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The Sino-Indian Border Dispute: Implications of China's Economic The Sino-Indian Border Dispute: Implications of China’s Economic Reforms on the 1987 Border Conflict By Kunsang Gyurme Submitted to Central European University Department of International Relations and European Studies In partial fulfillment of the requirements for the degree of Masters of Arts in International Relations and European Studies Supervisor: Indre Balcaite Word Count: 16,599 CEU eTD Collection Budapest, Hungary 2016 Abstract This thesis builds on the existing works on the conflictual Sino-Indian relationship since birth of respective nations to the late 1980s. The first part of this thesis aims to examine the Sino-Indian relationship in two periods, 1947-1962 and 1978-1987. It investigates how two similar conflicts at the same border had different outcomes. I focus on the existing literature to determine the various factors that led to conflict in both periods. By employing the comparative political method, I show that economic interdependence factor was the variable that deescalated border conflict in 1987. The second part of the thesis applies the liberal view of economic interdependence and theory of trade expectations in the Sino-Indian case of the late 1980s. I argue that economic interdependence can explain the absence of war between the two nations. It shows that China’s economic reform and “open poor policy” had a huge impact on China’s prioritizing foreign trade and economic development since the reform was closely linked to the survival of communist regime. Thus China chose cooperation over war in the border conflict with India. As a result, border conflict between India and China did not escalate into a fully-fledged war in 1987. CEU eTD Collection i Acknowledgements I would like to extend my deep appreciation and thanks to my family, friends, Central European University, Open Society Foundation for their support and guidance. Lastly, I cannot thank enough to my supervisor Dr. Indre Balcaite for her constant guidance and support in this journey, without her, I could not have made this thesis possible. CEU eTD Collection ii Table of Contents ABSTRACT ............................................................................................................................................. I ACKNOWLEDGEMENTS......................................................................................................................... II TABLE OF CONTENTS ........................................................................................................................... III LIST OF FIGURES .................................................................................................................................. IV LIST OF ABBREVIATIONS ....................................................................................................................... V INTRODUCTION .................................................................................................................................... 1 CHAPTER 1 RESEARCH DESIGN ............................................................................................................ 6 CHAPTER 2 LITERATURE REVIEW ON SINO-INDIAN RELATIONSHIP BETWEEN 1947 -1962 AND 1978- 1988 ................................................................................................................................................... 13 CHAPTER 3 THE SINO-INDIAN RELATIONSHIP IN 1947-1988 ............................................................... 24 3.1 SINO-INDIAN BORDER DISPUTE AND THE 1962 WAR .................................................................................. 25 3. 2 CONTENTIOUS RELATIONSHIP IN THE 1980S ............................................................................................ 32 3.3 COMPARATIVE ANALYSIS OF THE TWO PERIODS ......................................................................................... 36 CHAPTER 4 CHINA’S ECONOMIC REFORM AND ITS IMPLICATIONS FOR THE SINO-INDIAN BORDER CONFLICT............................................................................................................................................ 41 4.1 A REVIEW OF LIBERAL THEORY OF ECONOMIC INTERDEPENDENCE ................................................................. 42 4.2 ECONOMIC INTERDEPENDENCE: SINO-INDIAN COOPERATION DURING THE BORDER CONFLICT ............................ 45 4.2.1 Era of Economic Reform in China ......................................................................................... 46 4.2.2 Employing Economic Interdependence Theory in the Case of Sino-Indian relations in the 1980s ............................................................................................................................................... 50 4.2.3 China’s Entry into the World Market ..................................................................................... 54 4.2.4 Regime Survival and Economic Development in Post-Mao China......................................... 56 CONCLUSION ...................................................................................................................................... 59 BIBLIOGRAPHY ................................................................................................................................... 61 CEU eTD Collection iii List of Figures FIGURE 1 MILL'S METHOD OF DIFFERENCE........................................................................................... 37 FIGURE 2 ADAPTATION OF MILL'S METHOD TO SINO-INDIAN CASE ..................................................... 38 FIGURE 3 CHINA'S GDP GROWTH (1978-1992) ...................................................................................... 49 FIGURE 4 SINO-INDIAN TRADE VOLUME IN MILLIONS (1964-1990)...................................................... 53 FIGURE 5 CHINA'S TRADE MEASURE AS SHARE OF GDP....................................................................... 54 CEU eTD Collection iv List of Abbreviations CCP - Chinese Communist Party CPC- Communist Party of China LAC - Line of Actual Control MFN - Most Favored Nation NEFA - North East Frontier Agency PLA - People’s Liberation Army PRC - People’s Republic of China ROI - Republic of India SFF - Special Frontier Force CEU eTD Collection v Introduction Having emerged as independent countries in 1947 and 1949 respectively, India and China soon claimed the ownership of disputed regions along their long border. In 1962, they fought a short border war after numerous failed negotiations on demarcating the border. The disputed border was the legacy of British colonial rule in India and China’s reassertion of her control over Tibet. In 1914, Sir McMahon of British India convened a conference to discuss the status of Tibet and to delimit the border between Tibet and India, with parties from both Tibet and China in Simla. The British representatives secured a treaty known as “Simla Convention of 1914”1 signed only by delegations from Tibet and British India but not the Chinese.2 The agreement established the border known as the “McMahon Line”. The Indian government complied with the Simla Convention concerning her border with Tibet and then with China after China’s take over Tibet in 1949, whereas China rejected the validity of the McMahon Line.3 In the early 1950s, India and China signed friendship treaties where India was one of the first democratic nations to recognize CEU eTD Collection 1 Simla Convention is not to be confused with Simla Agreement, a treaty between India and Pakistan concluded in 1972. 2 Amit Ranjan, “India-China Boundary Dispute: An Overview” Asian Affairs, 47, No. 1, (March, 2015), 103. 3 Parshotam Mehra, Essays in Frontier History: India, China, and the Disputed Border, (New Delhi: Oxford University Press, 2007), 24-31. 1 the Communist Party as the legitimate government of China. In hope of better relations with China, India aggressively pushed the international community to include Communist China in the Security Council of the United Nations, replacing the Republic of China (ROC) – Taiwan under Nationalist (Kuomintang) government.4 However, the territorial issue caused more confrontations in the late 1954 with China issuing a map showing the disputed territories as hers, and also building a highway in the Aksai Chin, one of the disputed areas along the Western border. The Tibetan Uprising of 1959 and the subsequent welcoming of the Dalai Lama in India along with thousands of his fellow Tibetans exacerbated the situation.5 The final straw that pushed China to attack was Nehru’s “forward policy” which increased Indian military presence in the disputed territories.6 This eventually led to the short Indo-China war of 1962 that ended with the Chinese victory. There is broad agreement among scholars that the border conflict escalated because of India’s miscalculations of China’s willingness and ability to wage war and China’s misconception of India’s intentions with regards to the issue of Tibet. The situation at the border remained relatively the same as before the war with no significant commitment to resolve the issue, and relationship went sour as a result. The war CEU eTD Collection 4 Shang Quanyu, “Sino-Indian Friendship in the Nehru Era: A Chinese Perspective” China Report, 41, No.3, (2005), 237-252. 5 John Garver, “China’s Decision for War with India in 1962” Stanford University Press, Ed. Robert Ross and Alastair Johnston, (2005), 9-29. 6 Neville Maxwell, India’s China War, (Dehradun: Natraj Publishers, 1970), 189-288, Graver, “China’s Decision for War with India in 1962”, 32. 2 did not bring any
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