India and China—both large, populous countries with 5000-year-old civilisations—are currently experiencing an unprecedented boom in their respective economies, and the possibilities for further growth are immense. What’s more, though they were surging ahead independently to a large extent previously, today, these two Asian giants are becoming ever closer to each other in terms of political and economic bilateral cooperation. The Chinese economy, which was decentralised in 1978, has rapidly grown into an economic powerhouse, largely through a chain of economic reforms. In 1980, China’s share in global trade was a meagre one percent, but by 1999, China emerged as the second largest economy in the world (only after the US) in terms of GDP, measured on purchasing power parity (PPP) basis. Over the last five years, China has posted an annual 9.5 percent economic growth on an average; in 2005, China’s GDP was US$2.23 trillion (US$8.86 trillion PPP)— a more than tenfold increase since 1978. Similarly, India—which started on the road of liberalisation in 1991—is an economy on the move. Banking on its new found success in the services sector, especially in IT and biotechnology, the Indian economy is forging ahead on the path of progress and prosperity, and making its impact felt globally. It has posted an impressive GDP growth of 8.4 percent during fiscal 2005-06, exceeding forecasts of 8.1 percent growth. Already the world’s fourth largest economy in terms of purchasing power parity, KPMG has projected that India’s GDP—US$719.8 billion (US$3.611 trillion PPP) in 2005—would be the third largest in the world by 2020, following only China and the US.

Sino-Indian bilateral trade has shown significant growth over the last five years. By the end of 2000, trade between India and China was a healthy US$2.9 billion, whereas during 2005, the trade between these two emerging economic powers of Asia has escalated over US$18 billion. The unfounded apprehension of India getting flooded by Chinese products has now given way to a healthy balance of trade between the two friendly neighbours. In 2004, India’s trade with China reached US$13.6 billion, with its exports to China reaching US$7.7 billion and imports from China to India touching US$5.9 billion—thereby leading to a positive balance of trade in favour of India. Now, China is all set to emerge as India’s largest trade partner in the ensuing two-three years, next only to the US and Singapore.

According to a Confederation of Indian Industry (CII) study, services and knowledge trade between India and China have significant potential for growth in areas like biotechnology, IT and ITES, health, education, tourism, and financial sectors. Chinese Premier Wen Jiabao has asserted that the trade between India and China must reach the figure of US$30 billion by 2010. China has also outlined a five-point agenda that includes reduction of trade barriers and enhancing multilateral cooperation to give further impetus to bilateral trade.

A high-level Joint Study Group, constituted during the visit of then Indian Prime Minister Atal Bihari Vajpayee to Beijing in 2003, presented its report to Indian Prime Minister Dr. Manmohan Singh and Chinese Premier Wen Jiabao in April 2005. The report consists of exhaustive recommendations for the development of Sino-Indian trade and economic cooperation over the next five years. These include trade in goods and services, investments, and other areas of economic cooperation. Its recommendations have been endorsed by the two Governments and the implementation is in progress.

It should, however, be borne in mind that cooperation between these two countries is not a recent phenomenon—the legacy dates back several millennia with cultural interactions and trade. If India gave China the spiritual growth of Buddhism, China reciprocated sweetly with tea. And, the interaction between these two neighbours has not been limited only to the realms of spirituality or gastronomy; however, the examples are too numerous to mention, but succinctly put: both civilisations have a history of mutual enrichment by cultural interactions with each other. Trade with each other, in which the famed Silk Route played a crucial role, also facilitated interactions. Buddhist monks, scholars, emissaries, scientists, and merchants from both these countries have left their footprints in the sands of time that have fostered Indo-Chinese historical ties to a great extent and have given it an enduring character.

Since ancient times, Buddhist scholars and monks of China were attracted to India in their quest for knowledge and spiritual fulfilment. Buddhist scholar Fa-Hien, travelled across Central Asia, India, and Sri Lanka for fifteen years (399-414 AD). He was later followed by Huen Tsang in the 7th Century. Their authoritative and unbiased chronicles are now an essential part of the study of ancient Indian history. Though Fa-Hien and Huen Tsang were the chief cultural ambassadors of China to India during the ancient era, there were many others too. In fact, Fa-Hien’s pilgrimage to India inspired generations of numerous Chinese monks to travel to India—the ‘Land of the Buddha’—in search of the Dhamma or Ultimate Truth. In doing so, they took up the risks and hardships of travelling long distances (in those days with no trains or planes, travel was everything but fun) with challenge and grace.

During the Tang Dynasty (581-618 AD), Chinese literature was influenced by Indian literary traditions and during this period, some works of legend literature developed somewhat with similar features to Indian classical literature in terms of structure and content. For example, Wang Du’s The Ancient Mirror shows a similarity in structure with India’s Panchatantra. Similarly, there are many outstanding works of Chinese literature that were influenced by their Indian counterparts in terms of content. On the other hand, the chronicles of Huen Tsang and Fa-Hien have become an integral part of India’s history.

In art and sculpture, history records a vibrant cross-cultural interaction between India and China, time and again. In terms of sculpture of Buddha figures, Gandhara Art, which itself is a hybrid of Indian and Greek influences, has had a clear bearing on Chinese sculptures, which followed Indian traditions of cutting into a mountain and digging caves to engrave Buddha figures. During the Tang Dynasty, the Gupta Art of India made inroads into China. The famous Longmen Grotto, Yungang Grotto, Dunhuang Mogao Grotto, and Leshan Buddha in Sichuang Province are perfect syntheses of traditional Indian sculptures of Buddha figures and Chinese folk sculpture arts.

Colonialism in India and semi-colonialism in China impeded the flow of cultural interactions between these two neighbouring nations, but the deep empathy towards each other’s concerns was very much evident even then. The great leaders and freedom fighters of pre-independent India, such as Gandhi, Tagore, Nehru, and Subhas Chandra Bose, had an abiding empathy and great support for the Chinese struggle for democracy. Gandhi vehemently condemned the Japanese aggression on China, and Nehru launched the ‘China Day’ movement to boycott Japanese goods. He also mobilized donations to rush medicines to the afflicted Chinese suffering from Japanese imperialistic onslaughts. With the encouragement of Tagore, the great scholar and educationist Prof. Tan Yun-Shan—known as the cultural envoy between India and China and worked closely with Tagore to foster Sino-Indian cultural relations and contributed a lot to the Sino-Indian anti-Japanese struggle—established the Sino-Indian Cultural Society in China in 1933. One of the important achievements of the Sino-Indian Cultural Society was to help the Visva-Bharati (International University) of India establish the Cheena-Bhavana (Chinese Institution). During the preparatory stage of the Sino-Indian Cultural Society, Tagore had discoursed over the idea of establishing such an institution with Yun-Shan. In his book Yindu Zhouyouji, Yun-Shan wrote, “… specially the Sino-Indian relations is the most important of the most important. Apart from our relationship in the past, if we just consider the current situation, it is my firm conviction that if there is no real unity between the Chinese and Indian nations and without their joint endeavour, they would achieve nothing; be it strife for world peace or that for world revolution; be it the cause of human civilisation or that of the human fraternity … without the real unity of the two nations and their joint endeavour nothing can be achieved.” These wise words ring even more true in today’s unipolar world.

In the post Word War II era, the historic ties of friendship between India and China were resumed largely due to Nehru. Nehru not only greeted the birth of a new communist China under the dynamic leadership of Mao Zedong, he also consistently supported for China’s membership in the United Nations. His warm approach to China gradually helped develop a climate conducive for friendship between India and China. The relationship was further endorsed by the famed ‘Panchsheel Agreement’, signed in 1954 by Nehru and his Chinese counterpart Chou En-Lai. In that document, India and China decided to abide by the five principles of peaceful coexistence. Based on mutual respect for national sovereignty and territorial integrity, as well as non-interference in each other’s internal and external matters, the agreement constituted an edifice for carrying out relations between India and China, both bilaterally and multilaterally. The Bandung Conference of April 1955 gave a further fillip to the existing friendly relations between the two emerging giants of Asia.

In the 20th Century, popular culture of India, too, made its impression on China’s cultural fabric and vice versa. Many Bollywood blockbusters of the 50s were very popular among that generation of China’s cinegoers; especially, Raj Kappor’s masterpiece Awara made a lasting impression on many young Chinese cine buffs. Many Chinese of that generation can still hum the evergreen tune of “Awara Hoon …” with nostalgia. Many Indians have grown up watching Chinese martial arts movies. (The same tradition of cross-cultural interaction has been continuing in the 21st century as well: 21st Century urban India is fascinated with Feng Shui, which has been traditionally linked with Taoism, and also in Chinese astrology.)

However, from the late fifties, following Nehru’s decision to grant political asylum to the Dalai Lama in 1959, the otherwise friendly relationship between the neighbours started running into rough weather. China perceived this hasty act of Nehru as a direct interference in its internal affairs. The Dalai Lama, for quite some time, had been giving the Tibetan issue an international platform and was proving to be a threat to China’s international image. This rift was further accentuated by the disagreement over the legality of the McMohan Line, which was created by the British in 1914. China refused to accept the McMohan Line as the final line of border demarcation between India and China. Its argument was that historically no treaty or agreement pertaining to Sino-Indian boundary had been enacted between the Chinese and the Indian government. This acrimonious climate culminated into the unfortunate incident of the India-China war in 1962. However, this climate of hostility between the two otherwise friendly nations had fortunately been a very brief passing phase. Very soon the clouds of animosity were cleared through astute diplomatic processes to revive the enduring legacy of mutual warmth, friendship, and cooperation that has dominated the character of the relationship between the two countries since time immemorial.

The present healthy scenario of economic cooperation between India and China has a two-decade-old legacy. In 1984, India and China entered a trade agreement that entailed ‘Most Favoured Nation’ treatment. Sino-Indian relations received a further shot-in-the-arm with the visit of then Indian Prime Minister Rajiv Gandhi to Beijing in December 1988. He endeavoured to bring a positive shift in the existing bilateral relationship, which was going through a phase of thaw. During his visit, both sides agreed to break the deadlock on the debatable issue of boundary, and maintain peace and stability along the Line of Actual Control (LAC). The visit was particularly eventful in the sense that during his visit, both countries signed an agreement to set up a Joint Working Group for the purpose of diffusing tension along the border. During Rajiv Gandhi’ tenure, a number of bilateral agreements between India and China were signed. These agreements were on science and technology cooperation, civil aviation, establishing direct air links, and educational and cultural exchanges. Soon the spirit of cooperation snowballed into other areas of mutual benefit, and it was reflected in the signing of several agreements on scientific and technological cooperation, and educational and cultural exchange programmes.

From the 1990s, the Sino-Indian relationship started gaining momentum thanks to a series of high-level diplomatic visitations from both ends. Premier Li Peng’s visit to India in December 1991 further developed the relationship and fostered mutual understanding. His Indian counterpart Prime Minister PV Narashima Rao concurred with him that the ticklish border issue should not come in the way of cooperation in other areas of mutual interest. They signed a trade protocol that entailed both sides to promote bilateral border trade, and after a gap of thirty years, border trade between the two countries resumed in 1992. This was followed by PV Narashima Rao’s visit to China in September 1993 that led to the signing of an agreement on the LAC, which has ensured an amicable atmosphere along the border ever since. In 1994, the two countries signed an agreement on avoidance of double taxation. Agreements for cooperation in health and medical science, MoUs on simplifying the procedure for visa application, and on banking cooperation between the two countries have also been signed.

During Chinese President Jiang Zemin’s visit to India in November 1996, four landmark agreements were signed between the two countries that pertained to mutual cooperation in diverse fields. One of them was about confidence building measures (CBMs) along the border areas, under which both Delhi and Beijing agreed to downsize their forces along the LAC. The agreement was ratified by the Chinese parliament in the following year, thereby providing a major breakthrough in Sino-Indian bilateral relations.

Over the last decade, through a spate of high-level diplomatic parleys, the friendly relationship between New Delhi and Beijing has been further strengthened. Now, mutual cooperation between India and China covers a wide ambit of areas—spanning from business to culture to education to entertainment. Political bilateral cooperation on regional and global issues like WTO, the environment, framework of the G-20, etc., is also experiencing a positive thrust.

India and China are characterized by resilient economies, thriving domestic markets, and rich reservoirs of human resources. Iron ore constitutes 53 percent of India’s total exports to China. Marine products, oil seeds, salt, inorganic chemicals, plastic, rubber, optical and medical equipment, and dairy products are the other important exports of India to China. Electrical machinery is the most important component of China’s exports to India. Now with 2006 being celebrated as the ‘India-China Friendship Year’, it is only natural that the vibrant cultural ties between these two ancient civilizations and modern nations will receive an added fillip. To commemorate this momentous occasion, a number of important activities in various spheres are envisaged for this year, many of which pertain to culture. The cultural activities include, among others, the visit of India’s Minister of Culture to China, visit of Chinese Government’s cultural delegation to India and signing of India-China Cultural Exchange Programme for 2006-2008, inauguration of the Indian-style Buddhist temple in Luoyang, inauguration and opening ceremony of the Xuan Zang Memorial in Nalanda, reciprocal hosting of film festivals in each other’s country and encouraging joint production of films, visit of Indian classical dance troupes to China, and visit of a Bollywood song and dance troupe to China. Furthermore, an academic seminar on ‘India-China Cultural Exchanges’ is to be organized by the Centre for India Studies in Peking University with its Indian counterpart, or the China Institute of International Studies (CIIS), Beijing. Besides, a TV documentary series named Along the Footprints of Xuan Zang is to be produced by China’s Central TV (CCTV). Other cultural activities for the India-China Friendship Year include mutual translation of literary classics, participation of Liaoning Peking Opera Troupe in India’s National Opera Festival, and the Shanxi Culture Week in India.

There is no denying the fact that India and China are the two most important economies to watch out for in the future, and their cooperation can, indeed, reap rich dividends for their progress. The ‘India-China Friendship Year’ is an endorsement of the close links, and one can be sure that the rich past that India and China have inherited can only but translate into a very promising future indeed … China and India, together, can and probably will reorder the world economic order in the years ahead.