Century of the East and Peaceful coexistence of China and India: Moderating role of Belt and Road Initiative in Emerging Asian Economies

Abstract

The study focusses on historical perspective, contemporary historical perspective as well as futurologist perspective of Sino-India relations, economic development and bilateral trade. The economic growth has been examined with the interaction effect of Belt & Road Initiative. The purpose of this study is to find out the reasons of correlation between Sino-India economic growth patterns for last two thousand years as well as making recommendations for the optimal level of the relations in the region in the emerging century of East. The study further aims to examine the cross-country impact of infrastructure development on other countries. A total of thirty countries which are a part of Belt and Road Initiative were selected. The data is collected from World Bank Database from 1990 to 2019 (n=900). The data were analyzed using penal data regression models (fixed random effect regression models) to test the effect of macro-economic variables on economic growth, while hierarchical moderated regression analysis was used to determine the moderating effect of Belt and Road Initiative on the economic growth of participating economies. Belt & Road Initiative significantly moderate the relationship of economic growth with its factors. Therefore, we conclude that Belt & Road is pivotal for economic growth of region. In the century of Asia, China and India must understand that trade cooperation and congenial relations with in the region is beneficial for all the stakeholders in Asian Region while West and USA want to utilize India to halt the progress in the region and converting India a leading state to fight with China in the best interest of West. The only resolvable issues in Sino-India relations are border marketing in Tibrt, Arnachal Perdesh and Kashmir which are not only hampering the economic growth of these areas but also deviating the focus from economic growth towards militarization of the region. The limitations of this article is that the idea of Belt & Road was initiated in 2013 and different countries have joined BRI in different years. We have taken only those countries which have become a part of BRI till 2017. Another limitation is that we have selected few macroeconomic and social variables to test their effect on economic growth. We have selected those variables which are important for developing economies since majority of countries in BRI are developing. It is a unique study from the perspective, that it is using the available and estimated GDP of last two thousand years to find out the correlation between China’s and India’s economic growth and based on empirical analysis rather than theoretical one, suggesting the optimal level of relationship between China and India, why active participation of Betl & Road Initiative (BRI) by India is necessary for India’s growth.