US report says China sees LAC de-escalation as opportunity to boost economic ties, diplomatic standing and domestic stability.
Current calm viewed as temporary, Beijing retains heavy military presence and infrastructure along border.
De-escalation allows China to focus resources on Taiwan and South China Sea while projecting responsible image in region.
China Likely Seeking To Capitalise On De-escalation Along LAC with India: US Report
Annual US intelligence assessment says Beijing views reduced border tensions as opportunity to expand economic influence and diplomatic leverage in South Asia while managing domestic pressures
Summary
A new US intelligence community assessment released on December 23, 2025, concludes that China is deliberately pursuing de-escalation along the Line of Actual Control (LAC) with India to reap strategic, economic and diplomatic benefits. The report, part of the Annual Threat Assessment submitted to Congress by the Office of the Director of National Intelligence (ODNI), notes that Beijing sees the current calm as a chance to “stabilise its periphery” and redirect resources toward broader geopolitical goals.
The assessment highlights several key motivations behind China's apparent willingness to de-escalate:
Economic Re-engagement: With bilateral trade already surpassing $130 billion annually despite tensions, China aims to deepen economic interdependence, secure critical mineral supplies from India, and expand market access for Chinese goods.
Diplomatic Leverage: Reduced military friction allows Beijing to project an image of a “responsible great power” while weakening India's narrative of Chinese aggression in multilateral forums like the Quad and G20.
Domestic Stability: De-escalation helps Xi Jinping manage internal pressures from economic slowdown, youth unemployment, and the need to avoid prolonged external conflicts that could strain PLA resources.
Strategic Diversion: By lowering the temperature with India, China frees up military bandwidth to focus on Taiwan, the South China Sea, and Indo-Pacific competition with the United States.
The report notes that while disengagement from key flashpoints like Depsang and Demchok has progressed since the October 2024 patrolling agreement, China continues to maintain significant infrastructure build-up, forward deployments, and rapid mobilisation capabilities along the LAC. It cautions that the current calm should not be mistaken for a permanent resolution, describing it as “tactical de-escalation” rather than strategic accommodation.
US officials, briefing reporters on background, said the assessment underscores Beijing's pattern of using controlled de-escalation as a tool to buy time and consolidate gains. They emphasised that Washington continues to view the India-China border dynamic as a key variable in Indo-Pacific stability, with the US quietly supporting India's military modernisation and strategic autonomy.
The findings come as India and China held their 23rd round of Corps Commander-level talks in late December 2025, with both sides reporting “positive momentum” but no full disengagement in all friction points.
Published At: