south Tibet is too big a piece of land,I don't think Chinese government will risk being overthrown by the people by accepting loss of that land,so it simply won't happen.flaring nationalism will swallow the government up.so the best Chinese government can offer is to split South Tibet half and half I guess.
Why would the Chinese government want to settle the South Tibet issue right now?
South Tibet, as far as Chinese is concerned, has no resources and no strategic value since all the strategic position of the area is already in Chinese hands, therefore there is no need for immediate action.
The supply situation may have improved in the recent years, but it is still a chore to get stuff to the place or vice versa, so there is no immediate incentive to hold the place.
Due advantages in equipment and training, as well as holding strategic locations, the Chinese only need to station one division of troops in the South Tibet border. Indians, on the other hand, have to station a much large force just to maintain the balance. This not only leaves India with less troop to deploy on the Pakistan front, it also create a cost disparity. Meaning a small amount of Chinese budget managed to boggle down a much large India budget. This is not including the fact that the Chinese forces has way more resource to work with and the difference is only gonna get bigger from here.
This also forces India into an arm race, but the difference is that the Chinese are using domestically manufactured equipments while India is buying stuff from other countries. So the arm races helps the Chinese industries to grow while it just saps money from Indians. No matter how you look at the equation, the scenario is only gonna get worse for India from here.
There is also the matter of casus belli. If the Chinese and India actual work out an accord, then the Chinese would be left with no farther claim on the area. However, by keeping the area under "disputed" status, the Chinese will have a valid claim on the entire South Tibet area.
Overall, there is absolutely no reason and motivation for the Chinese government to settle the south Tibet issue right now. A drawn out dispute of that particular area is pretty advantage to the Chinese in every possible way.
It's very simple: no Nehru = no Forward Policy = no war = no lives lost = no resentment
The fact that Nehru was warned for months that his Forward Policy was pushing both countries to the brink of war completely flew over his head. If he wasn't idiotic enough to begin with, he was surprised when war broke out. It's not like he wasn't told war was coming.
Well,
on paper, he actually picked a very good time to attack.
Remember, 1962 was merely 9 years from the Korean war, so the Chinese are pretty much persona non grata with the Europeans and Americans (except the Franch, who would be establishing diplomatic relationship with China in 2 years and the British, who has been smuggling goods to China through Hongkong since the end of the Korean war).
At the time, China also just broke with Soviet Union and many of the other communist countries chose to side with Soviets. In comparison, at the time, India was generally viewed as the leader of the third world countries. (partly because of the non-alignment movement, partly because many people at the time believed that the Chinese achievements are the results of Soviet help)
Internally, the three years of natural disaster has just finished and the Chinese are still recovering their infrastructure.
Since the Qinghai-Tibet railway did not exist back then, the Chinese forces is few in number and also had limited supply. This also means reinforcements take a long time to arrive. The most experienced of the Chinese troops are also stationed somewhere else in the country, since the India-China border was consider less dangerous than the others.
Production wise, it was also believed, at the time, that India had better industrial base. (Not actually true, although India started out with much better industrial base in the 40s, by 1962, the Chinese already finished one five year plan and part of the second five year plan, aka "great leap forward", while the 2nd five year plan is an disaster overall, it still managed to reach some of its targets.)
So you can see, on paper, Nehru actually picked the perfect time to attack. Of course, history showed us that what looked fine on paper may be very different in reality. Nehru had pretty everything in his favor, but just didn't count the fact that India veteran troops couldn't even beat Chinese border guards.