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Romance the dragon & demystify China

THE most critical and important bilateral relationship for the world is that between China and the US. The unipolar moment of the post-Cold War era has well and truly passed. The US capacity to determine regional outcomes even in Eastern Europe and the Middle East has visibly waned, while the public bickering between the administration and the Congress further diminishes its global authority.

Romance the dragon & demystify China

Former Prime Minister Atal Bihari Vajpayee with the then Chinese premier Wen Jiabao in Bali in 2003. Photos: Homai Vyarawalla/AFP/Reuters



Ramesh Thakur

THE most critical and important bilateral relationship for the world is that between China and the US. The unipolar moment of the post-Cold War era has well and truly passed. The US capacity to determine regional outcomes even in Eastern Europe and the Middle East has visibly waned, while the public bickering between the administration and the Congress further diminishes its global authority. In retrospect, the so-called US pivot to Asia — announced by US President Barack Obama on November 17, 2011, in an address to Australia's Parliament — was less an assertion of  continuing US primacy in the region than a recognition of growing Chinese presence, visibility and influence across the Pacific.

As part of the shifting global order, US influence and prestige have fallen but it remains the most influential international and the only truly global actor; Japan continues its slow decline; Russia is marking time with some signs of renewed self-confidence; Europe's reach is strangely shorter than its grasp; India under different policy settings with a new Narendra Modi government might recapture world attention and interest that steadily waned over the last, lost decade; and the real winner is China with an ascendant economy, growing poise and expanding soft power assets.

First rank of powers

The China-India relationship is the world's second most critical and consequential. The only two countries with billion plus populations are also nuclear-armed and comprise the heartland of the world. Throughout human history both have been among the first ranks of powers. The last two-three centuries in which they faded into obscurity as systemically significant independent countries was the historical anomaly. The pendulum of history is now swinging back to its default setting. China's re-emergence into Asian, and increasingly global, prominence began earlier and has proceeded faster and so it is outpacing India in attention, excitement and apprehension. Democratic governance is expected to ensure that India's growth and power trajectory will not generate comparable anxiety in the family of nations, but expectations can prove false.

Resilient democracy

India has a rugged, resilient and vibrant democracy, as demonstrated only too vividly in last year's exciting General Election. China is seeking to promote market-led economic growth within tight political centralism by the Communist Party. While India's legitimacy is rooted in its political model that is unique in the annals of human history in terms of scale and poverty, China's is rooted in economic success that is without precedent in human history in scale and pace. China uses political control and the heavy hand of the State to forestall and suppress all challenges and uprisings. India for much of its independent history has used procrastination and indecisiveness to ride out and exhaust most insurgencies along with an oppressive security presence in some cases.

This may change with the Modi sarkar with his can-do approach to governance. India was conquered and colonised by the West and also humiliated militarily by China in 1962. Indian strategic thinking vis-à-vis China remains trapped in the 1962 syndrome, much as Pakistan's vis-à-vis India does in the 1971 syndrome. China is the only Asian giant that was neither defeated nor colonised. But it was attacked, invaded and humiliated by a string of unequal treaties by Japan as well as western powers. China is the most vibrantly growing economy at present. But, provided governance and policy issues are handled right, demographic trends of a growing working and consumer cohort favour India as tomorrow's economic success story.

Of US-China & China-India relations

Beijing may complain that Washington has betrayed elements of a containment policy in trying to cope with the relative shift in weight and influence from the US to China. Yet the record shows Washington to have been far more understanding and generous in accommodating China than Beijing has demonstrated in its India policy. That said, China was much more far-sighted than the US in dealing with Narendra Modi as the head of the state government of Gujarat. Hubris and ignorance combined to induce a remarkable arrogance that led the US and many European powers to ostracise Modi and deny him entry to their countries. By contrast, China welcomed him several times and occasionally accorded him ceremonial privileges normally reserved for heads of national governments.

Past slights forgotten

As Prime Minister, Modi has proven himself to be more agile and forward looking in foreign policy so far than in domestic policy, which he was expected to prioritise. In courting neighbours, in mobilising the vast and influential Indian diaspora, in seeking foreign investment, markets and technology, and in establishing a personal rapport with key foreign leaders, Modi has shown that he is pragmatic and practical, not  dogmatic and ideological. Past US and European slights have been put aside in pursuit of present and prospective common interests.

This does not mean that past courtesies have been forgotten. When President Xi Jinping visited India last year, his trip began in Modi's home state Gujarat. When Modi travelled to China on May 14-16, his first stop was Xian, President Xi's home province and the historic point of entry of Indian cultural influences, including Buddhism, to China. An intriguing and under-explored 'sideshow' during Xi's September 2014 visit to India was the unusually deep incursion into India-claimed territory in Ladakh while Xi was in India. Was the PLA  acting under instructions from Xi or sending him an internal message of defiant independence? Regardless, the incident underscored how far China's infrastructure with military implications has outpaced India's rudimentary preparedness along the long-disputed border. 

Underlining his difference from the previous coy leaders, Modi spoke openly about the differences between China and India and the need to find a workable resolution to them in order to consolidate bilateral ties and avoid giving opportunities to third parties to exploit the dispute to their own agendas. People-to-people and firm-to-firm ties are also shockingly low between the world's most populous countries and emerging markets. Only about 30 per cent of Chinese and Indians hold favourable views of each other compared to more than 50 per cent in each who hold favourable views of the US. Modi was clear in emphasising that both countries are limited in their ability to fulfil their potential because of the prevailing mistrust, and on the need to build strategic trust to underpin good relations in the future. He called on China to reconsider its approach on some of these issues.

Bilateral trade

Bilateral trade has grown satisfactorily rather than spectacularly. Troublingly from an Indian point of view, however, India has a $40-bn imbalance in the approximately $70-bn trade that is surprisingly shallow as well as small. While some of the deficit is explained by India lagging behind in value-added products at competitive prices, some also results from barriers to the entry of goods and services in which India is competitive (pharmaceuticals, services industry) imposed by government policy. 

During the Modi visit 21 agreements were signed by Indian firms for Chinese investment worth $22 bn, in steel, renewable energy, telecom etc. Modi also sought Chinese investment in housing and infrastructure, including high-speed rail. 

India’s Security Council seat

China is the only country of consequence that is fiercely opposed to both India's and Japan's long-held aspirations to join the UN Security Council as permanent members. Beijing has not previously concealed its contempt for India's core security sensitivities. India's billion-dollar line of credit to Mongolia for infrastructure development announced during Modi's visit there — the first by any Indian leader — may be a pointer to how Modi will not simply be a passive onlooker to Chinese provocations. The bigger strategic options open to India involve deepening strategic dialogues and joint exercises with the likes of Australia, Japan and the US. 

High-stakes global games

As long as India's Foreign Service is not expanded enormously with a sense of urgency, however, India will be entering these high-stakes global games with one- and-a-half hands tied firmly behind its back. Even more importantly, Modi needs to put foreign travel on hold for a while and focus on his domestic development, good governance and economic reform agenda. In a worrying sign, jokes are starting to emerge among the people from whose sharp wit no leader has been spared. 

The writer is Professor in the Crawford School of Public Policy, Australian National University

Broader geopolitical context

Putting this in a broader global context, on the one hand, India has joined China in the BRICS Development Bank whose first president will be Infosys Ltd. Chairman and the  non-executive Chairman of the Board of Directors of ICICI Bank K.V. Kamath from India, and is a founding member of the China-led and based Asian Infrastructure Investment Bank (AIIB). On the other hand, India remains wary of China ring-fencing India with substantial moves into countries in India's neighbourhood with its financial and technical muscle in the construction and infrastructure sectors. The change of  government in Sri Lanka in January was a rare diplomatic win for India against China. Seduced by China's growing market and intimidated by its potential retaliation, virtually the entire world turned a deliberate blind eye to the way in which Beijing was Pakistan's true nuclear weapons enabler. 

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