India: Tracks of change

20th Aug, 2014

Next month China’s President Xi Jingping will journey to Islamabad to put the final touches on plans to build an almost two thousand kilometer railway linking Beijing to Islamabad. This follows 2010’s inauguration of the Pakistan-China “friendship centre” in Islamabad, a glass-fronted gift to the tune of £35 million from the Chinese government.

The new railway will stretch to Karachi, and then on to a Chinese-built sea port on the Gulf of Oman in efforts to boost western China’s economy, and build on the existing $32 billion the Chinese have pledged to invest in Pakistan over the coming seven years. The project holds punch, reducing the journey of goods from China to the Gulf to under 5000 kilometers.

The joint venture relies on three particulars. First, the indisputable need of partners: to boost Chinese exports and Pakistani infrastructure. Secondly, as both nations’ find their behavior periodically antagonizing the West, they can find solace in one another. This is evidenced by China’s supply of arms since the 1990s meaning Pakistan’s arsenal of nuclear warheads probably now exceeds that of India. Finally, both Pakistan and China conveniently host border disputes with India, and thus the small matter of territory does not thwart progress (railway is to go through the Gilgit-Baltistan area, controlled by Pakistan but disputed by India. China disputes the Arunachal Pradesh region of India).

Anyone could tell you that this situation will make India feel a little hot under the collar. How concerned should she be, and are there any benefits which might encourage a composed response?

The railway and surrounding projects indicate that China sees Pakistan as its most ‘useful’ neighbor in the region, and where it receives the warmest reception amongst the Islamic nations. India is viewed by China as being unlikely to act in a way that would irritate the US and thus perhaps not on the same page when it comes to some foreign pursuits. 

India’s growth remains spluttering around the 5% mark, reducing in recent years the number of comparisons to China. This situation will not be improved by missing out on potential trade links with a growing China. Indeed, missing out to Pakistan will feel like the ultimate snub for India.

Despite the glassy front of the Pakistan-China friendship centre, Chinese-Pakistan relations are not as guaranteed as they may appear. After Pakistan’s devastating floods in 2010 the US put forward $700 million to help the country cope. China put up $18 million in aid; hardly the actions of a best friend and lifelong partner.

The potential for unrest in Pakistan is a constant concern, and perhaps no amount of shared trade options can dilute that. The insurgency and sectarian violence that finds its home in Pakistan is feared to spillover into the relatively restive Chinese southwest. It is not a stretch to say that if unrest should rear its head the Chinese projects will grind to a halt.

The greatest hope in mitigating Indian hand-wringing over Pakistan-China relations is the newest player on the scene: one Mr Narendra Modi.

Until recently, he was unwelcome on American soil and advisors say he is of the belief that the US will ‘come to him’ to gain his favour. There are real fears that India is simply not special enough to the White House to take precedence over China. Long term, Mr Modi will see the value in keeping China onside, and not allow this railway to be the beginning of a long rift. There are scuffles on their disputed border, but both sides have stated publicly that it will not affect relations.

If election rhetoric is to be believed, Mr Modi is about to ease open India’s market for foreign investment, something China is unlikely to turn away from. India also has the added benefit of being a more stable neighbor than Pakistan, which may be the best hand they have to play.

Modi should also rest easy knowing at present, trade figures between India and China are estimated to exceed £100 billion by 2015, far exceeding even the most generous estimates of Pakistan and China.

India could have a real opportunity here to present itself as a rational nation, understanding a multifaceted approach is needed to tackle almost all of the region’s issues, from extremism, to trade to water security. Collaboration on previously hot topics can already be seen in China’s issuing of reports on the Tsangpo river flow in the flood season, separately to India and to Bangladesh.

Miles of newspaper script has analysed Modi’s election promises to resume talks with Pakistan once ‘all the violence’ stopped. Whether this happens or not is not of importance right now, the gesture itself speaks volumes about a new approach to an old conflict. 

It is in everyone’s interest to have a stable Pakistan. India must see the benefits in the China-Pakistan relationship, and that if done properly she can market herself as a completely different cohort for China.