China, US & India: Just look at the ‘transactional’ opportunities

China has an unemotional “transactional” approach that supports its own sense of hegemonic aspirations in the 21st century. Enumerated in 1954, its “Five Principles of Peaceful Coexistence” are a convenient alternative to the Western view of a world order based on concepts like democracy, human rights, liberality, environmentalism, etc, whereas the Chinese State insists on no such moral prerequisites. This freedom afforded in the Chinese manual of diplomacy endears it to roguish states like North Korea, Pakistan, etc. Thus, a supposedly Communist regime like China can have an “all-weather friendship” with an avowedly Islamic Republic of Pakistan! However, if the cost of supporting is greater than the gains, the “transactional” Chinese can take a U-turn without batting an eyelid. The non-sentimentality of a net “gain-loss” calculation in the realpolitik framework defines the Chinese approach.

The Chinese “transactional” approach is matched by the United States, which recently withdrew the preferential treatment of India under the Generalised System of Preferences. This unilateral move by the US has created space for recalibration in the Sino-Indian dynamic. Recently, the Chinese had conceded two very unusual and strategic grounds to India, suggesting a rapprochement between the two. First, the chilling neutrality displayed by the Chinese in the Pulwama-Balakot episode that even fell short of any usual offer to “mediate” on behalf of its “iron brothers” in Pakistan — this when the nuclear armed countries attacked each other with military wherewithal. The second was the withdrawal of the “technical hold” in designating Masood Azhar a UN-listed terrorist — after earlier thwarting India’s attempt by vetoing successively (veto is rarely used by China as it either “abstains” or “agrees”). Both these moves were embarrassing and unexpected for Pakistan, and in sharp contrast to the pro-Pakistan rhetoric from China, that usually accompanied the India-Pakistan dissonances.

The Doklam standoff in 2017 was perhaps the lowest point in the restive Sino-Indian realm, with deliberately provocative moves initiated by the Chinese to up the ante. For the Chinese, no occasion was too solemn to restrain its fangs, as was witnessed during the meeting of the Indian Prime Minister and the Chinese President in Ahmedabad, where the optics were marred by a parallel standoff at the Sino-Indian border, in the Chumar area. Today, a distinctly changed narrative is at play that seems to have opened space for unprecedented engagement between Delhi and Beijing.

After the unusual Chinese moves of thawing the bilateral relationship, the national leaders of the two ancient civilisations are engaged in reciprocal symbolism that is symptomatic of the opportunities that be. After the Chinese President had hosted the Indian Prime Minister in Xiamen, where he was an office-bearer of the Communist Party of China 30 years ago, Prime Minister Narendra Modi wants to invite Xi Jinping for an informal summit to his own parliamentary constituency of Varanasi, in a continuation of the charm-offensives. Befittingly, the situation along the long India-China border is also unusually calm, unlike the status on the India-Pakistan Line of Control (LoC).

Pakistan is completely indebted and beholden to the Chinese due to the financial bailouts, economic infrastructure (China-Pakistan Economic Corridor investments of $60 billion upwards), weapon systems, etc — and the Chinese now need to restore and enhance crucial relationships beyond its existing leverages, like Pakistan. Unlike the $15 billion worth of trade at stake in the annual Sino-Pak domain, Sino-Indian trade is almost worth six times at $90 billion and growing at a robust pace — besides the difference in the health of the economies of India and Pakistan, which would further tilt Chinese interest towards India. The dark clouds of the impending disruptions in the ensuing US-China trade wars are purely economic in the short-term, and therefore the economic considerations would triumph over all other considerations for the Chinese, at least till Donald Trump is at the helm of affairs. No further “investments” (financial or diplomatic), beyond those already committed for Islamabad, are required. Chinese calculations would show lower “returns” by investing any further in Pakistan as compared to India, supporting the new Chinese opportunity.

In such a scenario, the Chinese firms with large export businesses to the US could hedge and invest in subsidiaries in India, as it possesses the requisite scale, skills and stability to set up bases, naturally and cost-competitively, compared to most other countries. Already the Chinese manufacturing footprint exists in India and the opportunity for the “new” government in New Delhi to receive additional foreign investments via the Chinese companies may get a receptive ear from the Indian leadership, that is under stress to accelerate economic growth and create new job opportunities. Beyond the economic angularity, Indian diplomacy must tap into China’s pragmatic self-interest and insecurities. The Chinese are morbidly concerned about a religious uprising in its Xinjiang Uighur Autonomous Region, and have set up unprecedented concentration camps to “de-radicalise”, over a million Uighur Chinese Muslims. The threat of a Kabul ruled by the Pakistan-Taliban combine in the aftermath of a US troop withdrawal is real, and it shares a 76-km land border with China, along the Wakhan Corridor. The parallel US-Iranian muddle is yet another point of common convergence and concern for both China and India.

The recent ebb and flow of global geopolitical churn offers new opportunities that must be partook, even if it emerges providentially. The truism of “there are no permanent friends and no permanent enemies, only permanent interests” ought to define the topical potential of Sino-Indian opportunities that now loom. India ought to know the Chinese better than most, with its civilisational connect and more importantly, its own wounded history of “Hindi Chini Bhai Bhai” frivolousness that holds invaluable lessons for managing expectations, relations and the destinies of the two nations. Both the Chinese and Indian leaderships are powerfully entrenched domestically and in a position to go beyond their traditional positions and narratives. Indians too should take a leaf out of the Chinese “transactional” approach, and maximise the circumstantial opportunity.