Indo-China Economic Cooperation: Will Strategic Rivalry Be Overshadowed By Economic Interdependence?

In the USA’s new Indo-Pacific strategy, India has a major role to contain the rise of China as the USA is anticipating India as the guardian of the international liberal order in the Asia region against the challenge posed by China but to realize that end, India will have to continue with its remarkable economic growth rate and then, convert those economic gains into the means of power projection well beyond its shores

35

India and the People’s Republic of China face each other in the Indian Ocean, which is a tremendous sea territory crossing the Indian Ocean and the Pacific Ocean. The two countries are developing long-range naval capabilities in blue waters, and are adopting a mechanized-style marine energy strategy for forecasting electricity. There are some signs of global cooperation between China and India. The two states long for reform before the Western-majority international institutions, seek multiple international orders, and have the same environmental stance, different responsibilities on international obligations. However, competition at the regional level is more pronounced.

The Indian Ocean is the busiest of all the oceanic trade routes linking four major continents of the World. It is the shortest of all the trade routes joining East Asia, Australia with the Middle East, Africa, and Europe as it connects the Pacific with the Mediterranean Sea. Moreover, it also provides the shortest route for trade between the Middle East and America. The presence of oil-rich Persian Gulf states, which are connected with the Indian Ocean through the Strait of Hormuz, makes it a significant course for the worldwide vehicle of oil representing over 70% of global petroleum traffic. In addition to that, from the Middle East to the Indonesian Islands, the Indian Ocean provides the Sea Lane of Communications (SLOC) for more than 50% of worldwide container traffic. It is the major trade route for the World’s second-biggest economy, China, which exports to major markets in the Middle East and Europe besides relying on the Indian Ocean for more than 85% of its oil imports. Moreover, India which recently asserted itself in the world’s top ten economies and poised to become the world’s third-biggest consumer of oil-based goods, is also reliant on sea-lanes of the Indian Ocean for more than 90% of its oil imports, most of them coming from the Persian Gulf.

Being a littoral state of the Pacific Ocean, China is a major player in the Pacific region. Besides maritime dependence, it has territorial claims over various islands in the East and the South China Sea, both offshoot water bodies of the Pacific Ocean. These territorial claims have led to tensions in the region with the USA and its allied regional powers like Japan and the Philippines. The USA, the existing dominant player in the region, negates those Chinese claims while China has become more inflexible about its stance over the disputed islands. The USA considers China to be the disturbing power in the Pacific Ocean primarily because it is anticipating China’s potential to challenge its supremacy not only in the region but also at the global level.

Currently, India neither has the economic potential nor the military might project its power in the broader Asia-Pacific region as a counterweight to China. Besides, its political influence in the Pacific region also has no match with that of China, which is a regional player, has an overarching edge. However, India is attempting to project its power in the East Asia region. Its trade volume with East Asian countries has reached $80 billion and it is diversifying its relationship with the Pacific Islands states. Although these feats have very little strategic value, they are paving way for India to establish its foothold in the Pacific region. Also, in the USA’s new Indo-Pacific strategy, India has a major role to contain the rise of China as the USA is anticipating India as the guardian of the international liberal order in the Asia region against the challenge posed by China but to realize that end, India will have to continue with its remarkable economic growth rate and then, convert those economic gains into the means of power projection well beyond its shores.

Although India and China share a long history of rivalry and competition, their Economic cooperation has undergone a massive upsurge in recent times. These two major economies of Asia have an annual trade volume of nearly $120 billion and with each passing year, this volume is increasing which is the manifestation of increasing economic interdependence between the two countries.

In the case of India and China, it will also be the nuclear deterrence, not the economic interdependence that will contribute towards the aversion of any major conflict. Although, trade is increasing between India and China trade balance is highly tilted in favor of China, which is leading to resentment among local industrialists and businesspersons in India. Moreover, for India, it is not a viable option that its markets are continued to be flooded by cheap Chinese goods thus disturbing the local manufacturers and traders. Under such circumstances, imposing trade barriers remains the only option to protect the local industry and traders. Thus, there are bright chances that India taking a clue from its strategic partner USA, may go on to impose some trade restrictions on Chinese goods which will ultimately result in a decline in the trade volume between the two countries and as a result, lesser economic interdependence between the two countries.

The Indo-Pacific region is an image of worldwide power transformation. Although the United States needs to keep everything under control on the planet and the worldwide framework, then again, China proclaims its acknowledgment as a significant force and looks to grow its impact. Russia, Japan, South Korea, India, Australia, and the ASEAN nations have become key partners yet to be determined of intensity in the Indian Pacific area and accomplish their center objectives through a powerful equilibrium of interests. For maritime cooperation in the Pacific region, multilateral exercises are needed to build maritime infrastructure such as security and economic prosperity along the 21st century maritime Silk Road. To further enhance their effectiveness, China should conduct multilateral exercises in cooperation with China, deepening mutual understanding and increasing the potential for maritime cooperation in non-conventional security issues such as crisis aid and relief during crises, etc.

Comments are closed.

Subscribe to Newsletter
close-link