SupChina illustration by Derek Zheng
Although India established diplomatic relations with the P.R.C. in 1950, the two countries have had an uneasy relationship ever since. They fought a brief war in 1962 over a border dispute that has never been properly resolved.
Tensions between Beijing and New Delhi have continued in recent years. In 2017, a standoff near the disputed border escalated to the point that a Chinese diplomat called it “the worst in 30 years.” Although both sides climbed down by the end of the summer, new frictions were exposed in October that year.
The relationship warmed up in April 2018, when Chinese leader Xí Jìnpíng 习近平 hosted an “informal” summit with Indian Prime Minister Narendra Modi in Wuhan, where they pledged to work together “for the revival of eastern civilization.”
Last week, Chinese leader Xí Jìnpíng 习近平 said that “China-India relations are standing at a new starting point and facing new opportunities…when exchanging congratulatory messages with his Indian counterpart, Ram Nath Kovind, on the 70th anniversary of bilateral diplomatic ties,” according to China’s state-owned Xinhua News Agency.
One reason for India and China to get along is money: The two Asian giants are playing an increasingly prominent role in each other’s economies. The Brookings Institution has published a new paper titled Following the money: China Inc’s growing stake in India-China relations. In summary:
Total current and planned Chinese investment in India is more than $26 billion. This “has changed the nature of what has been a largely transactional trade relationship.”
- Chinese companies are emerging as prominent players and investors, in areas ranging from infrastructure and energy to newer sectors of interest such as technology startups and real estate.
- For the first time, Chinese companies are seeking to establish a long-term presence in India, and their acquisitions in Indian companies give them an enduring stake in the Indian market.