Wuhan spirit breaks down: Will India learn that it cannot have Chinese cake and eat it too?

GVS Editor argues that China’s flexing of muscles in Ladakh was a long time in making as India treads a path that China feels goes against the Wuhan spirit that both countries had signed on for in 2018. She looks at whether India is in a position to take on China, and if Modi’s muscular foreign policy is bearing fruit.

In Jonathan Swift’s 1738 farce “Polite Conversation,” the character Lady Answerall says, “she cannot eat her cake and have her cake”. A modern-sounding variant from 1812 reads: “We cannot have our cake and eat it too”- this has become received wisdom for all everywhere but the strategic community in New Delhi and all those around Narendra Modi never really grasped it. With ongoing Indo-China tensions, they are finally forced to confront Swift’s wise words.

China’s sudden flexing of muscles in Ladakh has been an unprecedented public humiliation for India’s strong man: Narendra Modi. His muscular regional policy is continuously backfiring – and this time he finds thousands of Chinese PLA soldiers entrenched over a large area within the Indian side of the LAC, in disputed Ladakh.

And no one in Delhi is sure how to handle this challenge, whilst still keeping all those pretensions of India they have been selling to the west and the Indian public.

Since the BJP came to power for the second time, it has pursued an aggressive ‘hyper-nationalistic’ agenda, tailored for its domestic audience but managing to upset all its neighbors on one or the other issue. Pakistan was first amused by Modi’s antics of “surgical strike” across LOC in Oct 2016; he then managed to order an actual one over Balakot, in the Pakistani province of K.P. in Feb 2019. This led to a swift counterstrike by Pakistan that was in no mood to let Modi establish a “New Normal” in South Asia.

Recently, Modi backed by BJP and RSS has created an unnecessary challenge in the region by changing the status quo position on the disputed territory of Jammu, Kashmir & Ladakh. Earlier, Hindutva fanatics irked Bangladesh over the Muslim citizenship law and alienated landlocked Hindu state of Nepal after imposing a trade blockade. Modi did not stop there; Kathmandu has been further alienated after India issued a new map showing disputed territory, claimed by Nepal, as Indian.

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Several issues have upset China, which has been closely watching Indian actions on various fronts, including Amit Shah’s statement in parliament claiming that Aksai Chin (held currently by China) is a part of the Ladakh union territory. Then last month, two BJP MPs, Meenakshi Lekhi and Rahul Kaswan, virtually participated in the swearing-in ceremony of Taiwan President Tsai Ing-wen, in a move that China protested.

But most importantly, Beijing is increasingly apprehensive – over the Indian role in counter-balancing China – in the United States Indo-Pacific strategy. A role over which the Chinese state newspaper Global Times editorial warned: “India should not be fooled by the U.S. Washington is keen on placing a wedge between countries and drawing countries to its own side. But this serves the U.S.’ strategic pressure on China, instead of other countries’ geopolitical interests.”

Wuhan Spirit dies an infant’s death

After the last conflict between the two countries in 2017 in Doklam, Narendra Modi and Xi Jinping met for an informal summit in Wuhan in April 2018. It was an attempt to rejig the narrative between the two largest Asian nations that had been acrimonious on many issues. Both countries wanted to find areas where they could discover converging interests. Modi was seeking a new term in office, and much hype was generated about the Wuhan spirit of accord between the two countries, with pictures released of the two leaders relaxing with mountains in the background sipping juice together.

China stridently voiced its concerns against the policy, stating it believed it to be against the WTO rules on discrimination that require that investments from different countries have to be treated equally

To the extent, the aim was that any differences between the countries should not turn into disputes; it has successfully served for almost two years. But the Wuhan spirit between the two countries envisaged them as strategic partners rather than strategic rivals – which would have been best captured by them working together in CPEC (flagship of China’s Belt and Road Initiative). For China, “Wuhan Consensus” was also a way to remind India, to reflect hard, before it got too close to the U.S. and Japan against China, given that the two largest Asian nations shared borders.

Watch Editor Force Magazine, Pravin Sawhney, explain the essence of diplomatic exchanges between Delhi and Beijing: 

Hugging China and becoming part of Quad & U.S. Indo-Pacific strategy 

Interestingly defying Jonathan Swift’s age-old wisdom – you cannot have your cake and eat it too – during the same period in which Modi conducted his hug and juice diplomacy with Xi Jinping in Wuhan, promising China more cooperation, India was also busy taking a more active role in the Quadrilateral Strategic Dialogue, otherwise known as the ‘Quad’ group (which consists of Japan, Australia, USA, and India).

The Quad group was reinvigorated in November 2017, after a 10-year hiatus, on the sidelines of the ASEAN summit in Manila.

After Modi’s second term, Quad meetings in September 2019 were elevated to Ministerial level. After these meetings, the U.S. State Department emphasized India’s importance. “If I could single out India’s role in the Quad, I think it highlights India’s leadership at the end of the Pacific region. It’s one of the many ways that the U.S. and India are now cooperating closely on shared strategic objectives.”

In a public meeting in October 2019, the U.S. Secretary of State Mike Pompeo described one of the purposes of the quadrilateral as restraining China. “There is no doubt that the Quad plays a key role in combatting Chinese influence in the Indo-Pacific region.”

Read more: Should we start countdown for War In Asia?

Australia initially withdrew from the Quad group in 2007, under PM John Howard, a position reaffirmed later by PM Kevin Rudd in February 2008, after the Quad had also been rejected by other Quad partners. The former had expressed concerns that it was being perceived as an alliance against China with two of its historic adversaries Japan and India. Despite protestations to the contrary by its members, it is described by many as the Asian NATO – against China in this case – which has created friction with China.

Its resuscitation in 2017 was done at a time when US-China relations were fraught with difficulties in the South China Sea. An Asian NATO may still see the light of the day, if the Quad meetings held in March, ostensibly to discuss Covid-19, included New Zealand, South Korea, and Vietnam – actually transpire in these countries actively joining the Quad group.

How much China will be worried about India’s new strategic agreements with Australia? Watch this GVS discussion with Moeed Pirzada: 

Australia and India also recently co-sponsored, a resolution in the WHO asking for an independent investigation of the origin of the Coronavirus – which irks Beijing, given Trump’s repeated allegations that China somehow has hidden facts about the virus. Adding insult to the injury, on 4 June – while tensions continued in Ladakh – during a virtual summit between Australian and Indian prime ministers, both countries elevated their ties to a comprehensive strategic partnership.

They signed nine agreements including Australia-India Mutual Logistics Support Arrangement (similar to LEMOA that India signed with the U.S. in 2016) and the Defense Science and Technology Implementing Arrangement, which will cover the Indo-Pacific region and will allow both their navies to cooperate closely in what China rightly perceives as its backyard. It is understood that this India-Australia arrangement might be in the pipeline, but its dramatic emergence – while tensions flared in Ladakh – was certainly not good optics.

Darbuk-Shayok-Daulat Beg Oldie, Rohtang tunnel, and alternative access to Leh, which connects the Manali and Zanskar Valley, are the critical strategic roads being built by the Indian Border Road Organization (BRO) in Ladakh area

Last year, Indian warships also joined the U.S., Japanese, and Philippine naval vessels in transit of the South China Sea. It has increased defense cooperation since 2016 over Logistics, army, navy, and various supply agreements with the United States. This is in addition to the annual Malabar naval exercise that brings together the U.S. and Indian militaries along with the Japanese Self-Defense Forces. No wonder, India’s points of discord with China are multiplying.

India’s New Foreign Direct Investment Rules: discriminate against China 

The Wuhan spirit above all was looking towards economic cooperation between the two countries- to help reduce differences – however, India amid the Corona pandemic in April 2020 tightened rules under which foreign companies from ‘neighboring countries’ can invest in India – to curtail ‘opportunistic takeovers’ while companies were cheap after the stock market collapse in late March. The Press release issued by the Department for Promotion of Industry and Internal Trade (DPIIT) stated that foreign companies had to get government approvals before investing.

DPITT press release stated: “an entity of a country that shares a land border with India or where the beneficial owner of investment into India is situated in or is a citizen of any such country, can invest only under the Government route.” – it needed no special eyes to see that the new rules were adversely targeting China to favor the U.S. other western investments as pointed out by Russian Analyst, Andrew Korybko in his piece, “India’s Embrace of Economic Nationalism is directed against China” (Global Village Space, 23 April, 2020).

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China’s FDI in India has grown several folds since 2014 as of December 2019, its total direct investment in India was greater than $8 billion. A Brookings India paper published in March 2020 calculated the total current and planned Chinese investment in India as being over $26 billion. China stridently voiced its concerns against the policy, stating it believed it to be against the WTO rules on discrimination that require that investments from different countries have to be treated equally.

The policy change came days after China’s central bank, the People’s Bank of China (PBoC), raised its shareholding in India’s Housing Development Finance Corporation (HDFC) from 0.8% to over one percent during the recent stock market slump. At the same time, India is also using the post-COVID anti-China sentiments to sell itself as an alternative destination for companies wishing to leave China, or in light of what is happening in Hong Kong, promoting itself as the cheaper, English speaking and democratic freedom-loving business destination.

India’s “Contentious Infrastructure” in “disputed border” areas

Both countries, as they have become richer and technology has improved, have started building significant infrastructure in the disputed border areas. These areas often exist in 14,000 – 16,000 feet high ranges. In the last couple of years, India has been busy building roads despite protests from the Chinese side.

Darbuk-Shayok-Daulat Beg Oldie, Rohtang tunnel, and alternative access to Leh, which connects the Manali and Zanskar Valley, are the critical strategic roads being built by the Indian Border Road Organization (BRO) in Ladakh area. The organization overall has been given the task to build 61 strategic Indo-China border Roads. Out of these 61 roads, 28 roads of a total length of 981 km were completed by 2018, and connectivity has been achieved in a further 27 roads.

Indeed, this is a transformative period for India to think big and to cast its net wide to realize an objective which remains elusive — to transition as a middle-income country. Do not squander it away in frivolous pastimes and reality shows. There is nothing to gain out of getting under the Chinese skin

While issues between India and China are of a broader strategic nature, but they find expression in the form of the current border dispute. Chinese are apparently unhappy with the 255-kilometer Darbuk-Shayok-Daulat Beg Oldie road (most of which has been blacktopped), which connects to the base of the Karakoram pass – the last Indian military post. The road goes very close to Aksai Chin, and the Chinese fear that this gives Indian army capability to threaten the Lhasa-Kashgar highway. The road also significantly reduces the time it takes the Indian army to reach Daulat Beg Oldie from Leh to six hours from the current two days without the road.

Why India cannot afford a conventional war with China

Despite its current geostrategic moves and assertions, India cannot afford a conventional war with China. Unfortunately for India, its strategic rival is now economically (China’s GDP is $14 trillion versus India’s $3 trillion) and technologically far superior. According to the Swedish Peace Research Institute, in 2019, China spent $260 billion on its military expenditure versus India’s $71 billion.

China has many more men in its armed forces, and the PLA already has over 200,000 men in the Tibet autonomous region, so it would not take long to move them towards the Ladakh area. More importantly, especially after the Doklam crisis (June-Aug 2017), the Chinese have created a habitat in the region for themselves through which they can sustain their forces for a more extended period – which currently the Indian army cannot do.

Read more: Will the Chinese Dragon and the Indian Tiger go to War?

Moreover, as Pravin Sawhney, Editor force magazine argues (in his interview with Global Village Space, June 2020), China does not need to conduct a conventional war and incur the costs it entails. Cheap Chinese technology is all over India; it makes far more sense that the Chinese conduct cyber warfare to bring India – at least in the North – to a standstill. Eric Sayers, the former special assistant to the commander of U.S. Pacific Command (PACOM), has pointed out that “the accumulation of economic power and digital influence is the greatest concern in the next decade because it gives Beijing new tools as a revisionist power to try to coerce their neighbors and rewrite the order. It could impact the balance of national security.”

Nehru’s policy of Non-Alignment, from the days of Bandung Conference (1955), had provided India with the strategic space to successfully negotiate the middle path between the USSR and the USA (superpowers between 1950-1990). After 1962, when they needed help from the United States, they sent JFK a cable asking for helicopters and other military equipment, and in 1965 they could rely upon the Soviet Union for Tashkent Agreement with Pakistan.

In 1971, while full-fledged aggression was being planned against Pakistan fearing robust intervention from Nixon and Kissinger’s America, Indira Gandhi conveniently aligned herself with the Soviet Union through a Friendship agreement. With this successful history of playing major powers against each other Modi’s and those around him think that they can posture in Indo-Pacific to please the United States to get a seat on G-7 table, entry into Security Council and NSG and US, French and Israeli military equipment and technology to be used against Pakistan.

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And all the while, they can build a $100 billion-plus bilateral trade with China and buy S-400 missile systems from Russia. Apparently, with Chinese flexing of muscles, it seems Indian strategists will have to wake up, close Nehru’s old books, and think for themselves. As Ambassador Bhadrakumar, India’s foremost foreign policy expert, writes in his blog, “Indeed, this is a transformative period for India to think big and to cast its net wide to realize an objective which remains elusive — to transition as a middle-income country. Do not squander it away in frivolous pastimes and reality shows. There is nothing to gain out of getting under the Chinese skin”.

Najma Minhas is Managing Editor, Global Village Space. She has worked with National Economic Research Associates (NERA) in New York, Lehman Brothers in London and Standard Chartered Bank in Pakistan. Before launching GVS, she worked as a consultant with World Bank, USAID, and FES and is a regular participant of Salzburg Forum. Najma studied economics at London School of Economics and International Relations at Columbia University, NewYork. she tweets at @MinhasNajma.