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A loud message from Asia

HONG KONG: The India-China summit meeting in Delhi this week was less about the promised increases in mutual cooperation than making a statement to the world: We are the future. For China there was a subtext: India is learning from us.

There is actually less than meets the eye in the talk of trade and investment links. Strategic divides remain and the structures of the two states, cultural and institutional, are so different that it is often hard to see how much either is capable of learning from the other.

But the reality of China's emergence as a global power - using trade, strategic weapons and its UN Security Council permanent seat as tools - has incited an economically resurgent, more self-confident India to seek the same status.

The "we are the future" statement is thus aimed at the old developed world (including Russia). And it is a message to the developing world: We are your leaders.

From a practical standpoint, the ties across the Himalayas are weak. Yes, trade has grown dramatically in the past few years as cheap Chinese consumer goods have penetrated Indian markets and as China has bought increasing amounts of Indian coal and iron ore to feed its furnaces. But this complementary relationship is largely based on the weakness of the Indian manufacturing industry.

If India is to follow China's path to growth, even at a slower rate, it will be looking to export manufactured goods, using its own more abundant labor force, rather than exporting raw materials that its own economy will need in increasing volume. Cross-investment will take place but probably not on a scale significant to either country. More important is whether they can agree on water issues.

The U.S. strategic partnership with India shown in the recent nuclear deal and military cooperation is evidently aimed in part at China. Border disputes between the two Asian countries have been set aside. India's hopes of joining the UN Security Council remain frustrated by China's opposition to Japan also joining. The India-China rivalry is seen in Delhi's attempts to accommodate the regime in Myanmar in an effort to reduce China's overwhelming influence there. Should India's trade continue to prosper, one can see it gaining influence across Southeast Asia.

At the same time, however, economic confidence and the decline of U.S. influence due to issues arising out of the Sept. 11 attacks have created an international space that both countries want to fill. So far they have been able to do so without their interests too obviously clashing.

The honeymoon may not last. The economic confidence is driven, for India, by the availability of foreign capital and, for China, by the availability of foreign markets for its goods. Both are vulnerable to a change in circumstances in our globalized world, in particular, recession or protectionism in the United States.

Both have wanted to be seen as international players but neither has done much in practice to help the systems from which they have benefited. China's stance on its currency and India's on the current round of global trade negotiations have both put national pride before international economic stability.

It is hard to argue that their global roles will not continue to increase, regardless of their future rates of economic growth, when we consider their combination of population and growing technological expertise. Yet one ingredient is still lacking if potential is to be realized: politics.

A China ruled by a rampantly corrupt Communist party has yet to show that it can develop the institutions to ensure continuity of policy. And India must show that the federal system necessary to accommodate its extraordinary diversity can both deliver the national identity and a focused foreign policy necessary for global impact.

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