SINGAPORE Trade between India and China is booming but diplomatic ties have become increasingly fraught over an unsettled border, the disputed Kashmir region and the competing global aspirations of the world's most populous nations.
China is seeking to expand its influence in South Asia and could use India's "soft underbelly" of Kashmir to box it in, a newspaper quoted Indian Prime Minister Manmohan Singh as saying, a rare public criticism of his giant neighbor.
WHAT IS THE LATEST PROVOCATION?
Last month China refused a visa to an Indian military general based in the disputed region of Kashmir, prompting New Delhi to suspend defense ties, a defense source and local media said. Defense relations between the two countries, which fought a brief border war in 1962, are in any case limited to visits by military officials and the occasional, low-level exercises, nowhere near the scale and sophistication of the wargames that India conducts with the United States each year.
Beijing had for decades maintained a low profile on Kashmir, where Indian forces have been trying to quell a 20-year separatist revolt that New Delhi blames on Pakistan. But China signaled a more assertive policy last year when it started issuing different visas for residents of the territory.
India, which considers Kashmir to be its territory, is extremely sensitive to any foreign power treating the area as a disputed region, which Pakistan also claims in full. Last year, India bristled at a U.S.-China joint statement calling for better India-Pakistan relations.
WHAT ARE CHINA'S CONCERNS?
Beijing's longest running grudge with India is its granting of asylum to Tibetan leader Dalai Lama, who fled to India in the 1950s following a failed uprising, setting off a chain of events that eventually led to the war between India and China. Beijing, which brands the Dalai Lama as a separatist, worries that Tibet's spiritual leader is using his base in the northern hill town of Dharamsala to keep separatist fires alive.
Last year, China reacted angrily to New Delhi's decision to allow the Dalai Lama to visit the border state of Arunachal Pradesh disputed by China. For the first time in years, it also criticized a visit by Prime Minister Singh to the state, suggesting that it was raising the stakes there.
Arunachal Pradesh in the eastern stretch of the Himalayan border and Aksai Chin on the western end are two large, contested areas. While India controls Arunachal, China holds the remote Aksai China, and despite rounds of fitful talks over several decades, the two are nowhere near a resolution.
WHAT ARE THE GEOPOLITICAL RIVALRIES?
China is concerned about India's growing strategic ties with the United States. Several analysts consider a 2008 civilian nuclear deal as a turning point in ties not only between India and the United States, but also indirectly impacting relations with China. Under the deal, Washington ended India's nuclear isolation, granting it access to nuclear fuel and technology while continuing its nuclear weapons program. Washington then rammed the pact through the Nuclear Suppliers Group, despite reservations from several countries including China which saw it as part of a U.S. move to build India into a strategic counterweight.
Beijing, in retaliation, has offered to build new nuclear powered reactors for Pakistan, despite global concerns of nuclear proliferation.
The two countries also compete for global resources, especially energy supplies, to power their growing economies.
WHAT ABOUT REGIONAL RIVALRIES?
Concern has also mounted in New Delhi over growing Chinese strategic assistance to not only Pakistan, but also Sri Lanka, Bangladesh and Myanmar, countries India has regarded as part of its sphere of influence. Beijing is helping build ports in Gwadar in Pakistan and Humbantota in Sri Lanka, as well as in Myanmar and Bangladesh in what seen as a "string of pearls" strategy to build a network of port facilities across the Indian Ocean, mounting a challenge to the Indian and U.S. navies, the two big powers there.
The strategy has also raised Indian fears of encirclement and the worry that Beijing wants to pin down India within South Asia, crushing its global aspirations. Some Indian officials, however, have said some of those fears of expanded Chinese presence in the Indian Ocean are overblown.
(Editing by Miral Fahmy)