subject: Chris Devonshire-ellis: Moving China And India Forward [print this page] Over the last few years, our firm has been involved in China and India and we have commented many times on the relationship between them. I personally have been involved in the bilateral trade space through the mutually beneficial development of the firm into both markets since 2005. We now possess 15 offices and a team of several hundred staff between the two countries.
As the relationship starts to look at maturing to a more trade-based focus, the announcement by Chinese Premier Wen Jiabao this week of an expected increase in bilateral trade to US$100 billion in volume by 2015 has begun to concentrate minds on how these two giants of Asia are to manage their development. Indeed, the China-India issue is not just a regional matter, it is one that will affect global trade balances and security. If China and India succeed, global growth is almost assured for the remainder of the century. Hundreds of millions will be lifted out of poverty. Fail, and the fallout may spark serious conflict, possibly even nuclear. The stakes may never have been higher in ensuring that a dependable, secure and mutually beneficial relationship emerges.
In this article I try and examine the differences between the two nations, what I see as the sticking points, and provide clues as to why some of these may be about to be removed to clear the path for a more pragmatic and commercial-minded relationship between the two countries. That the relationship is highly politicized is beyond doubt; matters concerning the position of the Dalai Lama and the Tibetan government in exile, currently resident in India, provide a case in point. China regards the regime as subversive, and consequently uses this to push India towards its point of view by making claims on Indian territory and making border incursions along disputed areas on a regular basis. Indias military responds by requesting budget increases along its territory with China, delaying the construction of cross-border highways that they suspect would provide China with the opportunity to just march in, and both use up resources in addition to inhibiting development. For a nation requiring massive infrastructure development, such expense and deliberate regional suppression comes at a huge opportunity cost.
Chinas relationship with Pakistan too, can be a thorn in Indias side a failed state, responsible for attacks in Indias major cities, with a habit of antagonizing Indias huge Muslim population causes both a continuation of mistrust between Pakistan and India, but also deflects Indian attention, finance, military and resources towards its western border and again prevents India from economic growth that could potentially challenge Chinas bid for regional supremacy. Its hardly any wonder that the two sides view each other from polar opposites.
However, against this backdrop is the increasing need to develop bilateral trade ties. China needs a huge, export consumer market to sell too, India provides this. So does China for Indian businesses. What is happening therefore is a rebalancing of the relationship, to try and move it away from border disputes to a more settled and reliable trade platform. Depending upon the future plans of the Dalai Lama, who one suspects is well aware of the problems caused to the Indian government in hosting him, it is possible the next Dalai Lama and by this I mean the Dharamsala appointed figure, not the possible Beijing incarnation may be found born externally from India. Such a scenario would provide India with a get-out clause in its relations with China, and lead the Tibetan government in exile to establish its operations elsewhere. There are precedents the fourth Dalai Lama was born in Mongolia. It is not beyond the bounds of imagination to perceive the next incarnation being found there the Mongolians relationship with China is tetchy at the best of times, and Mongolia is largely interdependent from Chinese trade. That scenario mentioned, it is also possible that the current Dalai Lama could find a way to agree with Beijing to assume a reincarnation found in Tibet, or China. Such issues require dialogue, and are naturally highly sensitive. One hopes such discussions are taking place, at least informally. It would appear in Beijings best interests not to preside over a situation where two Dalai Lamas are announced. That would only prolong the conflict for much of the remainder of the century. Reconciliation is surely in the interests of Beijing, the Dalai Lama, the Tibetan Government in Exile and the Tibetans themselves. One hopes common sense and a longer term view of the cost of continuing this fractured arrangement will spur a mutually acceptable understanding. Hardliners need to give way to pragmatists.
China-India trade developments for the time being then are very much interwoven with the future of the Dalai Lama. If his government leaves India, Indian relations with China will massively improve. Both sides understand each other on this point, and both are mature enough to determine border dispute reminders not withstanding that time will tell.
