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Are China and India allies or enemies in the South Asian China has taken over the construction of Gwadar Port in
economy? Well, it seems they are both; working togeth- the Pakistani province of Baluchistan, on the Arabian Sea.
er in healthy and profitable partnerships while main- China has also begun building the Gwadar road corridor
taining armies in the contested China-India borders. all the way north to Xinjiang.
This article explains the paradoxical nature of the These developments in South Asia are not unusual
China-India relationship and its impact and implications considering that China has expanded its trade ties with
for the smaller countries in South Asia and neighboring many developing countries, secured more energy supplies
Southeast Asia. from them and built extensive transport and urban infra-
structure (roads and municipal buildings) there in recent
T
he rise of China and India over the last two or three years.1 At first glance, China’s growing presence in South
decades continues to make global news headlines. Asia is part and parcel of its global reach of economic
Competition between these two global powers in activities. A closer look reveals distinctive regional chal-
economic, political and diplomatic domains has garnered lenges facing China in the presence and growth of India
scholarly and media attention. Yet we know much less as a major geopolitical power. Unlike in any other world
about China’s growing ties and contention with India that region, China has to contend with India, not so much in
are also spreading across the South Asia subcontinent and direct economic competition but rather in restricting the
beyond. As China-India trade has grown, India in 2006 latter versus its long-time ally Pakistan, thus maintaining a
opened the historical trade route, Nathula Pass, which had rough balance of power in South Asia.2 This broad geopo-
remained closed for almost 50 years as a result of a border litical concern shadows any moves of China and India and
war with China in 1962. Today in the presence of several their impact in the region.
persistently disputed border zones in South Asia (see Map
1), China is beginning to build dams on the rivers in the
China has to contend with India, not so much in
Tibetan Plateau, including the upper Brahmaputra (yarlung
tsangpo or Yarlung River), which could impact populations direct economic competition but rather in restrict-
living downstream in India and Bangladesh (see Map 1). ing the latter versus its long-time ally Pakistan, thus
maintaining a rough balance of power in South Asia.
Map 1: China-South Asia Boundaries
A Contested Borderland Source: The Agricultural Department of Yunnan Province, China (June 2013).
The India–China border stretches across the entire snowy
range of Himalayas from the North to Northeast regions Despite the long-standing border disputes, India and
of India. When Britain ended her colonial rule over China have emerged as major economic powers and com-
India, she left behind a fraught legacy of arbitrarily drawn petitors in the region. Since the 1980 economic reforms in
borders between countries in South Asia. For decades China and the 1990 liberalization of the Indian economy,
now these borders have caused bilateral tensions between governments on both sides have pushed to invest in trans-
India and other surrounding countries particularly China, border trade opportunities. As documented by Banerjee and
Pakistan and Bangladesh. Chen, 8 “in an attempt to develop the underdeveloped regions
In their 2012 paper on India-China and India-Bangladesh near the border between Southwest China and Northeast
borderlands, Pallavi Banerjee and Xiangming Chen argued, India and increase trade linkages, China has been promoting
www.europeanfinancialreview.com 11
Global Economy
Water is essential to agriculture in China (137 million hectares of arable land) and India (161
million hectares of arable land) with a majority of citizens relying on agriculture for income.
the Kunming (City) Initiative (now symbol of Chinese aggression after The gravity of the Sino-Indian
the BCIM Forum advancing the cor- People’s Liberation Army (PLA) sol- border-intensive conflict is immense.
ridor project) to strengthen regional diers intruded on alleged Indian ter- Asia is the driest continent with the
economic cooperation and cultural ritory in Ladakh. 11 Though border lowest per capita freshwater avail-
exchange between the contiguous issues grab attention, the water con- ability, around 3,190 cubic metres
regions of Eastern/Northeastern flict between the two countries is de- (less than half of the global average).
India, China’s Southwest, Myanmar veloping at a much faster rate and will On the other hand, its irrigation prac-
and Bangladesh.” China has empha- have a greater impact in the coming tices have amounted to three fourths
sized the advantages of trans-border years. On March 1, the Arunachal of the world’s irrigated land. Water
trade, tourism and transport linkages, Pradesh government reported that the is essential to agriculture in China (137
investing in building access routes by Brahmaputra River was drying up due million hectares of arable land) and
land (railways) and sea to South Asia to alleged malpractices of Chinese India (161 million hectares of arable
and the Bay of Bengal. 9 China is now dams.12 Although this report was dis- land) with a majority of citizens relying
India’s second largest trading partner puted by the Indian government two on agriculture for income. Beyond rural
after the United States. months later, it generated attention in needs, urbanization and a growing
So what does the paradoxical China and other circles. 13 If the river middle class have offset the reduced
nature of the India-China relation- was indeed rerouted, as an Indian pressure of slowing population growth
ship (persistent border disputes co- analyst would say, it would “be akin in the two countries on water. With
existing with surging trade/economic to a declaration of water war on India growing water needs from indus-
relationships) mean for people living and Bangladesh.” 14 Similar to border trial hubs and for consumption pur-
in the borderlands? Border residents issues, the Sino-Indian water conflict poses, India and China will likely
are largely unfazed by the ongoing arises due to a lack of an institution- try to harness the resource at a much
disputes even though the living condi- alized approach and meaningful dia- faster rate. As such, the Brahmaputra
tions in the area are not ideal. 10 The logue to solve water issues. River has become the centrepiece of
governments have no stake in devel-
Table 1
oping these borderlands. The civic
resources are scarce, threats of mili- China's Exports and Imports Across Asia
tary action loom large and the terrain
remains harsh. In reaction to the con- 2011 2012
*In US$1 billion *In US$1 billion
ditions, the border residents downplay
the bilateral sanctity of the border, Country Total Trade Imports Exports to Total Trade Imports from Exports to
crossing between them often covertly, from China China China China
to access material resources on either Brunei 1.3 0.7 0.6 16 1.3 0.4
side. They have little allegiance to the Cambodia 2.5 2.3 0.2 2.9 2.7 0.2
nation-states or their politics but make Indonesia 60.6 29.2 31.3 66.2 34.3 32.0
the best of the situation by establish- Laos 1.3 0.5 0.8 1.7 0.9 0.8
ing economic and cultural relation- Malaysia 90.0 27.9 62.1 94.8 36.5 58.3
ship across the borders, rendering the Myanmar 6.5 4.8 1.7 7.0 5.7 1.3
borders open despite the ongoing con- Philippines 32.2 14.3 18.0 36.4 16.7 19.6
testations. It is up to the two countries Singapore 63.7 35.6 28.1 69.3 40.7 28.5
to resolve the geopolitical border con- Thailand 64.7 25.7 39.0 69.8 31.2 38.6
flicts and encourage the already exist- Vietnam 40.2 29.1 11.1 50.4 34.2 16.2
ing friendly cross-border relations. Hong Kong 283.5 268.0 15.5 341.3 323.4 17.9
Japan 342.8 148.3 194.6 329.5 151.6 177.8
Firing Conflict with Water South Korea 245.6 83.0 162.7 256.4 87.7 168.7
On April 15, 2013, a 19-km strip of Australia 116.6 33.9 82.7 122.3 37.7 84.6
land, barren and cold, with no apparent New Zealand 8.8 3.7 5.0 9.7 3.9 5.8
strategic importance, caught national India 73.9 50.5 23.4 66.5 47.7 18.8
attention in India and became the Source: 2013 China Statistical Yearbook
“
would have fed into the drying Yellow Thailand, with financing and construc- cession of security cooperation ini-
River in Northern China but would tion from China. 19 tiatives between India and ASEAN
have severely impacted livelihoods of
hundreds of millions in East India and After ten years of stalling, the Myanmese officials have
Bangladesh. Nonetheless, the Chinese
finally committed to completing a trilateral highway project
announced the creation of three dams
on the Brahmaputra, all near the with India and Thailand by 2016 that could increase India-
Indian border, without any consulta- ASEAN trade by $100 million over five years.”
tion with the Indian authorities. After
India lodged complaints against this Looking East and Going Southeast nations who hope a more active India
unilateral approach and suggested an China’s incursions into South and might help counter Chinese influ-
information sharing mechanism, the Southeast Asia worry Indian policy- ence.23 Myanmar’s opening up also
Chinese side responded with facts of makers who fear that an Asia under promises a new land bridge between
dam designs and a rejection of creating Chinese hegemony would end India’s India and ASEAN. After ten years of
new mechanisms.16 ambitions of becoming a global stalling, the Myanmese officials have
Even flood data sharing mecha- power and severely curtail its regional finally committed to completing a tri-
nisms are temporary and subject to influence. lateral highway project with India and
periodic agreements. Compared to These concerns are an impor- Thailand by 2016 that could increase
China’s relationship with the Mekong tant force behind India’s “Look East India-ASEAN trade by $100 million
River countries, 17 the conflict over the Policy” (LEP), a post-Cold War initia- over five years. 24
Brahmaputra River shows that the tive that centres Indian foreign policy Stronger ties with Southeast Asia are
Sino-Indian dialogue is more reac- around stronger engagement with its just one component of India’s efforts
tionary than it is a process. Moreover, neighbours to its east. 20 During the to reorganize the regional geography
unlike the unified approach Mekong Cold War, India was an isolated figure of Asia. The Bay of Bengal Initiative
Basin countries adopt, India’s frag- in Asian geopolitics. But the demise for Multi-sectoral and Economic
mented relations with its South Asian of the Soviet Union, as well as a flag- Cooperation (BIMSTEC), launched
neighbours decreases the diplomatic ging economy at home, forced India in 1997, includes seven geographi-
weight needed to ignite the creation of into two policy revolutions in the cally contiguous South and Southeast
water institutions. early 1990s: liberalization to fix the Asian countries: India, Nepal, Bhutan,
In a vast region with several major economy and the LEP to strengthen Bangladesh, Sri Lanka, Myanmar and
rivers crossing multiple national links with Southeast and East Asia. Thailand. These members established
boundaries, the heavy construction of Implementation of the LEP was slow a framework for a free trade agree-
dams presents major challenges. With in its first decade, as the Indian policy ment in 2004 and target completion by
several hundred dams being proposed establishment struggled to formulate 2017. The BCIM corridor mentioned
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Global Economy
Economy
Map 3: Gwadar Port’s Extensive Regional Reach happen would involve reversing Delhi’s
longstanding strategy towards the
region, a mixture of economic neglect
and military heavy-handedness.
Though it supports the BCIM corri-
dor, India is concerned that too much
Chinese access to India’s underde-
veloped border states will limit the
potential of the corridor as a spur for
growth. According to Binoda Kumar
Mishra, director of India's Centre for
Studies in International Relations and
Development, "as Yunnan is the most
advanced in the cluster, India fears that
it will become BCIM's economic centre,
with the rest of the region reduced to its
periphery." 30 Staging the first China-
South Asia Expo in Kunming in June
2013 (Photo 1) served as southwestern
China’s platform for connecting to and
expanding into South Asia. India lacks
Source: Based on the map in an article in Asia Sentinel (February 2014) cited in Endnote 32; redrawn by Mustafa the geopolitical and economic heft to
Ibraheem. The thick red line denotes the road from Gwadar Port to the border city of Kashgar in Xinjiang, China. fully match China’s growing influence
in Southeast Asia. But the shifting geo-
above could be even more transforma- take seven days to move by road to the politics of Asia are offering India new
tive. 25 The corridor retraces and revives Kolkata port, and then another three opportunities to strengthen integration
much of the ancient “Southern Silk to four weeks to move by sea to China; with its eastern neighbours and devel-
Road,” dating from 200 BCE, and the the reopening of the Stilwell Road will oping its own poor northeastern region.
Ledo or Stilwell Road (see Map 2), a allow them to reach Yunnan in less
World War II-era road that supplied than two days, while reducing trans- Hang Together or Hang Seperately
military equipment from Assam and port costs by about 30%. 27 Bangladesh As China and India seek a balance
British India to Chinese Nationalist also stands to benefit from the coastal between cooperation and contention in
forces fighting Japan. 26 Representatives shipping line as the movement of South Asia, their respective positions
from Bangladesh, China, India and basic commodities would be much in the region are complicated by their
Myanmar met in December 2013 for cheaper and faster.28 varied cross-border linkages with the
the first round of official-level talks But success for the BCIM corridor other neighbouring countries, as well as
to set a timetable for the multi-billion will require enormous changes in the their competition for exerting a greater
dollar initiative; they hope to establish political and economic environment of influence on these countries. Despite
a cooperation framework by late 2014 Northeast India. The region is a crucial being archrivals, India and Pakistan
to set the stage for on-the-ground work. starting point and link in the BCIM have decided to open the Wagah-Attari
Long-term aims include multi-modal corridor, but it suffers from weak border for 24/7 trade and allow contain-
transport networks across land, sea and infrastructure, poverty levels from ers to be moved right up to Amritsar and
air that will significantly shorten transit 40-60%, and as many as 109 ethnic Lahore instead of being unloaded at the
times for Chinese and Indian exports. insurgencies.29 At best, the corridor check-post and re-loaded on the other
Goods from China’s landlocked Yunnan could bring an economic boost to the side.31 This move will help smoothen
province will gain faster overland access Northeast akin to what stronger trade trade between the two countries. A long-
to the Bay of Bengal. Meanwhile, links with Southeast Asia have brought standing backyard for India, Nepal has
goods from India’s northeast right now to China’s Southwest. But making this become economically closer to China,
India’s ties with ASEAN have improved considerably under the watch of the LEP; trade reached $68 bil-
lion in 2011, from a baseline of $3.1 billion in 1991. But this volume does not establish India as a region-
al force commensurate with its global ambitions. China-ASEAN trade in 2011 was four times as large.
which overtook India to become the build on this momentum, India has des- of Indian Professional Families to the United
largest foreign investor in Nepal during ignated 2014 as the “Year of Friendly States, which explores how certain immi-
the second half of 2013. Exchanges” between India and China. gration policies and visa regimes shape the
China made a more significant move This optimism aside, the two key players lived experiences of families of migrant
to establish a strong foothold in South are bumping into each other’s strategic Indian professional workers in the US.
Asia when it took over the upgrading interests as India and Bangladesh look Gaurav Inder S. Toor is a member
and operation of Pakistan’s Gwadar east and China moves west and south. of Class of 2014 at Trinity College,
Port in 2013. The Gwadar project It is up to the two giant neighbours to Connecticut majoring in Political
serves China’s “look west” policy manage their competition by enhancing Science and Economics with a minor
while allowing Pakistan to “look east.” their cooperative activities and ties. If in Urban Studies. Besides the United
China is building a road from Gwadar they can do that, they will foster more States, his undergraduate studies have
all the way north to Kashgar or Kashi, favourable spaces of shared develop- spanned over India (Ramjas College,
the westernmost large city in Xinjiang, ment and prosperity for their smaller University of Delhi), China (River
China near the borders to Tajikistan neighbours in the region. Cities of the Yangtze Program), and
and Kyrgyzstan (see Map 3). Pakistan United Kingdom (Worcester College,
and China also plan to connect the port We would like to thank Kayla Chen for Oxford University). He is fluent in three
via the Indus Highway, around 414 her editorial reading of the article and regional languages of India, and has
km from the China-Pakistan border Mustafa Ibraheem at Trinity College for conducted fieldwork in China, India
and further reaches to Tajikistan, his excellent work on the maps. and Kenya. He has been a student re-
Kyrgyzstan and Kazakhstan. This searcher at the Center for Urban and
will provide China with a land-based About the Authors Global Studies at Trinity College since
supply of oil from Central Asia. Given Xiangming Chen is the founding Dean 2011, and will start his graduate studies
its geographical location, Gwadar cuts and Director of the Center for Urban in the Ph.D. program in Government at
China’s distance from the Persian Gulf, and Global Studies and Paul E. Raether Cornell University in fall 2014.
from which China gets 60% of its oil, Distinguished Professor of Global Urban Ned Downie is a member of the Yale
by thousands of kilometres. Gwadar is Studies and Sociology at Trinity College, College Class of 2014, majoring in Ethics,
already connected to Karachi through Connecticut, and a distinguished guest Politics, and Economics. He serves as
the Makran coastal highway, built with professor at Fudan University, Shanghai. a research assistant for Paul Kennedy,
$200 million in Chinese assistance. He has published extensively on urban- J. Richardson Dilworth Professor of
Overall Gwadar Port offers exist- ization and globalization with a focus on History and author of Rise and the Fall of
ing and new transport connections for China and Asia. His several books include the Great Powers. He has written for Foreign
moving commercial and other traffic to As Borders Bend: Transnational Spaces on Policy, the Yale Review of International
and through the Central Asian states, the Pacific Rim (Rowman & Littlefield Studies, and the Yale Daily News. He has
Afghanistan, the Middle East, the Publishers, 2005) and Shanghai Rising: carried out field research in northeast
Persian Gulf, China, Iran and Southeast State Power and Local Transformations in a China and speaks fluent Mandarin.
Asia (Map 3).32 Global Megacity (University of Minnesota
While the economic rise of China Press, 2009; Chinese Edition, 2009). As Borders Bend: Transnational
and India is felt globally, it is in South Pallavi Banerjee (PhD, Sociology, Spaces on the Pacific Rim, by
Xiangming Chen (Rowman &
Asia where the two emerging powers University of Illinois at Chicago, 2012) Littlefield Publishers, 2005)
both contend and cooperate with is currently a post-doctoral fellow at the
each other while wielding competing Sociology Department of Vanderbilt A brilliant deciphering of the
meaning and agency of borders.
influence on the neighbouring countries. University. Her research interests are situ- Chen shows us how the decen-
Despite the legacy from the 1962 border ated at the intersection of sociology of tering of state power enables
war, China and India have come a long immigration, gender, transnational labor, border regions to emerge from the shadow of
capital city regions. This in turn produces a whole
way in improving their bilateral relation- minority families, globalization, South new research agenda on the increasing complexity
ship, especially under India’s current and South East Asia. She is currently of the interaction among borders, transnationality,
Prime Minister Manmohan Singh and working on a book manuscript entitled: and the scattering of state functions.
former Chinese Premier Wen Jiabao. To Dismantling Dependence: Gendered Migration — Saskia Sassen, author of The Global City
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