Trade vs. tension in Asia

The trade agreement signed this week by India and China to double trade to $40 billion a year by 2010 is unlikely to trump tensions between the two titans of Asia. The rhetoric surrounding the visit of Chinese President Hu Jintao was lofty and florid. But, below the surface, Indian anxieties over an unresolved border issue and China’s support ...

606010_husingh5.jpg
606010_husingh5.jpg

The trade agreement signed this week by India and China to double trade to $40 billion a year by 2010 is unlikely to trump tensions between the two titans of Asia. The rhetoric surrounding the visit of Chinese President Hu Jintao was lofty and florid. But, below the surface, Indian anxieties over an unresolved border issue and China's support for Pakistan run deep.

Cooperation is undoubtedly good for both countries, but the two are engaged in frenzied competition for resources in Asia and Africa -- and, in both places, China is winning. In fact, having liberalized 10 years before India, China is ahead in virtually every economic indicator save India’s vaunted tech sector. And the competition isn't limited to just resources. China also energetically pursues alliances in India’s neighborhood. Consider its “all weather friendship” with Pakistan, whose missiles and nuclear program are believed to have come from Beijing with love. When India and Pakistan seemed on the verge of war in December, Pakistan's General Musharraf responded by visiting China three times in less than a year. China has also made sure it is one of Bangladesh’s biggest trading partners and is developing warm water ports in Burma and Pakistan to gain access to the Indian Ocean’s shipping lanes.

All this has some Indian commentators seeing regional developments through a China vs. India prism. One commentator, M.J. Akbar, remarked after surveying the North Korean nuclear blasts:

The trade agreement signed this week by India and China to double trade to $40 billion a year by 2010 is unlikely to trump tensions between the two titans of Asia. The rhetoric surrounding the visit of Chinese President Hu Jintao was lofty and florid. But, below the surface, Indian anxieties over an unresolved border issue and China’s support for Pakistan run deep.

Cooperation is undoubtedly good for both countries, but the two are engaged in frenzied competition for resources in Asia and Africa — and, in both places, China is winning. In fact, having liberalized 10 years before India, China is ahead in virtually every economic indicator save India’s vaunted tech sector. And the competition isn’t limited to just resources. China also energetically pursues alliances in India’s neighborhood. Consider its “all weather friendship” with Pakistan, whose missiles and nuclear program are believed to have come from Beijing with love. When India and Pakistan seemed on the verge of war in December, Pakistan’s General Musharraf responded by visiting China three times in less than a year. China has also made sure it is one of Bangladesh’s biggest trading partners and is developing warm water ports in Burma and Pakistan to gain access to the Indian Ocean’s shipping lanes.

All this has some Indian commentators seeing regional developments through a China vs. India prism. One commentator, M.J. Akbar, remarked after surveying the North Korean nuclear blasts:

China could not have dreamt of a better scenario: It has outsourced the aggressive element of nuclear geo-strategy. Whether you call it incidence or coincidence, both India and Japan [the natural contenders against China’s regional hegemony] have to deal with a nearby nuclear missile aimed at their heads.”

He may have a point. With India distracted by Pakistan, the U.S. burdened in Iraq, and Japan preoccupied by North Korea, China has a lot of room to maneuver without any real competition.

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