India Intelligence Report

US-Sino Relations & India


The Chinese President Hu Jintao’s meeting with who-is-who of the US business world even before his planned meeting with President George Bush demonstrates the focus of China in its relationship with the US. Also, knowing big Chinese polity is on symbolism, the elaborate first meeting hosted by Microsoft founder and richest man in the world Bill Gates also demonstrates the deep relationships China has built with business leaders in the US.

Similar to events during the Cold War, behind the bonhomie expressed between Jintao and Bush, in a disastrous first official event, are a stream of cat and mouse sparring contest being played out in various parts of the world. The only difference is that there is no declared Cold War but there is every sign that one is brewing. Nowhere is this cat and mouse being played out more than in Africa.

While China has been developing strong relationships in Africa since the 60s, its insatiable appetite for energy is creating new relations many nations and regimes solely for its own benefit. As noted by the Council on Foreign Relations report, “all across Africa today, China is acquiring control of natural resource assets, outbidding Western contractors on major infrastructure projects and providing soft loans and other incentives to bolster its competitive advantage.” 


In many cases, it is using its position as a veto-bearing so-called permanent member of the United Nations Security Council (UNSC) to block US initiatives or create a space for itself. Analysts point out China, along with Russia and Qatar, are blocking crippling sanctions on Sudan for the well-documented carnage at Darfur. China offers aid directly to the regime in Zimbabwe, known to feed its supporters but starve its opponents, instead of well-recognized practice of routing aid through international and local non-government organizations. China is warming up to new authoritarian regime in Togo when the US-led allies are calling for democratic regime in that nation. 

China has now converted its need for oil to buy up to 30% of its imports from Africa and exporting cheap prison camp made jeans, jewelry, motorcycles, etc. Pouring billions of dollars into China, state-owned Chinese companies now own most of Sudan’s oil production and major stakes in Nigeria. Unlike American interaction, China has also build in several deep-rooted relationships with African nations. It has educated several African students, deputed teams of doctors and advisers to many nations, building roads and infrastructure, operating cell phone services, etc.

With this win-win relationship, China is also bringing in a culture of authoritarianism. Unlike American or European business that demands democracy, economic reforms, or social equality, China has no such qualms or demands. Courting countries such as Mali and Mauritania seen as key components in Bush’s Trans-Saharan counter-terrorism initiative, China is compromising US plans in the region. Its “strategic partnership” with Nigeria, long considered a major oil supplier for the West is also turning that nation against the US. While US trade with Africa is more than China’s, the latter’s trade is growing at a faster rate and even exceeded the US in 2003. 

Behind these background events, the two nations promised to cooperate more closely on nuclear non-proliferation and reducing trade imbalances. No new initiatives, agreements, or announcements were made between the world’s largest economy and its fastest growing rival. Jintao even appeared in a media event with Bush and both acknowledged that they differed on several issues but insisted that they agreed on more items. A major area of disagreement is on Iran.

Both China and Russia have vehemently opposed US-led efforts to impose economic and military sanctions on Iran for its pursuit of nuclear weapons. While Russia said that it will support sanctions only when concrete proof was available, China took an evasive position that it will promote dialogue and not escalation of conflict.

The deep divide between the two nations poses a strange opportunity and grave dangers for India. While India has to ensure that it does not get dragged into the impending Cold War, it needs to also ensure that it does not get left behind. Indian participation with the US, however natural, will boost Chinese-Pakistan axis to a painful point but give it economic benefits. Indian participation with China, however unnatural, will boost US-Pakistan relationship to a painful point with no economic benefits. Staying in the middle will be a dangerous and arduous task but is the right way to go. India should also engage more with African nations directly through grants for orders from Indian companies and through international aid efforts. It should also encourage more educational, health-related, and environmental cooperation with these nations.

While India can discount and even disparage China on its social policy, it needs to learn a lot from Chinese finesse in foreign and economic policy driven only by its permanent interests.