Hi, this is Henrietta Levin, senior fellow with the CSIS Freeman Chair in China Studies and host of Pekingology. This however is not an episode of Pekingology. I wanted to share with our listeners a new CSIS podcast called State of Play, where CSIS experts unpack the biggest geopolitical developments of the week. This episode dives into the China-India relationship and the big Modi Xi meeting at the SEO summit in Tianjin, featuring me and CSIS Chair on India and emerging Asia economies, Rick Roso, alongside host Will Todman. If you like it, you can subscribe to State of Play wherever you get your podcasts. Welcome to State of Play. I'm Will Todman, Chief of Staff of the Geopolitics and Foreign Policy Department at the Centre for Strategic and International Studies. In this podcast, we bring together our leading experts to unpack the latest geopolitical developments from around the world and what it all means. Warming ties between China and India are dominating the geopolitical headlines of the week, and this is because last weekend's Shanghai Corporation organisation, Summit in Tianjin, saw the first Xi-Modi meeting in one of the two countries in either China or India in six years, and it was all hand-holding and smiles. And President Xi said it was time for the dragon and the elephant to come together. So India and China have announced some concrete steps to boost their ties as well. Today, I want to put this in the broader context. How real is this rapprochement? Is it really because of President Trump's tariffs, as lots of pundits have been saying, or are there some other things at play? So today, we have China and India experts to help us think through the meaning of all of this. Rick Roso is senior advisor and holds the chair on India and emerging Asia economics at CSIS. Rick, you are our first guest from the Economic Security and Technology department. So a special welcome to you, and I just heard you said you also represent the biggest country in the world now. They say, so they say. Depends how you're measuring. OK, so fighting for China. No, I'm joking. Wait, we're going to cut that. Henrietta Levin is back in the studio, who is senior fellow in the Freeman chair on China studies. And Henrietta, you told me something, which I think is really interesting. So although most of your time in government, you were focusing on China, you said you actually went to India or spent more time in India than anywhere else. Is that right? In my last job at the State Department, where my job was to work with our allies and partners around the world to think about how we deal with everything China means for the world together. India was absolutely at the center of those conversations, given that it had become such a critical partnership on everything America did in the world, which maybe is a sad transition into some of what we'll be discussing today. Six months, like 60 years ago. OK, so let's let's then dive into it. So we had the SEO summit this weekend and we had the Xi-Modi meeting on the side. Are the smiles really a sign of a fundamentally changing relationship between China and India? Or do you think some of us are exaggerating the changes underway? Well, from my view, I mean, India certainly doesn't want to have conflict with its large, more powerful neighbor. And so any steps that both sides can take, as long as they can be measured in their concrete, that reduce tensions are going to be welcomed in Delhi. There still are more fundamental challenges, which I'm sure we'll touch on quite a bit during this podcast, which say that there may be limits to what they can do, you know, barring a dramatic change of direction from Beijing. But as of right now, we're resolving some of these pain points, improving people-to-people connectivity. It's all good stuff and certainly something we want to see big countries begin to take off and pursue. So I think it's helpful to look back to the initial breakthrough in terms of border disengagement that India and China achieved together last fall. Because I think the conversation in DC has been very focused on how this fits into the current Trump moment. But I mean, this path had been set by India and China towards Rapprishma, based on very initial steps and certainly not based on any trust. But I think we've been going in that direction from a time even before Donald Trump was elected. And we have seen then in recent weeks progress on things like the reestablishment of direct flights between India and China, normalization of visa issuance. And I think, though, we do see Prime Minister Modi's engagement with President Xi in tangent representing an acceleration of this trend and a significant one. I was, to some degree, surprised by how exclusively warm the tone was between them. Lots of conversation of partnership and normalization. But you do see, even in the context of that very warm engagement, the seeds of problems down the line and that there are real limits on how far really either side will be willing to go in their mutual partner side. So I want to get to that bit in a bit, but I want to start on the growing ties between them and sort of understanding how real they are. So are there, Rick, was anything surprising to you out of this summit that we saw at the weekend? Or are there areas that you think are going to be a focus for China and India for collaboration going forward? Well, I'll just stomp on what, agree with what Henrietta said. Stomp on a helpful way. Yeah, this does predate President Trump coming in. And part of that's because India, this Make an India campaign, they started about 11 years ago about trying to transform the economy to have more of a manufacturing focus. Like a lot of countries, India at that time, and I think President Trump today looks at manufacturing as mining the metals, intermediate processing, final product. Like, you got to have all of it if you're really going to manufacture. And India had that same kind of a viewpoint. And they've developed a more nuanced viewpoint of late. You see India signing trade agreements. They're trying to promote trade with China. There's a recognition that if they want to attract major supply chain manufacturing in areas like semiconductors, they can't do everything from mining to final product. Some of that's got to be imported, the capital equipment, the minerals, things like that. And you can't do that in today's society and economy without having trade collaboration with China. So nothing in the agreement was terribly surprising because you have seen this trajectory moving in that direction for quite some time. The only flip side for that is a couple of times India and China have had summits. At the same time, you saw China begin to take steps on the border that imperiled India's positions. And this time so far, we've got no recognition that they were sort of playing the two games at the same time. At least that's a perception in India that China has done in the past. So this was straight up good things on India's front, things they wanted, things that should improve the relations, and nothing dramatic on the downside between the two. And it seemed to me that the smiles were quite unique in terms of a major democracy showing such a warm public relationship with President Xi. Should we read something into that or is that just part of this game that everyone is playing at the moment? I think that you do see an interest from the Indian side in building stronger partnerships with all of its partners, regardless of their political system. And I'm sure Rick can speak more deeply to that. I do wonder if perhaps the enthusiasm that Modi showed so visibly for that engagement perhaps had something to do with proving a point to Washington. In light of the emulation of the US-India relationship that we've seen coming out of DC in recent weeks, perhaps there was an effort to show Washington that India has a wide range of choices in its international affairs. But I think that ultimately or more fundamentally, the rapprochement is being driven by India's domestic economic requirements and strategic vision for its role in the region. I know for this conversation, we're talking a lot about the SCO summit and the bilateral engagements India had. But if you look actually just a couple of days before that Prime Minister Modi visited Japan and you look at the series of concrete announcements on security cooperation, commercial cooperation, science and tech, it's infinitely deeper than what got announced at the SCO summit or in the bilaterals that happened just after that. So, you know, while India is striking out and trying to secure deeper partnerships in Japan, it's not new for India. They've been actually even before the United States really began to tilt towards India. Japan was already starting to move in that direction, recognizing India was growing. It was it was it was likable. There was a huge commercial opportunity there. So if you look at what actually took place just a couple of days before that, far more significant with India intertwining itself with a core partner of the United States than what you saw in the engagement with China, Russia or the SCO at large. That's interesting. So then let's let's talk about some of the limits to this relationship between China and India. Of course, Henrietta, you referred to the border issues and in 2020 we had these deadly clashes between Chinese and Indian militaries on the border over the disputed areas. Clearly, that is still a source of tension. Beyond that, what other sources of tensions sort of exist between the two that might limit the growing alignment between these two countries? Three areas of tension beyond the border, which is an incredibly significant area of tension that come to mind for me are firstly, of course, China's longstanding and continued support for Pakistan, India's arch rival, including quite high end forms of military cooperation that I don't think Delhi is likely to forgive. There are tensions over Tibet and the fact that the Dalai Lama has been resident in India for many decades, an issue that I will think be on the forefront of leaders minds, at least in Beijing as the question of the Dalai Lama succession comes into focus in the coming months and years. And there are real economic tensions as well. I did note that in how the Indians and the Chinese described this meeting because there was no joint statement, but they both put out separate readouts. There was some language that was clearly coordinated. And then there were other areas of clear difference. So the Indians, for example, highlighted the trade deficit with China and the need for progress on that front. And you could imagine imbalances in that trading relationship continuing to create tensions as China, for its part, doubles down on industrial subsidies leading to overcapacity as its fundamental model of growth, which of course causes real dislocations for many of its neighbors, including India. I agree with those when I would add to it, which is China's deepening engagement in the Indian Ocean region, increased naval presence and engaging a lot of India's neighbors throughout the region as well, which to me, I think probably remains the most significant prize for China's viewpoint. I think that's for China's viewpoint, looking forward to maintain lines of communication open even during wartime and having such a presence there that, but when we talk about how India and China are able to climb down from some of the tensions they've had recently, every briefing I've been in the last couple of years show that China's engagement with India's neighbors, military activities in the Indian Ocean is down quite a bit as well, which opens up the door. So, I think that's probably part of the long term prize, but at least for right now, the fact that you've seen a downplay in some of the pressures India felt from its own neighborhood is probably a good step as well that helped make a pretty good summit transpire in the last couple of days. And so then turning to the US, I think, Henry, to use the term immolating relations between the US and India, I've seen quite a lot of chatter saying, you know, all of the optics, this was all about the US and the 50% tariffs that President Trump has based on India. Is that true? Is the US really shaping this rapprochement between India and China? And how much should we be focusing on US-India ties here? Well, I say it's probably, from India's view of its partnership with China, it's 5% or 10% at most. Again, most of this was in train even before President Trump was elected. India does want to improve ties, reduce security threats and pressure, improve trade in areas that it makes sense, improving exports, but also make sure that they have unfettered access to the material they need for their own manufacturing drive. These things don't really depend on whether President Trump is an office or not. But to some extent, you know, is the warmth maybe added to somewhat because of what's happening in the US-India for sure. More importantly, though, I think India is striking out a mention Japan. Singapore's Prime Minister is going to be in India this week. You see a lot of other consequential engagements, signing trade agreements with the UK, trade agreements in recent years with Australia, UAE, the Swiss Ledefte Group. So even before Trump was elected this time, I think India recognizes somebody like Trump may become an ever-present part of the American political system now. He's one person for sure, but he represents some size of a movement. And so you've seen India change its face and really engaging a lot of other countries. Most of them and the deepest engagements are countries we would consider partners. Russia's probably the one exception to that, where India has a deeper level of interoperability and the upside for that relationship still limited, but a different plane, I would say, than what the future might hold for India-China relations. And that's of course why President Trump said he's put these 50% tariffs on because of India buying Russian oil. So are you implying that perhaps that's going to be a tricky relationship for India to end in the way that President Trump might like to see? Yeah, it was in some ways winding its way down already a few years ago, but with the invasion in Ukraine, with India's opportunity to get relatively cheap hydrocarbons, India didn't have a significant trade relationship with Russia. I think Russia was the 25th largest trade partner, and now they're up in the top five because of buying oil, because of buying fertilizers, even growth in other sectors. India still relies heavily on Russian-made military equipment, including spare parts, a lot of that coming in spare parts, but you're talking going down from 80% reliance down to 50%. Definitely heading in the right direction before the invasion, and suddenly because of an opportunity and relatively warm ties, India stepped in and provided an economic lifeline for Russia. And I think I understand why they were targeted, not why they were uniquely targeted. There's a lot of other countries that probably should have been a list for sanctions. And I think if the role and the goal really was trying to get countries to stop supporting economically Russia's continued economy, what it's been able to do, backing the legislation going through on Capitol Hill that would have enforced sanctions, secondary sanctions against countries that buy a lot of other tools they could have done. So I think India was caught a little off guard by the unique sharp focus with the recent Russia sanction. And on that point, of course, it's China that more than any other country is responsible for backing the Russian war effort in Ukraine through economic and financial support, as well as these really critical dual-use inputs like machine tools, propellants, UAV parts for the Russian defense industrial base. And like the war in Ukraine could not continue without that support from China. So it's also been a little odd to see this very intense focus on, from Washington, on how India is in some ways supporting the Russians, but seemingly no counterpart conversation with Beijing on the same set of challenges that may rise to a slightly more significant scale when it comes to the China-Russia relationship. We need to check Twitter every 30 seconds now to see who the next target is, right? Yes, and we should. We usually could have changed in the course of this conversation. We should have checked. And we are recording this at 10.25 on Tuesday the second time. Do you get the second count as well? You might need that. And we have not checked our phones for the last five minutes. Dangerous. So what do closer India-China ties mean for the US and for the Quad as well? Is there real trouble ahead there, do you think? For me, I would say it's good if we can limit economic collaboration as much as possible. There's going to be three consequential economies in the world. The United States, China and India. That's it. That's the countries that have crossed the $10 trillion mark. And the three countries are going to provide more than half of global economic growth over the next 25 years. And if China is going to continue export-led economic growth, which gives it the resources to plow into major infrastructure programs globally and such, reducing China's ability to leverage, you know, its export balance with India. India also, helpfully, does not have these massive level of stranded investments in China. You know, decoupling from the United States is particularly difficult because most major American manufacturers, I mean, we talk about importing from China. It's a lot of American-made goods coming from China. And India doesn't have that. So that pull that we have on not cutting out China so completely, at least in high-tech areas, is partially because a lot of American companies and their economic interests and lobbying power are heavily vested with China. India doesn't have that. They haven't made big investments. This is a unique moment when we can have that third-large economy, more on our side of the ledger, as an economic partner, but we need to wake up every single day looking for ways to win that. And it's not through threats, pressure, and coercion. You can get some distance. You can get some distance in any threats. We got them on a table on a really good trade agreement that we should have signed a month and a half ago, but pushing for market access, deeper levels, and agriculture, our real red lines, India isn't able to cross. So it's ours to win as a partner. India wants to be won. They want to be deeper with the United States. But so far, yeah, a lot of steps over the last two months in particular have been more towards fumbling the ball at the goal line and potentially losing the game, at least for a while. So, China is clearly trying to build an alternative international order in the region, in the Indo-Pacific, and globally as well, that displaces U.S. leadership and advances this alternative vision of a world more friendly to China's parochial interests. When it comes to Taiwan, when it comes to the South China Sea, and of course, more friendly to its authoritarian political system. And maybe this is especially on our minds now, seeing how the Shanghai Cooperation Organization, meeting Intend and played out with China kind of saying the quiet part out loud, and announcing a global governance initiative, and doing it at SEO, which I think does speak quite loudly. And anyway, so if it is the goal of the U.S. of Europe, of like-minded countries in the world to uphold the rules-based international order in the face of China's significant efforts to build this alternative path, then the only way that can be achieved is by close partnership with like-minded countries, especially in the Indo-Pacific, because you see China trying to pilot many of its more aggressive or revisionist goals for the international order first in its neighborhood. And so, that's just one more reason why it's so important to have the U.S.-India partnership in a strong place. You asked about the Quad too, and if you look just two years ago or so, the agenda of what was announced at a BRIC summit, or an SEO summit versus Quad, it's like 95 to 5. 95% of the substantive announcements would be more for the Quad. A much smaller set would be in India's alternative organizations that they were members of. You saw the Quad Foreign Ministers meeting just a month and a half ago, two months ago. A much-paired down agenda, still fairly robust, and there's reasons why pairing it down makes sense. Suddenly, when you think about the kind of initiatives that they have on the table, they're getting a little bit more closer to parity. But the big question in the Quad is, is President Trump going to go to India as has been planned in the fall for the Quad leaders meeting? I've heard November brought up as roughly the date, the timeframe they were looking at. And you're not seeing a lot of the movements and rumblings leading to it. It could still happen. It doesn't take, I mean, there's obviously a lot of planning that goes into it, but you're not seeing the wheels turning quite as fast as you ordinarily might expect. And again, with the United States and India in kind of a bad place right now, would Prime Minister Modi want to be pinned down in a direct meeting with President Trump, where he might get Zalenskied on some of these trade issues, things like that? So Quad, the agenda has come a little closer to parity, which is unfortunate. The summit could change that, but you're not seeing the rumblings yet, but we're still hoping it happens in the fall. Interesting. Okay, so let's end them with our usual quickfire round. So the first question I have for you is, sum up the state of China-India relations in one word. I'm going with stabilized. Stabilized. Okay. Feel like appropriately unambitious in my terminology, but I do want to recognize that, you know, real, if incremental steps have been achieved. Okay. I might have been ascending them for that calculated. There's smart things they can do and limits on how they can go. So I would say it's calculated steps. Okay. But definitely good to see two big countries warming things up rather than shooting at each other. Yes, yes. Okay, so then out of the three, out of China, Russia and the U.S., who is up, who's down the most this week? I think both China and Russia are up. The United States, I would say, is down. You don't see big summits. You don't see that kind of... But for China and Russia, both to be surrounded by a number of other countries, including partners with the United States like India, and holding hands and saying it loudly that things are moving in the right direction, even if a little bit might be bluster, it definitely improves their standing. Yeah. Okay, I'm going to go with China being up. Okay. Of course, I think that China has won a huge propaganda crew coming out of the SCO summit in Tianjin demonstrating, I think, what they feel is significant, convening power, not only of a diverse range of heads of state and government, but also the U.N. leadership coming for this moment to, you know, listen admiringly of Xi's vision for global governance. I mean, that's a pretty significant win. But I would say China's even continuing to come out ahead vis-à-vis Russia, and you see that in some of how the SCO meeting played out. So, for example, China finally got to announce its SCO Development Bank, which is something it's wanted for years. And in the past, the Russians have actually blocked that initiative because they wanted capital and infrastructure financing for Central Asia, for Eurasia to go through institutions with greater Russian influence and that weren't so obviously controlled by Beijing. And as we see Russia increasingly become the junior partner in its relationship with China as it grows so dependent, again, as a result of China's support for the Russian military, we see the Russians making more and more concessions on what they previously, I think, would have thought of as important national interests. And so now the Russians have allowed this Development Bank to go ahead, which will clearly be controlled by China when it comes to this investment in the region. That was not quick, but it was very interesting. So thank you. I could go longer. Trust me. No, no, no, no. Okay, so final one. What one word or phrase would you like to ban pundits from using when talking about India, India-China relations, or more broadly, anything that's been annoying you? So you mentioned two thirds of this phrase at the top. I would like to ban dragon elephant tango. Okay. Which is a breeze. I think originated by our Chinese friends, but that has been regrettably adopted by news media and sometimes by the Indians as well. I think we can put that one aside. I was quoting to be in my defense. You didn't go full tango. Yes. So it wasn't as egregious as it often is. Okay, good. One that I just hate think tanks using overall synergy, but every Indian media agency that's been calling me has wanted to throw it in. What do you think about these new synergies? What does that even mean? It's such an amorphous word. So keep that one out. Keep it concrete. Ask me direct questions and I'll hop on it. So synergy, do me that favor. Okay, so I think although we saw these smiles, the hand-holding that I talked about at the start, I think you've both provided a lot more nuance and context to the broader relationship between India and China. The broader trajectory of their growing relationship was there well underway before President Trump came into office, but perhaps it's been accelerating in recent months. But I think you pointed out that India has been building ties with a lot of countries in the region with Japan, with Singapore, with the UK. And part of this is about preparing for broader shifts underway in US-India relations. But then there are ongoing tensions that will limit the degree to which India and China can come together. We've got, of course, the border issues. We've got China's presence in the Indian Ocean. We've got China's support for Pakistan, India's hosting of the Dalai Lama trade imbalances. So lots of causes of tension there. And then I think when it comes to the US, you've said, you know, it would be a mistake to let this relationship keep going and not to keep trying to keep India on side and develop those ties. India doesn't have the same investments in China. This is a competition. I think you said that the US should be fighting every day. But it and Henrietta, I think you said the US needs these close partnerships with like-minded countries, especially in the Indo-Pacific. So as we look forward, we'll be looking forward to see is the Quad playing the same substantive role it's been playing in the past? Will that meeting happen later this fall? Don't know yet. And is the SEO going to be playing more of a quad-like role in terms of much more substantive outcomes from these summits? So a lot to watch. But thank you so much, Rick and Henrietta, for joining me today and for providing all of this context and your analysis. Great. Thanks for having me, Will. Thanks so much. Thanks for listening to State of Play. If you enjoyed this episode, subscribe to it wherever you heard it. And you can find more analysis at www.csis.org. Until next time.
