India-China economic cooperation – The art of balancing

TERRA ECONOMICUS, , Vol. 19 (no. 3),

India and China are the two largest states in Asia and among the most influential actors in the world. The core aspect that determined their position in the structure of international relations was their economic power. Based on the economic achievements of the two Asian giants, experts began to predict the onset of the “Asian century”, in which the center of world gravity would shift to the Asia-Pacific region, China would become a new superpower, and India – its main contender in the region. Against this background, many researchers started to pay attention to the domestic potential at regional and global levels, while bilateral relations between Delhi and Beijing were almost exclusively considered as related to geopolitics. The author deals with the bilateral economic ties and reasons that impede a mutually beneficial dialogue. A qualitative analysis has become a key research tool as it showed that today the determining source of problems are the internal imbalances of India and China, rather than their geo-economic competition, which, despite its negative impact, is still not the major factor hindering economic cooperation between the two countries. It is the solution of internal problems that activates the external trade relations of both states, but especially India, which to this day continues to be an inward-oriented economy.
Citation: Shavlay E.P. (2021). India-China economic cooperation – The art of balancing. Terra Economicus 19(3): 65–77. DOI: 10.18522/2073-6606-2021-19-3-65-77
Acknowledgment: The article is prepared within the project “Post-crisis world order: Challenges and technologies, competition and cooperation” supported by the grant from Ministry of Science and Higher Education of the Russian Federation program for research projects in priority areas of scientific and technological development (Agreement № 075-15-2020-783).

Keywords: India; China; economic cooperation; imbalances; economic patterns; competitiveness; budget deficit; Asian century

JEL codes: D47, E23, F01, F14, F20, F52, F61

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Publisher: Southern Federal University
Founder: Southern Federal University
ISSN: 2073-6606