Written by Karan Tripathi.

The world order that followed the end of the Second World War was one marked with economic prioritization. Confidence building took centre stage in International Security discourses and economic integration became an inevitable reality for nations that once boasted of imperial prowess.

It was under this ecosystem of mutual economic growth through international cooperation, that political boundaries started to blur, ideologies phased out, and suddenly even the smallest of players emerged as a potential trading asset. This phenomena occurred in Europe before it made its way to Asia; it became institutionalised in Japan’s foreign policy approach to its pre-war hostile neighbours. This was how the world was introduced to seikei bunri.

India’s growing market for digital goods has forced China and Chinese digital giants such as Xiaomi to engage with India despite the political differences. Boston Consultation Group estimates that India’s consumption will triple to $4 trillion by 2025 and China, which currently sends only 3% of its exports to India, is eying to capture the maximum of this potential market.

A policy that creates a distinction between a political and economic relationship, seikei bunri, has shaped as well as strengthened Japan’s economic rise and was marked with stronger trade relations with both China and United States of America. Despite the serious tensions hovering over the Sino-Japanese relationship, whether it is the rise of nationalist sentiments or security breaches in the maritime zones, Japan has capitalised well on Chinese markets and cheap labour for its manufacturing hubs.

Just like its fellow Asian superpowers, India has changed its narrative towards its unpredictable neighbour following the 1962 border war. After the opening of the Chinese economy in the 1970s, both India and China have seen each other as significant trading partners despite quite obvious political and security unreliability. The nationalist sentiments in both countries have not changed much since the 1962 misadventure, but that has not deterred both governments from engaging each other on diplomatic as well as industry levels.

This developing seikei bunri nature of the Sino-India relationship was put to a stern test in the months leading up to the much anticipated BRICS Summit in Xiamen, China.

Many experts thought that the Doklam issue would be the elephant in the room while some even suggested Prime Minister Narendra Modi would give the Xiamen summit a miss as a mark of protest. The relentless verbal onslaught of the Global Times through its propagandist techniques had certainly produced some dark clouds ahead of the possibility of a Modi-Xi meeting on the sidelines of the summit. However, all of the doubts were withered in a whim by a sudden diplomatic development between Beijing and Delhi. Just days before Modi’s departure to Beijing, reports emerged of both governments undertaking moves to deescalate the tensions at Doklam which came as a welcome surprise. The remaining doubts regarding this sudden diplomatic development were soon cleared in the Xiamen Declaration of the BRICS Summit.

Three out of the four documents signed during the Summit directly refer to trade and economics; while the fourth deals with innovation cooperation. As Russia, Brazil and South Africa maintained a neutral and distanced stance on the Doklam standoff the content of the declaration signified the understanding that India and China had reached in pushing forward a common agenda that defines both their mutual relationship and their roles in this multinational body.

While the Xiamen declaration quite extensively describes the vision on economic cooperation between the BRICS members, the chapter on Peace and Security remains generically worded. Members have restrained from making any groundbreaking developments in their security and political relationships with each other, while restricting the section to a commentary on global security concerns such as Yemen crisis and the Syrian conflict.

On the other hand, the deliberations on multilateral trade and investment policies have been quite vividly and optimistically laid down. Pacts such as Interbank Cooperation Mechanism and PPP Project Preparation Funds are some of the examples of the aforementioned trend. In order to capture the contemporary trends in cross-border trade, members have focused heavily on promoting ICT infrastructure for enhancing e-commerce and achieving synergy in trade by developing common auditing standards and Science, Technology and Innovation (STI) investment.

The paradigm shift from political engagements to something called Global Economic Governance reflects the maturing seikei bunri in the Sino-Indian relationship. Despite their differences in the strategic alignment in the region, China and India have mutually advocated for a strengthening trade and investment engagement with the Southeast Asian region. India’s growing market for digital goods has forced China and Chinese digital giants such as Xiaomi to engage with India despite the political differences. Boston Consultation Group estimates that India’s consumption will triple to $4 trillion by 2025 and China, which currently sends only 3% of its exports to India, is eyeing to capture the maximum of this potential market.

So it would not be difficult to understand the setting aside of the Doklam standoff as a pragmatic approach adopted by both nations to keep economic ties intact. This development in the Sino-Indian relationship, which could have gone either way, is undoubtedly reflecting a seikei bunri characteristic. Although there were statements of a political nature, such as a stance against terror groups like Jaish and al-Qaida and support for India’s greater role in the UN, the major takeaway from Xiamen is the mutual understanding that it is trade that drives it all.

Karan Tripathi is pursuing a degree in Law and Humanities from Faculty of Law, Symbiosis International University. He is the Co-Founder of a South Asian Cultural Exchange Forum called The Dialogue. Image credit: CC by Wikipedia Commons.

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