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India and China: a developing tale

PUBLISHED : Wednesday, 22 May, 2013, 12:00am
UPDATED : Wednesday, 22 May, 2013, 2:53am
 

Premier Li Keqiang's offered hand of friendship to India during his first overseas trip since taking office was as practical as it was diplomatic. Coming weeks after a military stand-off on the nations' disputed border, it was an obligatory gesture to a country long sceptical of China's intentions. Positive style and substance were on display in pledges and billion-dollar business and investment deals signed. But a single visit will not overcome the decades of mistrust. The benefits that a partnership would bring can only come about if both sides are willing to resolve their differences through compromise.

Of the gains there is little doubt. China and India - with one-third of the world's people, the second and fourth biggest economies and strong growth rates - would be an economic powerhouse if they shared goals. Li highlighted the wider ramifications of such a partnership, pointing out that together, they could become a new engine for the global economy. As appealing as such a prospect is, though, it remains a far-off wish. Beyond the disputed boundary over which they went to war in 1962, a host of bilateral differences blot relations.

China's economic and political links with India's neighbours - Li's second stop, Pakistan, most damaging among them - is troublesome, as are its perceived Indian Ocean ambitions. So, too, is New Delhi's support for Tibetan spiritual leader the Dalai Lama and his followers. Chinese dams being built upstream of the Brahmaputra River are causing concern about water supplies and Beijing is widely criticised for restricting market access to Indian companies. Although bilateral trade has increased 15-fold since economic ties were kick-started in 1992, it amounted last year to a modest US$66 billion, with India's deficit standing at US$27 billion.

That is not to say that relations are bad - the speedy defusing of the latest crisis is proof of progress. Talks between the sides on Afghanistan went ahead and Chinese and Indian military officers met. Li's trip was not disrupted, nor was it thrown off course by politics or protests. He goes on to Pakistan today and from there, to Switzerland and Germany, having made clear the new Chinese leadership is committed to overcoming obstacles.

Focusing on potential economic gains is a wise strategy. China has to build trust with India's voters by proving its intentions are peaceful. Both sides have to offer concessions. If the rewards of working together are to come to pass, the greatest give-and-take has to be over the ill-defined border.

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