China’s shadow lengthens

A proper appreciation of China’s relationship with US is important in the milieu of the developing Indo-US relationship.

Published: 22nd November 2010 10:45 PM  |   Last Updated: 16th May 2012 04:56 PM   |  A+A-

The international geopolitical scene continues to be fluid, with potentially new power centres set to emerge in Asia. The existing world powers are meanwhile manoeuvring, especially with the nascent powers, to try and arrange the emerging new world order to suit their interests. In this backdrop the dynamics between China, India and the US are crucial and have the potential to substantively influence the future.

India and China are two Asian powers rising simultaneously for the first time in history. Japan, already a major Asian power, as yet appears undecided as to its future course of action. India and China are both trying to build durable and strong relationships with the US, which they consider essential for their development. Both view the US as a large market and source of capital, hi-technology, scientific infusions and defence equipment. China, however, has a considerable head start. The US too views a partnership with each of these countries as useful, but for quite different reasons. A common feature is the attractiveness to the US of their large and growing unexploited markets.

US President Barack Obama’s recent visit to India fairly early in his term took place in this backdrop. It materialised at a time when apprehensions in Asia have been raised consequent to China’s assertive behaviour and demonstrated willingness to use force in the past couple of years. The veritable U-turn effected by the Obama administration in its China policy has coincided with this development. The latter has been demonstrated in recent months by the new vigour injected by the US in its relationships with countries in Asia. The US simultaneously underscored its commitment to defence treaty obligations to its allies. It broke new ground by asserting that it would preserve the freedom of navigation and over flights in the ‘global commons’ of the South China Seas, thereby making implementation of its sovereignty claims, over the Nansha (Spratlys) and Xisha (Paracels) archipelagos, more difficult for China.

The US’ capacity for manoeuvre with regard to China is constrained by the nature of its bilateral relationship with China developed over the years and China’s permanent membership of the United Nations Security Council (UNSC). A proper appreciation of the breadth and depth of China’s relationship and exchanges with the US is important in the context of the developing India-US relationship. Beijing currently has over 80 points of contact and approximately 60 platforms for engagement with the US. Of particular importance in these are the ‘Strategic Economic Dialogue’ and the ‘Senior Dialogue on Global Issues’. These encompass subjects ranging from monetary policy and trade to space, cultural, educational and military exchanges. Also, during their summit meetings Obama and Hu Jintao discuss and cooperate on a range of global and regional issues including Iran’s nuclear issue, resolution of problems in South Asia — a codeword for Kashmir — and the North Korean nuclear stalemate.

In economic terms, the major portion of China’s exports are accounted for by foreign companies. Almost all ‘Fortune 500’ companies are present in China and by 2008 US companies had invested in excess of $50 billion in over 50,000 Chinese companies. Important in the current domestic climate in the US is that low-cost Chinese manufacturing helps US taxpayers save an estimated $70 billion annually. China’s holding of US Treasury Bills was estimated in July 2010 at $894.8 billion. China’s direct investments in the US also rose to $6.4 billion by the end of last year. The US and China together account for over 30 per cent of global GDP. The extent of this economic relationship not only reveals a bipartisan consensus on the US’ China policy but, at the same time, emphasises the mutual limits on independence of action imposed by this interdependence.

The US is now concerned at the pace of China’s economic and military growth and rapid spread of its influence. Expanding Chinese influence in South East and South Asia has begun to, albeit very gradually, diminish US influence. China’s steadily increasing military strength has simultaneously begun to give it a capability adequate to deter US forces from going to the aid of allies in the region, like Taiwan and Japan. US efforts are underway to check China’s growth and enmesh China in the international political and economic systems so that its rise is non-threatening.

During his visit to India, Obama in his speech to Parliament offered India a ‘global partnership in the 21st century in Asia and the Indian Ocean’. The implication was evident — to check China in both these regions. However, his remark that the US would welcome India as a permanent member in the UNSC was high on rhetoric and lacked substance. There are many impediments in India’s path to permanent membership of the UNSC including the lack of consensus on the issue in the US, firm opposition from China and Pakistan and the glacial pace of the reform process itself which has yet to formalise a view on whether future permanent UNSC members would have the right of veto.

In addition to the extant Sino-US relationship, it is imperative that note is taken of the areas where US and Chinese interests converge and impact on India’s sovereignty and territory. Both countries have a stake in Pakistan. Obama candidly acknowledged the US interest while in India. Neither will exert unrelenting pressure on Pakistan to neutralise the sources of terrorism against India despite protestations to the contrary. Their positions also converge on Kashmir, though for different reasons. While the US has chosen to strongly nudge India from the sidelines to offer concessions on Kashmir, China has opted for direct pressure through an assertive stance declaring the entire state of Jammu and Kashmir as disputed. India will come under increasing pressure on the issue in the months and years to come. India will have to formulate its independent stand on both these matters. Another area where the US and China’s interests converge, at least in the short-to-medium term, is Afghanistan. The US is facilitating, and pressuring, China’s involvement in Afghanistan. It anticipates that China, lured by the estimated $1 trillion mineral deposits in Afghanistan, will commence their exploitation yielding a steady revenue stream to the government in Kabul.

Nevertheless, it is in India’s short and long-term interest to utilise the present advantageous international situation to build and expand its relations with the US. At the same time it will need to be clear-eyed and hard-nosed as it fashions this important relationship. Its physical proximity to China will be an important consideration as will the challenges anticipated to emerge in the near-to-medium term in India-China relations. India will need to recognise that in such situations the US will be a distant witness

About the author:                        

Jayadeva Ranade is a former additional secretary in the Cabinet Secretariat, government of India

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