The Sino–Indian relationship is worryingly ambivalent. On one side of the equation we see a flourishing people-to-people relationship underwritten by what is projected to be the world’s largest bilateral trading partnership sometime between 2010 and 2020. In the past four years, trade has grown at a phenomenal average of 52 per cent to a total of US$25.76 billion in 2006/07; trade is on track to being worth US$40 billion by 2010 (Acharya 2008:10).

China and India have also made a mutual decision to set aside fighting about their disputed border while the two giants develop their economies and enter world markets—known in the case of China as the ‘peaceful development’ doctrine. In 2005, the two agreed on a set of ‘guiding principles’ to govern border negotiations. There is a flourishing process of two-way visits, even at the senior military level, culminating in the visit of president Hu Jintao to India in late 2006 and the reciprocal visit of Prime Minister Manmohan Singh to Beijing in January 2008. In recent years, China’s image of India has evolved from that of a weak country of no real consequence to what the Chinese call a ‘comprehensive national power’. ^[2]

This is not, however, a simple relationship from India’s perspective. India’s trade deficit with China has been growing and now stands at more than US$9 billion. ^[3] As Chinese imports increase into what should be a labour-intensive manufacturing country, the vaunted trading ‘revolution’ could look less promising from the Indian perspective. India asserts that China is dumping large quantities of manufactures onto the Indian market. New Delhi has refused vital Chinese investment in key areas that it considers to be security risks, such as telecommunications and port development. It continues to deny China market economy status and resists China’s offer of a free trade agreement. Clearly, this is a country that lacks confidence that it can meet the economic challenge posed by its giant neighbour.

The issue of the contested border can also be presented in negative as well as positive terms. China’s ambassador to New Delhi shocked India two days before Hu’s visit by asserting that Arunachal Pradesh—a populated part of India—was still disputed territory. The Indians were of the view that China had previously conceded that it belonged to India. The Chinese reversal could simply have been viewed as tough negotiating tactics in Beijing, or it could have reflected Chinese concerns about Tawang, in populated Arunachal Pradesh—the birthplace of the sixth Dalai Lama. It was, however, perceived in New Delhi as ‘disingenuous yo-yoing designed to keep India second-guessing and on its back foot’ (Aiyar 2008). According to the Indian version of the 2005 guiding principles, China also breached those principles in laying claim to a portion of land containing a substantial, settled population. It caused India to question seriously China’s veracity as a negotiating partner and possibly to wonder how China might behave once truly powerful.

Closely associated with border issues is the issue of water. According to Ramachandran (2008), China’s plans to divert 40 billion gallons of water annually from rivers in Tibet—especially the massive Yalong Tsangpo, which becomes the Brahmaputra in India and subsequently the Megnad in Bangladesh—to the parched Yellow River Basin are causing considerable concern in India and Bangladesh. The situation is exacerbated by the melting of the Himalayan glaciers that feed the great rivers of Asia, on which 47 per cent of the world’s population depends. Ramachandran concludes that China’s plans mean it will ‘acquire great power leverage over India, worsening tensions between these two countries’.

China’s growing footprint in the Indian Ocean, and especially in South Asia, is also deeply worrying to a country such as India, surrounded as it is by vulnerable borders and volatile countries with which it is often at loggerheads. China is selling weapons to all India’s immediate neighbours except Bhutan and constructing deep-water ports in Myanmar, Bangladesh, Sri Lanka and Pakistan. Although claims of Chinese military bases in Myanmar are exaggerated, India feels surrounded in its own backyard. ^[4]

India’s discomfort with China’s growing Indian Ocean footprint is expressed most clearly at the official level in the Indian Maritime Doctrine, issued to the public in 2005. Having declared that the Indian Ocean is India’s ‘backyard’ and outlining an ambitious schedule for Indian naval expansion in the Indian Ocean, the document cites China as a major reason for this expansion in the following terms: ‘China has embarked on an ambitious military modernization programme…the [People’s Liberation Army] Navy, which is the only Asian navy with an SLBM capability, is aspiring to operate much further from its coast than hitherto.’ ^[5]

India and China have also become locked in urgent competition for energy in the Middle East, Africa, Central Asia and Myanmar. This sense of competition has become all the more urgent for India because of the poverty of its domestic supplies of liquid hydrocarbons and its energy-intensive requirements for maintaining economic growth from a low base.

Some observers assert that India and China have adjusted their competition for energy such that they do not unduly compete in the same markets and inflate prices (Khanna 2008). India was nevertheless shocked to find that natural gas from two leases it had helped to develop in the Shwe field off Myanmar was sold by Myanmar’s nationalised oil company not to India, as expected, but to China. This unexpected loss was likely due to pressure on the Myanmar junta from China (see Clarke and Dalliwall 2008; Lees 2006). Moreover, in seeking compensation, India was apparently given sole controlling rights to Sittwe port, which it is developing—but this too was later overturned, again apparently after pressure from China (Lees 2006).

Although the official Indian position on China is positive, if one scratches the surface, Indian commentary often quickly descends to visceral suspicion of China. Such commentary ranges from the prominent Indian academic Brahma Chellaney (2008), who asserts that in ‘order to avert the rise of a peer rival in Asia, China has sought to strategically tie down India south of the Himalayas’, and the commentary of officials such as Admiral Prakash, who said India would keep a ‘close eye’ on China’s naval intentions in the Indian Ocean (OPRF 2005:9), to India’s Maritime Doctrine, cited above.

Given this ambivalent relationship, it is not difficult to imagine that if China continues to surpass and draw away from India economically and strategically—as we assess to be the case on present indications—such ambivalence will soon give way to wariness, concern and, ultimately, the more overt desire to balance China’s rise.