Topic: India, China Forge Ties, But Old Differences Fester

Wall Street Journal
November 22, 2006
Pg. 6

By Peter Wonacott
NEW DELHI -- Leaders of Asia's two emerging giants, China and India, showed yesterday how difficult it is to revamp a relationship still marred by decades of suspicion.
The two nations are enjoying explosive growth and widening influence in the global economy. But they also have struggled to join forces -- and that struggle appears to continue after Chinese President Hu Jintao's visit to India, the first in a decade by a Chinese head of state, in which he met with Indian Prime Minister Manmohan Singh.
The leaders of the two countries signed more than a dozen agreements that ranged from energy cooperation to cultural exchange. But what was left unresolved during Mr. Hu's visit underscored the fractious issues that have hindered the forging of closer ties.
A joint declaration contained no breakthroughs on boundary disputes. And the main political thorn in the China-India relationship, the residence in India of the Dalai Lama, the Tibetan spiritual leader, and his advocacy of increased autonomy for Tibetans, wasn't addressed in the eight-page statement.
During a visit to India last year, Chinese Premier Wen Jiabao announced a "strategic partnership" between the countries. But the relationship remains dogged by distrust that stems, in part, from a 1962 border war India lost to China. The countries still haven't settled ownership of swaths of territory involved in the war.
Yesterday, Messrs. Hu and Singh both described their talks as friendly. Instead of seeking breakthroughs on their differences, the two leaders mainly sought to fortify common interests. They have set a two-way trade goal of $40 billion by 2010; in 2005, the total was $17 billion.
For India, reaching the goal would mean diversifying its exports to China beyond the raw materials -- mainly iron ore -- that it now ships to the country. Still, India remains wary of entering a free-trade agreement with China, mainly because trade officials fear a flood of cheap Chinese imports.
China and India, both with economies expanding at more than 8% a year, offer attractive markets for other trade partners and each other. The two nations have sought ways to meet the energy needs that this fast growth requires.
The leaders of the two nations, both pinched for oil and gas supplies, pledged that Chinese and Indian energy companies would cooperate, including by undertaking joint exploration projects in other countries. On another front, India and China said they will seek to expand cooperation in civilian nuclear energy, but details weren't spelled out.