Economy

Old neighbors become new friends

By Ma Liyao (China Daily)
Updated: 2011-03-24 14:43

A Chinese monk performs kungfu at Shaolin Temple in Henan province to celebrate the Indian Year in China on June 20, 2010. [Photo / Xinhua]

Editor's note: From BRICS to the United Nations, China and India are getting closer on the world stage. The two ancient civilizations on each side of the Himalayas are now striving to get to know each other better.

BEIJING - Being neighbors for thousands of years, China and India are now helping to shape the world.

However, this important bilateral relationship does not follow a balanced pattern of development. While political ties sometimes suffer from suspicion, economic cooperation is blooming. And while the governments vow to boost friendly relations, the two peoples are still trying to get to know each other.

Now the two ancient civilizations are emerging on the global stage and bringing the world greater prosperity, but at the same time there is a gap in mutual understanding.

China's economy became the world's second-largest last year, while India's economic growth is expected to further accelerate this year.

The two economies, both Asian giants with a combined population of more than 2.3 billion, meet each other next month around the table of the BRICS (Brazil, Russia, India, China, and South Africa) summit in Sanya, a coastal city in southern China.

Interaction and cooperation on global issues between the two neighbors is becoming increasingly common. India supported China at the Copenhagen climate change summit last May, and similar cooperation took place in Cancun toward the end of last year.

Economics and trade is without question the area in which the two countries most closely interact.

Bilateral trade between China and India has expanded substantially from $200 million annually in the early 1990s to $61 billion last year. Air links also improved as the tourism industry developed.

"In the business sector, China and India are at the same time partners and competitors, but by no means rivals," said E.B. Rajesh Kumar, deputy director and chief representative of the Confederation of Indian Industry's China office.

The two countries have a strong base and many opportunities to cooperate in various fields, Shanghai-based Kumar told China Daily.

"For example, China can contribute to India's infrastructure construction with its advances in the area, and India can also add value to China's IT industry."

However, there are still concerns, mainly regarding the imbalance in bilateral trade and investment, he added.

"China's exports to India covered around two-thirds of the total bilateral trade in 2010, and the gap is widening. It is not a good phenomenon in the long run. A similar situation is in mutual investment," said Kumar.

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But the trend shows signs of changing.

"More Chinese want to invest in India now, which is a good sign," added Kumar.

Such prominent interaction and cooperation between these two large countries in economic affairs and global issues has attracted international attention, and has also aroused some concern.

Similarities in their history, stage of development, and their close geographic proximity often lead to comparisons of China and India in the media, which describe the two as "rivals".

The Indian media pays close attention to China's development, and often gets jittery on China's growth, especially military growth.

In a report on March 8 on China's construction of airbases near the border with India, The Times of India said: "India is now, albeit belatedly, trying to strategically counter China".

"Some countries are afraid of China and India getting closer, and wrong information about each other is spread in both countries in an effort to make Chinese and Indian people think getting closer is bad," said Madhav Das Nalapat, a professor of geopolitics at Manipal University in southern India.

The border issue has long been a sensitive topic between China and India.

The dispute is left over from the 19th century when India was under British control.

India and China gained a common border in 1826. British negotiator Henry McMahon drew a proposed boundary between China and India in 1913, but China objected to it.

Although India, which gained independence in 1947, was among the first countries to establish diplomatic relations with the People's Republic of China in 1950, the two countries have been unable to resolve some territorial issues.

Indians argue that China claims the territory on the basis that it was under Chinese imperial control in the past, while Chinese say that India claims the territory on the basis that it was once under British imperial control.

The two countries have been discussing the issue for nearly three decades. "Concerns emerge on why this cannot be resolved after so much discussion," said Srikanth Kondapalli, professor of Chinese studies at Jawaharlal Nehru University in New Delhi.

"This issue of the border dispute and military deployment breeds suspicion and mutual mistrust," he added, saying this will continue to affect bilateral relations for some time to come.