India and China – friends again
April 14, 2011

India and China leaped ahead in diplomatic talks on Wednesday when heads of state Prime Minister Manmohan Singh and President Hu Jintao met on the sidelines of the third BRICS Summit in Sanya. The sweet and sour relationship between the two tasted a lot sweeter after they agreed to work towards removing all major irritants impacting their bilateral relationship including the border issue and trade imbalance. The neighboring countries that have often been fickle towards each other, decided to  set up a mechanism on coordination and consultation on border affairs, resume senior-level defence exchanges, initiate a high-level economic dialogue for the  focussed redress of investment and market access grievances and step up high-level contacts. The two countries also launched the “Year of China-India Friendly Exchange” to expand cooperation and push bilateral ties to a new higher level. The two leaders made a point that the two states will increase cooperation in infrastructure, information technology and investment in each other’s industries.

Hailed as a major push towards healthier Sino-Indian relations on all fronts, the agreements will have long lasting effects on how the two work together regionally and internationally.  Of late, India and China have been pitted against each other, bickering about stapled visa’s, border tensions, trade imbalances and energy security. However it now seems that the tide is turning and China and India will become friends rather than foes.

For one, both China and India realize that both have much more to gain by working together. Their symbiotic economies need one another for maximum growth and development. We can learn more from each other, sell to each others humongous markets and reduce prices by complementing each other rather than competing.

The shift in relationship also comes at a time when China’s economy is tapering. According to the IMF, while China’s economy grew at 10.3 percent last year, India’s grew faster at 10.4 percent. China’s newly laid out 12th five year plan is also more open to India and outlines several industries and sectors where the two countries can co-operate.

Post the 50 minute meeting between the two heads of state, it was agreed that high-level defence exchanges will be resumed with a multi-command Indian Army delegation scheduled to visit China later this year. India and China also agreed to hold the first meeting of a high-level strategic and economic dialogue mechanism which will address reservations expressed by  both sides in the fields of infrastructure, Information and Technology, pharmaceuticals, investments, project contracting and banking “to achieve a win-win result,” as Mr. Hu put it.  Planning Commission Deputy Chairman Montek Singh Ahluwalia, is expected to head this forum from the Indian side.

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