Mutual rise of China and India will benefit the world

Together, China and India as a factory and service centre to the world are on track to drive much of global economy this century and beyond.

China and India announced they will resume joint military exercises at the conclusion of the Annual Defense Dialogue on January 14. It suggested a sign of growing engagement. The People's Daily applauded India's decision to go ahead with the exercises in the face of pressure from the US and Japan.

"The future generations are assured of peace and prosperity," said Sushma Swaraj, the leader of the opposition in India's lower house of parliament Lok Sabha, reacting to the news.

Days earlier, underscoring the importance of China-India relations, Xi Jinping, the new General Secretary of the Chinese Communist Party (CPC), said in a letter delivered to Prime Minister Manmohan Singh that China "expects to carry out close cooperation with India to create a brighter future of their bilateral relations." The world, he added has enough space for the two and "needs their common development."

Bilateral relations between the world's two largest countries have improved since the late 1980s. Trade volume, which was about US$3 billion (Dh11bn) at the turn of the century has now soared to $80 billion, making China India's largest trading partner, and India becoming China's biggest trading partner in South Asia. Both aim to increase their trade to $100 billion by 2015.

Indian business circles are ecstatic about the growing China-India business relationship. Ordinary people in India benefit from the flow of cheap Chinese products. Together, China and India are, respectively, a factory for the world and service centre to the world and are on track to drive much of the world economy this century and beyond.

This volume of business activity has become possible after the two countries settled on the political guiding principles that "economic and trade relations are conducive to the increase of mutual trust and negotiated settlement of border issues."

The IMF estimates that the China's GDP may overtake that of the US by 2017. By the middle of this century China and India will be the biggest economies in the world. Together their GDP are about $10 trillion and still rising.

China has become the world's second largest oil importer after the US, importing roughly 5.5 million barrels per day, while India at number four imports approximately 2.3 million bpd. The bulk of their oil originates from the Arabian Gulf and Africa. As economic powerhouses both need to cooperate in ensuring the security of sealanes.

China and India are ancient civilisations known for their immense contribution to human knowledge. People from both countries have spread afar peacefully, taking along with them Chinese and Indian cultures to the far corners of the world.

While there are many convergences between China and India, there still remain several disputes which need to be managed and defused carefully. The short 1962 border war is an aberration in centuries of peaceful existence, leaving behind an unpleasant legacy in the form of the disputed border from Arunachal Pradesh in the east to Kashmir in the west.

There are also differences over Tibet and over how India deals with Pakistan, China's important regional ally. India is worried at China's port-building activity in Pakistan and Sri Lanka, and the Chinese presence in the Seychelles and around the east coast of Africa. For their part, the Chinese are concerned at India-Vietnam oil explorations in the South China Sea, which China claims as its territorial waters.

Their differences have not deterred the two countries from developing a strong economic partnership as a precursor to solving more intractable issues.

As the two rise peacefully, China's big worry is the US' apparent interest in goading India to act as a counter-balance to rising Chinese power. That is why very early in his term Mr Xi chose to send a personal letter to Mr Singh acknowledging India as a key interlocutor for maintaining peace and security in the region.

In pursuit of a balancing strategy, Japan is also being brought in. The US has openly asked Japan and India to work together to counterbalance China.

China is mindful of these attempts but is understandably keen to maintain relations with India on an even keel. It may well be in the interests of the US or Japan - powers with declining clout in the world - to seek a partnership with India against China. But such an arrangement is against India's interest and so also against Asia's. China-India adversity will prevent the Asian century.

China decided under Deng Xiaoping to single-mindedly pursue economic development. In 30 years, China has lifted over 650 million Chinese out of poverty and is on the way to global leadership. India, too, has unleashed its economic potential by liberalising its economy and boasts a middle class population of over 350 million. The two need to complement each other.

This "democratization of human spirit", as Kishore Mahbubani, dean of the Lee Kuan Yee School of Public Policy in Singapore calls it, amongst nearly a third of mankind, channeled constructively by China and India, is a game-changer for the good of the world. This should not be sacrificed for big power politics.

Sajjad Ashraf is an adjunct professor at the Lee Kuan Yew School of Public Policy, National University of Singapore and a visiting senior research fellow at the Institute of Southeast Asian Studies, Singapore