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China's Influence in India's Neighbourhood-Part 1

[Extracts of the paper presented by the writer, Col.R.Hariharan, at the India-Taiwan interaction, jointly organised by the Chennai Centre for China Studies and the Federation of Chambers of Commerce & Industry-Tamil Nadu Chapter at Chennai on August 1, 2008.]

China is aiming to quadruple its per capita GDP to $ 3200 by 2020 from $ 800 per capita attained in 2000. This would imply an average annual economic growth of 7.2% till 2020. In order to attain this, China will have to keep meeting the enormous appetite of its manufacturing economy for raw material and energy resources. On the other hand, it has to open up new markets for Chinese products while keeping the competitive economies of Asia and Americas at bay. Though this might be viewed as an exercise in international trade, it has to be driven by international relations backed by strategic defence capability.

Conscious of these imperatives, China’s international relations are developing on twin tracks: gaining sources of raw material across the globe, and increasing its strategic power projection. It is on a fast track development of missile capability and submarine fleet. According to some analysts China would be able to match the defence capability to of the U.S. by 2050. This is evident from the progress of the military modernisation programme of China which is making forays into space warfare, enhancing nuclear deterrence, naval expansion and acquiring rapid reaction and deployment capability.

China’s single minded pursuit for accessing resources has increased its visibility in Asia, Africa and South America. This has also made China support some of the most notorious regimes shunned by the rest of the world including Myanmar, Sudan, and Zimbabwe. At the same time it has embarked upon strategic infrastructure development in friendly countries that would improve China’s strategic reach.

This is reflected in China’s growing influence in South Asia where its presence is being firmed up in Pakistan, Bangladesh, Afghanistan and Sri Lanka, and possibly in Nepal at a future date. This has been a cause of security concern not only for India but also for the U.S.

China’s interest in South Asia

South Asia’s geographic location, midway between the oil rich Middle East and the South East Asian regions, lends it strategic importance. South Asia borders most of China’s sensitive southern boundary. This gives China the strategic option of opening direct access through South Asia to the international sea lanes of Indian Ocean. The Indian Ocean region has always been the scene of power play between Russia, the US and the West, and the theocratic Islamic states because 75 % of global merchant shipping passes through it.

In recent times, South Asia has also become a source of inspiration for Jihadi terrorism and separatism in China. Western parts of South Asia bordering China had been the fountainhead of Jihadi terrorism inspiring fellow Muslims across the borders in Xinjiang province. Similarly, the presence of large number of Tibetan refugees in India and Nepal with strong anti-Chinese sentiments had always been a source of potential trouble for China.

On the other hand South Asia holds a number of attractions for China. The region has a growing economy of over 1.5 billion people in different stages of economic and social development. Its huge, young population represent an enormous and untapped market for Chinese goods. Major political, economic and social problems within and between South Asian nations offer fertile ground for increasing China’s influence through political, military and economic means. The region has considerable natural resources including coal, iron ore, natural gas and oil waiting to be fully exploited.

The India factor

In developing its relations with South Asian nations China has to contend with Indian sensitivities. India borders seven of the eight South Asian nations and dwarfs them both geographically and population wise. This makes it easy for India to physically influence, if not intervene, its neighbouring countries. India’s huge population forms the bulk of South Asia’s teeming millions. Historically, strong Indian influence has been permeating the social, cultural and religious life of its neighbours. As a result India wields a strong political clout unmatched by any other county in this region.

India nearly a decade long economic boom ago is pushing it into the realms of becoming a global economic power by 2050. India’s technology training institutions, churning out large number of engineers and professionals, are making India a reservoir of qualified technology professionals. This has also enabled India to become a world leader in software development. India’s traditional entrepreneurial skill, coupled with sizeable natural resources, gives it a strong economic clout in the region. As India’s share of global trade increases, Indian industrial houses are nursing ambitions to become global players. India is also striving to expand its manufacturing base. It is also in the quest for oil and gas resources all over the world, though on a much smaller scale than China.

The Indian growth model, despite operating within the constraints of being the largest functional democracy in the world, offers a strong contrast to the Chinese single-party model of monolithic development. India’s democratic polity has given it political stability unmatched by most of the other South Asian nations. Its large and modern armed forces serve as guardians of democracy. This is in stark contrast to some other countries of the region i.e., Pakistan and Bangladesh where armed forces had usurped power and throttled democracy.

The failure of India and China to amicably resolve rival territorial claims along the largely unmarked boundary following China’s occupation of large chunks of territory in Aksai Chin and other border areas resulted in the two countries going to war in 1962. The 1962 war had kindled strong suspicion in India about China’s strategic intentions in the region. It had also generated anti-Chinese feeling in India that persists to this day. Despite many rounds of talks between the two countries, the border dispute remains unresolved and continues to cramp the free articulation of Sino-Indian relations.

A major irritant for China in India is the presence of the Tibetan spiritual leader Dalai Lama and his followers in exile, who are the visible face of Tibetan freedom. The presence of a large Tibetan refugee population in India clamouring for Tibetan independence is major cause of security concern for China. The Tibetan issue continues to be another rider in the development of smooth relations between India and China.

In recent years China’s has been viewing with growing concern India’s emergence as a dominant regional military power with nuclear weapon and missile capability. Its large armed forces are being modernised and the Indian navy is on way to acquire blue water capability. The progressive growth of India-US security synergies, adding strength to the strategic security reach of both the powers, has further fuelled China’s security concerns.

These strategic factors coupled with the growing economic muscle have made India a potential challenger to the growth of China’s influence on the South Asian turf. In tandem with the U.S., India could also become a formidable contender for power in other parts of the world in the coming years.

At the same time, India also holds some positive attractions for China. Its growing economy and very large middle class provide an attractive consumer market for Chinese goods. For the resource hungry China, India’s large coal, manganese and iron ore reserves are useful. India also finds doing business with China an attractive proposition and India-China two-way trade had been booming despite the frosty relations. It is set to reach $ 25 billion by 2010.

[To be continued]

(The writer,Col. R Hariharan, is a retired Military Intelligence specialist on South Asia, is associated with the South Asia Analysis Group, and the Chennai Centre for China Studies.

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