China and the Other Asian Giant: Where are Relations with India Headed?
A ChinaFile Conversation
Earlier this week at an Asia Society forum on U.S.-China economic relations, Dr. Henry Kissinger remarked that when the U.S. first started down the path of normalizing relations with China in the early 1970s, the economic relationship and trade between the two countries was virtually non-existent. Amazingly, a similar statement could have been made about India and China as recently as a decade ago. It was at that time, around nine years ago, that the Asia Society published a seminal book on the relationship The India-China Relationship: What the United States Needs to Know. Back then, very few people were looking at the relationship in a sustained and serious way. Two-way trade between the countries was only $3 billion. During an authors’ trip to both countries in advance of publication, and in meetings with local experts, it was apparent that while the Indian interlocuters had thought long and hard about China (and seemed quite concerned by China’s rise), their Chinese counterparts seemed far less interested, and certainly less concerned.
Fast forward to this week, when Premier Li Keqiang has just wrapped up a three-day visit to India, his first visit to a foreign country since taking on his current role. How dramatically the relationship has changed in these last ten years for India to be the first stop on such trip, ahead of traditional partners such as Pakistan. While Premier Li suggested the three purposes of his visit as “enhancing the strategic mutual trust, deepening two-way cooperation and ensuring both sides face up to the future,” economics was front and center during the visit—evidenced by the large business delegation traveling with the Premier and the quick trip to Mumbai, India’s business capital. The numbers further bear out this focus. Building from paltry sums ten years ago, two-way trade between India and China last year was more than $65 billion and is projected to reach $100 billion by 2015. China is now India’s second largest trading partner, and India is a growing presence in China’s economic calculations. In addition, there are spots within the economic relationship which seem ripe for greater future interaction. For example, India’s most recent economic plans suggest a major push on infrastructure in the coming years, and Chinese companies have a strong track record on building out such.
There are still sensitive touch points in the relationship that will continue to challenge the efforts of diplomats on both sides. China’s trade surplus is a source of concern, and the recent border confrontation demonstrated the potential for problems. But in a volatile global economy, with China’s aging population and India’s youth bulge, these two countries need each other. Similar to the conversation on U.S.-China relations, the world needs an India and China that can work together. This trip was a positive next step in achieving that goal.
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