The IPCS, in collaboration with the Konrad Adenauer Foundation (KAF) organized the annual Trilateral Dialogue between India, China and Germany at Hotel Uppal's Orchid, New Delhi from 12 - 13 March 2007. China was represented by a delegation from the China Reform Forum headed by former Ambassador Zhou Gang, Councilor, China Reform Forum. The German delegation was headed by Dr. Karl A. Lamers, Member of German Parliament and Deputy Chairman of its Defense Committee. Leading experts on China and Europe from India participated at the conference. Details of participants are given below.

In the first session on Asian Security Issues, former Indian Foreign Secretary and Ambassador to the United States, Lalit Mansingh, making the Indian presentation stated that a new struggle for power was taking shape in Asia, principally between the current hegemon, the US, and the emerging challenger, China. Since neither was openly confrontational, most of the powers in the region, including India, were pursuing a policy of "strategic hedging." The outcome of this new Cold War was unpredictable. In addition, Islamic terrorism and the proliferation of weapons of mass destruction were concerns across the Asian region. Access to sources of energy, minerals, water and control over the sea lanes were likely to emerge as causes of future conflicts in Asia. Prof. Liu Jianfei noted that there were unprecedented opportunities for Asia to push for peace, stability and development especially in view of the fact that relations between major powers in Asia had become more cooperative. Some regional multilateral security regimes had been set up and Asia had the fastest economic growth in the world. At the same time the region faced challenges from Cold War legacies, which continued to influence stability in Asia as also the spectre of terrorism. The maintenance of regional security however, accorded with the core interests of both China and India and the two countries could play an important role in maintaining regional security. Dr. Karl A Lamers looked at the EU role in Asian security matters including Iraq, Iran and Afghanistan and questions of terrorism, failed states and rising energy needs. He stressed the need for a multilateral approach that the EU had adopted and especially NATO's role in Afghanistan. While Germany enjoyed good relations with China, it was obvious that its rise posed several challenges on human rights and the environment among others. Lamers also stressed that regional organizations such as the ASEAN, SAARC and the SCO had to work together to contribute to security in the region and the world.

Session II on Developments in West Asia - Implications for Global Security, saw the Chinese speaker Mr. Rong Ying, focus on Iranian nuclear issues and its development over the years. He sketched out three scenarios - an escalation of pressure via the UNSC, a military strike by either the US or Israel and direct talks between the US and Iran - and how any of these might come about and the implications thereof. Ambassador Chinmay Gharekhan, the Prime Minister's Special Envoy for West Asia and Middle East Peace Process talked of the conflict in Iraq, and the possible roles of Iran and Saudi Arabia in bringing about an end to the crisis. He also noted that Shia-Sunni tensions posed a big threat not only to the region but also outside it. Iran was, however, mainly concerned with regime survival at present and not the spread of Shiism. Ambassador Gharekhan also doubted the possibility of the break-up of Iraq into three separate entities. He also called on Europe to play a more active role in West Asia. The German speaker, Mr Erich Fritz, touched on the Israel-Palestine crisis, the Iran nuclear issue, terrorism and stability in Afghanistan. He especially focussed on ways and means to ensure that farmers in Afghanistan reduced their dependency on poppy cultivation as a means of livelihood.

The third session, Towards Multilateralism and International Institutions, saw Prof. Stefan Bierling, differentiate between the American, Chinese and European understandings of multilateralism. Prof. Bierling also outlined the major influences on foreign policy decision-making in Germany. He noted that the reason that multilateralism and the role of international institutions were currently so prominent was primarily due to the fact that one power - the US - overshadowed all others in the world. Despite its blunder in Iraq, for the foreseeable future, the US would remain the strongest power on the planet in terms of both hard and soft power. Therefore, other powers would try to tie the US down within a network of international institutions. Col. Dr. Wang Guifang in her presentation took up the case of the Shanghai Cooperation Organization (SCO). Initially founded as a mechanism to solve the decades-old border disputes among its member states, the SCO in the last five years has seen a deepening of its structures and a continuous expansion in its scope and functions. As a multilateral cooperation mechanism covering East Asia, Central Asia, West Asia and South Asia, the SCO has improved mutual understanding among member nations and enhanced regional security in Asia. Former Indian Ambassador to Germany and France, T C A Rangachari, focused on the role and perceptions of the United Nations in recent years. The UN had scored many successes over the years despite its inability often, to prevent unilateral actions by powerful member states. The UN's successes were not limited only to diplomacy but also extended to economic and social issues such as the Millennium Development Goals. It was imperative, however, that the highest decision-making bodies of the UN became more representative in nature. Developing countries had to make their numbers count.

Trade and Economic Issues was the subject of the fourth session and Mr. Anjan Roy, Advisor - Economic Affairs and Research, FICCI, in his presentation on "Germany's Evolving Economic Relations with India and China," compared the positions of the two Asian neighbours in their trade with Germany in terms of the key items of trade and of sectors targeted for investment. He noted that China's trade with Germany was nine times larger than the trade between India and Germany. India and China also competed for the same market in Germany in case of commodities such as textiles, leather and leather products, metal products, chemicals, machinery and gems and jewelry. China also accounted for four times the FDI channeled into India. The latter was however, slowly emerging as an alternative investment destination in Asia. Prof. Wu Zhonghu, focused his presentation on the issue of greater cooperation within Asia in the energy sector. With increasing demand for energy arising out of rising global economic growth rates, and consequently rising, it was necessary for developing countries to cooperate in international investments in energy. There needed to be a focus on improving the security of oil supply, diversification of sources and energy conservation. In his presentation, Mr. Erich Fritz, noted that while the US remained the undisputed engine of the world economy, the IMF expected the growth to shift to the EU and China. Focusing also on the future of the world trading system, Mr Fritz noted that the Doha round of WTO talks was unlikely to succeed. >From the German perspective, comparing China and India, it was obvious that the latter had a lot of catching up to do especially in the area of international trade. While Germany had invested in Chinese SMEs, it could do more in the area of clean technology. With respect to India, Germany could help with investments in infrastructure, possibly with public-private partnerships.

In the final session on Emerging India-China Relations, Prof. Brahma Chellaney of the Centre for Policy Research, New Delhi, noted that while India and China were old civilizations, they were new neighbours, becoming so only with the disappearance of the Tibetan buffer in 1950. Comparing the recent rise of China and India, he contrasted their economic bases and the models of growth that the two countries had adopted. Prof. Chellaney also contrasted the military capabilities of the two countries and their defence budgets. While China's budget witnessed the highest rise in the world over the last two decades in terms of percentage of national GDP, India's defence budget had actually declined as a percentage of the GDP. However, it was not the size of the Chinese defence budget but the use that the money was put to that was important - modernization, high-tech weaponry, the development of indigenous weaponry and the export of military capabilities to realign the balance of power. Indian defence spending was still largely on conventional technology even as non-conventional threats were on the rise. There was as yet no change in the mindset of Indian defence planners. Mr Ma Jiali said that the Sino-Indian relationship had witnessed steady positive development since the 1990s. In the new century, the two countries had reached an understanding on security issues, reaffirming that neither posed a threat to the other. The bilateral relationship was moving out of the shadow of a 'cold peace' to a process of 'hot cooperation.' Mutual visits and contacts at high level are now frequent, dialogue mechanisms have improved, economic and trade relations have been developing quickly and multilateral cooperation and coordination have strengthened remarkably. Nevertheless, some difficulties and obstacles remain hindering further development of the relationship, including the border issue and the lack of political trust. However, there are also many conditions favourable to the improvement of bilateral ties. These include similar views on the international order after the Cold War, opposition to hegemony and unilateralism, belief in the Five Principles of Peaceful Coexistence and faith in the UN Charter. In this light, problems between the two countries can be ultimately resolved with sincerity, resolution and wisdom from the two governments. With stronger political confidence, economic interaction and cultural exchanges, the two countries can together ensure prosperity and well-being for their peoples and the peace and development of Asia and the world at large.