From The Sunday Times
March 30, 2008

Tibet is one thing, but India and China tensions spell bigger disaster

India and China are booming and will shape the 21st century, but old tensions between the two could spell disaster for the region
Bill Emmott

Few of his contemporaries think of George Walker Bush as a visionary American president, unless they are using the term to imply a touch of madness. Yet early in his second term Bush launched a bold initiative to try to establish closer American ties with India, the world’s biggest democracy, in what may eventually be judged by historians as a move of great strategic importance and imagination.

It recognised the fact that while Al-Qaeda and its cohorts pose the biggest short-term and perhaps medium-term challenge to America, in the long term it is the expected shift in the world’s economic and political balance towards Asia that promises to have the greatest significance.

That is why this month’s events in Tibet, as well as the purchase by India’s Tata Motors of Land Rover and Jaguar from Ford, need to be seen in a wider context.

Bush, meanwhile, has managed to cast aside 40 years of hostility and suspicion between America and India – and even agreed to start collaborating over nuclear energy – in the hope of strengthening India and its economy. And all for a special reason: the rise of China.
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Economists at Goldman Sachs reckon that if China carries on with pro-growth policies and manages its economy reasonably well, it could overtake the United States as the world’s biggest economy as soon as the late 2020s. By 2050 India might also have overtaken the United States if it pursues vigorous economic reforms in this decade and beyond. India, at present the world’s 11th-largest economy, has long been thought of as a laggard compared with China: good at information technology and outsourcing but incapable of the sort of manufacturing that has powered China’s economic emergence.

That is changing. These days India is beginning to follow the Chinese model with investment soaring as a share of GDP, with trade booming and with manufacturing expanding faster than services. Its biggest companies, of which the Tata Group is in the lead, are achieving global reach, capabilities and prominence far faster than their Chinese counterparts.

If a Chinese car maker had sought to buy Jaguar and Land Rover, it would almost certainly have encountered opposition in America’s Congress – but India, unlike China, is seen as an ally.

India, however, needs help in financing the construction of its roads, airports and power plants and it needs help with technology. In fact, it is already being helped by Japan – egged on by America – with its infrastructure financing. And Bush’s civil nuclear deal was aimed at providing the technology that India desperately needs.

So even if the dates and figures in forecasts such as Goldman’s are wrong, Asia is going to get richer and stronger, probably for a long time to come. The reason why Tibet and Tata come into the picture is that the rise of Asia is not just going to pit Asia against the West. It is going to pit Asians against Asians. This is the first time in history when there have been three powerful countries in Asia at the same time: China, India and Japan. That might not matter if they liked each other or were somehow naturally compatible. But they do not and are not. Far from it, in fact.

An array of disputes, historical bitternesses and regional flashpoints weigh down on all three countries. Conflict is not inevitable but nor is it inconceivable. If it were to occur – over Taiwan, say, or the Korean peninsula or Tibet or Pakistan – it would not simply be an intra-Asian affair. The outside world would be drawn in.

Such a conflict could break out suddenly. This month’s unrest in Tibet has shown just how volatile China can be – and how easily one of those flashpoints could cause international tension.

In 1962 China and India fought a border war that humiliated India and left an enduring legacy of bitterness and suspicion. Both countries are now increasing their military spending and trying to modernise their armed forces.

The border dispute remains unresolved.

China claims an entire Indian state, Arunachal Pradesh, which borders southern Tibet and is roughly the size of Portugal. India claims that China is occupying 15,000 square miles of what is rightfully India – in Aksai Chin, an almost uninhabited plateau high in the Himalayas.

You can see these disputes as relics of colonialism. They involve two areas of limited strategic importance which, while large, are not heavily populated and do not as far as we know contain hugely valuable mineral resources. The other way to view these disputes is that they are not about specific border demarcations at all. In truth, they are about Tibet.

China invaded Tibet in October 1950 and annexed it to Mao Tse-tung’s newly declared people’s republic. The Chinese say that Tibet had historically been part of China since the 13th century. But in practice the reason why it is now an “autonomous regionâ€