There are two possible outcomes in terms of their future relationship. First, China could accept that South Asia is, in effect, India ’s rightful sphere of influence. In practice, this seems rather unlikely. Chinese influence in the region is too extensive and too well established for it to be rolled back or for China to concede that this should happen. It is an outcome which both China and its formal and informal allies in the region would resist. Furthermore, given China ’s growing strength relative to India, it is probably less likely than at any time in the last half-century. Second, India could accept that China ’s presence in South Asia is permanent and resolve to accommodate itself to this reality by, for example, conceding that an Indian- Chinese partnership is necessary for handling security problems in the region. In the longer run, this could even mean that India acquiesces in China ’s pre-eminence in South Asia as well as in East Asia. [1123] In this context, a major Chinese objective is to prevent the creation of any barriers which might impede the long-term growth of its presence, role and influence in Asia; other examples of this are its resistance to the widening of the US-Japan alliance and its refusal to accept any multilateral approaches or solutions to the sovereignty of the disputed islands in the South China Sea. [1124] The latter scenario — Indian acceptance of China ’s role in South Asia — would be consonant with this objective. In reality, of course, India has been obliged over many years to adapt — de facto at least — to the growing power of China in South Asia, so elements of this scenario already exist in tacit form. [1125]
China ’s rapid economic growth has underpinned its growing strength in South Asia. In 1950 the per capita income of India was around 40 per cent greater than that of China; by 1978 they were roughly on a par. By 1999, however, China ’s was not far short of being twice that of India ’s. [1126] Furthermore, although India ’s growth rate has steadily risen in recent years, it still remains significantly below that of China: in other words, China is continuing to extend its economic lead over India. Although India enjoys some economic advantages over China, notably its prowess in software, the software industry only accounts for a very small proportion of its labour force. Manufacturing accounted for a little over a fifth of India’s GDP in 2003 compared with over a half of China’s, while 59 per cent of India’s population was still employed in agriculture in 2001 compared with less than half in China. [1127] China ’s economy is now three times as large as that of India, [1128] with the gap extending. Even if India ’s growth rate overtakes that of China, it would take a very long time for the Indian economy to become as large as the Chinese. In short, China ’s economic power is likely to overshadow that of India at least in the medium term, if not much longer.
This makes the second scenario — India being obliged to live with and adapt to China ’s power and presence in South Asia — rather more probable. It also increases the likelihood that China will emerge over time not only as the dominant power in East Asia but in South Asia as well. There is, however, an important rider to this, as the rules of the game appear to be chang-ing in a significant way. During the second term of the Clinton administration, the United States established a strategic partnership with India which was extended in 2006 by the Bush administration to include nuclear cooperation, an agreement which was eventually approved by the Indian parliament in 2008. [1129] The agreement violated previous American policy by accepting India ’s status as a nuclear power, even though it was not a signatory to the Non-Proliferation Treaty. This was a pointed reminder that US policy on nuclear proliferation is a matter of interest and convenience rather than principle, as the contrasting cases of Iran and Israel in the Middle East also illustrate. The reason for the American volte-face was geopolitical, the desire to promote India as a global power and establish a new US- India axis in South Asia as a counter to the rise of China. [1130] During the Cold War relations between India and the US were distant and distrustful, and even after 1989 they improved little, with the US pursuing an even-handed approach to India and Pakistan and imposing sanctions on India after its nuclear tests in 1998. It is testimony to the growing American concern about China that the US was persuaded to engage in such a U-turn. For its part, India ’s position had previously been characterized by its relative isolation: apart from its long-standing alliance with the former Soviet Union, its determinedly non-aligned status had led it to resist forming strategic partnerships with the major powers or even second-tier ones. [1131] But there is unease amongst sections of the Indian establishment, especially the military, about China ’s growing power. [1132] Depending on how the US- India partnership evolves, it could dramatically change the balance of power between China and India in South Asia, persuading China to act more cautiously while at the same time emboldening India. [1133] The US-India partnership raises many questions and introduces numerous uncertainties. If it proves effective and durable, then it could act as a significant regional and global counter to China. How China will respond remains to be seen: the most obvious move might be a closer relationship with Pakistan, but it is not inconceivable that China might decide to seek a strategic rapprochement with India as a means of fending off the United States and denying it a major presence in South Asia.
Map 13. Territory Disputed by China and India
Figure 39. Comparative economic performance of China and India.
EUROPE
China ’s relationship with Europe is significantly different from that with the United States. While the US- China relationship has been a more or less continuous source of domestic debate and controversy, the Europe-China relationship has, until recently, attracted relatively little attention. Relations between Europe and China have hitherto been relatively straightforward and conflict-free. Historically this is a little ironic. After all, it was the European powers, starting with Britain and the Opium Wars, which colonized China, with the United States very much a latecomer to the process. The ‘century of humiliation’ was about Europe, together with Japan, with the United States playing no more than a bit part. The present relationship between Europe and China has been low profile largely because Europe, apart from its economic interests, is no longer a major power in East Asia, a position it relinquished to the United States in the aftermath of the Second World War. That Europe is largely invisible in such an important region of the world bears testimony to its post-1945 global decline and its retreat into an increasingly regional role, a process which continues apace and is likely to accelerate with the rise of China and India. [1134] With the exception of the euro, discussion of Europe ’s wider global role is largely confined to what is known as ‘normative power’, namely the promotion of standards that are negotiated and legitimized within international institutions. [1135] Nonetheless, with an economy rivalling that of the United States in size, together with the fact that it forms the other half of the Western alliance, Europe’s attitude towards China is clearly of some importance.
[1123] Garver,
[1124] Ibid., p. 374.
[1125] Ibid., p. 384.
[1126] Desai, ‘India and China’, pp. 2, 8, 10, 12; Martin Wolf, ‘On the Move: Asia’s Giants Take Different Routes in Pursuit of Economic Greatness’,
[1127] Simon Long, ‘India and China: The Tiger in Front’, survey,
[1128] Measured in terms of GDP exchange rates. It is over twice as large measured by GDP purchasing power parity;
[1129] Gideon Rachman, ‘Welcome to the Nuclear Club, India ’,
[1130] Jo Johnson and Edward Luce, ‘ Delhi Nuclear Deal Signals US Shift’,
[1131] Garver,
[1132] Charles Grant, ‘ India ’s Role in the New World Order’,
[1133] Roger Cohen, ‘Nuclear Deal With India a Sign of New US Focus’,