Passing the yuan

The impasse in Sino-India relations after the 1962 war, disputes over boundaries and China’s non-recognition of Sikkim as an Indian state were among the geo-strategic and political factors that ensured that 44 years pass before the re-opening of the Nathu la trade, writes Mahendra P Lama.

The impasse in Sino-India relations after the 1962 war, disputes over boundaries and China’s non-recognition of Sikkim as an Indian state were among the geo-strategic and political factors that ensured that 44 years pass before the re-opening of the Nathu la trade route. The abrupt closing down of the border in 1962 disrupted a cohesive and prosperous economic systemThe impasse in Sino-India relations after the 1962 war, disputes over boundaries and China’s non-recognition of Sikkim as an Indian state were among the geo-strategic and political factors that ensured that 44 years pass before the re-opening of the Nathu la trade route in the Eastern Himalaya — Sikkim, West Bengal’s hill areas, Arunachal Pradesh, Tibet and areas of China. The disconnect meant a loss of livelihood for many. Many business houses collapsed overnight. Governments faced a sharp erosion in their revenue base, and also had to cope with large numbers of people displaced.

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The cultural bonding gave way to the barbed wire fence. A long spell of cold relations followed, controlled by the military on either side. The frozen faces have only just started smiling in the hope of a better future. Nathu la is no longer a forbidden pass.

The Sikkim Democratic Front (SDF) led by Chief Minister Pawan Chamling was emphatic that the reopening of the pass be included in its election manifesto as far back as in 1994. The opening of Changu Lake and the Nathu la pass to tourists in the late Nineties indicated a major shift in government policy.

Then Prime Minister Rajiv Gandhi’s 1988 visit to China — the first visit by an Indian Prime Minister after the 1962 war — broke the ice. Rajiv Gandhi’s exuberance about having cordial relations with India’s neighbours matched Deng Xiaoping’s advocacy of zhoubian zhengce (periphery policy). Following this thaw in relations were the visits of PM Narasimha Rao to China in 1993, President Jiang Zemin’s to India in 1996, PM Atal Behari Vajpayee’s to China in 2003 and Premier Wen Jiabao’s visit to India in 2005.

China’s altered approach showed in its policy. It realised that to spur reform and prevent domestic political turmoil, China would need a larger playing field. The other critical dimension was the conviction that national security could be ensured through a ‘good neighbourly policy to cope with the changes that challenged China’s understanding of its relations with neighbouring countries’. Deng Xiaoping and his reform-oriented colleagues understood that China tended to remain ‘a regional power without a regional policy’. A clear regional policy based on wendingz bhoubian (stabilising periphery) thus emerged.

A driving force for China to open its border for trade has been its need to bring its peripheral provinces, mainly the western region, into the national mainstream. This could supplement mainland China’s expansion of its politico-military leverages. China’s 27 provinces are divided into four regions — the northeast with three provinces, midland with eight, the eastern with six and the western with 10 provinces.

Western China has a lot to do with the reopening of the Nathu la pass. It covers two-thirds of the nation’s territory, with a population of nearly 23 per cent of the nation. It has plenty of land and oil and gas. Eastern China’s 14,000 km-long coastline brought fortunes to China in the last two decades. It is now western China’s turn with 3,500 km land frontier lines that will become the second golden area of reopening.

The western region hasn’t seen the speed of development that the eastern region has. Accelerated growth and development in these politically volatile provinces and regions could, to a large extent, quell political dissent in a durable manner. Thus, the provision of autonomy and flexibility in cross border interactions were considered vital.

Premier Zhu Rongji’s report on National Economic and Social Development identified the eight most important tasks to be achieved during the Tenth Five Year Plan period (2001-2005). These tasks included developing the western region for regionally balanced economic development, deepening reform and adopting an open-door policy. Part of Deng Xiaoping’s development strategy in the early Eighties was pursued by Premier Zhao Ziyang. The Chinese government launched a ‘develop-the-west’ campaign in 2000. Preferential policies for capital, improvement of the investment environment and the development of science, education and human resources were offered to the western region. A number of mega infrastructural projects have been implemented on war footing. These include the recently-inaugurated 1142 km long railway line connecting Lhasa with mainland China.

Attractive fiscal and market incentives to foreign funded enterprises and liberal labour policies are key to the region’s development. Against the widely practiced Hukou system that restricts human migration, the Ministry of Public Security dictated that investors and professionals in western China can be registered where they work. In a rare move, it allowed them to return to where they came from with their new residence registration still valid. This concession is aimed at encouraging reasonable and an orderly population immigration.

But China is wary of national security concerns. Margaret Swain in her book Rethinking China’s Provinces talked of this. In China's Economic growth: The Impact on Regions, Migration and the Environment, Ian G Cook develops three scenarios of ‘no substantial change’, ‘China shrinks’ and ‘China expands’ as a sequel to the globalisation process. He argues that “the erosion of sovereignty by the combined pressures of globalisation, new regionalism and ethnic dissent, would lead to fragmentation.” These apprehensions are there within China too — however far-fetched they may seem at the moment.

(The writer is Chairman, South Asia Centre, JNU and Leader of the Nathu La Trade Study Group)