What matters more in
international relations? What shapes the contours of bilateral ties in
contemporary times? Certainly trade is an important factor but it is not the
most important factor.
It is always about the
engagement on strategic levels that defines bilateral relations between
countries or the international alliances of groupings of countries, be it
US-Israel or US-UK or NATO and other similar ties and alliances. They have been
rock solid ties weathering varying seasons with equal fervour because the
cornerstone of these relations have been strategic concerns. Historical linkages
are an added advantage.
Though NATO has seen some
trouble recently with US President Donald Trump raising objections over skewed
funding contribution in the world's most formidable military alliance between
countries where the US is the largest contributor, NATO is still sailing smoothly
with regular high level US visits to the NATO headquarters at Brussels.
In contrast, trading blocs
like WTO, NAFTA, ASEAN, APEC, SCO and so on are basically about commercial
engagements and though have increasingly become important in a world globalized
by economy, cannot replace the ties built on strategic interests, especially in
the times of crisis, like prolonged border standoffs or any aggression inimical
to bilateral ties.
Also, when countries are
globally important and are slated to become poles in a multi-polar world of
future, like India and China are, what is going to define their diplomacy and
international politics is how they cultivate their strategic ties.
Because loss of commercial interests
can be met with forging other ties and alliances but there is no replacement
for a strategic tie that gives a country sense of security or tools to secure
its borders and skies.
That is why China doesn't
matter for India in case the ongoing border tension in the Sikkim Sector between
two countries escalate to severe levels resulting in localized, limited scale
military hostilities (because the two nuclear powered nations cannot afford a
China is basically a country
engaged in trade relations with India. Relations have failed to go beyond that.
There are no cultural ties and people to people contact. Defence and other
strategic elements are non-existent from the table. Coupled it with the
non-existent India-China bilateral trade in services. All these factors make
India to easily look beyond China when it comes to suspending ties.
The bilateral trade between
India and China was around $71 Billion in 2016 with a trade deficit highly
skewed in Chinese favour - $47.8 Billion. India basically exports diamonds,
cotton, yarn, organic chemicals, iron ore and copper worth $12 Billion (2016).
Chinese export to India includes fertilizers, antibiotics, electrical
machinery, equipments and organic chemicals and the 2016 worth was $59 Billion.
When we see the items of
import and export, especially in the context of the stagnating Chinese economy,
it is quite clear that India can easily do away with its miniscule Chinese
export. But it will be difficult for China to ignore India, the world's fastest
growing large economy now for many quarters. Add to it India's projected middle
class base of around 450 million people and the country becomes a promising
market for any manufacturing hub like China.
The trade deficit with China
doesn't hurt us (and won't hurt us), at least in the near future, till the
country reaches to a stage where unemployment becomes chronic and threatening
for the country's weaving; till the time we have ramped up our infrastructure to
be able to make for any future contingency on our manufacturing needs. Till
then, it's like we have outsourced our manufacturing needs to countries like
China (and with manufacturing bases in many other countries, we can easily find
But China has not this
advantage. It is already the manufacturing engine of the world with its
majority of population engaged in those small or large factories supplying to
the world. They are as dependent on the domestic Chinese consumption as the international
With a slowing down economy,
the domestic consumption in China is going to ease and its manufacturing hubs
are going to be ever more dependent on big overseas markets and India is a big
imperative there. It is important to maintain China's social fabric with flow
of jobs and gains of economy in the society and is going to be must for its
behemoth economy that needs global markets to lubricate its tentacles. Just a
corollary would suffice to prove the point here. Four Chinese manufactures, Xiaomi,
Lenovo, Oppo and Vivo, are in top five of the Indian smartphone market. India
can easily find alternative smartphone manufacturers with a strong domestic industry
to fill the gaps. But these Chinese manufactures cannot find a market like
India that has emerged as the world's fastest growing smartphone market.