Assessing Sino-Indian Economic Relations in an Interdependence Framework: 1992-2008

TLDR: In this article, the authors argue that interdependence has only recently emerged in the India-China dyad and that lingering strategic distrust, national security consideration, and protectionist tendency have prevented the deepening of economic interdependencies.

Abstract: This study situates Sino-Indian economic interaction under the interdependence framework. By mapping conflict behavior in this dyad against the trends in the economic interdependence, we find a discernible shift away from escalation (high-level conflict) towards bargaining (diplomatic contestation). This paper argues that interdependence has only recently emerged in the India-China dyad and that lingering strategic distrust, national security consideration, and protectionist tendency have prevented the deepening of economic interdependence. The findings challenge the direction of interdependence in this dyad normally gleaned from nominal trade data. This paper also highlights key issue-areas that inhibit strategic coupling in the bilateral economic interaction.