Frankly India has demonstrated consistently to the Chinese on this issue that their promises are worth less then toilet paper. And that’s toilet paper today, not 2019 toilet paper, which was actually worth something.
Frankly, I think modern India is the proverbial scorpion who cannot help but stab China in the back the first good chance it gets even if doing so dooms itself as well.
It seems they have now made hating on and being envious and covetous of China’s wealth, power and position in the world a fundamental foundational cornerstone of Indian identity and that’s not something that can be changed easily or quickly even with Chinese levels of determination, competence and persistence. With India, it’s an impossible ask as far as I can see.
This means that China must eternally be on guard for this stab in the back from India. And keeping the boarder dispute live will be a fail safe to guard against complacency from future Chinese generations. Because the Indians won’t be able to help themselves from stirring shit up and showing their true face at least once a generation or two. Which will serve as timely reminders for future Chinese generations least they start to forget. Better a few small boarder skirmishes every now and again than risk future generations letting their guard down and getting stabbed really badly in the back by India.
Once upon a time, China was eager to settle borders with neighbors. At this point, I don't think there is much impetus to do so. Thinking of it, I don't think China would even settle with India without some sort of settlement with respect to Pakistan. If, after the settlement with China, India turn her full attention on fighting Pakistan, that would jeopardize the Belts and Roads initiative. In that sense, the current situation suits China just fine. It is up to India to make the settlement worth while.
In the future, maybe a decade or two, when the U.S. retreats from the first, then second island chains, the opportunity to settle the border with China would be lost. When the U.S. realize we are destined to be number two in two decades, it would be the U.S. that would seek to break up India to prevent a challenger to our number two position. If, at that time, India is still antagonistic towards China, the U.S. will have the acquiescence from China to break up India.
Sometimes you miss an opportunity, events can turn significantly worse down the road.