China wants to isolate India but can't afford to ignore Indian market

TheDoklamstandoff has underscored that India still lives under the shadow of the 1962 war, says a former Indian army corps commander who served in Sikkim. In his view, the manner in which the incident ballooned—its non-stop media coverage—and thegrand designs attributed to themandarins in Beijing by experts of various persuasionssuggests that suspicions aboutChina's intentions run very deep.

He believes astandoff in some godforsaken corner of their borderis too small an issue toexcite China's national leadership. If it is to teach India a lesson, there are other ways this can and has been done: some would say India's adverse trade balance with China, its inability to effectively counter China in the region, the stark disparities in development and income levels between the two countries has offered daily lessons for India.

But this very obvious economic and strategic asymmetry may be constant reminders in India of themilitaryasymmetry that alsoprevails. While nobody can denyIndia'smilitary has undergonemajortransformation since 1962, and infrastructure while still developing has improved, the Chinese not only present larger forcelevels, they can also move them faster and more efficiently giventhe phenomenal infrastructure they have invested in.

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It largely explains India's measured and limited response to Chinese fulminations, official and otherwise, as well astheir intemperate name calling. Clearly, thenational security bureaucracy saw no purpose inbaiting the dragon, at least not now.

Aformer intelligence official says India will shake off this mindsetthe day we give China abloody nose! He says India needs to defeat China militarily, 1962 must be avenged if India is to come out of this psychological straitjacket.

All that for later if at all. There's talk of China neither forgiving nor forgetting their loss of face inDoklamandretaliating maybe after the BRICS summit in Xiamen is over. What form of retaliation? Some say it could be more transgressions along parts of the Line of Actual Control, pitching tents, refusing to move. We've seen this before, small changes.

What some find more worrying is thepossibility of China doing aDoklamon India. There are at least two tri-junctions where India has territorial disagreements withthe neighbours: One is in theKalapaniarea which isthe tri-junction of Nepal, India and China. Another is a sliver of territory disputed by Myanmar, andIndia with China forming the third angle of the tri-junction. In that sense, China's warnings to India in this regard need to be taken seriously.

Also,Arunachal Pradesh. Forget the seven main valleys which India closely monitors. There are scores ofothersmaller valleys and passes through which China can infiltrate. If the aim is to retaliate, create trouble, China has a range of options open.

China is already probing India's soft underbelly, promising toinvest 50 billion dollars or more in Pakistan; other reports said China had offered tiny Bhutan 10 billion dollars to back them onDoklam; China hasovertaken India as the largest aid giver toNepal; it's giving Bangladesh two submarines!

There is a view that China is actively discouraging investment by Chinese companies in India. The argument is, why help build theIndianeconomy? Current levels of Chinese FDI are quite low, less than five billion dollars. The future doesn't look good amid reports of India levying tariffs on Chineseimports,and falling sales of Chinese mobile phones.

But there's always a silver lining. China cannot ignore the Indian market, nor can it afford to not engage with India as it pushes ties with Japan and the US.Doklamcould also be the trigger forSouth-east Asian states to stop bowing to the dragon and build alliances that can help strengthen their own security and independence. Watch this space for more on the post-Doklam scenario.