Syllabus
GS Paper 2 India and its neighborhood- relations.
Applications where to apply?
When asked about
India – China relations
Global power dynamics
Emerging economies
Regional security architecture.
Context
The article examines the debate surrounding China’s economic future and its consequence for the global order. It thereby lays focus on the implications for India and Asia as a whole.
Source
The Indian Express | Editorial dated 31 January 2024
India’s new possibilities amid China’s relative economic decline
India-China Relations
The relationship between India and China, two of Asia’s major powers and the world’s most populous nations, has been a complex tapestry woven with threads of cooperation, competition, and conflict. Understanding this complex dynamic requires delving into its historical context, examining the intricacies of economic relations, and analyzing the ongoing border disputes and bilateral talks.
Historical Context
- Ancient Era: For centuries, trade routes flourished between India and China, facilitating cultural and economic exchange. Travellers and monks like Fa Hien, Hiuen Tsang, Bodhidharma enriched cultural heritage of both nations.
- British Era: Indian soldiers, who were in British service participated in the First and Second Opium Wars against Qing China. Indian sepoys were also involved in the suppression of the Boxer Rebellion in 1900, in addition to serving as guards in the British colony of Hong Kong and foreign concessions such as the Shanghai International Settlement.
- Post Independence:. The newly independent India established diplomatic relations with the Republic of China (ROC). On 1 October 1949, the Chinese People’s Liberation Army defeated the Kuomintang (the ROC’s ruling Nationalist Party) and took over Mainland China, establishing the People’s Republic of China (PRC).
- India established diplomatic relations with the PRC on 1 April 1950, the first non-communist/socialist nation in Asia to do so.
- Jawaharlal Nehru, the first prime minister of India, and Chinese premier Zhou Enlai articulated a vision of an internationalist foreign policy governed by the ethics of the Panchsheel.
- Sino-Indian War (1962) : Due to disputed sovereignty over Aksai Chin and Arunachal Pradesh regions. Relations between India and China deteriorated after India provided the Dalai Lama sanctuary.
- Relations between the PRC and India deteriorated during the rest of the 1960s and the early 1970s, while China–Pakistan relations improved and Sino-Soviet relations worsened.
- The PRC backed Pakistan in its 1965 war with India, and issued “ultimatums” threatening military action at its own border.In late 1967, there were two more conflicts between Indian and Chinese forces at their contested border, in Sikkim, known as the Nathu La and Cho La clashes.
- Post-Cold War: The late 1980s witnessed a gradual thaw in relations, with economic cooperation emerging as a key driver.
Border Disputes
- The unresolved boundary dispute spanning over 3,400 km (LAC) is a major source of tension.
- Skirmishes and standoffs along the LAC, like the 2020 Galwan Valley clash, have heightened security concerns.
Bilateral Talks
- Regular dialogue mechanisms exist, including Special Representative meetings and Working Mechanism for Consultation and Coordination on Border Affairs (WMCC).
- Despite ongoing talks, trust deficit and differing perceptions continue to pose challenges.
- Finding a mutually acceptable solution to the border dispute remains crucial for stable relations.
Economic Relations
- China is India’s biggest source of imports, and its share in total Indian imports is more than double. India’s dependence on China for non-oil imports can be as high as 25% or more.
- The major items that India exports to China include organic chemicals, cotton yarn, copper, and ores. However, India faces a significant trade deficit with China.
- Both nations are members of BRICS and SCO, promoting economic and security cooperation.
- China’s Belt and Road Initiative (BRI) has raised concerns in India over potential debt traps and geopolitical implications.
China’s recent relative decline
While China’s rise has been remarkable, its limits are becoming evident. China’s share in the world’s GDP rose from about two per cent in 1990 (after a decade of economic reform and opening up) to about 18.4 per cent in 2021. It is now down to 17 per cent.
- Demographic Challenges: Shrinking workforce and aging population will limit economic potential.
- Policy Hindrances: Xi Jinping’s interventions, high debt, and declining productivity are detrimental.
- Shifting Global Landscape: Emerging economies are catching up, diversifying the global power structure.
- Emerging markets like India, Indonesia, Mexico, Brazil, and Poland contributed to nearly half of the expansion of the global economy last year.
- Growing gap between US and Chinese economies: The latest numbers on the world economy put the US economy in 2023 at $28 trillion and the Chinese at 18 trillion.
- In 2020, the Chinese economy was inching towards 80 per cent of America’s. It is now drifting down towards 60 per cent. If the present trends continue, China’s relative weight vis-a-vis the US is likely to go down further.
- The US has grown at an impressive rate and made up most of the other half. Last year, the US added $1.6 trillion to its GDP, about the size of the South Korean economy (which is the 13th largest in the world).
Opportunity for India
China’s relative decline implies a move away from a bipolar world dominated by the US and China. This opens doors for a “multipolar Asia” with India, Indonesia, and other emerging economies playing a more prominent role.
- There is opportunity for India to reduce the economic gap with China and play a more assertive role in the region.
- Increased Market Share: As China’s dominance in global manufacturing weakens, India could attract more investment and orders, particularly in labor-intensive sectors like textiles and apparel.
- India can cope up with the Chinese power more confidently if it continues to build on its national capabilities and strengthens the Quad and other regional coalitions.
- Geopolitical Shift: The West’s focus on reducing dependence on China could open doors for India to collaborate on various projects and initiatives.
Conclusion
Changing global order calls for a reassessment of assumptions about global power distribution. It emphasizes the need for India to remain calm, build its strengths, and capitalize on strategic opportunities amidst the shifting power landscape.
RELATED TOPICS
The Panchsheel
The Panchsheel agreement served as one of the most important relation build between India and China to further the economic and security cooperation. An underlying assumption of the Five Principles was that newly independent states after decolonization would be able to develop a new and more principled approach to international relations.
The Five Principles, as stated in the Sino–Indian Agreement 1954, are:
- mutual respect for each other’s territorial integrity and sovereignty,
- mutual non aggression,
- mutual non-interference in each other’s internal affairs,
- equality and co-operation for mutual benefit, and
- peaceful co-existence
Belt and Road Initiative (BRI)
Launched in 2013 by China, aiming to build infrastructure networks connecting China to other countries in Asia, Europe, and Africa through land (Belt) and maritime (Road) routes.
- Focuses on:
- Transportation infrastructure (roads, railways, ports)
- Energy infrastructure (pipelines, power grids)
- Telecommunications infrastructure
- Industrial parks and special economic zones
- Criticisms: Potential debt traps, lack of transparency, environmental concerns, geopolitical implications.
Regional Comprehensive Economic Partnership (RCEP)
- Signed in 2020, forming a free trade agreement (FTA) between 15 Asia-Pacific nations, including China, Japan, South Korea, and 10 ASEAN member states.
- Aims to:
- Eliminate tariffs on most goods within the bloc over time.
- Simplify customs procedures and harmonize regulations.
- Facilitate trade in services and investment.
- Expected benefits: Increased trade, economic growth, and regional integration.
- Potential challenges: Implementation challenges, varying levels of development among member states, concerns about China’s dominance.
The Quad
The Quad, formally known as the Quadrilateral Security Dialogue, is a strategic security dialogue between four nations: Australia, India, Japan, and the United States. It aims to promote a free, open, and prosperous Indo-Pacific region.
Origins and Objectives:
- The Quad’s origins can be traced back to 2004, when the member countries collaborated on humanitarian assistance and disaster relief efforts following the Indian Ocean tsunami.
- It was officially revived in 2017 with the aim of:
- Countering China’s growing influence in the region
- Promoting a rules-based international order
- Ensuring freedom of navigation and overflight in the Indo-Pacific
- Addressing shared challenges like maritime security, terrorism, and climate change
Activities and Initiatives:
- The Quad members engage in regular dialogue and consultations at various levels, including ministerial and leadership summits.
- They also collaborate on a range of initiatives, such as:
- Maritime security exercises and information sharing
- Humanitarian assistance and disaster relief cooperation
- Vaccine development and distribution
- Critical and emerging technologies cooperation
- Climate change mitigation and adaptation
References
Practice Question
Discuss the potential implications for India’s strategic and economic interests in a multipolar Asia, in light of China’s relative economic decline. [150 words]