Business beyond borders

Updated: Jan 18 2002, 05:30am hrs
Go to and type China, India, relations and you get a list of items devoted to business, culture and tourism, with just an odd one on nuclear issues or on the border dispute. Replace China with Pakistan and you get nothing but articles on conflict and terrorism. This should not surprise anyone who has followed the visit to India of Chinas Prime Minister Zhu Rongji and compares it with General Pervez Musharrafs visit to India.

India and China are no longer publicly arguing about borders and territory, nor about one interfering in the internal affairs of the other. That is all either passe or left for quieter and closed door discussions. In public we talk about doing more business and trade. Mr Zhu travelled to Bangalore, Mr Musharraf wanted to go to old Delhis Jama Masjid! Therein lies the difference.

It is not as if India and China do not have unresolved political issues that divide them. China continues to lay claim to parts of Indias north-east, even though it has indicated its willingness to finally grant official recognition to Sikkims accession to India. Going beyond territorial claims, there are other political issues, including Indias asylum to Dalai Lama, which bedevil Sino-Indian relations. Indeed, more seriously there are issues pertaining to Chinas military cooperation with Pakistan and Myanmar which worry India. The list of issues which can keep Sino-Indian relations tepid and testy is long.

Yet, India and China have been able to do more business with each other in the past decade than in the entire 20th century! Sino-Indian bilateral trade has crossed $3 billion and it would be double that if Indias trade with Hong Kong is included. Indian companies are investing in China and vice-versa. Indias prowess in information technology has become popular knowledge in China. Walking in a shopping district in Shanghai a few weeks ago I was greeted by a stranger who first asked Indu Indo and then followed up that question with IT

The bonhomie that marked Mr Li Pengs visit to Bangalore last year and Mr Zhus meeting with Indian business leaders in Mumbai this week shows how much increased economic interaction between the two countries has helped alter attitudes. If the Indian government now finally agrees to alter Indias official map to show Aksai Chin and other parts on the other side of the so-called line of actual control occupied by China as belonging to China, and finalises a border agreement making de jure what is de facto, few in India will protest.

Is there a lesson in all this for Pakistan and for Indias relations with Pakistan Of course there is and that is what governments in India have been saying for over a decade now. Business and economic cooperation can help ease political tensions and reduce the relevance of border disputes. If Pakistan wants to keep the Kashmir pot boiling it is free to do so, but just as China has come to regard Indias support for Dalai Lama in the correct perspective, India may well begin to regard Pakistans political stance in a more agreeable perspective. But there must be a quid for every quo!

India and China agreed to extend to each other the Most Favoured Nation treatment in 1984, a few years before Prime Minister Rajiv Gandhi made his historic visit to Beijing. The 1990s have witnessed a blossoming of the business relationship. If the pace of trade expansion witnessed in the last five years is sustained over the next five years, China will emerge as a major business partner for India, perhaps even overtaking Japan. Geo-economics may then well turn geo-politics on its head.

The decade following the end of the Cold War has witnessed fundamental changes in Indias relations with both the United States and China. It is true that the 1990s has also seen Indias relations with the rest of Asia changing, especially relations with South-east and East Asia. Equally, there has been a sustained improvement in the already good relations with Central Asia and the Gulf region. From the straits of Hormuz to the straits of Malacca, India has experienced an improvement in her relations with her wider Asian neighbourhood. This has, in part, been shaped by Indias own economic growth and her greater openness to external trade and investment flows and in part by the improved relations with both the US and China.

The only relationship which is an exception that proves the rule is the relationship with Pakistan. Pakistan remains obsessed with short-term political goals and its external relationship with India remains a prisoner to its domestic politics and the politics of its national identity. During the tenure of Prime Minister Nawaz Sharif there was some evidence of a change in this world view. Mr Sharif was willing to talk business and the meetings he had with Prime Minister I K Gujral in Dhaka and Colombo appeared to be the beginning of a new phase in which business and economics would come to the fore. A hopeful Pakistani economist, the late Dr Mahbub ul Haq, wrote a series of articles in the Pakistani media educating his countrymen about what MFN meant and how this was no special concession to India but a mere multilateral obligation which could foster greater economic interaction.

General Pervez Musharraf is yet to reach the milestone that his civilian predecessors had crossed half a decade ago. As a result, when he marched to the podium at the Saarc summit in Kathmandu last fortnight, he relegated the core issue of the summit, namely regional economic cooperation and a time-table for increased intra-Saarc trade, to the background and tried to convert a regional forum into a bilateral summit on a patently political issue.

Chinas leaders have not forgotten their political differences with India, nor have territorial claims been fully given up. They have chosen, however, to push such differences under the red carpet that they have rolled out to increased business and trade. China has improved its political relations with the US and most of its neighbours, including Vietnam, through economic engagement and diplomatic mercantilism, not just crossing borders but setting them aside to do business. Surely, thats an easy lesson for General Musharraf to learn, considering he goes so frequently to Beijing!