Contemporary World: China and Europe

The rise of China

Picture a small shop that, in 40 years, becomes a giant supermarket chain with branches in every town and loans to other shopkeepers. That is how fast China rose, and why its neighbours, including India, watch it closely.

• Deng’s opening: China let farmers sell extra crops, set up Special Economic Zones for foreign firms, and slowly allowed private business, while the Communist Party kept power.
• Nominal GDP: the total value of goods and services a country makes, at current prices. China passed Japan around 2010.
• Belt and Road Initiative (BRI): China funds ports, roads and railways in other countries. Critics warn of “debt traps”, where poor countries cannot repay, as with Sri Lanka’s Hambantota port, leased to a Chinese firm in 2017.
• CPEC: the China–Pakistan Economic Corridor, a BRI project. India opposes it because it runs through Pakistan-occupied Kashmir, which India sees as its own territory.
• Galwan: in June 2020, Indian and Chinese troops clashed in Ladakh’s Galwan Valley; 20 Indian soldiers died.
• Xi Jinping: leader since 2012, who removed presidential term limits in 2018 and gathered power in his own hands.

The European Union since 1991

• Enlargement: countries such as Poland, Hungary and the Czech Republic joined after leaving Soviet control.
• Eurozone debt crisis: Greece and others could not repay their debts. Since they shared the euro, the whole group had to bail them out with strict conditions.
• Refugee crisis: over a million people fleeing wars in Syria and elsewhere reached Europe in 2015, causing political strain.
• India–EU: the trade talks relaunched in 2022 were concluded on 27 January 2026.

Common doubts

What is the String of Pearls? A name for China’s network of ports and bases around the Indian Ocean, such as in Pakistan (Gwadar), Sri Lanka and Djibouti, which some see as encircling India.

Why does China’s rise matter for India? China is India’s large neighbour, a major trading partner and a rival on the border. Its presence in South Asia and the Indian Ocean affects India’s security.

Is the EU weaker after Brexit? It lost a big economy and military power, but the remaining 27 members have stayed united, for example in backing Ukraine since 2022.

How India responds to China

• Building roads and posts along the border.
• Working with partners like the Quad for a free Indo-Pacific.
• Making more at home to cut dependence on Chinese imports.
• Keeping talks open to manage the border; in October 2024 the two sides agreed on patrolling arrangements to ease the stand-off in eastern Ladakh.
• Blocking some Chinese apps and screening Chinese investment for security.

What UPSC asks

Prelims: 1978 reforms, WTO 2001, BRI 2013, Galwan 2020, EU enlargement 2004, Brexit 2020. Mains: China’s rise and India’s response, and the EU’s crises.