For a host of reasons, India and China will find there is no time like the present to make a new start in their ties.

Asian giants with a mountain of mistrust between them: that has been the view of India and China for decades. Yet, as Prime Minister Manmohan Singh travelled West last week — amid a focus on the drift in India-United States ties, and a freeze on Indo-Pakistani ties — his most productive meetings may well have been with our eastern neighbour, engaging President Hu Jintao on the sidelines of the summits in Washington and Brasilia.

The meetings were their first since the surprising show of unity India and China put up at the climate change conference in Copenhagen in December 2009 — which many are crediting with also changing the climate of ties between New Delhi and Beijing. According to Environment Minister Jairam Ramesh, who has made five trips to China in the past six months, “Just as we mark BC as the beginning of the new age, so too in India-China ties, there is a BC — Before Copenhagen, and after.” Before Copenhagen, was of course, annus horribilis — filled with heated exchanges over incursions, stapled visas, and China's ire over Indian official visits to Tawang.

The new spirit, one that we saw glimpses of during the Rio and Kyoto environmental conferences, comes this time amid a flurry of engagements between New Delhi and Beijing, which mark 60 years of diplomatic ties. In both China and many parts of India, the 60th year is considered auspicious (in Tamil Nadu a man who turns 60 celebrates shashtyabthapoorthy and remarries his wife to renew vows). For a host of reasons, India and China will also find there's no time like the present to make a new start in their ties. The immediate dividend from Copenhagen was seen when External Affairs Minister S.M. Krishna visited Beijing this month and announced the setting up of a hotline between Mr. Wen and Dr. Singh. At a reception hosted by the Indian embassy, Chinese special envoy Dai Bingguo dropped in unannounced and stayed for an unprecedented two hours. He then met with his counterpart Shiv Shankar Menon in Brasilia, agreeing to restart the border talks that have been stalled since last August, along with Prime Minister Singh and Premier Hu Jintao.

Even the official language seems to denote a shift — last week, the state-owned China Daily ran an editorial that advocated closer Sino-Indian ties, on the lines of the “all-weather friendship” China has with Pakistan. Certainly, a turnaround. “An Asian century will remain a dream,” it said, “unless India and China resolve their differences.”

At the same time, the Indian Defence Ministry annual report for 2009-10, released last month, makes no mention of any border tensions during the year, noting that the armed forces of the two countries have, instead, made considerable progress in ties. “A regular mechanism for exchanges in the military sphere has been established through the ongoing confidence building measure,” it concludes, while noting China's major military modernisation drive.

Beyond military matters, the two sides may also be able to build confidence, even a compact on terror — China is increasingly worried about the possibility of jihadi terror in the western province of Xinjiang. In the past, it caused a strain in Sino-Pakistani ties only when Chinese nationals were kidnapped or attacked in Pakistan. But now, evidence of groups like the Lashkar-e-Taiba and the Hizb-ul Mujahideen training and supporting the separatist Uighur movement poses a threat in China too. According to one official, Chinese security chiefs were particularly upset after having been handed transcripts of conversations the 26/11 terrorists had with their Lashkar handlers, who gave the orders to execute a Singaporean national they mistook for a Chinese. As India lobbies the world for action against the Mumbai attack planners, China-watchers say it may have Beijing's ear, as China is more willing to listen and worried than ever before.

The largest worry for China, however, remains the threat of an economic collapse — which some economists are already predicting. In an article, China's Red Flags, journalist Edward Chancellor warns that China's status as the world's largest exporter also makes it extremely vulnerable to any slowdown in demand, given that the exports consist largely of semi-processed goods from the Far-East finished in China. In December 2009, China posted a 2.8 per cent decline in exports and a whopping 21 per cent decline in imports. Despite its massive $39-billion trade surplus, Mr. Chancellor likens the economy to the bomb-laden bus in the Hollywood thriller Speed that will explode if it goes below 50 miles an hour — “Were China's economy to slow below Beijing's 8 per cent growth target, bad things are liable to happen,” he concludes, adding all the new infrastructure and excess capacity would be rendered worthless. Of course, doomsayers were wrong earlier but with money supply rising at a dangerous 26 per cent annual rate, the inflation and real estate boom combination does worry Chinese leaders as the recent National People's Congress proceedings reveal.

As a result, India looks a more attractive market for sales and investment for China — deals for infrastructure in particular, like the $1.5-billion bid the Chinese State grid corp. has just won from Vedanta Resources in Orissa. In return, it is India's expertise in Information Technology that China is recognising more and more and, for the first time, state contracts in IT have considered Indian companies. On a recent visit to Beijing, this writer heard the phrase: “Chinese hardware in exchange for Indian software” more than once from officials.

The other genuine concern expressed was over the impact of China's strict “one-child” policy on the future. Demographic projections show that the Chinese working population ratio (the 18-60 age group as a ratio of the whole) will begin to decline from 2015. China will grow old before it becomes rich, goes a saying there. This may open up the possibility of China issuing H1-B-type of visas to Indian skilled professionals soon.

Finally, it is the strategic mindset that needs to be upgraded: fears of Chinese ‘encirclement' must not cause unreasonable alarm and Indian under-confidence, as they did last year. 2010 is not 1962 — in terms of both comparative Chinese capability and Indian incapacity. China seems to want to clear the air on border issues including Arunachal Pradesh now, even as India remains true to its word on the recognition of TAR (Tibetan Autonomous Region) and Taiwan as part of the PRC. Interestingly, Union Home Minister P. Chidambaram's visit to Tawang earlier this month was accompanied by none of the angry voices from Beijing that the President and Prime Minister's visits last year attracted.

While that may not in itself be a significant shift in position, it may be yet another indicator of China's desire to engage with India that is causing many in the West to sit up and take notice. In his just published work, Shifting Superpowers: the emerging relationships between U.S., China and India, Martin Sieff surmises: “The strategic environment in the early 21st century is nearly the exact opposite of what it was at the time of the India-China war of 1962. Then Mao was able to turn his back on Taiwan and attack India — today China has been working hard to resolve its remaining border disputes with India in order to free up its forces to concentrate on Taiwan.”

There is no denying the massive mistrust the two countries have for each other, mired in the 1962 war, built over the years of China's relations with Pakistan and India's relations with the Dalai Lama, and heightened in more recent years by the fear of a cyber war. It is one of the reasons why all India-China conferences prefer to begin with long descriptions of their historical ties, rather than contemporary history — speaking of 2,000 years of a civilisation friendship rather than the last few decades of diplomatic ties.

But as a young Chinese journalist pointed out at a recent media conference in Beijing: “Enough of the old ties — it's now time for young China to engage young India and the other way round.” And, to perhaps allow the newly uncorked ‘spirit of Copenhagen' to flow into other aspects of their relationship too.

More In: Lead | Opinion