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China-India: Optimism and mistrust

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15 December 2010 12:06

As Chinese premier Wen Jiabao prepares to accompany over 100 senior business leaders on an official trip to India, it is timely to reflect on the state of relations between Asia's two greatest powers.

Relatively unharmed by the GFC, rapidly growing India and China continue to forge an ever-strengthening economic partnership. Indeed, Wen's visit – the first in four years by a Chinese premier – is designed to buttress what is shaping up to be a $60 billion bilateral trade relationship in 2010. Despite the lack of progress on a free trade agreement, Sino-Indian trade revenue is projected to surpass $120 billion in 2012.

Nevertheless, deep-seated mistrust overshadows Sino-Indian strategic relations. Since India's defeat at the hands of Chinese forces in their bloody 1962 war, New Delhi has regarded China with a mixture of apprehension and acrimony. India is highly suspicious of Beijing's wider regional ambitions and alarmed by its longstanding (and sometimes illegal) support of nuclear-armed Pakistan.

Beijing, for its part, is concerned by the deepening partnership between India and the US, symbolised by President Obama's high-profile visit to India earlier this year. Despite their attempts to downplay these anxieties, policymakers in China worry that cosy Indo-US relations could be used as a front to contain China's rise. 

These tensions are playing out in two domains. On land, Sino-Indian rivalries simmer over the contested McMahon Line at Aksai Chin and the disputed border in Arunachal Pradesh, where New Delhi maintains a contingent of around 100,000 troops. At sea, strategic jostling is even more apparent as China and India modernise their navies and compete to extend their influence from the Malacca Strait to the Gulf of Aden.

Yet as my recent paper in the Lowy Institute's 'Strategic Snapshot' series points out, Sino-Indian rivalry in the Indo-Pacific region is far from inevitable. For the next two decades, both countries will be compelled to stay focused on their own relatively separate geostrategic neighbourhoods. Moreover, even as their naval forces come into more frequent contact on the high seas, there is reason to believe that confidence-building measures can help prevent destabilising clashes between Chinese and Indian fleets.

Premier Wen's trip to the subcontinent raises another reason for cautious optimism. If economic links and bilateral trade continue to grow over the coming years, Beijing and New Delhi may find that the rewards of interdependence will attenuate the latent mistrust in other aspects the relationship.

Photo by Flickr user rajkumar1220.

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