Modi-Xi seek a modus vivendi

India and China have put progressive economics agenda on top priority while giving consideration to sorting out geopolitical issues, including contested territories, during the 27-28 April Wuhan Summit.

Prime Minister Narendra Modi and President Xi Jinping have laid out a new strategic platform for progress underlining the power of the two countries and markets economic values.

Former foreign secretary Dr S. Jaishankar shared his views at the Institute of South Asian Studies (ISAS) lecture on 9 May 2018.

We re-produce the lecture of Jaishankar, a Distinguished Visiting Research Fellow at ISAS, a leading regional think-tank on South Asia at the National University of Singapore.

Jaishankar reflects on, among other factors, Wuhan Summit’s unusual informal nature in a lecture, “India-China Relations in an Uncertain World”.

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The Wuhan Summit is worth reflecting on, among other factors for its unusual informal nature. But it also brings out the salience of stable India-China ties in turbulent global politics.

That the world outlook is today uncertain is a proposition that few would dispute. In fact, most observers would probably use stronger adjectives like unpredictable – or even volatile – to characterize current international relations. It is not just that behavior and outcomes have been different. The very structure of the world order is in transition with the elements of the new one just beginning to emerge. Many of our habits and assumptions are no longer valid. In its dealings, the world has got more transactional and demanding. In its attitudes, it is more parochial culturally and protectionist economically. The network of alliances and understandings that has been its underpinning for many decades has weakened. But what it is not is as important to understand as what it is. It is neither as impulsive or anarchic as it is sometimes made out to be. The thinking may be different, but at the end of the day, there is a thinking – whether we agree with it not.

There are aspects to the transformation underway that are important to comprehend. One, while there are sharp changes, there is also substantial structural and institutional continuity. This applies to security, politics as well as to trade. Two, the changes are inducing reactions to the shifts in balance that seek to mitigate instability. And keep in mind that that the interdependence of globalization, even if less binding, is still very much a constraining force. The short point is that the world may have become more unpredictable; it has not come to an end! Even this world functions within a framework, albeit a looser one. The lines are less cleanly drawn and demands may be different. It is more a world of pressures and influence – and the ability to resist them. This is the new normal.

There are today competing but co-existing trends that lead to a more uncertain world. To begin with, we have a stronger sense of balance of power than in the past. While such practical realism is can co-exist with rule-abiding multi-lateralism, it is not without its risks. Immoderate nationalism is one of them. But that, in turn, is tempered by a culture of convergence – of like-minded states coming together. Convergence, if I recall my geometry correctly, is not congruence. Those who work together can have some differing interests. Then there is the bargaining within the tent – the diplomatic ‘green on blue’ situations. Even when it comes to competitors, the black and white are seeking some common ground. That is usually dictated by interests in regard to the rest of the world. World politics has acquired the character of a marketplace – transactions are the daily business, but relationships really matter, and the bottom line is that you have to come out ahead.

There are a number of factors that have combined to produce this scenario. If you want that as common sense and not political science, let me get specific. The key one is, of course, the remarkable rise of China and its profound impact across the world on a range of issues. Power shifts happen as a matter of course in global politics, but this particular rise has been exceptionally dramatic. Its implications are not fully apparent, perhaps even to itself. In a sense, the Chinese should be flattered that all of us are revisiting our calculations because of them. Of late, China has been behaving as if its moment has come; time will tell if that is indeed so. The second big change is in regard to the terms of engagement of the United States with the rest of the world. This has altered very significantly and been accompanied by a redefining of American interests that is extremely consequential. Seeing it as isolationism is not reading it right. On the contrary, it is an effort to reassert leadership by revisiting basics, something that companies do when they are down.

In the meanwhile, a Europe coming out of the Eurozone problems and a refugee crisis finds itself riveted by the Brexit challenge. For good measure, it is deeply affected by developments in the US, Russia and China. Strains between Europe and the United States on the one hand, and between each of them and Russia on the other, aggravate an already complicated global situation. Pressures that the West exert on Russia eventually transmits itself eastwards and Eurasia certainly does not come out the better for it. Here in Asia, the ASEAN is passing through a crisis of cohesion and centrality. Even more than Europe, it is feeling the changes on the American and Chinese accounts, being a direct beneficiary of their balance. Japan is progressing gradually on a different national security course, though it’s destination is not yet clear. The Gulf and the Middle East are in the midst of their own transition and the world has much riding on those outcomes. In contrast, India that has been a stable and predictable player in this period. Its choices can contribute to smoothening some of the rougher edges of global politics today. As its diplomacy surveys the world, it could even ask itself whether this uncertain landscape actually offers opportunities for advancement.

Part of the challenge in Asia today is to appreciate that our positive evaluation of globalization is no longer universally shared. The last few decades may have delivered enormous economic, social and political gains for Asian societies. But in many parts of the developed world, it is perceived in zero sum game terms. Issues of jobless growth, unemployment, quality of life and immigration have contributed to the political discrediting of the globalization process. This was visible in Brexit, in European politics and in the American elections. At the heart of the matter is that the dilution of Western centrality to the global economy. Two issues have become the popular lightning rods of this anxiety – trade and immigration. Asia cannot be dismissive of a narrative that believes that the global trading system has been gamed to create undue advantages for some. Moreover, if intellectual property comes under pressure, polities who see technology leads as the source of their primacy will resist. The agenda of global discourse in the near term will revolve around these concerns and the outlook is not optimistic.

The rise of China has stirred a serious debate at last about the true nature of its relationship with the global system. The Economist, some weeks ago, raised the issue whether the world had misread the extent to which China would adjust to it. The fact is that the judgments of the day reflected the power equations of the day. The West was more confident in the past, and China was more soothing when that was required. The
balance has altered, and so too has the behavior. That changing equation is central to the uneasiness the world is passing through. While the entire world has felt the ripples of China’s growing strength, this is obviously more evident in its immediate neighborhood and the Asian continent. This region has watched developments after the 2008 financial crisis closely and seen the unfolding of new ambitions and approaches. What kind of balance would emerge is an open question that is dependent on the policies of many players. New thinking and new concepts are needed. But the process of getting to an equilibrium will be one littered by concerns and difficulties. Not just that; we are seeing new institutions like the AIIB (Asian Infrastructure Investment Bank), initiatives like the BRI (Belt Road Initiative) and aspirations like the China Dream. This is not about policy adjustments but a much larger structural revision. A large part of the challenge is to market economics itself. This assessment has gathered traction in the US and Europe, amongst others, in recent days.

In contrast to the underestimation of the impact of China’s rise, reactions to the shift in American politics are somewhat over the top. Somewhat, because there are indeed real changes in the interests, expectations, attitudes and policies of the United States. For a start, the US has refocused on achieving its goals through greater bilateral interactions rather than multilateral or regional arrangements. On the security side, it appears to be addressing the concern that it is over-extended. In parallel with its economic approach, there is a greater emphasis on burden-sharing. The alliance network that has been so critical to the world order since 1945 is feeling the pressure of these changes. The combination of more bilateralism, some retrenchment and resource constraints has introduced a degree of radicalism in US policy. This is already visible in respect to the Gulf and the Middle East and we may well be seeing it in Korea in the coming days. But make no mistake; the US is actually shifting gears and preparing for a re-assertion of leadership based on economic and technology leads. The sharp identification of China and Russia as adversaries in the new National Security Strategy points in that direction. So too do elements of its recent trade policy measures viz-a-viz China, especially the targeting of the 2025 Made in China programme. The direction of the 2017 Af-Pak (Afganistan-Pakistan) review and the recent embrace of the concept of Indo-Pacific indicates a willingness to go beyond orthodox – actually outdated – thinking. The implications for the security calculus of Asia are not insignificant. All these should be viewed as a trend, not an episode.

The turbulence in world politics right now is truly unsettling. President Trump’s decision on Iran, though expected now, could hardly have been anticipated when the deal was reached. It exposes gaps between the US and Europe while bringing the latter closer to Russia on this issue. The Russia relationship itself is an issue, within Washington DC as much as between America and the world. There is widespread surprise at the turn of events on Korea too. Its consequences are visible in multiple ways, including in intra-Korean talks, the Dalian and Beijing meetings between China and DPRK (Democractic People’s Republic of Korea), an American visit by PM Abe (of Japan) and the anticipated summit between President Trump and Chairman Kim (of North Korea). US trade measures have unleashed their own dynamic with friends and adversaries, with both scrambling to respond appropriately. A Japan-China-South Korea trilateral is also taking place after some years, as also a Chinese Prime Ministerial visit to Japan. But all of this is really a tale of turbulence foretold. When global tectonic plates shift, key issues, sensitive theatres and major relationships cannot remain unaffected. Those who understand it will ensure that they steady their ship in choppy waters without losing course.

These developments are all factors in India’s strategizing of its own role in world affairs. Its relationships with most power centers are actually in good repair. With the United States, the shift to bilateralism suits it better. Not being ally or adversary, it has neither disappointed nor offended. Its own growing capabilities find resonance with converging interests. The steady expansion of Indo-US defence cooperation, for example, speaks for itself. In tandem, India has also developed stronger ties with a reawakening Japan. Russia remains a trusted partner and the recent surge in economic cooperation adds to traditional military bonds. With Europe, Prime Minister Modi’s recent visits that included the first ever Nordic Summit, his presence at the Commonwealth gathering and his meeting with Chancellor Merkel (of Germany) – all point to a deeper engagement. India’s sense of its extended neighborhood has also become sharper. The recent Summit with the ASEAN in January 2018 underlined the broadening ties that reflect the Act East Policy. Ties with constituent states like Singapore, of course, represent its bedrock. Beyond ASEAN, Australia has emerged as an increasingly prominent partner. Looking westwards, this sense firmly covers the Gulf, where trade, energy and diaspora are today buttressed by a strong flow of investments and expanded security contacts. And in its immediate vicinity, the Neighborhood First policy speaks of a continued commitment to regionalism and connectivity.

What can India do make this world less uncertain? To begin with, it’s very rise has a reassuring impact on the international community. This is a stable polity, a market economy and a working democracy. Its success would ensure a multi-polar Asia, an essential prerequisite for a multi-polar world. I recall that some years ago, Lee Kuan Yew expressed a view on why India’s rise made the world less anxious than that of China. What
India can do best right now is to strengthen the rules-based order. This is in economics as much as in politics. Basing it on its own conduct will make it more credible, as for example on maritime disputes. Another area of contribution is to positively influence the relationships among major powers. That can be done by encouraging more common ground. India has sought to do so, especially in the G-20. Where there are particular tensions, such as on Russia, it must be a strong advocate of pragmatism. India can also strengthen convergences and encourage the balances so necessary for larger stability. Working in all directions with as many parties is central to this effort. Finally, it must engage China more intensively, not just to steady its own relationship when both are rising, but also to ensure greater Asian and global stability.

As the prospects of India-China ties seem unclear, recent events display a joint determination to address that imponderable, to the extent currently possible. The relationship is complex because these are civilizational societies that are both rising. The pace and extent of the rise may be different. But that both nations have improved their standing very significantly makes the establishment of an equilibrium problematic. They have a recent history of issues, among them a boundary dispute. China has long practiced balance of power and perhaps India is now beginning to learn that game. That they are neighbors with overlapping peripheries is also a factor. In different ways, the two nations cooperate and contest with the existing order. Their own challenge is to find a modus vivendi if possible that manages their rise smoothly.

The history of the relationship has both positive and difficult phases. Culturally, the two societies have shaped each other more closely than is appreciated today. They had a tradition of empathy and support as they struggled to regain their independence and create a post-colonial world. The border conflict of 1962 may be a negative overhang on the relationship. But it is also a fact that their economic interactions have grown very substantially in the last two decades. So too have the dealings between their people – tourists, students or professionals. As their global influence increases, each one also benefits from the spaces opened up by the other. In short, this is an important – perhaps even critical – relationship for each other and for Asia. It has considerable substance, many challenges and at the moment, less than a definitive direction.

The reasons for that include a competitive perception of China in India. It is no secret that much of that dates back to the boundary dispute and the border conflict. It is, however, made much sharper by China’s close ties with Pakistan that have impinged negatively on India’s interests. There is also a feeling that China’s growing presence in India’s neighborhood has not been to its advantage. Indian aspirations to become a permanent member of the UN Security Council or to join a regime like the Nuclear Suppliers Group have not elicited support. And when it comes to trade – an activity that normally binds nations closer – a large deficit that emanates from lack of market access in China has made it a contentious subject.

In other circumstances, global issues would bring the world’s two largest developing economies naturally together. In fact, that has been somewhat their history, whether on climate change, trade, finance or even sovereignty. However, newer initiatives that reflect different levels of ambition have created concerns. Terrorism is a common challenge to the two multi-religious, multi-ethnic societies. But the two are on a very different page because of third party relationships. Connectivity again should logically be a common ground; but in reality, being pursued on the basis of different principles. On trade, India is a staunch proponent of WTO rules, but is itself facing an unsustainable deficit with China. Maritime security is a shared concern for two large economies dependent on the same sea lanes. However, it is not easy to reconcile the security interests of the two.

Yet, India and China have labored together when there is adequate convergence. That the BRICS (Brazil, Russia, India, China and South Africa) grouping has reached this level of prominence is due to their joint efforts. India’s membership of the Shanghai Cooperation Organization has opened up new avenues. On trade and finance platforms, their representatives often take mutually supportive positions. When the world moved from the G-7 to the G-20, it was to their shared benefit. At the end of the day, they both represent the return of history and the emergence of a new world order. They cannot be oblivious to the fact that the rise of Asia would only happen if they find a way of working better with each other.

The perils of not properly handling the relationship are by now evident. A connectivity initiative has given rise to sovereignty concerns. A multilateral position has caused offence on terrorism. Frictions on the boundary have acquired public resonance. All of this shape the larger image of the relationship. And last year, the prolonged standoff at Doklam highlighted how sensitive these ties can be. On the Chinese side, there are suggestions that a “China threat” outlook has been gaining ground in India. In fact, what has really happened are predictable reactions to China’s rise and its assertions of influence. If these are kept more prudent and considerate, it goes without saying that the responses too would be less alarmistic. That is why honest conversations between the two countries about how they assess each other is badly needed, particularly at the leadership level.

The engagement of India and China has to be on the basis of political equality, just as it has been for China with other powers in the last many years. It has to be conducted with mutual sensitivity, especially as both polities have made their core interests known to each other. They have ambitions as rising powers and it is logical that these can often intersect. Differences between neighbors or rising powers are not unnatural in world politics. But how well they are managed is really the test of diplomacy.

It is for all these reasons that the informal Summit at Wuhan was particularly welcome. This was an event quite some time in the making. Contrary to some speculation, it was actuated neither by the recent US-China trade dispute nor by the earlier Doklam stand-off. In fact, its origins pre-date both and go back to the Astana meeting of the two leaders in early June 2017. It was envisaged as a dialogue between the two rising civilizational powers whose re-emergence on the global stage has transformational implications. To see it through the narrowest possible bilateral lens is to display neither a sense of history nor an understanding of global strategy. The logic for such engagement is strong and quite independent of negotiating hard on outstanding issues. India is looking at an optimal positioning in a rapidly changing world. It cannot ignore the
second largest power that also happens to be a neighbor. That they have difficulties makes the case for talking at the leadership level stronger, not weaker. Similarly, Chinese interests are hardly served by strained ties with another rising power – that too a promising economic partner immediately to its south. China’s agenda is so expansive that getting stuck on one front is counter-productive. Any credible analysis of India-China relations must grasp the enormous challenges inherent in the twin rise of powers in close proximity. This rise is positively imagined – for themselves and the world, not negatively against each other. An excessive mutual preoccupation is only to the benefit of others.

The intent of the Wuhan Summit was actually laid out last June when the two leaders met at Astana. At that time, they declared that the relationship between India and China must be a factor of stability in an uncertain world. They also desired that differences between India and China should not become disputes. However, this was followed shortly thereafter by the face off at Doklam that lasted much of the summer. Significantly, its conclusion saw the two countries reiterate these very approaches at the BRICS Summit at Xiamen in September 2017. Since then, there have been intensive exchanges at senior policy levels between them including the Foreign Ministers and the National Security Advisers. It appears that the continuing uncertainty which characterizes the global situation has only strengthened a resolve to engage directly and constructively.

By all indications, the conversations at Wuhan were big picture strategic discussions that looked at the relationship in the long term. Where its bilateral implications are concerned, the focus seems to have been on measures to strengthen stability and manage differences. Some extra effort seems to have gone into finding common ground, whether on trade or on Afghanistan. The optics of the meeting and the read-out afterwards point to a productive engagement. These are actually the only two nations with over a billion in population (each). They are also among the world’s major economies now. Their experiences in development and governance are worth exchanging. That they are sitting down to discuss their future, conscious that it rides on an ability to manage contradictions, is no small development. World history has shown the dangers of rising powers remaining self-absorbed. Growing capabilities and influence actually require greater engagement with the world, not less. As Asia rises, there are lessons that could be usefully drawn from the experiences of others, especially Europe. It would appear that this realization is as strong in Beijing as in New Delhi. India-China relations have always had a global context and will always have one. In an uncertain world, the Wuhan meeting was an important step in the direction of greater stability. Unquote. -/fii-news.com