India and China: Partners not rivals

In a sense, therefore, the question that we seek to explore today, has been answered by the two countries themselves. What does perhaps need to be explored further, is whether there is a substantive basis to this assertion and whether this eminently favourable state of affairs is likely to endure amidst a rapidly transforming global landscape.

Can the history of India-China relations tell us something in this regard? Both India and China are unique in the sense, that unlike other major powers, such as the United States or Russia for example, the two countries did enjoy several centuries of parallel ascendancy before the advent of colonialism and imperialism. They were both the major economies of the world, accounting for more than 50 percent of the global economy by some estimates, until their secular decline began with the advent of the industrial revolution in Europe in the 18th century.

Therefore, in a sense, both India and China share a deep-rooted sense of themselves as great and flourishing civilisations, which are only now beginning to regain their historical space in the Asian and global order. The two civilisations co-existed together for a very long time in history. There was considerable interaction between them. The spread of Buddhism to China from India is one example. The fishermen of the Malabar Coast still use fishing nets that came from China, which are called 'Chinese nets'. There was a significant volume of trade between the two countries, and remains of ancient Hindu temples in the port city of Quanzhou, built by Tamil merchants, is testimony to that.

It is a fact that, for many centuries, the whole of South East Asia was criss-crossed by trade and shipping links that followed the monsoon winds. Indian and Chinese cultures influenced the countries of the region and were in turn enriched by the diverse and colourful cultures of the region. There is no hint of any clash of cultures or trade wars between India and China in this region. On the contrary, a virtuous circle of exchange of goods, ideas and cultures was sustained over many centuries, even though wars and conflict and internal dissension affected our region as much as they did other parts of the world.

Therefore, there is historical precedent for Asia playing home to two major civilisations and economic powerhouses, without confrontation and clash of interests being inevitable. There is also a historical precedent for our region benefiting rather than being adversely impacted by the looming presence of the two countries.

One can go further and look at more recent history. While we speak of the simultaneous rise of India and China today as representing a new experience for the existing world order, this is not entirely accurate. One should recall the independence of India in 1947 and the liberation of China in 1949 which also constituted a major development both in Asia and the world. The almost coincidental re-emergence of India and China from the backwaters of history was a significant development and its impact was considerable.

There is no doubt that the accelerated phase of decolonisation, the movement towards Third World solidarity, and the search of a new Asian identity were all catalysed and encouraged by the emergence of the two countries. There was an early promise of the two countries working together to transform the landscape of Asia and the world. Certainly, Jawaharlal Nehru and Zhou En-lai did attempt to forge a partnership that would enable them to work together in restructuring a global order then increasingly being riven by ideological and great power rivalry, finding space for newly independent countries.

The Asian Relations Conference in 1947 and the subsequent Bandung Conference in 1955, represented a concerted effort in that direction. The five principles of peaceful co-existence were jointly advocated by India and China as the basis for a more equitable world order and also as a code of conduct among all nations. However, this positive phase was short-lived, partly because it was overlaid by the pressures generated by the Cold War, and partly because it was overwhelmed by the compulsions of national consolidation within modern conceptions of national boundaries in place of what had remained for centuries, more loosely defined zones of overlapping cultures.

Furthermore, unlike today, India and China did not have a substantial economic and trade relationship, which could engender a sense of inter-dependence. In fact, their respective economic strategies tended to be inward-oriented and emphasising self-reliance. When the controversy over the Dalai Lama's entry into India in 1959 and the subsequent armed conflict in 1962 came, these developments quite predictably overwhelmed the short-lived phase of goodwill and shared vision that the leaders of the two countries had tried to fashion together, with a strong sense of idealism and of historic responsibility born out of their long history of benign co-existence.

Which brings me to the current phase of India-China relations. Can India and China remain as partners as they have declared today, or is a clash of interests inevitable? History would indicate that the simultaneity of the rise of India and China does not suggest inevitability of conflict. In fact, the historical record appears to suggest that the two countries, as ascendant powers, may be quite comfortable in their co-existence. And this is, of course, good news for this region as well as for the world at large.

However, the failed promise of Panchsheel and Bandung, and the souring of the Hindi-Chini Bhai-Bhai phase, is also salutary. It suggests that history can be trumped by suspicion and mistrust born out of differing perceptions, particularly if a substantial foundation of economic inter-dependence is missing.

There is also a role for political leadership to play. Relationships have to be nurtured; they need to be managed with skill. There is also a role that people-to-people relations can play. Societies insulated from each other rarely develop enduring relationships and in this context, memories of historical contacts may not be enough to counteract stereotyped images of the other.

Are India and China doing enough to address these lessons of the recent history of their relationship? What is today different in our relations, and the context of our relations, which may suggest greater promise than in the past?

There is no doubt both India and China share the view that the management of their relations is of the highest priority for both countries. There is recognition that how India and China manage their relations as both countries emerge as major powers, would not only have an impact on their interests but also on Asia and the world as a whole.

Following from this recognition is the tradition now fully established for frequent and regular engagement between the two countries at several different levels. Indian and Chinese leaders have met regularly not only in their own capitals but also at regional and international fora.

Senior officials of the two countries have been holding regular consultations on a range of regional and international issues in the annual strategic dialogue which commenced in 2005. We have a security dialogue focusing on counter-terrorism and a defence dialogue between our defence establishments. Exchange of visits by naval vessels and, more recently, friendly exercises between our naval and land forces, have provided valuable opportunities for confidence building. Both sides are committed to expanding such exchanges.

The dramatic new feature of India-China relations, of course, is their rapidly expanding economic and trade relations. The volume of trade today stands at $38 billion (about Rs 152,000 crore) and the target of $40 billion (about Rs 160,000 crore) for 2010 is likely to be surpassed in 2008 itself. If the current rate of increase in trade is maintained, then China could well emerge as India's largest trading partner.

Furthermore, there is considerable cross-investment taking place between the two countries as well. Chinese companies, it is reported, have contracted over $12 billion (about Rs 48,000 crore) worth of projects in India, and there are more than 200 Indian companies now represented in China, including in the software and pharmaceutical sectors.

It is true that India's private sector does have some reservations on establishing a full-fledged free trade agreement with China. Some concerns have also been expressed over non-tariff barriers which Indian business confronts in the Chinese market. However, the trend is towards a more liberal trade and investment regime between the two continental sized economies and this can only deepen the economic interdependence between them.

We recognise that in the economic and commercial field, there will be areas of competition between the two countries. But this is something to be welcomed. There is little doubt that India's economic reform and liberalisation process has been spurred by China's remarkable success and will continue to be. As long as the two countries match their respective mettles on an even playing field, their economies will gain as will the regional and global economy.

What are the possible points of uncertainty as we take this relationship forward?

Firstly, there is the long-standing boundary issue between the two countries, which has so far defied a satisfactory solution. The good news is that the two countries have managed to maintain peace and tranquillity along our borders, pending a final settlement. There is also a mutual agreement that in seeking a settlement, we must keep in mind the strategic perspective of India-China relations.

What this really means is that once the two countries come to the conclusion that not resolving the border issue is becoming a constraint in taking toward collaboration on larger global issues, and the price being paid for the latter is greater than the price which they need to pay for not resolving the former, then a settlement will become possible. I have a sense that we are moving in that direction, but as of now the lingering dispute does create a sense of uncertainty over the relations.

Secondly, from the Indian perspective, there is a careful watch over how China will treat issues of sensitivity for India. Does China support India's entry into the UN Security Council as a permanent member? Will China, as a member of the Nuclear Suppliers Group join a consensus in allowing its members to engage in international commerce in nuclear energy with India? Would China display the same commitment to the East Asia Summit process, where India is a partner, as it does to the ASEAN+3 process? Our prime minister's recent visit and the formulations in the joint statement, give us cause for optimism on all these issues.

Thirdly, India has concerns about the impact of climate change and other human interactions on the several cross border rivers between China's Tibet autonomous region and northern India. The ecology of Himalayan glaciers is under threat and could adverse affect the livelihood and safety of millions of both Indian and Chinese citizens.

We expect that our Chinese friends will fully cooperate with us, through regular consultations and joint investigation, in managing this risk. We are encouraged by the assistance extended so far by China in the provision of flood season hydrological data but we need an appropriate bilateral mechanism to place such cooperation on a regular footing.

Finally, as our prime minister observed in his speech to the Chinese Academy of Social Sciences, there continues to exist a 'knowledge gap' between India and China. The prime minister said, and I quote: 'We need to make much more sustained effort to ensure proper awareness of each other. This not only applies to our culture and history but also to contemporary developments. We need to have more people to people contacts to remove misconceptions and prejudices. We need a broad based comprehensive dialogue at the level of intelligentsia, media, non-governmental professionals and the worlds of culture and the arts.'

India and China, today, are leading the shift in the centre of gravity of the world economy from the West towards Asia. Furthermore, as the world confronts a number of global and cross-cutting challenges such as the establishment and maintenance of a multilateral, non-discriminatory and rule-based trading system, dealing with the energy challenge but in an environmentally sustainable manner within a multilateral regime that is based on the principle of common and differentiated responsibility, the risk of global pandemics and many other similar challenges, India and China will have shared interests to safeguard and, in the process, also champion the cause of the developing world. Such cooperation is still evolving, but the trend appears to be in a positive direction.

I would submit for your consideration, the following broad propositions:

i. Historical experience suggests that the simultaneous emergence of India and China as major powers, far from resulting inevitably in a conflict of interest, may in fact create opportunities for mutually beneficial interaction. Dr Manmohan Singh said in Beijing, and I quote: 'I look forward with optimism to the future and the role which India and China are destined to play in the transformation of Asia and the world as well. This optimism is based on my conviction that there is enough space for both India and China to grow and prosper while strengthening our cooperative engagement. History shows that our two civilisations, flourished for centuries, side by side, interacting and influencing each other.'

ii. The energies of the two countries are focused on economic development, for raising the living standards of our billion plus populations. This is likely to be our preoccupation for a long time to come, and for this both our countries need a peaceful regional and global environment. There is now a recognition that both India and China can, in fact, leverage their new-found economic dynamism to contribute to precisely such a peaceful and prosperous periphery. This, I believe, is good news for Asia.

iii. In a sense, Asia's rich civilisational history, full of dramatic and creative encounters among the cultures of this region, is beginning to re-emerge. It is our hope that India and China will, together, once again lead the way in the re-emergence of our continent as a crucible of human endeavour.