India and China: The End of Cold Peace?

China's pushiness could turn a quiet rivalry hostile.

In recent years China’s attempts to alter the status quo in its territorial disputes with Japan, the Philippines and Vietnam have seized global headlines. The games of brinksmanship being played by Chinese naval forces in the Western Pacific have put the region on edge, propelling Asia into becoming “the most militarized region in the world.” Yet while the world’s attention has been focused on the maritime arena, it is China’s neighbor to the south, India, that has quietly become the world’s largest importer of arms.

The China-India rivalry has not garnered the same attention as the China-Japan rivalry because their disputed Himalayan border—the longest disputed border in the world—has been virtually free of violence since the first major conflict in their history, the 1962 border war. Compared with the volatile confrontations playing out in the East and South China Seas, the de facto China-India border, the Line of Actual Control (LAC), has been relatively tame. It’s also because since the 1980s, Beijing and Delhi have crafted a durable framework to manage their border dispute and cooperate in areas of mutual interest within the confines of a cold peace.

Today China and India are more politically and economically engaged than at any time in recent history. Bilateral trade expanded sixty-seven-fold from 1998 to 2012, and the Chinese and Indian armies held their first-ever joint military exercise in 2007, followed by two more in 2008 and 2013. They have periodically found common agendas on global issues of mutual interest like world trade talks, climate-change negotiations, the primacy of state sovereignty, and the need to reform global-governance institutions.

Most important, both capitals have shown a commitment to mitigating recurring tensions in the relationship. When crises do arise—as was the case when a Chinese border patrol intruded across the LAC for three weeks in April 2013—they’ve responded with calm and patience to dissolve the crisis diplomatically. At the government-to-government level relations are, in a word, civil.

However, cooperation and competition coexist in this relationship, advancing in tandem on parallel tracks. And while the cooperative track has been accelerating since the turn of the century, the strategic competition has kept pace, and in some arenas advanced faster. The phenomenon should be familiar to Washington. U.S.-Chinese relations operate in a similar framework: deeper integration in the diplomatic and economic sphere accompanied by growing strategic mistrust in the security arena.

Perhaps the key feature of the China-India rivalry is that while it is felt and sustained by both parties, it is in many ways one-sided. China’s “comprehensive national power” exceeds India’s by such a wide margin. China’s economy was over four times the size of India’s in 2012, and over eight times the size when adjusting for purchasing-power parity (PPP). China’s official military budget of $119 billion in 2013 was over three times larger than India’s $38 billion defense budget. India more than twice China’s poverty rate (29.8 percent vs. 13.4 percent) and only two-thirds its literacy rate (62 percent vs. 95 percent).

If India can leverage favorable demographics it will be in a position to close the strategic gap with China by midcentury. In 2012 India’s working-age population grew by twelve million while China’s shrank by over three million. A June 2013 UN report on world population prospects predicts India’s population will surpass China’s by 2028.

However, for the immediate future China will remain a distant peer, and this gap is matched by a major asymmetry in threat perceptions. While India ranks somewhere in the middle of the pack in China’s matrix of strategic priorities, most Indian strategists today view China as their country’s principal security threat. In Delhi, being anti-China is politically popular and financially profitable. A Lowy Institute Poll released in May 2013 found just 31 percent of Indians surveyed felt China’s rise had been good for India while 65 percent felt India should “join other countries to limit China’s influence.” Some 73 percent of Indians surveyed thought war with China was a “big threat” and 70 percent thought China’s aim was “to dominate Asia.”

These assessments are corroborated by India’s evolving twenty-first century defense posture: India is now the world’s largest importer of arms, despite its conventional military superiority over archrival Pakistan. Nearly all the major initiatives to improve India’s military infrastructure are taking place not at the India-Pakistan border, but the India-China border. In 2009 India added two new mountain-infantry divisions, followed in 2013 by the raising of India’s first offensive Strike Corps, all for the Eastern Sector of the border dispute with China.