China is simultaneously a threat and an opportunity

Prime Minister Narendra Modi has struck a delicate balance of engaging with China where there is mutual benefit and standing up to the South Asian neighbour where India's strategic interests demand. Dealing with China is arguably Prime Minister Narendra Modi's most daunting foreign policy challenge. That's because it is difficult to fit the Middle Kingdom into any of the comfortable stereotypes that Indian diplomats have got used to. The first problem is one of definition. How does one categorise China Is it a friend A minuscule minority in India will define it as such, based mainly on ideological affinity but a vast majority - and the government, definitely - will beg to differ. The reason: China's decision to block India's membership of the Nuclear Supplier's Group (NSG), its putting on technical hold India's proposal to have Pakistani terror mastermind Maulana Azhar Masood declared a United Nations-designated terrorist and its decision to ride roughshod over Indian sovereignty by building the $46-billion China Pakistan Economic Corridor (CPEC) that passes through Pakistan-Occupied Kashmir. No country that does the above can be India's friend, goes the argument. Is it, then, an enemy Significant sections of the Indian population and strategic community will vociferously agree but sober sections among them will point out that President Xi Jinping has promised significant assistance, and Chinese companies have committed to invest $20 billion in India on building world class infrastructure, sine qua non for lifting this country's GDP growth to or near double figures, which, in turn, is a prerequisite for creating millions of jobs and lifting living standards in India. Would an enemy help out on such a crucial mission There are no easy and comfortable answers for this. For his part, Modi has decided to break from the practice of previous Indian governments and engage with China where there is mutual benefit while at the same time standing up to Beijing where India's strategic interests demand such a stance. On both counts, he has gone where no previous Indian government has dared to tread. He has, for example, cut through the bureaucracy, overruling several security concerns, to give Chinese telecom and power companies access to the vast and lucrative Indian market. Then, he has also taken steps to address the complaints of Chinese businesses that getting Indian visas was extremely difficult. If Modi has walked the extra mile on meeting China's concerns on the business front, he has also taken care to build political partnerships with the US, Japan, Australia and some East Asian countries to guard against potential Chinese adventurism and retain the traditionally multi-polar character of Asia and the Asia Pacific region. Under him, India has begun playing the high stakes global balance of power game, which the country had shunned since Independence. Making common cause with countries such as Vietnam, the Philippines and Japan, India has supported their stance against China's claim to sovereignty over all of South China Sea. Here, India has found itself on the same side as newfound strategic ally, the US. Though some domestic commentators have questioned this move, the strategic rationale for wading into the South China Sea impasse is clear: Modi is trying to wrest some bargaining chips, frittered away by previous governments, for utilisation on issues of greater importance to India. China, for example, has made steady inroads into the Indian Ocean region and also neighbouring countries such as Nepal, Bangladesh and Sri Lanka. And it has turned Pakistan almost into a client state that it unleashes on India from time to time to ensure that New Delhi remains stuck to South Asia. Modi's proactive foreign policy stance has brought some dividends. The country has managed to win back some of the strategic and economic space it had ceded to China in Nepal, Myanmar, Bangladesh and Sri Lanka. Admittedly, this is dynamic game and equations are not cast in stone, but India is no longer considered a pushover in this strategic great game. However, China has also entered the scene in South Asia as a very real and powerful player via Pakistan, which is now almost its vassal. As a result, whenever India has tried to squeeze Pakistan on its support for terror, it has had to contend with China's overt support for Islamabad. China has also formally shed its traditional neutrality on Kashmir and is no longer shy of being seen in Pakistan's corner, even if it means it has to stand against the global consensus - as is evident from its stance on India's bid for NSG membership and Azhar. India now has to contend with two more variables in its relations with China. As China's growth has tapered off in recent years and the pain of adjusting to a slower economy has dented the legitimacy of the China's ruling communist party, President Xi has increasingly turned to Han nationalism as a rallying cry. Such a policy can obviously have consequences for China's neighbours, especially India, which Beijing views as a country that can challenge its hegemony in the future - even if the present economic and military asymmetry between the two countries precludes the possibility of that coming to pass anytime soon. The Donald Trump presidency is another imponderable that could affect India-China ties. If the new US President carries out his threat and launches a trade war against China, it will be bad for the world and bad for India, especially as this country's economy is showing signs of crawling out of a long and stubborn slowdown. The last thing Modi wants for the Indian economy is an all-out trade war between the world's two largest trading nations that will squeeze his space for economic diplomacy to extract maximum advantage for India. In sum, how the Prime Minister navigates his way around the opportunities and threats posed by China could well define India's global stature in the decades to come. *As told to India Inc Staff

Ashok Malik is a Senior Columnist.