INDIA AND CHINA: PROSPECTS FOR NORMALIZATION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP06T00412R000200620001-0
• Release Decision: RIPPUB
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• Content Type: REPORT

IVIF5'
National
Foreign
Assessment
Center
Secret
India and China:
Prospects for Normalization
Secret
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NESA 81-10076
December 1981
Copy 345
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National
Foreign
Assessment
Center
India and China:
Prospects for Normalization
Information available as of 9 December 1981
has been used in the preparation of this report.
NESA,
This memorandum was prepared b
Office of Near East-South Asia Analysis. Comments
and queries are welcome and may be directed to
Chief, Subcontinent Branch, South Asia Division,
This paper was coordinated with the Offices of East
Asian Analysis and Global Intelligence, the
Directorate of Operations, and the National
Intelligence Officers for Near East-South Asia
and East Asia-Pacific.
Secret
NESA 81-10076
December 1981
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Secret
Summary
India and China: M
Prospects for Normalization 25X1
The Sino-Indian diplomatic dialogue that resumed this month in Beijing
probably will yield new agreements for a modest expansion of trade and
cultural exchanges but no breakthrough on the longstanding border dispute
that led to war in 1962. The warming trend in Sino-Indian relations that
began in 1976 has fluctuated, and Indian Prime Minister Gandhi has yet to
show real enthusiasm for rapprochement.
Rapid resolution of the border problem will require either substantial
Chinese territorial concessions or Indian acquiescence in the status quo.
China is eager for normalization because it sees India as the key to a more
stable South Asia that might better resist Soviet inroads. Thus far,
however, Beijing has not revised the border offer India rejected 20 years
ago.
Gandhi's suspicion of China is another impediment. She believes China's
friendly overtures are aimed primarily at undercutting Indo-Soviet rela-
tions. Nonetheless, Gandhi wants to keep the China option open, because it
provides flexibility in reacting to the unstable strategic environment in
South Asia following the Soviet move into Afghanistan and Pakistan's
efforts to improve its military capability and become a nuclear power.
Secret
NESA 81-10076
December 1981
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India-China Border Area
Road
Railroad
Disputed Area
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( 4 K (
44
Boundary representation is
not necessarily authoritative.
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India and China:
Prospects for Normalization
Regional Crisis and The Soviet invasion of Afghanistan in December 1979, followed by Indira
Gandhi's Return to Gandhi's reelection days later, rekindled Beijing's interest in improving
Power relations with India. Steps toward normalization, which had been unfold-
ing since 1976 when relations between the two countries were upgraded to
the ambassadorial level, faltered in the wake of the Chinese invasion of
Vietnam and the growing ineffectiveness of the government of Morarji
Desai. The Chinese, determined to offset what they saw as an alarming in-
crease in Soviet influence in South Asia, took the opportunity to court
India by publicly congratulating Gandhi on her return to office.'
Despite private views that Gandhi's return to power was a setback to
Chinese interests in the region, Beijing began to explore normalizing
relations. Chinese Foreign Minister Huang Hua attended the annual
Republic Day reception at the Indian Embassy in Beijing-the highest
level of Chinese representation since 1961-telling the Indian Ambassador
that "the new situation in the region imposes greater obligations on both of
us to improve relations." This same message was conveyed directly to
Gandhi by senior Chinese officials at the Zimbabwe independence celebra-
tion in Salisbury in April 1980 and again at Tito's funeral in Belgrade in
May.
The Chinese overtures sparked little response from New Delhi. Although
Gandhi publicly professed a desire for closer ties, she did not conceal
belief that China's initiatives stemmed from its anti-Soviet stance.
Chinese Visit Huang Hua's visit to New Delhi in June 1981 marked an important step
toward rapprochement. The Foreign Minister's visit had been postponed a
year because of China's disapproval of India's recognition of the Soviet-
backed government in Kampuchea in June 1980. In New Delhi Huang
Hua appeared eager to conclude new cultural agreements and expand
cooperation in science, technology, and other fields, but he failed to secure
firm commitments from the Indians. While affirming its desire to expand 25X1
ties in "all fields," India maintained that progress in relations could not be
achieved so long as the boundary question remained unresolved.
' An overview of Sino-Indian relations appears in appendix A. Details on the border issue
are outlined in appendix B.
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Foreign Ministers Rao and
Huang Hua in New Delhi, June
The New Delhi talks did break new ground on a key procedural problem
and gained Chinese recognition that the border issue was the main obstacle
to Indian agreement to upgrade the negotiations. Tentative plans were
made to consider the contentious border problem along with other matters
such as bilateral trade and cultural ties. The agenda also was broadened to
include other outstanding problems, such as the status of the former Indian
Embassy in Beijing, seized during the Cultural Revolution, and the frozen
assets of Chinese banks operating in India before the Sino-Indian war.
Although this procedural agreement is a compromise on both sides, India
maintains it has wrung a major concession from China.
As a sign of good faith, China agreed during the talks that limited numbers
of Indians could visit sacred areas just across the border with Tibet, which
has been closed since 1959. The first group of Hindu pilgrims completed
the trip in September. Along with Chinese efforts in recent years to
encourage Tibetan refugees in India-including the Dalai Lama-to
return home, this gesture has further reduced the sensitivity of the Tibet is-
sue in Sino-Indian relations.
Continuing Dialogue India used the round of talks on 10-14 December between Foreign
Ministry officials to get a deeper understanding of Chinese attitudes and to
see if they are prepared to make further concessions to strengthen
friendship with India. Neither side made any specific proposals for a
border settlement last June in New Delhi. Huang Hua's call for a
"comprehensive solution ... that would take into account the historical
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Secret
Premier Zao Ziyang and Prime
Minister Gandhi at Cancun,
Mexico, October 19810
background, national sentiments, and present position on the ground" was
sufficiently ambiguous to engender Indian skepticism about a fruitful
outcome.
The Indians, nonetheless, are curious whether China will eventually offer a
new border proposal. New Delhi has made clear it will continue to reject
the longstanding Chinese offer to convert the existing line of control into a
permanent boundary. Indian Foreign Minister Rao reaffirmed in Parlia-
ment last June India's claim to nearly 24,000 square kilometers held by
China in the western sector. India presumably does not expect to receive
nearly this much territory in a settlement, but it will insist on some
readjustments in the line of control.
Gandhi's lack of enthusiasm for the negotiations was reflected in her
reluctance to set a date for the December talks. She postponed the decision
to go forward until after meeting Chinese Premier Zao Ziyang at the
North-South summit in Cancun in late October. Gandhi wanted to assess
the Chinese leader's intentions firsthand and possibly convey her tough-
mindedness.
Gandhi's lukewarm attitude toward China arises from several factors.
Foremost is her preoccupation with Pakistan, China's close ally. The
proposed US arms aid to Pakistan as well as Islamabad's determination to
develop a-nuclear capability make Gandhi highly uncertain about the
implications of the Pakistan-US-China relationship. In addition Gandhi is
among the many Indians who believe that Chinese leaders deceived Prime
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Indian Pilgrims with armed Ti-
betan escorts inside Tibet-
September 1981.
Minister Nehru, her father, by concocting the border dispute and then
using it as a pretext for an invasion. Gandhi finds it difficult to trust any
regime in Beijing. Finally, there is no significant public pressure in India
for rapprochement. On the contrary, any agreement signed by Gandhi
would be attacked by her political opponents as an unwarranted abandon-
ment of long-held Indian positions. Such. criticism would not undermine
Gandhi's political dominance but would focus public debate on a sensitive
issue and put Gandhi on the defensive
Other Indian In addition to territorial concessions, New Delhi probably will insist that
Negotiating Goals China alter its positions on Kashmir and. Sikkim. For years China sided
with Pakistan in the Indo-Pakistani feud. over Kashmir. While courting
India, Beijing has tried to duck the Kashmir controversy or has indicated
that India and Pakistan should reach an accommodation. Beijing still
refuses to acknowledge the legality of India's takeover of Sikkim in 1975.
India wants China to accept the integration of Sikkim into the Indian
Union as irrevocable.
New Delhi will also seek guarantees of a. hands-off policy toward India's
unstable northeast region. Although India is basically satisfied that China
no longer supplies small arms and guerrilla training to tribes in the
northeastern corner of India bordering Tibet and Burma, New Delhi wants
assurances that China will not aggravate problems in the area.
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Prospects Despite China's conciliatory attitude and its persistence in wooing India,
the prospects for an early border settlement are remote. India considers
itself the aggrieved party in the dispute and believes China must take the
lead in proposing a solution. Because China wants to avoid allowing the
talks to bog down quickly, it may hint at a more flexible bargaining
position on small pockets of disputed territory and seek to entice the
Indians to become less intransigent on the border issue. Even if no progress
in the current talks is made, this would at least keep the door open for ne-
gotiations at a later date, which the Chinese view as vital to their efforts to
counter Soviet influence in the region. Beijing doubts that even sustained
discussion would produce a fundamental change in India's alignment with
the USSR but hopes that talks will encourage New Delhi to be more
flexible.
India, for its part, is in no hurry for rapprochement but clearly discerns
that even the possibility of Sino-Indian detente enhances New Delhi's
leverage with Moscow. At the same time Gandhi recognizes that closer ties
with China would be advantageous in Indian attempts to weaken Beijing's
ties with Pakistan, which still looks to China as a counterweight to Indian
predominance on the subcontinent. Accordingly, Gandhi will keep diplo-
matic channels open in order to preserve the China option for a time when
it could more directly serve India's interest.
So long as both sides want to keep the dialogue going, Sino-Indian trade
and exchanges will continue to expand, but only gradually. Trade potential,
however, is limited. Both countries are reluctant to allow key industries to
become vulnerable to disruptions in imports from the other and will prefer
to cultivate more politically reliable suppliers and markets for their major
trade products.
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Appendix A
The Historical Setting
The friendship that developed between newly independent India and the
new Communist government in China in the early 1950s was gradually
undermined by disagreement over the alignment of their 3,380-kilometer
common border. By the end of the decade, India and China had moved
troops into contested areas of the rugged Himalayas. The two sides
exchanged volumes of evidence and argument to buttress their respective
territorial claims, but diplomatic negotiations proved futile, and a final
effort between Prime Minister Nehru and Zhou Enlai in 1960 to settle the
issue peacefully ended in deadlock.
In 1961 India launched a new, aggressive military strategy aimed at
outflanking and isolating Chinese military posts. The diplomatic dialogue
grew increasingly bitter, and both sides hurried to establish new border
posts and increased their patrolling. Indian troops were poorly equipped
and unaccustomed to operating at high altitudes, however, and China's
tactical advantage grew.
In October 1962 China launched a full-scale attack and with little
difficulty overran Indian forces in both sectors of the border. A month later
Beijing declared a unilateral cease-fire and withdrew to positions 20
kilometers behind the line of control that existed in 1959. During the next
20 years, an occasional skirmish occurred along the line, but for the most
part an armed truce has prevailed.
India was deeply humiliated by China's victory. Although many Indians
believed Nehru had deluded himself about India's military capability and
the seriousness of the border problem, the common view in India was that
China had used the dispute as a pretext for an invasion. Through the 1960s
India and China exchanged bitter diplomatic notes, and relations deterio-
rated almost to the breaking point
Upturn in Relations The acrimonious trend reversed in the mid-1970s when Prime Minister
Gandhi sought to dispel international criticism of her authoritarian rule by
adopting a more evenhanded foreign policy. Through better relations with
China and the United States, Gandhi aimed at softening her pro-Soviet
image and offsetting the special Indo-Soviet relationship that grew out of
Moscow's willingness to meet India's requests for diplomatic, economic,
and military aid
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With order returning to China following the Cultural Revolution, Beijing
was receptive to India's feelers. The focus of Chinese policy toward South
Asia shifted from fanning anti-Indian. sentiment among India's small
neighbors to a strategy designed almost exclusively to thwart Soviet
expansion in South Asia. Beijing wanted to allay Indian fears of China and
ultimately wean India from its dependence on the USSR. China also hoped
to channel the South Asian nations into a cooperative relationship support-
ed by the West and open to Chinese influence. The Chinese were willing to
recognize South Asia as an Indian sphere of influence and attempted to
flatter the Indians by maintaining that they had a special leadership role to
play.
In 1976 India and China agreed to raise relations to the ambassadorial
level-the first positive development since the border war. For the Chinese,
Gandhi's electoral defeat in 1977 portended an even more promising phase
in Sino-Indian relations. The new Indian Prime Minister, Morarji Desai,
reaffirmed Indian nonalignment and encouraged closer ties with Beijing.
Because of India's reliance on the Soviet Union, however, Desai refused to
abrogate Gandhi's friendship treaty with Moscow-a special target of
Chinese criticism.
The normalization process continued. Sino-Indian trade resumed after a
13-year hiatus, and exchanges were arranged in diverse fields ranging from
agriculture to art. Although the Indians had anticipated sizable export
opportunities and significant imports of Chinese crude oil, they were soon
disappointed by the slowdown in China's modernization program and its oil
conservation policy. By 1980 bilateral trade had grown somewhat, but still
accounted for less than 0.5 percent of each country's exports and imports.
The highlight of the thaw was Foreign Minister Vajpayee's visit to Beijing
in February 1979. The atmosphere was highly positive until the talks
focused on a critical procedural question. China wanted to ignore the
border issue until relations were expanded in other fields. India insisted
they tackle the border problem immediately. Despite the impasse, the talks
ended in an upbeat mood with an understanding that the border issue
would be addressed at a low level of representation in the near future. In
the meantime, the status quo on the frontier was maintained and bilateral
exchanges increased.
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withered.
China's invasion of Vietnam, which occurred while Vajpayee was touring
other parts of China, immediately shattered optimism about Sino-Indian
detente. As a longstanding supporter of the Hanoi government, New Delhi
was offended and embarrassed by the timing of the Chinese assault.
Additionally, Desai's Janata Party government faced increasing political
trouble, and as dissolution became more likely, its foreign policy initiatives
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Appendix B
The Sino-Indian Border
The 3,380-kilometer border is composed of two widely separated parts:
? A western portion that extends from the Karakoram Pass in Ladakh
(northeastern Kashmir) to Nepal.
? An eastern portion that stretches from Burma to Bhutan and separates
Tibet from the Indian state of Arunachal Pradesh.
Between the two sectors lie the independent nations of Nepal ' and
Bhutan 2 separated by the Indian state of Sikkim.
The dispute involves three areas:
? A western sector. At issue are nearly 24,000 square kilometers of
northeastern Ladakh, the easternmost part of which is known as Aksai
Chin. The area consists of barren basins and plains at elevations of 4,700
meters bordered by even higher mountains to the north and west.
Uninhabited and rarely visited for centuries, the region assumed strategic
importance to China when the Chinese began to extend their control over
Tibet. Because of the great distance and difficult terrain between Lhasa
and western Tibet, China decided to supply its isolated forces in the area
from bases in Xinjiang Province and built a road across Aksai Chin.
Beijing will almost certainly insist on continued control over most of the
Aksai Chin area in any border negotiations with India.
? A middle sector. This dispute involves five areas totaling about 4,500
square kilometers. Counterclaims relate to problems of interpreting
traditional usage and determining the water divide.
? An eastern sector. The conflict in this sector concerns the validity of the
McMahon Line (drawn by British India) and China's claim to 77,000
square kilometers south of the line. Before the deterioration of Sino-
Indian relations in 1959-60, Beijing indicated a willingness to give up its
claims in this sector in return for clear title to Aksai Chinj
' The Sino-Nepalese border, which extends some 1,078 kilometers along the crests of the
Himalayas, was surveyed and demarcated in 1962-63. Following a review of border issues in
May 1978, joint teams began replacing damaged or lost markers along the border.
2 Bhutan's 483-kilometer border with Xizang has never been demarcated. Chinese maps
claim some 777 square kilometers of northeastern Bhutan, but China has not raised the is-
sue, and neither side has sought to discuss the border. Sino-Bhutanese relations are correct
but limited partly because of India's strong incluence in Bhutan. Under the Bhutanese
Treaty of 1949 Bhutan agreed to be "guided" by India in its foreign affairs
' Sikkim's 177-kilometer demarcated border with Tibet follows the crests of the Himalayas.
Its alignment was defined in the 1890 Anglo-Chinese agreement, which confirmed
Britain's-and then India's-suzerainty in Sikkim. In 1975 Sikkim's semiautonomous
status ended when India made it the 22nd state in the federal union.
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