Remove the blinkers

Instead of looking at China with jealousy and suspicion, it should be seen as a huge opportunity to build synergies between India and China.

Although prime minister Narendra Modi is meeting with leaders of the top three most important countries of the world in one month, he still has some way to go to join the big league of global politics given numerous daunting domestic problems. In order for India to overcome them, its economy needs to gallop next three decades just as the Chinese economy did in the last three decades. It requires attracting huge foreign investments in manufacturing and infrastructure by creating conducive environment and by taking aggressive proactive steps. It is here that India’s engagement with East Asia in general and China in particular would come handy. 

If China is looked at from a narrow perspective of trade and border dispute, we most certainly are missing the wood for trees. In about a decade China is likely to overtake the US to become the largest economy. It is the third largest capital exporter in the world and if the rate at which its investments from Russian Far East to Africa are growing are any indication, very soon it will overtake both Japan and the US to be number one. Sitting on a mountain of foreign exchange reserves (more than $4 trillion), China is the world’s largest manufacturing and trading nation. For comparison, the Indian economy was larger than China’s in 1980 and in 1991 China’s GDP was just $50 bn larger than India - today it is more than five times that of India. 

No question that China’s economic rise is unprecedented. Instead of looking at China with jealousy and suspicion, it should be seen as a huge opportunity to build synergies between India and China, the same way most of its East Asian neighbours are doing. To do that, it is imperative to consciously separate economic relations with political issues.

Unfortunately much of the discourse in India tends to be either on the disputed border or on China’s links with Pakistan. An objective analysis clearly demonstrates that they in fact have become non-issues.  Occasional border incursions are normal given that more than 95,000 sq km of territory is disputed and much of the terrain, especially the Ladakh region, comprising high altitude deserts and snowy mountains, is such that no meaningful demarcation is possible in the absence of an agreement. It has been peaceful and there are numerous mechanisms to ensure stability along the border. It is a fact that not a single shot has been fired across the border since 1967. Nonetheless, strong vested interests are always at work to ensure that these incidents are blown out of proportion, especially by hyperactive media.

Similarly, today Pakistan has become a major liability to China. The earlier rationale of using it as a strategic counterweight to India (especially by helping it to acquire nuclear capability) may have worked for a while but not now. India is too big to be tied down by a Pakistan that is mired in political instability and terrorism. 

Competitors, not rivals

The issues that matter to India and China are global  — to get a fair deal in climate change talks, WTO, counter-terrorism, etc — and regional in the Indo-Pacific, Indian Ocean and South China Sea. Yet, no question that India and China compete for investments, markets, resources and political influence but it should not be construed as rivalry. 

It, however, does not mean there are no problems between India and China. China tried to undermine India’s role in East Asia till recently but now has reconciled to the fact that New Delhi is a factor and that it has certain legitimate interests. China is concerned about India joining Japan and the US to contain it. It is here that political acumen is needed to deal with China. New Delhi needs to explain that its close links with any country should not be read as doing their bidding. 

In the final analysis, the border has become a major irritant and hence there is an urgent need to resolve it. When Modi raised it vociferously, it appeared he was trying to please the hardliners both in his party as well in the government. However, he doesn’t have to live with the baggage of past mistakes from Nehru’s days; instead he can chart a new course in all sincerity to resolve it as quickly as possible.

On the other hand, on trade front Modi is fully justified in taking a hardline position. China cannot expect India to live with huge trade deficits year after year while it shuts door for Indian products. Similarly, both countries should take steps to promote mutual investments. Chinese investments can go a long way in modernising the Indian railways, which for too long has been milking cow for politicians and bureaucrats. Likewise, China should also be involved in building India’s teetering infrastructure in a big way. The $20 bn. commitment over next five years is too little given its economic weight. There appears to be still considerable reticence on India’s part to solicit Chinese investments, whereas we should be following Deng Xiaoping’s famous dictum: it doesn’t matter what the colour of the cat is as long as it catches the mice.  

As China prospers, its labour is becoming expensive and that is leading to declining investments in manufacturing and China itself is also relocating many labour intensive industries to neighbouring Southeast Asia. India should make use of a window of opportunity that is available here.

There is also huge scope for cooperation in the security field in the vast Indo-Pacific region, especially in tackling non-conventional threats such as terrorism, piracy and natural disasters besides intensified exchanges between the armed forces. 

A major drawback between India and China is that there are very few institutional mechanisms to engage each other at various levels. There are very few academic or people-to-people exchanges to understand each other better. As Xi Jinping rightly pointed out, India and China are twin anchors of peace and stability in the Asia Pacific and hence the need more robust engagement. 

(The writer teaches at Jawaharlal Nehru University, New Delhi)