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India signalling for closer ties with China ahead of hosting diplomacy summits: Yeo

Jovi Ho
Jovi Ho • 7 min read
India signalling for closer ties with China ahead of hosting diplomacy summits: Yeo
Yeo: India-China relations will be quite decisive in settling the fate of the world. Photo: Albert Chua/The Edge Singapore
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India is unlikely to ever dethrone China as a manufacturing power, says Singapore’s former foreign minister George Yeo, but Asia’s third-largest economy has its own strengths.

India and China can exploit that strength by working together, adds Yeo, and the two countries have several reasons to do so. “India-China relations will be quite decisive in settling the fate of the world. [Former Chinese leader] Deng Xiaoping was widely quoted as saying: ‘Without India and China working together, there will be no Asian century.’”

Deng’s oft-quoted term harks back to 1988, when he met then Indian prime minister Rajiv Gandhi and called for mutual cooperation.

In August 2022, Indian External Affairs Minister Subrahmanyam Jaishankar referenced Deng’s words in a lecture at Thailand’s Chulalongkorn University, stirring political analysts on both sides.

“Every Chinese who read it knew the signal he was sending, and it was a signal being sent,” says Yeo in a public lecture on Jan 16. “Between [Indian Prime Minister Narendra] Modi and [Chinese President] Xi [Jinping], they have been careful not to say an ill word of each other, because it’s a relationship that has been carefully fostered.”

As China rises on the world stage, with India following behind and within sight, Yeo calls for “much more cultural understanding” between the two sides. “To me, the old great game, the current great game, all will recede. But cultural understanding of each other is very important, and today, each sees the other in stereotypes and prejudices.”

See also: Don't underestimate Chinese leaders' will to reverse shrinking population: George Yeo

Yeo, on his part, has long held a deep-seated interest in the ancient civilisations of India and China. Back in July 2015, he famously took over as the chancellor of Nalanda University as part of an ambitious project to revive the ancient seat of learning in India.

However, just over a year later, Yeo resigned, citing the Indian government’s failure to maintain the university’s autonomy as promised and how he, as chancellor, was kept out of the loop on key decisions, such as changes to the university’s governing board.

Despite running against India’s domestic politics and bureaucracy, Yeo has evidently maintained his interest in the country and the role India plays today.

See also: 'The sky has not fallen' following Pelosi's Taiwan visit: George Yeo

A new equilibrium

In November 2022, India’s Modi got off his seat to greet China’s Xi at the sidelines of the G20 Summit in Bali. The informal exchange marked the first public meeting since Sino-Indian border skirmishes in 2020 and 2021, a detente that Yeo does not attribute to happenstance.

“That short friendly encounter between Xi and Modi in Bali was not an accident,” says Yeo, “neither an accident in the initiation of the encounter nor an accident in Xi’s reaction to it.”

The media-savvy Modi needs warmer ties this year more than ever, says Yeo. India will host the Shanghai Cooperation Organisation (SCO) summit sometime in the middle of this year and the G20 summit in New Delhi to follow in September — and “both of which India would like China’s cooperation”, Yeo adds.

The US is eyeing India cautiously for straddling both the Quad and SCO, says Yeo, especially after India maintained friendly relations with Russia following the outbreak of the Ukraine war.

Formed in 2007, the Quad’s members of Australia, India, Japan and the US are counter to the SCO’s eight member states: China, India, Kazakhstan, Kyrgyzstan, Russia, Pakistan, Tajikistan and Uzbekistan.

Indian minister Jaishankar defends this realpolitik in a written interview with Nikkei Asia earlier this month: “India has historically been an independent-minded polity, and this is very much our image. As our economy and capabilities have grown and we draw more on our heritage and traditions, this will intensify. We have a range of interests and a range of partners. Obviously, we are trying to maximise our gains. There is a danger of losing trust only if actions contradict positions. In our case, our policies are openly expressed and are as independent as our initiatives. The world understands this well.”

See also: The future world will be multipolar, if we don't kill each other first: George Yeo

India saw tactical advantages in moving towards the Quad, and the US saw India playing the same role as fellow members Australia and Japan in counterbalancing China, says Yeo. “But when the Ukraine war happened, it was very clear to the US that India is not anyone’s satellite, and it will play its own game.”

India will maintain this “equidistant position”, says Yeo, and the US will have to take this into its calculations. “[The US] cannot assume that India will support it; India will support it to the extent it is in India’s interests.”

But India cannot have it both ways. “In the same way, India will discover that the more they use the US to negotiate with China, the less they get from China,” says Yeo. “All sides are learning from their experiences. It will take time for a new equilibrium to reach, but I’m not pessimistic.”

‘Severe’ long-term costs

Owing to border skirmishes, India blacklisted over 50 Chinese and Chinese-owned mobile applications in February 2022, citing security concerns. Yeo says this heavy-handed move has damaged India’s reputation in business circles.

“When India took action against Chinese tech companies, including a Singapore company called Sea, or Garena, I was shocked. It gave some emotional satisfaction to India to hit back at China, but to me, the long-term cost is very severe,” he says.

Garena is the digital entertainment arm of Sea, which also owns e-commerce platform Shopee. In March 2022, Shopee exited India, just five months after launching there.

These companies have investors from China and the world, adds Yeo, and many who saw India as an additional market were caught by surprise. “I don’t think Indian policymakers have thought through the long-term implications of what they have done,” says Yeo. “I don’t think it was wise at all.”

Even with such punitive measures on companies linked to China, many investors have taken a renewed liking to India. While China was mired in pandemic-related restrictions throughout 2022, India’s economy amassed a growing chorus of market pundits. They cite India’s emergence as a serious manufacturing base, younger population and business-friendly policies as they cheer India’s markets on.

A growing list of Singapore-listed companies, too, have announced deals to level up their presence in India. Singapore Airlines, for example, commits to spend up to $1.24 billion on a stake in Air India by expanding its partnership with the Tata conglomerate. Sembcorp Industries, even as it ditches its two coal-fired plants in India, has invested $474 million to beef up its renewable energy portfolio there. The Singapore Exchange, meanwhile, has set up a new derivatives and trading link with the National Stock Exchange of India.

Differences remain

While trade between China and India has grown, stark differences remain between the two growing economies. “I doubt India can ever compete with China as a manufacturing power, but India has its own strengths,” says Yeo.

Citing a meeting with Mukesh Ambani, chairman of the Reliance conglomerate, Yeo recalls the leading Indian industrialist saying: “For simple goods, China is more competitive; but for complex products, [such as] chemicals, processes, software, India has an advantage.”

Nonetheless, as a rising power, India is big enough and has a depth of history to play its own game, says Yeo, and to become its own pole in a multipolar world.

Yeo said in November 2022 that the multipolar world of the future will include India and China. “Europe, despite its relative decline, will always play a major role in human history… In the Americas, Brazil, despite its current problems, will always be a separate pole [from the US]. In Africa, the picture is still not very clear. But eventually, poles will emerge around Nigeria and South Africa, and maybe around Kenya, Ethiopia, Uganda [and] Rwanda.”

With diverse ethnicities within either country, India and China are “very comfortable” in a multipolar world, says Yeo. “This will be India and China’s greatest contribution to world civilisation this century. The idea that the West dominates the world and its values are considered universal — that will gradually recede. In its place will be an acceptance of diversity.”

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