Spark points between India and China
February 16, 2010

On Tuesday India announced it would increase its defense budget relative to the growth in GDP. India’s defence budget contributes  between 2.3 and 2.5 percent of GDP which is expected to grow by about 8 percent this year.

China too is expected to announce an increase in defence expenditure when its National Committee meets later in the year. China’s official 2009 budget included a 15 percent rise in defence spending to 480 billion yuan (US$70.3 billion), however these estimates do not include an account of weapons bought overseas or research and development funding.

As both nations raise defence budgets in the face of western depression, tensions between India and China remain at three major points of friction.

The disputed border: Parts of North East India and South West China, such as Aksai Chin and Arunachal Pradesh have never formally been resolved. Every few months, both countries blame the other for encroaching into the others land, beefing up security forces and building new infrastructure such as roads, bridges and railways right at the border. However this lingering dispute is not expected to result in a war situation like in 1962. While both countries use the border dispute as an irritant during bilateral talks, fearing a loss of investor confidence and trust from its Asian neighbors, neither country can afford to exert uncontrolled hostility towards the other.

Any military action by China towards any of its neighbors, especially a democracy like India, will erode the carefully crafted image of its “peaceful rise”, it will also further act as a catalyst souring US-China relations and give Japan a good reason to strengthen its military might in the region. Attacking India, which has also given the Dalai Lama refuge, would also mean committing diplomatic hara-kiri on a global scale. On the other hand, India a weaker military, which needs the economic and political support of China at a global platform, knows better than to attack its neighbor.

Naval rivalry in the Indian Ocean: As trade becomes and important aspect for the rise of China and India, disputes over water harboring major trade routes, potential oil bases and fishing zones are expected to fuel tensions.

Further, as China seeks to project its power regionally, India’s navy will continue to be the only regional impediment to China’s blue water ambitions. Other countries in the region may object to China’s projection of sea power, but only India has the ability to challenge it.

Less than a year after satellite pictures of a massive Chinese underground submarine and warship base off the south coast of China were published in the British media, India is upgrading airstrips in the Andaman and Nicobar Islands to support fighter operations, inducting 5,000 more troops and deploying additional warships.

The latest naval expansion by India, seeks to offset listening posts and other information gathering technologies in the Indian Ocean that China has set up as part of its ‘String of pearl’s’ theory. The theory, a foreign policy strategy explains China’s naval and military build-up, encircling India by co-operating with her neighbors.

Besides partnering with local governments to build major ports in Eastern Pakistan, Bangladesh and Myanmar, China is also more recently believed to have won the contract to construct which will be Sri Lanka’s largest port at Hambantota, near South India. Sri Lankan officials plan to turn Hambantota which was ravaged during the 2004 Tsunami and recent civil war into the second-largest urban area in the country after Colombo, the capital city. It is currently the ninth biggest today. Till date China is estimated to have poured approximately US$6 billion into the tear drop shapped nation in the Indian Ocean more than any other country, including India and Japan, which have historically been big donors and investors in Sri Lanka.

The Indian Ocean, is being hotly contested for mostly due to the important trade routes it provides. The ocean serves as a vital link from East Asia to the Middle East and Europe. It also provides for large reserves of hydrocarbons and approximately, 40 percent of the world’s offshore oil production. Fishing for shrimp and tuna has also become a profitable source of income for countries bordering the Indian Ocean.

Pakistan: Believing in the philosophy of my enemy’s enemy is my friend China and Pakistan share a special relationship. While Chinese funds have helped build Pakistan’s military and ports; the middle Kingdom is still weary of terrorism emanating from Pakistan fueling tensions at its Uigher border. However as long as India and Pakistan remain at loggerheads, the China-Pakistan nexus will grow. This alliance will also seek to strengthen the India-US-Japan relationship, which has been increasing their presence in the region, fearing China’s supersonic rise.

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