key: cord-0060190-w07w47js
authors: Deepak, B. R.
title: India-China Relations Post-COVID-19 Pandemic and Galwan Incident
date: 2020-09-22
journal: India and China
DOI: 10.1007/978-981-15-9500-4_10
sha: fc76355e1cb4cad0a0ae94d05daf2183e13f09d6
doc_id: 60190
cord_uid: w07w47js

As the narrative of “Emerging India” which was based on India’s robust economic growth, demographic dividend, and capacity to handle domestic and global challenges pragmatically enters unpredictability, especially after the Covid-19 pandemic, existing asymmetries with China are bound to widen even further. China’s GDP in the last decade (2010–2020) rose from $6 trillion to nearly $14trillion comparing India’s rising from $1.7 trillion to a little less than $3trillion. Added to this, the lingering Covid-19 crisis in India and the Galwan stealth attack by China in which India lost 20 of its soldiers who had contested China changing the status quo at certain areas in the Western sector has proven that the kind of equilibrium and understanding India seeks with China is extremely difficult, for China has been vocal to remind India of this asymmetry more often than not. Therefore, China will have no compulsion to accommodate India’s interest whether bilateral, regional or global. The study argues that the Covid-19 pandemic and Galwan should free India from any delusion that China will be sensitive to India’s sensitivities; the best India could do at this juncture is to undertake a comprehensive review of her China policy and formulate a new policy which is long-term, goal oriented and sustainable.

Hong Kong, who escaped to the USA, are to be believed, Chinese government knew about the virus but covered it up. Dr. Yan calls it a "PLA virus" and not of natural origin. She says that even a fake genome sequence was shared on 12 January but was subsequently replaced by a new one, as the pandemic spread outside China. Yan's version has been dismissed by China as "unfounded' and "hearsay"; however, notwithstanding such reports, there appears to be initial laxity on the part of Wuhan authorities in recognizing the gravity of the pandemic when the virus was detected in early December 2019 for obvious reasons of "losing face" to the higher authorities and putting lid on a "negative news." Having realized the gravity of the situation, China did demonstrate greater transparency and swiftness comparing the SARS scare in 2003. Chinese government instantly quarantines 11 million residents of Wuhan, and three new hospitals were built in 10 days with a capacity of 3500 beds (Deepak 2020a) .

Though the World Health Organization did not recommend travel or trade restrictions against China, however, it was understandable that many bordering countries sealed their borders, many cancelled flights and evacuated their citizens from Wuhan and issued travel advisories. India too brought back 647 of its citizens by special flights from Wuhan. The fear of the pandemic forced India to cancel all visas to Chinese nationals as people tested positive for the virus in states such as Kerala, Bihar and Delhi. The move to evacuate citizens from Wuhan and issuance of travel advisories by a few countries including India certainly irked China, as she believed that such measures by countries will flare up already tense situation. Chinese ambassador to India, Sun Weidong revealed that Chinese State Counsellor and Foreign Minister Wang Yi did tell his counterpart Mr. S. Jaishankar over telephone that "We don't think it is helpful for a certain country to hype up the situation or even create panic" (Deepak 2020a) . It is perhaps owing to certain decisions of India that neither Prime Minister Modi made a call to President Xi Jinping during the Wuhan outbreak, nor did Xi called Modi when India grappled with the pandemic in subsequent months.

As countries and regions reel under the lockdown, the pandemic is denting economies across the globe. According to the "World Economic Outlook Report" updated for June 2020 by the IMF, global growth is projected as −4.5% for the year 2020. The adverse impact on low-income households is particularly acute, imperilling the significant progress made in reducing extreme poverty in the world since the 1990s (IMF 2020). This will impact adversely on India and China, countries that have alleviated almost 1.2 billion people out of poverty in the phase of globalization and trade liberalization. The liberalization is likely to pave way for protectionism, and diversification of certain supply chains will be imminent, as these have been drastically disrupted, and some have demonstrated that there is heavy reliance on China.

The Covid-19 pandemic also took strategic rivalry between China and the USA to new heights and has certainly pushed India closer to the USA. The USA seems to have freed itself from the delusion of China as non-enemy and the misbelief that liberalization and globalization will affect a peaceful transition in China. It is in the wake of such a thinking that there are mummers about hard decoupling of the US economy with China, changes in international order, deglobalization and even the very way of life of the people. Experts are predicting imminent decoupling in selective sectors such as telecom, electronics and ICT (Deepak 2020b) . Being a close US ally, Japan announced allocation of $2.2 billion to help Japanese enterprises to move their production facilities out of China. As for the EU, though it has pronounced China as a "systemic rival" since 2019, but will there be a domino effect, it remains to be seen. At this point in time, it appears that Brussel has been disappointed rather displeased by China's "mask diplomacy" in Europe sending signals as if the EU was incompetent in handling and supporting its fellow members such as Italy and Spain in the times of crisis. The decoupling will further impact adversely on Chinese and global economy. The plunge in global economic growth could be worse than what has been suggested by the IMF.

As India struggled to contain the Covid-19 pandemic through lockdowns and social distancing between March and June 2020, China mobilised massive forces, heavy artillery, tanks, armoured vehicles and aircrafts along the LAC in Eastern Ladakh. The PLA quickly captured vantage points, changed the status quo, erected structures and denied India access to the positions which she used to patrol in April. The areas the PLA encroached included patrolling points in Depsang plains, Galwan, Pangong Tso, Hot Springs and Gogra heights, and there were scuffles at Naku La in Sikkim also. When India resisted, the Chinese reacted aggressively resulting in the first serious clashes on 5 May 2020, brutally injuring 76 Indian soldiers at Pangong Tso. This was just a precursor to the 15 June savage attacks of the PLA on a small Indian contingent at patrolling point 14 in the Galwan Valley. The ensuing body blows resulted in 20 fatalities on the Indian side and an unknown number of deaths on the Chinese side. Chinese scholars of South Asia blame it on India, as they believe that India is taking advantage of deteriorating Sino-US ties and flaring up incidents along the border, pushing out Chinese companies from fair competition in the Indian markets by bringing in new FDI rules, and joining the USA and its allies in containing China. Conversely, India believes that China is taking advantage of India's Covid flare up to occupy more territories along the LAC, it is provoking its neighbours to open up new conflict zones with India. For example, India's army general hinting at China for Nepal claiming Lipulekh, Kalapani and Limpyaudhura as it territories and altering its age old map in the wake of India's Dharchula-Lipulekh road (NDTV 2020). How has Covid-19 and border stand-off that enters its seventh month impacted on the bilateral relations, let us evaluate the following variable:

On the night of 15th June 2020, when Indian soldiers went to verify the disengagement plan reached by the corps commanders for Patrol Point 14 on June 6, the Chinese not only had not withdrawn from the point, but ambushed Indian soldiers, used metal rods and nail studded clubs in most barbaric way. The exchange of body blows resulted in casualties on both sides. The Indian side reported 20 fatalities including a colonel; Chinese side did not make their deaths public. The stand-off and the barbaric attack resulted from China's deployment of forces in the rear from the just concluded military exercise. India retaliated by mobilizing of its own forces and equipment to deal with the Chinese challenge. Though both have activated military and diplomatic channels for disengagements and de-escalation, however, the very confrontation and deployment means that the PLA has shown utter disregard for the LAC and the CBMs, thus spiralling the bilateral relations to a new low. This is perhaps the most fatal blow to India-China relations since 1962 and will comprehensively transform India's approach and responses towards China.

As China's military and economic muscle bulged, starting from the mid 1980s, she began to take maximalist position on the border dispute; replicated South China Sea strategy of island reclamation, militarization, changing the status quo, and present a fait accompli of the disputed area. It is owing to this approach that resolution of the border is not the main agenda of China. Added to this, people (Jha 2020) argue that basic premise of the 1993 "Agreement on Peace and Tranquillity in the Border Regions" was that "China and India would go back to the strategic cooperation on international issues that had existed between them at the height of the Cold War." However, this understanding has taken a beating given the salami slicing tactic of China along the LAC. This view has been refuted by Chinese scholars (Long 2020; Liu 2020) who in turn has blamed India for "nibbling" Chinese territory though her "forward policy" along the border and has attributed the occurrence of the incident to "India's domestic political process and its China policy going astray over the years." Some attribute, erosion of the so-called understanding or "consensus" between India and China to India cementing civil nuclear deal with the USA in 2008. Prime Minister, Narendra Modi "aligning India with the US on key issue of the freedom of navigation in the South China Sea" followed by the US granting India the "major defence partner" status after both signed the Logistics Exchange Memorandum of Agreement (LEMOA) a variant of the Logistics Support Agreement (LSA) that the USA has signed with its NATO allies. Both tried hard to restore the consensus reached in Wuhan after the Doklam stand-off (2017), but China remained apprehensive about India not implementing the "consensus" in letter and spirit. The visits of the Chinese leaders, according to Jha (2020) , were "designed to enlarge his own image" by Modi. Besides cosying up to the USA, many in India believe that China was unhappy about the abrogation of the Article 370 and bifurcation of Jammu and Kashmir into two union territories (Malik 2020; Deepak 2019a) .

The Chinese have also expressed concern over the abrogation and have gone on record to say that the bifurcation has posed a "challenge to the sovereignty of Pakistan and China". The Indian move has prompted China and Pakistan to "take counter measures." The very issue, in the words of Wang (2020a) , a researcher at the China Institute of Contemporary International relations, has "dramatically increased the difficulty in resolving the border issue between China and India." Similar views have been expressed by Long (2020) , when he says that India has been "constantly finding opportunities to nibble the Chinese territory, and has often taken advantage of China's domestic difficulties and conflict with the United States to seize territory." The Chinese are quick to remind India that it was this thinking of India that eventually led to an armed conflict on the Sino-Indian border in 1962. India's rebuff to China on the BRI on account of the CPEC and India beefing up border infrastructure, in particular roads like Durban-Shyok-DBO and Dharchula-Lipulekh, are pronounced as some of the triggers of Galwan, Pangong Tso, Hot Spring and Naku La stand-offs. But, is this true?

One, there may be some logic to these assertions; however, these stand-offs are not one of the incidents, had it been the case, incidents like DBO-Depsang (2013), Chumar (2014) and Doklam (2017) would not have happened at all; number of incursions along the entire LAC would not have jumped to such a proportion.

Two, since China has built state of the art infrastructure across the Line of Actual Control, logically, it has better access to the LAC in terms of patrolling and deployment in the rear. Relying on the tactic of "two step forward and one step back", China changes the status quo and present a fait accompli, as has been the case in Pangong Tso, Depsang plains and Hot Springs. If this is resisted by India, China is quick to ask for disengagement by way of withdrawing a few kilometres from the point of frictions after having moved two step forward and imposing a "buffer" on India on its own claim line, as was witnessed in Galwan in June-July 2020.

Three, since the LAC largely remains a huge grey area on ground where the Indian and Chinese perceptions differ, China, relying on its better accessibility to the LAC, has the scope to shift the line further west in the Western sector. This has been demonstrated by ever increasing transgressions, mostly in the Western sector by the PLA-the Galwan Valley (2-3 kms); the Srijap range where India's claim line extends to Finger 8, but does not control the areas beyond Finger 4, an area of 35-40 kms now occupied by China (Panag 2020) ; and Naku La in Sikkim. Similar incidents can happen in other sectors where perceptions differ and China laying claim to the areas falling within its so-called traditional customary line. For example, in the Middle sector, areas such as Nilang-Jadang, Bara Hoti, Sangchamalla and Lapthal, Shipki La and Spiti area could be next flashpoints. Interestingly, having reinforced its 1960 claim line in the Western sector, China is playing victim and blaming India for "provoking the incident" in Galwan Valley "intentionally" and "trying to change the status quo unilaterally", but the ground reality reveals the opposite. Wang Dehua, a veteran of India-China relations in an article in sohu.com on 19 May 2020, even warned Prime Minister Narendra Modi that "Boundless is the sea of misery, yet a man who will repent can reach the shore nearby" (Deepak 2020c) .

In fact, some of these are new areas of transgression, which are not even flagged in the 23 contested areas (11 in Western sector, 4 in Middle sector and 8 in Eastern sector) identified by both sides since formation of the Joint Working Group (JWG) in 1988 and later during the exchange and comparison of maps in 2000 and 2002.

China's modus operandi remains the same, as has been witnessed in the South China Sea, i.e. reclaim the unchartered territory, build infrastructure, militarise it and then present a fait accompli. According to General Malik (2020), "any intrusion across the LAC and then trying to defend the area involved would be "occupation." Therefore, posits Lt. General Panag (2020) that "China cannot be allowed to get away with usurping Indian territories like it has done till now. This confrontation must end with status quo ante of 1 April, 2020 and sanctification of the LAC with formal exchange of maps." Former Army General Malik (2020) is of the view that "If LAC not marked soon, it will remain vulnerable to face-offs and India and China may end up deploying more troops there, just like it is on the LoC with Pakistan."

Four, it is also for this reason that China is not interested in identification of the LAC. The very identification according to China will open a can of worms and would complicate the matter as was revealed by Wang Xin, director of Border and Ocean Affairs of the MOFA during the 2nd track II dialogue on border issue in Shanghai in November 2019.

Five, China believes that it has not reached the stage where resolution is must, therefore, "maintenance of peace and tranquillity", "managing" rather than solving the problem will be its top priority, albeit Chinese scholars have told this author that the cost of maintaining "peace and tranquillity" is becoming higher and higher. Nevertheless, provides China with an opportunity to push the LAC westward if not challenged. In event of friction, China strategy would be to occupy the disputed land by moving two steps and force a buffer area separating the two forces by stepping back one step, as has happened in Galwan. China has also pitched for the so-called "early harvest" fruits, which according to my understanding is nothing but going to the sectoral approach, and will lead to nowhere.

As for India, though late comer in infrastructure development along its borders, of late she is also ramping up border infrastructure "rapidly", which has caused uneasiness to the other side of the LAC. Although the 255-km-long Darbuk-Shayok-Daulat Beg Oldie (DS-DBO) Road took 19 years to complete, nonetheless, it will make accessible many areas of the LAC for patrolling and will keep an eye on Chinese movements in Aksai Chin, which is a few kilometres away. The road also endangers China's G219 highway linking Xinjiang and Tibet on the one hand and Karakoram highway on the other. Chinese transgressions in Depsang and Galwan demonstrate this anxiety of the Chinese. They were not to claim higher grounds overlooking the DS-DBO road and block it in event of hostilities. India has initiated 60 more such projects that are part of the 3300-km road network along the border, the work of which was supposed to be completed in 2019, but according to the BRO officials, only 75% of the work has been completed. Surveys for border rail projects such as Bilaspur-Manali-Leh, Misamari-Tenga-Tawang, North Lakhimpur-Bame-Silapathar and Pasighat-Teju-Parsuram Kund-Rupai are on and are supposed to be completed by 2025.

Notwithstanding India beefing its border infrastructure, there remains huge asymmetries in border infrastructure between India and China. For example, the "Thirteenth Five-Year Plan" (2016-2020) allocates 200 billion RMB ($20.5 billion) for infrastructure development in Tibet. There are 90,000 kms of roads inside Tibet (Xinhua 2018) . The Lhasa-Shigatse Highway, which is being accorded top priority is expected to be completed by the year 2020. Furthermore, the work to connect Lhasa-Shigatse Expressway and the Gesa section of Beijing-Tibet Expressway commenced in 2018, and once connected, it is estimated that PLA can supply logistics support in less than 4 days traversing a distance of 3725 kms from Beijing to Lhasa and then further to the border areas. The highways are being connected with rail connectivity. For example, the Lhasa-Shigatse line that was opened to traffic in 2014 is being further extended as Lhasa-Nyingchi Railway and Shigatse-Yadong line, the latter falling in Doklam area. The construction of Sichuan-Tibet Railway has been in full swing. China believes that the opening of this line will alter China's disadvantageous position in Tibet, especially in the so-called "South Tibet". China claims that once the line passes through Linzhi and Nanshan, logistics constraints as regards the areas will not be a concern in event of "an incident"; China holds that areas such as Zayul, Motuo, Cuona and Longzi have been held by India. In addition, Chinese strategy also includes Xinjiang-Tibet Railway from Hetian, Xinjiang, the Yunnan-Tibet Railway from Lijiang, Yunnan, Gansu-Tibet Railway from Lanzhou, Gansu and Shigatse to Yadong and then to the Gyerong Port on the Sino-Nepal border, and even a Chengdu-Qinghai line connecting Golmud that will eventually cross Kunlun Mountains through Korla and join Sichuan-Tibet and Qinghai-Tibet lines is under construction (DW News 2018; Beyondnew 2020).

No doubt, infrastructure asymmetry is visible, but it is perhaps the new "development", i.e. India building border infrastructure which has been a cause of concern to China. As a result, China has been making forays into new areas simply for "holding the line" as they perceive. India perhaps will too "hold the line" if more areas are accessible once the infrastructure is laid. This, however, will give rise to Galwan (2020) and Doklam (2017) like confrontation and could lead to a larger conflict. This is also out of this thinking that China is contemplating demilitarization of the LAC. India too perhaps could think of such a proposal if she feels comfortable with the notion of equal and mutual security, for the cost of maintaining "peace and tranquillity" is becoming higher for both India and China.

The disruption in the global supply chains in the wake of the Covid-19 has given rise to two sentiments in India, also reflected in Atamnirbhar (self-reliance) Bharat programme of the government. The first is the swadeshi "movement", which has been there for some time. This is also flared up by the organizations like Swadeshi Jagran Manch (SJM) with a "boycott made in China" agenda. The agenda has taken roots in public minds, especially after the Galwan Valley stand-off and fatalities. Since 25th May 2020, the SJM has launched "Swadeshi Self-Reliance Campaign" with a five-point program. The very first point is boycott of Chinese products. This can also be discerned from government declaring 42 of the Chinese Apps as dangerous in early June, followed by the launch of "Remove China App" developed by One Touch AppLabs, then banning 59 Chinese apps including TikTok, SHAREit, Mi Video Call, UC Browser and adding 47 clones of banned apps in the list in July. TikTok, which has the largest consumer base outside China, has estimated a loss of $6 billion after the ban. Various states followed the suit cancelling projects signed with the Chinese companies in sectors such as automobile, railways including the Vande Bharat, telecom, energy and road infrastructure worth billions of dollars. It may be remembered that contracted value of the Chinese projects in India is over $60 billion. India has made it clear that if there is bloodshed at the border, it cannot be business as usual. Chinese analysts like Yuan Jirong (2020), a former correspondent of People's Daily in India, do believe that ban and the border stand-off in Galwan cannot be treated as isolated events, however, maintains that it is also owing to the "rise of Hindu nationalism, and India's mentality and ambition to become a major power." According to Yuan, India is "evolving from a regional troublemaker to a regional strategic competitor of China," a popular discourse making rounds in academic as well as media writings in China.

The second is the dream of making India an alternative global supply chain destination. As Covid-19 triggered a debate on decoupling of the supply chains from China, India changed its FDI policy on 17 April 2020 to protect Indian companies from "opportunistic takeovers and acquisitions," implying that India abolished the automatic route that does not require government and Reserve Bank of India's permission. Many in India linked the policy change to the People's Bank of China increasing its stake in India's largest private credit institution, the Indian Housing Development Finance Corporation from 0.8% to 1.01% (Xinhua 2020) . China immediately rebutted the Indian move, deemed it "discriminatory" and demanded rectification. Draphant (2020; Sina. com 2020), a Chinese start-up that assists Chinese investment in India, in a study argued that "although the policy is aimed at India's neighbours on the surface, but among all the neighbours, only China has made significant investments in India. In essence, the policy is aimed at Chinese companies. The policy change involves a variety of Chinese direct or indirect investment behaviours in India." India deem these as initial responses to China's posturing at border, there may be more in the offing.

India emerging as the next supply chain destination is rather a hype and exaggeration. It took China 40 years to develop a supply chain system with the support of its detractors such as the USA and Japan. It may take many more decades for India to realize the same, but shutting doors to Chinese investment may further prolong it. Going by Moody's Investor Services, the prospects do not look optimistic, for India's sovereign rating has been downgraded to the lowest investment grade of "BAA3" from "BAA2" on 1 June 2020. The agency also maintained the outlook from "stable" to "negative" (IE 2020b). The USA-China decoupling is bound to happen in some sectors but do not forget China is the third largest importer of the US goods. If China cannot replace the USA as main security provider in the Asia-Pacific, in the same vein, the USA cannot replace China as the main supplier of the manufactured goods. On the other hand, China too has intensified relocation of its labour-intensive manufacturing supply chains to other countries, especially the developing countries. Countries like Vietnam, Cambodia, Myanmar and Thailand in Southeast Asia and India and Bangladesh in South Asia are the biggest beneficiaries (Deepak 2020b) . Since the focus of most of the governments for the period 2021-2025 will be health of their economies, trade and investment cooperation between India and China will be crucial, albeit would be determined by the benevolent or malevolent nature of the relationship.

Chinese investment in India has risen up exponentially. Between 2017 and 2019, Chinese investment in India reached $9.5 billion, of which $5billion was pumped by the Chinese companies in the Indian starts-ups, mostly in the "Digital India" project. Alibaba, Shunwei Capital, Fosun Tencent and Xiaomi are the largest investors injecting money in consumers, food-tech, logistics, retail, artificial intelligence, Internet of things and fintech, etc., sectors. Chinese brands such as Xiaomi, Vivo, Oppo and Huawei have captured 72% of India's market share. Other industries such as energy and pharmaceutical have also witnessed deep penetration from China.

China's investment in this sector, nonetheless, will face a stiff competition from local giant like Reliance Jio in the long run, for bigwigs of tech world such as Google, Facebook, Intel and Qualcom have shown great interest. Facebook, Google, KKR and Vista have invested $5.8 billion, $4.5, $1.5 and $1.5 billion each in Jio. Jio apart from having the above market share of the Chinese in mind will also participate in the bidding of 5G spectrum, thus keeping Huawei out of India. Huawei has already announced that they are reducing 50% of their employees in India. Chinese media was abuzz with the news of India launching a $6.65 billion plan on June 2, targeting five global smartphone manufacturers, encouraging them to invest in or expand their smartphone production lines in India. In addition, two other plans will help India produce smartphones and parts worth $133 billion by 2025.

There are assumptions that these moves, which are part of Atamnirbhar (selfreliance) Bharat program, will gradually push Chinese companies out of the Indian market. Nevertheless, other supply chains in sectors such as electronics, home appliances, optical fibre cable, solar cells will continue to be dominated by the Chinese in the foreseeable future, for most of these have been localized. Other sectors that will continue to be interdependent are pharma, energy and automobile.

Although the Covid-19 exposed India's excessive dependence on active pharmaceutical ingredients (APIs) from China, but cooperation in this sector has emerged as the one having huge complementarities. According to the Trade Promotion Council of India (TCPI), India imports 53 APIs and critical key starting materials (KSMs) from China accounting for 70% of its API requirements (BioWorld 2020). According to a report in Economic Times, the total pharmaceutical and organic chemical imports from China are close to $10 billions of which bulk drug imports are more than $2.5 billion in value as per a report by Haitong Securities (ET 2020). Indian companies such as Laurus, Granules India, Solara Active Pharma were listed as having significant exposure. Even though the government is thinking of building new pharma parks, but the low cost of the API and medical equipment from China will continue to attract Indian pharma sector. Not only this, 25,000 Indian students studying medicine in China on competitive fee structure add another dimension to this cooperation.

Energy and automobiles sectors are other promising areas where policy could be aligned. India targets to increase the share of manufacturing in GDP to 25%, which looks difficult to achieve given that growth has contracted by 1% in the July-September quarter of 2019-20 from 6.9% expansion a year ago. China's MG Motor started selling cars in India in 2019, and the company has not fully made its promised investment of $650 million in India. Great Wall Motor has not yet started production in India, but in February said it plans to invest $1 billion in the next few years. Since the Covid-19 and tensions at the border has thrown many uncertainties, they are likely to withhold their decision to go ahead with the investment unless and until the government of India opens doors for such investment selectively.

India's policy formulators must understand that it is owing to the structural adjustment in the Chinese economy that labour-intensive industries are either being phased out or relocated to other advantageous locations in Southeast and South Asia. Even if, China has been cautious in its investment approach, but has selected some sectors where it has carved a nisch for itself. For example, mobile telephony, electronics, e-commerce, machine tools and logistics. This is not surprising, as "Made in China 2025" is geared towards letting the Chinese manufacturing move up the value chain in production and innovation during Xi Jinping's "New Era" from the labour intensive and low end manufacturing of the reform era . One of the most ambitious goals it has identified is to achieve 40% "self-sufficiency" by 2020, and 70% "self-sufficiency" by 2025 in core components and critical materials in a wide range of industries, including aerospace equipment and telecommunications equipment and achieve international recognition for Chinese brands (Deepak 2018a ). Ten core areas the strategy has identified are (1) New advanced information technology, including artificial intelligence and quantum computing, (2) Automated machine tools and robotics, (3) Aerospace and aeronautical equipment, (4) Maritime equipment and high-tech shipping, (5) Modern rail transport equipment, (6) Self-driving and new-energy vehicles, (7) Power equipment, (8) Agricultural equipment, (9) New materials and (10) Biopharma and advanced medical products. Of these, China has already made huge inroads in artificial intelligence (AI), robotics, high-speed rail and aerospace. The Chinese ambitions have been pronounced "bad for America" by the US officials, and Trump administration has justified the need for a US military space force by 2020. This is also one of the reasons for ongoing Cold War between the USA and China.

In this context, it is not surprising that almost 50% of China's GDP is accounted by its trade with Asia, China sees an opportunity in strengthening its economic partnerships with Asian countries by initiating connectivity and industrial capacity building projects. China joining the RCEP and concluding FTAs with most of the countries in the vicinity, securing its energy supply routes by ports facilities in Myanmar and Pakistan demonstrate this fact. China's engagement is futuristic in this area which has gradually and steadily expanded into South Asia, for Asia or rather Eurasia has become the fulcrum of geo-economics as well as geopolitics. India must take these factors into consideration while formulating its policy towards China and other players in the region.

As regards India's options, I believe hard decoupling from China by any nation is impossible. Therefore, India must identify sectors where investment could be attracted with active consultation and policy coordination. China's investment in "Digital India" happened because it is a growing sector and hassle free comparing other sectors where issues related to labour laws and land acquisition are problematic. While safeguarding big data remains a worrisome proposition, but India also needs to worry about lower labour productivity, higher land and industrial electricity costs, higher capital costs, higher logistics and compliance costs, a sudden policy change, delay in performance of government contracts, costly legal procedures and so on, which are visible bottlenecks for attracting investment, despite of the fact that "ease of doing business" in India at present has climbed up to the 77th position from 140th in 2014, nonetheless, compared with many developing countries, India's "cost of doing business" is still very high.

Therefore, when it comes to factors and resource costs of land, labour, capital, raw materials and electricity, India needs to take measures to make these competitive. The price of industrial electricity is too high, which limits the development of enterprises. India lacks world-class infrastructure, especially in logistics, which is necessary for rapid movement of goods in and out of India and a necessary condition for international production networks. Logistics costs in India account for 13-15% of the product cost, compared with a global average of 6%. High logistics costs increase operating costs and hinder competitiveness of the industry. It is possible to create our own supply chain clusters, provided we acts now, identify sectors, make a 27 years' roadmap and execute it in letter and spirit. If acted upon I am sure at the 100th anniversary of India's independence, we would be a different India.

As India-China border stand-off continues to impact relationship, China's has further strengthened engagement with India's neighbours in the backdrop of Covid-19 pandemic. The "Silk Road of Health" diplomacy has been extended to countries like Pakistan, Afghanistan and Nepal through a virtual meeting between Wang Yi and his counterparts on 27 July 2020. According to a report by Xinhua (2020; XinhuaNet 2020) Wang proposed that "four countries consolidate consensus of solidarity against COVID-19, carry out joint cooperation mechanism on COVID-19 response in the region, enhance cooperation in the fight against the pandemic and in vaccine, and accelerate economic recovery and development after the pandemic." Earlier China had extended "Silk Road of Health" to Central Asia and ASEAN. Early in May during a speech delivered at the 73rd World Health Assembly, President Xi Jinping unveiled slew of measures to fight the Covid-19 on a global scale, which included $2 billion international aid, coordination with the UN to establish a global humanitarian crisis response hub in China and provision of any vaccine as a global public good. The "Silk Health Road" entering various regions is likely to benefit from this aid money. Perhaps avoiding adding fuel to fire, China did not invite Bangladesh, Sri Lanka and Maldives.

Covid-19 diplomacy could be regarded as one of the many measures to consolidate China's relationship with these countries. China is solidly dug in the subcontinent owing to the countervailing nature of China's power in the neighbourhood, and China's larger strategy of its pivot to Asia, in which pinning India down to South Asia is the unstated objective. With the rise of China's economic and military muscle in the last 40 years, China's engagement in India's immediate and extended neighbourhood has increased manifolds. Countries in India's immediate neighbourhood such as Bangladesh, Nepal and Sri Lanka have deep economic and security ties with China and are heavily tilted towards China. In Bangladesh, China has invested over $10 billion in infrastructure projects. Nepal is executing China-Nepal Transit and Transportation Agreement that will facilitate building of a connectivity network in terms of roads, rails, air and optical fibre cables along Koshi, Kaligandaki and Karnali, etc., corridors. Interestingly, during the second Forum on Belt and Road in 2019, of all the 13 bilateral and 16 multilateral agreements with Myanmar, Bangladesh, Sri Lanka, Nepal and Pakistan, almost none is in the infrastructure sector (Deepak 2019a ). China's investment in the region has been astronomical, amounting to $13.87 billion to Bangladesh, $3.11 billion to Sri Lanka, $1.34 billion to Nepal, $970 million to Maldives and $12.9 billion to Pakistan (Tambi 2018) . Pakistan has been a lynchpin and willing pawn of Chinese strategy. Ignoring India's sensitivities as well as environmental concerns, China is building dams in Gilgit Baltistan in disputed territory between India and Pakistan; CPEC, the flagship of China's BRI also runs through this territory violating India's sovereignty.

China's deepening engagement in Myanmar, especially after the conclusion of the China Myanmar Economic Corridor (CMEC), which will connect China's southwestern province of Yunnan to Mandalay in central Myanmar, and then east to Yangon and west to the Kyaukpyu Special Economic Zone (SEZ) demonstrates consolidation of China's hold in Myanmar. The CMEC envisages to have Kyaukpyu deep sea water port ($1.3 billion) with two berths in its initial phase including Kyaukpyu SEZ ($2 billion); China-Myanmar oil and gas pipeline ($5 billion); Mandalay Yida Economic and Trade Cooperation Zone ($4billion); Tagaung Taung (Dagongshan) Nickel Industry Development Project ($820 million); Letpadaung copper mine project ($1 billion); Kunming-Kyaukpyu railway line; Mandalay-Tigyaing-Muse expressway and Kyaukpyu-Nay Pyi Taw highway projects, etc. (Deepak 2018b) .

In India's extended neighbourhood, China has unfolded its "small state diplomacy" aggressively having regional and global ramifications. Ren (2020) in a paper written for the Institute of South Asian Studies identifies three major drivers for China's "small state diplomacy in the IOR". According to him, "Geographically, the small island states protect the critical and strategic sea lines of communication (SLOCs); geopolitically and geo-economically, they provide political and economic values worth exploring; and geo-strategically, they could assist China in managing competition with the other major powers." It is in the view of these drivers, he says, China has promoted its relations with the four small island states in the IOR, namely, Sri Lanka, the Maldives, Mauritius and the Seychelles, to unprecedented levels. As China's dependence on imported crude oil exceeds 70% and China's investment in the region and beyond deepens, China deems it fit to secure and safeguard the SLOCs for its energy security and economic interests. China's bilateral trade volume with Sri Lanka, Mauritius, Maldieves and Seychelles stood at $ 4.5 billion, $842 million, $397 million and $61 million, respectively (Ren 2020). As part of its expansive BRI, China has undertaken construction of 42 ports in 34 countries. In the words of Sun and Zoubir (2017) , research fellow at the Shanghai Institute of International Studies, the construction "aims at providing a great opportunity for its military forces to deploy globally in order to provide public goods, engage in international peacekeeping, provide military training, humanitarian aid, consular protection, convoy for commercial ships, and engage in joint military rehearsals." China considers these small states in the IOR as indispensable nodes in balancing the growing presence of the USA and India in the Indo-Pacific, especially the three "pivotal states" of Myanmar, Bangladesh and Sri Lanka according to Sun and Zoubir (2017) .

India needs to unfold a workable connectivity strategy with our neighbourhood. New initiatives such as "Bharat Mala" a network of 5000 kms of roads connecting the Himalayan states of India with a capital of $2.2 billion needs to be carried out in letter and spirit and at war footing. In the same vein, the "Sagar Mala" project whereby all coastal cities in India would be interconnected through road, rail, ports and airports through a special development package needs to be sped up. Simultaneously, the nodes of these projects must be extended to India's immediate and extended neighbourhood and aligned with the SAGAR and IORA vision.

India must strengthen its strategic and economic partnership with BIMSTEC and ASEAN countries. The RCEP is an opportunity to integrate Indian economy with the region; nevertheless, safeguards against Chinese products flooding Indian markets must be negotiated. Meanwhile, strategic location of India's northeast needs to be utilized for building bridges with the region, without the development of northeast India, Act East Policy will not reap much dividends. Rebuilding and reopening the Stillwell Road could be one of the options. In this context, we must have an assertive approach as regards the BCIM. In the backdrop of the Galwan incident, perhaps there will not be any taker for such an approach. Conversely, the Indo-Pacific Strategy, cooperation with the Quad will be emphasized, not only in the field of security but also economic.

India needs to be magnanimous in its approach as far as resolving bilateral problems are concerned. The arm twisting by way of economic blockades in case of Nepal, and stopping of gas supplies to Bhutan sometimes back, will only harm our own national interests. Furthermore, India's non-committal approach needs to be changed for good, and whatever she commits needs to be delivered. For example, some of India's projects in Nepal such as Rs. 33,108 crore Pancheshwar multipurpose project on Mahakali river envisaged in the 1990s and revived during Prime Minister Modi's Nepal visit in 2014 has not made much progress. A police academy promised to Nepal by India in the 1990s, revived by our Prime Minister in 2014 did not make progress either. The Chinese seized the opportunity and built a swanky academy with a cost of $350 million in a record two years' time and gifted it free of cost to Nepal in June 2017.

Finally, as could be discerned from the above, it is economy stupid! In November 2017, during a two two-day Nepal Investment Summit, 89 companies from China committed an investment of $8.3 billion in various sectors compared to an investment of $317 million committed by 21 Indian companies present at the Summit. Even Bangladesh and Sri Lankan commitment far exceeded the Indian investment. Therefore, India needs to strengthen its economic drivers, build capacities in every field that will make it competitive and attractive market not only for our neighbours but globally too. In this context, it is necessary for India to forge closer economic ties with China, benefit from its over capacities and deep pockets and lay the ground for a better economic flight. The option of 2 + 1 in the vicinity could be explored for viable joint projects. We must think beyond the security prism as far as trade, transport and tourism is concerned and certainly should not take our cultural ties in the region for granted.

As India and China grapple with the twin disasters of the Covid-19 and Galwan, disruption caused to their bilateral and multilateral engagement is unprecedented. In late 2019, India and China resolved to hold 70 activities, including cultural, religious and trade promotion events besides military exchanges to commemorate the 70th anniversary of the establishment of diplomatic relations. The Covid-19 and the bloody clashes in the Galwan have dealt a heavy blow to these activities. Nevertheless, it is believed that the disruption will help both to reset their relations and work on the modalities of possible cooperation in certain areas where both may be comfortable with.

It is impossible to have a robust relationship without people's engagement in different domains. The very understanding of the history may be jaundiced as it remains now. A correct understanding of the history on both sides needs to be developed including their imperialist as well as imperial legacies in the Himalayan regions. Both must recognize that it was the unhindered circulation of ideas, technology, objects and people that enriched the Indian and Chinese civilizations, not the inheritance of the legacies of their masters. As both lay emphasis on them being civilizational states, they need to develop civilizational studies with the focus on historical sources in each other's textual and oral tradition. In this context, both had decided in 2019 that they will trace their civilizational links and conduct events to celebrate these. China had planned to hold an International Xuanzang Forum, advancing studies related to the Chinese scholar who studied in Nalanda for four years during his 16 years stay in India. There is a huge scope for cooperation, a Buddhist corridor could be established and further connected to other South Asian countries, say Nepal and Sri Lanka. These measures would be conducive to lay a solid foundation for connectivity, trade and commerce, and above all a robust bilateral relation. Unfortunately, tourism is the sector that has been hit the worst.

Collaboration in the field of traditional medicines, Yoga, and cinema has a huge room. In recent years, China has been captivated by Indian Yoga and Bollywood films. There is a new interest in India's Ayurveda in China. Conversely, a section of Indian population is also inclined towards traditional Chinese medicine (TCM) and acupuncture therapy. It has been reported that by 2018, export and import of the TCM reached $5.7 billion; there were 300,000 TCM clinics around the world with over 400 million people using TCM. As for the Ayurveda, it generated $1 billion revenue; had 789, 000 trained doctors and 702 educational institutions (Wang 2020b, 69-70) . Ayurveda's dissemination into China is as old as the dissemination of Buddhism to China. According to Ji Xianlin, one of the tallest Indologists in China, ancient India's surgical procedures had probably been introduced into China during the Jin, Northern and Southern Dynasties. In the same vein, Chinese scholar monks disseminated TCM to India (Wang 2020b, 70) . Wang (2020b, 74) suggests that an exchange mechanism for TCM and Ayurveda can be established between China and India, same can be replicated across other multilateral forums such as BRICS, SCO, G20, Boao Forum and BCIM economic corridor; joint training and exchange of personnel in this domain; establishment of Ayurveda and Acupuncture clinics in respective countries; trading and market access to each other's traditional medicines could be initiated.

Chinese and Indian studies in each other's countries need to be encouraged and strengthened, so as capacities are built across government and private sectors for better understanding and employment opportunities. Especially in the Indian context, the development of China studies has resulted from a knee jerk reaction of the government. The 1962 conflict saw the establishment of Centre for Chinese Studies in Delhi; Doklam in 2017 resulted in the MEA establishing an in-house Centre for Contemporary Chinese Studies (CCCS); any untoward incident with China wakes up the government for strengthening our relationship with the Indic civilizations, establishment of Buddhist corridors, purchase of arms and ammunition, revamping of border infrastructure, etc., measures. India dropping Chinese as one of the options in the secondary education and probing the Confucius Institutes and Chinese language programmes assisted by China will further impact negatively on people-to-people exchanges. There is need to have a long-term view of each and every variable of India's engagement with China rather than looking for cosmetic and myopic remedies.

Academic activities through webinars will go on unhindered albeit may not see the magnitude of the way Indian and Chinese scholars frequented institutes in respective countries. Some of the projects undertaken by both the government such as "Cooperation in mutual translation and publication of Classic, Modern and Contemporary Works" that envisages each translating twenty five of their classical, modern and contemporary works will go on unhindered. Sahitya Akademy's translation project that aims to translate ten Indian modern and contemporary works into Chinese has been completed on the eve of the SCO summit in Russia. Remember, it was the translators from India, China and Central Asian countries that built a huge repository of Buddhist literature in China and were responsible for changing the entire sociocultural landscape of east Asia in ancient times. The momentum that was being witnessed in the publishing sector of both the countries has been disrupted too.

The ground reality demonstrates that we are far from seeing global solidarity and global solutions in the fight against Covid-19. In the face of global leadership void in the post-Covid-19 world, especially when the credibility of global institutions like the WHO is fast eroding, we are likely to witness gradual collapse of the liberal international order, realignment of geopolitical and economic forces, perhaps bitter political struggles, fall of regimes and even bigger racial and religious divide across the globe. The retrenchment, protectionism and nativism will further get strengthened across the globe, and the globalization and liberalization will witness a gradual retreat. This will result in exclusivism, racial discrimination, further divisions within diverse societies in the name of religious and other identities.

If the spat over Covid-19 between the USA and China has damaged their bilateral relations drastically, then Chinese "salami slicing" along the LAC and Galwan brutality is likely to free India from the delusion that China can be trusted. Externally, India-US security partnership will be further strengthened. The Indo-Pacific Strategy and the Quad will gain traction, and trade and investment will witness an incremental rise. Initial thinking of India that she does not want to be caught in a zero-sum geopolitical contest between the two hegemons perhaps will be revaluated. Economically, India is likely to benefit from the decoupling of the Western countries with China, as well as from China's economic rebalancing in the region. Though the China baiters may suggest India's "decoupling" with China, but hard decoupling is impossible. Though multilateralism will get a beating, nonetheless, India's engagement with China in the BRICS, Shanghai Cooperation Organization (SCO), the BRICS New Development Bank (NDB), Asian Infrastructure Investment Bank (AIIB), etc., will continue. In the neighbourhood, India must take China's pivot to Asia in its strategic calculus and devise feasible strategies to deal with the existing and new challenges from the pivot in making states. The people-to-people exchange should be encouraged and strengthened.

India has to acknowledge the reality of China's rise, asymmetries in relationship, dynamics of global and regional balance of power and major power relations. We need to carry out a comprehensive review of our China policy, and has to restructure and recalibrate it by leveraging all instruments of state policy. India must recognize, what is workable, achievable and what is not, accordingly reshape engagement with China on the basis of pragmatic constructivism. Foreign policy and military affairs cannot be hijacked by sporadic outbursts of national sentiments, rather they need to be goal oriented, long-term and sustainable. There should be no room for cosmetic changes, knee jerk reactions, lip service and lopsided approaches.

Finally, India's economic growth and her capacities to handle domestic and external challenges will enable it to seek an equilibrium and understanding from China along India's borders, as well as for its regional and global aspirations. As long as India's growth trajectory remains weak, social cohesion and communal harmony remain in disarray, the kind of understanding India seeks from global player will be impossible.

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