The advent of a stronger Sino-India relationship could not have come along at a more favorable time. After two wars that seized considerable Indian territory in the north, a relationship that once seemed incredibly icy now appears to be thawing away.
And what is even more interesting is that this change is not based on a realization of brotherhood amongst neighbors or any other lofty ideal. The Indians and Chinese have entered a phase of cooperation that is based on economics.
The territorial aggression that existed between the two from the 1950s until the 1970s has been transformed into a battle for oil: Over the past few years, we have seen China and India fighting for assets in oil companies all over the world. They have contested for stakes in countries such as Canada, Angola and Niger.
Additionally, just as it had won the wars fought between the two countries, China won all the bids, giving it the lead in the war for energy. It has become evident that the war over territory has spilled into a costly war for energy.
Recently, China acquired Petrokazakh by paying $500 million more that it would have, had India not contested the bid. This hostile bidding, which drove up the price of oil assets around the world, proved to be a pivotal point in the Sino-India rivalry.
After losing this bid, the minister overseeing petroleum ventures in India, Mani Shankar Aiyar, released a statement explaining that, in the future, China and India would jointly bid for assets instead of attempting to out-bid each other.
This does not mean that there will no longer be independent bids from either side. Rather, it only signifies an increased level of cooperation. This development seems to be perfectly logical from the Indian side, as the country has failed to win vital energy assets. But China may profit from this partnership even more than India.
The most prized possession that China can hope to acquire from the new deal with India is a better relationship with America. The United States has been trying to establish cordial relations with India by offering nuclear programs in an effort to win over one more ally in the region.
Because of the budding Indo-American relationship, it is in China's best interest to bid with India in regions where China alone previously could not. This will allow China to venture into new territories. Energy bases could be extended to parts of Iran, Myanmar, Sudan and Libya. China will not only have warded off exorbitant bids from India, but it will have also penetrated new regions - regions that would have been out of its reach were it not for the U.S.
However, things may not remain so simple. Gathering such large energy bases around the world and setting up companies in anti-American countries will undermine American foreign policy. This will act as a counterbalance to the American hyperpower. When two huge economies, which combine to form one third of the world's population, join forces, the clout that this pact creates can be enormous.
The amount of Asian countries acquiring oil assets abroad has made the Europeans fear more than the Americans.
It became quite clear how the French feel about their own corporations in comparison to international companies when Mittal Steel bid for Arcelor: The French government neither holds stocks nor regulates the industry, yet it tried to interfere in the deal.
The animosity over intrusive takeovers and bids has threatened the EU hawks. Another case in which European vulnerability to energy concerns has been seen was the Russian-Ukrainian oil tiff.
This event truly captures the precarious situation of Europe. Consequently, European governments are already facing calls from local corporations to regulate industries in order to keep the Chinese and Indians at bay.
The threat does not only lie in the fact that the advancing Chinese and Indians can gobble up the remaining energy assets that Europeans hold so dearly, or the fact that unemployment will rise because of such acquisitions.
This form of European paranoia seems to stem more from the changing face of the global balance of power.
In the era of globalization, Europe must find ways to ensure its own security without propagating hypocritical regulations that keep others out of the game.
