Why China seeks better relations with India

China and India fought a brief war over their disputed Himalayan borders in 1962

On Sunday, India and China began pulling back troops from disputed territory near their ill-defined border in the Ladakh region of the Himalayas after a stand-off lasting nearly a month. Senior Indian journalist Subir Bhaumik, who was travelling in China last week, reports on the mood in the country.

China has much more to do with India than fight over a de facto border where, as former Indian Prime Minister Jawaharlal Nehru had said, "not a blade of grass grows".

"We have a problem with the border, no denying it. But we want it solved. That may take a while, but we do not want our relations to suffer," says Kong Can, chief of the Development Research Centre in China's south-western Yunnan province and a senior Communist party official.

Kong Can wants border trade with India to flourish, the way it has with some of China's other neighbours.

China is already one of India's top trading partners: the two sides have agreed a new $100bn (£65bn) bilateral trade target for 2015, up from over $66bn in 2012.

"The volume of trade will go up further if we can develop border trade," said Kong Can.

'Huge trading bloc'

With more than a third of the world's population living in India and China, the two countries can be "one huge trading bloc", says Li Zhu of the Yunnan University of Finance and Economics.

Yunnan is China's gateway province, crucial to its strategy to forge close trade and cultural ties with neighbouring countries in south-east and South Asia.

Yunnan is hoping for Indian investments

"From Yunnan we are developing a whole network of highways, rail links and waterways to Vietnam, Laos, Thailand and Burma," said Kong Can's colleague, Yang Ye.

He said China was also keen on reopening the old Stillwell Road, through which the allies used to send supplies to China during WWII.

The road begins in India's tea-producing state of Assam. It passes through the dense forests of the neighbouring state of Arunachal Pradesh and Upper Burma's Kachin state before reaching Yunnan.

But India has security reservations about reopening the road.

China, Mr Yang says, is keen to develop transport links from Yunnan to eastern India and Bangladesh.

Also, Kong Can says, China seeks "Indian investments in Yunnan, mainly in [the] pharmaceutical and information technology [industries]". He would be also happy to see an Indian consulate in the city of Kunming.

Beside boosting trade and business ties, China seeks closer relations with India for other reasons.

'More nuanced'

If Sino-Indian ties worsen, India could well be firmly drawn towards the US, a possibility that worries Beijing considerably, say analysts.

"If we have bad relations, there are many to take advantage," says Zhou Yunxiang, who leads a Yunnan research group in sub-regional studies.

China-watcher Binoda Mishra of the Calcutta-based Centre for Studies in International Relations and Development says that Chinese policy towards India "appears to be more nuanced than many imagine in India".

"Military commanders may push hard on the border to seek some tactical advantage but the top leaders in Beijing are aware of India's importance as a growing market and a balancing factor in Asia," he says.

The tension points will remain: the disputed border, Tibet and much else.

China has a domestic nationalist constituency to address, but, unlike in India, the 1962 month-long border war is hardly in the public memory.

"We have a huge problem with Japan for historical reasons but not with India. We like you people," Yunnan university student Li Hsun told me.