The 'CHINDIA Connection' and its implications for the transatlantic partnership

14th Transatlantic Roundtable in Munich

01.04.2006 · Improving Responsiveness

With the emergence of China and India the focus of international politics is shifting more and more to Asia. American and European experts therefore discussed in a two-day conference at the Center for Applied Policy Research (C∙A∙P) the 'Chindia Connection' and the implications for the transatlantic partnership. The 14th Transatlantic Roundtable of the Improving Responsiveness Program, dealing with this important topic, was organized in cooperation with the U.S. Consulate General in Munich. The 25 Participants analysed various security and economy related aspects concerning the current approach of the United States and the European Union towards China and India and the increasing cooperation between both emerging powers.

The Center for Applied Policy Research would like to thank the German Marshall Fund of the United States for enabling this conference by the generous support of the Transatlantic Roundtable Program as part of a Key Institution Grant to the C∙A∙P.

Ashley J. Tellis

China and India in the year 2020 - transatlantic vision of two emerging superpowers

The Roundtable started by taking a closer look at the economic and political development of both emerging powers within the next decades and the role of the transatlantic partners within the reshaping of international relations.

Various statistics show that China and India will be the fastest growing markets for the next 15 years, leaving Russia and Brazil behind. Important criteria for this development are the growth of the population (approximately 1.5 billion each in 2025), investment in human capital and the opening of their economies. In terms of democracy, environment and open economic markets India seems to be in a better position to handle the enormous challenges related herewith. Despite their great performance both will stay 'emerging' markets even beyond 2020.

On the other hand, the economic growth also demands more  natural resources for the production of energy. Both countries strongly depend on the import of oil and natural gas, especially from the Middle East region. Apart from the environmental implications this dependency may also lead to some form of energy nationalism. Current attempts of signing cooperation deals with less reputable states can be seen as one indicator for this development.

From an economic point of view there will be a different impact on the transatlantic partnership and the world economy. Not every other actor will benefit from the increasing importance of both countries. Related herewith, indirect consequences need to be considered such as the dominating role of Chinese textile exports which leads to a decline of the textile industries in other countries e.g. in North Africa.

It was also pointed out that the integration of China and India into the global security architecture will be a major challenge for the United States and Europe. Looking at the continuous double digit growth of the Chinese defence budget since 1990 the modernization efforts could  be seen as a major strategic challenge especially for the United States in Asia. But compared to the overall economic development, China and India are currently spending only between 2.3-2.8% of their GDP on the military. Nevertheless, it seems  questionable whether China could become the regions’ stakeholder in the field of defence.

The possible scenario for 2020 concerning the cooperation between India and China could reach from loose cooperation in the field of peacekeeping to closer economic relationship. There was also agreement that domestic disturbances in China could lead to instability and even state failure within the region.

In a transatlantic context, the key issues discussed were the different perceptions of the United States and Europe towards the growing Chinese defence budget, the role of Japan as a 'counter balance', the relationship between China and Russia, the engagement of China in Africa, and a possible competition between a solid partnership of China and India on the one hand and the EU and U.S. on the other. 

Thorsten Klaßen, Roy Kamphausen, Klaus Brummer

The role of India in Washington's foreign and economic policy

After three decades of isolation the relationship between the United States and India seems to be transforming into a new form of strategic partnership. Washington has practical economic, political, energy, and strategic interests to enhance better relations. The second session of the Roundtable discussed the foreign policy of the Bush-administration as well as the debate concerning the civil nuclear cooperation deal between both countries, which de facto recognizes India as nuclear weapon state, even though it has not signed the Non-Proliferation Treaty (NPT).

Besides the positive effects of this strategic approach there are several risks attached to this deal. First, other countries like Pakistan, North Korea, or Iran could reconsider their self-restrained position and feel encouraged to intensify their military nuclear program. Pakistan could adopt the U.S.-India agreement for an according model with China. Second,  international efforts to control the spread of nuclear arms could in general seriously be damaged. The deal still has to be confirmed by U.S. Congress, which seems possible, if India accepts special conditions concerning the cooperation with the U.S. and the International Atomic Energy Agency.

In this context it was pointed out, that the way how the U.S. and India prepared the agreement - only consulting some EU member states - was not helpful for the transatlantic partnership. Doubts were also raised whether India could be taken for granted. An emerging India, which is referred to as a strategic partner for the United States, could become an ambitious political power in the region, unprepared to act in a reasonable and responsible way. Moreover, it was a point of interest, whether the U.S. are cooperating with and supporting India because they represent the same value for democracy - in contrast to China. This could be seen as a wider process of a 'democracy-promoting-strategy' of the U.S.

EU-China cooperation - what's in it for Europe?

The European Union does not refer to China as a direct military threat, but rather as a major economic partner. Economy is currently the main field of cooperation. China is the second most important trading partner of the EU and China refers to Europe as its most important trading partner partner (with Germany as the strongest European trading partner of China followed by France). Nevertheless Europe needs to bear in mind that with the still open Taiwan question and  strained China-Japan relations there are unresolved security tensions within the region endangering  stability. Growing nationalism within China might increase this danger.

Ashley J. Tellis and Thomas Bauer

It was also laid out that there is a big structural difference in Europe's approach towards China, compared to the China policy of the United States. The multifaceted nature of the EU's policy-making leads to varying competences in the policy fields involved, a variety of actors, and different perceptions within the member states. Because of the disparity within the EU, Europeans concentrate more on institutions and sometimes get the allegation to focus rather on the debate than on the implementation of political action. But even though the EU cannot be seen as a single actor it is nevertheless an important global player.

In contrast to the United States the EU’s perception of China is determined by trade and economic relations. In terms of security policy Europe still faces problems to define its global security interests. While the United States proclaim their concerns in a very open manner security in the Asia-Pacific region is still limited to an expert debate  in Europe. If both transatlantic partners  think about elaborating  a common agenda, the EU and the U.S. have to consider how to deal with the dilemma of sharing responsibilities as allies in the terms of security policy while being economic competitors at the same time.

The 'Chindia connection' as touchstone for the future transatlantic partnership?

Concluding the consequences of the emergence of China and India for the transatlantic partnership as such were discussed. For the United States this topic is part of a broader context dealing with the rise of Asia, leading to principal challenges:

• Will the region produce a peer competitor to the United States?
• Will the region's weaknesses produce threats to U.S. security?
• Will the region's behaviour produce collective action problems that undermine U.S. security?
• Will the region produce new partners that can collaborate in the attainment of common goals?

Europe's strategic deficit is clearly a great disadvantage for the transatlantic partnership, making it almost impossible to find a common approach towards China and India. The main issue remains to be the impact of globalization on the international struggle for power. The central dilemma in this struggle is that the process of economic interdependence that conduces to the mutual prosperity of the West also leads to the creation of capacities and capabilities that aggravates strategic competition. Nevertheless Washington is counting on the pacifying effects of economic interdependence and democracy. Problems occur because of the different if not even diverging perceptions among the United States and the EU.

What both transatlantic partners currently have in common is that their approach is a balancing act based on the hope that globalization, democratization and the need for ongoing economic development in both China and India will help to settle potential security dilemmas.

Downloads

Agenda (pdf)

List of Participants (pdf)

Alexander Lennon: The Rise of Asia (ms-word)

Christian Wagner: Role of India for the US (ms-word)

William Hoehn: Role of India for the US (ms-word)

Roy Kamphausen: China and India in the year 2020