Competition between China and India goes beyond borders

(The New York Times)
Updated: 2006-11-21 10:27

NEW DELHI: A 40-year border dispute remains unresolved. Tibetan refugees continue to pour across the Himalayas. The memory of India's bruising defeat by China in 1962 remains fresh in the minds of a certain generation.

But as President Hu Jintao of China arrived here Monday for a four-day visit to shore up relations between Asia's two giants, what matters is no longer just the territorial arguments between them. As India and China tend their flourishing economies and strive to expand their global reach, they also increasingly find themselves scrambling for natural resources and political influence around the world. At times, they appear to be linking arms; at times, they are in active competition.

It is not exactly a relationship of equals. So measurably does India lag behind on virtually every indicator - except, notably, in the size of the software industry and the number of billionaires (India wins on both counts) - that the Indian minister for commerce, Jairam Ramesh, told an audience here Monday that Indians would do well to stop racing with the Chinese and start admiring.

"We are not in a race," he said at a seminar sponsored by the Confederation of Indian Industry. "They have already won the race."

Some of the competition is in each other's neighborhoods. China is a longtime ally of Pakistan, India's chief antagonist, and it is helping the Pakistanis to fulfill their nuclear energy ambitions and is building a deep- water port at Gwadar on the Arabian Sea.

On India's eastern flank, China has emerged as one of the largest trading partners of Bangladesh.

India, meanwhile, is ever more visible in China's backyard. It signed a free trade agreement with Singapore last year, and is increasingly cozying up to the junta in Myanmar.

Some of the competition is taking place near and far, as China and India, both hungering for raw materials like fossil fuels and iron ore, aggressively court resource-rich countries like Nigeria and Kazakhstan.

"As two large countries with their own oversized egos, with their sense of manifest destinies, the rivalry is natural," said C. Raja Mohan, strategic affairs columnist for The Indian Express, an English-language newspaper. "The self-perception in both China and India is that they have a larger stake in the world. Therefore, there is a politics of balancing which has become more acute."

Never mind, many Indian analysts say, that the United States is seeking to shore up India as a bulwark against China. India has its own reasons to step up to China or, at times, to collaborate.

For instance, India, like China, has bucked U.S. efforts to isolate the Myanmar military regime. India is instead building roads, refurbishing a port and considering the construction of a natural gas pipeline.

India and China are partners in an oil venture in Sudan. Both countries remain staunch supporters of the Sudanese government despite international pressure over the fighting in Darfur.

Both China and India have stepped up their courtship of Africa. At a meeting this month in Beijing attended by representatives from 48 African countries, China signed trade agreements worth $1.9 billion, pledged $5 billion in loans and credit and offered to double its foreign aid to Africa.

Trade between China and African nations, with their ample deposits of iron ore, copper and oil, has grown tenfold in the past 10 years, to nearly $40 billion last year.

India, though far behind, is making a beeline for some of those very same resource-rich African nations. Indian companies are making sport utility vehicles for the African market, selling hair care products and bidding for hotels. India's bilateral trade with African countries has inched up, to about $12 billion last year.

Their economic rises have prompted India and China to gradually put away distrust and start doing business together. Trade has more than doubled in the last two years, reaching nearly $18 billion in 2005. A report by the Confederation of Indian Industry forecast that it would reach $30 billion by 2010. A historic trading route at Nathula Pass reopened earlier this year.

But distrust remains a stumbling block to expanded economic ties. The Indian government, on security grounds, has blocked Chinese investment in ports and telecommunications in India.

The most entrenched bilateral dispute has to do with their competing border claims. India claims as its own a vast swath of Chinese-controlled territory in Kashmir. China says that the Indian state of Arunachal Pradesh is part of China. Talks between the two countries have yet to yield a resolution on the border.

Pakistan is the other sore point. Hu, the first Chinese president to visit India in 10 years, is scheduled to visit Pakistan later in the week. Among the potential deals to be announced there is the expansion of trade and further nuclear cooperation.

For India, such overtures are more than a minor irritant, making it ever harder for New Delhi to overcome a legacy of distrust about China.

"These are issues that concern us," said Ramesh, the Indian commerce minister.

"Some of them are hangovers from the past. Some of them are also contemporary in nature."

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