June 23, 2020

IronFX, What's happening? - Rising tensions between China and India

Everything about China and India relationship. Why the countries' confrontations have started?

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Military Confrontation between China and India

Among the top global matters that have concerned the media very recently are the increasing tensions between neighbour countries India and China.

By tensions we mean military confrontation, which during the past days have led to twenty soldiers losing their lives. Through this report we aim to explain the position each country is in at the moment and try to clarify whether the latest adverse developments stand the chance of turning into something far more dangerous and possibly affecting the rest of the world.

History of China and India Relationship

First, we will take a look into the history and recent developments of the relationship between the countries that could possibly pass some valuable messages to us, in order to understand the intentions of the two sides.

During the past decades, the countries surrounding the Himalayas, or Himalaya mountain range in Asia, have not managed to claim ownership of the area.

Even though the mountains inhabit millions of people from various ethnic groups including Bhutan, China, India, Nepal, Pakistan and Afghanistan the largest powers in the area remain the aforementioned ones, in our title.

During the past decades no major military happenings had taken place while the Himalayas grew as a popular holiday destination.

Yet, in the past months, a considerable number of Indian and Chinese soldiers have moved into the mountains at three locations along their border and tensions have intensified ever since.

During the previous week in the Galwan area, soldiers from both sides clashed and a standoff turned into a very heated moment.

Both sides accused each other of trespassing and crossing the line, so we may not ever know who started this, yet the standoff was a rather defining moment.

The two sides came face to face with each other and according to many sources fists, iron bars, and stones were thrown all adding up to a massive fight.

Even though this could be considered an action of animosity from both sides which had led to the death of 20 soldiers, no firearms or explosives were used.

This could also be likened to a deadly hooligan fight were soldiers literally killed each other with their hands.

Despite the casualties, which are a very disturbing incident, the fact that no military weapons, guns, bombs, rockets or artillery was used, displays some line of conduct as the situation could escalate to the worst case scenario, which is a war.

However, it was also said that due to an agreement formed in the past, the two sides are not to open fire within the Line of Actual Control (LAC).

The question here is why the two sides have been eager to meet and confront each other, after so many decades (major clashes in 1967).

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How did the confrontation start?

Some argue that India was in the process of upgrading the roads nearby the Himalayan Mountains something that the Chinese strongly opposed.

As the two countries are basically separated by the mountains, building roads could give a military advantage to either side that could create fears.

Both sides having massive armies with technological advantages remain on guard and so they keep an eye on each other.

In general, both sides have expansionary tendencies and fears over one another.

A series of incursions is also said to have taken place recently in the Ladakh region, where India claims the Chinese side has breached its area by more than 3km.

Some individuals that have been monitoring the matter for decades see all this happening for one side to gain an advantage militarily over the other.

Covid-19 outbreak

Secondly, the Covid-19 outbreak has been rather devastating for the world with many pointing the finger at China, as the virus may have not been kept properly under control.

Even though we do not have evidence of how the virus and the outbreak started, Wuhan was the first to report cases and so most believe it started in China.

Yet, the main point here is that as the virus moved into India, some tension was created between the two countries in the past months that tends to highlight the urge for confrontation.

Please note, currently India is in the 4th place worldwide with the most coronavirus cases which surpass 400.000.

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Military and Political actions by China

Third, India doesn’t approve some military and political actions China has taken on other countries nearby them and internationally.

The political and economic ambitions and potential China has as the second largest economy in the world, is not working in favour of a good relationship with India.

Worries could be fuelled over the power China has militarily and economically, which India perceives as a threat.

Not to be misunderstood, India is also a significant power globally and is recognized by many large countries as an upcoming dominant force.

India has to display some sort of reaction and retaliation to the Chinese confidence on many fronts.

China is expanding in technology with its 5G program and is passing new laws in Hong Kong but also performing military exercises in the Southeast Asian sea.

All these actions are being opposed by many countries including India.

However, the fact that India is a neighbour country to China maybe making things even worse.

Summarizing the International Relationships

Furthermore, international relationships on behalf of both countries, China and India, seem to create controversy and problems.

On the one part, India is closer to the United States and Japan who seem to be having major disputes with China.

China and the United States have enacted a trade dispute that has been resolved partially but the matter still has a long way before being completely settled.

Then again, the US and China are also blaming each other over the Covid-19 outbreak and the US opposes Huawei’s expansion.

On the other hand, we have China being on rather good terms with Pakistan which is a thorny issue from India’s perspective.

Even though the dispute between India and China cannot keep either country from being on good terms with other global powers, picking sides could be negative for China and India and even intensify problems on other fronts.


As a conclusion, both India and China are considered rising powers in the global stage and have huge potential as emerging markets, as they attract serious investments.

We could also add that for the pre mentioned reasons, they have a lot of common interests that could help them mend their relationship in the future.

In the present moment, if we would ponder between the two countries supporting and cooperating or competing and battling each other, we lean towards the latter as the recent developments seem to escalate to the negative.

However, from a business and trade perspective, logic tells us that they can benefit much more from each other due to their neighbouring position.

If the two sides cannot accept that they both have huge markets with the potential of turning Asia into a unilateral humongous market, then the cooperation cannot exist.

We say this as the competition could turn into a bloody rivalry.

In contrast, competition to a certain degree is very healthy and can bring the best out of each other.

Finally, the military risks that persist could prove catastrophic, if not controlled.

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