When balance of power meets globalization: China, India and the small states of South Asia

Abstract

This article addresses the research question: how have most small states of South Asian region managed to acquire substantial amount of investment from China and India without falling into the strategic orbit of either power? This is an anomaly because most structural theories, in particular neorealism, would expect small states not to have much power and influence on their own in their relationship with powerful states. I answer this puzzle by arguing that the limited competition between China and India in an era of intensified economic globalization has provided a window of opportunity to small states to maximize their returns from the two without upsetting their relationship with either in a big way. This short-term bargaining window has been facilitated by the managed rivalry and economic interdependence between China and India which is yet to become an intense strategic rivalry. The article cautions that as the Chinese and Indian ambitions in the Indo-Pacific collide, the smaller states may be asked to make choices akin to bandwagoning with either one, in particular by offering military bases and naval facilities. This development, if it occurs, will drastically affect the bargaining power of the smaller states.