Issues motivated for choosing this topic The Doklam standoff, as we would discuss later in this assignment, is just the latest ofmany irritants dogging relations between the world’s two most populous nations.
Foryears, China has vigorously wooed Bhutan and other, smaller countries in India’straditional sphere of influence, including Nepal, Sri Lanka and Myanmar. The oldsaying, “When the dragon sneezes, the world catches cold ” has acquired a completelynew meaning after the announcement of the One Belt, One Road (OBOR) initiativeby China’s President Xi Jinping in 2013. India’s reluctance to embrace Beijing’spromise of road building and connectivity is based on long withstanding strategicmistrust. The country is wedged between two nuclear-armed neighbors and has foughtwars against both in the last 60 years.
The historical baggage of the 1962 war stilllooms large in India’s imagination. China also has complained bitterly for decadesover India accepting the Dalai Lama as a refugee in 1959. The Tibetan Buddhistspiritual leader has kept his headquarters in northern India since fleeing Chinese-ruledTibet. Despite their disagreements, India and China entered a trade agreement in 1985and have stepped up cooperation in agriculture, science and cultural exchange. But a$46.
6-billion trade deficit favouring China has irked Indian members of parliament,who call regularly for more balance. The relationsip today showcases more and morecompetition and less cooperation on the following 4 issues: Bilateral border dispute, particularly over one whole Indian state. Bilateral economic relationship. China is India’s largest trade partner in goods.
Regional security – their relationship between Pakistan, Afganistan, Indian Ocean, SCS etc. Climate change. 4 5 Existing scholarly work – Literature ReviewSino-Indian Relations; History, Problems and Prospects,Keshava Guha,2012 This study analyzes the growth trajectory and future prospects of the Asian powers.
Itstates that while China, deservingly, receives a majority of the said attention, India is notlacking far behind. The study also talks about the potential rivalry between India andChina and how the current scenario could be dubbed as “the contest of the century”. Sino-indian war 1962–Where do India and China stand today, Qasim Hameedy,2011 This study talks about how the countries view each other within an extremelysophisticated framework of cooperation and antagonism. It states and analysis that China,a member of the permanent five of the United Nations Security Council, gives theimpression that it is interested in having a more powerful role on the global stage.
India, amajor contributor of military forces to the United Nations, but not a member of theSecurity Council, perceives this to be threatening. A Study of India’s Trade Relations with China in WTO Era Surendar Singh,Gobind Garh, R. C. Mishra, 2014 This paper studies China’s joining of WTO in 2001 and how it completely changed itseconomic structure. It also studies its entry in WTO and how it proved to be a landmarkevent in the global economy. It further analysis China’s trade relations with the worldparticularly with India. The Sino-Indian Border Dispute: Implications of China’s Economic Reforms on the1987 Border Conflic, Kunsang Gyurme, 2016 This paper builds on the existing works on the conflictual Sino-Indian relationship sincebirth of respective nations to the late 1980s. The paper applies the liberal view ofeconomic interdependence and theory of trade expectations in the Sino-Indian case andmakes further interpretations based on the same.
Impact of FDI on GDP: A Comparative Study of China and India, Agarwal G.,Khan M. A. (2011) The study found that 1% increase in FDI would result in 0.07% increase in GDP ofChina and 0.02% increase in GDP of India.
It also found that China?s growth is moreaffected by FDI, than India?s growth. Current Situation China’s keenness for a partnership with India is because China’s demography is itsAchilles heel. With the Chinese population aging at an unprecedented pace,China’s working age population peaked in 2012, the median age will rise ratherabruptly to 49 by 2050, and with national debt at 300 percent of GDP, it has only asmall window to achieve the ‘national dream’ of becoming rich before getting old.
Incontrast, India’s working age population will increase till 2050, enabling highergrowth rates and eventually overtaking the United States in terms of GDP. For India,the fundamental question is that it cannot be a USD 10 trillion economy withoutintegration into the growing Asian market and benefiting from Chinese investment,given the rise of protectionism in the United States. India-China strategic convergencewill need recognition of the Asian century composed of two nodes. India and China had a roller-coaster relationship in 2017 which was highlighted byissues pertaining to the Doklam standoff, blocking of India’s NSG membership bidand moves to declare the JeM chief a global terrorist. But the year ended on apromising note with both sides vowing to create favourable conditions for development of their ties. Prime Minister Narendra Modi inSeptember travelled to China to attend the 9t h BRICS Summit on the sidelines ofwhich he met Chinese President Xi Jinping and held extensive talks. Currently thetwo countries would be putting behind the Dokalam standoff, and taking forward theirties in the right track.
Lessons learned China and India became next-door neighbors with contested frontiers and disputedhistories in 1950, following the occupation of Tibet by Mao’s People’s LiberationArmy (PLA). While the rest of the world started taking note of China’s rise during thelast decade of the twentieth century, China and India have a longstanding 2,600-mileborder dispute; with China continuing to claim nearly 35,000 square miles of territoryin India’s eastern sector, tensions simmer. India also alleges that China occupiesnearly 14,670 square miles of Indian Territory in the western sector.
This disputeresulted in a short but intense war between the two sides in 1962 in which India wasdefeated, followed by skirmishes in 1967 and 1987. Several rounds of talks held since1981 have failed to resolve the disputed claims. Economically in 2012, China-India bilateral trade stood at US $75 billion, and it is 6 predicted to reach US $100 billion by 2015. Today, China’s GDP is four times aslarge as that of India, and Beijing spends three times more than India on defense.While India’s economic growth rates in recent years have been impressive, China hasgrown much faster over a much longer period. Delhi must necessarily focus on accelerating its economic growth, which is criticalfor the building up of India’s comprehensive national power. India, however, cannotbalance China’s rise on its own means.
It needs deeper partnership with the UnitedStates, Japan, and other middle powers in Asia to construct a regional securityarchitecture that can absorb potential shocks from a non-peaceful China. Last decade China’s reluctance to support the U.S. initiative to integrate India into thenuclear global order and it has support Pakistan’s quest for nuclear parity.
Anunsettled border provides China the strategic leverage to keep India uncertain aboutits intentions, and nervous about its capabilities, while exposing India’s vulnerabilitiesand weaknesses, and encouraging New Delhi’s “good behavior” on issues of vitalconcern. Recommendations for Future The last time Prime Minister Modi and President Xi met in Astana in June 2017, theoutcome was a milestone in the relationship. At Astana, India and China recognizedthat “their relations are a factor of stability” in a “multipolar world, and at a time ofglobal instability” and that “differences should not become disputes”. The two ancientcivilizations need to become cooperative partners, develop complementary industriesand cooperate in protecting common security for achieving the dream of an Asiancentury.
Think tanks in China recognize India’s role in making timely success of infrastructurebased connectivity by enabling the digital economy. The digital economy is expectedto be the biggest generator of new market growth opportunities and jobs in the next30 to 40 years. Knowledge-intensive flows, rather than labour, capital, orresource-intensive flows, already account for half of global flows and are gainingfurther share.
Building on “Digital India” could add a value of about a trillion dollarsover the next five years in India. Global trends support a partnership between India and China in shaping the rules ofthe emerging Asia-centred order, and such a framework is also bestsuited for settling the boundary question. China is India’s largest trading partner &its investment is deepening in India. In partnership, the combined GDP of the Asiangiants will soon surpass that of the G7, thus providing the capacity to set the newrules in Asia. In 2050 there will be a global economic triumvirate of the UnitedStates, China and India. A re-emerging Asia gains more from a common market,while a declining West benefits from a security focused balance–of-power rivalry inthe Asian continent.
India has to find creative ways of raising its concerns on the One Belt and One Road 7 Initiative (OBOR), rather than staying away. The future will be extremely challengingfor India, needing thought leadership in the new institutions and in the United Nationson revisiting sustainability for late developers, becoming a globalknowledge-biotech-cyber power with clear goals and opportunities for business anddeveloping a better understanding of China and Asia.