China, India should resolve boundary issue quickly: PM

Outlining seven principles of engagement for closer cooperation between India and China, Prime Minister Manmohan Singh on Thursday said the two countries should show sensitivity to each other's interests and sovereignty and move quickly to resolve the boundary issue.

Addressing future leaders at the Chinese Communist Party's CentralPartySchool, Singh said old theories of alliances and containment are no longer relevant.

"India and China cannot be contained and our recent history is testimony to this. Nor should we seek to contain others," he said.

The prime minister was received with a standing ovation and his speech on "India, China - A New Era" was given a huge round of applause by the audience.

In his seven principles of engagement, Singh said, "One should reaffirm an unwavering commitment to the principles of 'Panchsheel' and conduct our relationship in a spirit of mutual respect, sensitivity to each other's interests and sovereignty, and mutual and equal security."

He said India has welcomed President Xi Jinping's concept of a new type of great power relations. "This is a contemporary development of the Panchsheel or Five Principles of co-existence, elaborated by Prime Minister (Jawaharlal) Nehru and Premier Zhou Enlai in the 1950s," Singh said.

A day after reaching accords on cooperation in border defence and trans-border river issues, Singh said maintaining peace and tranquillity in the India-China border region has been the cornerstone of the bilateral relationship.

"It is essential for mutual confidence and for the expansion of our relations. We should do nothing to disturb that. Indeed we can achieve it by adhering to our agreements and utilising our bilateral mechanisms effectively. At the same time, we should move quickly to resolve our boundary issue," he said.

The address to the CommunistPartyCentralSchool is a rare honour given to visiting leaders from abroad. The prime minister also spelt out a six-point roadmap of areas offering cooperation between the two countries and invited Chinese investment in Indian plans to invest $1 trillion in infrastructure in the next five years.

Stating that India and China need a stable, secure and prosperous Asia Pacific region, Singh said, "Terrorism, extremism and radicalism emanating from our neighbourhood affect both of us directly and can create instability across Asia."

Also, maritime security in the Pacific and IndianOceans was vital for the two economies just as peace and stability in West Asia and Gulf are essential for their energy security.

"While both India and China are large and confident enough to manage their security challenges on their own, we can be more effective if we work together. Regional stability and prosperity will also gain from stronger connectivity in the Asia-Pacific region. This should be a shared enterprise of India and China," he said.

Seeking Chinese expertise and investment in infrastructure building, the Prime Minister said India plans to invest $1 trillion in next five years to boost infrastructure in the country.

"We need to increase our agriculture productivity in order to reduce rural-urban disparities in income and manage efficiently the process of mass urbanisation," he said seeking China's help in dealing with the physical, social, environmental and human challenges of mobility and urbanisation.

Singh saw opportunities for China in India's manufacturing sector as well as collaboration on development of renewable energy resources and jointly working in third countries.

"Growing population, shrinking land, improving consumption levels and price volatility make food security a key policy priority for us. India has launched a major legislation-based food security programme. Our two countries should pool our resources and expertise in this area," he said.

India and China, he said, can work together to impart stability to the global economy and sustain growth by leveraging their resources, large unsaturated demand, economies of scale and growing income levels.

Stating that economic success requires a favourable external environment, Singh said the two nations should therefore work together to make the international economic environment more conducive to their development efforts.

"After the prolonged global economic crisis of 2008, we face a fundamentally different future for the world economy. We are in the midst of a significant and ongoing transformation where both political and economic power is being diffused. A multi-polar world is emerging but its contours are not yet clear.

"Protectionist sentiments in the West have increased and the global trading regime may become fragmented by regional arrangements among major countries. India and China  have a vital stake in preserving an open, integrated and stable global trade regime even as we work together to foster regional economic integration," he said.

India and China should also intensify their efforts to support trade and investment and reduce risks in emerging markets, he said adding cooperation between the two nations will also help accelerate reforms in global financial institutions.

Singh also referred to concerns between the two countries on different issues.

"Naturally, there are also concerns on both sides, whether it is incidents in the border region, trans-border rivers or trade imbalances," he said.

At the same time "recent experiences between the two countries have shown that these issues can become impediments to the full exploitation of the opportunities for bilateral and multilateral cooperation between India and China, which is important for the continuing progress and transformation of our two countries," Singh said.

"I believe that our two countries not only share a common destiny, but that we have unlimited possibilities for closer cooperation," he said.

Describing relations between India and China as unique in the world, Singh said the two countries are continuous ancient civilisations.

Singh outlined the complementarities between the two countries, saying "We are neighbours with a long history of cultural, spiritual and economic ties. We both embarked on a new phase of our political histories around the same time," he said.

"Today, we are the world's two most populous nations, engaged in a process of socio-economic transformation of our people on a scale and at a pace unprecedented in human history. Both our countries have achieved considerable success in this endeavour," he said.

"China's early economic reforms and impressive achievements are source of inspiration across the developing world. After China, India has been the fastest growing major economy in the world, averaging a growth rate of seven per year over the past two decades and around eight per year during the past ten years," he pointed out.

Singh noted that both the economies have expanded several times and have achieved a high degree of economic modernisation while lifting hundreds of millions of people out of the clutches of extreme poverty.

"In our own ways, we have also had an impact in shaping the global economy, China in the manufacturing sector and India in the services sector," he said.

Elaborating on India's economic reforms, Singh said over the past two decades, the process of economic reforms has gone through the rigour of democratic debate, and met the test of political consensus and public support.

"India's policies have focused not only on accelerating growth, but also on making it sustainable and regionally balanced," he said.

"We have emphasised not only modernisation, but also addressing the challenges of opportunities, capacity and equity for our vast and diverse population. This is the path on which we will continue to move forward," he said.

Singh pointed out that in structural terms, India's growth is propelled by domestic demand and financed largely by its own resources but the country is also increasingly integrated into the global economy.

"The prolonged global economic crisis has affected us, as it has many emerging economies. I believe, however, that this is a temporary disruption.

In recent months, we have taken measures to enhance foreign investment flows, speed up implementation of major projects, boost infrastructure development, strengthen our financial markets, reform our tax systems and make our business environment more attractive," he said.

Singh noted that a multi-polar world is emerging but its contours are not yet clear.

"We should also intensify our efforts to support trade and investment and reduce risks in emerging markets. The BRICS Development Bank and the Contingency Reserve Arrangement are examples of such cooperative efforts," Singh said.

Singh stressed that cooperation between India and China will also help accelerate reforms in global financial institutions.

Calling for both countries to confront the challenges of climate change and focus greater attention on the safeguarding of their fragile environment, Singh said, "Both India and China are heirs to civilisations that value nature and have practiced sustainability through the ages."

"However, as we meet the basic needs of our people, we also face the danger of unfair burdens being imposed on us for mitigating climate change," he said.

"We should ensure that the international response to climate change does not constrain our growth and that it continues to be based on the principle of common but differentiated responsibilities," Singh added.