REACHING OUT ACROSS THE HIMALAYAS

Premier Li Keqiang’s trip stresses further cooperation between China and India By Yu Lintao

In an article published in two of India’s most widely read newspapers,Dainik JagranandThe Hindu, on May 20 during his visit to India,Chinese Premier Li Keqiang likened the friendship between the two neighbors—China and India—as a handshake across the Himalayas.With the huge size of the world’s two most populous nations, their“handshake” links more than one third of humanity.

Despite lingering disputes,observers say bilateral relations have seen remarkable progress in recent decades. Premier Li’s visit to India, the opening leg of his maiden overseas trip since taking of fi ce, was welcomed by the Indian Government and public as a positive signal for further developing these ties. While Li noted in his speech at the Indian Council of World Affairs in New Delhi that some clouds in the sky cannot shield the sunshine of Sino-Indian friendship, observers pointed out that common interests and common goals for pursuing development would spur the two neighbors to seek cooperation while managing differences.

LOOKING AHEAD: Chinese Premier Li Keqiang meets withIndian Prime Minister Manmohan Singh in New Delhi on May 20

The big picture

“Premier Li’s visit to India demonstrates both the high importance Beijing attaches to New Delhi and the confidence of the two sides for cooperation in regional and international affairs,” said Sun Shihai, President of the Chinese Association for South Asian Studies. Sun added that the visit played a positive role in enhancing mutual trust.

Lou Chunhao, a researcher on South Asian studies with the China Institutes of Contemporary International Relations, toldBeijing Reviewthat as two emerging powers and the largest developing countries, both consider their relationship to be of special importance.

When meeting with Premier Li, Indian Prime Minister Manmohan Singh stressed that“India and China are partners, not opponents.”Mainstream Indian media paid close attention to Li’s visit. Press Trust of India wrote, “While President Xi Jinping chose to visit Russia on his way to the BRICS Summit in March, Li chose India to be his fi rst destination abroad to send a message of the commitment of the new leadership to further friendly relations with New Delhi.”The Times of Indianewspaper commented that it was a golden opportunity for New Delhi to seize and script a fresh, more positive chapter in bilateral relations.

A few days before Li’s trip, a border standoff took place in the western part of the border the two countries share.

However, despite being much hyped by the international media, the incident was quickly resolved. Observers said it was a sign that the two neighbors are becoming more mature in handling their differences.

Chinese Vice Foreign Minister Song Tao said at a press conference before Li’s trip that China and India should “focus on the big issues while managing properly the small issues.”

Jiang Jingkui, Director of the Center of South Asian Studies at Peking University, said neither side is willing to allow a small issue like a border dispute to disrupt their strategic partnership.

During his stay in New Delhi, Premier Li said,“World peace and regional stability cannot be a reality without strategic mutual trust between China and India.

On the world stage, China and India are natural partners in reshaping global rules on climate change, trade and finance. They have already carried out effective cooperation within the frameworks of the Group of 20 and BRICS to push for a fairer multi-polar world.

Lou said the common ground of cooperation for both countries is the need for a peaceful and stable environment for development.

Business ties

During Li’s trip to India, the two countries signed eight agreements in areas such as the economy, trade, agriculture and environmental protection to expand practical cooperation.

“Due to different development modes in the last decades, the two countries’ economies are broadly complementary to each other. Thus,there is large space for economic cooperation,”said Lou. “If the two big markets are well connected, they will give a strong impetus to the world economy.”

China is strong in manufacturing and India excels in the IT industry, minerals, biomedicine,banking and outsourcing. China is now India’s second largest trade partner, while India is China’s biggest partner in South Asia. India’s exports to China are mainly cotton and minerals,while China offers manufactured goods such as industrial equipment. Statistics from China’s Ministry of Commerce show that two-way trade amounted to $66.5 billion last year, but both sides believe the potential is much greater. The two countries are aiming for a trade volume of$100 billion by 2015.

Sun said that to expand bilateral economic engagement, the huge potential of cooperation on Indian infrastructure construction and mutual investment must be further tapped.

It is widely acknowledged that the backward infrastructure of India has become a bottleneck for the country’s pursuit of rapid development.The two big blackouts last year in India, affecting the lives of 360 million and 680 million people respectively, caused awkward moments for the country on a global scale.

Lou said China’s wealth of funds, experience and technology in infrastructure construction offers it big advantages to India in terms of cooperation. China has become the largest overseas project contractor of India. Even so,much room is still left for additional projects.

DEEP FRIENDSHIP: Chinese Premier Li Keqiang meets with Manorama, sister of Dr. Dwarkanath Kotnis who died in China while providing medical aid during World War II, in Mumbai on May 21

China, which has advantages in manufacturing, is now faced with pressing problems as material and labor costs continue to rise in the domestic market. But in the meantime, a research report released by Kunming-based Yunnan University shows 51 percent of the Indian population are younger than 25 and in 2025 India will have about 130 million extra workers available to the world.

Sun claims that it would be a good choice for China’s manufacturing sector, troubled by surging labor prices at home, to transfer business to India. At the same time, it would provide an opportunity for India to improve its manufacturing industry and create more jobs. Some economists also noted that only when India develops a more mature manufacturing base,can it achieve trade parity with China.

Trust building

Areas of Cooperation

Bilateral relations: improving political trust and the great potential for trade and investment growth

International issues: climate change,reform of the international system and protection of the shared interests of developing countries

Regional outreach: development of the China-India-Myanmar-Bangladesh economic corridor and consensus on Afghanistan’s reconstruction

Points of Contention

Territory: The 2,000-km border between China and India has never been formally demarcated

Tibet: India hosts the Dalai Lama’s “Central Tibetan Administration,” which the Chinese Government accuses of attempting to separate Tibet from China

Trade deficit: India ran a trade deficit of$28.87 billion with China in 2012

Third party: India is cautious about China’s close ties with its neighboring rival Pakistan

China and India, both of which fought against semi-colonial or colonial rule, enjoy traditional friendship. However, exchanges between the two countries were interrupted by a border con fl ict in 1962.

Lou said the border dispute has severely hindered mutual trust. In the joint statement issued during Li’s visit, both sides agreed to work together to maintain tranquility and peace in the border areas.

To address the newly emerging trade imbalance, the two sides agreed to improve ties between Chinese enterprises and the Indian IT industry, and expand border trade through the Nathu La border port. They also made an agreement on trade in buffalo meat, which could help redress the trade imbalance as Chinese demand for the meat is potentially worth $1.5 billion a year.

Cooperative projects concerning security issues are also included in the joint statement,which observers say could help promote mutual trust. They include expanding civil nuclear energy programs, enhancing cooperation on maritime security, holding joint military exercises as well as strengthening cooperation in naval escort missions to counter piracy in the Indian Ocean.