TRADING SEASON ENDS OVER NATHULA

Despite unfavorable environment, Border Trade crosses Rs. 7 crore mark

IMPORTS RETURN WITH A BANG – CHINESE GOODS WORTH Rs. 1 Cr COME IN

GANGTOK, 29 Nov:( SourceSikkim Now)

The Nathula Border Trade closed today for the seventh season bringing down the curtains to one of most unstable trading seasons, which was also the most productive thus far. Unpredictability in fact marked this trading season with GoI surprising everyone by first enhancing the list of items allowed to be imported over Nathula and then throwing a wet blanket over the announcement by not clarifying the Customs Duty status of these goods. And then there were border personnel here fighting traders and them arresting one on charges of espionage.
Many days were lost to boycotts, sometimes by traders from Sikkim sometimes by their counterparts from Tibetan Autonomous Region and then more days were lost to snapped roads. Despite all of this, year 2012 saw the highest trade turnover thus far, the consolidated accounts crossing the Rs. 7 crore mark. Even imports, which had remained officially zero for two years, returned with a bang this year and broke the Rs. 1 crore mark. It is obvious that trade will only pick up from here on.
Trading closed at Sherathang Trade Mart amidst the usual bonhomie and fanfare which accompanies the last day of trading both Indian and Chinese traders closed their accounts and said farewell to each other; this was marked with small picnic groups and finally khadas for each other.
After 6 seasons of an import drought the total worth of imports from China through Nathula for 2012 was over Rs.1 crore. The exact import value computed till 27 November from the start of the season comes to Rs. 1,00,24,982.
This figure includes imports of Chinese goods at the Sherathang trade mart as well as those imports brought in by Indian traders from Rinchengang, the trade mart on the Tibetan side of the border. Direct imports brought into Sherathang has been calculated at Rs. 67,10,732 and imports brought in by Indian traders from Rinchengang is at Rs. 33,14,250 as of 27 November.
The handsome showing on the imports side of the Nathula Border Trade ledger is thanks to the enhancement in the list of goods allowed for import over Nathula. This was done in May earlier this year, and after some initial confusion over Customs Duty, on 14 June 2012, the Government of India clarified that even these new goods were exempt from Customs Duty. The five items added to the list allowed for import are: readymade garments, shoes, quilts/ blankets, carpets and local herbal medicine.
As for exports, this season saw over Rs. 6 crore worth of goods being exported to China with the figure till 27 November coming to Rs. 6,06,87,685. The sales made at Rinchengang by Indian traders was calculated at Rs. 1,37,94,795 while sales recorded at Sherathang trade mart itself by Indian traders to their Chinese counterparts was worth Rs. 4,68,92,890.
In fact August 2012 was the first month when the Nathula trade recorded official imports of listed Chinese goods at Rs. 1.8 lakh. A total of 284 Chinese traders crossed over this season compared to around 260 Indian traders crossing over to Rinchengaang.
As for today, there were as many as 44 trucks from Tibet which crossed over to Sherathang and about 20 vehicles from India carrying Indian traders to the other side. In fact the last week or so has been witnessing a large number of Chinese traders crossing over to engage in trade. On average there were around 150 to 180 Chinese traders coming over every trading compared to 50 – 60 Indian traders crossing over.
This is largely due to the fact that many traders have to now close their accounts with each other or wait for the next 6 months; the other reason for the large number of Chinese traders coming over is also due to the fact that trade was shut for the whole of the second week of November. Traders could be seen huddling together with sheets of paper calculating their transactions for close of accounts.
There was lots of trade as well, even on the last day. And that is a good sign. For the past 6 seasons there was nothing much to trade and Nathula seemed a dead end as far as border trade and its growth was concerned. After this season, which also saw an expansion in the list of items of trade, we can expect much more transactions next year on as well as expansion of trade itself given the kind of response both Indian and Chinese traders have displayed this year despite several causes for tension.

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November 27, 2012, 3:12 am 

India and China Deepen Economic Ties

By HARI KUMAR

Courtesy of Press Information BureauChairman of National Development and Reform Commission of China, Zhang Ping being received by the deputy chairman, Planning Commission, Montek Singh Ahluwalia, at the Second India-China Strategic Economic Dialogue, in New Delhi on Monday.

While India and China continue to disagree over their shared border, and the role of both countries in the South China Sea, on the economic front, the two countries are making strides.
On Monday afternoon, during a “strategic dialogue” held in New Delhi, representatives of the two countries signed seven economic cooperation agreements worth $5.2 billion, their second such dialogue in as many years.
The countries agreed to cooperate in renewable energy, information technology, steel manufacturing and electric transmission lines. The delegations also signed four memorandums of understanding related to energy efficiency, railroads, information technology and their intent to conducting joint studies on “issues of mutual interest.”

The Indian delegation was headed by Montek Singh Ahluwalia, deputy chairman of India’s Planning Commission, while China’s delegation was headed by Zhang Ping, the chairman of the National Development and Reform Commission of China. The Chinese delegation visiting India had 180 delegates, including officials and business executives.
“The economic growth of India and China is a critical element of the transformation of the global order that is under way,” Mr. Ahluwalia said Monday. “Our ability to influence global decision making will be stronger if we work together.” India can “certainly benefit by studying the Chinese experience in the building of infrastructure and handling of urbanization,” Mr. Ahluwalia added.
Trade between the two countries has grown significantly in the past decade and a half, from less than $3 billion in 2000 to $74 billion last year. Chinese companies supply electronic hardware, white goods, construction machinery and power transmission equipment to India, while Indian companies supply tractors, engineering equipment and information technology education to China.
The two sides also announced several broad mutual goals on Monday: to increase their cooperation at the global level, strengthen communication on macroeconomic policies, deepen and expand trade and investment and expand cooperation in the financial and infrastructure sectors.
Specific project agreements signed Monday include a $3 billion renewable energy project between Reliance Power and Guangdong Mingyang Wind Power Industry and an $800 million deal between India’s National Institute of Information Technology and the province of Hainan for setting up an information technology park in Hainan.
In the future, the two countries plan to cooperate on high-speed rail, transportation of freight and passenger train station development, and developing common standards for digital television and mobile communication.
The first round of strategic economic dialogue took place in Beijing in September 2011. The third India China strategic economic dialogue will take place in China in 2013.

Compromises needed on border issue: China

by Sandeep Dikshit
SourceThe Hindu)

Former Communist Party of China leader briefs media ahead of next week’s border talks in Beijing

Ahead of the India-China border talks in Beijing next week, a senior Chinese leader urged both sides to reach an agreement on the dispute by meeting each other’s claims half way. Admitting that the 1962 border clash between India and China and the subsequent tensions along the border had hindered optimum development of bilateral ties, Li Junro, former deputy head of the Communist Party of China’s (CPC) Central Party School, said both sides must “turn over to a new page as soon as possible.”

“We are happy that the two governments are engaging increasingly in dialogue, which has led to a better understanding of each other. Both should make compromises and meet each other half-way,” said Mr. Li, head of a Chinese delegation that is in South Asia to brief journalists, political parties and academicians on the recently concluded 18th National Congress of the CPC.

The team has already visited Pakistan and, after briefing political parties and thinkers here, it engaged with journalists and left for Sri Lanka. Similar delegations have fanned out to other regions except the U.S., for which a more senior team from the CPC will be earmarked. “China needs to know more about the world and the world needs to know more about China,” he said while encapsulating the reason for similar teams heading for Europe, Australia and South East Asia, besides South Asia.

Mr. Li reasoned that states took time to reach an understanding with each other but once the issue [border dispute] was resolved, nothing would hinder the development of bilateral relations. Asked about China’s aircraft carrier project, he said the current phase — a subject of much interest in the western media — was aimed at mastering the techniques of handling the vessel. Thereafter, it would be “normal” to have a functioning aircraft carrier whose major function will be to defend China’s maritime sovereignty. Even India has operated aircraft carriers for a long time, he pointedly noted.

On the tensions in the South China Sea and the East China Sea between China and several of its maritime neighbours, the Chinese leader reiterated the official line — these islands were part of China, but after the discovery of oil and gas, others started laying claim to them; and China wanted dialogue, but would not countenance a show of force.

On the party conference, Mr. Li attributed the smooth transition of the top leadership due to changes made in the country’s political structure. “We abandoned the outdated method of life tenures and, therefore, we had a normal and successful transition of the top leadership,” he said. Similar changes have been continuously made over the past 30 years because success in reforming and opening up the economic structure cannot happen without changes in the political structure.”

During his interaction with the media, Mr. Li said the move towards “consultative democracy” could be the next major political reform in China. The trends were visible — the run-up to the recent party conference saw more multiple candidates and direct candidature. Asked about the land acquisition and rehabilitation issues, he admitted there were problems. India, which was taking the same path to modernisation, could use China’s experience in this regard as a reference, he offered.

..Tripura's silk industry gets a facelift

.Agartala (Tripura), Nov.28 (ANI): The Government of Tripura is making all possible efforts to increase silk production through adaptation of modern techniques. Recently, the state's first power loom silk unit for inaugurated by Tripura's Industries and Commerce Minister Jitendra Chowdhury.

Eight automatic machines brought from Karnataka have been installed in the unit which will produce over 500 silk sarees per month.

It will give a fillip to the growth of silk industry in the state and will benefit more than 9,000 people associated with sericulture, mostly tribal women.

Earlier, we used to work on handlooms and collect raw material from tribal women engaged in sericulture and cocoon production. Now cocoons will be turned into yarn at the factory itself. Earlier everything was done on handlooms but now power looms will be used thus reducing our workload. We are hopeful of earning 4000 to 5000 rupees per month," said Dilip Debnath, a powerloom silk weaver.

The state government plans to increase the total area under mulberry cultivation from 1,821 hectares to 4,000 hectares. This will increase raw silk production from present 31 MT to 100 MT by 2015.

"We believe that the price of cocoons will increase with the usage of power looms. At present, the price is 230 per kg and it will be beneficial if it goes up to 300 to 350 Rs. around 1000 women in our area are engaged, along with me, in this work," said Promila Rupini, a sericulture farmer.

"With this, the women can earn even at their homes and we feel empowered as we are not solely dependent on our husbands' income. We have been traditionally engaged in sericulture and cocoon rearing and the government has helped us a lot. We are able to produce 160 kg cocoon every month and this has benefited our families," said Kitin Debbarma, a cocoon producer.

Over the years the government has introduced several schemes and programmes to strengthen farming and boost the handicraft industry in the region. (ANI)

..

Change of Guard in China: The Context and the Actors

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Avinash Godbole

November 12, 2012

source:IDSA

The 18th Congress of the Chinese Communist Party (CCP) to select the next generation of leaders began on 8 November 2012 in Beijing. At the end of this Congress, the People’s Republic of China (PRC) will unveil its new national leadership from 14 November. But policy change will be minimal and much will remain the same in the unique one party system in China. Nevertheless, due to circumstances prevailing inside and outside China, a lot is expected from the new leaders and thus this leadership change is a vastly important process for China and for the world.

One important aspect about the way the CCP functions is that China has moved from a system marked by a strong paramount leader who guided the country on the basis of ideology and a weak country to a system of a strong country and weak and fragmented leadership. At the same time, selections to the top echelons of the party are opaque, often based on networks and lineages. What this means is that in general there is resistance to changing the status quo as interest groups within the party do not want to harm the structures that have benefited them in the first place. The two factions within the present day CCP—the Princelings (sons of former top leaders) and others belonging to the Communist Youth League (CYL)—have jostled for party positions. Among the next set of leaders, the Princelings are likely to dominate due to backing from former President Jiang Zemin who has had a major influence in their selection. Jiang, himself a princeling, had always supported Xi’s nominations and his influence is seen as a much needed calming role by a senior after the ideological storm over Bo Xilai’s ouster.

Introducing Xi and Li

China’s current Vice President, Xi Jinping, will take over the position of the Secretary General of the CCP from Hu Jintao at the end of the Party Congress and will become President sometime in March 2013. Xi will be leading a conservative Politburo Standing Committee. Xi Jinping is the son of Xi Zhongxun, who was Vice Premier under Mao and was purged during the Cultural Revolution. While Xi belongs to the princelings faction, unlike many others from this group, Xi himself has had a relatively long tenure in rural China when he began his political career in a small village named Liangjiahe in Shaanxi province. Following this, he has had an interesting career. His national image as being clean and tough on corruption is based on his tenure in Shanghai where he was appointed after a major financial fraud by a party official. His earlier tenures as senior official in Zhejiang and Fujian means that he has closely dealt with Taiwanese business and official interests. He is expected to push for more integration with Taiwan leading to unification. His closer ties to the military have been viewed as a reason for the possible rise in stature of the PLA in decision-making. However, from time to time, he might also have to use his closeness to restrain the PLA in order to reassure smaller neighbours. Xi’s last major assignment as a national leader before his elevation as future president was confirmed with the success of the Beijing Olympics where he was in-charge of overall preparations. In the last two years, Xi has visited 50 countries in order to increase his outreach, an area in which he had lacked experience. Many of these have been developing countries with which China has booming trade relations.

Li Keqiang, current Vice-Premier, is likely to become Premier in March 2013. Like Xi, Li’s career also began with rural education in Fengyang County of Anhui province. He studied Law and acquired a PhD from Peking University where he joined the Communist Youth League (CYL). He rose in the CYL hierarchy like Hu Jintao and later joined the CCP. He became the Governor and Party Secretary in Henan and is credited for the economic transformation of the province. He is a known to be a tough economic administrator, coordinator and organiser.

Generational Change and the Quantum Leap

The future is not going to be easy for the Xi-Li leadership. Their tasks are amply clear and these are not at all easy; they have to maintain the pace of economic growth, encourage domestic consumption and make growth more sustainable, all at the same time. China’s stimulus packages in terms of investments in infrastructure after the meltdown of 2008-09 temporarily boosted the economy but have not been able to sustain the momentum in the last couple of years. Quarterly growth has come below 7.5 per cent and is likely to stagnate there as domestic demand has also slowed down. The housing bubble is just one example of the misconceived stimulus package. Rebalancing would involve tough political decisions that would not be easy for the new leaders. At the same time, reducing regional and income inequalities remain a prime concern. How the new leadership manages to balance the two remains to be seen. Corruption, property and rule of law are important points of debate in China. Cases like the one involving Gu Kailai have demonstrated the serious misuse of power for profiteering.1Land grabbing and development without adequate compensation have led to protests by the masses. China needs a clearer legal system to deter the misuse of power; otherwise mass-incidents would continue to grow in numbers and intensity.

The new leadership will be under immense pressure to walk the talk and deliver on these issues. China is clearly running out of time as far as its relations with the ethnic minorities are concerned. Tibet is an ideological challenge whereas Xinjiang struggles with the question of identity and religious space. These issues have to be taken to a conclusion by the Xi-Li generation. Importantly, when the last power transition happened, information was scarce and managed and propaganda abundant whereas in the China of 2012 there is Weibo and China has entered an era where “everybody has a microphone”.2
China’s international relations are also in an important and delicate state. There are no easy solutions to China’s territorial disputes in the East and South China seas. China has to control its nationalism and jingoism in its dialogue with the smaller neighbours, even as its military capacity and reach continue to rise. Otherwise it is an invitation for the reinvigoration of the US role in the region which is already underway with the declaration of the pivot strategy. At the same time, Barack Obama’s re-election should reassure the Chinese leadership as Obama is preferable to the hardliner Romney.

Thus, what the new Chinese leaders need to do is amply clear; it remains to be seen whether or not they are actually able to do it. As far as India is concerned, India-China relations will largely continue to proceed on cautious lines. An early visit of Xi Jinping to India after he assumes the Presidency would send the right signals in this regard. At the same time, India-China bilateral ties will also depend on how the second Obama Administration approaches the two countries and the extent to which China under the Xi-Li leadership feels assured of its position in the international order.

1. 1.However, recent attempts at portraying Neil Haywood as a spy might well be an attempt towards restoring Bo Xilai and reducing the prison term of Gu Kailai.
2. 2.One only has to look at how Chinese netizens approached the recent Presidential Elections in the US, with appreciation and enthusiasm expressed over it. Don Weinland for China Digital Times (2010), Yu Jianrong (于建嵘): “Everyone Has a Microphone”, Accessed 5 November 2012, at http://chinadigitaltimes.net/2010/12/yu-jianrong-%E4%BA%8E%E5%BB%BA%E5%B5%98-everyone-has-a-microphone/

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India and the Outgoing Chinese Leadership: Change with Continuity

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R N Das

Source: IDSA

November 14, 2012

A new pantheon of leaders will take the reins of power in the People’s Republic of China in March 2013, and the baton will be handed down to a new regime under the leadership of Xi Jinping, the incumbent Vice-President, who has already been declared the General Secretary of the Communist Party of China and is tipped to step into the exalted office of the President of China. Similarly, the current Vice-Premier Li Keqiang is sure to succeed the present Premier Wen Jiabao. In a system of collective leadership, and more so in a communist system, a change of leadership should not normally affect the bilateral relationship between any two countries since the relationship is interest driven and not governed by personal likes and dislikes although personal comfort level and chemistry between leaders at times do play a role.

It is worthwhile in this context to put on record the achievements in the India-China bilateral relationship during the regime of the outgoing Chinese leadership over the last decade, and particularly of the trio—President Hu Jintao, Premier Wen Jiabao and State Counsellor Dai Bingguo who is also China’s Special Representative to the mechanism of Sino-Indian border talks. Those in the Chinese leadership who will step down also include 71 year old General Liang Guanglie, China’s Defence Minister, who visited India recently. Over the years a degree of comfort level has been established between the leadership of the two countries at the highest political level. It is believed that Prime Minister Dr. Manmohan Singh has met the Chinese President and Premier about 20 times over these years, out of which he has met his Chinese counterpart Wen Jiabao about 13 times in the last few years. Incidentally, Prime Minister Singh is shortly going to meet Wen Jiabao on the occasion of the East Asia Summit being held in Phnom Penh in Cambodia this week. In all probability, this would be their last meeting.

A noticeable aspect of the close political relationship between the two countries is the fact that in spite of changes in regimes the relationship has continued to grow. For example, the landmark visit of Prime Minister Rajiv Gandhi to China during which the Joint Working Group (JWG) was set up was carried forward by Prime Minister Narasimha Rao in 1993 when a Confidence Building Measure—the Agreement on Maintenance of Peace and Tranquillity along the Line of Actual Control in the India-China Border Area—was signed. The 1993 Agreement asserted that the boundary question shall be resolved through friendly consultations and that neither side shall use or threaten to use force against the other. Rao’s visit to China was followed by the visit of President Jiang Zemin to India in November 1996 during which the Agreement on CBMs in the military field along the Line of Actual Control was signed. Six years later, Prime Minister Atal Behari Vajpayee heading the National Democratic Alliance Government paid a visit to China in 2003, which was significant on many counts. Firstly, the two countries recognised that their common interests outweigh their differences. Secondly, they stated that they do not pose a threat to each other and that neither side shall use or threaten to use force against the other. Thirdly, while India recognised the Tibet Autonomous Region as a part of the People’s Republic of China, China by agreeing to open Nathu La Pass through Sikkim for border trade recognised India’s sovereignty over the state. Finally, the two sides agreed to each appoint a Special Representative to explore, from the political perspective of the overall bilateral relationship, the framework of a boundary settlement. The 15th round of border talks in this new framework was concluded in New Delhi in January 2012. The next breakthrough in the relationship was achieved during the visit of Premier Wen Jiabao to India in April 2005. While Prime Minister Singh himself described the outcome of the visit as substantive, Premier Wen called it ‘historic’. During the visit the two Prime Ministers signed a joint statement and agreed to establish a “Strategic and Cooperative Partnership for Peace and Prosperity”. In a suo motu statement in Lok Sabha, Prime Minister Singh said the Joint Statement

“codifies the consensus between us that India-China relations transcend bilateral issues and have now acquired a global and strategic character. The partnership also reflects our desire to proactively resolve outstanding differences, while not letting them come in the way of continued development of relations. This is not in the nature of a military pact or alliance but reflects a congruence of purpose apart from a common perception of world events.”

One of the continuing links with India of the new regime in Beijing would be Ma Xiaotian, who was recently named commander of the Air Force after holding the post of deputy chief of the general staff. Ma had visited India earlier in December 2011 to participate in the Annual Defence Dialogue. At a time when the PLA is assuming a greater say in foreign policy issues, Ma’s acquaintance with India, its leaders, issues and the political, military and diplomatic processes would be useful for greater understanding and cooperation between the two countries.

Though Xi Jinping has visited most countries in the world including the United States and nearer home countries in South East Asia including Myanmar, his visit to India is yet to take place and, now, it looks like it will not take place any time soon. If he were to visit India soon after assuming the office of President, that will certainly send a positive signal. The only important Indian political leader whom he has met so far is the former President of India Smt. Pratibha Devisingh Patil in 2010. Besides, National Security Adviser Shivshankar Menon had a meeting with him in 2010. The visit of Vice-President of India Mr. Hamid Ansari to China is also yet to take place. It is likely that once the leadership issue in China settles down, it would be appropriate for the Vice-President to pay a visit to China and extend an invitation, on behalf of the President of India, to President designate Xi to visit India at a mutually convenient date. It would also be appropriate on the part of Defence Minster A. K. Antony to return the visit of his counterpart to India. New Delhi should proactively engage the new Chinese leadership in China. Here, some suggestions that New Delhi could consider are:

1. For better coordination, the existing institutional mechanisms and dialogue structures need to be further strengthened at various levels including political, diplomatic, military and bureaucratic.
2. There should be an institutional arrangement for annual meetings between the Foreign Ministers of the two countries, as envisaged in the 2005 agreement. At present, the two Foreign Ministers meet only occasionally, and sometimes on the margins of multilateral meetings.
3. In future, there should also be annual meetings between the two Prime Ministers.
4. The idea of a US-India-China trilateral needs to be pondered over.
5. To have trust and transparency, the outcomes of the trilateral meetings among the United States, Japan and India should be shared with China by the three countries.
6. To generate better understanding, there needs to be an exchange of Parliamentary delegations and exchange of the leaders of political parties. Now that the Chairmen of India’s two Houses of Parliament are former diplomats, it is all the more appropriate for an exchange of Parliamentary delegations.

Trade in the ghosts of 1962

By Ravi Bhoothalingam
The Hindu

  

1

With the growing power and influence that India and China exercise on the world stage, business people in both nations must take the lead in visualising a new relationship

Fifty years have passed since the short but ill-fated war between India and China. The anniversary has already prompted several military men, diplomats and politicians to share their views. This is only natural, as they were indeed the principal actors in that tense drama in the high Himalaya. However, a view from a perch less privileged with insider knowledge, and more distant from the action, may also yield some insights. It is with that objective that I offer these thoughts, viewed from the standpoint of a management professional who has been involved with business and industry for over four decades.

Victory and defeat, success and failure, advance and retreat are all part of the rhythm of life. Business people know this all too well since they deal with risk every day, and feel the results through the ebb and flow of their fortunes. Risks in business are manifold. Less than one in 20 of new product launches, for example, turn out successful. Even smaller is the probability of hitting on a “blockbuster” product. The best of recruitment methods, interview panels and psychological techniques cannot guarantee that those selected as employees will not fall by the wayside later. Yet, risk cannot be evaded as it constitutes the very lifeblood of enterprise. What is important is to learn how to manage it. A truly capable business manager would demonstrate poise in adversity, an ability to study and learn from reverses, and the avoidance of hubris in times of triumph.

Closed archives

But can learning from business reverses — so different in magnitude from the national humiliation and tragedy of the Sino-Indian war — apply to the 1962 case? Indeed, yes, for the difference lies in scale and not in kind. Death through an industrial accident is no less a tragedy than through combat in distant mountains. The displacement of refugees through war and their loss of livelihoods are no more wrenching than jobs lost through factory closures and bankruptcies. How to experience and learn from defeat may, therefore, hold common lessons.

Learning from a setback is easier said than done. Confronting mistakes is painful, unpleasant and challenges one’s self-confidence. So, critiques of poor performance often lapse into easy self-justifications and excuses, however well disguised these may be as astute analyses. To get to the heart of the matter requires openness and a willingness to undergo painful introspection, backed by a determination to get at the “truth,” so that future generations might learn from our mistakes. Have we truly done this with 1962? That our official archives are not openly accessible provides a dusty and discouraging answer.

Managing a setback

Successful entrepreneurs and well-managed companies manage a setback through analysing both its content and process. In the “content” phase, they distinguish between two distinct sorts of human errors. What we may call “Type I mistakes” occur when the disastrous event is caused by a lack of knowledge or know-how, or through lapses of motivation, e.g. carelessness, shortcuts, poor application, etc. The second type of mistake — the Type II error — is caused not by shortages of knowledge or motivation, but by lapses in business judgement. Good businessmen distinguish between the two types of mistake even though their consequences may be similar.

Those who commit the first type of error are certainly taken to task. But, in well-run organisations, their immediate supervisors are punished more severely. For theirs was the responsibility to equip the people in their charge with the skills and the attitude to do the job well. However, the approach to Type II mistakes is quite different. A company that punishes bona fide errors of judgement will never build a cadre of entrepreneurial managers. Still, an infinite tolerance for well-intentioned but disastrous decisions can drive the best enterprise to the wall. A good company approaches this dilemma through careful career planning, gradually building the risk-taking ability of its people, whilst limiting the damage at any one time.

Yet, it is the “process” stage of this analysis that is crucially important. The sequence of examining one’s errors and learning lessons happens in well-run companies through a highly cathartic method of individual and group reflection, sometimes moderated by experts, on what went right and what went wrong. It is a painful experience as it exposes others and one’s own follies, omissions and attitudes. This cleansing process helps the participants understand and accept what went wrong, and to energise them to rectify the errors. Even more importantly, it stimulates a creative search for new directions and new vistas. Often, breakthroughs happen as a result.

In Europe and South Africa

The literature of business is replete with cases where enterprises that have gone through this cycle have radically changed their business model and their strategies, attaining great success. But so have countries. Take Germany after 1945. A shattered nation resolved to rebuild itself whilst simultaneously shunning militarism and revenge. Germany reconciled with her age-old enemy, France, and together they laid the foundation for what later became the European Union. Most difficult of all, Germany expressed true remorse and contrition to the Jewish people for her actions during 1933-1945. The contrast with an earlier, defeated Germany in 1918, with its bitterness and revanchism, is striking. Another example is South Africa. If Nelson Mandela’s inspired “Truth and Reconciliation Commission” had not happened, what would the wounds of apartheid have wrought in a free, South African state?

Thus, a genuine search for answers to the questions posed by 1962 means a lot for India. The correctives, when identified, to the Type-I and Type-II errors of 1962, will in themselves be important. But what will be crucial, and what we might miss in the absence of an authentic process of creative introspection, could be the formulation of a new relationship with China for the 21st century. Here again, examples from business point the way.

Business rivals rarely view each other as enemies. They might compete ferociously in the marketplace, yet they can and do cooperate in many other areas which benefit the industry as a whole. For example, in developing raw material sources, or improving educational facilities for future employees. A favourite is to lobby government collectively to press for pro-industry policies. Companies of standing generally respect and do not demonise the opposition, though their formations battling in the marketplace do give vent to their feelings in no mean measure! Such contradictions are second nature in business — indeed, businessmen could be the true disciples of Mao Zedong, adept as they are at “the correct handling of contradictions.”

As populous, continent-sized countries, with aspirations to provide their peoples with the basics of a decent living, both India and China face huge challenges in their domestic spheres. Their growing power and influence draws attention regionally as well as globally. So it is only realistic that their relationship with each other will be complex and multifaceted. Great opportunities will coexist alongside problems and irritations. So a return to the naïvety of the 1950s bhai-bhai type would be foolish. But so would clinging to the Westphalian “realist” notion of the “inevitability of conflict between rising powers.” That would only bring joy to the international arms merchants whilst doing a great disservice to the common man. Left to themselves, I suspect that business people in both countries would rather focus on the huge opportunities and benefits in the potential reconnection of their two giant economies, in the sharing of common concerns, and in cooperative approaches to innovations and new projects where Sino-Indian collaboration could benefit the entire planet. Could the business people of both countries take the lead in breaking free from the past and visualising a new relationship between China and India?

Is this a step too far, an “impossible dream”? Perhaps not. Businessmen know that whilst having one’s feet planted firmly on the ground, without daring to dream there can be neither innovation nor transformation. If we can exorcise the ghosts of 1962, perhaps this may be the lesson that emerges out of that tragedy 50 years ago.

(Ravi Bhoothalingam is a former president of the Oberoi Group of Hotels and travels extensively to China.)November 15, 2012