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19.
Both Koreas may have a mutual interest in a period of reduced tension. The North is aware that its international standing was gravely affected by 1983 Rangoon bombing (which China privately deplored). The North has severe economic problems. It is already entering the period when Kim Il Sung will be succeeded by his son Kim Chong Il. This could give rise to internal disputes, so far hidden by the regime's closed face to the outside world. As the 1988 Seoul Olympics approach, the South will wish to promote an
international image of stability.
e) South Asia
India: Internal
20. On the 24 December general election (postponed in Punjab and
Assam for security reasons), Rajiv Gandhi and Congress (I) are
expected to win. But after the elections Rajiv will face serious problems: Sikh separatism in Punjab and inter-commercial tensions elsewhere; and in ensuring the cohesion of, and his authority over,
Congress (I).
Indo-Chinese Relations
21. After strained relations following the 1962 conflict, China
and India exchanged Ambassadors in 1976. The central issue in
bilateral relations is the border dispute. Five rounds of talks
have been held since 1981, the latest in Peking on 17-23 September
when Chinese conceded an Indian demand that the border be considered
sector by sector, rather than globally. The way is therefore open
for substantive discussions of the issue. However, although both
sides are probably anxious to put relations on a more normal footing, neither appears ready for the trading of concessions which would make an early settlement possible.
22.
Routine contacts are increasing. However, trade remains
insubstantial. Exchanges are largely restricted to culture, commerce and science and technology. Strategic obstacles to a closer relation-
ship are India's concern about China's close relations with her neighbours, particularly Pakistan; and Chinese concern about Soviet influence in India. If anything, the Chinese are now making the running. They have proposed a visit to Peking by the Indian Foreign
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/Minister
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