The Sino-Indian relationship remains pregnant with interesting possibilities. Bilateral developments continue to excite both sceptics and optimists. Sceptics hardly see light at the end of the tunnel that both countries trudge. Optimists on the other hand don?t entertain such visions. Both quarters are certain about the future course of Sino-Indian relationship as dictated by their respective interpretations. Sceptics believe that the current phase of mixed engagement?classifiable as ?day? (though cloudy)?will give way to a darker phase of ?night? dominated by hostility. Optimists, in contrast, are convinced that the current phase of mistrust and suspicion?more typically ?night??will be suppressed by a brighter ?day?. At present, however, optimists appear to be outnumbered by sceptics. The sceptical version of the Sino-Indian story is well known. This includes familiar arguments such as territorial disputes, contentions over Tibet, balance of power in the Asian continent, hegemonic desires and likewise. Copious literature and thousands of conferences, seminars and workshops have been devoted to threadbare analysis of each minute bone of contention. Such enormous discussions on bilateral difficulties should have, by now, eased, if not eliminated some of the difficulties. But intellectual and academic deliberations appear to have imparted a greater sense of irreconcilability to outstanding issues. Strategic communities have hardly spared any efforts to prepare both countries for prolonged conflicts.
But history is replete with ample evidence of Sino-Indian cooperation particularly in trade and commercial exchange. The two countries not only traded deep and wide but were also two of the world?s most prosperous economies on the eve of the industrial revolution of the 18th century. De-industrialization of both economies occurred almost in tandem as China and India plunged into prolonged economic slumps from 1820 onwards. Both have begun recovering after languishing for more than one and a half centuries.
A simple lesson from history needs to be taken note of: bilateral trade flourished when both countries were growing well in the pre-industrial revolution era. In a much shorter span of seven-eight years?the early years of the latest millennium?trade between the two countries has begun flourishing again. The last few years?before the onset of the global downturn ?also marked the period when both countries recorded growth rates that were among the highest in the world. Thus bilateral trade again revived strongly with both countries growing well.
It is difficult to figure out why two countries that are trading vigorously with each other would like to go to war. Since China?s entry in the WTO in December 2001, Sino-India merchandise trade, within a short span of seven years has increased from $2.3 billion in 2002 to $40 billion in 2008. There is no doubt that both countries are gaining from this enlarging exchange. Are they keen on choking off such gains and clamping their own growths by fighting with each other?
Sceptics, particularly on the Indian side, argue that gains from trade have been mostly one-sided. With a merchandise trade deficit of $22 billion, India has hardly benefited from greater trade according to them. Services trade data is not available. However, such trade balance is likely to be in India?s favour. Furthermore, actors involved in business transactions are guided by the rational objective of maximising profits. There are obviously solid reasons behind Indian enterprises importing large volumes of electrical machinery, electronic goods, mechanical appliances, fertilisers, steel and chemicals from China. There are equally sensible reasons behind Chinese enterprises undertaking large imports of iron ore, copper and plastics from India. The most obvious explanation is that imports are helping producers and consumers on both sides by increasing access to cheap raw materials and decent inexpensive finished products. Indian industry wouldn?t have imported from China had domestic intermediates been available at similar price and qualities.
As both countries recover from the global downturn, there is no reason why they should not look ahead to trading more with each other. Unfortunately, unjustified fears might create circumstances hindering trade growth. Delays in issuing visas and permits are typical examples.
Rather than finding difficulties in every opportunity, sceptics will be better off looking at the larger Sino-India history. That clearly shows there are opportunities in every difficulty and not otherwise.
?The author is a visiting research fellow at the Institute of South Asian Studies in the National University of Singapore. These are his personal views