India, China need each other to change the world

The simultaneous rise of China and India is phenomenal, but serious concerns also arise on the bilateral relationship. After all, the lingering border dispute, geopolitical mismatches, inevitable conflict of interests, and a huge trust deficit between the two nations could all trigger tensions and even confrontation, bringing about disastrous consequences to both countries and the entire region.

But the problems in Indian-China relations are mostly the legacy of the Cold War, during which India and China were in different camps.  Indeed, in those years, the two countries shared little common ground in their development -- India and China did not really need each other in their nation-state building, nor did they have any joint security concerns. While China perceived its fundamental threat coming from the North (during the Cold War) and Pacific, India saw the de facto Sino-Pakistan coalition as a real security threat. As a result, there were little exchanges between the two neighbouring nations. Mutual suspicion and even hostility prevailed.

Fundamental changes have taken place since the 1990s, and these changes have made cooperation the only option for China and India to sustain their ascendancy. First and foremost, unlike previous powers whose rise was preconditioned by the global reach of their military capability, China and India cannot rise through expansion backed by military might in today's world. Rather, China and India are rising through integration into the existing world system amidst globalisation; and, this world system is based on capitalism and is dominated by developed countries.

Thus, reform, not military power, has been the precondition for the rise of China and India. Only by changing themselves first, in order to join the world, can a rising China and India help change the world.

The pursuit of a similar path in their ascendancy has resulted in common interests and demands. Rising as status quo powers, India and China have a shared demand to reform the existing world system, so that it can continuously facilitate, rather than hinder, their development. This explains why on major global issues -- from environmental concerns to food security and from restructuring the world financial system to trade policies -- India and China are naturally on the same side.

Beneath these common interests lies the fact that India and China are facing the same fundamental challenge in their endeavours for modernisation. Yet the established model to achieve this goal -- modernisation through industrialisation -- is unsustainable because the experience of the developed countries shows that industrialisation means massive consumption of natural resources and rampant urbanisation.  Given the combined population of 2.5 billion people, western-style industrialisation in India and China would bring doomsday.

Thus, it is a joint mission for India and China to find an alternative path and, moreover, to persuade the developed countries to support this mission and help pay up the environmental deficit that had been accumulated in their modernisation process.

Bilateral cooperation also serves the interests of India and China on other more pressing issues. "Water shortage looms for China, India" -- this eye-catching Bloomberg headline on May 31, 2010 indicates a looming crisis of water in India, China and all the Asian-continental countries, where the flowing water comes from the same place. As water has become a vital economic resource and an important strategic asset, bilateral cooperation between the two big powers in Asia is the key to solve this problem. Confrontation will only make everyone the loser.

Nowadays, India and China also find convergent concern rather than divergent interest on the Pakistan issue. Lingering instability, rapid expansion of fundamentalist influences, and persistent military dominance since the start of the Afghan war have dramatically increased Pakistan's profile in China's security concerns, especially after the violent, explosive riot in Xinjiang on July 5, 2009. China and India will have to work together to promote stability and development in Pakistan, with a military under solid civilian control and an economy integrated regionally.

Even on the thorny border issue, bilateral cooperation brings more benefits. Beijing and New Delhi have keenly realised that the border dispute involves strong nationalistic resentment because it roots deep in the injustice both nations had endured during the colonial period.  Any compromise on this issue -- even if necessary -- can provoke damaging backlashes in domestic politics. Thus, the bilateral approach towards the border dispute, as indicated by the dialogue between National Security Advisor M K Narayanan and State Councilor Dai Bingguo in August 2009, is to seek effective management, rather than a premature solution. Obviously, it takes constant consultations to manage the dispute and prevent explosive escalation.

Indeed, bilateral cooperation demands a forward-looking vision. The explosive increase in Sino-India trade -- from merely $2 billion in 2000 to over $60 billion in 2009 -- is but a footnote of the unfolding momentum in bilateral relations. It is true that Sino-India trade was less than 3 per cent of China's total trade volume -- $2007.2 billion -- in 2009.  But bilateral trade -- if its annual increase keeps just half of the 50 per cent annual rate in the past decade -- will be over $400 billion in 2020, which is larger than the present trade between China and America.

No doubt that there are conflicts of interest between the two rising powers. But this only highlights the importance and necessity of bilateral cooperation, not just because common interests far outweigh conflictual ones, but because confrontation would surely make both losers. It is high time for China and India to make a joint effort to promote bilateral exchanges and, specifically, to institutionalise bilateral summits and high-level dialogues.

An Asian Group of Two -- the institutionalised management of bilateral cooperation -- is necessary to promote and sustain a peaceful and constructive relationship between the two rising Asian powers, whose success is essential for peace and prosperity in the entire region.

The author is professor, Lee Kuan Yew School of Public Policy, Singapore. He has also been an interlocutor between the Dalai Lama and Chinese authorities.