India and China
Bridging the Himalayan divide
Mar 28th 2002 | DELHI
>From The Economist print edition
Trade is easing the wariness between the world's two most populous countries
THE armies of India and Pakistan are continuing their long stand-off in the disputed region of Kashmir. But there is some good news this week from India's other flank, its border with China. On March 28th, China Eastern Airlines was due to fly into Delhi from Beijing, inaugurating the first ever direct air link between the world's two largest countries. Jaswant Singh, India's foreign minister, was booked on the return evening flight as the guest of the Chinese government. He is expected to sign a joint agreement on tackling terrorism during his stay in Beijing. These are useful steps for two nuclear-armed powers which, divided by the Himalayan mountain ranges and contrasting cultures, have until recently barely been on speaking terms. The post-colonial solidarity of the 1950s was shattered by China's victory in a 1962 border war which left a legacy of bitterness and border disputes. China has also annoyed India by supporting Pakistan's military and nuclear development; and India's own nuclear tests in 1998 soured relations further. China resents India for harbouring the Dalai Lama, Tibet's spiritual leader, who fled in 1959, as well as, since 2000, the youthful Karmapa Lama. These differences are now being edged aside by growing economic links. Annual two-way trade has risen from a few hundred million dollars in the mid-1990s to $3 billion this year, and India hopes to see that rise to $10 billion within five years. Cheap Chinese toys, locks, and other consumer goods are flooding into India. Such competition is causing concern in Delhi; but Indian manufacturers are responding by setting up operations in China to turn out goods varying from tyres to microwave ovens. India also worries about losing its status as Asia's leading producer of software. Though its software exports this year are expected to top $8 billion to China's $1 billion, China has been sending teams to learn the secret of India's success. Responding to the implicit challenge, Indian software companies such as NIIT and Infosys are moving into China. All this, says an Indian government spokesperson, is "adding value and content to the relationship". It should also help to fill the seats on China Eastern's twice-weekly flights linking Delhi with Shanghai and Beijing.
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