The Relationship between China and India

1083 WordsJun 23, 20185 Pages
The historical relationship between India and China has been ambivalent at best. Plagued by border disputes and economic competition, the countries have long fostered feelings of animosity towards one another. Recently however, both sides have made concerted efforts to improve relations recognizing that coöperation offers economic and political advantages. In May, Indian and Chinese officials issued a joint statement affirming their resolve to further improve their relations through increased economic and cultural exchanges (Bagri). In addition however, India has also called on China to lower their non-tariff-barriers in order to enable India to reduce its growing trade deficit to China (Dasgupta). Although China and India have many…show more content…
Whether or not China is willing to relinquish their barriers that protect domestic industries is unclear and India’s perception of whether or not China will follow through with an agreement to reduce their Non-Tariff-Barriers is critical to any coöperation. If both sides perceive the other as trustworthy and a mutually beneficial option is presented, a deal will likely be made, if not another result could occur. China’s decision could also have ramifications for future business between the countries for if China balks at India’s proposal, it could change India’s perception and lead them to take actions that wean themselves off of Chinese dependence. Coöperation may be difficult to achieve because both agreement and enforcement are necessary. A distributional problem is present because, on one side India believes that China lowering trade barriers would benefit both sides while China is unsure holding the belief that domestic producers and workers could be hurt in the protected industries if the barriers were removed. Furthermore, an informational problem also exists because it is unknown what will actually happened if China agrees to remove their barriers. On one hand it could lower India’s trade deficit, thus allowing the Chinese citizenry access to cheaper goods, but it could also lead to domestic firms shutting down, citizens getting
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