The China-India Border Dispute: What to Know

In Brief

The China-India Border Dispute: What to Know

China and India’s border dispute turned deadly for the first time in more than four decades. Indian Prime Minister Narendra Modi’s response will be critical to de-escalation.

Thousands of Chinese and Indian troops have been in a standoff in the Ladakh region high in the Himalayas since early May. After reaching an agreement to de-escalate on June 6, the mutual withdrawal of troops from the Galwan Valley went dramatically wrong on June 15, with Indian army officials reporting clashes that resulted in twenty deaths. China’s government and media have not provided casualty figures for Chinese troops, but unconfirmed Indian media reports indicated that more than forty died.

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Speaking by phone on June 17, both the Chinese and Indian foreign ministers agreed to avoid actions that might escalate the conflict. The same day, Indian Prime Minister Narendra Modi emphasized in a TV address that “India wants peace. But on provocation, India will give a befitting reply.”

Why are Chinese and Indian troops there in the first place?

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Both countries’ troops have patrolled this region for decades, as the contested 2,200-mile border [PDF] is a long-standing subject of competing claims and tensions, including a brief war in 1962. The border, or Line of Actual Control, is not demarcated, and China and India have differing ideas of where it should be located, leading to regular border “transgressions.” Often these don’t escalate tensions; a serious border standoff like the current one is less frequent, though this is the fourth since 2013.

A soldier stands on a pile of rocks in a mountainous region along the China-India border.
Indian soldiers guard a highway near the border with China. Tauseef Mustafa/AFP/Getty Images

The Ladakh region is especially complex, with particularly unusual features. First, there is Aksai Chin, a territory that India has long claimed but China occupies. China began building a road through the area in 1956—linking Tibet to Xinjiang—and has occupied it since 1962. There is also territory that Pakistan ceded to China in 1963. Surveying and mapping the region’s terrain historically proved immensely challenging. A forthcoming history of the Ladakh region points out how colonial-era efforts to survey this area using natural features such as watersheds as focal points did not always align with cartographic needs for precision, and, importantly, ideas of where a country’s territory begins and ends.

 

Why have tensions escalated now?

There’s no clear reason why tensions have escalated now to their worst in decades—with the first fatalities in forty-five years. And New Delhi and Beijing hold very different views of what happened the night of June 15. India pointed to “premeditated” Chinese action that “reflected an intent to change the facts on the ground in violation of all our agreements to not change the status quo.” China said that “Indian frontline border forces openly broke the consensus reached.”

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Explanations circulating in the Indian and international media cover a broad range: China was unhappy with India’s actions in August 2019 to end Jammu and Kashmir’s traditional autonomy, one result of which was the creation of the Union Territory of Ladakh; China saw India’s recent road construction work in the area as a change to the status quo and a challenge to its strategic position; China dislikes India drawing closer to the United States and its allies in Asia; China seeks to distract attention from its part in the global pandemic; and the frank appraisal that India’s growing military imbalance with China, and China’s “political will” to deploy its might under President Xi Jinping, is the real difference. 

What are the prospects for a peaceful resolution?

China’s moves are hard to gauge, and as many scholars have noted, India’s options are limited. Modi said in his June 17 address that India’s “sovereignty is supreme,” indicating that accepting a territorial shift in China’s favor likely will not be his next step. But looking for conflict at a time of economic downturn and still-rising coronavirus cases is not a good option, either. New Delhi will likely assess other nonmilitary policy options. The blanket calls to boycott Chinese products have gained some mass appeal in India, but the government may take further steps, such as increasing scrutiny on inbound investment from China, similar to the Committee on Foreign Investment in the United States (CFIUS) review process. India recently announced review procedures for foreign investment from “neighboring” countries, and this net could expand further. China is a source of investment [PDF] in some of India’s top start-ups. And press reports have already identified forthcoming restrictions on Chinese equipment in India’s large and growing telecom sector, including a likely ban on Chinese companies’ involvement in building 5G infrastructure.

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Despite long-standing border tensions, the two giants have significant multilateral cooperation, including through alternate global institutions created over the past decade. The BRICS bloc, comprising Brazil, Russia, India, China, and South Africa; the Asian Infrastructure Investment Bank (AIIB), in which India is the second-largest capital contributor; the New Development Bank; and the Shanghai Cooperation Organization, which India recently joined, have all been arenas for cooperation despite the countries’ ongoing security competition. But with escalating security tensions, New Delhi may reexamine its level of interaction in other areas.

Finally, the border clash will likely illustrate for India’s foreign policy planners that its preferred formulation—“the world is one family,” derived from a Sanskrit saying—does not apply to all its bilateral relationships, unless the interpretation of “one family” includes family members working against India’s national interests. From this realization, India may begin to make more choices about its partnerships, recognizing that it isn’t possible to maintain equal ties with all indefinitely.

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Artificial Intelligence (AI)

Sign up to receive CFR President Mike Froman’s analysis on the most important foreign policy story of the week, delivered to your inbox every Friday afternoon. Subscribe to The World This Week. In the Middle East, Israel and Iran are engaged in what could be the most consequential conflict in the region since the wars in Afghanistan and Iraq. CFR’s experts continue to cover all aspects of the evolving conflict on CFR.org. While the situation evolves, including the potential for direct U.S. involvement, it is worth touching on another recent development in the region which could have far-reaching consequences: the diffusion of cutting-edge U.S. artificial intelligence (AI) technology to leading Gulf powers. The defining feature of President Donald Trump’s foreign policy is his willingness to question and, in many cases, reject the prevailing consensus on matters ranging from European security to trade. His approach to AI policy is no exception. Less than six months into his second term, Trump is set to fundamentally rewrite the United States’ international AI strategy in ways that could influence the balance of global power for decades to come. In February, at the Artificial Intelligence Action Summit in Paris, Vice President JD Vance delivered a rousing speech at the Grand Palais, and made it clear that the Trump administration planned to abandon the Biden administration’s safety-centric approach to AI governance in favor of a laissez-faire regulatory regime. “The AI future is not going to be won by hand-wringing about safety,” Vance said. “It will be won by building—from reliable power plants to the manufacturing facilities that can produce the chips of the future.” And as Trump’s AI czar David Sacks put it, “Washington wants to control things, the bureaucracy wants to control things. That’s not a winning formula for technology development. We’ve got to let the private sector cook.” The accelerationist thrust of Vance and Sacks’s remarks is manifesting on a global scale. Last month, during Trump’s tour of the Middle East, the United States announced a series of deals to permit the United Arab Emirates (UAE) and Saudi Arabia to import huge quantities (potentially over one million units) of advanced AI chips to be housed in massive new data centers that will serve U.S. and Gulf AI firms that are training and operating cutting-edge models. These imports were made possible by the Trump administration’s decision to scrap a Biden administration executive order that capped chip exports to geopolitical swing states in the Gulf and beyond, and which represents the most significant proliferation of AI capabilities outside the United States and China to date. The recipe for building and operating cutting-edge AI models has a few key raw ingredients: training data, algorithms (the governing logic of AI models like ChatGPT), advanced chips like Graphics Processing Units (GPUs) or Tensor Processing Units (TPUs)—and massive, power-hungry data centers filled with advanced chips.  Today, the United States maintains a monopoly of only one of these inputs: advanced semiconductors, and more specifically, the design of advanced semiconductors—a field in which U.S. tech giants like Nvidia and AMD, remain far ahead of their global competitors. To weaponize this chokepoint, the first Trump administration and the Biden administration placed a series of ever-stricter export controls on the sale of advanced U.S.-designed AI chips to countries of concern, including China.  The semiconductor export control regime culminated in the final days of the Biden administration with the rollout of the Framework for Artificial Intelligence Diffusion, more commonly known as the AI diffusion rule—a comprehensive global framework for limiting the proliferation of advanced semiconductors. The rule sorted the world into three camps. Tier 1 countries, including core U.S. allies such as Australia, Japan, and the United Kingdom, were exempt from restrictions, whereas tier 3 countries, such as Russia, China, and Iran, were subject to the extremely stringent controls. The core controversy of the diffusion rule stemmed from the tier 2 bucket, which included some 150 countries including India, Mexico, Israel, Switzerland, Saudi Arabia, and the United Arab Emirates. Many tier 2 states, particularly Gulf powers with deep economic and military ties to the United States, were furious.  The rule wasn’t just a matter of how many chips could be imported and by whom. It refashioned how the United States could steer the distribution of computing resources, including the regulation and real-time monitoring of their deployment abroad and the terms by which the technologies can be shared with third parties. Proponents of the restrictions pointed to the need to limit geopolitical swing states’ access to leading AI capabilities and to prevent Chinese, Russian, and other adversarial actors from accessing powerful AI chips by contracting cloud service providers in these swing states.  However, critics of the rule, including leading AI model developers and cloud service providers, claimed that the constraints would stifle U.S. innovation and incentivize tier 2 countries to adopt Chinese AI infrastructure. Moreover, critics argued that with domestic capital expenditures on AI development and infrastructure running into the hundreds of billions of dollars in 2025 alone, fresh capital and scale-up opportunities in the Gulf and beyond represented the most viable option for expanding the U.S. AI ecosystem. This hypothesis is about to be tested in real time. In May, the Trump administration killed the diffusion rule, days before it would have been set into motion, in part to facilitate the export of these cutting-edge chips abroad to the Gulf powers. This represents a fundamental pivot for AI policy, but potentially also in the logic of U.S. grand strategy vis-à-vis China. The most recent era of great power competition, the Cold War, was fundamentally bipolar and the United States leaned heavily on the principle of non-proliferation, particularly in the nuclear domain, to limit the possibility of new entrants. We are now playing by a new set of rules where the diffusion of U.S. technology—and an effort to box out Chinese technology—is of paramount importance. Perhaps maintaining and expanding the United States’ global market share in key AI chokepoint technologies will deny China the scale it needs to outcompete the United States—but it also introduces the risk of U.S. chips falling into the wrong hands via transhipment, smuggling, and other means, or being co-opted by authoritarian regimes for malign purposes.  Such risks are not illusory: there is already ample evidence of Chinese firms using shell entities to access leading-edge U.S. chips through cloud service providers in Southeast Asia. And Chinese firms, including Huawei, were important vendors for leading Gulf AI firms, including the UAE’s G-42, until the U.S. government forced the firm to divest its Chinese hardware as a condition for receiving a strategic investment from Microsoft in 2024. In the United States, the ability to build new data centers is severely constrained by complex permitting processes and limited capacity to bring new power to the grid. What the Gulf countries lack in terms of semiconductor prowess and AI talent, they make up for with abundant capital, energy, and accommodating regulations. The Gulf countries are well-positioned for massive AI infrastructure buildouts. The question is simply, using whose technology—American or Chinese—and on what terms? In Saudi Arabia and the UAE, it will be American technology for now. The question remains whether the diffusion of the most powerful dual-use technologies of our day will bind foreign users to the United States and what impact it will have on the global balance of power.  We welcome your feedback on this column. Let me know what foreign policy issues you’d like me to address next by replying to [email protected].

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