Shaky truce: Decoding China’s double game

India needs a geoeconomic strategy that efficiently navigates China’s border assertions and global economic clout

India’s External Affairs Minister S Jaishankar visited China from July 13 to 15, to participate in the SCO (Shanghai Cooperation Organisation) meeting, marking his first visit since the deadly Galwan Valley clash in 2020, where 20 Indian soldiers lost their lives in a confrontation with China’s PLA. His visit comes at a time of heightened global disorder and complex geopolitical dynamics. “The international situation, as we meet today, is very complex. As neighbouring nations and major economies, an open exchange of views and perspectives between India and China is very important,” Jaishankar said in Beijing.

This meeting was diplomatically significant given the prolonged freeze in high-level visits and the ongoing military standoff at various friction points along the Line of Actual Control (LAC). While Jaishankar emphasised the need to maintain dialogue and respect mutual sensitivities, the context in which the visit occurred reveals the larger structural tensions between the two nations.

China continues to advocate for cooperation with India, particularly in trade and economic engagement. However, it simultaneously maintains military pressure along the border and supports India’s strategic rivals. India has repeatedly emphasised that border tensions cannot be delinked from the overall bilateral relationship. Despite this, China’s strategy appears to keep the border issue unresolved, leveraging it as a psychological and strategic tool to constrain India’s rise.

Though agreements on patrolling arrangements were reached just before the Modi-Xi meeting in Kazan in 2024 and a partial disengagement occurred, Indian and Chinese troops remain face-to-face at many friction points. China’s aim seems to be to keep India diplomatically stretched, focused on continental threats, and distracted from maritime, economic, and technological aspirations.

Ahead of Jaishankar’s visit, tensions rose over India’s engagement with the Dalai Lama. Indian leaders extended birthday greetings, while the Dalai Lama asserted that his successor would be born in a “free country” – a subtle rebuke to China’s claims. In response, the Chinese embassy in New Delhi warned that India was “shooting itself in the foot” by raising Tibet-related issues.

Chinese embassy spokesperson Yu Jing criticised sections of India’s strategic and academic community for making “improper remarks” regarding the Dalai Lama’s reincarnation. She reiterated that the matter is an “internal affair” of China and demanded that India respect Beijing’s sovereignty and sensitivities concerning Tibet. This reaction reflects a stark asymmetry: while China demands respect for its internal affairs, it shows little regard for India’s core security interests.

China’s duplicity is stark in its growing support for Pakistan, providing military hardware, satellite intelligence, and diplomatic backing. Over 80% of Pakistan’s major defense systems are Chinese-made. Despite deadly attacks like the April 2025 Pahalgam incident, Beijing continues to shield Pakistan-based terrorists from UN sanctions. Adding to this, China, Pakistan, and Bangladesh have informally aligned to sideline Indian-led multilateral platforms – an evident strategy of regional encirclement. Yet, China expects India to respect its internal affairs while actively undermining India’s sovereignty.

As the defence expert Brigadier (Retd) PK Sehgal notes, Beijing condemns terrorism in principle but blocks action against it in practice. Strategic analyst Seshadri Chari similarly highlights China’s disregard for India’s core security concerns, be it terrorism or territorial integrity.

China’s global influence stems largely from its economic might. Controlling 90% of rare earth exports and dominating manufacturing, Beijing has become indispensable to the global economy. India, too, remains reliant on China for key imports like Active Pharmaceutical Ingredients (APIs), electronics, and rare earths.

Though Jaishankar raised rare earth restrictions with his Chinese counterpart, the broader issue persists: India and the world have allowed excessive economic dependence on China, giving Beijing enormous leverage. Even the US, under Donald Trump, attempted to challenge this dominance but softened its stance due to these entanglements.

The Quad, despite its strategic potential, has not effectively addressed this geoeconomic imbalance. Without confronting the roots of China’s economic power, the geopolitical contest remains lopsided. This unchecked dominance also shields China’s internal repression from global scrutiny. In Tibet, forced boarding schools and “Sinification” campaigns aim to erase cultural identity. China’s manipulation of the Dalai Lama’s reincarnation process is part of a broader control strategy. In Xinjiang, widespread abuses against Uyghur Muslims continue with little international outcry, muted by economic interests.

Strategic path ahead

During the SCO meeting, Jaishankar indirectly criticised the organisation for not living up to its foundational principles of fighting terrorism, separatism, and extremism. Referring to the Pahalgam attack, he reminded the grouping of the UN Security Council’s strong condemnation and pressed the SCO to take a firm stand against terrorism. He emphasised mutual respect and sensitivity as pillars for future ties, making it clear that China must also acknowledge India’s concerns, not just demand deference.

Despite continuing tensions, India-China trade has grown, revealing India’s challenges in reducing dependence. This underscores the need for a deeper geoeconomic strategy rooted in self-reliance, supply chain diversification, and strategic partnerships focused on critical technologies and minerals. Efforts like the Quad Critical Minerals Initiative are in the right direction, but need much more follow-through.

India-China relations today are not merely bilateral – they are emblematic of a deeper structural contest between two civilisational states with divergent worldviews. While China uses its economic and geopolitical clout to constrain India, it demands unreciprocated respect for its internal concerns. Unless India adopts a comprehensive strategy that addresses both the border dispute and economic dependencies, China will continue to dominate the narrative and the balance of power.

(The writer is an associate research fellow at the International Centre for Peace Studies, New Delhi)