Can China and India ever be friends?
A comparison between India and China is inevitable – both the countries are on the cusp of becoming the world’s leading economies. Two recent events have boosted India’s image in the eyes of the world: Firstly, President Barrack Obama’s visit – he is the first US president to have attended India’s Republic Day parade as a guest of honour. And, secondly, the recent economic forecasts by the International Monetary Fund (IMF) and the World Bank which state that India’s pace of growth is set to outstrip that of China in 2016.
In a major breakthrough, India and the US have reached a broad understanding of the liability clause in the Civil Nuclear Damage Law over which the US nuclear suppliers had serious reservations. India assured the US that it will create an insurance pool that will indemnify the US suppliers against liability in case of an accident. This is a serious issue as in the event of an accident like in Japan, India may have to bear the brunt of the loss.
Moreover, the Global Economic Prospects, a World Bank group flagship report, released this month, states that the Indian economy will grow at seven per cent by the end of 2017, against China’s 6.9%.
However, this does not mean that India would be anywhere close to China in terms of economic development. It will take India at least 50 years to catch up to China in terms of absolute economic measures; the current GDP of China is two trillion dollars, which is predicted to reach $48.6 trillion by 2050. India’s current GDP, on the other hand, is one trillion dollars, which is expected to reach $27 trillion by 2050.
The Indian economy has shown an upward spiral ever since the Bharatiya Janata Party (BJP) led by Narendra Modi was voted into power. The new government has initiated a slew of economic reforms that is likely to improve the investment climate, deregulation and a reorientation of bureaucracy to become more business friendly.
Although the geopolitical tension between India and China can be attributed to the contentious border dispute, the overarching challenge in the Sino-Indian relations is to explore ways to overcome the trust deficit. The only way to lessen the tension is by engaging with one another, by collaborating in trade and business, leaving the contentious border issue temporarily on the back burner. Once a better understanding is developed, it will lead a spirit of accommodation between the countries for resolving the border issue.
This is a great opportunity for both the countries to work closely and collaborate with one another for the common good. While China can help India build its infrastructure, modernise its railways, invest in its power sector, set up manufacturing facilities, where China has considerable expertise, India, on the other hand, can help China with software development, pharmaceuticals and services.
Chinese President, Xi Jinping, chose India as the first destination, after his appointment as the president, recognising India as China’s important strategic partner.
The leadership in both countries believe that it is only by engaging with each other, and through mutual collaboration, that the lingering elements of mistrust can be removed. In spite of disagreements on the contentious border issue, left by historical legacy, both the leaders have shown that it is only through active dialogue that the border issue be settled. It may come as a surprise that not a single shot has been fired on both the sides since the last 50 years, a lesson to be learnt for other countries. The matured political leadership of both the countries has so far ensured that the dispute never escalates into a confrontation. The Chinese president pledged $20 billion to India for reducing the trade deficit. China has also agreed to set up industrial parks in the Indian states of Maharashtra and Gujarat.
China’s strategy of providing military assistance to Pakistan, making huge investments in Sri Lanka, Bangladesh, Myanmar and Nepal have been viewed in India as a deliberate attempt to encircle it.
Beijing is aware that the US, Japan and other Asian countries are trying to include India in their anti-China geopolitical-military strategy. The political leadership in India, so far, has avoided aligning with the US or Japan to counter China, as it feels such a strategy would be counterproductive. It is not in India’s interest to antagonise China. However, China should not view India’s restraint as a sign of weakness and should dispel India’s concern of its aggressive posture in South Asia through dialogue.
India and China should initiate confidence building measures and this can be done through people to people contact, removing visa restrictions, especially of Chinese workers wanting to work in India, encouraging more economic cooperation.
This is a watershed moment in the bilateral relations between both the countries. In the coming years, there will be greater opportunities to embark on forging a closer cooperation for the common good of the people of both the countries. They should make every effort to settle their disputes expeditiously, as festering disputes can be exploited by the West in setting one against the other, which will be not be in the interest of either country.
There is every hope that the matured leadership of Xi Jinping and Narendra Modi will chart a trajectory that will take the bilateral relations to new heights.