Economics drives growing India-China partnership despite military tension

By Alan Callow

THE last few years India has faced the biggest threats since independence. While battling a terrible pandemic and its economic consequences, it had to stand up to China in the sharp military confrontation.

At first sight, the historical contradictions between India and China are so deep and touchy that any rapprochement between the two looks impossible.

However, the fascinating potential of both countries economies leaves a great promise for better relations. Even with the current conflict, China keeps on being India’s largest trading partner.

India-China trade crossed the record figure of $100 billion in 2021. The volume will be doubled if the border tensions are resolved.  It is no surprise then that Chinese business is deeply interested in moving into India as its market represents huge capabilities.

For example, Chinese smartphone makers are establishing plants in India. Only Oppo reported to make six million phones a month in its factory in Noida, India.

Cooperation fields

The global green transition could come from China’s dominance of appropriate technologies (solar power and wind farms) and electric vehicles.

In order to comply with new global trends, India will need to tap into China’s expertise in clean energy technologies.

For its part, India has world-class strengths in statistics, data management and cloud-based operations which could be very attractive for China. Last years great number of foreign banks and even Goldman Sachs shifted key operations to India.

To overcome the risks of melting Himalayan glaciers from where many major rivers — Yangtze, Mekong etc. — originate, India and China need to work together in the very areas their armies are in confrontation. So there are reasons to hope that the two countries will find the necessary will to resolve the conflict without either country suffering a loss of image.

Border differences

Both countries are interested  to rise above the temporal ambitions and work towards a lasting peace between them.

There are so many reasons for India and China to partner with each other and make the 21st century truly an Asian one.

Given the will this is possible.

Featured Image: Pixabay

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