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Sino-Indian relations: a future unlik
24-01-05, 13:56
Sino-Indian relations: a future unlike the past —C Raja Mohan

India and China have barely scratched the surface of the potential bilateral economic cooperation. As the world’s second largest economy, China, and the fourth largest, India, begin to deepen their engagement, the consequences will not be linear. They have the potential to transform the geo-economics of the subcontinent and beyond

As India and China unveil their first round of strategic dialogue this week, the signs of a different political future for the subcontinent and Asia are at hand. The strategic dialogue is not aimed at adding yet another brick to the expanding edifice of Sino-Indian relations. It is about achieving a qualitative transformation of a relationship that has already expanded in terms of quantity.

Imparting a new strategic dimension to the Sino-Indian relations could also raise the profile of the forthcoming visit to India by the Chinese premier Wen Jiabao later this year. Expectations are already high that the Wen’s visit could turn out to be a landmark in Sino-Indian relations.

That India and China have had steadily improving ties since the late 1980s has been widely noticed. The only brief exception was in the immediate aftermath of the Indian nuclear tests in May 1998.

Few analysts around the world, however, appreciate the possibilities for strategic cooperation between the two nations. In the past India and China have often issued thundering statements on global issues and have often called for a multi-polar world. But they have rarely found themselves in tandem on any matters of substance within their neighbourhood.

This has reinforced the cynical view that as rising powers of Asia, India and China are destined for rivalry. Others have argued that given the long legacy of mutual suspicion and a host of bilateral problems, India and China will tend to have a wary normalisation rather than an enthusiastic engagement.

But the talks this week between the Indian foreign secretary Shyam Saran and the visiting Chinese deputy foreign minister Wu Dawei could begin to change all that by clearing the ground for a tangible political partnership between India and China.

Don’t be fooled by the level at which the strategic dialogue is taking place. India and China have always moved deliberately and with caution on their bilateral relations. Talks at the level of senior officials have had the benefit of bringing on board the two bureaucratic establishments that have a long history of mistrust. Sustained talks at the official level have begun to create a new habit of cooperation.

The dramatic expansion of trade between the two countries in the last few years is the biggest single new factor in Sino-Indian relations. From a few hundred million dollars in the mid 1990s, commerce between the two countries has now galloped to nearly $13 billion in 2004.

While the trade volume remains a small percentage of Chinese trade, it is the growth rate — which has often been more than 50 per cent per annum — that signal the prospect for an explosive future for Sino-Indian economic relations. The robust growth of trade will inevitably be followed by increased flows of investment. As the Indian and Chinese middle classes begin to travel abroad in large numbers, there is a huge potential in drawing the people of the two nations to visit each other for tourism.

It is in this context that experts from the two countries are engaged in a study of comprehensive economic cooperation that could include more liberal trading arrangements.

The growing economic cooperation has been accompanied by a new political approach to bilateral relations focused on problem solving. The two nations are already in the process of removing the question of Sikkim as a contentious issue in their bilateral relations.

Even more important, India and China are in the middle of serious negotiations at the political level to resolve the long-standing boundary dispute. A broad framework agreement on the principles for the resolution of the boundary dispute during Wen’s visit to India could help create an extra-ordinarily positive political environment for the rapid advancement of bilateral relations. Meanwhile high-level military exchanges have gathered momentum.

As they widen cooperation, one big strategic opportunity awaits India and China. Amidst the rapid growth of their economies, New Delhi and Beijing should be giving some thought to the imperatives of wider regional economic integration in their neighbourhood.

Although both India and China are negotiating free trade agreements separately with the ten-member Association of South East Asian Nations, they are a long way from applying the same principles to many regions that fall between and around the two nations. Political sensitivities in New Delhi and Beijing in recent decades have resulted in closing the historical trade routes between the frontier regions of the two countries. As a consequence people living in the shared border regions of India and China have tended to suffer.

Although India and China do conduct border trade at some points along their frontier, it could be expanded in size and scope. Equally important, the two nations would have to eventually consider the possibility of transit trade through the traditional routes that link the two nations.

As they re-establish centuries-old trading links between Xinjiang, Tibet and Yunnan regions of China and the India’s Himalayan provinces and states in the Indo-Gangetic plain as well as states in the North Eastern region, New Delhi and Beijing will bring rapid development of some of the remotest regions in their countries as well as integrate inner Asia into the global market.

In expanding their own bilateral economic cooperation, India and China will also be able to draw in their neighbouring countries in Central, South and South East Asia into the processes of regional economic integration.

In the past, there has been a sense of rivalry between the two nations in their neighbouring regions. But today amidst globalisation of all economies, there can be no exclusive spheres of influence. In fact the two sides could begin to explore joint regional ventures in such areas as trans-border pipelines and transport corridors.

India and China have barely scratched the surface of the potential bilateral economic cooperation. As the world’s second largest economy, China, and the fourth largest, India, begin to deepen their engagement, the consequences will not be linear. They have the potential to transform the geo-economics of the subcontinent and beyond.

C Raja Mohan is professor of South Asian studies at Jawaharlal Nehru University and a columnist for the Indian Express