Engage and endear

There will be many schools of thought as to why relations between India and China have degenerated into a series of tit-for-tat retaliations.

There will be many schools of thought as to why relations between India and China have degenerated into a series of tit-for-tat retaliations. Closure over what led to what is unlikely given the opacity of decision-making in both capitals. But what seems clear is that China has been less flexible towards India on a number of issues, and that this predates the present unrest in Tibet. What is also clear is that the man on the street believes New Delhi’s responses toward China have been out of line with the country’s global aspirations.

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Underlying this is that Sino-Indian relations continue to lack genuine depth. Even when things are supposedly going well, the good news has been underwhelming. Much is made of the fact China has become India’s largest-trading partner. However, most of this is in raw materials like iron ore. Over time, this is likely to be diverted to India’s new steel plants. The best measure of deepening economic relations is cross-border investment. According to Beijing’s own figures, Chinese investment in India is a microscopic $ 250,000. The difference between primary product exports and greenfield investment is the difference between a one-night stand and a formal engagement. It is keeping this under-performance in mind that Prime Minister Manmohan Singh repeatedly spoke during his visit to Beijing in January about the “historic necessity” for two of the world’s fastest-growing economies to work together. That the $ 40 billion-target of two-way trade volumes by 2010 was almost reached last year (and had to be revised to $ 60 billion) tells its own story. Mr Singh’s impatience in Beijing was as much directed to Indian businessmen as it was to mandarins on both sides of the fence.