The high road to prosperity

A bulldozer at Nathu La works to re-open the historic pass between India and China. Picture / Reuters

CHINA - High in the Himalayas, a barbed wire fence snakes its way across a desolate landscape and on most days, a thick, white, freezing cloud descends across the peaks.

It is hard to see anything, but now and then a figure looms out of the mist, dressed in combat fatigues. It is like a scene from some old war film.

This is where Chinese and Indian Armies have faced off across a border that has been closed for 44 years. But now there is frenetic activity on both sides of the fence.

Bulldozers are clearing land. Prefabricated warehouses have gone up. The world's highest custom house is back in business: the border is about to reopen. This is the return of the Silk Road.

The narrow road that threads its way through the hills up to the Nathu La is barely motorable, better suited to mules than trucks.

For 58 years this road was the main artery of trade between India and China. And now Delhi and Beijing are hoping that here the Silk Road, which once accounted for a staggering proportion of the world's productivity, can be reborn.

Talks are under way between India and China in Lhasa, the Tibetan capital, on reopening the border crossing at the Nathu La pass.

If all goes according to plan, it could be open as soon as Friday. And the Sikkim state government on the Indian side is predicting that by 2010, total trade across Nathu La could be worth US$1 billion ($1.6 billion).

Even if observers think that figure is a little ambitious, there is no mistaking the significance of what is going on at Nathu La. At this lonely mountain border post, the two fastest-growing economies in the world meet. And after decades of hostility, suddenly they are hungry to invest in each others' markets.

In the 1750s, China and India together produced a remarkable 57 per cent of the world's manufacturing output. For centuries, the Silk Road was one of the most flourishing trade arteries in the world connecting China to India, the Middle East and Europe.

But in 1962, after a border war, the Silk Road was closed and trade between the two Asian giants slowed to a trickle.

Not any more. Glimpsing the huge economic potential in co-operation, China and India have shrugged aside their decades-old rivalry.

Even as US President George W. Bush is courting India as a strategic ally against China, Delhi is cosying up to Beijing economically.

They have marked this year as Sino-Indian friendship year, a tribute to a booming trade relationship worth US$10 billion last year - and that was without a direct land crossing between the two countries.

It represented a rise of nearly 38 per cent from the previous year, and is expected to rise this year, data from China's Ministry of Commerce shows.

In India, the talk is of "Chindia", an economic region with vast domestic markets, where China's manufacturing complements India's IT sector.

The border between China and India lies along some of the most impenetrable mountain terrain in the world, and although there are other border crossings, they are remote and more the stuff of adventure than trade. Which is where Nathu La comes in. Until the beginning of the 20th century, the Silk Road ran from China across Nepal to India.

But in 1904, the route across Nathu La was opened up.

Lord Curzon, the British Viceroy of India, became increasingly concerned that Russia could exploit Chinese weakness to invade Tibet and threaten colonial India's borders.

A decades-old report by a Deputy Commission in Darjeeling spoke of the route into Tibet via the remote Himalayan land of Sikkim.

And so Lord Curzon sent for Colonel Francis Younghusband, an explorer, adventurer and mystic who could have walked out of the pages of a Victorian novel. Younghusband was dispatched to negotiate with the Tibetans - with a heavily armed expeditionary force to back him.

The journey across the mountains was so cold that ink froze. Younghusband failed in his mission, but managed to machine-gun down 900 Tibetans along the way.

He did succeed in opening up the one practicable direct land route between Tibet and India - a route that was quickly taken over by trade.

Traffic across the Nathu La Pass accounted for 80 per cent of the total border trade volume between the two countries in the early 20th century.

That was until 1962, when it was closed. For decades, it became a symbol of mutual Chinese and Indian hostility. The once flourishing road fell silent. Troops glowered at each other. The area became deserted as inhabitants fled to more peaceful areas.

Once a week, postmen exchanged letters from mountain herders on either side of the border at the fence.

Today the atmosphere at Nathu La tells a different story.

Tourists trek up to the border, and Indian and Chinese troops pose near each other for photographs.

A giant sign on the Indian side provides basic Chinese greetings to call across to the Chinese soldiers on the other side.

India is predicting a tourist boom. The reopened border will provide a direct route between the former Himalayan kingdoms of Tibet and Sikkim.

It will also allow tourists to travel directly from Tibet to the great Buddhist shrines in Bihar, in India.

Already, the newly completed trade zone has been outfitted with tourist infrastructure, including the world's highest cash point, a cyber-cafe and long-distance telephone lines.

"The reopening of border trade will help end economic isolation in this area and play a key role in boosting market economy there," Hao Peng, the vice-chairman of Tibet, said.

The Indian Government is equally pleased.

"The resumption of border trade is a great historic event, not only for enlarging trade, but also for greater relations between the two great countries," said Christy Fernandez, additional secretary of the Indian Department of Commerce.

But the route is not without its political implications. The reopening of the border has raised fears that Tibet's desire for more autonomy might be crushed by the loftier ambitions of two of Asia's superpowers.

In Sikkim, too, there are concerns. Sikkim was an independent princely state with treaty agreements with British colonial India, and that arrangement continued after Indian independence - until 1975. But after a widespread rural revolt against the landowning monasteries and a referendum India took control.

There is growing discontent among the native Sikkimese Bhutia-Lepcha community who, like the Tibetans, are concerned at the influx of "mainlanders" into their lands. Today they account for just 21 per cent of the population of Sikkim.

"Our main concern is being outnumbered in our own homeland," a local politician, Tseten Tashi Bhutia, told the Indian Express. "How long can we tolerate this? How long before AK-47s are taken up?"

China has long castigated India for the claim that the Himalayan kingdom of Sikkim was an independent country "annexed" by India in 1975.

That message will probably change now, as will India's tough line on Tibet, even though Tibet's spiritual leader, the Dalai Lama, has lived in exile in Dharamsala in India since 1959.

Geographically, it makes sense for Tibet to use the pass. Tibet has to import and export goods via the port of Tianjin, which is in the northeast of the country.

Chinese Communist troops entered Tibet in 1950 and Beijing sees itself as a liberating force which freed the locals of the backward yoke of a theocracy, bringing prosperity and doing much to open up the famously secretive region to modern ways.

Beijing also points to marvels of engineering, such as the Qinghai-Tibet railway, the world's highest, which was completed in October and is due to start operation on July 1.

Although some critics say it will help swamp Lhasa with the dominant Han Chinese ethnic group, the government in Beijing sees it as a major opportunity for Tibet.

Tibet, which last year had a foreign trade volume of US$109 million, will benefit from resumed border trade, Hao Peng said.

"If only 10 per cent of Sino-Indian trade goes through the pass it means at least more than US$1 billion dollars a year," he said.

Qiangba Puncog, chairman of the Tibet Autonomous Regional Government, pointed to economic growth of more than 12 per cent last year in Tibet - above the Chinese average - as a sign of how well the region was doing.

For India, the reopening of the road is first and foremost an opening into China's lucrative market.

But the geography also presents a way to improve the economy in eastern India, much of which has been left behind as economic powerhouses Mumbai (formerly Bombay) and Bangalore forge ahead.

Kolkata (Calcutta) is at last beginning to show signs of emerging from its poverty, but the reopened border could present it with an opportunity for regeneration as a commercial port.

And outside Kolkata, eastern India remains desperately underdeveloped.

While gleaming new office buildings go up in Bangalore, in rural West Bengal people still starve to death.

It is in the east that India's Maoists have seized control of land, riding on discontent and poverty.

But, as ever in India, the project may be held up by slow infrastructure.

With the proposed reopening just a week away, the Indian Express reports that the authorities had only just brought the road to the same level as on the Chinese side, and the Border Roads Organisation had admitted that it could not widen the single-lane road to two lanes until 2010.

- INDEPENDENT