Is it next to impossible for entrepreneurs to do meaningful non-trading business between India and China, because of the long-standing political mistrust?

This question has been asked by one of my friends in China.

A lot has been said here already about the long standing mistrust between the two countries. As far as we are concerned it would be to the advantage of both to do business. But we share a long and  fractured history.

Let me take you back to 1962. The Chinese army sang the "Hindi Chini bhai bhai" song when they attacked Arunachal Pradesh and defeated us in the only war we have lost so humiliatingly since our independence. Time has passed over the next 48 years. But the scars remain. How can you trust and do business with a country who happens to be the closest ally of Pakistan - who have vowed to see a thousand cuts on India till they take Kasmir in its entirety.

I give you an update on what is happening to Indians in 2010 doing business in China. 21 diamond traders from Gujarat have been jailed in China's Shenzen SEZ for offences that are yet to be specified. They are in jail for two and a half months with no charges being framed against them. The 100 diamond polishing units owned by Gujaratis in China have now been shut down. The merchants have moved to Hong Kong, leaving behind millions of dollars that they invested in Shenzen SEZ. The diamond traders are accused of smuggling but no case has been filed against them.

China was only interested in learning diamond cutting and polishing skills from Gujaratis and cut into their monopoly over the business. That aim has been achieved. Now they are bent on driving the Indians out of the SEZ. Corruption is rampant there and local businessmen and officials are part of the racket.

A theory doing the rounds in Surat is that the Chinese actions stems from envy. The Shenzen SEZ was dominated by Gujaratis, who made rapid progress there, and local Chinese traders did not take kindly to this success story. The traders are systematically targeted by the authorities.

May be readers can now draw their conclusions. I remember our earlier defence minister, George Fernandes had referred to China as India's "potential threat number one."