August 31, 2017 10:00 am JST

Detente in the borderlands for India and China

Agreement to withdraw troops in disputed region eases fears of a bigger conflict

KIRAN SHARMA, Nikkei staff writer

Indian Prime Minister Narendra Modi, left, and Chinese President Xi Jinping, seen here in October 2016, are expected to meet on the sidelines of the BRICS summit in Xiamen, China, in September. © Reuters

NEW DELHI India and China have agreed to end a tense border standoff that ran for over two months, their longest such confrontation in decades and one that had raised fears of a bigger conflict spilling over to trade and economic ties.

The announcement of an "expeditious disengagement" of troops in the disputed Doklam region was made in a statement by India's External Affairs Ministry on Aug. 28, ahead of Prime Minister Narendra Modi's visit to Xiamen in China to attend the ninth annual summit of the BRICS countries (Brazil, Russia, India, China and South Africa) on Sept. 3-5.

The two nuclear-armed countries, which have long been fractious neighbors, share a 3,500km border and in 1962 fought a war over it. The latest dispute began on June 16 when, according to New Delhi, a Chinese People's Liberation Army construction team entered the Doklam plateau at a strategic junction -- where the boundaries of India, China and tiny Bhutan meet -- to build a road, a move it said had "serious security implications" for India.

Bhutan, which has a territorial dispute with China over Doklam, sought help from its close ally India, which sent its own troops to the region on June 18 and told the Chinese to withdraw. China, for its part, accused Indian troops of crossing into its territory and demanded that they pull back.

Despite the tensions, the two sides kept diplomatic channels open during the standoff. The Indian ministry said in its statement that an "expeditious disengagement of border personnel at the faceoff site at Doklam has been agreed to and is ongoing."

CHANGE IN THE AIR Until recently, there had been no sign of the tensions easing, with analysts fearing trade and economic ties between the two countries would suffer. China is India's biggest trading partner. Total bilateral trade between the two stood at $71.5 billion in the fiscal year that ended in March. That trade is heavily tilted in Beijing's favor, with its exports to India coming to about $61.3 billion.

Behind the scenes, China has been trying to win over Bhutan. A government source told The Nikkei in early August that Beijing was offering its tiny neighbor $10 billion in economic assistance to soften its stance. The package includes a grant, low-interest loans and direct investment. Sources say that since the offer, Bhutan has toned down its allegations that China is violating its territorial claims.

With India's statement on "disengagement," the two Asian giants will likely be on a firmer footing ahead of the Xiamen summit, where Modi and Chinese President Xi Jinping are expected to hold bilateral talks on the sidelines.

Although India's Aug. 28 statement gave the impression that both sides were withdrawing troops from Doklam, Chinese Foreign Ministry spokeswoman Hua Chunying was vague on the subject at a Beijing press conference the same day. When pressed about whether there had been a mutual withdrawal, she would only confirm "India's withdrawal of personnel and equipment which was crossing the border" from the contested area in Doklam, and said the Chinese side "will continue to safeguard its territorial sovereignty according to historical boundary treaties."

Hua did, however, stress the need to maintain peace and stability in the border region.

As for the somewhat conflicting statements, analysts said China and India targeted their comments at domestic audiences and that the issue had likely been resolved.

Shekhar Gupta, a political analysts, tweeted: "No winners or losers in #Doklam, whatever either side's spin. If Chinese keep patrolling but stop road-building, it's a return to status quo."

Yuji Kuronuma, Nikkei staff writer, contributed to this report.

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