by Patrick Fearon-Hernandez, CFA | PDF
In a bizarre confrontation last month, Chinese and Indian soldiers fought a pitched battle in near total darkness high up in the Himalayan mountains. If that wasn’t strange enough, the weapons used were merely fists, stones, police batons, and wooden clubs wrapped in barbed wire or studded with nails. At least 20 of the Indian soldiers died, many after falling down steep mountain ravines or freezing to death in the cold. An unknown number of Chinese troops also died. In spite of the primitive weapons used and the relatively small number of casualties, the skirmish created a major crisis and risk of war between Asia’s two nuclear behemoths.
In this report, we explain how the confrontation came about and why it was waged in such a primitive way. More importantly, we examine the tensions building between China and India and how the skirmish could cause them to spiral out of control. We also outline how things could develop from here and the likely ramifications for investors.