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Context:

India and China's relationship is very complex as it involves border disputes and other strategic concerns.

Details

• The emergence of China as a major economic and political power has reshaped global dynamics.
• Many countries are struggling to manage their relationship with China, facing difficulties in balancing economic benefits with political and strategic concerns.

Concerns Related to China's Growing Influence

• China is a big trading partner and one of the most important investors in lots of countries, this dependency creates vulnerabilities.
• The aggressive stance of China in its foreign policy, especially regarding the South China Sea and the Belt-And-Road Initiative (BRI) has raised geopolitical tensions.
• The human rights record of China has been criticized globally and it also adversely impacted diplomatic relations with several countries, particularly the US and European nations.
• China's technological development has caused doubts about security and breaches of intellectual property Rights.

How to reduce dependency on China? ●Countries can reduce economic dependence on China by diversifying their trade and Investment Partnerships. For example, India has been working to strengthen economic ties with other countries through initiatives like the Make in India Campaign to attract foreign investment. ●Increasing engagement in multilateral forums and alliances can help countries to address geopolitical tension and promote collective security.  For example, the Quad (Quadrilateral Security Dialogue) involving the USA, India, Japan and Australia aims to ensure a free and open Indo-Pacific region. ●Countries can advocate for human rights and the rule of law through diplomatic channels and international organizations. For example, the European Union has been vocal about human rights issues in China, using diplomatic pressure to address concerns. ●Investing in domestic technology and innovation can help countries to compete with China and protect their intellectual property. For example, South Korea has invested heavily in its technology sector, becoming a global leader in areas like semiconductors and electronics.

India’s Special China Problem

• India's relationship with China is complex and diverse, including both cooperation and conflict.
• While many countries face challenges in dealing with China, India has a unique set of issues that make its situation challenging.

Border disputes

• India and China share a long and disputed border stretching over more than 3400 kilometers, and is divided into three sectors:
  • • The western (Aksai Chin)
    • The middle (Uttarakhand and Himachal Pradesh)
    • The eastern (Arunachal Pradesh)
• Aksai Chin, governed by China but claimed by India, is strategically vital to both countries. China constructed the Xinjiang-Tibet route there, improving its military logistics.
• India administers Arunachal Pradesh, but China considers it part of its territory, referring to it as "South Tibet." Tensions have risen in this region, with frequent military conflict.

Economic Relation

• India's largest trading partner is China.
• India and China's trade was valued at about $118.4 billion in 2023–2024. India's trade deficit with China is still a concern.
• Chinese investments in India have mostly gone into the manufacturing, infrastructure, and technology sectors.
• Chinese businesses that have extensively penetrated the Indian market, such as Xiaomi and Huawei, have boosted the country's economy.
• India sees China's ambitious Belt and Road Initiative (BRI) as a strategic tool to increase Chinese influence throughout South Asia and decided not to join the project.

Key Challenges

• The Line of Actual Control (LAC) between India and China remains tense, with the 2020 Galvan Valley conflict exposing the region’s instability.
• The trade deficit with China reached $85 billion in 2022-23, increasing pressure on India's foreign exchange reserve.
• India's participation in the Quadrilateral Security Dialogue with the USA, Japan, and Australia is viewed as an attempt to counteract China's dominance in the Indo-Pacific. This further deteriorates the relationship with China.

Way Forward

• It is important to communicate regularly to resolve disputes and lower the chances of misunderstandings.
  • • Strengthening of the existing diplomatic mechanisms like the institutional framework Special Representatives Mechanism on boundary negotiations between both countries is needed.
• India and China have the scope of working together in areas promoting economic benefits for both countries.
  • • Both nations could work together on renewable energy projects that would assist each country in answering its long-term energetic requirements sustainably.
• Both sides should take confidence-building measures which are important to reduce military tensions in areas near the border.

Source:

Indian Express

Ministry of External Affairs

Carnegie Endowment

PRACTICE QUESTION Q. How do India and China's economic dependency shape their strategic partnership, and how do recent geopolitical developments, such as the United States-China trade war have impacted this relationship?