enquiries – from western customers."

Says a Bangalore based IT firm CEO, with an exposure to the Chinese IT training market, "China overtook the US in August 2008 as the largest net surfing nation. China also has put a man in space all on its own. It does not take rocket science to understand the complex high end IT input that Endeavour took."

Clearly The Chinese are closer then they appear in India's rare view mirror

2. The Sino Indian border question - The line of no control

As flashpoints go the Sino Indian border is potentially the most dangerous in the world. If there is one dispute between the two countries that could turn volatile any time it is the border question. India and China have held several rounds of high level border talks. It has been a futile and frustrating process.

The root problem of the border issue is in the year 1962 when India got a hiding from the Chinese PLA. The humiliating defeat has left India scared. So much so that the government report on the war - which truly broke the back of Nehru's foolish post colonial fool hardy Sino – Indian bohemian, is still a state secret. Titled the Henderson – Brooks report all government including the BJP kept it Classified. It is believed that Jaswant Singh was almost persuaded to make it public but developed cold feet at the last minute.

The Chinese and Indians positions on the border dispute have an amazing simplicity. The only problem is that they are totally at odds. India claims 10,000 super kilometers in the Northern sector the region of Aksai Chin.

China calls claim to the entire Arunachal Pradesh and in the western sector and some nooks in the middle sector facing Uttarakhand. For China Arunachal Pradesh is "Southern Tibet", a term increasingly in use in Chinese foreign policy think tanks.

The Chinese position is premised in history. It refuses to recognize the McMahan line which was drawn up by the colonial British power. China's stance is that as a colonial subject it would not accept the McMahan line. So much so, that in the Eastern sector it does not even authenticate actual ground positions of the respective armies. There have been more than 30 incursions in Arunachal Pradesh over the last one year alone. Yet the Chinese can claim that since there is no border there are no incursions.

India had hoped that by recognizing Tibet as an "autonomous" part of China during AB Vajpayee's 1985 visit there would be a thaw in ties. If any thing the Chinese position has only hardened. Says a source in the external affairs ministry " China clearly things it is in a position of advantage. Its economic growth and military modernization as well as the issue with Taiwan call for buying time on the India border question. This is exactly what it is doing."

The problem for India is that China in 1962 took over the entire Arunachal Pradesh and then withdrew. It made its claim and backed off. With time, Chinese military strength will only increase – and India fears a repeated. Says CPR's Bharat Karnad , "India is in a humiliating position vis a vis the border issue. It suffers strategic myopia and more we postponed the border issue for the future more we loose ground. Time is on China's side."

To that end India has stared a massive modernization of Arunachal Pradesh. Says a member of the planning commission on the condition of anonymity "Make no mistake this is a mini marshal plan. A project to make Arunachal modern."

As in other facets of the great rivalry, China is not far behind in August 2008 the People's Republic launched two funds. One was a much talked about $ 2 billion sovereign wealth fund that took positions in US jewels like Citibank - the other was a $ 3 billion fund for Tibet. This is on top of the railway line that connects Lahsa. The fund is to support 180 projects to "modernize Tibet".

As thing stand India can no longer delay a solution to the border questions. Analysts believe that the best India can offer s a trade off between aksai chin and Arunachal Pradesh, Except China already has de fecto control in Aksai Chin and have already reached Arunachal once through display of power in 1962 when it was no where near the power it is today. The border question for India is the ultimate diplomatic log jam.

3. The military imbalance

The real asymmetry in the Sino India relationship comes out of the military imbalance between the two countries. In 2007 China boosted its defense budget by nearly 20 percent; it amounts to $45 billion and is double India's spending. What is more it is only two percent of the Chinese GDP and thus leaves room for further increase.

From India's perspective three aspects of the Chinese military modernization are of particular concern. The first is the deployment and capacity of the latest Chinese nuclear missiles, the second is the modernization of the PLA's rapid action capabilities and the massive modernization of the PLA Navy.

The Chinese have a capability leap Vis a vis India in terms of nuclear missiles. China recently became only the third country in the world to knock down a satellite in space from the ground. Its arsenal has a recent addition the dong feng 31 an ICBM with a range of 8000 kilometers. The DF 31 is a solid fueled three stage missile that can hit targets in the United States. For India an even greater concern is the DF 21 based in Delingha near Tibet that can strike almost all over India given its 2500 kilometer range. China has similar missiles on Hainin Island in the Indian Ocean where its missile base is coming up.

India by contrast has stumbled in its missile programme while it successfully tested Agni III a missile with a range of 3500 kilometers that can strike targets in Tibet the missile is far from a deployment stage. What is more Indian missile carry weapon loads in kilotons when compared to the Chinese missile which have at least one megaton on each ICBM platform Indian missile are mere firecrackers.

China is rapidly building all component of rapid action special forces especially facing India in Tibet. These according to intelligence estimates are based under the 13^th army of the PLA in the chongdu region. The forces include mechanized tank brigades, rapid airlift capabilities as well as paratrooper. They are boosted by the completion of the Tibet railroad and augmented by the 52^nd brigade in nearby Linzi. Says a General VP Mallik the ex chief of Army staff "the Chinese have rapid special forces capacity that has been significantly beefed up and when taken with the infrastructure modernization of Tibet posses a clear immediate challenge for defense planners."

Finally India faces the Chinese Naval threat. The new Jin class nuclear missile for the first time gives the PLA navy deterrent petrol capabilities. These are nuclear armed with undersea launch JL 2 Missile and can should the boat be in the Indian littoral hit any target in India. The Chinese have also introduced a fleet of new Russian destroyers and is beefing up aircraft carrier capability by testing on two mothballed Russian ships till its own design come about. In other words the Indian strategy of blue water navy will within this decade run into a similar strategy by China.

When take with the unsolved border and the Chinese running rings around India in South Asia by providing weapons and nuclear technology to Pakistan and military capabilities to Bangladesh Myanmar and Nepal the modernization of the Chinese military is a real and present danger that's little mention either in the Indian strategic establishment or its media. This could turn out to b a dangerous blind spot should things turn sour diplomatically.

Handling the dragon – own India should respond to China

1) Talk peace but prepare for war.

India must build more muscle. The western sector is vulnerable. The country needs to be prepared for a strategy of limited war with an ability to stand its ground. Some of this is already happening. India is raising two new mountain division. It is upgrading infrastructure in both Sikkim and Arunachal Pradesh. It has reportedly based Frontline SU 30 fighters (two squadrons) in Tezpur and is placing another one in Kashmir. The IAF will son place an order for 126 new generation fighter jets planes

The Indian Navy will acquire long range spy aircraft from the US as well as a nuclear powered submarine from Russia over the next three years.

2) Beef up nuclear forces

Deterrence does not work without capability. India has very little by the way of a credible nuclear deterrent against China. Our Missiles as well as Fighter planes are vulnerable t a Chinese first strike. What are more outs is a declared no first use of nuclear weapons posture. Thus we are assuming at least in posture nuclear strike survivability. Without submarine based nuclear missiles and a range of 500 kilometers for out land based missiles such as Agni China is unlikely to be deterred.

3) Build an international fund of maritime democracies

India must take the diplomatic lead and create an alliance of democratic maritime powers. The systemic challenge of China is democracy. A totalitarian regime much face from pressure from the US and India with partners like Thailand Australia and Japan through institutional mechanism s in world fora including the UN

3) Keep Tibet open

India foolishly gave in a declared that Tibet is an"autonomous" part of China when Vajpayee visited China in 2005. However there is a premise – Tibetan autonomy. No autonomy no Tibet. India has never compromised on the line that China has no historic claim on Tibet it has only recognized that as things stand Tibet is an autonomous part of China. India should keep Tibet open and a beginning can be made by not rounding up random Tibet protestors at the drop of a hat. One should bear in mind that there is energy proof to establish Chinese support for Naxals in India. And that score this needs to be settled in the long run. China is waiting for the death of the Dalai Lama India should make clear that the Daliam lama has declared that his reincarnation will not be born in Chinese occupied Tibet and as far as India is concerned the new Dalai Lama will be chosen here.

4) Learn from China

There is a lot to learn from China. Country that in 20 years has risen to prominence on an unbelievable scale. Learning can come from their manufacturing model. There emphasis on crating infrastructure first and inviting industry later. India can inculcate Their ability to execute grand projects in time. India has a lot to gain from understanding their disciplined confusion work ethic.

5) Build on the US partnership but cautiously do not annoy China

The next big development in world affairs could be the momentum of the US India deal. This grand strategy however needs to be played out cautiously. Just as China has quietly build her diplomatic clout India needs to build on the India- US partnership. However at all points it should be made clear that China is not the bilateral reason of this relationship

6) Expose the soft power of china within India the Indian left

China has a unique advantage over India. The Indian left parties have always supported China over their own motherland. This is a pattern since 1962. Politically Indian parties and people must constantly be on the vigil about this very potent fifth column within India.

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