Contrary to the belief that BRIC would overtake the economic might of the West, the lack of progress of the bloc due to China’s hegemony and pessimism calls for a rethink of policies, especially for India. Perhaps, it is time for us to look at other partners that could actually help India’s growth story.
Bilateral problems between India and China have existed for long and border disputes keep simmering every now and then, especially in relation to Kashmir, the Aksai Chin area and Arunachal Pradesh. Experts believe that China, because of its own domestic politics and strategic interests, would never foresake its claim from Arunachal and return Aksai Chin to India. The government of India has claimed and reclaimed this area, which legitimately belongs to India and was captured by China during the 1962 Indo-China war, every now and then. China, however, due to its own strategic policies does not seem to be in any mood to give up this land which is basically a corridor connector between the Xinjiang and Tibet. China has constructed an all weathered metal road through Aksai Chin which starts from Lhasa and goes all the way upto the capital of Xinjiang. A part of this metal road (called the Karakoram Highway) also passes through Pakistan occupied Kashmir (PoK) and connects Islamabad with China. It’s said that China even has plans to link Karachi with Gwadar, a sea port that China is developing in Pakistan’s Balochistan province (Makran coast area). There is a strategic motive of China behind this and the question of China giving up the Aksai Chin territory does not seem likely to arise. As long as this dispute remains, the relation between India & China is not going to be cordial in the real sense of the term.
The relevance here is that border disputes between India and China are going to have a major repercussions on the BRIC bloc. For the sustainability of BRIC as a viable alternative to the West, it is extremely crucial that India has a friendly and cordial relation with China. Historically, India has very friendly ties with the other nations of BRIC, i.e, Russia and Brazil. The only problem for India lies with China which is a major component of BRIC. Even thinking of BRIC as a bloc without China is not practical. But then, because of historical differences, territorial claims and counter claims, reasonable relations between India and China also do not seem likely in the near future.
Apart from the territorial disputes, there is also a huge trade imbalance between these two countries. The balance of trade is abnormally tilted towards China and despite India making repeated requests to China to give it the most favoured nation status for several goods, the Chinese leadership is yet to oblige. Even though Indian companies have requested the Indian government to take up this issue with China, no fruitful results have emerged yet. On the flipside, when it comes to Chinese companies, they are making huge profits here in India. India’s trade imbalances, as a result, have been increasing everyday.
If we come to the question of power play within the BRIC nations itself, Russia still has major problems with China with respect to Central Asia and countries around it. The problems are in relation with countries such as Uzbekistan, Kazakhstan, Turkmenistan, Azerbaijan, Georgia, Kyrgyzstan, Armenia, which have huge reserves of natural resources, especially oil and gas. While China has major interests in staking claim and forging partnerships with all these countries for exploration of oil and natural gas, Russia does not seem too happy with it as it does not want any other power to have stake in any of these countries which are close to its sphere of influence. China already has problems with India and with the Indo-China dispute over the South China Sea that has recently come up, things have gone from bad to worse. Further, India’s penetration into the South China Sea for oil exploration (after Vietnam’s invitation to ONGC and OIL for exploration on a 50:50 basis) has Russia’s tactic support because of its interests in Central Asia. South China Sea (SCS) is an inland sea which has a stake of four nations – Philippines, Vietnam, China and Taiwan. The SCS has huge reserves of natural oil and gas, uranium, thorium, plutonium etc. The dispute here is territorial between the four countries as China feels that it has the right to claim this whole area of Spartly Islands as the area historically belonged to it before the United Kingdom took over. The stakes have gone high after the discovery of oil. Today, these four nations have staked claim to portions of the SCS, which happens to be in accordance with the international jurisprudence. China here is just playing the big bully and its claims are against the international jurisprudence on the laws of the sea, according to which the South China Sea should be equally divided between the four surrounding nations.
The relevance here is that border disputes between India and China are going to have a major repercussions on the BRIC bloc. For the sustainability of BRIC as a viable alternative to the West, it is extremely crucial that India has a friendly and cordial relation with China. Historically, India has very friendly ties with the other nations of BRIC, i.e, Russia and Brazil. The only problem for India lies with China which is a major component of BRIC. Even thinking of BRIC as a bloc without China is not practical. But then, because of historical differences, territorial claims and counter claims, reasonable relations between India and China also do not seem likely in the near future.
Apart from the territorial disputes, there is also a huge trade imbalance between these two countries. The balance of trade is abnormally tilted towards China and despite India making repeated requests to China to give it the most favoured nation status for several goods, the Chinese leadership is yet to oblige. Even though Indian companies have requested the Indian government to take up this issue with China, no fruitful results have emerged yet. On the flipside, when it comes to Chinese companies, they are making huge profits here in India. India’s trade imbalances, as a result, have been increasing everyday.
If we come to the question of power play within the BRIC nations itself, Russia still has major problems with China with respect to Central Asia and countries around it. The problems are in relation with countries such as Uzbekistan, Kazakhstan, Turkmenistan, Azerbaijan, Georgia, Kyrgyzstan, Armenia, which have huge reserves of natural resources, especially oil and gas. While China has major interests in staking claim and forging partnerships with all these countries for exploration of oil and natural gas, Russia does not seem too happy with it as it does not want any other power to have stake in any of these countries which are close to its sphere of influence. China already has problems with India and with the Indo-China dispute over the South China Sea that has recently come up, things have gone from bad to worse. Further, India’s penetration into the South China Sea for oil exploration (after Vietnam’s invitation to ONGC and OIL for exploration on a 50:50 basis) has Russia’s tactic support because of its interests in Central Asia. South China Sea (SCS) is an inland sea which has a stake of four nations – Philippines, Vietnam, China and Taiwan. The SCS has huge reserves of natural oil and gas, uranium, thorium, plutonium etc. The dispute here is territorial between the four countries as China feels that it has the right to claim this whole area of Spartly Islands as the area historically belonged to it before the United Kingdom took over. The stakes have gone high after the discovery of oil. Today, these four nations have staked claim to portions of the SCS, which happens to be in accordance with the international jurisprudence. China here is just playing the big bully and its claims are against the international jurisprudence on the laws of the sea, according to which the South China Sea should be equally divided between the four surrounding nations.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
