How China is fuelling border tensions to check India’s economic rise in post-COVID-19 world

The first publicised incident of the ongoing standoff took place on May 5, when Chinese troops tried to block an Indian patrol in the Pangong lake region of eastern Ladakh. Similar confrontations have been provoked by China in the Galwan valley in Ladakh and in the Naku La mountain pass in Sikkim a few days later. What has motivated the Chinese to ratchet up the aggression despite confidence-building efforts and summit meetings between Prime Minister Narendra Modi and Chinese President Xi Jinping in Wuhan (the same city which gave the world COVID) and Mamallapuram (an ancient seaport of the Pallava dynasty)?

Two developments — both of which have a commercial angle — appear to have been the reason that the Chinese have decided to employ military tactics in an attempt to thwart India. On April 19, India revised its foreign investment policy to tighten investment rules for companies sharing a land border with India. This development followed the Chinese central bank increasing its stake in housing finance lender HDFC when share prices are cratering around the world as a result of the pandemic.

A few days later, in early May, media reports said India was developing a land pool twice the size of Luxembourg to host companies leaving China because of widespread anger at Beijing’s handling of COVID. India was openly setting itself up as a commercial rival when the world is revulsed by Chinese actions, something that the communist regime could not stomach. In sum, China is using its military to try and bully India and prevent its western neighbour from making decisions which are in its economic interests. It’s about money, the ultimate source of military strength.

The balance of power between China and India, which is tilted heavily in favour of the former, could shift to become less uneven if the Chinese economy takes a bad knock as a fallout of COVID and India gains, relatively speaking. There is no certainty — indeed, there is room for doubt — that India can attract investments from global corporations at the expense of China. But assuming India gets its act together, over a few years the balance-of-power equation has the potential to shift significantly. And with it military capability. China’s calculations are transparent.

Despite protestations to the contrary, China is single-minded about attempting to block India’s rise as a major economic power. True China alone cannot do this — it requires Indian complicity. We are not single-minded about pursuing sensible economic policies — our reforms, if and when they happen, are in fits and starts. Democracy cannot be an excuse for poor economic policies, but that is how it works in India.

Back to the main point: what course will this military standoff take? It could actually depend on the Western response to China over the coming weeks and months. If tension with the West increases and major powers determine that China deserves a bit of humiliation, China may decide that harassing India may not be worth the effort. It will have bigger problems to contend with.

And how the West responds may actually be down to the US election, which is due in November. A major conflict involving nuclear powers is unthinkable, but there are enough and more influential strategic minds who could advise that Chinese interests in Tibet, Hong Kong and Taiwan are not that sacrosanct. Is it any wonder that China is using this moment to undermine the autonomy of Hong Kong? Or that two MPs from the BJP — Meenakshi Lekhi and Rahul Kaswan — 'virtually attended' the swearing-in on Wednesday of Taiwan's President Tsai Ing-wen.

From Vietnam and the Philippines to the United States and Australia, there is little sympathy for China and its authoritarian moves. China is a global power with a mighty military. But India is no pushover and can hold its own on land, sea and the air. For the Communist regime to imagine that India will capitulate on its Himalayan frontier will be foolhardy. This is 2020, not 1962. China cannot stop India’s rise, but how high India rises is up to us. Now.