The International Herald Tribune: India and China: A delicate dance

January 24, 2006 Tuesday

Michael Vatikiotis

Singapore: India and China are performing an awkward tango. Each is wary of the other as partners; both are talented and experienced on their feet. But dance together they must.

In Beijing this month, India's oil minister, Mani Shankar Aiyer, signed an agreement to cooperate with China in securing crude oil resources overseas. The landmark deal is aimed at preventing fierce competition for oil from driving up the price of assets. It marks the start of a new era of energy geopolitics focused on Asia, and reveals something of how Asia's emerging superpowers intend to behave.

The quest for oil is a strategic priority for both India and China, which rely on crude oil imports for 70 percent and 40 percent of their needs, respectively. Competition for overseas supplies has already seen some ferocious bidding wars, most of which China has won.

With stakes so high, one side had to blink. ''It is clear to me,'' said Aiyer, India's oil minister, in Beijing, ''that any imitation of the 'Great Game' between India and China is a danger to peace. We cannot endanger each other's security in our quest for energy security.''

Speaking in Shanghai in early January, India's foreign secretary, Shyam Saran, said that India and China ''are too big to contain each other or be contained by any other country.'' He spoke of both countries fashioning a ''strategic and cooperative partnership for peace and prosperity.''

Superficially, India and China make more logical partners than protagonists. Both economies are booming so that trade and investment synergies are proliferating. India's hi-tech companies are flocking to China, where there are opportunities for applying research and innovation in cost-effective ways. China's manufacturers see in India a potentially vast market for appliances, cars and the steel that is used to make them.

On the political front, both countries want to carve out spheres of influence in their neighborhoods and need assurances that local adventurism won't invite intervention. So China stays out of the Kashmir quagmire, in return for which India doesn't play games in Tibet. China is backing India's candidacy for membership of the United Nations Security Council.

This won't be an easy partnership, however. Beneath the hype about shared prosperity, each side mistrusts the other and uses competing alliances to jostle for advantage. India deploys its so-called strategic partnership with America to maintain leverage over China. China uses its proximity to Pakistan and Bangladesh to nip at India's heels.

Neither do China and India share much in common other than great power aspirations. India's rambling but reliable democracy is very different from China's rigid authoritarian system. They will eventually compete in the same Western and Asian markets.

Luckily, geography makes it hard for China and India to confront one another. The Himalayas pose a formidable barrier to military adventurism in either direction, which explains why the month-long border war the two countries fought in 1962 ended in stalemate.

The trouble is that today wars are fought by proxy, and since both India and China are nuclear powers, this suggests a scenario for nuclear brinkmanship in Asia. China helped Pakistan develop the missile technology that brought Indian cities into the range of Pakistan's nuclear weapons. Now New Delhi fears that Beijing's answer to the recent Indian-U.S. pact on nuclear energy development is a pledge to supply Pakistan with new nuclear reactor technology.

A complicating factor will be Japan, which has realized that one way to counter what it sees as the growing strategic threat from China is to bolster ties with India. This could explain why Japan's foreign minister, Taro Aso, was in New Delhi in the first week of January seeking regular high-level dialogue on nuclear and defense issues.

India is going to need this extra leverage over China, because judging from China's aggressive energy policy, it's hard to see much win-win stemming from the cooperation India signed on to in Beijing. Before the ink was even dry on the Beijing agreement, Indian oil ministry officials found out that Myanmar had agreed to sell natural gas from a field partly owned by an Indian company exclusively to China.

Michael Vatikiotis is a visiting research fellow at the Institute of Southeast Asian Studies, Singapore.