What’s Behind China’s Mining at the Disputed Sino-Indian Border?

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What’s Behind China’s Mining at the Disputed Sino-Indian Border?

Is China replicating its South China Sea strategy in regions disputed with India?

What’s Behind China’s Mining at the Disputed Sino-Indian Border?
Credit: Facebook/ Narendra Modi

On May 20, the South China Morning Post (SCMP) ran a report highlighting Beijing’s “unprecedented scale” of mining on its side of the disputed border with India in South Tibet, known in India as Arunachal Pradesh. The precious minerals, including gold and silver, are valued at about $58 billion by Chinese geologists, and are largely located in Lhunze county – a Chinese military stronghold occupied during the 1962 Sino-Indian border war.

The following day, when asked about SCMP’s article at a media briefing, Chinese Foreign Ministry spokesman Lu Kang asserted that “it is completely within China’s sovereignty” to conduct such geological activities, stating that “China’s position on the India-China boundary is consistent and clear cut. China never recognised the so-called Arunachal Pradesh.”

Lu added that the two countries are negotiating to reach a fair and justified resolution to the border dispute. In the meantime, Beijing hoped that New Delhi could “abide by the Line of Actual Control and stop hyping up and work with China to jointly maintain peace and stability in the border areas,” hinting at a possible Indian role in bringing the mining issue to the fore.

It is not surprising that China has seized the initiative in conducting mining activities in South Tibet over the last several years. More concerning is that Beijing has continued – and indeed, doubled down on – mining at the disputed Sino-Indian border amid a period of heightened diplomatic sensitivity between the two rising powers.

In late April, Indian Prime Minister Narendra Modi and Chinese President Xi Jinping held a highly publicized, informal Wuhan summit that aimed to iron out strategic differences between the two countries – including military confrontations at the border following the Doklam standoff that ended in late August 2017.

Economics, Sovereignty, and the Regional Balance of Power

Three considerations explain Beijing’s seemingly hardline position on continuing mining activities in Lhunze – evidenced by the reactionary statements from its Foreign Ministry.

First, the projected value of the minerals in Lhunze makes it lucrative for companies – often state-owned – to build the necessary mining infrastructure.

Beyond the dollar value that the ores can fetch, investment in infrastructure such as roads, power lines, communication networks, and even a future airport with passenger services improve the quality of life of local residents. According to SCMP, mining and its auxiliary activities had propelled annual gross domestic product (GDP) growth in the area to 20 percent, increasing the average income of residents by nearly three-fold from pre-mining years.

From Beijing’s perspective, this economic rationale is correlated to its internal security. With severe wealth inequality within China between the rich eastern coastal provinces and the western inland provinces, there is significant pressure on the state to further alleviate poverty and advance the living conditions of residents. According to a 2016 Economist report, Shanghai – a coastal province – is five times wealthier than the poorest inland province of Gansu. Tibet does not fare much better – in 2015, fiscal transfers from Beijing amounted to 112 percent of GDP, with the province needing these handouts to stay afloat.

There is nonetheless a limit on the extent of centrally funded assistance. Dissatisfaction that the rest of China is prospering while the inland provinces are being left behind could lead to internal social instabilities that threaten the Chinese Communist Party’s hold on power – especially in provinces such as Xinjiang and Tibet where ethnic tensions are at play. Therefore, the economic argument suggests that extensive mining in South Tibet is likely to continue as a means to develop the province, despite such activities being inflammatory to traditionally fragile Sino-Indian relations.

Second, the perpetuation of mining in Lhunze can be attributed to Beijing’s desire to consolidate sovereignty over disputed border regions, and hence safeguard its national security vis-à-vis India.

This is likely to be the central reason why China proceeded with large-scale mining in the first place, as it strove to assert its sovereignty over areas it deemed as rightfully Chinese territory. As China continues to develop the counties it controls that neighbor Indian-administered Arunachal Pradesh, Beijing’s claim to the area grows stronger.

This measurably strengthens Beijing’s hand at future border delineation negotiations with New Delhi, as the areas it has already developed will not be offered in any land swap arrangement that New Delhi may propose involving the disputed regions of Arunachal Pradesh and the Chinese-administered Aksai Chin in Xinjiang.

As such, China is highly likely to retain sovereignty over the territories in South Tibet it already holds, which will continue to perform a strategic security buffer role thanks to the natural barriers of the Himalayas, vis-à-vis the growing Indian military presence in Arunachal Pradesh.

The third consideration behind Beijing’s continued mining activities is the need for a regional balance of power in the Indian subcontinent.

Since the Trump administration has come into office, key policy statements and actions have signaled a willingness by Washington to foster closer U.S.-Indian relations. Among other things, this included the revival of the Quadrilateral grouping of like-minded, democratic states involving India; the announcement of an inaugural two-plus-two meeting between U.S. and Indian foreign and defense secretaries; and former Secretary of State Rex Tillerson’s speech at the Center for Strategic and International Studies emphasizing the need for the U.S. to “dramatically deepen ways” for partnership, with Washington willing to be New Delhi’s “reliable partner on the world stage.”

Crucially, the administration has based its Asia strategy on the need for closer cooperation with India, including embracing the term “Indo-Pacific” instead of the more commonly used “Asia-Pacific.” The inclusion of the Indian Ocean’s – and hence India’s – importance to the United States in its strategy slogan signals impending U.S.-Indian rapprochement.

Beijing must have watched these developments with considerable concern. An apparent Indian tilt toward the United States reinforces New Delhi’s geopolitical position and undermines Beijing’s interests in South Asia. Beijing’s attempts to change the status quo in South Asia could face steep opposition if India gained overt U.S. support to counter Chinese military or diplomatic coercion.

Continuing mining activities in Lhunze – while fully aware of India’s strong aversion to any encroachment of its sovereignty – could be meant to signal Beijing’s pushback against New Delhi’s alignment with Washington under the Indo-Pacific construct. In the overall scheme of developments, this could be seen as part of China’s efforts to maintain the geopolitical dynamics and the balance of power in the region.

Arunachal Pradesh – A South China Sea equivalent?

While Modi and Xi have pledged to strengthen communications between their militaries to maintain “peace and tranquillity in the border region,” it is clear that geopolitical jostling using civilian fronts – such as mining – has continued. The concern is whether Beijing will replicate  the  “salami-slicing” strategy executed in its claims over the South China Sea in South Tibet/Arunachal Pradesh.

While this remains a distinct possibility, the reality is that the South China Sea dispute is fundamentally different from the Sino-Indian border row. India, being a rising global power, is capable of countering Beijing geopolitically, diplomatically, and militarily in a way Southeast Asian states can’t given New Delhi’s emergent national power and growing weight in the international arena .

China’s naval prowess far exceeds those of the four Southeast Asian states claiming the South China Sea. But Chinese and Indian land forces have comparable capabilities at the border regions. Coupled with the difficult terrain of these territories, Beijing will be forced to think twice before encroaching into Arunachal Pradesh in the manner it took over Scarborough Shoal from the Philippines.

Therefore, the likelihood of a gradual Chinese takeover of parts of Arunachal Pradesh – while not provoking a forceful response from New Delhi, as seen in the Doklam standoff – is very low. After all, the traumatic 1962 Sino-Indian border war lingers in the minds of Indian political and military leaders, who will not allow Beijing to have its way in territories India deems its own.

Jansen Tham is a Masters in Public Policy candidate specializing in Politics and International Affairs at the Lee Kuan Yew School of Public Policy, National University of Singapore.