Earlier today, the governments of China and India signed agreements worth billions of dollars inked at an earlier strategic economic dialogue in New Delhi. The deal “included plans for investments in clean energy, infrastructure, electric power, steel and other projects”, representing a new level of interdependence that stands in marked contrast to the large amount of vitriolic rhetoric between the world’s two most populous nations. Despite such political challenges as the unresolved border disputes of Aksai China and Arunachal Pradesh, China’s arming of India’s nemesis Pakistan, India’s harboring of the Dalai Lama, and a history of contemptuous foreign relations (or perhaps because of all of this), the governments in Beijing and New Delhi deem it prudent to seek a larger degree of  economic interdependence. While foreign trade between the two countries is burgeoning (bilateral trade is currently worth approximately $75 billion), nearly all of this is exchanged via extended sea trade routes rather than over their shared borders, indicating just how tense and underdeveloped their disputed territories remain to this day.

I believe the symbolism of the lack of overland trade is important to keep in mind in light of this new deal. As the territorial disputes in the South and East China Seas have displayed in recent months, the economic security of such interconnected countries as Japan and China remains at the mercy of otherwise non-related political/territorial disputes. Japan’s economy has greatly suffered and now threatens recession yet again, arguably a consequence of decreased bilateral trade between itself and China over the Senkaku/Diaoyu controversy. While globalization proponents argue that economic interdependence should be pursued as a mechanism to facilitate a simultaneous convergence of interests and relaxation of tensions, in light of the recent spasms of nationalistic vitriol spilling forth from East Asia, India and China may be careful to consider that throwing their economic security into the fray of an already stressed bilateral relationship might not be a guarantee of peaceful coexistence.

 

 

Related Stories: http://tribune.com.pk/story/471169/india-china-firms-sign-deals-despite-political-tensions/

http://www.economist.com/news/asia/21564861-fifty-years-after-nasty-high-altitude-war-border-dispute-remains-unresolved

Image: http://shanghaiist.com/2009/07/14/china_india_war_in_2012_we_say_not_1.php

 

-William Kyle