Why India and China’s latest dispute could cost both sides greatly
- Tensions are running high following last month’s deadly clash in the Himalayas and calls are mounting for a boycott of Chinese goods.
- But China has invested billions of dollars in India, which also relies heavily on imports from the world’s second biggest economy
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So far, China has not announced any retaliatory economic action, but it has warned India to rethink its decision and said its actions go against World Trade Organisation regulations.
There is a lot at stake for both sides if this relationship unravels.
Chinese tech companies have splurged billions of investments into the emerging Indian market and four fifths of smart phone makers in India are Chinese, according calculations from tech research firm Counterpoint.
Du Youkang, a specialist in South Asia studies at Fudan University in Shanghai, said he did not expect there to be a lasting impact on economic relations because India relies heavily on Chinese imports.
“They can always find alternatives, but it will cost them quality and money,” Du said.