This article discusses a constructivist institutional approach to understand changing China-South Asia relations in the 21st Century. It argues that constructivist institutionalism and concepts of international political economy of trade can explain the reality of politics and foreign policy changes between and within China and South Asian states in a positivist viewpoint. Taking into consideration the political and foreign policy aspects of the ‘Belt and Road’ initiative of China, in changing patterns of international relations, it explains how the idea of international trade has shaped and re-shaped the political preferences and public confidence of these states. Trade is a universal medium that links political, economic and ideological trends in economies for global development, peace and security. The purpose here is not to present a new thesis through testing raw data; rather it presents an analytical approach, using prominent theories of international relations, to understand the changing China-South Asia relations today.
* Note: the author acknowledges that this paper is a recreation of his conference paper presented to the 3rd Conference of China-South Asian Think-Tank Forum (CSATTF) held in Kunming, China, 12-13 June 2015.
This article discusses a constructivist institutional approach to understand the changing China-South Asia relations in the 21st Century. It argues that constructivist institutionalism and concepts of international political economy of trade can explain the reality of politics and foreign policy changes between and within China and South Asian states in a positivist viewpoint. It stresses the political and foreign policy aspects of the ‘Belt and Road’ initiative of China—also known as the initiative of jointly building the Silk Road Economic Belt and the 21st-Century Maritime Silk Road—in changing patterns of international relations concerning these states. It argues that foreign policy approaches affecting the relationship between China and South Asia can be shaped and re-shaped by the ideological changes affecting political preferences at the socio-political level, through trade as a structural force affecting foreign policy making (see Hay 2006; Schmidt 2011). Trade is identified as a universal median that links political, economic and ideological trends in economies for global development, peace and security (see Milner 1999).
In this view, the ‘Belt and Road’ initiative is a means of creating discourse for closing up or minimizing the strategic, political and ideological gaps between China and South Asian states. Trade opportunities from the ‘Silk Road’ hold forces of cooperation for the development of South Asian societies and China. Trade links politics and the economy robustly. International trade links states with global markets (see Milner 1999; Frieden & Martin 2003; Fritsch 2011). The ‘Belt and Road’ initiative does not only link China and South Asian states, it also links the ideologies and cultures of these societies— through structure-agency interplay — creating intertwined domestic and societal demands, which change power-politics towards achieving mutually beneficial goals by cooperation.
Interaction between states is affected by the social strata composed of ideas, norms and cultures of human life (see Hay 2006; Schmidt 2011) that cannot be avoided in understanding foreign policy making in international relations or regional integration. This ‘social strata’ is not static (Bell 2011; North 1990), it is changeable through political choices and decisions and through socio-political interaction within and between societies. Such interaction affects and is affected by socio-economic opportunities of development, economic prosperity and social wellbeing—defining properties of political preference and public confidence. This opportunity structure is distinct through formal and informal institutional structures composed of interests and ideas that shape and re-shape political choices and decisions at the domestic and international level (Bell 2011; North 1990; Schmidt 2011). Taking trade as a prominent opportunity structure, which can affect social demands that affect and are affected by foreign policy (Milner 1999), it is argued that trade opportunities introduced by the ‘Belt and Road’ have institutional potential to shape and re-shape ideas of political preferences leading to cooperative relations between China and South Asia.
Despite the multidimensional relationship based on mutually exclusive and beneficial interests rooted in the 3rd Century BC, China and South Asian economies share multi-level aspects of cooperation and competition, and collaboration and conflict between their economies. Realists may frame such behaviour as an inevitable ontology of states in an anarchical international system, adhering to the concept of power-politics—a cornerstone of international relations (see Dornan 2011; Donnelly 2000; Dunne, Kurki, & Smith 2013). Since the turn of 21st century, China and South Asian economies have become more interconnected to the global market economy—more recently through the ‘Belt and Road’ initiative leading to the idea of building bilateral and multilateral partnerships for regional integration and global development through trade (Milner 1999).
Changing relations between China and South Asia is an evolving phenomenon in international politics today. It is only recently that academic scholars and foreign policy analysts have started to investigate the aspects of this development in foreign policy reflecting international relations. This article seeks to develop a discussion on the existing literature and debate on China-South Asia relations. It uses qualitative methods by collecting data from secondary sources including research journal articles, newspaper stories and conference outcomes. This does not limit the quality of research and the methodological framework present in this paper as it covers the generic and specific knowledge in this new developing area of international relations concerning China-South Asia relations. The purpose of this article is not to present a new thesis through testing raw data; rather it presents an analytical approach, using prominent theories of international relations, to understand the changing China-South Asia relations.
This article proceeds as follows. The first part presents an overview of trade engagements between China and South Asian states with a view to show trade has acted as a way forward for cooperation and enhanced relations between them. The next section presents realists’ assessments of the existing relations between China and South Asia. Using a constructivist institutional approach to international political economy of trade, it discusses how trade has created and engenders an ideational structural change re-shaping the existing foreign policy approaches and political preferences of these states towards each other. It then provides an analytical explanation of the aspects of change in international relations amongst these states by the impact of international trade associated with the ‘Belt and Road’ initiative. It concludes with the summary of the discussions.
Trade and China-South Asian Relations
Foreign policy scholars stress the importance of trade and growing economic engagements as their positive attitudes of cooperation between states. Here trade (or the international trade norm) is argued to be an element of international relations that shapes and re-shapes foreign policy, by changing political attitudes (and public opinion) to regional integration and international cooperation. A study to explore the impact of trade on foreign policy, concerning relations between China and Africa and Latin America, asserted that ‘more states trade with China, the more likely they are to converge with it on issues of foreign policy.’ (Flores-Macı´as, & Kreps 2013). In a similar study, it was observed that, against the Western critique of the expansion of China, South African public opinion was also influenced by the growing economic role played by China in the global economy because of the trade opportunity it encompasses for positive cooperation for development. South African public opinion also changed because China became a potential development partner due to the effect of its ‘hyper-competitive manufacturing base on local industries’ (Anthony; Tembe; and Gull 2015). Strategically and politically negative international perceptions of the economic expansion of China makes minimal impact on the public opinion concerning bilateral relations between states based on trade engagements.
Liberalisation of trade in both domestic and international contexts has been the growing foreign policy trend since the post-Cold War era. During the 1980s a push to a ‘freer trade’ agenda began across the globe (Milner 1999). Both developed and developing countries have adopted this trend in promoting their national development. One may argue that trade has been a driving force for interaction between states in maximising national interests. Since the 1970s and 1980s, economic security has become significant for hegemonic powers in the international system. Economic resources have become crucial in national and international agendas for development and security. Trade liberalisation has made states become more integrated in promoting national interests through economic relations supporting broader development (see Dunne; Kurki and Smith 2013).
At the same time, China-South Asia trade relations remain more forthcoming than their strategic relations. China’s trade relations with South Asia are two-fold: the bilateral trade engagements and the multilateral trade engagements through the South Asian Association for Regional Cooperation (SAARC) framework. Bilaterally, in the early 21st Century, China signed different economic agreements with South Asian economies including India and Pakistan. For example, the tourism agreement with Pakistan was signed to facilitate business and tourism related travel and exchange between the two countries. China has helped Pakistan in infrastructure development projects and continued cooperation in the China-Pakistan Economic Corridor (CPEC) plan (Zongyi 2014). In 2007, an understanding was signed with India to promote tourism between the two countries (Hailin 2008). According to Gupta & Wang (2009):
The reduction and elimination of trade barriers has helped to stimulate economic exchange. Since 2000, trade between China and India has grown nearly twice as fast as each country’s trade with the rest of the world, and since 2001, China’s trade with India has grown more rapidly than its trade with any of its top 10 trade partners. In 2008, China surpassed the United States to become India’s largest trade partner. Last year [/2008], India was China’s tenth-largest export market.
Multilaterally, with its ‘Go Global’ initiative, China has established stronger economic bonds with SAARC and has been working collaboratively to promote the SAARC development framework. China’s ‘opening up’ policy came with its own economic expansion. For example, its ‘bilateral trade volume expanded from 6.5 billion USD in 2001 to 73.9 billion USD in 2012, registering an average growth rate of 26 percent’ indicating potential for enhancing its economic relations within Asia for regional integration and development (see Zongyi 2014). According to Zongyi (2014):
China has a large consumption market and the fastest growing economy in the world, while South Asian countries are rich in both natural and human resources. Combined, the economic integration of China and SAARC will create a huge market with 2.8 billion people, which will bring new force for economic development to China, South Asia and the whole world.
China and South Asian economies—through the SAARC framework—have shown modest cooperation despite their historically drawn structural differences. Political commitment for a unified approach in promoting their national interests is also greater in dealing with common issues in this setting as well as in dealing with global trade related issues. The institutionalised approaches to economic cooperation through SAARC framework have developed common economic interests for China and South Asian economies in the international arena. Especially because they are economies of the developing ‘South’, there is growing need for a collaborative effort to deal with the international trade regime namely the World Trade Organisation (WTO), in promoting national interests (Pandey 2014; BBC 2014).
In both bilateral and multilateral contexts, China and South Asian states continue to establish and expand trade relations, achieving mutually beneficial and exclusive cooperation for development. This reality of trade engagement remains challenging against the realists’ backdrop that states are prone to, covertly or directly, entertain hostile relations. The same applies to China-South Asia relations on strategic aspects.
China-South Asia Relations: A Realist Viewpoint
From a realist viewpoint, China-South Asia relations can be described as one with historically drawn structures of cooperation and competition as well as collaboration and conflict between South Asian states and China. In an anarchical international system, both China and the states of South Asia, including strategically prominent states like India and Pakistan, may have sought to establish their political and economic footprints to achieve their national interests (Frieden & Martin 2003; Viotti & Kauppi 2011). National interests are achieved through political and strategic dominance sought by the interplay of power and politics amongst concerned states immersed with suspicion and conflict. Power as a determinant of political and strategic superiority is a cornerstone of international relations (Hurd 2008; Brunjes, Levine, Palmer, & Smith, 2013). Over centuries, power has been a resource and source of gaining and sustaining national interests of sovereignty and security in the international system (see Baldwin 2013). The aspects of these historically drawn structures, composed of institutional and policy preferences of cooperation and competition as well as collaboration and conflict, can be a point of departure to develop an analytical angle to better understand the changing relations between China and South Asia.
Historically, relations between China and South Asian economies can be portrayed as one built on security aspects comprising strategic and ideological similarities and differences between these states (Mearsheimer 2013; Hailin 2008). Multi-level political and strategic differences exist between South Asian states and between those states and China. South Asia forms a culturally diverse, politically collaborative group of economies including India, Pakistan, Bangladesh, Sri Lanka, Nepal, Bhutan, Maldives and Afghanistan—formally forming South Asian Association for Regional Cooperation (SAARC) (see SAARC 2014). SAARC as a regional organization has been politically stable through continuous efforts of political and diplomatic cooperation. However, its economic conditions have been challenged by historically drawn structures of conflict between its states—unlike in Europe (Siles-Brugge 2013). This has limited its capacity for regional integration. For example, most significant of the disputes between India and Pakistan, the territorial dispute over Kashmir has remained an unresolved dispute and burden for harmonizing strategic relationships for regional integration between South Asian states (see Small 2014; UNCTAD 2012).
Power-politics exists as a property of both protecting national interests of sovereignty and maintaining the balance of power and the security of the states (Baldwin 2013; Viotti, & Kauppi 2011). Although until recently when Narendra Modi’s Foreign Policy started to refocus on the existing state of the relationship with Pakistan by stressing aspects of economic cooperation (Joshi 2015), the historically drawn structure of political and strategic tension between India and Pakistan has remained a barrier to a unified approach towards regional growth and development. Hence, the interaction between South Asia and other economies of the globe including China also becomes, geopolitically and strategically, ever more challenging (see UNCTAD 2012).
For example, China and India relations are affected by historically drawn conflicting interactions based on the Indo-China border dispute, Tibet, Kashmir, China’s backing of Pakistan and the more recently perceived phenomenon of power-politics concerning the rise of China and India to influence beyond their borders (Hailin 2008; Small 2014; UNCTAD 2012). On the other hand, China enjoys a more forward-looking relationship with Pakistan. China and Pakistan enjoy economic cooperation involving technical and technological exchanges on political and security issues such as cracking down extremism in the region (see Rudolf, Julienne, & Buckow 2015). Pakistan being a strategic rival of India on specific bilateral issues, its relations with China can also create room for suspicion amongst these states on strategic grounds (see UNCTAD 2012).
Strategically, China has both political and economic interests having closer ties with Pakistan to maintain balance of power between China and India, but never with the expressed intention to contain India. China may see it as a gateway to broader cooperation with South Asia. China has always maintained a foreign policy based on the principle non-interference and respect for territorial integrity of South Asian states and any other state for that matter (see Small 2014). China has never extended support to resolve the Kashmir issue on Pakistan’s behalf, did not challenge Indian dominance over Bhutan, or did not continue to be hostile towards India even immediately after the border conflict on Indian territory in 1962 (see Hailin 2008). Despite the persistence of traditional political and military issues with South Asian states, China has sought cooperative, mutually exclusive and beneficial relations with South Asian economies through economic relations, especially through trade (Liqun 2010).
China-South Asia Trade Relations: Constructivist Viewpoint
From the realist viewpoint, China and South Asian states have established bilateral arrangements for economic and political cooperation. The challenges concerning such arrangements arise through preferences of national interests of individual states. The political preferences of states are significantly influenced by historically drawn structures embedded in South Asia and its longstanding relationships with China. More importantly, current literature and foreign policy debate give importance to both realist and constructivist aspects, not exclusively though, in understanding a way forward for better relations between these states (Milner 1999; Givalia, Lebanidze, & Iashvili, 2011).
From a constructivist institutional viewpoint (see Hay 2006; Fritsch 2011; Schmidt 2011), the new structures of trade and economic engagement can become a methodological turning point for sustainable and cooperative relationships between China and South Asia. Here it is argued that trade (or the international trade norms) can have an effect on shaping and re-shaping foreign policy by changing the political (and public) attitude towards regional integration—constructivist institutionalism asserts that the ‘rational actor’ changes policy by changing and developing new ideas about their national interests preference(s) (Hay 2006; Fritsch 2011; Schmidt 2011; Tang 2012; Frieden & Martin 2003; Milner 1999). The key question here is how the international trade regimes—the idea of trade involving the ‘Belt and Road’ initiative—can affect political preferences and public confidence in changing the status quo within historically drawn structural settings.
Literature on international political economy of trade stresses both the domestic and international aspects of trade in promoting and achieving national interests. Foreign policy towards trading partners through bilateral and multilateral engagements is significantly influenced by domestic demand structures. Liberalisation of trade since the post-Cold War has drawn interest in cooperation from both developed and developing economies (see Frieden & Martin 2003). In the realist viewpoint, states have strategic engagements with other states to maximise their national interest. Their strategic engagement is also shaped by the information they acquire about the interests and intentions of other states—what states believe initially changes over time through interplay with other states. Hence, political choice may vary depending on change of interests amongst states (see Frieden & Martin 2003; North 1990). While this happens, preserving national interests also becomes a common interests of all states(see Baldwin 2013; Donnelly 2000; Viotti & Kauppi 2011), which on the other hand reflects the success of their economic development and social coherence.
In an institutionalist viewpoint, states in the international system can become ‘boundedly rational’ actors due to uncertainty and lack of information about other states (see Frieden & Martin 2003; Simon, 1979, WTO 2009). For example, China and South Asian states are ‘boundedly rational’ actors in political and economic engagements due to the uncertainties and lack of trust amongst them rooted in the historically drawn structural setting in the region. Their decision making is affected by ambiguity and lack of information on strategic and political positions. On the other hand, the international political economy of trade stresses that international trade regimes enable states to strategically engage in trade relations with each other. International trade regimes form a trade norm with the institutionalisation of global trade. The WTO forms a crucial part of this regime, which can inform decision makers on the type of engagements preferred (Milner 1999). Institutions with certain disciplines can shape and re-shape political preference structures of states through influencing political choice (Bell 2011; North 1990). For example, states with democratic systems may be able to understand each other’s political system to make rational decisions on the engagement.
In this regard, the trade regime also goes a step further than realist institutional relations models in moulding political (and public) preference, by challenging a norm of democratic institutionalism as a necessary condition for sustainable trade engagements (Milner 1999; Haggard & Webb 1994). Despite the type of politico-institutional systems, states interact with each other through trade liberalisation to support their development agenda—involvement of Least Developed Countries (LDCs) with different politico-institutional systems in international trade, during the 1980s and 1990s, explains this phenomenon of trade (Frieden & Martin 2003).
Constructivist institutionalism extends the functions of institutions as a source of information for strategic interplay between states by stressing the role of idea in shaping and re-shaping socio-political structures (see Bell 2011; Hay 2006; Fritsch 2011). If trade becomes a driving structural force for the change of political preferences, it also has the institutional capacity to enable states to make rational decision to maximise their interests in the international system. The idea of trade sends a signal of assurance for positive engagement between trading partners especially through international institutional frameworks (see Fritsch 2011). Trade has created the idea that states are supposed to cooperate if they want to survive and develop their economies in today’s global marketplace. This ideational structure of trade becomes an institutional force that can alter political preference towards changing the status quo of agency in international relations.
The effect of trade on public demand structures enables politicians to change initial policy choices. The idea of trade liberalisation affects the decision making process by informing policy makers how existing economic structures and freer trade may help economic development of their societies. This is observed through experiences of trade engagements and their positive results on developing countries such as LDCs during their inception of trade liberalisation in the 1980s (see Tang 2012; Milner 1999). If trade brings socio-economic opportunities for societal progress, public demand will increase towards changing policy preferences that accommodate healthy trade engagements between states while reducing the role of ‘hegemonic leadership’ in international relations (Milner 1999; Frieden & Martin 2003).
The ‘Belt and Road’ initiative, an idea towards cooperation
It is obvious that the existing cooperation and collaboration between China and South Asia (see Tiezzi 2014; Gupta & Wang 2009)—in spite of the historically drawn structural differences—is a result of the change of political preferences of these states based on an idea of positive and mutually beneficial offerings from trade engagements and economic cooperation. In a relational choice aspect of constructivist institutionalism, the idea of trade may have a significantly influential effect on the political preference if those ideas provide sufficient information on possible outcomes of trade interactions—an idea of healthy relationships based on trade engagements and economic cooperation (see Dunne, Kurki, & Smith 2013; Hay 2006; Schmidt 2011).
In this respect, the ‘Belt and Road’ initiative creates an ideational structure for cooperation through freer trade between China and South Asian states. That is, cross-border business interactions are inevitable, resulting in an increase in demand for national policy change towards other states, enhancing their interactions within the global marketplace (Hay 2013; Siles-Brugge 2013). The idea here is that public demand associated with international linkages matters in policy preferences. The idea of demand for policy changes can generate ideational shifts among policy makers to change their political preferences with respect to China–South Asia relations. If the ‘Belt and Road’ initiative engenders information for the public (or businesses) about opportunities for further enhancing their business opportunities and gains through trade relations, then China’s approach to South Asia through trade relations can create incentives and common interests for policy makers on both sides to work together on both political and economic contexts.
Policy debate and scholarly research should be built on the aspects and opportunities entailing the ‘Belt and Road’ initiative for both China and South Asian economies to constructively and strategically engage between each other. The objective of the ‘Belt and Road’ is to ‘help promote the economic prosperity of the countries along the Belt and Road and regional cooperation, strengthen exchanges and mutual leaning between different civilisations, and promote world peace and development’ (Xinhua 2015). The connectivity projects run along the ‘Belt and Road’ can create opportunities for and facilitate freer trade interactions among China and South Asian economies. For example, the 21st Century Maritime Silk Road (Road) runs from the coast of China through South China Sea and Indian Ocean to Europe which can also create a route of trade linkages for South Asian economies to access the global trading system. On the other hand, the Silk Road Economic Belt (Belt) stretches through China-Pakistan Economic Corridor and the Bangladesh-China-India-Myanmar Economic Corridor creating trade and economic opportunities for international and regional linkages by land (Xinhua 2015).
Since the 21st Century, China has moved towards enhancing economic and trade relations with South Asia through individual and mutual engagement with South Asian economies. The developing integration between China and South Asia also lies largely with the recent opening up of the China to the rest of the world (see Breslin 2007; Liqun 2010). South Asian economies including India became crucial partners of China in pushing its economic agendas in climate change negotiations, the Doha trade talks and the debates of BRICS (see Small 2014). The ‘strategic and cooperative partnership for peace and prosperity’ reached during the visit of Chinese Premier Wen Jiabao to India in 2005, became a cornerstone of economic cooperation between the two countries (Hailin 2008). Similar engagements have been established with Bangladesh, Pakistan, Maldives, Sri Lanka and Nepal (UNCTAD 2012).
South Asia also realizes that high costs associated with the traditional strategic positions and policies in a liberalizing global economy. There was need for more liberal thought and collaborative engagement with the global economy including China. A unifying effort was needed. Despite the strategic and ideological differences amongst South Asian states, Pakistan and India for example have made mutually beneficial collaborative efforts for national development. Such efforts to relax the tension amongst South Asian states have unified South Asia supporting functions of SAARC for regional integration and facilitated China’s efforts of economic engagement with South Asia (see UNCTAD 2012; Hailin 2008; Lal 2003). China has established positive attitude towards SAARC as a regional trading partner to promote regional security, stability and development (see Jiali 2012; Hailin 2008). Trade has been key to cooperation amongst South Asian states. Enhanced cooperation amongst South Asian economies through regional trade agreements has become a stepping stone for mutually beneficial relations between these states (Zongyi 2014; Hailin 2008). Especially as in economies of the developing ‘South’, there is growing need for collaborative efforts to deal with the international trade regime namely the World Trade Organisation (WTO), in promoting national interests (Pandey 2014; BBC 2014).
While acknowledging that China and South Asia maintain multidimensional relationships based on mutually exclusive and beneficial interests affected by historically drawn structural differences, this article has projected a discourse stressing the role of trade in moulding China-South Asia relations. In light of the concepts of international political economy of trade and constructivist institutionalism, this article has presented a methodological framework to understand the cooperative aspects of relations between China and South Asia, using the aspect of the ‘Belt and Road’ initiative as an idea that can shape and re-shape political preferences of these states. Using the idea that trade brings development to all economies, this paper has put forward a constructivist argument that the ‘Belt and Road’ initiative can be used by South Asian states and vice versa China, to enhance their national interests by working collaboratively through trade interactions.
The discussion here stresses that we could build our policy debate and academic research on the premise that foreign policy approaches affecting the relationship between China and South Asia may be shaped and re-shaped by the ideological changes incurred by the political preference at socio-political levels as a result of trade. Constructivist institutionalism of international political economy of trade regarding the ‘Belt and Road’ initiative sets an agenda for such debate and research by informing the role of ideational aspects of trade affecting the changes in foreign policy preferences for regional integration. However, further research on the political economy of trade policy in South Asia in relation to China is required to better understand the reality of their policy preferences and future relations.
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 The paper uses South Asian economies and South Asia states interchangeably.