Mending fences at last

These two landmark commitments are infinitely more important than the total of 11 agreements India and China signed on a range of issues, including trade, water, energy, security, cultural relations and a financial dialogue mechanism. Together, the two represent something of a breakthrough.

The strategic and cooperative partnership idea acknowledges that Sino-India relations have acquired a global and strategic character. The partnership is for peace and prosperity; it’s not a military alliance. China has such partnership with only a few countries like Russia, France, Germany, Brazil and Mexico. India’s upgradation to this status results from China’s recognition that India is emerging as a significant Asian power. Sino-Indian relations could now acquire a welcome, friendly, non-adversarial character — 16 years after the thaw beginning with Rajiv Gandhi’s Beijing visit of 1988, and leading to gradual progress in the 1990s and the early 2000s under different regimes in both China and India.

The second agreement, regarding principles for a boundary settlement, is even more important, at least for India. It signifies the distance India has travelled since the 1962 border war with China. For years before and after 1962, it refused all Chinese proposals for settling the boundary dispute through negotiations. But New Delhi now accepts 11 political parameters and guiding principles for a package settlement covering all sectors of the India-China boundary — as a "strategic objective." Earlier, India insisted on a sector-by-sector solution. Right from the late 1940s onwards, India took a rigid position on the boundary issue, citing the MacMahon Line and various unequal Anglo-Tibetan treaties. China’s rebuffs and India’s responses to these eventually led to the disastrous war of 1962. Despite this, India for years reasserted colonial British territorial claims — as if it were the legitimate inheritor of Empire! The present, radical, shift from this position is welcome although it comes after more than 40 years and 20 rounds of talks. The guiding principles don’t guarantee an instant border settlement, but pave the way for a three-phase deal. During the coming phase, the two will construct a framework for a settlement based on the elements contained in Articles IV-VII of the 11-point deal. All of these-whether historical evidence, strategic interests or safeguarding settled populations — will be considered together, within an overarching political perspective of growing relations. In Phase III, the framework will be applied to produce a single "package" deal. With this, some of the bitterness caused in Beijing by India’s 1998 nuclear tests seems to have been overcome. India had then cited China and Pakistan as adversaries to rationalise the tests.

The two governments have agreed to continue meetings of their Joint Working Groups on the border issue and exchange maps of their respective versions of the Line of Actual Control. They have already exchanged maps of the least contentious Middle Sector adjoining Himachal Pradesh and Uttaranchal. They could well reach broad agreement on the other two. China already recognises Sikkim as a part of India.

The most important ‘guiding principle’ is Article I, which says, "the differences on the boundary question should not be allowed to affect the overall development of bilateral relations. The two sides will resolve the boundary question through peaceful and friendly consultations. Neither side shall use or threaten to use force against the other ..."

India and China have agreed to a protocol on implementation of "confidence-building measures in the military field", reached in 1996. Under it, each side will inform the other well in advance before holding a military exercise involving more than 15,000 troops, and ensure that the manoeuvres are directed away from positions held in frontline deployments. The Protocol restricts the movement of combat aircraft to within 10 km of the LAC. In case of an aircraft intrusion, the two sides will hold a flag meeting within 48 hours to clarify the position.

This means India and China are committing themselves not to drift into a hostile military build-up. They have agreed not to engage in offensive manoeuvres either. India can now be far more relaxed about its Eastern and Northern borders. It can gradually pull out some 150,000 troops-a huge peace dividend.

Meanwhile, the two countries will concentrate further on economic cooperation. Their bilateral trade has risen 13-fold in 10 years. Over the past four years, it has grown from under $3 billion to $14 billion. It could rise to $20 billion by 2008 and $30 billion by 2010.

However, the much tom-tommed idea of a Sino-India free trade agreement may be premature. India is not yet in the China league. China enjoys a massive headstart. Its per capita GDP is more than double that of India’s. Its steel and oil consumption are respectively eight times and twice as high as India’s. It consumes 43 per cent of the cement the world produces. More than 50 per cent of China’s GDP comes from manufacturing-in contrast to only a quarter for India.

India’s tariffs are still relatively high. Lowering them suddenly through an FTA could threaten a number of industries and cause job losses. It won’t be easy for India to compete with China on labour conditions. Nor should it want to. China’s labour practices are appalling. It has all but abolished the minimum wage, banned trade unionism, and introduced a long working week of up to 100 hours.

India and China should exploit the potential that exists for mutually beneficial cooperation-in energy exploration, science and technology, education and culture. By settling the border dispute soon, they must put the legacy of hostility behind themselves.

Praful Bidwai is an eminent Indian journalist and commentator