India - China: China’s Concerns over India’s Association with The Quad
STORIES, ANALYSES, EXPERT VIEWS
In September this year, the Prime Minister Narendra Modi attended the meeting of Quad nations. This, writes M.K. Narayanan (former Director, Intelligence Bureau, a former National Security Adviser, and a former Governor of West Bengal) “turned out to be possibly the most significant meeting of the Quad to date, during which the quartet seemed to firm up what may be viewed as a security alliance.”
Without naming China, the ‘Wilmington Declaration’ “left nothing to the imagination that it was aimed at the containment of China across the entire Indo-Pacific. Despite the absence of any reference to a formal mutual defence declaration, it was obvious that the 'four maritime democracies’ had a single objective, viz., to checkmate China.”
Relations deteriorating
The message from the Wilmington Declaration, writes Narayanan “has certain overriding implications for India and India’s security. India-China relations today are not merely stalemated but are also steadily deteriorating. In the northern border regions, the stalemate in the Galwan region continues despite some soothing statements by India’s military and civilian leaders. Recently, India announced that it will maintain, if not increase, its vigilance in the border areas by inducting more forces despite the onset of winter. In the Depsang Plains and Demchok, there has been no breakthrough in negotiations regarding disengagement. In Ladakh alone, the number of ‘friction points’ has increased, with Indian forces unable to access several ‘patrolling points’ that they were previously accustomed to.
“The military is currently in the process of further augmenting its fighting capabilities across the entire length of the China-India border…..China appears unfazed by India’s moves, confident that given its defence budget (which dwarfs that of India), it can thwart any new Indian initiative.”
China’s view on Quad
China has increasing concerns over India’s association with the Quad. “Rumblings from China have grown stronger of late. To the fevered Chinese mind of today, India’s membership of the Quad represents a far more serious threat to it than the occasional skirmishes on the Himalayan heights. The Wilmington Declaration, having given up any pretence that the Quad is not a defence alliance, could well be seen by China as an indication of a grand design by the U.S. and its enemies to encircle and contain China. With this, China’s understanding of the threat posed by India will increase significantly.”
India should not send out any wrong signals
India therefore, “must take due care not to send out any wrong signals, as the consequences of this could be serious. Any resort to confrontational politics, in substance and as well as in style, can have adverse repercussions in the India-China context……India must not also be seen to subscribe to the West’s entrenched belief that China’s rise is inimical to the future of mankind, and that nations across the globe should join together to post a challenge to it."
In the context of China, concludes Narayanan “it would, hence, be prudent for India not to be seen to be increasing its security congruence with the U.S. and the West….”
Economic problem: to let China invest in India or not
India has ate contend with an equally contentious economic problem in its relations with China. Policymakers in India, writes TCA Sharad Raghavan (Deputy Editor – Economy at ThePrint) “are once again grappling with an old economic problem with renewed vigour: what to do about China. Should we give in to the increasing trend of becoming a cog in the Chinese wheel, or should we create our own wheel through the judicious use of Chinese investments?”
The problem is that the tightening measures as well as ‘Make in India’ campaigns “haven’t really worked—at least not as originally envisaged. Even measures to incentivise manufacturing in India through various Production-Linked Incentive (PLI) schemes, are dependent on components coming from China, “with Indian companies only engaged in assembling those parts,” says Raghavan.
Indian imports from China surged from $65.2 billion in the financial year ending March 2021 to $101 billion in the year ending March 2024. The current financial year looks set to exceed that figure, with imports in April to July 2024 already reaching $35.8 billion—nearly 10 percent higher than the same period last year.
With this trend unfolding, the latest Economic Survey in July raised the question of whether India should further integrate into China’s supply chain or allow Chinese FDI into the country to develop a robust supply chain of its own.
In his Economic Survey, Chief Economic Advisor V Anantha Nageswaran made a point: ‘As the US and Europe shift their immediate sourcing away from China, it is more effective to have Chinese companies invest in India and then export the products to these markets rather than importing from China, adding minimal value, and then re-exporting them.’
This situation, argues Raghavan “highlights both the opportunities and threats India faces from Western trade actions against China—a neat case study of which is the solar module industry….
“As more sectors become inextricably linked to Chinese imports, they will increasingly be hostage to international developments rather than domestic ones. One way to address this is by encouraging Chinese investment and manufacturing within India…..” An easy interim solution “could be to fast-track pending non-strategic investment proposals from Chinese companies.”
