CHAPTER and economic relations between China and

CHAPTER – 1: INTRODUCTIONChina–India relationsChina–India relations, also called Sino-Indian relations or Indo-China relations, refers to the bilateral relationship between the People’s Republic of China (PRC) and the Republic of India. The modern relationship began in 1950 when India was among the first countries to end formal ties with the Republic of China (Taiwan) and recognize the PRC as the legitimate government of Mainland China.

China and India are the two most populous countries and fastest growing major economies in the world. Growth in diplomatic and economic influence has increased the significance of their bilateral relationship. Currently, ties between the two nuclear armed countries have severely deteriorated due to a military standoff in Bhutan.Cultural and economic relations between China and India date back to ancient times.

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The Silk Road not only served as a major trade route between India and China, but is also credited for facilitating the spread of Buddhism from India to East Asia. During the 19th century, China’s growing opium trade with the East India Company triggered the First and Second Opium Wars. Relations between contemporary China and India have been characterized by border disputes, resulting in three military conflicts — the Sino-Indian War of 1962, the Chola incident in 1967, and the 1987 Sino-Indian skirmish. However, since the late 1980s, both countries have successfully rebuilt diplomatic and economic ties. In 2008, China became India’s largest trading partner and the two countries have also extended their strategic and military relations.China and India the fastest growing countries, have emphatically made their presence felt in the rapidly globalizing world economy.

Both the countries are among the major countries in the global population as both the nations contribute 37% of the world’s population and 6.4% of the value of world output and income at current prices and exchange rates. Rapid economic growth, large foreign direct investments (FDI) and growing trade along with the whole world are some of the peculiar characteristics of both the countries of development.

Yet, both differ from each other immensely in relation to their political background, nature of development specially economic and its approaches like exchange rate arrangements opted by both the countries. In this backdrop, a comparison between the two along with their trade relations with each other and with the rest of the world becomes attention-grabbing.Indian Exports to China under the India China Trade Relations:The principal items of Indian exports to China are ores, slag and ash, iron and steel, plastics, organic chemicals, and cotton. In order to increase the extent of exporting Indian goods to China, however, there should be a special emphasis on investments and trade in services and knowledge-based sectors. The other potential items of trade between India and China are marine products, oil seeds, salt, inorganic chemicals, plastic, rubber, optical and medical equipment, and dairy products. Great potential also exists in areas like biotechnology, IT and ITES, health, education, tourism, and financial sector.

Chinese Exports to India under the India China Trade Relations:The main items that comprise Chinese exports to India are electrical machinery and equipment, cement, organic chemicals, nuclear reactors, boilers, machinery, silk, mineral fuels, and oils. Value added items like electrical machinery dominates Chinese exports to India. This exhibits that Chinese exports to India are fairly diversified and includes resource-based products, manufactured items, and low and medium technology products.

It is said that if India is to capture the markets of China and enjoy profits, then it would have to discover new merchandise and branch out its exports to China. HISTORY:India and china are two major countries in The Asia – Pacific region and it is Natural that both of them want upper hand.1. POLITICAL RELATIONS:On 1st April 1950 India became the first non-socialist country to establish relations with the People’s Republic of china.

Erstwhile PM adopted the policy of non-alignment and disarmament which is known as NEHRUVIAN CONCESSION. He had introduced the famous “PANCHSHEEL SIDHAANT” and used to say HINDI CHINI BHAI BHAI. Unfortunately His govt. suffered a major setback in 1962 when his so called BHAI infiltrated in India and ended up capturing Indian land called Aksai-cheen. It is pointless to criticize Nehru for his policies because He had adopted best foreign policy.

Do you think we could have afford to involve in any dispute be it military or political When we were sufferings from Poverty, unemployment, refugee crises and many more. Nehru wants to get support from all the Major countries to domestic development that’s why he adopted non alignment.2. COMMERCIAL AND ECONOMIC RELATIONS:Till 2003 the trade between India and china was just 3billion.

In 2003 erstwhile PM Mr. Atal Bihari Vajpayee visited china and signed various pacts in different sectors like defense, agriculture, space, science etc. In the backdrop of these pacts the trade between china and India increased by 73.9 billion. A refrigerator to mobile phone, we import these items from china. Even on Diwali we import our Ganesh and Lakshmi ji from china. Trade deficit is increasing with china because china imposed ban systemically on Indian goods and it is a part of its strategy to become world’s largest manufacturing hub.

India is the 7th largest exporting destination for china and china is the 27th largest exporting hub for India. Indian export to china is decreased by 12.29% in last year where imports from china is increased by 2.

01%.In recent commercial ministerial meetings china assured India that we will take action to reduce trade deficit but as far as I know Chinese strategy they successfully made a monkey out of India policy makers like they did before. Once they released that this treaty is not working in their favors they will back out like they did before.

3. CULTURE RELATIONS: Culture relations between India and china existed date back in 1500-1000BC. There is some evidence that India’s Vedic civilization and China’s Shang Zhou civilization had exchange religious views. India’s monk spreads Buddhism in china and some Chinese monks also travelled to India and few of them were Vhen sang, Fa Xian, Xuan say etc. Erstwhile President of India Mrs.

Partibha Devi Patil visited china in 2010 and inaugurated the temple which is dedicated to Indian monks.China and India both had attained the liberation from imperialist domination over a century. The impact of this imperialist rule had a different corollary on the two nations as the nature of this imperialist rule differed in both the countries. For over the period of hundred years, India endured a single imperialist rule of Britain, whereas, Chinese empire had witnessed five imperialist rulers. India had more elaborate and established infrastructure facilities such as railways, roads etc., and advance communication systems than that of China.

Even it was ahead, in literacy rate and higher education. However, the Indian agriculture had been exploited by the British Raj; most of the irrigation facilities and fertilizers had been diverted to cash crops as a part of British policy. Unlike India China had focused more on developing a particular agricultural pattern, known as an operating crop rotation system. As a result, despite the neglect of investments in agriculture, China achieved a significant improvement in the growth rate of food grains, which was about six times higher than India by 1952. China had more stabilized agricultural system, whereas Indian agriculture was developed as per the needs and requirements of British rule. Around 1950, India and China founded their republics, China had a relatively comfortable food surplus, which accelerated its industrial growth whereas India suffered badly experiencing food grain crises for a long period, which restrained the rapid industrialization growth in the country.

Both traversed on a similar growth trajectory between 1952 and 1978, as the economic growth rate in China and India was almost same, i.e. around 3.8% per year for India and 4% for China. However; India had a fast growing service sector whereas Chinese growth was mainly based on manufacturing sector.


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