Rebecca Graebner
October 5, 2011 at 1:15 pm

http://blog.heritage.org/2011/10/05/india-and-china-enhance-economic-ties-amidst-growing-maritime-tension/

The most recent reminder of the complex relationship dynamics between India and China was the first “Strategic Economic Dialogue” that took place last week.

The diplomatic relationship between India and China has been less than warm in the last few years, with simmering border disputes and recent disagreements over China’s much disputed claims in the South China Sea. Many of the countries in the Indo-Pacific region, from India to Vietnam and the Philippines, are deeply concerned about China’s military modernization and intentions in the region. Today, and in the years to come, they are bound to find common cause in tempering Chinese ambition.

This does not mean, however, that India is interested in playing an overt balancing role vis-à-vis the Chinese. It, like the U.S., is actively engaged with the Chinese, especially on economic issues and will likely continue to strengthen economic ties with Beijing even as it builds closer strategic relations with Washington.

At the Strategic Dialogue, though, there were signs of rapprochement.

Montek Singh Ahluwalia, Planning Commission deputy chairman and leader of the Indian delegation, lauded China’s economic transformation, stating that India has much to learn from China. Topics of interest between Ahluwalia and Zhang Ping, National Development and Reform Commission chairman and point man for the Chinese delegation, focused on the mutual widening and accessibility to each other’s markets.

Despite India’s concern regarding Chinese access to cyber materials and potentially sensitive information, India has been pushing to gain access to China’s IT market. India has also been courting China for the opportunity to introduce Indian pharmaceuticals to Chinese markets, a sector in which India excels. Other areas of interest focus on the environment—specifically water resources and energy efficiency—as well as railway projects.

Last December, China–India trade hit the $70 billion mark, with the two nations setting a goal of $100 billion by 2015. China has been India’s largest trading partner since 2008, and both countries are projected to be the two leading economies by 2025.

This willingness to work together, in spite of a history of disagreements and conflict, will not be overturned by a dust-up or two in the South China Sea. The U.S. should continue to build its ties with India, as both countries hedge against a rising China, but it should realize that India’s objectives are as complex as its own.


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