Where is India Headed in Relations with China? the Economic Dimension

Abstract

Relations with China have to be placed within a changed dynamic that takes sufficient account of the political, security and economic areas that have come to govern these relations. China for one has shown itself in command of the manner and content that it wants to impart to relations with India. In the very nature of this paper the concentration is on the economic dimension; however, it is important that the overhang on the economic dimension of the political and the security aspects is referred to en passant. China had shown its aggressive side even during the recent visit of Xi Jinping to India when its troops committed serious violations across the Indian side of the Line of Actual Control in the Ladakh region. The violations continued during the entire visit by Xi despite the claim that he had directed the PLA to remove its troops. The fact is that in the political and security dimensions the Chinese are in the mode of securing an environment that contains India in, or rather confines her to, the South Asian region denting India's credentials as an alternative to dependence on China for the South East Asian region. At the same time China is progressing its relations with the countries of South Asia not merely in economic or investment terms, but also in strategic areas like ports, airports etc. to counter and negate India's influence in the South Asian region and to effectively place herself in a position of competing with and to an extent reducing India's presence, importance and influence among India's neighbours. The 'string of pearls' strategy adopted by China that is reflected in its presence in Myanmar·s maritime space and in development of ports in Sri Lanka and Pakistan is of a piece with its containment strategy and forms a significant part of a strategic move that it has adopted to create and secure areas of regional influence in our T ndian Ocean back yard. In this context it is hardly surprising that China is utilising her relationship with Nepal to push for membership in SAARC where it is presently accepted as an observer along with the US, EU and others. The intention is clear: China would like to provide an alternative to the SAARC member countries so as to help reduce the overwhelming Indian geographical presence within the region. For India is the largest country in South Asia, with an economy that is larger than that of all the other South Asian countries put together.