India And China Bristle Over Politics, Purr Over Trade

Relations between the world's two fastest-rising superpowers are suddenly as chilly as their snowy mountain border, with China and India trading blows in a high-stakes verbal war.

Border tensions between the two nations are inflamed, the disagreement over disputed territory that China calls “southern Tibet” and which India governs as its state of Arunchal Pradesh. Each country claims huge chunks of the other's territory along the 3,500-kilometer Himalayan boundary in a dispute that stems from their brief war in 1962.

India reports a sharp rise in Chinese “incursions” into its territory over the past 18 months, which has prompted new troop deployments and upgrades to fortifications.

In Beijing, meanwhile, hostility to India has risen in the state-run media in recent weeks, with the People's Daily calling India “narrow-minded,” accusing it of “provocations” and adding that “India turned a blind eye to the concessions China had repeatedly made over the disputed border issues, and refused to drop the pretentious airs when dealing with neighbors like Pakistan.”

“This level of harsh words between two sides has never happened in the past,” said Sun Shihai, dean of South Asian culture at the Chinese Academy of Social Sciences.

Beyond the border dispute, China's grievances center on the shelter India provides to Tibet's spiritual leader, the Dalai Lama, and tens of thousands of other Tibetan exiles in the town of Dharamsala. Although India has gone so far as to recognize Tibet as part of China, the platform the Dalai Lama has from his Indian base infuriates Beijing, and China's verbal attacks on India have escalated since violent riots last year in the Tibetan capital of Lhasa, which Beijing claims were organized by Tibetan exiles based in Dharamsala.

China also reacted angrily to an Oct. 3 visit by Indian Prime Minister Manmohan Singh to Arunchal Pradesh, calling it a deliberate snub. A proposed visit by the Dalai Lama to the area next month is already attracting condemnation from Beijing.

But in Delhi, Beijing watchers believe there is an underlying cause to this bellicosity: China is uneasy with India's increasingly friendly relationship with the United States. The deterioration in relations began, they say, when India inked a historic nuclear-power deal with the United States in 2006, and shortly thereafter agreed to a new defense framework.

“Since then, the mood changed in Beijing. There has been a pattern of ratcheting up threats and going back on agreements,” said Brahma Chellaney, a security expert at the Center for Policy Research in New Delhi. It's ironic, he added, since many in government in New Delhi believe the U.S. administration is bending over backwards to make nice with Beijing.

China first outraged India by initially opposing the removal of the restrictions on civilian nuclear trade with India at the Nuclear Suppliers' Group last September, although it did eventually let the waiver go through. More recently, China fought to block a $2.9-billion Asian Development Bank loan to India because some of the money was earmarked for an irrigation project in Arunchal Pradesh. India is also disturbed by Chinese plans for a massive dam along the Yarlung Zangbo river in southern Tibet, a project some experts say could turn a crucial Indian agricultural region into a dustbowl.

The most tangible signs of the dispute are the Chinese military incursions by helicopters or ground troops, which India says jumped to 280 in 2008 from 140 in 2007, and are at the same level this year. A 28-year-old negotiations process aimed at resolving the border dispute is effectively stalled.

The Cold War-style exchanges between the world's two most populous countries are also fueled by China's support for Pakistan in its frequently violent dispute with India over Kashmir. China views Pakistan as a strategic counterbalance to India's rising clout in the region, and recently announced that it would upgrade a cross-border highway into Pakistani-controlled Kashmir and would lend financial aid to a hydroelectric plant in the same area.

Both investments drew protests from New Delhi, as did a move by Beijing earlier this year to start issuing special visas to residents of Indian-administered regions of Kashmir that are different from those granted to other Indian citizens. India controls about 45 per cent of historic Kashmir, while Pakistan holds roughly a third and China the remainder.

China is also fostering close military relationships with Nepal, Sri Lanka, Burma and Bangladesh - every country around India, noted Prof. Chellaney.

All of this, however, occurs against a backdrop of rapidly growing economic ties - China is India's largest trading partner, and trade between the two may hit $100-billion (U.S.) this year. As Western countries continue to struggle in the wake of the global financial crisis, these two countries have roaring economies and increasingly recognize each other as the best potential for trade.

Prime Minister Singh is to meet his Chinese counterpart, Wen Jiabao, on Saturday, on the sidelines of a regional summit in Thailand, in an effort to smooth over the recent breakdown in relations.

Experts on both sides of the border say there is little risk of the hostilities turning into full-on military conflict.

“There is no panic because of a possible outbreak of hostilities, but there is concern that because this relationship appears to be unraveling, all this effort of the past 10 years starts to look very shaky, especially in public perception,” said Alka Acharya, a professor of Chinese studies in the Center for East Asian Studies at Jawaharlal Nehru University in New Delhi and adviser to the Indian government on Chinese affairs.

“The last 10 years had brought it to a level where differences could be maturely and soberly discussed, but the moment a problem comes up, the whole thing looks like it's coming unstuck.”

While jingoistic media in both countries play up the drama, she said, the reality is that political leadership in both Beijing and New Delhi “have demonstrated a will to look at these large, rising powers as inevitably competing in many areas” but as ultimately better served by good relations.