/ 7 July 2006

India and China put aside differences to reopen trade

China and India on Thursday bridged decades of distrust and the world’s highest mountain range by opening a direct trade link along a winding road that runs between the planet’s two most populous countries.

The two nations’ representatives, who broke bread and ate sweets together, declared the customs post open in the early morning. ”Today is a historic day,” said Pawan Chamling, chief minister of India’s Sikkim state, connected to Tibet. ”A contact that started centuries back between our two civilisations is being re-established today. The formal reopening of this trade route will be a win-win situation for both countries.”

The pass was closed 44 years ago after a short, bloody war between Mao’s China and Nehru’s India. Chinese and Indian soldiers have been eyeballing each other ever since at Nathu La. Drawing an iron curtain across the roof of the world ended the then booming cross-border trade in wool, machine parts and tea, which was carried over on pack mules supervised by resident trade commissioners on either side.

What has eased the hostility between the nuclear-armed neighbours in recent years and brought them closer is economics. Last year trade between India and China, the two fastest growing big economies in the world, was worth almost $19-billion, and this is projected to be more than $30-billion before the end of the decade.

Under multi-hued bunting and the mountain mist, Indian businessmen, some of whom left thriving businesses in Tibet in 1962 when the border closed, crossed over into China to inspect the facilities provided in Yadong, past Tibet’s flower-filled Chumbi Valley. At the same time two dozen Chinese traders took the opportunity to visit the Indian mountainside village of Sherathang, which has been furnished with an internet cafe, new telephone exchange, a golf course and the world’s highest altitude cash machine.

The overland route carried three quarters of border trade, worth hundreds of millions of dollars, before it shut. Today border exchanges between India and China account for only $100-million of the total trade, with the rest going by sea or air. This will not change immediately. The goods allowed to be sold at first will be restricted to 44 commodities, but experts say that Nathu La could see $2,8-billion of trade in less than a decade.

The reason for rapid improvement in trade is that China’s western region can only be lifted from poverty by trading with South Asia. ”It is a fact of geography that the port closet to Lhasa [the capital of Tibet] is Calcutta. Even with the new railway line to Tibet, for getting goods in and out of China’s massive western provinces you need to go south to the ports in the Bay of Bengal,” said Mahendra Lama, chairperson of the South Asia Centre at New Delhi’s Jawaharlal Nehru University.

Lama, who advised the government on opening Nathu La, said road and rail networks needed to be extended across the border so that goods could travel between Tibet and the bigger markets in South Asia. In the past few days there has been speculation that the new railway linking the Chinese city of Golmud in Qinghai province with Lhasa could be lengthened to the Chinese-Indian border. If such radical infrastructure projects were completed the mountain kingdom of Sikkim would once again become a pit stop on one of Asia’s main arterial routes.

Until 1962 this portion of the ancient Silk Road linked the Buddhist kingdom of Sikkim to its larger neighbour Tibet. Sikkim was a semi-independent monarchy until it officially became part of India in 1975. China claimed India had seized it illegally, and only in 2003 recognised Sikkim as part of India. In return New Delhi effectively accepted Tibet as part of China.

Beijing has long resented India for harbouring the Dalai Lama, Tibet’s spiritual leader. Many of his supporters were bitter that Thursday was chosen to open Nathu La, as it was the 71st birthday of the Dalai Lama, who spent it in bed on the advice of doctors.

”It was nothing less than an insult to do this on his holiness’s birthday,” said Vijay Kranti, a campaigner for Tibet based in Delhi. ”It suits China but not India. India has always treated the Tibetan people well and I hope this is not some drastic change in policy.”

Although the opening of Nathu La is a new chapter in relations between the two Asian neighbours, there is an unspoken rivalry between them. Delhi is irked that China has helped to build Pakistan’s nuclear bomb and supplied it with the technology to manufacture long-range missiles. This year Beijing warned India off closer relations with Taiwan, and it is wary of the ties emerging between Japan’s military high command and India’s.

Perhaps most serious is the unresolved border question. India accuses China of occupying nearly 24 000 square kilometres of Kashmir, while Beijing claims Delhi squats on about 56 000 square kilometres in what it calls South Tibet, or what Indian maps show as Arunachal Pradesh. The two countries have agreed to resolve their rows politically, but talks have made little progress and the result is that much of the 3 520km frontier remains disputed.

”We are doomed to both compete and cooperate with each other,” said Raja Mohan, strategic affairs editor of the Indian Express. ”These things cannot be wished away. But it is important not to let them get in the way of trade. China and Japan are large trading partners but they still have their disagreements.”

The Silk Road

  • Name coined in 1800s by Ferdinand von Richthofen, German scholar

  • First developed in 1st century BC, and utilised by the Romans

  • Route used to transport goods, including gold, ivory, silk, jade and furs

  • Buddhism spread east along the road from India in fourth century, as Chinese rulers sent missionaries, who returned with scriptures and artwork

  • Marco Polo was one of first Europeans to travel the route. Returned to Italy in 1295 and collaborated on book about his discoveries

  • Use declined from 14th century, when rise of Islam brought barriers between central and eastern Asia, and trade routes by sea developed. Trade with west declined as China became more isolationist, and by the 18th century road was little used. – Guardian Unlimited Â