Story Of The Week

Why China can’t afford a war with India?

“All war is a symptom of man’s failure as a thinking animal.”
-John Steinbeck

With a whopping economic growth in last three decades, China has been subject to various studies and researches. For the past thirty years it has maintained an average annual GDP growth of 9.91%. Even in the Indian markets, some of the cheapest and most affordable products have been gifts of Chinese strategists.

India, the golden bird, has been shooting back with an impressive economic growth and is displaying a tremendous potential. Despite being the clear contenders for the future superpower, the past sixty years have incorporated tremendous tussles. Without further ado, let’s begin the tale…

China vs. India: Digging the Past

The relationship started nearly 2000 years ago when India and China started the odyssey together. The development of political and economic extravaganza increased the importance of bilateral trade between the two countries. There are many instances in history to support the relationship that the two nations share. During the drought period in Bengal, the Chinese government generously extended its hands for support & helped India recover.

Despite these strong ties, the tide turned after India attained Independence which resulted in three military clashes- the Sino-Indian War (1962), the “Nathu La” and “Cho La” incidents (1967) and the Sino-Indian skirmish (1987).


Figure-1 Clashes in the past

The Skeptical Relationship

Apart from these ground warfares, the relationship deteriorated when many vital issues reached a stalemate.

MTCR (Missile Technology Control Regime)

China has found India’s presence in MTCR as an entry challenge. This has come as a diplomatic counter in Indo-China relations. India can now leverage its NSG entry for China’s entry into MTCR

UNSC (United Nations Security Council)

China has been rigid on an ambiguous policy related to India’s entry in the UNSC. Though India has provided a strong financial and military support to the UN peacekeeping troops, it still serves as a non-permanent member and has always won votes from almost all the permanent UNSC members but China. China’s indifference in its stance is sometimes attributed to it being the only country in Asia to hold a special position.

Nuclear Suppliers Group (NSG)

India’s entry into the NSG (Nuclear Suppliers Group), a group of 48 nations, has been blocked by China in 2016, coming as a counter to India’s denial of signing the NPT in the past. Out of 48 countries, 38 supported India but China.

The South China Sea

For decades, the South China Sea has been the hotbed of various conflicts among all the coastal countries. This territorial region is rich in oil and gas and one-third of global trade passes through this region. China as an Asian giant is regularly flexing its muscle while India is also arming these countries with sophisticated arm technology which is restricting movement of Chinese Navy 4th fleet in the region.

Shanghai Cooperation Organization (SCO)

Recently, for the first time in 17 years, the Shanghai Cooperation Organization has included two new members, India and Pakistan. With India gaining a full membership, it will achieve regional and global stability which will help bring prosperity in the Central Asian region. It gave India and China’s relationship a new turning point and gave signs of stable relations between the two Asian giants.

China-Pakistan Economic Corridor (CPEC)

The CPEC is the centerpiece of China’s global vision of infrastructure and connectivity. It offers a huge potential in terms of leveraging connectivity to the Middle East Countries. But India’s concern is that it passes through the disputed region of POK (Pakistan Occupied Kashmir).

Why not a war?

Geographical Advantage

India has a strong advantage in terms of its unique positioning in the Sea Conflict. Its strategic location astride the Indian Ocean would cause trouble for the Chinese Naval Force. Also, China’s shipping route would have to be diverted through the Pacific Ocean where it would be vulnerable to attack from India’s Allies. China imports petroleum from the Middle East and once China’s reserves would be exhausted, they would be forced to end the War. Both China and India have large tactical air forces capable of flying missions over vast areas but India’s Air Force has an upper hand in Air conflict.

Indian Allies

The second order effect of war would come to India’s advantage. The global impact of war, the economic unrest, and action by Indian allies i.e. USA, Japan, Russia, Israel would cause a fall in China’s exports. This could lead to mass unemployment of Chinese laborers causing major cause of concern for Chinese Communist Party and its hold on the country. China has no such lever over India, except in the form of a rain of ballistic missiles.


India and China have been at loggerheads in the past regarding issues ranging from McMahon Line (Border between India and Tibet) to Aksai Chin (Land annexed by China after 1962 war) but still, there has been an unprecedented explosion of economic ties. Even if we look at the trade figures between India and China in the last fiscal year, India imported goods worth of $61,286.24 million USD from China. On the other hand, India shipped $10,196.69 million USD worth of goods to China. In 1987 bilateral trade was $117 million USD and is supposed to cross $100 billion USD by 2020. So, a war at this point of time will be detrimental to both economies.

Global Edge

Figure-2 Global edge/Country Insight/China

Trade Statistics

Figure-3 Direction of Trade Statistics, IMF

Extending an Olive Branch

Indian and Chinese representatives met at the BRICS conference to improve their relations which have worsened in the recent years. The two nations have been involved in several joint projects to enhance the flow of information and trade. Indian Space Research Organization and China National Space Administration have signed a Memorandum of Understanding for better utilization of commercial benefits of the space economy. India’s entry into SCO gives it the opportunity to forge deeper ties with the founding members to facilitate the development of beneficial trade agreements and it may also enable India to restart stalled projects like Iran-Pakistan-India (IPI) pipeline. For China, the cooperation from India will yield the benefits of a larger market to exhaust its production potential.

Since it is almost certain that India and China will emerge as the two largest superpowers by 2050, consequently the trade relationship between the two countries would be of prime importance.



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