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Coordination of China and India's Development Under the Iniative of the "Belt and Road"

June 02 , 2017 04:33 PM by LIN Minwang


Minwang LIN, Non-Resident Fellow of iGCU, Peking University, Professor, Deputy Director of the Center for South Asian Studies and Assistant to Dean of the Institute of International Studies at Fudan University. 


The "Belt and Road" initiative proposed by China got positive responses from the international community, and it has achieved preliminary development. Among China's neighboring countries, India still holds a suspicious attitude toward the initiative. In spite of this, economic cooperation and coordination between China and India still has achieved important progress and development.

China and India's s coordination in building "Belt and Road" is not only possible but the coordination process has been started even before the "Belt and Road" initiative was proposed; and currently, the two countries are seeking coordination at a higher level.

The main contents of the coordination between China and India includes the following: Invest in natural resources; Invest in India's Special Economic Areas and Industrial Parks; Shipbuilding industry; Infrastructure Building.

As for the risks and challenges for Coodination between China and India, China is still faced with many potential risks regarding investment in India, which are mainly reflected in the many restrictions that India lays out regarding Chinese investments in India: India's internal corruption is very serious, and its examination and approval procedures are complicated; India has many different laws regulating investment, which hinders foreign investors to invest in India; besides, India's infrastructures are poor. Due to a lack of mutual political trust between China and India, India places many restrictions on investments from China. The risks of investing in India also include rampant corruption and pervasive rent-seeking of Indian officials. 

To sum up, India's economic basis and Modi government's "Make in India" Campaign bring an opportunity for economic coordination between China and India. This paper mainly discusses about several possible sectors in which coordination can be conducted. In fact, the content and scope of economic cooperation between China and India are much wider. When Premier Li Keqiang visited India in 2013, China promised to take measures to address the issue of trade imbalance between China and India, carry out cooperation in drug supervision and administration (including registration), and strengthen the relationship between Chinese companies and India's information industry. China will strive to complete negotiation over quarantine inspection of farming produces and plants. India welcomes Chinese companies to come to invest in India, and participate in building of infrastructure in India, and further strengthen project contracting cooperation between companies from the two countries. Moreover, the two countries also established strategic economic dialogue mechanisms to study the issue of coordination of their macroeconomic policy and agreed to further strengthen cooperation in such areas as energy conservation, environmental protection, new and renewable energy resources and high technology. And the two countries agreed to strengthen cooperation in the area of railways, including transportation with heavy loads and development of railway stations.

Note: Lin M. (2017) Coordination of China and India’s Development Under the Iniative of the “Belt and Road”. In: Wang R., Zhu C. (eds) Annual Report on the Development of the Indian Ocean Region (2016). Research Series on the Chinese Dream and China’s Development Path. Springer, Singapore.