However, the involvement of China and India in Nepal should be analyzed in a holistic perspective, keeping in mind the existing Sino-Indian relations.[break]
The Sino-India relations refer to the trade, economic co-operations, cultural, political, military and strategic engagements between China and India. The ties among these two most populous countries with tremendous economic clout in recent years increased the significance of their bilateral relationship. Historically, Sino-India relations can appropriately be represented as controversial. Their relationship had undergone a full scale war two times, as rivals for a long time and as competitors in times of peace. Once traditional rivals and enemies, they have now turned into comfortable neighbors and have become development partners in the recent decade.
Both countries, despite bitter mutual histories, have in recent years successfully attempted to reorient diplomatic and economic engagements. The emergence of China and India as economic giants undoubtedly will throw a huge new weight onto the political and strategic balances in the international political order. New political-strategic strengths backed by economic development, military and atomic strength gave rebirth to Indian nationalism which could bring a clash with Chinese nationalism which emerged in same way.
Trade and economic cooperation
Sino-India relations are marked by benign engagement on the primacy of economic interaction on trumping political disagreements and differences in the recent decade. Cooperation could allow them to balance U.S. influence and increase their negotiating stands with the western countries. On economic, environmental and cultural issues, they may have far more reasons to cooperate than to ram. In the international front, they are working together for their common interests. For instance, they are undertaking trade negotiations in the WTO and G20 meetings, intensifying trade and commerce and thus raising the stakes for bilateral relationship.

India-China economic ties are rapidly emerging as one of the most important bilateral relationships in the world. Trade between the two countries has grown incredibly. Each country’s aggregate international trade is expanding by 23-24% annually. In comparison, India-China trade grew at a 50% rate during 2002-2006 annually and it increased by a further 54% during 2007 to reach $37 billion. India’s trade with China is greater than that with Japan, the US, or the entire world. China’s trade with India is only slightly below that with Japan, the US, or the entire world.
It is almost certain that, by 2050, China and India will be the two largest economies in the world. It is inevitable that the bilateral trade between them will become the most important bilateral economic relationship in the world. Sino-India trade reached US$ 43.4 billion in 2009, down from 51.8 billion in 2008 due to global economic downturn, accounting for about two percent of China’s total global trade. The independent projections suggest that the Sino-India bilateral trade will reach about $60 billion at the end of 2010 and $225 billion in 2015. In this context there is no room for Sino-Indian confrontation on infinitesimal issues that don’t affect their long term strategic importance. While they are competitors for power and influence in Asia, they also share interests in maintaining regional stability; for example, combating growing Islamic fundamentalism, exploiting economic opportunities, maintaining access to energy sources, markets and enhancing regional cooperation.
Sino-Indian maritime competitions
More recently, resource scarcity has now added a maritime dimension to the traditional Sino-Indian geopolitical competition. As India and China’s energy dependence on the Gulf and Africa increases, both are aggressively looking to hunt closer defense and security related engagements with resource purveyor countries and to develop appropriate naval capabilities to control the sea territories through which the bulk of their commercial flows. According to security expert sources, nearly 90 percent of Chinese arms sales go to countries of the Indian Ocean basin. China is investing heavily in developing the Gwadar deep-seaport in Pakistan, naval bases in Sri Lanka, Bangladesh and Myanmar. For its part, India has countered by promoting defense cooperation with Oman and Israel in the west; while upgrading military ties with the Maldives, Madagascar and the United States in the Indian Ocean and with Myanmar, Singapore, Indonesia, Thailand, Vietnam, Taiwan, the Philippines, Australia, Japan, and the United States in the east. On February 4, 2010, 12 countries jointly performed a military exercise both on maritime and in air on and above the Indian Ocean.
Competition in influencing neighbors
In the international political power game, while China has gushed ahead by acquiring economic and military capabilities underpinned by a clear policy to achieve broader strategic objectives however India has a lot of to do to be like China. China has been able to resolve the border disputes among its neighbors except India; however, India has not been able to resolve the same with any of its neighbors. India has border disputes with Bangladesh, Nepal, Pakistan, Myanmar and China. Similar asymmetry exits in economic and infrastructures development. The existing asymmetry in international status and power serves China’s interests very clearly; any attempt by India to challenge or undermine its power and influence are strongly resisted through a combination of military, economic, strategic and diplomatic apparatus.
Both of the countries have been intensifying their influences in their neighboring countries like Nepal, Myanmar, Sri-Lanka and Bangladesh. Pakistan is also an ally of China, the traditional rival of India. The economic and security cooperation of China to its ally countries have increased immensely in recent years. The then Chinese foreign minister Qian Qichen initiated its neighborhood policy as “In international relations, to bully the small, oppress the poor, override the weak, impose own social system, ideologies and values on others... all run counter to the spirits of UN charter” and China was able to solve its border disputes with all neighbors except India. Similarly, India initiated the Gujral doctrine; however the Indian bureaucracy discarded it completely. Indian attitude towards its ultimate neighbors is best stereotyped as ‘big brother’ in south Asia. India has to learn a lot from Chinese neighborhood policy.
Competition in development activities
Immense competition persists between these countries in developing infrastructures, research and development, human resources, space exploration and science and technological development. China formed a Knowledge Commission to assess the future requirements of human resources and the commission recommended the establishment of 1500 universities. Similarly, India did such an appraisal and suggested about 700 universities be setup. China successfully completed the mammoth Three-George-Dam hydroelectric project. On the contrary, India is planning to implement a project linking the major rivers of the Indian sub-continent. China successfully hosted the Beijing Olympics while India is to host the Common Wealth Games this year. These are few examples of the Sino-Indian competitions in apolitical areas.
It’s implications for Nepal
Simmering tensions over territory, overlapping spheres of influence, resource scarcity and the monopolized market and rivalry in alliances show the relations between the two Asian giants will be characterized more by competition and rivalry than cooperation for a good time to come. In the short and medium terms, neither India nor China will attempt to take any step that destabilizes their bilateral relationship or arouses the suspicions of their smaller Asian neighbors. Their efforts will be aimed at consolidating their power and position in the region. But instability in Tibet, China’s military links with Pakistan, Sri-Lanka and Myanmar will pose a continuing impediment to India. In chorus, both will continue to monitor closely each other’s activities to expand influence in the region and will attempt to fill any perceived power vacuum or block the other from doing so. India, like China, would prefer to dodge enmeshing alliances so as to maximize its options.
Therefore, we see a mixture of cooperation and competition in defining Sino-Indian engagements. There has been great competition between India and China to expand power and to influence Nepal in many ways. Frequent high level diplomatic and political visits and the economic cooperation with Nepal is characterized by Sino-Indian competition. Considerably, after the abolishment of the Monarchy, China has wrought a fundamental policy shift from silence to pro-active diplomacy in Nepal. China has handed over a draft treaty replacing its 60 years old predecessor as a response to Indian approval on rethinking the 1950’s Indo-Nepal Peace and Friendship Treaty. China Radio International has launched programs in collaboration with local FM Radio station such as Maitri FM 99.8 in Kathmandu India’s interests in Nepal are; first its monopoly in the Nepali market since Nepal is the largest trade partner of India in South Asia. Second is the resource utilization of Nepal; third is the security and strategic importance of Nepal in the context of the Asian power equation in the long as well as short run.
The Maoist insurgency is the ‘biggest domestic security threat’ to India and the Islamic fundamentalist, separatist movements and sectarian conflicts to cite a few are its serious security concerns. India believes that the insurgent groups are getting leverage from China through Nepal. On the contrary, China’s concern in Nepal is firstly the global prominence in international politics and second on security issues. Tibetan and other anti-Chinese activities are serious issues to China and it wants none of such groups getting any leverage from India or third countries through Nepal’s geography like the Khampa uprising in the past.
South Asia needs a strong India to counter balance China strategically. Similarly, India and China have to play a greater effective role to balance the western power equation in South Asia. But to fulfill that role, India must be committed to respect the territorial integrity and sovereignty of its ultimate neighbors as China does. If India wants to assume a bigger role which it aspires towards for the backing of its economic strength, it will have to be credible first with its neighbors as China.
Finally, in the long term, whatever has been said- “China and India are friendly neighbors and partners; they are not rivals or enemies” - neither Indian nor Chinese strategists can rule out the possibility of a renewed confrontation over Tibet, Kashmir, Arunachal, Myanmar, or in the Indian Ocean. Prime Minister Jawaharlal Nehru committed the mistake in 1962 of believing in the notion of “Hindi-Chini Bhai Bhai” (India and Chinese are bothers) and chose to believe that a fellow socialist nation could not confront India militarily.
However, such sentiment usually does not work when determining international strategies. The Sino-Indian rivalry in South Asia and the Indian Ocean may be a dominant feature of Asian geopolitics in the 21st century, which could force their neighbors to choose sides. The nature of the rivalry will be determined by how domestic, political and economic developments in these two countries affect their power, foreign and security policies and implementing strategies.
In this context of South Asia’s power equation, Nepal will have only three possible options in the future; first to aside India, second to aside China and finally to maintain the role of a neutral state. The present buffer zone concept of Nepal will not help to benefit Nepal in the long run. Nepal will have to play a role of the neutral state in the possible military and political confrontation between its two giant neighbors in the long run. Nepal should assure its neighbors that Nepal will not be used in any anti-Indian or anti-Chinese activities and will not be an ally of any. In turn, Nepal will benefit from the economic prosperity of its two neighbors which are the world’s economic powerbase by 2050. Nepal must bear in mind that Chairman Mao and Premier Chau En Lai always used to advise BP Koirala, Mahendra and Birendra to keep a good relationship with India in the past. President Hu. Nepal- Jintao might have reiterated the same advice to Prime Minister Puspa Kamal Dahal “Prachanda” in 2008. Nepal-China relations cannot be a substitute for Nepal-India relation because of the social, cultural, geographical and religious factors. Therefore, both the pro-China tilt and the pro-India rhetoric will not serve the Nepali foreign policy harvesting in the future.
(Author is Executive Director of Nepal South Asia Centre)
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