19/12/2015 8:08 AM IST | Updated 15/07/2016 8:25 AM IST

Why China And India Must Band Together

Indian Prime Minister Narendra Modi, right, welcomes Chinese President Xi Jinping, upon his arrival at a hotel in Ahmadabad, India, Wednesday, Sept. 17, 2014. Xi landed in Modi’s home state of Gujarat on Wednesday for a three-day visit expected to focus on India's need to improve worn out infrastructure and reduce its trade deficit. (AP Photo/Ajit Solanki)

A flagship report of the World Bank, "The Global Economic Prospects", the Indian economy will grow at 7% per annum by the end of 2016, against 7.9% growth in China. Another study by the Organization for Economic Cooperation and Development (OECD) projected that India will be within striking distance of China by 2016 in the pace of growth. However, witht the recent meltdown in the Chinese economy, China will find it extremely difficult to even maintain 6.9% growth in 2016.

The Indian economy, which was earlier besieged by indecisive leadership, coalition compulsions, scams and a misplaced emphasis on welfare schemes, has shown a remarkable turnaround after the Narendra Modi-led BJP was voted to power. A slew of economic reforms introduced by the government is likely to improve the investment climate, promote deregulation and a bureaucracy that is expected to be more business friendly.

It is said that lasting relations between two nations can come only from a position of strength and, today, India, is being looked upon by China and the West as one of the emerging global powers. China and India are on the cusp of becoming among the world's top three economies. Various economic surveys have predicted that China has the potential to displace the United States economy by 2024, while India is set to take its place at the third position. This movement towards growth gives a great opportunity for both the countries to eschew rivalry and forge a close collaboration in economic, military and political spheres. Both the countries can also play a vital role in ensuring peace and stability in the Middle East and South Asia.

Although the geopolitical tension between India and China can be attributed to a contentious border dispute, the overarching challenge in Sino-Indian relations is to overcome the trust deficit.

Although the geopolitical tension between India and China can be attributed to a contentious border dispute, the overarching challenge in Sino-Indian relations is to overcome the trust deficit. The only way to lessen the tension is by engaging with one another, by collaborating in trade and business and leaving border issue on the back burner temporarily. Once a better understanding is developed, it will lead a spirit of accommodation between the countries for resolving the border dispute.

While China can help India to build its infrastructure, modernise its railways, invest in the power sector, set up manufacturing facilities, India can be of assistance to China in the areas of software development, pharmaceuticals and services.

Chinese President Xi Jinping, in his first state visit to India, signalled clearly that he recognised the nation as an important strategic partner for China. The leadership in both the countries believes that only by engaging with each other, and through mutual collaboration, can mistrust be removed. Both the leaders have shown maturity in recognising that only though dialogue can the border issue be settled. It may come as a surprise that not a single shot has been fired from either side over the last 50 years or so, a lesson to be learnt by other countries.

Meanwhile, the Indian Prime Minister has invited foreign companies to set up a manufacturing hub in India to realise his dream of "Make in India" - China can play a pivotal role in sharing its expertise in the setting up of such manufacturing centres. The Chinese President has pledged $20 billion for reducing India's trade deficit. China also agreed to set up industrial parks in Maharashtra and Gujarat.

India and China should initiate confidence-building measures through people-to-people contacts, removing visa restrictions, especially of Chinese workers wanting to work in India and encouraging more economic cooperation. China's strategy of providing military assistance to Pakistan, making huge investments in Sri Lanka, Bangladesh, Myanmar and Nepal have been viewed in India as a deliberate to encircle India. Beijing is aware that the US, Japan and other Asian countries are trying to include India in their anti-China geopolitical military strategy. The political leadership in India, so far, has avoided aligning with the US or Japan to counter China, as it feels such a strategy would be counterproductive. However, China should not view India's restraint as a sign of weakness, and must strengthen its ties with India to dispel concerns over Beijing's aggressive posture in South Asia.

This is a watershed moment in the bilateral relations between both the countries. In the coming years, there is every hope that the forward-looking leadership of Xi Jinping and Narendra Modi will chart a trajectory that will take bilateral ties to new heights.

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