Narayanan analyzes the policy of the National Democratic Alliance (NDA) government towards China since 1998. He details the perceptions and issues dominating Sino-Indian relations, providing a window into the significance of Prime Minister Vajpayee's recent visit to China.

Raviprasad Narayanan earned his Ph.D in International Relations from Jawaharlal Nehru University, New Delhi, where he worked on “China’s Economic Diplomacy.” In 2001-2002, he served as a Visiting Scholar at the Shanghai Academy of Social Sciences in 2001-2002. Beginning in February 2004 he will be a Post-Doctoral Fellow at the Center for Asian Studies, Hong Kong University.

Sino-Indian relations are characterized by the theory of the ‘unity of opposites.’ These opposites involve “estrangement” and “rapprochement” as the tectonic forces governing their relationship have shifted over the past five decades. Despite the differences perceived and acknowledged by both countries, however, there is a desire to engage more intensively in a relationship not dictated by the events of past. China and India visualize a process of understanding each other through the prism of being “civilizational states”1 prior to their emergence as nation states in a Westphalian construct.2 It is perhaps this understanding that informs their respective roles. Bearing in mind this construct of “civilizational states” evolving into “nation states” but with different political cultures and institutional arrangements, the Sino-Indian relationship is a study of both contrasts and commonalities.

In interpreting the events that have determined the course and trajectory of Sino-Indian relations since 1998, realism, especially concerning security complex/dilemma and balance of threat, is a useful analytical framework with which to understand the post-Pokhran behaviour of India vis a vis China.3 Both Beijing and New Delhi are more concerned with achieving a minimum level of security than achieving a maximum level of power, but their behavior and policy affect each other’s threat perceptions and policy responses.4 The unity of opposites comes into play because China and India as security seekers rather than power seekers are highly conscious of relative gains. Hence, prospects for cooperation between the two exist even as areas for potential conflict remain.5  

The NDA Phase

Led by the Bharatiya Janata Party, the National Democratic Alliance (NDA) that took office in March 1998 was perhaps the first Indian government that prior to assuming office had promised to deal more vigorously with what it claimed was India’s deteriorating security environment. (Earlier, public articulation of India’s security concerns was reflected only in bureaucratic reports.) By pursuing great power diplomacy to raise its own profile on the global stage, India’s desire to be recognized as a major power beyond South Asia posed a challenge to China’s interests in the region.6 For China, the pertinent characteristics of India’s growing role are the following: first, India’s consolidation of its dominance in South Asia; second, a comprehensive defense modernization drive, including a minimum and credible deterrent against China; third, an improving Indo-US relationship (and its effects); and finally, India’s attempts at reaching out to countries beyond its sphere of strategic influence, including Vietnam, Japan and the countries comprising the ASEAN.7  

Shortly after the NDA alliance came to power, the defense minister, George Fernandes, called China “India’s threat number one.”8 This statement began yet another tumultuous phase in Sino-Indian relations. Fernandes’ remarks, much vilified in China, were characterized by the Chinese Ministry of Foreign Affairs (MFA) as “ridiculous and not worth refuting.” The MFA statement added that Fernandes’ remarks had “seriously destroyed the good atmosphere of improved relations between the two countries. The Chinese side has to express extreme regret and indignation over this.”9 Closely following Fernandes’ remarks, India decided to conduct three underground nuclear tests. Beijing’s response, surprisingly, was subdued and the official statement released by Beijing merely labeled the tests “detrimental to peace and stability in the South Asian region.”10 In an interesting angle, Beijing Radio explained the tests in terms of India’s rejection of Western pressures – a reference to the then prevalent debate on the Comprehensive Test Ban Treaty (CTBT). The reluctance of China to criticize India by name, however, changed following the next two tests conducted on May 13 and the publication of Vajpayee’s letter to US President Clinton.11 To justify the tests, the letter dwelt more on China than Pakistan as a threat. In response to Vajpayee’s letter, Chinese commentators made it clear that the “anti-China justification of India’s nuclear tests was of greater concern to Beijing than the tests themselves.”12 

From Beijing’s perspective, New Delhi’s concern regarding China’s ties to other South Asian countries was a violation of the Five Principles of Peaceful Co-existence,13 most notably the idea of sovereign equality of all states, according to which states have the right to determine their own foreign relations. The letter and its contents prompted calls at several levels in China to ‘untie the knot.’ At the international level, Chinese diplomats went to work to mobilize international pressure on New Delhi from the standpoint of a non-proliferation agenda.14 In New Delhi, the Chinese ambassador, Zhou Gang, gave talks and interviews condemning “certain personages” for “jeopardizing the future of Sino-Indian relations.” Further upping the ante, China expected an explanation to such “verbal assaults” and also expected “practical actions” to move Sino-India relations back to a normal course of development.15 With tempers near a boiling point, an about-turn by India in October 1998 began the process of normalization. The Principal Secretary to the Indian Prime Minister in 1998 (now National Security Adviser) Brajesh Mishra made a statement on the government’s policy towards China, according to which India did not see China as an “enemy” or desire an “arms race” with China.16 

Continuing along the lines of Brajesh Mishra’s statement, President K.R. Narayanan in a January 1999 meeting with Ambassador Zhou Gang and former Ambassador Cheng Ruisheng called for “broad cooperation between India and China” and declared that “China does not constitute a threat to India.”17 On cue, the Chinese quietly restarted the stalled Joint Working Group meetings, suspended since the nuclear tests by India. The process of normalization had begun with the highest constitutionally authorized representative from India, President K.R. Narayanan, stating that China was not a threat to India.

In this step by step normalization process, the Kargil war provided China with further impetus to moderate its tone, given its wish to avoid a conflict on its southern flank involving two de facto nuclear powers.18 It must be stated that at the peak of the Kargil conflict, Pakistan’s army chief (and now president) Pervez Musharraf began a week long visit to Beijing. Chinese sources asserted, however, that Musharraf’s visit was not related to the Kargil war and that “military ties between China and Pakistan…are an important part of the Sino-Pak comprehensive cooperative partnership.”19 Significantly, Premier Li Peng and Foreign Minister Tang Jiaxuan called for both countries “to maintain peace and stability in South Asia” and to resolve the “Kashmir issue politically…through negotiations and consultations.”20 

It was at this time that Foreign Minister Jaswant Singh visited Beijing during June 15-17, 2003. Jaswant Singh’s visit revealed the willingness of both countries to discuss each other’s security concerns. Considered to be a success, the visit saw the initiation of a formal security dialogue with China – a credit to the NDA government’s handling of its China policy. Previous governments had discussed such issues with China through routine diplomatic channels. The issues under discussion, let alone disagreements, had not been made public. To maintain the momentum of this process of engagement, President K.R. Narayanan visited China in May-June 2000 to mark the 50th anniversary of the establishment of Sino-Indian relations. The rapprochement had completed a full circle from the May 1998 statements of defense minister George Fernandes’ speech in which he labeled China a threat.

Interpreting Vajpayee’s Visit

In a statement prior to Prime Minister Vajpayee’s visit to China in June 2003, Hua Junduo, the Chinese Ambassador to India, outlined three peak periods in India-China relations. ‘The first period,’ Hua Junduo wrote, ‘can be traced to two millenniums back when Buddhism bound China and India together’ in the earliest stage of the historic exchange between the two great ancient civilizations. The second period features mutual sympathy and support in the respective struggles for national independence and liberation in modern times. As the third period, Ambassador Hua Junduo mentioned the ‘good-neighborly relationship’ in the 1950’s between the two independent Asian nations newly emerging in the international arena and by the Five Principles of Peaceful Co-existence they jointly initiated after the Second World War.21 It is in this spirit of continuity that Atal Behari Vajpayee became the fourth Indian prime minister to visit China after Jawaharlal Nehru (October 1954), Rajiv Gandhi (December 1988) and P.V. Narasimha Rao (September 1993). As the External Affairs minister, Mr. Vajpayee had traveled to China in 1979 – a visit that began the recent round of high-level exchanges between the two countries.

With a broad consensus across the political spectrum on handling relations with China, Vajpayee’s visit was preceded by an exercise of opinion building primarily in the media that created a positive atmosphere to further intensify relations with China and to seek innovative means to resolve the Sino-Indian border dispute.22 In examining Vajpayee’s visit, it is imperative to answer the following three questions: What was expected? What was attained? And, what lies ahead?

What was expected?

With the debacle of 196223 retreating from the perception of the decision-makers in the foreign policy establishment, Vajpayee’s visit was heralded as a new beginning to resolve “outstanding issues” (diplomatic speak for the border issue) and to secure recognition of Sikkim’s accession to India, which has still not been officially acknowledged by China. Resolution of the stalemate over the border issue was sought by including a “political touch” to the entire exercise of demarcation that would satisfy both sides. This was in line with China’s “pragmatic preference for a negotiated settlement on the basis of mutual understanding, mutual accommodation” and most importantly “mutual adjustment.”24 One reason for optimism in the relations between the two countries, highlighted by officials, was the growing confidence witnessed by the recent expansion of Sino-Indian trade. The emphasis on promoting trade between the two countries was, in essence, a continuation of former Premier Zhu Rongji’s call for Sino-Indian trade to reach the figure of 10 billion dollars by the year 2007 – a statement he had made when on an official visit to India in early 2002. Since Sino-Indian trade had reached the five billion dollar mark in early 2003, the situation was ripe to pursue agreements that would protect bilateral investments and resolve the problems of double taxation and repatriation of profits.25 Prior to Vajpayee’s visit, the Chief Minister of Sikkim, Pawan Kumar Chamling, had strongly advocated the promotion of border trade. The question of opening up Nathu La pass for trade and transit, it was hoped, would act as a powerful symbol of the growing relationship between the two countries in matters pertaining to trade and commerce. Nathu La pass could also become the spiritual gateway for Tibetan Buddhists, thereby tremendously increasing the possibilities of spiritual tourism.

With regard to the wider international arena, some were of the opinion that Vajpayee’s visit should reiterate India’s opposition to the Sino-Pak axis in response to the transfer of missiles and fissile material from China to Pakistan. The Iraq war and its subsequent fallout were also expected to be on the agenda.

What was attained?

In what the China Daily described as “a handshake across the Himalayas,” Vajpayee’s visit saw the signing of a total of ten agreements and a Declaration on Principles for Relations and Comprehensive Cooperation between India and China. Of primary importance in the joint declaration issued in Beijing was the decision for each side to appoint a Special Representative to explore the framework for a boundary settlement from the political perspective of the overall bilateral relationship. The Indian National Security Adviser, Brajesh Mishra, and the Chinese Senior Vice-Minister, Dai Bingguo, were appointed as Special Representatives charged with resolving the border issue. The appointment of the two negotiators reflects a political will on the part of New Delhi to negotiate a final settlement of the boundary dispute that, if resolved, holds the possibility of enhanced trade and economic cooperation between neighboring provinces of the two countries. Significantly, the Chinese Premier, Wen Jiabao, underlined a new principle of Sino-Indian equality as one of the terms for the final settlement of China’s boundary dispute with India. The principle of “consultation on an equal footing” was first propounded by China just recently. The two sides further reaffirmed that pending an ultimate solution, they will work to maintain peace and continue work on delineation and clarification of the Line of Actual Control (LAC). With a mechanism for resolving the border dispute, India and China have clearly made a break from their past history of mutual distrust which affected all levels of official engagement. More importantly, economics is no longer hostage to political decision-making and has generated a tremendous amount of optimism that Sino-Indian relations are headed for a more constructive engagement than ever before.

While the appointment of a special representative for resolving the boundary issue marks a significant gain for India, for the Chinese the most welcome development was the declaration on Tibet. To quote: “The Indian side recognizes that the Tibetan Autonomous Region is part of the territory of the People’s Republic of China and reiterates that it does not allow Tibetans to engage in anti-China political activities.”26 The Chinese expressed “appreciation for the Indian position and reiterated that it is firmly opposed to any attempt and action aimed at splitting China and bringing about independence of Tibet.” In what must be an attempt to highlight a positive outcome, the Chinese media lauded India’s acknowledgement that Tibet is an integral part of China. The phrase “Tibetan Autonomous Region” in the joint declaration contrasts subtly with the reference to Tibet in the joint communiqué issued on December 23, 1988, following the visit to China by Rajiv Gandhi. This period is characterized by the statement: “[t]he Chinese side expressed concern over anti-China activities by some Tibetan elements in India. The Indian side reiterated the longstanding and consistent policy of the Government of India that Tibet is an autonomous region of China and that anti-China political activities by Tibetan elements are not permitted on Indian soil.”27 With the Dalai Lama’s emissaries engaged in a parallel dialogue with China on issues of autonomy as opposed to independence, the Indian government offset any nascent opposition to its stance on Tibet by the Tibetan community settled in India.

Economic incentives were also evident in some aspects of the agreements signed during the summit. It could be argued that India’s newfound confidence in promoting bilateral relations with China stems from its improved economic performance. With exports showing a dramatic increase and economic growth projected to be 5.7 percent for 2002, India has become China’s largest trading partner in South Asia. The two-way trade between the two reached $4.95 billion dollars in 2002, up by 37 percent from the previous year. In the first five months of 2003, the two-way trade rose to $2.9 billion, reflecting a jump of 70 percent over the corresponding period the year before. China exported $1.22 billion and imported $1.68 billion worth of goods and services from January to May of 2003.

In an important development prompted by the desire on both sides for increased commercial development, the two countries agreed to designate Changgu in Sikkim and Renqinggang of the Tibetan Autonomous Region as the venues for border trade. The two sides also agreed on using Nathu La as the pass for entry and exit for persons, means of transport and commodities engaged in border trade. The recognition of Nathu La as the pass for entry and exit could be interpreted as a subtle gesture on the part of China in acknowledging India’s sovereignty over Sikkim, while not being explicitly mentioned as much. While generating a lot of optimism, the lack of a clear statement on the status of Sikkim from the Chinese side reflects in many ways the arduous nature of the task ahead for the special representatives. Not one to wait for any official recognition from China, the chief minister of Sikkim, Pawan Chamling, said that it was time that there was a direct bus service from Gangtok to Lhasa along the lines of the Lahore-Delhi and Kolkata-Dhaka services currently in operation. Nathu La thus becomes the third pass across the Himalayas where border trade is conducted with China, the other two being Lipulekh Pass in Uttaranchal and Shipki La in Himachal Pradesh.

With Prime Minister Vajpayee identifying economic cooperation as the new focus of India-China ties, the visit saw the two countries agreeing to coordinate their strategies in supporting developing countries within the World Trade Organisation (WTO). A key aspect will be the search for special safeguard mechanisms on behalf of developing countries in the field of agriculture. Other areas of possible Sino-Indian cooperation within the WTO framework pertain to Trade Related Investment Protection Measures related to public health issues (in the specific context of paragraph 6 of the Doha Declaration), investment policy and dispute settlement. The first of its kind, a five hundred million dollar fund for investments, mostly for the infrastructure sector in India, was announced by China.

With mutual calls for synergizing their software and hardware sectors, India and China are expanding their horizons in sourcing goods and services from each other. On the software front, India continues to enjoy a comparative advantage in the delivery of information technology (IT) services. The software and IT services industries, India’s fastest growing sectors, grew to $6.2 billion in 2002. Trade between the two countries, expected to reach Premier Zhu’s target of $10 billion sooner than was hoped, is thus emerging as a point of “mutual convergence” and “mutual benefit.”

What lies ahead?

Prime Minister Vajpayee’s visit to China and the Joint Declaration issued by both the countries brings to the fore a sense of “realism” that permeates relations between the two countries. This aspect of realism is most visible in the pragmatic approach adopted by both countries to commit to a regular exchange of high level visits and their decision to promote trade as a vehicle for future cooperation. The realism is further evidenced by the acknowledgement that the border issue is indeed a continuing issue that needs a political will to achieve results in the near future. The appointment of special representatives to resolve the boundary dispute will infuse dynamism to the entire process of delineating the LAC and establish the contours of a firm, permanent, mutually acceptable boundary between the two countries. The entire process, if successful, would have the effect of raising Sino-Indian relations to unprecedented levels and bestowing a sense of maturity to their growing engagement. Vajpayee’s visit, for the first time, did not raise the bogeyman of Sino-Pak cooperation in military affairs. By downplaying this issue, India showed an awareness of how to constructively further relations with China. Despite China’s ‘all-weather’ relationship with Pakistan, India displayed a confidence that results from highlighting bilateral spheres of cooperation and exchange.

 India’s acknowledgement of Chinese sovereignty over the Tibetan Autonomous Region may have been emphasized by the Chinese for the purpose of selling the visit to its domestic audience as a “successful” endeavor. The opening of Nathu La pass and the setting up of two customs posts on either side (Renqinggang in Tibetan Autonomous Region of China and Changgu in Sikkim, India) is a positive step forward. Sikkim will again be connected to the Tibetan plateau once trade commences through the Nathu La pass. With it, a significant chapter of the 1962 war will be closed. Linked to this is the new focus on trade as a mantra for closer interaction and coordination between India and China. In a fast globalizing world, multilateral institutions are the “platforms” shaping the global trends in commerce. The decision for India and China to cooperate in providing safeguard mechanisms in the field of agriculture is another important step forward. It recognizes the fact that for both countries, despite reforms and their limited success, a majority of the workforce still earns its livelihood by cultivating the land as has been done for several centuries. With large populations to support, introducing market forces too quickly in this crucial sector would lead to the undoing of the relative gains accrued from years of ‘fine-tuning’ the economy to face the challenges of globalization. The recognition that economic interests are the driving force in bilateral ties is a welcome departure from the mutual distrust and pessimism that prevailed earlier.

Vajpayee’s visit must also be heralded as the culmination in the sensitive handling of relations with China since 1998. It should be recalled that following India’s nuclear tests, a letter written by Prime Minister Vajpayee had in no uncertain terms singled out China as India’s prime security concern. A long road has been traveled since then and a longer road needs to be journeyed in achieving results that perhaps, for the first time do not seem unrealistic. With time and caution the two countries might just get there.

Endnotes

 1 “Civilizational state” : The perception by a nation state that its influences, cultural and otherwise, transcend its frontiers and are a social feature spread over a vast domain.

 2 The Treaty of Westphalia signed on October 24, 1648 between the Holy Roman Emperor and the King of France and their allies is considered the precursor to the emergence of the modern unitary state.

 3 After India’s nuclear tests in May 1998 at Pokhran, Sino-Indian relations came under strain following the publication of a letter written by Prime Minister Vajpayee to President Clinton. The letter, while defending India’s nuclear tests, pointed an accusing finger at China and its support of Pakistan as being an important factor in forcing India to go nuclear. New York Times, 13 May 1998, p. A12.

 4 The ‘minimum security’ position was expressly spelt out in the Draft Indian Nuclear Doctrine (dIND), which envisages the creation of a deterrent that is minimal yet effective enough to provide for a ‘second strike capability.’ Interestingly, China also maintains a ‘minimum credible deterrent.’

 5 China and India share common interests in the following areas: opposing hegemonism and power politics, human rights, North-South relations, the establishment of a new international economic order and environmental protection.

 6 Hans Morgenthau defines power diplomacy as follows: “The power of a nation depends not only upon the skill of its diplomacy and the might of its armed forces, but also upon the attractiveness of its political philosophy, political institutions and policies.” An illustration was the competing ideologies of the United States and the Soviet Union during the Cold War period.

 7 Ma Jiali, “Yindu zhanlue diwei tuxian” [India’s elevating strategic position], Heping yu fazhan [Peace and Development], no.4 (2000), pp. 20-23.

 8 “China is threat number one,” Times of India (New Delhi), 4 May 1998.

 9 Foreign Ministry News Briefings, Beijing Review, May 25 – 31, 1998, p. 7. The vilification of George Fernandes in the Chinese media and official commentaries stems from his articulating causes that go against China’s interests, such as restoration of democracy in Myanmar and independence for Tibet.

 10 Xinhua, 13 May 1998, in Foreign Broadcast Information Service, Daily Report, China (FBIS-CHI, No.98-133) http://www.wnc.gov.

 11 a) The Chinese Ministry of Foreign Affairs stated China’s grave concern over the tests which were detrimental to peace and stability in the South Asian region, as cited in Xinhua, 13 May, 1998, in Foreign Broadcast Information Service, Daily Report, China (FBIS-CHI).

 b) “India’s letter to Clinton on the Nuclear testing,” New York Times, 13 May 1998. p. A12.

 12 Ye Zhengjia, “Wushi nianlai de Zhong Yin guanxi: jingyan he jiaoxun” (“Experience and lessons in 50 years of Sino-Indian relations”) Guoji wenti yanjiu (Beijing) (International Studies), no. 4 (1999), pp. 17-23. Also, Wang Hongwei, “Tancheng duihua shi yi zeng xin” (“Frank dialogue, dispelling doubts, increasing trust”) Nanya yanjiu (Beijing) (South Asia Research) No. 1 (1999) pp. 14-17.

 13 The Five Principles of Peaceful Co-existence between India and China or Panchsheel as they are known in India are: 1) Mutual respect for each other’s territorial integrity and sovereignty; 2) Mutual non-aggression; 3) Mutual non-interference in each other’s internal affairs; 4) Equality and mutual benefit, and 5) Peaceful co-existence. These principles formed the preamble to the ‘Agreement between the Republic of India and the People’s Republic of China on Trade and Intercourse between the Tibet Region of China and India’ signed at Peking (Beijing) on 29 April 1954.

 14 To India’s discomfiture, China played an active role in joining the members of the Security Council to pass Resolution 1172 condemning India and Pakistan’s nuclear tests.

 15 Xinhua, 10 July 1998, FBIS_CHI, No. 98-193.

 16 John W. Garver, “Sino-Indian rapprochement and the Sino-Pakistan entente,” Political Science Quarterly (Washington), vol. 111, no. 2, 1996, pp. 323-347.

 17 President Narayanan, perhaps as a former Ambassador to China at a crucial time when Sino-Indian relations were restored in 1976 following the 1962 war, initiated on his own a process of rapprochement, as there has been no evidence up to now that he acted so at the behest of the cabinet or at the recommendation of the Prime Minister. The President in India is the head of state and occupies a ceremonial post. The Prime Minister is the head of government and functions through the cabinet. While the Prime Minister is elected by the people, the President is elected by an electoral college composing the members of the Parliament and State Assemblies.

 18 In the summer of 1999, India and Pakistan fought a brief but intense ‘mini’ war in the mountains of Kargil in Kashmir. This limited conflict arose after Prime Minister Vajpayee’s visit to Pakistan to meet the civilian government headed by Nawaz Sharif. The Kargil conflict was seen in India as a betrayal of faith by Pakistan even as India was initiating a process of rapprochement.

 19 Xinhua, 25 May 1999, FBIS-CHI 1999-0526.

 20 Xinhua, 11 June 1999, FBIS-CHI 1999-0611.

 21 Hua Junduo, “Partners, not rivals” The Hindu (New Delhi), 11 June 2003, p. 11.

 22 The Sino-Indian border is divided into three sectors: the western sector, from the Karakoram Pass to Demchok on the Indus; the middle sector from Demchok to the Nepalese boundary, and covering on the Indian side the states of Uttaranchal and Himachal Pradesh; and the eastern sector from Bhutan to Myanmar.

 23 In October and November 1962, China and India fought a war, in which Indian troops were convincingly defeated, over the disputed boundary called the McMahon line.

 24 P.S. Suryanarayana, “China identifies basis for ties with India,” The Hindu, 20 June 2003, p. 11.

 25 ‘Double taxation’ refers in this case to the imposition of taxes by authorities in two different countries on the same income. ‘Repatriation of profits’ involves the return of profits from foreign investments to the nation of the investor, thereby leading to a gross outflow of capital.

 26 Text of the Declaration on Principles for Relations and Comprehensive Cooperation between the Republic of India and the People’s Republic of China.”

 27 Amit Baruah, “Taking a New Road,” Frontline (Chennai), July 5-18, 2003, vol. 20, no. 14, p. 6.