The rise of India is rarely considered in the same frame, except in terms of its potential to serve as a hedge against China’s putative growing military might. The idea that a new quadrilateral alliance in Asia and the Pacific centred on India’s anchor role, with the United States, Japan and Australia, in a soft, ‘values-based’ containment initiative (Quad Initiative) directed at a strategic encirclement of China blossomed briefly and faded from public view. It’s still around in less formal guise.

If you’ve done a little International Economics 101 in your preparation for security analysis (it should be compulsory but it clearly isn’t), this idea would strike you as passing strange. What we know from the analysis of the international economy is that two powerful forces dominate the economic interdependence between national economies. The first is the size or scale of the economic activity (or output) they generate. The second is their proximity, or how close they are geographically (and in other ways) to each other. If China and India are each becoming bigger and bigger in the world economy, and because they are geographically relatively close, it follows that their growth and closeness will likely drive higher and higher levels of trade, investment and economic interdependence between them. And, when you look at their relationship, that’s just what’s going on. China (and East Asia more broadly) is becoming a larger and larger trade partner with India. China became India’s largest trading partner in 2008. India–China trade hit US$60 billion this year. The leaders have set a target of US$100 billion of two-way trade by 2015.

To those in Washington, Tokyo or Canberra, who incline to the Quad strategy, not as a contingency but as some kind of in-your-face alternative to Chinese engagement, politically and militarily, as well as economically, it is well to reflect, as I’ve written before, upon the independent evolution and challenges of India’s relationship with China. These are two powers, with common borders, each with their own vulnerabilities, inexorably growing economic complementary, shared interests and objectives in global governance and the need to deal with each other’s growing power in their own Asian space. Engaging with China bilaterally is an imperative for India, not an option. The challenge for New Delhi — as it has always been — is to factor calculation of national self-interest (and security) into dealings with China without foreclosing the potential of a resurgent Asia with China and India at its core. Third-country strategic partners are a useful adjunct in this process but an adjunct at best, and relegated in most part to narrow aspects of the security realm. India’s self-image as an aspiring great power and a peer of China demand that the burden (and instruments) for managing and engaging China will rest primarily on its own capabilities. And it will have to discharge this self-imposed obligation in its own time frame, not at the whim of others.

These realities suggest that India’s strategic imperatives, whatever the baggage of history in either New Delhi or Beijing, have to encompass doing what comes naturally through commitment to globalisation in the international economy — a commitment which is central to fulfilling national ambitions in both China and India. My colleague, Shiro Armstrong, has made this point about the power of the economics over the politics in this context in his careful work on the China–Japan relationship. That relationship is the biggest bilateral relationship in Asia. Yet this relationship has not been thrown off course by serious tensions in the political relationship because it is conducted significantly within the framework of global rules and institutions that allow business in each country to get on with the job while the politicians scratch.

Suman Bery, in this week’s lead essay, draws the same lessons for South Asia. India’s future, going global, is inexorably tied to China’s and East Asia’s because of their economic weight in the world. Bery notes that, thus far, India and China have preferred to address the issue of their growing interdependence through intensive bilateral contacts, as well as through contact in various multilateral forums such as the G20 and East Asian Summit (EAS). In a speech delivered earlier this year, India’s former Foreign Secretary (previously an Ambassador to China) noted that between 2005 and 2010, Prime Minister Manmohan Singh and Premier Wen Jiabao had met no less than eleven times. Following Premier Wen’s official visit to New Delhi in December 2010, the two sides agreed to institute a strategic bilateral economic dialogue.

The question, Bery says, is whether relations between India and China might be strengthened more rapidly through participation in plurilateral groupings rather than purely bilaterally, and, if so, what such a grouping might look like. ‘The issue of regional economic architecture’, he notes, ‘is yet to receive sustained attention within the Indian establishment. Much will depend on how an expanded EAS, now to include Russia and the US, begins to function on security issues, and on whether the expanded EAS generates any economic coordination mechanism similar to that provided by ASEAN+3. India should embrace the EAS process vigorously as a way of complementing bilateral contacts with China that span economic and security issues’.

This augurs a very different strategic environment from the one that security analysts normally fret about. And it’s one that recommends a dramatic shift in China’s and India’s policy priorities, with greater focus on the crucial role that the regional and global economic institutions can play in facilitating positive economic and political relations in the region.

Peter Drysdale