TOPIC: -INDIA CHINA CONTROVERSY

SUBMITTED BY,

Amrendra Kumar Singh

Roll no.-RS1902A01 Reg.no.- 10900038 Program- M.B.A Section- RS1902 SUBMITTED TO, Prof. Mr. Ashish Sharma

CONTENTS
1. INTRODUCTION OF INDIA-CHINA 2. INDIA CHINA CONTROVERSIES 3. RELATION BETWEEN INDIA AND CHINA 4. PURPOSE OF STUDY 5. METHODOLOGY 6. REFRENCES AND BIBLIOGRAPHY 7. CONCLUSIN

1. INTRODUCTION OF INDIA-CHINA
India and china both are in Asia continent. India and China are two of the worlds most ancient surviving civilizations. India is a Democratic Country but China is a communist. Both have huge number of population. Both democratic India and Communist China embarked upon ambitious science, technology, and

economic development programs through centralized planning. Both emphasized self-reliance through local initiatives, restricting the flow of foreign capital and technology for nearly three decades. During this time, the Peoples Republic of China controlled its economy and protected it from outside influences far more than did India. That relationship began to crack in 1962 because of the USSRs reluctance to transfer nuclear technology to the Peoples Republic. China continued its isolation and suffered serious stagnation for 20 or so more years, the only source of foreign capital and technology for China was its ideological partner, the Soviet Union. During this period India also strictly regulated its economy, allowing only partial and highly restricted entry of foreign capital and technology. The Indian economy began to open its door a bit more widely by the middle of the 1980s, at about the same time as did China. By this time, the global economy had already taken hold of the national economies in North America, Europe, and the Pacific Rim. The protected government sector thrived despite its magnificent mismanagement. Indias industrial development suffered. While these negative trends were the legacy of regulations, government policy of self-reliance helped built robust networks of technoeconomic institutions and individuals that were ready to march forward when the global economy did finally reach India. Post-Independence era regulations proved a mixed blessing for India. It missed 20 years of the information technology revolution that was sweeping the world and driving the global economy remember how the IBM and Coca-Cola were kicked out of India in the middle of 1970s. The private sector stagnated under those regulations. Indias economic base is vast fourth largest in the world in terms of purchasing power parity and twelfth largest in terms of per capita GDP. It is projected to

become one of the five largest economies in the world by 2050 along with China and Brazil. Its markets are huge, with the current consumer class estimated to be around 350 million, about the size of the entire European Community. The combined economies of India and China are already bigger than that of the EU countries put together. At the present rate of growth, the consumer class in the two countries will reach about a billion people within the next decade. But per capita incomes remain low and income disparities are wide in both countries in international comparisons. These developments have far-reaching implications for the two countries themselves and the world at large in the 21st century. Many Americans see both India and China stealing American jobs China stealing manufacturing jobs (textile, shoes, furniture, hand tools, consumer electronics, Christmas ornaments, etc.); while India taking away IT jobs. Chinas military machine is one of the most formidable in the world. But it is the Chinese economy that scares both the Indians and the Americans. And now here comes China, closely followed by India. Not to be left behind in IT outsourcing, China is rapidly developing its English and software development skills to compete with India in the American high-tech industry. Chinese R&D has been rising by 20% a year over the past five years. . Indian R&D is even more astonishing - it has trebled in a decade. Indian engineers are flooding into the world's markets .It is a warning to us that we have to remain world-leaders and that knowledge also needs to be transferred from the academy to the marketplace. The truth is, China and India are increasingly attractive places for companies to do research and development India has an edge over China in attracting R&D investments due to the availability of more well-trained, English speaking scientists and engineers than in China. A high-tech company can hire

an engineer in India at one-fourth the cost for a similar hire in North America, for example. Such investments will be growing rapidly in the coming years in both India and China, perhaps more so in India than in China. The fact is both of these Asian giants have their own strengths and weaknesses, their own unique cultural traditions and political histories. The history of border disputes between India and China going back to the war of 1962 is well-known. China does want to increase its investment in India but feels resistance by the Indian government. It claims double standards by India in the matter of economic cooperation. The surfeit of qualified manpower out of China and India is yet to be fully and gainfully employed in the global production of knowledge, goods, and public services.

2. INDIA CHINA CONTROVERSY

There are many controversy happened between India and China. The names of these controversies are given below:-

2.1 Indo- China border controversy

We are back to square one as far as the border dispute with China is concerned. Some 12 meetings held on the border issue since the two countries agreed to talk about it have been futile. The Indian government has not been frank with the nation. Indian side's remarks that Arunachal Pradesh is a part of India. McMahon Line and that the status of the border state was "never officially

demarcated." Arunachal is an integral part of India and that China knows about it." Arunachal had already been settled. The first time the Sino- Indian border dispute was in the Union Home Minister in early 1957.The Foreign Ministry had been informed of the reports many times. Lakshman Singh from UP was the first person in 1954 to inform the government about the building of Aksai Chin Road. As our Trade Representative, he used to visit Tibet every year. His contacts were wide, and he met some labourers who had worked on building the road. The Ministry of External Affairs refused to entertain information about China's inroads into Indian Territory, this was straightaway filed. Prime Minister Jawaharlal Nehru got enraged even at the mention of a border dispute with China. Our ministry when somebody does not want to deal with a subject for a long time, he says. The Prime Minister also wanted to show that he was not alone in taking decisions on the border issue. His cabinet colleagues had to be carried along, and all of them felt rather strongly on the issue. There was also controversy over the border shown in Chinese maps. Nehru raised this point with Chou En-Lai many a time but every time the latter would say that they were Kuomintang Government's maps which his government had no time to correct. However, he was always general in his replies and never even once said that he accepted boundaries shown in the Indian maps. . India has produced 600 pieces of documentary evidence to establish that these areas were utilized by the people of Ladakh and administered by the governments of Ladakh and Jammu and Kashmir. And therefore they are India's. The new relationship between the two countries grew when Beijing agreed to have talks

on the border. Both had agreed to honour there was a firm settlement. The two countries are too big to push each other.

2.2 Indo-China panel to resolve trade issue

India and china want to resolve dispute with one another. India imposes over restriction on imports of Chinese goods, especially toys. India and China set up of a joint official panel to sort out trade-related issues. They want to settle issues through bilateral discussions. The department which recommends additional import duties on products that have witnessed a sharp increase in imports. China has already issued a complaint at WTO against quality restrictions placed by India on Chinese toys. However, it has not filed for a dispute yet.

India, which had lifted the six-month ban on Chinese toy imports in January, had placed quality restrictions. It allows only those Chinese toys that meet international quality standards. China, in its complaint to WTO, had said that India breached WTO conditions of national treatment which state that goods from a WTO member country are to be given similar treatment as domesticallyproduced goods and most favoured nation which lays down that all WTO member countries should be treated alike. The Chinese minister also discussed the 14 anti-dumping cases on Chinese products sold in India at prices lower than those applied in the domestic market. India is planning to levy additional import duties, known as safeguard duties, on a number of products from China including soda ash and some chemicals where there has been a surge in

imports. The member of joint panel will monitor developments such as import surges and decide if it could be addressed without resorting to trade curbs. India China trade increased.

2.3Dalai Lama Trip strains India China ties

India-China relations will get a simultaneous tweak this weekend when the Dalai Lama visits a Buddhist region at the heart of a border row between the Asian giants. The anti-China and separatist nature of the Dalai clique". The mere presence of the Dalai Lama in India, where he has lived for 50 years and set up his government in exile, has been a constant irritation in a bilateral relationship that has struggled to overcome decades of distrust. China and India fought a brief but bloody war over their Himalayan territories, including Arunachal, in 1962. The conflict left a festering border dispute which 13 rounds of bilateral talks have failed to resolve. India's growing economic and diplomatic clout has made it more assertive in dealings with its regional rival and the government has stood firm in the face of increasingly shrill Chinese protests over both the prime minister's and the Dalai Lama's trips to Arunachal. China's protests over his Arunachal visit and suggested that Beijing was being over-sensitive. "The Chinese government politicises too much wherever I go," he told reporters on a visit to Japan last week. The Nobel peace laureate has an emotional attachment to Arunachal which provided his point of entry into India when he fled Tibet in

1959 following a failed uprising against Chinese rule. During his visit, he will give teachings at India's biggest Tibetan monastery in Tawang, which was briefly occupied by Chinese troops in 1962 before they withdrew. When he arrives the mountainous north-eastern state of Arunachal Pradesh Sunday amid mounting protests from China over his visit. He arrives at the Tawang monastery in Arunachal Pradesh, a region bordering China and which Beijing claims. "The entire town and the monastery have got a facelift. It was through Tawang in Arunachal Pradesh that in 1959 the Dalai Lama escaped the Chinese to enter India. Since then he has lived in India. China has racked up a controversy by asking India not to allow the Tibetan spiritual leader to visit Arunachal Pradesh. The Indian government has already cleared the Dalai Lama's visit to Arunachal despite China's opposition. "China has simply no business to interfere in India's internal matters. The Dalai Lama's visit to Arunachal Pradesh is purely religious. Arunachal Pradesh shares a 1,030-km unfenced border with China. India and China fought a border war in 1962, with Chinese troops advancing deep into Arunachal Pradesh and inflicting heavy casualties on Indian troops. The border dispute with China was inherited by India from British rulers, who hosted a 1914 conference with the Tibetan and Chinese governments that set the border in what is now Arunachal Pradesh. China has never recognised the 1914 McMahon Line and claims 90,000 sq km, nearly all of Arunachal Pradesh. India in turn accuses China of occupying 8,000 sq km in Kashmir.

Tensions flared up again in 1986 with Indian and Chinese forces clashing in Sumdorong Chu valley of Arunachal. Chinese troops reportedly built a helipad in the valley leading to fresh skirmishes along the border.

2.4 India China equation

India must gear up to meet the challenges that China poses, both in domestic and international markets, and at the same time identify the areas where we can take advantage of the large Chinese market. Chinas economic growth continues unabated, and India needs to seize the opportunities that this presents and take concerted action to prevent its competitive advantage from taking a hit in some areas. China is the fourth largest economy in the world, while India is the tenth. While Chinas GDP has grown at about 10% per annum in the last two decades, Indias has grown by about 6.5%.Both India and China have huge domestic markets, are top emerging markets and attractive foreign investment destinations. Bilateral trade has grown over 70 times in the last 15 years. It is expected that in a few years time, China will overtake US as Indias topmost trading partner. Over 34% of Chinas GDP is contributed by manufacturing, whereas it is only 16% in India. Further, China has drawn investments from overseas Chinese, while India still struggles to lure NRI funds for business. Chinas SEZs have been a major attraction. Transhipment of goods to ports in China is easy

and quick, saving on time and cost in total contrast with India, with its inadequate infrastructure. To keep pace with China, India needs to get its infrastructure in place quickly. Projects in India are delayed for some reason or the other, leading to cost escalations. In China, there are no procedural/bureaucratic delays or hindrances, with decisions decentralised. In comparison, in India procedural costs are way too high. The SEZs in China are profit-earning centres. Only a certain percentage of the revenue is given to the Central or state government, the rest is retained for further development of the SEZ. In India, SEZs are mired in controversy. China is well aware of Indias achievement in the IT sector. A number of hi-tech parks have come up, and, it would not be surprising if it proves to be a worthy competitor for India in the IT sector as well. Also, there is a vigorous campaign in China to promote the learning of English. The India-China equation today is not a zero-sum game for foreign investors. Though it is increasingly getting clichd, it is not India or China any more, but India and China. And if the two come together, the global economy will see a tectonic shift.

3. TRADE BETWEEN INDIA AND CHINA

The Government of the Republic of India and the Central People's Government of the People's Republic of China, animated by the common desire to develop trade between the two countries and to strengthen further the

friendship that already exists between the Governments and the peoples of India and China.

The two contracting parties being desirous of adopting all appropriate measures for the expansion of trade between the two countries agree to give the fullest consideration to all suggestions for the promotion of such trade. They are agreeing that all commercial transactions between the two countries shall be carried out in accordance with the Import, Export and Foreign Exchange Regulations in force from time to time in their respective countries. Contracting parties agree to accord, subject to the laws and regulations of the two countries for the time being in force, facilities for the import and export of the commodities. The Trade between the Republic of India and the Tibet Region of the People's Republic of China will be conducted in accordance with the provisions of the Agreement between the Republic of India and the People's Republic of China on Trade and Intercourse between India and the Tibet Region of China signed in Peking on the 29th April 1954. All commercial and non-commercial payments between the Republic of India and the People's Republic of China may be effected in India rupees or in pounds sterling as may be mutually convenient. For the purpose of facilitating such payments, the People's Bank of China will open one or more account, with one or more commercial bank in India authorised to deal in

Foreign Exchange to be called account 'A'. In addition, the People's Bank of China will, if necessary, open another account with the Reserve Bank of India to be called account B. The two contracting parties agree to consult with each other on questions that may arise in the course of the implementation of the present Agreement. This Agreement will come into force from the date of its signature and will remain valid for a period of two years. This Agreement can be extended or renewed by negotiation between the two contracting parties to be commenced three months prior to its expiry. By exploring the export performances and specialization patterns of China and India, we assess their trade competitiveness and complementarity each other as well as with the rest of the world. India faces tough competition from China in the third markets especially in clothing, textile and leather products. India appears to be a competitor mainly for its neighbouring South Asian countries and complementarity exists between the imports of China and India. In recent years China and India have experienced unprecedented economic development. During the last decade, Chinas economy grew on average at 10 percent per annum and Indias at 6 percent per annum. Chinas share in world trade increased from a meagre 1 percent in early 1990s to 6 per cent in 2004 and that of India from 0.5percent to 1 per cent during the same period. Although the share of China and India in global output and trade still lags behind their combined share of world population, this is expected to reverse in the future. By 2003, China became the sixth largest economy in the world at market exchange rate; fourth largest global trader and

the major recipient of foreign direct investment they find that competition from China and India is not a serious concern for most countries in the region. Chinas GDP per capita is now 2.2 times higher than Indias although per capita GDP in both countries was at comparable levels until the early 1990s. Indias performance has improved noticeably in the last few years and it has outperformed most of the other countries in its income group. The good macroeconomic performance of both countries is expected to continue and real GDP is expected to grow over 10 percent in China and over 8 per cent in India in the short and medium terms economic liberalization reforms undertaken by both countries may have played an important role in triggering the high growth rates. This is because openness to trade provides access to imported inputs, new technology and larger markets and spurs growth. In recent years, international trade has grown manifold in China and India. Chinas trade to GDP ratio increased from 32 percent in 1990 to 49 per cent in 2000 and further rose to 70 per cent in 2005. Indias trade liberalization has been more modest. Its trade to GDP ratio was close to 16 percent in 1990, increasing to 29 per cent in 2000 and 44 per cent in 2005.The external balance position of India remained negative throughout the 1990s. This is in contrast to China, which has maintained a largely positive external balance since the early 1990. The average annual growth rates of Chinas and Indias exports of goods Chinas imports increased on average at 16 per cent per annum in 1990-2005 while Indias imports increased at 13 per cent per annum. Although China is the major recipient of foreign investment at present, India has a well-developed institutional framework in place, which includes property rights protection, a democratic political set-up, and the

presence of various market regulators. India has better corporate standards than China. The rate of return on assets has been higher and stocks performance better in India. China now has the highest share in world exports of clothing, leather, textiles and information technology (IT) and consumer electronic products. China is a leading exporter of telecommunications and computer equipment and India has a high share of imports of these products. Thus, India can enhance its imports of these items from China. Meanwhile, India possesses comparative advantages in a few resource-based industries such as aluminium, steel, agricultural commodities and paper that can be exported to China.

4. RELATION BETWEEN INDIA CHINA

The Sino Indian relationship will be one of the most important bilateral relationships in future as both the countries represent 40% of the world population and their continuing economic growth will project them to second and third places within the next two decades. Opportunities abound for Sino Indian relations in future. There is a need to put aside differences and focus on building good relation. As developing countries, both India and China are interested in gradually integrating their economies into the global trading system. Both countries are also desirous of greater economies assistance from the industrialized countries to the vast majority of developing countries. Both are critical of US unilateralism

and seek to promote a multipolar world where they can play a more important role in global affairs. Both champion for nuclear disarmament. Both are also interested in promoting the peaceful use of outer space and are developing their emerging civilian space programs. On 29 April 1954 when an "Agreement on Trade and Intercourse between China and India.Panchsheel agreement happened between India and China. The factor of Panchsheel Agreement was Hindi Chini Bhai-Bhai. In this agreement India recognized Tibet as part of China-in fact, as a mark of goodwill India also gave up all her extra-territorial rights in Tibet-but failed to settle the Indo-Tibetan border. The high and lofty ideals of Panchsheel began to crumble just 10 days shy of two months after the agreement was signed as the first of series of Chinese incursions, numbering in hundreds, occurred in Bharhoti area of Uttar Pradesh. These incursions culminated in the Chinese invasion of India with an overwhelming force on two separate flanks in October 1962. The Chinese aggression, and the defeat and humiliation it wreaked on India, caught off guard, remains deeply embedded in the Indian psyche to this day. After the signed on agreement, India was supplying rice to Chinese troops, engaged in building a road on Indian territory! And not just an ordinary road, it was the Aksai-Chin road cutting through the Indian territory in Ladakh. It is indeed a first in military annals that the government of a country supplies food to enemy troops. The friendly relations between India and China from 1947 to 1958.It exhibit that in the India was supplying rice to Chinese troops, engaged in building a road on Indian territory! And not just an ordinary road, it was the

Aksai-Chin road cutting through the Indian territory in Ladakh. It is indeed a first in military annals that the government of a country supplies food to enemy troops early, China and India had initimate bilateral relations characterised by mutual support and cooperation in many decisive national, regional and international issues, such as situated of India was supplying rice to Chinese troops, engaged in building a road on Indian territory! And not just an ordinary road, it was the Aksai-Chin road cutting through the Indian Territory in Ladakh. It is indeed a first in military annals that the government of a country supplies food to enemy troops. It exhibit that in the early ,China and India had intimate bilateral relations characterised by mutual support and cooperation in many decisive national, regional and international issues, such as establishment of diplomatic relations, admission of PRC to the United Nations, the Korean crisis, friendly exchanges in the Initiation Phase from 1947 to 1953 and the Panchsheel Agreement, Indo-China issue, Asian-African conference, Taiwan and Goa questions, and mutual visits of high-ranking leaders in the Honeymoon Phase from 1954 to 1958. The relationship will develop and play out is an important question in the twenty century. Political contacts between ancient China and India were few and far. In the cultural sphere, it was mostly a one way from India to China. Hindu and Buddhist religious and cultural influence spread to China through Central Asia, and Chinese scholars were sent to Indian universities at Nalanda and Taxilla. Though Chinese and Indian civilizations reacted to one another during the first few centuries of the Christian era, the process of religiouscultural interaction ceased after about the tenth century.

Indias partition in 1947 and the Chinese occupation of Tibet in 1950 have allowed China to extend its reach and influence into a region where it had, in terms of history and civilization, previously exercised no influence at all. China-India relations have been tense ever since a border dispute led to a full- scale war in 1962 and armed skirmishes in 1967 and 1987. Several rounds of talks held over more than a quarter of a century has failed to resolve the disputed claims. Agreements on maintaining peace on the disputed border were signed in 1993 and 1996. An agreement on the guiding principles for settlement was concluded in 2005. However, Chinas increasing assertiveness, as evidenced in increased attack in Arunachal Pradesh by the Peoples Liberation Army since 2005, has led to a rapid meltdown in the SinoIndian border talks, despite public protestations of amity. Apparently, the Chinese believe that a border settlement, without major Indian territorial concessions, could potentially augment Indias relative power position, and thus impact negatively on Chinas rise. Independent India has entertained hopes of a joint Sino- Indian leadership of Asia as a counter to Western influence, but the Chinese have shown no enthusiasm for sharing leadership of Asia with anyone, least of all India. Historically and culturally India never played second fiddle to China. Therein lies the root cause of volatile and strained relationship: Seeing China as the reference point of Indias economic, security, and diplomatic policies, Indias strategic analysts have long emphasized the need to keep up with China militarily. Initially, Indias nuclear capability was aimed solely at deterring China, not Pakistan. It is the adversarial nature of the Sino- Indian

relationship that has driven Indias and, in turn, Pakistans nuclear weapons programs. There are also many relations between India and China. Like - trade and economic, political relations, commerce relation, border relation, defence relation etc.

5. PURPOSE OF STUDY
1.) To study the major role of India and China in world. 2.) To study the bilateral agreements between India and China. 3.) To study about current and past controversy. 4.) To study the future of Indo-China relations.

6. METHODOLOGY

Secondary source: - Secondary data is available to the preparation of topic. The research must thoroughly search secondary data source before finding any effort for collecting primary data, defence relation etc.

6. REFRENCES AND BIBLIOGRAPHY

Reference books:
Economic growth in India and China -Leena Mary Eaten

Search from internet :

www.google.com www.answer.com www.wikipedia.org www.amazon.com

CONCLUSION

India and China both are in Asia continent. India and China are two of the worlds most ancient surviving civilization but there are many controversies between them. One of these controversies is India China border controversy and also many controversies happened between them, but India and China develop their relations. As developing countries both India and China interested in gradually integrating their economies into the global trading system. They have done Panchsheel agreement ,its main factor was Hindi- Chini BhaiBhai. The friendly relation between India and China from 1947 to 1958. After increasing the relation India and China want to develop their trade and they did do the trade between them. From the trade the economic position of India and China both are develop. Both country help each other, both are want to develop trade and relation. It is good for them. India and China both are want to develop market in world. India should reduce tax on import for China and China should also. From which the trade of both country will spread and they will make a developed country.