Edward Chiu knows how big the cultural divide can be between countries, even if they share a border. Chiu is a Sino-Indian. In the heart of New Delhi, at Connaught Place, the 30 year old makes polo and riding boots that are coveted the world over.

"I feel predominantly Indian but of course I’m also Chinese,” says Chiu, who grew up speaking Hindi and Mandarin with his family.

Chiu is a rarity. Of India’s 1.2 billion population, it’s estimated that there are only about 10,000 Chinese living here -- even though India and China are neighbors. The Indian population in China is just as small. Chiu is amazed that people who are geographically so close know so little about each other.

Though the people of India and China may still be keeping prejudices alive that have divided the two countries for decades, a rapprochement is taking place on the political level. In recent years, New Delhi has signaled that it may align with its former military enemy and current economic competitor in its battle for shares of the world market and to increase Asia's military clout. Together, the countries aspire to move up into the league of rich nations. Last year, Chinese Premier Wen Jiabao negotiated an economic cooperation partnership with the Indian government which would see an increase in trade from the current $13 billion a year to $20 billion by 2008.

A declaration of intent states that more cross-border businesses, roads, rail and flight connections should be created. Cooperation should also be strengthened "in the development and use of oil and gas resources in third countries." If these new Asian friends successfully implement their plans, a partnership that first caught Europe and the United States by surprise could soon fuel fear in the West. The most ambitious idea being floated in Beijing and New Delhi is that of creating a joint Sino-Indian common market based on the European model. If that effort ever prevailed, it would result in the world's largest economic unit, with around 2.5 billion consumers, one-third of the world's population.

The mood between New Delhi and Beijing hasn't always been as cooperative as it is now. In 1962, after the start of the Cold War and a brief period of alliance through their anti-imperialist stances, China and India went to war. China had secretly changed the course of the border it shares with its southern neighbor to its own advantage and occupied the sparsely populated Indian region of Aksai Chin. India reacted with military force and was humiliated. It was a low point in relations between the two countries, and the border dispute remains unresolved today.

When India conducted tests by detonating five nuclear bombs in May 1998, relations threatened to sour once again. At the time, India's then defense minister, George Fernandes described China as India's "potential No. 1 enemy." Despite Fernandes's finger pointing at Beijing, it was Pakistan that felt it was the target of the aggressive message and reacted with its own nuclear tests. Pakistan has gone to war with India three times since independence from the British monarchy and the division of the subcontinent in 1947. Outrage in Beijing over the atomic tests calmed down when the Chinese realized that the worldwide interpretation of the exchange of blows was that of an escalation of the India-Pakistan conflict. And Fernandes's statement was shrugged off as a gaffe.

Beijing watched India’s rise to a regional power courted from all sides like a hawk. It also began making attempts at political rapprochement. Long distrusting of China, the Soviet Union, and later Russia, had always supplied India with more modern weapons than it sold to Beijing. And Japan, playing the role of China's archenemy, has maintained traditionally friendly relations with India. New Delhi and Tokyo have also provided bilateral support in their efforts to obtain a permanent seat on the United Nations Security Council.

Washington's role

But it is Washington's growing enthusiasm in recent years for the Asian subcontinent that has proven most unsettling for China's Communist Party. During the spring of 2000, Bill Clinton became the first US president to visit India since 1978, and his trip helped breathe new life into the American-Indian friendship. Together with former Indian prime minister Atal Bihari Vajpayee, he signed a "vision paper" aimed at creating a “close and qualitative new relationship between the world’s biggest democracies." "In many respects, the 21st century will depend on the success of our cooperation for peace, prosperity, democracy and freedom,” it said. It is a vision which China's communists would love to prevent.

The Chinese were also astonished that the US, in contrast to its anger at Iran and North Korea for pursuing nuclear weapons programs, overlooked India's breach of the Non-Proliferation Treaty and other international regulations in 1998.

And by assuring that his country would continue to sell arms to New Delhi as well as to provide assistance with India's civilian nuclear energy program, US President George W. Bush also helped to liberate India from any reputation of being a nuclear pariah state. In that sense, Bush is continuing down a path that began with Clinton.

Following the 9/11 terrorist attacks, formerly non-aligned India has gained in strategic importance as an ally for the US. Together with Prime Minister Manmohan Singh, Bush affirmed in Washington last July, “to develop relations between both countries to a global partnership." In a joint statement, the leaders said the aim of the partnership was to promote "stability, democracy, prosperity and peace throughout the world." India is a “responsible state with advanced nuclear technology.”

In return, Singh praised Bush during his Washington visit in July for his "decisiveness and leadership in the battle against the challenges of international terrorism" and emphasized common values such as "the openness of our societies and economies."

An anti-China undercurrent?

In China, a slight anti-Chinese undercurrent is sensed all too clearly in this harmonious US-India alliance. "Without a doubt, the US policy, especially, has components that are aimed against China," Kay Möller of the German Institute for International and Security Affairs recently said in Berlin. "The dramatic rapprochement between the US and India is very similar to an alliance." There is also a perception in Beijing that China is being encircled by US forces, who are now stationed in central Asia, Japan, Afghanistan and Pakistan.

Meanwhile, India looks to China with envy over the country's breathtaking development. New Dehli's economy is growing by 7.5 percent annually, but Beijing is chalking up an impressive 9 percent in growth. In India, the country of monsoons, one would search in vain for the ultra-modern model cities found in China such as Shanghai. Foreign investors also appear to experience more difficulties when doing business with India than with its northern neighbor. The same applies to politicians. Former German Chancellor Gerhard Schröder visited China six times during his two terms in office, but he only traveled to India twice. He even risked votes at home for his efforts to lift the EU weapons embargo against China in the spring.

In a recent essay, G. P. Deshpande, Professor for International Politics at Jawaharlal Nehru University in New Delhi, wrote that India still has a strategic advantage over Beijing. "China never had a democratic tradition," he wrote. "Politics there were always authoritarian and even in history there is a tradition of centralization." Mao’s dictatorship reversed the country’s development by decades. But Deshpande, one of India’s most well-known Sinologists, also emphasized the countries' common characteristics: "India and China are both two huge, ancient countries; they are neighbors and they are the two most populous countries in the world. You could continue the list of things they have in common."

Some less educated Indians prefer to talk only of the differences. "The Chinese like to devour everything that moves," says Hanendra Paswam, a rickshaw driver in New Delhi who is proud of the country’s mainly vegetarian cuisine. He also mentions the death sentence in China: "They have the death penalty and kill people like flies." What annoys Paswam the most is that "they don’t have a proper religion. Those who only think about making money can’t be good people.”

Indians also think about making money. But so far, they have been far less successful at it than the Chinese. For many years, people generally assumed New Delhi could hold its own against China. India stocked up its military defenses after its humiliating defeat by China in 1962, and from an economic viewpoint, the fact that most Indians could speak better English than the Chinese seemed like a major advantage. From a political viewpoint, the competition pitted the "world's biggest democracy" against the world's biggest Communist regime.