The view that India and China are rivals is an over-generalisation and over-simplification of a complex relationship.

This year saw India and China celebrating the 60th anniversary of the establishment of diplomatic relations. A couple of weeks from now, Premier Wen Jiabao will be in India and will participate in the closing ceremony of the Festival of China in India which will bring to a close the calendar of activities organised in both China and India to commemorate this occasion.

The six decades of the India-China relationship behind us have a record that is chequered. We became arbiters of our national destinies from the date of India's independence and China's liberation in the late 40s of the last century, inspiring many others in Asia and Africa to end colonialism and foreign domination. This was the time when India and China in a sense, rediscovered each other, understanding the potential of the synergy between two of the largest populated nations in the world on the global stage. The vision of our founding fathers is within our reach today as we regain our place in Asia and the world as leading global economies. The awareness of historical contact between the two peoples of India and China created the basis for our well-intentioned attempt in the 1950s to build a new type of relationship based on Panchasheela, or the Five Principles of Peaceful Coexistence. It was an attempt which, however, faltered, telescoping into the troubled phase that enveloped our relationship in the sixties up until the mid seventies.

The leadership in both our countries understood the untenability of any sustained estrangement between us. The last three decades have been marked by well-intentioned efforts of exploration towards establishing the framework of a stable, peaceful, productive, and multi-sectoral relationship between India and China. Contradictions are sought to be managed, and our differences have not prevented an expanding bilateral engagement and building on congruence. There are elements of cooperation and competition that form the warp and weft of our relationship.

There are both challenges that the relationship confronts us with and also opportunities. As our Prime Minister has said, India and China will continue to grow, simultaneously, and our policies will have to cater to this emerging reality. For India, the situation is complex since China is not only our largest neighbour but also because China is today a major power in the world both from the traditional geo-political point of view and the more current geo-economic point of view. In the world of today, China is a factor in several equations and, therefore, it is intellectually satisfying to see that scholarship in India is increasingly dedicated to looking more closely at all facets of China.

China's rapid economic growth over the last three decades has been spectacular and riveting. It is now the second largest economy in the world with a GDP of roughly $5.5 trillion. China has begun to deal in the currency of global power, and its economic success is impacting its foreign, defence and security policies. The appellation of assertiveness is frequently applied to China's profile in global affairs today. The question that I am always asked is whether our relationship with China will be one dominated by increasing competition for influence and resources, as our economic needs grow. I believe that neither of us has the luxury of seeing each other in antagonistic terms. The view that India and China are rivals is an over-generalisation and over-simplification of a complex relationship which encompasses so many diverse issues. I believe the proposition of competition and rivalry should not be exaggerated in a manner that it overshadows our genuine attempts to manage and transact a rationally determined relationship.

It is true that divergences persist. We have a disputed border. There are legacies as well as lessons bequeathed to us by history. This is a complex problem and the cartographies that define national identity are internalised in the minds of people in both countries. At the same time, we are making a serious attempt at trying to arrive at a fair, reasonable and mutually acceptable solution to the boundary question as the recent 14th round of the Special Representatives talks will testify. The absence of a solution to the question is not due to lack of efforts but arises from the difficulty of the question.

What also needs to be appreciated is that the India-China boundary is one of the most peaceful of all borders. We have in place a well organised set of confidence building measures to ensure peace and tranquillity on the border. We are currently talking to each other on establishing more such mechanisms. There is maturity on both sides to understand the complexity of the issue and to insulate it from affecting our broader relationship. This policy on both sides I think has paid dividends and has contributed towards reducing the possibility of conflict.

Another issue of concern is the management of trans-border rivers. Many of the rivers nourishing the plains of Northern India and also areas in North-east India arise in the highlands of the Tibetan Autonomous Region and are a source of livelihood and sustenance for millions of our people. We are alert to reports of China damming trans-border rivers and have sought assurances from China that it will take no action to negatively affect the flow of the rivers into India, so that our rights as the lower riparian are not adversely affected. China has assured us that the projects on the Bramhaputra are run-of-the-river projects and are not meant for storing or diverting water. We look forward to working closely with China in this critical area of environmental and livelihood security.

There is, then, the question of the China-Pakistan relationship. India firmly believes that a stable and prosperous Pakistan is in India's interest, and we are not against Pakistan's relations with other countries. While I agree that relationships between countries are not zero-sum games, we do not hesitate to stress our genuine concerns regarding some aspects of the China-Pakistan relationship particularly when it comes to China's role in PoK, China's J&K policy and the Sino-Pak security and nuclear relationship. The need for mutual sensitivity to each other's concerns cannot be denied. The issue of giving stapled visas to Indian nationals from the state of Jammu and Kashmir arises in a similar context. We believe that the India-China relationship will grow even stronger as China shows more sensitivity on core issues that impinge on our sovereignty and territorial integrity. We hope this can be realised.

Our trade with China is growing faster than that with any other country and China is our largest trading partner in goods with trade likely to exceed US$ 60 billion this year. There is also serious discussion between the two countries on correcting the trade imbalance and we would like to see more Indian goods and services entering the Chinese market. Many Chinese companies are now well established in India and many Indian companies are also opening up in China. We in India have also worked to resolve hurdles that have sometimes been faced by Chinese companies to ensure a level playing field for all foreign investors. We also expect similar access to Chinese markets especially in the area of pharmaceuticals, IT, engineering goods, where our companies have often faced non-tariff and opaque barriers. India is one of China's largest markets for project contracting. India needs an investment of US $ 1 trillion during the next Five-Year Plan period in infrastructure. China is well positioned to participate in this process.

The results of our policy of engagement are manifest in many areas and are not limited to bilateral trade and investment alone. Over 7,000 Indian students study in China, and the CBSE is set to introduce Chinese in the curriculum of schools from the next academic session. There is also an information gap that keeps our peoples from understanding each other better and which we need to bridge by concerted public diplomacy from both sides. There is much work to be done to improve perceptions within the media in both countries.

The global trend towards multi-polarity and a more even distribution of power has been accelerated by the recent global economic crisis. While the immediate financial aspects of the crisis may have been addressed, its structural causes in terms of global imbalances remain unsolved. This provides an opportunity to India and China to work together. Our consultations within the G-20 have shown the way in this regard. Similarly, we have partnered well in BASIC (for the climate change negotiations), and in the BRIC grouping of Brazil, India, Russia and China. We hope such cooperation will also be strengthened on the important issue of UN Reform and that we will be able to build common ground on the issue relating to the expansion of the Security Council and India's interest in permanent membership. In the immediate region in which both countries are located, Asia, as well, there is common ground between India and China on combating terrorism and extremism, enhancing maritime security, and on the need for a peaceful environment to permit the domestic economic growth and development of the two countries. An open, balanced and inclusive architecture to enable a transparent dialogue on these issues that concern security and stability in Asia is in the interest of both our countries.

As India and China continue to pursue their interests, and so long as their overwhelming preoccupation remains their domestic transformation, and both understand that this goal requires a peaceful periphery, it is my firm conviction that the elements of competition in the bilateral relationship can be managed and the elements of congruence can be built upon. As our interests get progressively more complex, the costs of any withdrawal from engagement will rise. I believe this is a big relationship with the clear possibility of an ambitious agenda of mutual engagement that will be one of the most important bilateral equations of our new century. It is in our interest to view it in a more wide-angled and high definition manner than ever before.

(The author is the Foreign Secretary of India. This is an edited version of a speech she delivered to the Observer Research Foundation on December 3.)

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