BRICS Summit in China: Great Optics as India, China Affirm Bilateral Ties and Border Peace

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By Melissa Cyrill

The ninth annual summit of the BRICS countries – referring to the institutional coalition of major emerging powers Brazil, Russia, India, China, and South Africa – took place in Xiamen this Sunday through Tuesday.

Coming on the heels of a prolonged military stand-off between India and China over border tensions, the summit presented the best opportunity to showcase business as usual.

Naturally, optics played its part: a much awaited handshake between Prime Minister Narendra Modi and President Xi Jinping followed by bilateral talks underlined the summit’s optimistic undertone.

Even more interesting though – the Xiamen Declaration by the BRICS nations explicitly condemned Pakistan-based terrorist groups – a major concession to the Indian side by the Chinese.

All of this points to both countries opting for a constructive and “forward looking” approach.

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Economics trumps geopolitics – India, China move beyond Doklam stand-off

A 73 day stand-off at Doklam ended on August 28 – with India and China agreeing to a mutual disengagement.

The Doklam plateau is a disputed territory north of the tri-junction of Sikkim, Bhutan, and Tibet. Tensions began on June 16 when the Indian army intercepted Chinese road-building activity in the Doka La area of the plateau. Subsequently, the Bhutanese protested Chinese intervention into their territory – internationalizing the stand-off.

Yet, even as all sides indulged in media propaganda and political high-talk, India and China maintained diplomatic communications throughout.

Furthermore, the timing of the border dispute’s sudden resolution – just before the BRICS Summit at Xiamen – indicated that India’s participation was accepted as vital.

A primary reason is because at the top of China’s current foreign policy agenda is its One Belt, One Road (OBOR) vision. The OBOR seeks to establish infrastructure networks across Eurasia, including a China-Myanmar-Bangladesh-India Corridor and a China-Pakistan Corridor, the latter of which has India uneasy.

Just as important, however, are China’s expanding and deepening economic and business ties with India – both in terms of trade relations and private sector investments.

This is why economic considerations trumped geopolitical kinks in the latest face-off between the Asian giants.

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What is at stake

Besides concerns over OBOR, China knows the importance of its access to the Indian markets, while India continues to remain dependent on Chinese imports. In 2016-17, China’s goods exports to India valued at a whopping US$61.3 billion as against India’s shipments worth US$10.2 billion.

Chinese business linkages with India are also increasing. The country’s foreign investments into India has accelerated in recent years; between June and August 2016 alone, Chinese firms invested US$2.3 billion into India. Chinese firms are especially invested in India’s technology startups – across a variety of sectors.

Finally, India’s economic programs like Make in India and Digital India have also courted Chinese interest in investing in manufacturing, infrastructure, and the strengthening of India’s digital ecosystem.

Ultimately, it makes the most business sense to make peace and carry on.

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India Briefing is published by Asia Briefing, a subsidiary of Dezan Shira & Associates. We produce material for foreign investors throughout Eurasia, including ASEANChinaIndonesiaRussia, the Silk Road, & Vietnam. For editorial matters please contact us here and for a complimentary subscription to our products, please click here.

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