Uneasy Engagement: China rises, Region worries

In a new series of articles in the New York Times, titled "Uneasy Engagement", reporters have been looking at the rise of China, and the worries that many in the region are beginning to share. This is a contrast with India's experience, where India's economic growth has not sparked any particular concern even among its immediate neighbours. India's uneasy relationship with some of its immediate neighbour seems to be rooted more in history, rather than in economics.
In the first article, in this series, "Australia, Nourishing China’s Economic Engine, Questions Ties", NYT provides a glimpse of the sentiments in Australia.

China has become Australia’s biggest trading partner, one of its biggest tourism customers, the largest single buyer of its government debt, a major buyer of farmland and real estate...

China’s hunger for steel gobbles up half of Australia’s iron ore exports, and its textile factories buy more than half of Australia’s wool. Over 120,000 Chinese students throng to Australian schools and universities...

Three state owned Chinese companies said they would buy stakes in Australia’s storied mining industry totaling $22 billion — as much as China’s entire investment here in the last three years — some of this nation’s 21.3 million people have reacted with aggrieved nationalism...

Nor is Australia alone. From the Philippines to Vietnam, China’s neighbors are recalculating the benefits — and potential deficits — of life in the shadow of a newly dominant nation...

In the second of the series, "China and India Dispute Enclave on Edge of Tibet", NYT visits the predominently Buddhist area of Tawang in India's north eastern province of Arunachal Pradesh, and experiences the tension between China and India over this part of the border.

This is perhaps the most militarized Buddhist enclave in the world...

Though little known to the outside world, Tawang is the biggest tinderbox in relations between the world’s two most populous nations. It is the focus of China’s most delicate land-border dispute, a conflict rooted in Chinese claims of sovereignty over all of historical Tibet.

In recent months, both countries have stepped up efforts to secure their rights over this rugged patch of land. China tried to block a $2.9 billion loan to India from the Asian Development Bank on the grounds that part of the loan was destined for water projects in Arunachal Pradesh, the state that includes Tawang. It was the first time China had sought to influence the territorial dispute through a multilateral institution. Then the governor of Arunachal Pradesh announced that the Indian military was deploying extra troops and fighter jets in the area.

The growing belligerence has soured relations between the two Asian giants and has prompted one Indian military leader to declare that China has replaced Pakistan as India’s biggest threat.

Economic progress might be expected to bring the countries closer. China and India did $52 billion worth of trade last year, a 34 percent increase over 2007. But businesspeople say border tensions have infused business deals with official interference, damping the willingness of Chinese and Indian companies to invest in each other’s countries.

Many of us believe that open trade and commerce is one of the key factors in building peaceful relationship between communities and countries. But China's economic rise has generated admiration as well as triggered apprehension.