China has denied claims that troops from its People?s Liberation Army have been sent to Gilgit and Baltistan to build highways and other infrastructure.
Most of the public debate on the rumoured deployments has centred on the implications of China?s stance for Kashmir. Much less attention has been given to the bigger question of what China?s engagement with Pakistan and its broader geopolitical strategies really mean for India.
China made its choice about the status of Gilgit and Baltistan more than 50 years ago, when it agreed to partner with Pakistan on the construction of the Karakoram Highway (KKH) from Abbottabad to Kashgar. Twenty-five years of planning, construction and boundary surveys have turned that judgement into a strategic reality in China?s mind?so much so that it has proposed a new freight railway and pipeline from Gwadar port in Balochistan to western China along the route of the KKH. China would not contemplate an investment on this scale if it thought that there was even a remote chance of losing it due to changing realities on the ground.
Domestic Indian opinion about Kashmir does not figure in China?s calculations.
China?s flagship project in Pakistan so far has been its construction of Gwadar port. Like the ports, highways and pipelines that China is building in Bangladesh and Burma, Gwadar represents an attempt to hedge bets by diversifying transit routes for natural resources and manufacturing output beyond the Malacca and Lombok-Makassar straits routes. Both of these routes leave China dependent on the security from piracy provided by deep-water naval powers like the US?and eventually perhaps India?as well as on the hope that a major accident does not block either of these narrow sea lanes. China?s new network of ports and roads aims to spread the risk, as do proposals to improve freight-rail connections from western China to Europe.
These new projects also mean that China is now a major player in South Asia. It has substantial interests in Pakistan, Bangladesh, Nepal, Burma and Sri Lanka, and it will work in its usual discreet way to defend them just as much as any other major power would. China?s response to a number of killings and kidnappings of Chinese workers by Pakistani Taliban and Baloch nationalists in 2006 and 2007 is a case in point. The Chinese said very little in public but their private pressure to circumscribe jihadis? freedom of action appears to have been a factor in the Pakistani army?s decision to raid Islamabad?s Red Mosque in July 2007. The siege changed the course of jihadi violence in Pakistan in unintended ways, strengthening the Pakistani Taliban and facilitating a convenient narrative of persecution that energised many jihadis against the Pakistani government. Both Pakistan and India ended up paying a price to protect China?s strategic interests.
China?s view of its strategic interests extends beyond India?s immediate neighbours to India itself. Its eagerness to sign a deal to reopen the Nathu La pass in 2006 had little to do with immediate economic gains: at India?s insistence, only 44 types of goods are allowed across the pass. Nor could China really have believed that staffing the border post would staunch the flow of Tibetans to and from India. The real value of Nathu La?s opening was as a test-bed for a new type of relationship in which growing economic and trade ties balance out a studied ambiguity on territorial questions?precisely the kind of deal that India has offered Pakistan in the past. The Chinese gamble has not paid off in the short term: it has only been allowed to trade items like sheepskins, yak-tails and goats across the pass. But the ultimate prize for China would be a breathtaking strategic gain: a tunnel through the pass and a new trade route from Kolkata to Lhasa that would reduce its dependency on Pakistan, Bangladesh and Burma.
An even more striking illustration of the breadth of China?s strategic vision is its approach to natural resources. China currently produces up to 95% of the world?s rare earths, which are increasingly key to the high-tech economy as components for everything from catalytic converters and diesel fuel to cellphones and fibre-optic networks. Its control of these commodities looks sure to remain unchallenged for the foreseeable future: proposed mines in Australia, Latin America and the US may take up to 15 years to begin producing to capacity and only about 1% of the rare earths used in manufacturing is currently recycled.
China?s approach to this most valuable of 21st century resources has been a lesson in self-interested development. It has reduced its export quota of rare earths in each of the past three years, and this year it began to stockpile nearly a 10th of its annual production. The aim?as with China?s aggressive acquisition of sources of metals, oil and potash abroad?is to increase the commodity price outside of China while keeping it stable at home. The high-tech economy will be left with a stark choice over the medium term: relocate proprietary manufacturing and research to China or accept ever-escalating input costs. This will allow China?s rulers to accelerate an economic transformation away from lower-value outsourced manufacturing to high-tech, high-value production with minimal levels of domestic investment.
The developed world has often complained that the rise of India and China will place an intolerable burden on the world?s resources. China has already started to make tomorrow?s argument by taking control of many of those resources. Its efforts to diversify transport routes through Pakistan, Bangladesh and Burma are part and parcel of the same strategy.
India, on the other hand, is still making yesterday?s argument: that the size of its consumer market will force the world to bow to its growing power. But the Nano revolution?and many others like it?will only last as long as there is a supply of rare earths to help power its windshield wipers, fill its petrol tanks and tint its windshield glasses. Without a long-term resource strategy, India?s billion-plus consumers may well become one of its biggest geopolitical weaknesses.
Whether or not China has deployed PLA soldiers to build a highway or protect its construction workers in Gilgit-Baltistan should not be India?s main worry. The real question is whether India can find a credible response to China?s regional and global strategy.
?The author is a researcher in the Faculty of Asian and Middle Eastern Studies at the University of Cambridge