Dialogue  January-March, 2007, Volume 8  No. 3

China and India: Outlining Common Goals for the Future

Ravni Thakur


A comparison between India and China has become almost de-riguer especially since India’s economic growth rate moved into the post 7 per cent category per annum. Western scholars for example, see an inevitable degree of competition rising between the two countries as the economies of the two continue to develop and grow and as both start to compete for the same markets and for strategic influence in their common regional boundaries1. While this may be true, this paper will highlight how China and India can move beyond a security prism to highlight and identify common goals that will lead to greater trust and as President Hu Jintao and Prime Minister Manmohan Singh stressed, during the former’s visit to India in November 2006, build an “irreversible relationship of peace between the two countries”2.

This paper is divided into two parts. In the first, it will focus on the broad dimensions on a China policy that exist in India. It will argue that a cooperative relationship is an absolute necessity for both emerging great powers and essential if a balance of power is to be maintained in the future, not just regionally but also in terms of an international balance of power. It can lead to the building of Chindia – a region of peace and prosperity for all. However, for us to move forward towards this goal in a realistic fashion, it is important to pragmatically assess both the perceptions about China that exist in India and lay out a road map to tackle those areas that remain a roadblock towards its progress.

Indian Perceptions of China

Since the success of its economic reforms, China has been receiving very positive Press in India. It is seen as a model for economic prosperity and free trade within large third world countries. China, like Brazil and India, is proving that we can benefit from globalisation, provided secure state intervention to target social disparities is maintained. India being a democracy, a wide spectrum of opinion on India’s relationship with China can be identified within this country.

Three broad streams of opinion can be outlined on China within India. I will deal with each in detail. Although there is some overlapping between these positions, broadly they can be identified as paradigms within which China and Chinese moves are assessed. The first is a Mainstream or middle position on China. This argues that instead of viewing China from the prism of a security threat, we view it as an equal. In other words, we do not need to be complexed by China. The second that China is and can be a friendly neighbour and the third is that China is a hostile country and the biggest threat to Indian security and interests.

What has been identified as a mainstream position really came into its own after the visit of Prime-Minister Rajiv Gandhi to China in 1988 and has since then remained largely the position taken by Indian intellectuals and also the Congress Party3. The main contours of this position is that India needs to be cautious about China in the long run but there is no immediate or short term threat perception. This perspective emphasizes how certain Chinese positions on world affairs converge with that of India and that the possibility exists to maintain a diplomatic and negotiating position on all issues to avert any major crisis4. This position is largely based on India’s readings of China’s current situation and its desire to continue its economic growth and have peace and stability in the region. It also comments on China’s changed positions on Indo-Pakistan affairs. Like America, China too has been making moves to decouple the Indo Pak relationship, atleast where trade and diplomacy is concerned. Further China’s willingness to come to the table to talk about the border dispute is also seen in this light.

China today has stopped supporting the Pakistan position on Kashmir and although Pakistan still remains an “all weather friend”, China in its desire to heal the rift with India has assiduously left this issue alone5. Chinese thinkers today point out how necessary it is for both countries to have bilateral ties without the danger of partiality. In this light, the visit of President Hu Jintao to India and Pakistan in November is symptomatic of this change. President Hu stressed the need to maintain peace in the region. Finally, this position on both sides is positive about the future of Sino-Indian relations6.

Within a pro-China perspective, a further breakdown needs to be made. One is based on pragmatic long term strategic interests and the other is based on a cultural and civilisational paradigm. Old China hands like Prof. Tan Chung and others have a more cultural paradigm and one based on scholarship and the historical understanding of cultural synergy between India and China. This culture-centric view, in many ways, works within a civilisational paradigm7. This paradigm looks often at the golden period of Sino Indian relations paraphrased by Buddhism. And this is also the line that pro-India hands take within China8. Again, like in India, in China too, this perspective is largely restricted to academic circles. At the level of popular opinion, Buddhism is the tie that links the idea of India with China. Every time I have been in China, on learning that I came from India, the first thing I am told is that Buddhism came from India. India in the common mind has huge good will, unlike in India where the losses of personal life and national pride still colour the popular idea of China. We must use our Buddhist pacifist background and its rich inter-linkages to cement a stronger bond between us today. This once again emphasises the long historical and cultural roots that both countries share and also hope that trade will be the cement for a good relationship just like it was a major motor in cementing ties during the period of the Silk Route. During this historical period, trade played a leading role and Buddhism traveled largely across the silk routes, monks traveling with merchant caravans9. Today China is also pushing this historical paradigm and this discourse is very evident in their desire to link road and trade networks through Myanmar and Bangladesh into India. Similarly, trade routes over Sikkim and Himachal are also expanding.

Let us now turn to the view that China is a continuing security threat for us. This position is dominated by the close affinity, militarily, that China has with Pakistan and the conviction that China will never allow India to emerge as a global power by tying it down to the subcontinent, China as wanting to be the only Asian pole in a multi-polar world and China as dominating the Asian sub-continent10. The fact supporting this position is China’s support of Pakistan’s nuclear programme. Pakistan could not have become a nuclear power without Chinese help and this aid has been constant and sustained. China’s not solving the border dispute is also seen as a way of keeping a large number of Indian troops tied on the Chinese front, thereby aiding Pakistan again11. This section feels that China is slow on the border settlement because it wants to leave the option open to pressurize India if the need arises. In contrast, China has settled its border disputes with other countries since 1987. On the Chinese side, this view also takes note of China’s sensitivity towards Tibet. Here there has been an improvement when Jaswant Singh, and then Vajpayee accepted Tibet as a part of China and China in turn has shown Sikkim as a part of India in recent maps12. It is a well known fact that under the leadership of Deng Xiaoping, it wasn’t only economic policy that changed into a pragmatic one, China’s foreign policy too underwent a major shift. Further, China’s growing military presence in Myanmar and its military aid to Bangladesh is also seen as China’s long term policy of encircling India and its emerging as the dominant Asian pole13 According to this perspective, China wants preeminent role in Asia and will do anything to maintain that. They even criticize India’s foreign policy as too polite with China. This perspective, of course, dominates our security concerns and security agencies and is similar to how the Chinese security establishment has reacted to China’s growing engagement and strategic ties with America.

Chinese Perspectives on India

Now let me turn to the perspectives most visible within China where as India policy is concerned. The Chinese government has in the past decade encouraged several Universities to create specialized think tanks looking at bilateral relations between the two countries. Amongst these, those at Yunnan University, Sichuan University and Beijing are some of the more prominent ones. The centers at Kunming and Chengdu are closely linked to China’s attempts to expand its trade ties through its western provinces and is in turn linked to their policy of developing the Western region. The center in Kunming has been at the forefront of pushing through the track II BCIM initiative14.

Today two major issues dominate Chinese think-tanks whereas the future of bilateral ties are concerned. The first is the growing strategic ties between the USA and India and India and Japan. There is a feeling in China that this axis can work against China and is part of a “contain China” policy15. Where India is concerned, this is not the reason for India’s growing economic relationship with both Japan and the USA. India is a developing country with a booming economy. Yet to bridge the inequalities, both social and economic that exist in India, it needs both FDI and access to technology from across the world. It also welcomes Chinese investment. India is today maintaining a genuinely non-aligned position by building new relationships after the end of the cold war. It must not allow its American interest to overshadow its growing rapprochment with China. India must and can play the balancing role and this time be strong and confident enough to be truly non aligned between China and the USA.

The Chinese also must understand that apart from America’s strategic interests, several other factors are also responsible for improved bilateral ties between the USA and India. A major factor is the high profile that India’s IT industry and the consequent growth of its BPO industry has created. Indian technical manpower is in demand all over the world and India has proved its credentials as a growing economy. Like in China, American companies are interested in investing in India. American FDI in China has proved a major boost for China’s economy. It could do the same in India. The growing presence of the Indian diaspora in America and their reputation as successful professionals and entrepreneurs is another major reason. Thus, although, the ups and downs of the US relationship with India and China seem to work in contrast, in reality these are not exclusive relationships. Our friendship with America need not come in the way of our friendship with China, just as America continues to be one of China’s largest trading partners even today. China has benefited a great deal from American support earlier and India would be foolish to spurn the American hand of friendship. Geopolitics in the future may change our relationship but like China, we too can take advantage of it for the moment. We must remember that as in politics, in geo-politics too, there are no permanent friends or enemies. History is replete with such examples.

At the economic level, the Chinese have started taking India seriously and is impressed by our growing service sector and the huge success of our IT industry. They are keen to expand trade ties with India and see it as a huge market for its manufactured goods. Several Indian companies have already invested in China16. Whereas Chinese companies are concerned, India has been more wary due to the underlying security issues. Indian industry is also not keen that an FTA take place in the immediate future while they are still expanding their infrastructure and manufacturing skills.

Thus we see that perceptions about each other are varied and often overlap. Looking through them four core issues can be identified as the problem areas in Sino Indian relations.

Persistent Problem Areas

1. Sino-Pakistan Relationship.

2. The presence of Dalai Lama and free Tibet movement in India’

3. China’s attitude towards India as a nuclear power state

4. The continuing border dispute.

There also happen to be the areas where the Chinese and Indian positions differ, radically.

Sino-Pakistan relationship.

China considers Pakistan as its all weather friend today. Yet this was not the case till the Sino-Indian war of 1962. Before that Pakistan was a member of the American led SEATO and other anti-communist alliances. China too at that stage saw US imperialism as the greatest threat and did not want to ally with Pakistan. In fact in 1959 General Ayub Khan even proposed to India a joint military front. Nehru answered by saying against whom? 17 After 1962 however, China and Pakistan moved rapidly closer in an anti-India posture. China demarcated its boundary in Pakistan occupied Kashmir and economic and military aid started flowing to Pakistan. This shared perspective on India is the main motive to this friendship. However, Pakistan has also provided other help to China. It has helped in mediating in China’s relations with Saudi Arabia and America.

Whereas India is concerned, Pakistan has always used the China card against it and had even assumed that China would open a third front against it during the 1971 war. This, however, did not happen. China made up for this by beginning to aid Pakistani in its nuclear ambitions. The agreement was supposedly signed by Bhutto in 1976. India detonated its first nuclear bomb in 1972. After the take over of Afghanistan by the then Soviet Union, the Sino-Pak military relationship became stronger. Along with this, China, on the Kashmir issue, also sided with Pakistan. It used its status in the Security Council to block condemnations of Pakistan and also supported Pakistan’s emphasis on the UN resolution without supporting India’s stand which asked for Pakistan to withdraw its troops from the occupied areas18.

Today there is an attempt by China to be more equidistant with Pakistan. It has accepted the Indian position of no outside mediation on Kashmir and has advocated putting the Kashmir issue on the back burner and encouraged improvement of relations in other areas. This was clearly stated by Jiang Zemin in 1996 and by Chinese Ambassadors in India. Today, China is keen to develop relationship on equal footing with all South Asian countries and not just a special relationship with Pakistan. Further, it has welcomed the rapprochment between Pakistan and India. Even during the Kargil conflict, China did not come out in support of Pakistan.

Let us now turn to the Tibet issue. Although India has recognised China’s right over Tibet, it has given Dalai Lama and his people freedom in India and never imposed restrictions on Dalai Lama’s visiting other countries to propagate his cause. It has also allowed the Free Tibet Government in exile to function freely. This issue is the main issue on the Chinese side and continues to irk them. This was clearly brought out by representatives of prominent think-tanks in Beijing when they asked India to stop giving Dalai Lama the status of a head of the State and allowing him to remain as a mere “refugee”19. The recent statements made regarding the status of Arunachal Pradesh show a hardening of China’s bargaining position on areas of dispute.

India’s Nuclear Status and Security Council Reform

Two major reasons underlie India’s desire to go nuclear. The first China’s nuclear status and its help with the Pakistani bomb. The second its desire to enhance its own international status and break into the Security Council and the big five. It is in this context that the recently signed nuclear deal with America is of importance. Given the growing strategic rivalry between China and the USA, China would not like India to become a frontal ally of America. It is an acknowledged fact that China only started taking India seriously because India went openly nuclear. Secondly, America’s statement about helping India emerge as a world power is also of great importance for China. China will be forced to adjust its position with India keeping this changed scenario in mind. In fact the Indo US China trilateral relationship is going to be crucial for the future. Here the onus lies on India. It must convince China that its desire for nuclear energy is not a threat to China. Just like China has made gestures in its Indo-Pakistan approach, India too must play a balancing role in securing its growing energy needs and ensuring that American help does not derail its increased interaction with China.

The Border Problem

The recent war of words over Arunachal Pradesh and the counter claims by India and China just before the visit of Hu Jintao points once again to the real problem that persists between India and China. This is the border problem. China has consistently maintained that the maps used by India are a colonial legacy and not the real maps. India on its part has submitted pre-colonial histories and texts that clearly show these areas as part of India. Three areas of border exist between India and China These are the eastern, the western and the middle frontiers. Since the 1962 war, India’s position has always been that the border question must be solved before any other relations can be established. This position was changed when Prime-Minister Rajiv Gandhi visited China in 1988 and accepted the current Chinese policy of putting difficult issues on the back burner. During that trip, a high level JWG group was created to deal with the border problem. Later on during the visit of Prime Minister Narsimha Rao, another treaty called the Peace and Tranquility Treaty was also signed. This further cemented the warmth along the border and even established contacts between the commanders20. Today there are definite improvements even though India still feels that China is going slow. China in turn has been offering to give up claims in the eastern sector for the Aksai Chin region. India, being a democracy finds it more difficult to give up any territory. It is the middle sector that some gains can be expected. However, the fact that both sides are talking to each other and allowing other areas of contact to develop at the bilateral level is a good step forward. The opening up of Nathu La is certainly a strong symbolic step forward.

Areas of Cooperation

While areas of conflict and competition have been consistently highlighted in the Sino-Indian relationship, areas where they think alike, especially on geopolitical issues are neglected. It is these areas of cooperation that can pave the way for a strong friendship between the two countries. Chief amongst these is their support for multi-polarity or multilateralism. This was the basis of the Panchsheel agreement during the 1950s and continues to be a perspective that both countries share. Both India and China have resisted American uni-lateralism and have stressed the role of the United Nations. American foreign policy, especially under George Bush, has assumed the role of the word’s policeman. They also share an interest in ensuring that peace in the neighbourhood is not disturbed. With three nuclear power nations in one continent, the stakes of conflict are too high. And China and India are both responsible nations. Further, they also have similar stands on several WTO and other global trade issues. Both countries have agreed to work together in these and other multinational forums. Being the founder members of the G20 and G-33 groups, the two sides are both committed to an open, fair and equitable trading system. This cooperative stand can serve as the basis to reach consensus on other issues and help in furthering trust between the two countries. The two countries can also cooperate within regional forums and India’s acceptance of China as an observor within the SAARC forum and India’s observor status within the SCO are further steps in the right direction where regional cooperation is concerned21. 

Their interests in terms of global energy flows are also significantly similar since both are net exporters and need to ensure a stable price and availability structure. The recent statements that India and China have both made of cooperating in the field of energy are of immense importance. China and India are already amongst the top net exporters of oil and gas. In 2004 China imported roughly 120 million tons of oil. China is said to consume 5.5 million barrels a day and according to Lu Mai, Secretary General of China’s Development Research Foundation, it is estimated that by 2020 China’s demand for oil will be roughly 600 million tons a year which means that more than 55 per cent of China’s oil demand will have to be met from the open market. After America, China has emerged as the largest net importer of oil, pushing Japan into the third place. China’s oil Company Petrochina stands seventh in the list of the largest 25 Oil Companies22.

Similarly, India has a growing need for oil and gas. Its projected needs and consumption though lower than China’s is still large enough to put pressure on the world’s energy sources India produces much less oil than China and has always been energy dependent. A large part of India’s GDP is swallowed up by its oil bill. Going by 2003 figures, India’s oil reserves stood at 735 million tons. It produced 36 million tons and its consumption was 80 million tons. Today, India stands in fourth place in terms of energy consumption and is, like China, accepted to overtake Japan in the future. India’s ONGC stands in the 24th place in terms of the size of oil companies. India, would of course, do better if it was able to merge its companies into one large consolidated one that could in turn compete in the world market with a larger budget23.

Both countries have, at this level, been working overtime to secure their stake in the energy sector of different countries. While China has had a head start, India is catching up. China has concentrated on Latin America and Central Asia and has several oil blocks already under its belt. India has been working with Russia and Iran. It has also acquired one block in Libya and two in Egypt, amongst others. India’s most expensive acquisition to date has been securing a twenty per cent stake in the Russian Sakhalin oil field for 1.7 billion dollars. It has also signed a twenty five year contract for gas with Iran at the cost of 49 billion dollars. The gas pipeline deal with Iraq, passing through Pakistan, is only one of the deals that it is exploring Recently, Africa’s oil resources have also loomed large, especially regions of sub-Saharan Africa. India today is making deals with Venezuela, Colombia and Ecuador in Latin America.

This competition for stakes has pushed up the prices of properties and, in places, put the countries on a collision course. Cooperation at the energy resource level, is then, a must if both countries are not to defeat their quest for energy security in the future. A start has already been made in this regard where both countries are working together on the Greater Nile oil project in Sudan. The Chinese are building the Khartoum refinery and the Indians are laying the pipe -lines to the port. Both countries have also been talking of cooperating in the Russian oil sector. Xia Yishan, a Chinese scholar recently wrote on the benefits of tri-lateral cooperation between Russia, India and China. Russia today has the world’s seventh largest oil reserves. Located mainly in its Siberian region, most of them are still unexplored. In the past, India and the erstwhile Soviet Union cooperated extensively in this field. Between 1978-80 for example, the Soviet Union sold 1.5 million tons of oil to India, making up 50 per cent of its total exports. Today, Russia is playing the same role for China and has signed several agreements in this direction. In 2004, 8 million tons of oil were exported from Russia to China and this figure is expected to double by 200724.

A cooperative strategy between Russia, an oil surplus state and India and China, large oil importers, thus makes both economic and geopolitical sense. Chinese thinkers have mooted ideas of joint explorations, joint management and even laying down of pipe lines that pass through China via the Karakoram ranges, the three countries can also cooperate in terms of investment in third countries. Cooperation in this field can, and should. also extend to research and development in exploring imperishable sources of energy such as solar power and nuclear energy. The potential for all this is great, it is the political will that we need to match today. Both India and China, as mature and emerging world powers. Must realize that mutual competition will only benefit the rest.

Trade Ties

Apart from cooperation in the energy sector, burgeoning trade between India and China is also of great importance. The recent visit by President Hu stressed on this sector and hoped that the trade between the two countries would cross the 40 billion mark by 2010. However, while China is keen to put in place an FTA in this area, Indian industry and India are still cautious because Indian manufacturing is still not competitive enough. Secondly, the trade basked between India and China also needs to be diversified and here again effort has to be made in terms of mutual benefit instead of both countries competing over the same goods. The signing of the Bilateral Investment Promotion and Protection Agreement during the visit is a welcome development that will provide an institutional and legal basis to encourage and promote greater investment flows.

In the arena of trade, the agreements reached between the two sides to promote trans-border connectivity and cooperation is also of immense value. In this context, border trade between India and China, especially the opening of the Nathu La pass is significant.

Other track II initiatives between India and China such as cooperation on the cultural and academic fronts is also of importance. Frequent exchanges at these levels can help bridge the lack of knowledge between the two countries and lead to creating favourable public opinion in both countries.

The Future:

This is a general presentation of the state of Sino-Indian relations today. I started by pointing out the different perspectives that influence policy on China in India and vice a versa. We saw that there is a wide variety of opinion on the subject and this is openly expressed. India is a democracy with complete freedom of press and intellectual expression. I then turned to the main problem areas that exist in Sino-Indian relations. Here China’s military help to Pakistan and India’s support for Tibetan rights are I think the two biggest political hurdles. However, even on these two issues certain changes can be ascertained. China has of late been taking a more equidistant position on India and Pakistan and India too has been making efforts to encourage talks between the Dalai Lama and China. In areas of trade and cultural contact also great progress has been made. If this century is to be truly the century of Asia, and to ensure that this goal is realized, India and China as two responsible nations will have to continue to work together and work together with common goals for the peace and stability of the world.


     1.   John Garver: Protracted Contest: Sino- Indian Rivalry in the Twentieth Century, Seattle, University of Washington Press, 2001

     2.   Manmohan Singh: Press Statement issued during the visit of President Hu Jintao, November 21st 2006, New Delhi

     3.   Prime Minister Rajiv Gandhi’s visit to China in 1988 and his cordial meeting with Deng Xiaoping led to the opening of Sino-Indian relations and changed India’s foreign policy towards China permanently. It was Deng Xiaoping who suggested that the border dispute should not interfere with other relations between the two countries and this perspective was accepted with alacrity by Rajiv Gandhi.

     4.   Here Think Tanks like the Institute of Chinese Studies and ex diplomats like C.V. Ranganathan etc have played a major role in helping Indian popular opinion and policy makers in assessing the potential for mutually beneficial relations. This point is also brought out by James Clad in his “Convergent Chinese and Indian Perspectives in the Global Order:, in The India-China Relationship: Rivalry and Engagement, editors Francine Frankel and Harry Harding, Oxford University Press, New Delhi, 2004, pp. 267-293.

     5.   Cheng Ruisheng, “The Maturing of Sino-Indian Relations”, in Zhang Minqiu (editor),

     6.   President Hu Jintao, as quoted in The Times of India, 22nd November 2006.

     7.   Tan Chung and Geng Yinzeng, India and China: Twenty centuries of Civilisational Interaction and Vibrations, Centre for Studies in Civilizations, New Delhi, 2005

     8.   Ibid.

     9.   The Nalanda University Project is a major joint initiative between China and India and will help recreate the historically significant links that both countries shared with Buddhism as the vehicle.

   10.   G. Parthasarthy, former Ambassador, Brahma Chellaney, both intellectuals affiliated to various Indian Think Tanks and columnists with National Dailies represent this position most openly. See Chellaney (ed). Securing India’s Future in the New Millenium, New Delhi, Orient Longman, New Delhi 1999.

   11.   Ibid.

   12.   Prime Minister Vajpayee accepted this position during his visit to China in 2003. In return, China accepted Sikkim as a part of India. See Manoj Joshi “Sikkim Tibet pact boost India China Ties, Times of India, 25 June 2003.

   13.   Sun Shihai, quoted via PTI in the Tribune, Chandigarh, 21st December 2006.

   14.   Sichuan University and Yunnan University apart from Beijing have excellent South Asian Centers dealing with Sino-Indian, Sino-Pakistan and Sino-Bangladesh relations. These think tanks provide policy input for the government.

   15.   See S. Gopal. Op. cit.

   16.   See Susan Shirk, “One sided rivalry: China’s Perception and Policies towards India”, in Frankel and Harding, op.cit, pp. 75-102.

   17.   Ibid.

   18.   For a general overview of how India-China relations have improved, see Ranganathan and Khanna, India and China: The Way Ahead after Mao’s War, New Delhi, Har Anand, 2000.

   19.   Ibid.

   20.   Ibid

   21.   Joint membership of various regional organizations in Asia is important to build trust between both countries and essential to the new paradigm of cooperation not conflict between the two countries. China became an observor in the SAARC forum held in Bangladesh in 2005. See Raja Mohan, Crossing the Rubicon, Viking, New Delhi 2003.     

   22.   Xia Yishan, “The Future of Sino-Russian –Indian Cooperation in the Energy   Sector”, in World Affairs, Spring 2005, pp 62-56.

   23.   Ibid

   24.   Several Indian Newspapers have covered this need for cooperation between India and China where energy is concerned. See Ravni Thakur, “Fuel for the Economy”. Hindustan Times, June 2005.



Dialogue A quarterly journal of Astha Bharati

Astha Bharati