Though both sides are working to expand and deepen economic cooperation, there is as yet no strategic congruence between the two giants. Indeed, the issues that bind the two countries together are also the issues that divide them and fuel their rivalry because they have different positions in the international system, contrasting strategic cultures, world views, political systems, and competing geostrategic interests.
In the power competition game, China has clearly surged far ahead of India by acquiring potent economic and military capabilities, and the existing asymmetry in power and status serves Beijing’s interests; therefore, China has resisted any Indian attempts to narrow the power gap. Unlike China, India’s fractious polity continues to limit its economic and military potential. Nor has New Delhi been able to lend a strategic purpose to its foreign and economic policies.
Beneath the surface, frictions and tensions are simmering between the two countries over some fundamental issues: the territorial dispute, the nuclear issue, the U.N. Security Council reform issue, to name a few. Both remain locked in a classic security dilemma: one country sees its own actions as justifiably self-defensive, but these same actions appear aggressive to the other. In the past year, India has found itself ranged against China at the United Nations, the International Atomic Energy Agency over Iran’s nuclear program, the East Asia Summit and the Nuclear Suppliers Group (N.S.G.) over the issue of India’s membership.
Three major developments which shook the ground beneath South Block (India’s External Affairs Ministry building) in New Delhi recently were the emergence of a pro-China axis comprising Pakistan, Nepal, and Bangladesh at the 13th South Asian Association for Regional Cooperation (S.A.A.R.C.) Summit in Dhaka, China’s opposition to the July 2005 India-U.S. nuclear energy agreement, and Beijing’s moves to confine India to the periphery of a future East Asia Community at the first East Asia Summit in Kuala Lumpur in mid-December 2005.
Add to this Beijing’s worldwide campaign against India’s (and Japan’s) bids for permanent membership in the U.N. Security Council, the continuing stalemate in the India-China border negotiations, coupled with their ever-expanding economies and widening geopolitical horizons, it is clear that the bilateral relationship between the two rising Asian giants continues to be characterized more by competition and rivalry than by cooperation.
Despite the hype over India’s burgeoning trade with China, it consists mostly of raw materials, iron ore, steel, and like commodities that are used to fuel China’s economic growth while China exports manufactured goods, electronics and machinery to India. Even in the information technology sector, the focus of Chinese diplomacy remains on leveraging India’s strengths to China’s advantage without any quid pro quo in the technology hardware or manufacturing sectors.
Neither power is comfortable with the rise of the other. Each perceives the other as pursuing regional hegemony and entertaining geographical expansion. Each puts forward its own proposals for multilateral cooperation that exclude the other. Both vie for influence in Central, South and Southeast Asia, and for leadership positions in global and regional organizations.
More than ever before, the state of the India-China relationship is increasingly being influenced by “the U.S. factor” as the Southern and Central Asian region becomes an arena of strategic competition in Asia.