Contemporary Centres of Power

Chapter 1 ended with a unipolar world: the US as sole superpower. This chapter asks who can balance it. Its answer: regional groupings that turned old enmities into cooperation — the European Union in Europe and the Association of South East Asian Nations (ASEAN) in Asia — and the economic rise of China, India's immediate neighbour. Short boxes add Japan and South Korea.

• Links: Chapter 1 (End of Bipolarity — unipolarity and shock therapy, which China avoided); Politics in India since Independence Chapter 4, India's External Relations (Panchsheel, Tibet, the 1962 war); Indian Economic Development Chapter 3 (LPG reforms) and Chapter 10 (comparative development of India, China and Pakistan — not yet a live page); India: People and Economy Chapter 8 on international trade and trade blocs. Next in this book: Contemporary South Asia (SAARC — why it lagged ASEAN), International Organisations and Globalisation.
• UPSC: GS2 — ‘bilateral, regional and global groupings and agreements involving India’ and ‘effect of policies of developed and developing countries on India's interests’. Prelims has asked on the EU (1986–2026), ASEAN and its circles (2005–2026), BRICS (2014–2025) and China and Japan (1981–2022); Mains on Look East (2016), India–Japan (2013, 2019), the South China Sea (2014, 2016), CPEC and the Belt and Road (2014, 2018, 2026), China's power (2017, 2021, 2024) and BRICS (2014, 2026).

• Alternative centres of power — the EU, ASEAN and China (plus Japan and South Korea) — can limit US dominance after 1991.
• EU: Marshall Plan → OEEC 1948 → ECSC 1951 → EEC 1957 (Rome) → EU by the Maastricht Treaty (1992); flag, anthem, euro (2002); UK left in 2020.
• EU strengths: economy, trade, diplomacy (France in the UNSC), military; limits: divided foreign policies (Iraq 2003), Euro-scepticism.
• ASEAN (1967, Bangkok Declaration, five founders): the informal ASEAN Way; three-pillar ASEAN Community (2003); ARF (1994); India: Look East → Act East (2014), FTA 2010.
• China: Soviet model (1949) → Deng's open door (1978) → farm reform (1982), SEZs, WTO (2001) — gradual, state-led, not shock therapy.
• India–China: Tibet (1950), war (1962), relations restored (1976), talks (1981), Rajiv Gandhi's visit (1988); trade booms while the boundary and Pakistan remain irritants.

At the end of the Second World War, European leaders faced the ‘Question of Europe’: return to old rivalries, or rebuild on principles that would make relations positive? The war had ruined their economies and the assumptions on which Europe rested. The Cold War helped integration: the US gave massive aid under the Marshall Plan and created a collective security structure under NATO. The Organisation for European Economic Cooperation (OEEC), set up in 1948 to channel Marshall aid, became a forum for cooperation on trade and economics; the Council of Europe (1949) was a step in political cooperation. Economic integration of the capitalist states proceeded step by step to the European Economic Community in 1957, gained a political dimension with the European Parliament, and — on the fast track created by the Soviet collapse — became the European Union in 1992, laying foundations for a common foreign and security policy, cooperation on justice and home affairs, and a single currency.

The EU has evolved from an economic union into an increasingly political one and has begun to act more like a nation-state. Attempts at an EU Constitution failed, but it has its own flag, anthem, founding date and currency and some form of common foreign and security policy. It has expanded cooperation while taking in new members, especially from the former Soviet bloc — not easily, since many citizens are reluctant to hand their governments' powers to the EU, and there are reservations about admitting some countries.

Economic influence. NCERT projects EU GDP at about $19.35 trillion in 2024; the euro could challenge the dollar's dominance; its share of world trade is much larger than that of the US, making it assertive in trade disputes with the US and China; its economic power gives it influence in its neighbourhood and in Asia and Africa, and it is an important bloc in bodies such as the WTO. Political and diplomatic influence. One member, France, holds a permanent UN Security Council seat, and EU states are often non-permanent members, which has let the EU influence some US policies — NCERT cites Iran's nuclear programme. It prefers diplomacy, investment and negotiation to coercion, as in its dialogue with China on human rights and the environment. Military influence. NCERT says the EU's combined forces are the second largest in the world and its defence spending second only to the US; France has nuclear weapons (NCERT: about 335 warheads); the EU is the world's second most important source of space and communications technology.

Limits. As a supranational body the EU can intervene in economic, political and social areas, but in many matters its members keep their own foreign and defence policies, often at odds. In the 2003 Iraq invasion, Britain's Prime Minister Tony Blair was America's partner and many newer members joined the US-led ‘coalition of the willing’, while Germany and France opposed it. There is deep Euro-scepticism in parts of Europe: NCERT cites Britain under Margaret Thatcher, and Denmark and Sweden resisting the Maastricht Treaty and the euro. This limits the EU's ability to act in foreign relations and defence.

Before and during the Second World War, Southeast Asia suffered repeated colonialisms, European and Japanese. After the war it faced nation-building, poverty and economic backwardness, and pressure to align with one great power or another in the Cold War — a recipe for conflict. Earlier efforts at Asian and Third World unity, such as Bandung and the NAM, had not created conventions for informal cooperation. So Southeast Asia created its own alternative: ASEAN, established in 1967 by Indonesia, Malaysia, the Philippines, Singapore and Thailand through the Bangkok Declaration. Its primary aim was to accelerate economic growth and, through it, ‘social progress and cultural development’; a secondary aim was regional peace and stability based on the rule of law and the UN Charter. Brunei Darussalam, Vietnam, Lao PDR, Myanmar and Cambodia joined later, making ten.

Unlike the EU, ASEAN has little desire for supranational structures. Its members celebrate the ‘ASEAN Way’ — interaction that is informal, non-confrontationist and cooperative, with respect for national sovereignty at its core. With some of the world's fastest-growing economies, ASEAN broadened its aims: in 2003 it agreed to build an ASEAN Community of three pillars — the Security Community, the Economic Community and the Socio-Cultural Community. The security community rests on the conviction that territorial disputes must not escalate into armed conflict; by 2003 members had agreements to uphold peace, neutrality, cooperation, non-interference and respect for national differences and sovereign rights. The ASEAN Regional Forum (ARF), set up in 1994, coordinates security and foreign policy.

ASEAN was and remains principally an economic association. Its combined economy is much smaller than those of the US, the EU or Japan but has been growing much faster, which accounts for its rising influence. The ASEAN Economic Community aims at a common market and production base and at social and economic development, and would like to improve ASEAN's Dispute Settlement Mechanism for economic disputes. ASEAN has focused on a Free Trade Area for investment, labour and services; the US and China moved quickly to negotiate FTAs with it. Its Vision 2020 defined an outward-looking role, building on its policy of encouraging negotiation over conflicts; NCERT says ASEAN mediated the end of the Cambodian conflict and the East Timor crisis, and it meets annually on East Asian cooperation.

India and ASEAN. ASEAN's economic relevance to growing Asian economies such as India and China makes it attractive. During the Cold War India paid ASEAN inadequate attention; it has since tried to make amends, signing trade agreements with Malaysia, Singapore and Thailand; the ASEAN–India FTA came into effect in 2010. India's ‘Look East’ policy since the early 1990s and ‘Act East’ policy since 2014 have increased economic interaction with East Asia — ASEAN, China, Japan and South Korea. ASEAN's real strength, NCERT concludes, lies in interaction and consultation with members, dialogue partners and other organisations: it is the only regional association in Asia that offers a political forum where Asian countries and the major powers can discuss political and security concerns.

China, the third alternative centre and India's immediate neighbour, has been the fastest-growing economy since its reforms began in 1978, and that success is linked to its rise as a great power. NCERT says it is projected to overtake the US as the world's largest economy by 2040; its integration with the region makes it the driver of East Asian growth, and its economy — together with population, land mass, resources, location and political influence — adds greatly to its power.

The command economy. After the communist revolution led by Mao created the People's Republic in 1949, China's economy followed the Soviet model. Economically backward, it cut its links with the capitalist world and relied on its own resources and, briefly, Soviet aid and advice. The model built a state-owned heavy industry sector with capital squeezed from agriculture, and, short of foreign exchange, substituted imports with domestic goods. It laid an industrial foundation on an unprecedented scale, assured employment and welfare, and put China ahead of most developing countries in education and health; growth was a respectable 5–6%. But population grew 2–3% a year, so growth could not meet needs; agriculture produced too little surplus for industry; industrial growth was slow, trade minimal and per capita income very low — a crisis like the USSR's.

The turn. In the 1970s the leadership took major decisions. China ended its isolation by establishing relations with the United States in 1972; Premier Zhou Enlai proposed the ‘four modernisations’ — agriculture, industry, science and technology, and the military — in 1973; by 1978 leader Deng Xiaoping announced the ‘open door’ policy and economic reforms, to raise productivity through foreign capital and technology. China followed its own path: no ‘shock therapy’, but step-by-step opening. Agriculture was ‘privatised’ in 1982 and industry in 1998; trade barriers were removed only in Special Economic Zones (SEZs) where foreign investors could set up enterprises; and the state played, and still plays, the central role in building the market economy.

Results. The policies broke the stagnation. Farm reform raised agricultural output and rural incomes; high rural savings led to rapid growth of rural industry; trading laws and SEZs produced a phenomenal rise in foreign trade; China became the most important destination for FDI anywhere, and its large foreign-exchange reserves let it invest abroad. Its accession to the WTO in 2001 took the opening further; it aims to shape the future world economic order.

Not everyone in China has benefited. NCERT notes rising unemployment — nearly 100 million looking for work; female employment and working conditions as bad as in eighteenth- and nineteenth-century Europe; and rising environmental degradation, corruption and inequality between rural and urban residents and between coastal and inland provinces. Yet regionally and globally China has become an economic power to reckon with. The interdependence its trade has created gives it influence with partners, so its disputes with Japan, the US, ASEAN and Russia have been tempered by economic considerations. It hopes to resolve its differences with Taiwan, which it regards as a renegade province, by integrating it into its economy. Fears of its rise were eased by its help in stabilising ASEAN economies after the 1997 financial crisis, and its investment and aid in Latin America and Africa project it as a global player on the side of developing economies.

Before Western imperialism, India and China were great Asian powers. China held influence on its periphery through its tributary system — Mongolia, Korea, parts of Indo-China and Tibet at times accepted its authority — and Indian kingdoms also extended influence beyond their borders, politically, economically and culturally. But their spheres rarely overlapped, so neither knew the other well, and in the twentieth century both found it hard to frame a policy towards the other. After independence there was hope they would shape Asia's future together, and ‘Hindi-Chini bhai-bhai’ was briefly popular. In NCERT's words, ‘Chinese aggression on the Indian border’ marred that hope: differences arose from China's takeover of Tibet in 1950 and the unsettled boundary, leading to the 1962 conflict over competing claims, principally in Arunachal Pradesh and the Aksai Chin region of Ladakh (Exercise Q4a).

The 1962 conflict, in which India suffered military reverses, had long-term effects: diplomatic relations were downgraded until 1976. After China's leadership changed in the mid-to-late 1970s, its policy became more pragmatic and less ideological, ready to put off contentious issues while improving relations; boundary talks began in 1981. Since the Cold War's end relations have acquired strategic and economic dimensions; both see themselves as rising powers. Rajiv Gandhi's visit in December 1988 gave the impetus; since then both have taken measures to contain conflict and keep ‘peace and tranquillity’ on the border, signed agreements on culture and science, and opened border posts for trade. Trade grew about 30% a year from 1999 — from $338 million in 1992 to over $84 billion in 2017. They have agreed to cooperate where they might otherwise clash, such as bidding for energy deals abroad, and have taken similar positions in bodies such as the WTO.

Irritants. India justified its 1998 nuclear tests partly by a threat from China, but that did not halt engagement. China was seen as contributing to Pakistan's nuclear programme, and its military ties with Bangladesh and Myanmar were viewed as hostile to Indian interests. NCERT judged that none of these was likely to lead to conflict, as boundary talks continued and military-to-military cooperation grew (the joint exercise ‘Hand-in-Hand’ began in 2007 — UPSC 2008), with leaders and officials visiting each other more often. It adds that relations have recently taken a downslide because of border disputes, the China–Pakistan Economic Corridor and China's support to Pakistan at the UN against India's counter-terrorism moves.

Japan (box, page 27). Famous brands — Sony, Panasonic, Canon, Suzuki, Honda, Toyota, Mazda — reflect its high technology. With few natural resources and most raw materials imported, it still progressed rapidly after the war. It joined the OECD in 1964; NCERT calls it the third largest economy (2017), the only Asian member of the G-7 and the eleventh most populous nation. It is the only nation to have suffered nuclear bombing; NCERT calls it the second-largest contributor to the UN regular budget (almost 10%). It has had a security alliance with the US since 1951; under Article 9 of its Constitution the Japanese people forever renounce war as a sovereign right and the threat or use of force to settle disputes. Its military spending is only about 1% of GDP, yet, NCERT says, the seventh largest in the world.

South Korea (box, page 27). The Korean peninsula was divided along the 38th Parallel at the end of the Second World War into South Korea (Republic of Korea) and North Korea (Democratic People's Republic of Korea); the Korean War (1950–53) and Cold War dynamics deepened the rivalry; both became UN members on 17 September 1991. Between the 1960s and 1980s the South developed so rapidly that it is called the ‘Miracle on the Han River’; it joined the OECD in 1996. In 2017 its economy was the eleventh largest and its military spending the tenth largest. The Human Development Report 2016 ranked it 18th, crediting successful land reforms, rural development, extensive human-resource development and rapid, equitable growth, plus export orientation, strong redistribution, public infrastructure, effective institutions and governance. Samsung, LG and Hyundai are household names in India.

Try each first. Q1–Q3 are also in the self-check.

Numbers

One-liners

• Alternative centres of power — the EU, ASEAN and China — limit US dominance after 1991.
• Europe's answer to war: integrate economies first (coal and steel), politics later (Maastricht).
• The EU is supranational; ASEAN is intergovernmental and runs on the informal ASEAN Way.
• ASEAN's strength is dialogue: the only Asian forum where Asians and great powers discuss security.
• China opened step by step, state-led — the opposite of Russia's shock therapy.
• China's rise brings growth and influence, but also inequality, unemployment and pollution.
• India–China: 1962 and the boundary on one side; trade and cooperation in global bodies on the other.
• Japan and South Korea are centres of economic and technological, not military, power.

Traps to avoid

• The EU's flag has 12 stars for perfection and unity — not 12 members.
• Maastricht was signed in 1992 but the EU came into being on 1 November 1993.
• The UK joined the EEC in 1973 and left the EU on 31 January 2020; the 2016 vote was only the referendum.
• Schengen includes non-EU Norway, Iceland, Switzerland and Liechtenstein; Ireland is outside it.
• Switzerland and Norway are not EU members (UPSC 1995, 2009, 2026).
• ASEAN was founded in Bangkok (1967) but its Secretariat is in Jakarta (UPSC 2009).
• India is in the East Asia Summit and the ARF, not in ASEAN or APEC (UPSC 2015).
• BRICS' first summit was at Yekaterinburg (2009), not Rio; the NDB is in Shanghai, set up by BRICS, not APEC (UPSC 2014, 2016).
• US–China: Nixon's visit 1972; formal diplomatic relations only from 1 January 1979.
• China's 1982 farm reform leased collective land to households; land was not sold off.

Prelims — what UPSC asks

• The EU: who joined when (1986, 1995, 2007, 2009, 2026), the euro (1991, 1998), Maastricht and EU citizenship (1999), Commission vs Council (2010), the European Stability Mechanism (2016), the Stability and Growth Pact (2023), the India–EU BTIA (2017).
• ASEAN and its circles: members (2005, 2006, 2009), headquarters (2009), India in the EAS but not APEC (2015), RCEP (2016), ASEAN's FTA partners (2018), Look East (2011), India–ASEAN connectivity (2026), APEC (1996).
• BRICS: the first summit and the last member (2014), the Fortaleza Declaration (2015), the NDB (2016), Kazan and new members (2025).
• China and Japan: Mao's successor (1981), the Belt and Road (2016), India–China exercise Hand-in-Hand (2008), the Senkaku islands (2022), Japan's Ministry of Defense (2007).

Mains — where it appears and how to answer

• GS2 China: China's trade surplus as a tool of power (2017), the US–China rivalry compared with the Cold War (2021), the West fostering India as an alternative supply chain (2024), the South China Sea and India–China issues (2014; GS1 2016), CPEC (GS3 2014, 2018) and the BRI in South Asia (2026). Frame: China's model and rise (this chapter) → interests and claims, each side's position stated → impact on India → India's response (own growth, partnerships, engagement).
• GS2 East Asia: Look East in the post-Cold War context (2016); India–Japan ties and constraints (2013, 2019); the shift of trade towards the Indo-Pacific (GS1 2026). Use NCERT's ASEAN, Japan and South Korea material plus Act East facts.
• GS2 groupings: the NDB and AIIB (2014) and BRICS as a voice of the Global South (2026) — give the supporters' and sceptics' views and India's ‘non-Western, not anti-Western’ line.
• Answer frame for ‘centres of power’: define power (economic, political, military, soft) → EU (integration, influence, limits) → ASEAN (ASEAN Way, Community, ARF) → China (model, reforms, costs) → India's engagement → conclusion on multipolarity.

Tap an option. NCERT's own exercise questions come first; the rest test the figures and common confusions.

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