A New Step in the Dragon–Elephant Tango

UPSC Syllabus Topic: GS Paper 2 -International relations

Introduction

China and India are moving through important phases in their national development. China has approved the proposal for its 15th Five-Year Plan, which will guide its progress from 2026 to 2030. India is moving towards its Viksit Bharat 2047 goal. Both place development at the centre of their national vision. Their choices now influence regional stability, trade, technology, and global economic trends. These shifts open new possibilities for cooperation between the two neighbours.

China’s Development Foundation

1. Centralised Leadership: China follows the unified leadership of the Communist Party of China (CPC). This leadership ensures policy stability and long-term planning. It links national goals with social and economic priorities.
2. Long-Term Planning Culture: China uses a planning system that builds change step by step. The approach of “drawing a blueprint until it becomes a reality” supports steady transformation across decades.
3. Domestic Adjustments: China now faces population changes, property-sector correction, and lower gains from large infrastructure investment. These changes demand new engines of growth.
4. Global Uncertainty: China sees more global volatility. Strategic risks and opportunities now exist together. This environment increases the need for stronger economic stability.
5. Technology Competition: Technology is now a major area of global rivalry. China aims to reduce vulnerabilities and strengthen innovation self-reliance. This shapes its development path.
6. Market–State Coordination: China blends market forces with state guidance. Top-level design and public consultation support broad participation and smooth implementation of reforms.

China’s Progress in the 14th Five-Year Plan

1. Stable Growth: China grew at an average rate of 5.5% during 2021–25. Its economy is expected to reach Renminbi (RMB) 140 trillion this year.
2. Higher Per Capita Income: Per capita income has remained above $13,000 for two years. China now stands among upper-middle-income countries.
3. Innovation Strength: China ranks among the top ten in the Global Innovation Index. Its research base and technology capacity have expanded.
4. Green Energy Shift: About 60% of China’s installed power capacity now comes from renewable energy. Environmental quality has shown steady improvement.
5. Global Economic Role: China contributes about 30% to global economic growth. It is among the top three trading partners for 157 countries and regions.
6. Linked Domestic and External Growth: China has strengthened the connection between domestic upgrading and high-level opening up. This supports stable engagement with global partners.

The 15th Five-Year Plan: China’s New Direction

1. Focus on Industrial Modernisation: The new plan places industrial modernisation first. It prioritises advanced manufacturing, semiconductors, aerospace, and next-generation information technology.
2. Innovation with Application: The plan shifts from early-stage breakthroughs to wide application. The goal is to turn research into products, services, and strong industrial ecosystems.
3. Selective Opening Up: China will promote high-standard opening up, but in a more targeted way. Cooperation will deepen in specific regions and sectors linked to long-term stability.
4. Stronger Domestic Demand: The plan links consumption with structural change. Policies on childcare, employment, education, and welfare support productivity and long-term growth.
5. Cluster-Based Regional Strategy: Greater attention will go to major regions such as the Yangtze River Delta and the Greater Bay Area. Inland regions will focus on work that enhances resilience and security.
6. Shift Toward Structural Resilience: The plan focuses less on high-speed expansion and more on stable, high-quality growth. It prepares China for a more complex global environment.

Global Impacts of China’s New Path

1. Technology Landscape Changes: China’s push in AI, aerospace, new energy, and advanced manufacturing will influence global technology networks. These areas may see new competition and cooperation.
2. Supply Chain Reorganisation: China’s focus on resilience will shape supply-chain design. Trade may become more targeted as countries reassess interdependence.
3. Shift in Investment Patterns: High-quality growth emphasises advanced industries. Global investment may move toward sectors linked to China’s industrial upgrading.
4. Stronger Role of China’s Consumer Market: China’s domestic market will continue to expand. Global consumer-facing firms will adjust their strategies to stay relevant in this space.

India-Specific Impacts

1. Expanding Trade Scope: China remains one of India’s major trading partners. Bilateral trade reached $138.46 billion in 2024. India’s exports to China have grown, supported by multiple trade platforms.
2. Industrial Complementarity: China leads in manufacturing, electronics, new energy, and AI. India is strong in IT, software, and biopharma. These strengths complement each other and create scope for joint value-chain growth.
3. Revived Mobility: People-to-people exchanges are improving. China has resumed Indian pilgrimages, and India has restored tourist visas for Chinese citizens. More direct flights support tourism, education, and cultural exchange.
4. Shared Multilateral Role: Both countries engage through BRICS, SCO, and G20. They work together on climate change, food security, and public health. This cooperation supports a more balanced global order.
5. Aligned Development Visions: China’s modernisation and India’s Viksit Bharat 2047 vision share common goals. Both aim for technological progress, economic stability, and social improvement. This creates a natural basis for cooperation.
6. Deeper Economic Opportunities: As China strengthens high-quality development, opportunities open for India in services, technology, and niche manufacturing. Both sides can use these areas to build steady cooperation.

Conclusion

China’s new development strategy focuses on resilience, innovation, and stable growth in a world marked by rising uncertainty. India is advancing its Viksit Bharat 2047 vision with similar goals of modernization and long-term stability. Both countries can deepen cooperation in trade, technology, climate action, and multilateral platforms to support balanced regional growth. Their choices will shape supply chains, technology flows, and economic networks, influencing development across Asia and the wider global landscape.

Source: The Hindu