Chapter 3: The Sino-Indian Relations
3.3 Complex Interdependence Impacts in the case of Sino-Indian Relations
國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
‧
國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
hostilities. Additionally, states have political reasons to minimize their dependence on foreign commerce. States take military actions to reduce their economic vulnerability (Gilpin 1981, pp 140-141; Liberman, 1996). Therefore some scholars think that a heightened interdependence may stimulate belligerence (Mansfield, Pollins 2003).
3.3 Complex Interdependence Impacts in the case of Sino-Indian Relations
In the case of Sino-Indian Relations, despite a high interdependence, high politics continue to play an essential role in their relations. They increased political agendas to a higher degree; however they did not replace it as top priority in the foreign affairs agenda as the recent Doklam Dispute shows. The use of military force is still possible. Moreover, we can assess that Keohane claims are applicable in this case regarding the fact that competition is present, but benefit of cooperation is higher. This is not a zero-sum game.
Moreover, two out of three neoliberalist characteristics of the Complex Interdependence are fully filled. Indeed the “multiple channels” characteristic where various society actors of the two countries are connected is present. Second, the foreign affairs agenda of China and India covers diverse areas such as agriculture, energy, economic cooperation, etc.
Nevertheless, the supposed minor role of the military force is questionable. Indeed, China and India never gave up on establishing troops along their shared border thus recognizing the potential risk of attacks.
Asymmetry in Sino-Indian relations
First, according to the neoliberalist theory the assessment of sensitivity and vulnerability regarding interdependence is important. Indeed, the Sino-Indian economic exchanges are unbalanced, and the deficit of India is growing. Hence the sensitivity of India to Sino-Indian trade can be assessed as very high. The Indian market is very sensitive to
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
‧
國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
change in any economic issues. The degree of Indian responsiveness to Chinese policy change is also very high. The vulnerability of India is also significant. India is very vulnerable to any external events regarding Sino-Indian relations. The cost of changing the system is for India high. It is costly to adjust change.
As such, according to the theory, China is the less dependent actor therefore using the dependency of India as a source of power. In this climate of dependency, the threat perception of India toward China cannot improve. The recent protectionism of the Indian government regarding market sectors from Chinese investments shows a defensive response to its acknowledged vulnerability. For example, while Chinese companies account for 20% of the Indian telecom market, the pace of this investment was voluntarily delayed. Indeed, Indian Telecom companies advised the Ministry of Defense and Intelligence Bureau to restrain contracts from Chinese multinationals, because it entails the installation of equipment in sensitive areas. This was addressed as a matter of national security (Bajpaee 2010). This move shows the growing concerns of Indian companies toward Chinese companies and is not the only one. The protectionism of India is a direct response to dependency.
Moreover, states have political reasons to minimize their dependence on foreign commerce. In the case of India, protectionism is the response to China economic and political threat. As their bilateral relation is asymmetric and in favor of China, trade is powerless from avoiding hostilities. Therefore, in the case of Sino-Indian relations, interdependence stimulates belligerence.
The Economics-Security Nexus
Yuan Jingdong, a professor at the University of Sydney, exposes the issue of Economic Security Nexus in India China bilateral relations. He highlights the current issue of the Economic-Security Nexus that can negatively impact economic dispute.
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
‧
國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
"Economic Security in an era of globalization refers to a state's ability to enhance its overall economic performance and competitiveness, reduce the vulnerability in the areas of resources and energy supplies, and prevent dominance of critical sectors by foreign entities." (Yuan 2016, p.34)
According to him, economic factors played a huge role in restraining India and China economic relations. First the two countries do not have the same interest and therefore not leading the same kind of economic policies. As China is being more aggressive and always seeking new market entry and economic growth through investment, India has a more defensive policy about its own industry and guards against external intrusion such as its sphere of influence. The fact that China is seeking more power as a leader of Asia, India on the other hand is being distrustful and protecting its own economy of potential Chinese control. Yuan argues that India is using securitization against China and thus leading to limited economic growth potential. As an assessment, Chinese economic policies are considered as a threat to Indian interests. Geo-economics has replaced geopolitics when there is no open conflict between two countries according to the author.
Bargaining Process Failure
James D. Morrow (1994) argues that armed conflict is a consequence of failed interstate bargaining and to link economic ties between nations to the bargaining process.
State’s non-commercial interests (ex: defense of the homeland) overcome any effects of trade hostilities. This argument is also valuable in explaining the hostilities and military use between China and India. Indeed, the territorial dispute has never been settled. Negotiations leading to a solution and border peace have been unfruitful. Since their economic ties developed in 1988, they have tried to reach an agreement but failed. The development of economic ties was aiming to promote trust and peace and to ease border settlement
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
‧
國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
negotiations. Therefore, the bargaining process for territorial disputes between China and India has not improved with economic interdependence. The disputed territory is a matter of national security for both countries hence overcoming any effect of trade on hostilities.
Low intensity conflict(Morrow 1994)
Nevertheless, despite tensions and the prospect of minimal military use it is less likely that China and India conflict will escalate. The Complex Interdependence is playing a role in minimizing and controlling the role of the military in Sino-Indian relations despite its total prohibition. Indeed, according to Erik Gartzke (2007): “interdependence might foster a great deal of low intensity conflict but is unlikely to escalate”. This argument is applicable in the recent Doklam Dispute, as China and India initiated dialogue before the BRICS Summit in Xiamen. In fact, the troops were facing each other along the border and the tensions were high but the conflict did not escalate in violence or open war. Therefore, the role of Complex Interdependence and the cooperation in many areas it has generated over the year plays a significant role in pacifying China’s and India’s border. (Gartzke 2007)