ISE of China and India (in that order) will lead to a tectonic shift in international relations. China had headstart. In contrast to India, it had already embarked upon a sweeping programme of economic reform by the end of the 1970s. Under the leadership of Deng Xiaoping, Beijing launched the ambitious and comprehensive Four Modernisations policy in December 1978. China had no inhibitions in seeking the advice of Goh Keng Swee, a former deputy prime minister of Singapore and one of the principal architects of its economic policies.
In India, Rajiv Gandhi made a tentative attempt to open up the economy in the mid-1980s but failed to mobilise the required political support. The reforms petered out and it was only in the early 1990s that Prime Minister P.V. Narasimha Rao and Finance Minister Manmohan Singh successfully embarked on a step-by-step programme of systemic reforms. India decided to gradually open up its economy almost 14 long years after China.
Given this head start and Beijing’s unflinching resolve to accord overriding priority to economic growth over short-term questions of distributive justice, it is not surprising that China’s economic development has outpaced that of India. India is trailing behind China by almost a decade.
Paradoxically, partly because of this very reason, India’s growth rate may well exceed China’s in the next few years. In the earlier stages of industrialisation, developing countries are able to achieve rapid growth by technological leapfrogging; but, as they catch up with advanced countries in technology, the potential for further leapfrogging necessarily diminishes after a certain point. This is borne out by the experience of every country undergoing modernisation and China will be no exception.
Precisely because it has lagged behind till now, India will retain for a much longer period its potential for maintaining high growth rates by technological leapfrogging. According to the celebrated Goldman Sach’s BRIC (Brazil, Russia, India and China) projection, by 2050, India will be the only major economy with a growth rate of around 5 per cent. The others will have much lower growth rates.
In addition, demographic trends are also likely to work in India’s favour. The latest Chinese study of the country’s age profile (released in July) shows that the ratio of the population of working age (those between the ages of 15 and 60) to the total population will start shrinking by 2015. In the case of India, this is expected to occur at a much later date. This trend will also help raise India’s growth rate, relative to China’s.
For these reasons, many recent projections suggest that India’s growth rate may catch up with and surpass China’s in the next decade. Of course, our per capita income will remain lower than China’s for a far longer period because of the substantial disparity in current levels. The projections concerning relative growth rates indicate only that the current economic gap between the two countries may gradually be closed over a fairly extended period.
Despite China’s spectacular growth rates in the last three decades, it still has a long way to go before it catches up with the levels of prosperity of Singapore or South Korea. India, of course, has an even longer distance to travel before it approaches these levels. However, unlike the earlier rise of the two smaller Asian countries, the rapid economic rise of China and India will lead to a tectonic shift in the global power structure because of the size of their population and, consequently, the overall size of their national economies. Because of this demographic leverage, India and China have a global footprint and degree of influence that is disproportionate to their level of development.
There are obvious similarities between India and China. Both are developing countries and, on this account, share many common interests in global economic and environmental matters. Both have achieved and sustained impressive economic growth in recent years and are, therefore, ascendant powers, playing an increasing role in world affairs.
Not surprisingly, the two countries are frequently clubbed together by political analysts. The term “Chindia” has recently come into circulation, in an overblown version of such bracketing.
In my view, “Chindia” is a fantasy. It focuses only on the similarities in the status and interests of the two countries and glosses over the differences. China’s economy is more than twice the size of India’s and its military capabilities are more impressive. It is a permanent member of the United Nations Security Council. China wields much greater influence in global political and economic issues. China is already a great power while India is still poised to acquire that position.
A more realistic view must recognise that China is a rising great power while India is an emerging great power. A realistic analysis of the impact of the rise of India and China on international affairs must recognise the similarities as well as the differences between the two countries.
What is likely to be the distribution of global power in, say, 2025 and how will the major powers interact with one another? The most recent assessment of the US National Intelligence Council suggests that, in 2025, the eight largest economies in the world may be the United States, China, India, Japan, Germany, the UK, France and Russia. This broadly agrees with the Goldman Sachs papers referred to earlier.
China is already poised to replace Japan as the second largest economy. The latest World Bank figures show that, in 2009, China’s GDP (at exchange rates) was $ 4.9 trillion, just a shade below Japan’s $ 5 trillion. Apart from India and Russia, the other six countries already figure in the current ranking list. The US National Intelligence Council analysis assumes that “India will probably continue to enjoy relatively rapid economic growth.”
As regards Russia, it qualifies the projection by noting that Russia could experience an actual decline if it fails to invest adequately in human capital, diversify its economy and integrate with global markets, or if oil prices remain low. The US National Intelligence Council projection seems to me to be quite credible.
Following from this projection, the Council draws the conclusion that it is a “relative certainty” that “a global multipolar system is emerging with the rise of China, India and others” and that “by 2025, the international system will be a global multipolar one with gaps in national power continuing to narrow between developed and developing countries”.
This most significant feature of the assessment of the US National Intelligence Council is in contrast with the previous projection it offered four years earlier. In December 2004, the Council’s projection for 2020 indicated continued US dominance in international affairs and emphasised that most major powers had forsaken the idea of balancing the United States.
I have two comments on the new US projection. First, it has correctly assessed the waning of US dominance. The “unipolar moment” is passing. My second comment is that the emerging international order is more accurately described as “polycentric”, rather than “multipolar.”
From an Indian perspective, what are the implications of the evolution of this polycentric global order?
In the first place, as we move towards a polycentric world, India must follow a multi-directional foreign policy, seeking to cultivate cooperative relations, to the extent possible, with all countries and, more particularly, the major powers. This will enable us to obtain maximum leverage with each of the major powers. For example, success in cultivating close bilateral ties with Washington can also raise our profile in Beijing.
Likewise, a cooperative relationship with Beijing can give us leverage in Washington. In tomorrow’s polycentric world, non-alignment will be reincarnated in the form of a multidirectional foreign policy.
While pursuing such a policy, we should pay special attention to our relations with the US. Even after 50 years, the US will still continue to be the pre-eminent power in a polycentric world. Even if China’s GDP is larger by 2050 in aggregate terms, its per capita GDP will remain far below that of the US. US leadership in science and technology will also find reflection in military affairs.
India has an advantage in building closer ties with the US. Both countries are open societies. India’s rise is already being reflected in the evolving US policy. During the Cold War years, Washington attached relatively low priority to non-aligned India.
What portents do these projections hold for India-China relations?
On the whole, we have good relations with China at present. Commercial ties have grown rapidly. This has provided a positive impetus to bilateral relations even though the degree of inter-dependence between the two economies is still quite small. China has an impressive military presence in our border areas, but its posture is not hostile and, in this sense, China does not pose a threat to India.
Looking into the future, we have to consider the possibility of a negative change in the Chinese posture. China’s posture could change suddenly in the event of a political upheaval in that country. A powerful and unpredictable China could pose a threat to its neighbours. Chinese policies might also change if there is a big change in the power equation between the two countries. This is a common feature of inter-state relations. Let us consider each of these possibilities.
Some analysts believe that China is likely to become politically unstable in the near future. The US Sinologist Gordon Chang, for example, has been predicting the “coming collapse of China” for several years. These scholars point to several negative factors such as the fact that China’s political development has lagged behind its economic growth, the discontent arising from growing income disparities and the declining prestige of the Communist party. These factors have, indeed, generated social tensions.
Nevertheless, the Chinese leadership has been successful so far in maintaining stability. It is acutely conscious of the dangers of an upheaval and it seems ready to adopt flexible and pragmatic policies to maintain political stability.
On balance, bearing in mind the track record of the Chinese leadership, I would discount predictions of chaos or collapse. It is possible that the required institutional restructuring may not proceed altogether smoothly. This could result in blips in China’s growth trajectory but a collapse or upheaval is most unlikely.
What are the chances of an adverse shift in the India-China power balance? As we noted earlier, many projections indicate that our growth rates may overtake China’s in the near future. The economic gap that now exists is likely to be closed in gradual stages. Thus, an adverse shift in the India- China power balance appears to be unlikely. On the contrary, a convergent trend, or a narrower gap, in the power potential of the two countries would be a stabilising factor in bilateral relations. Growing economic exchanges would also help consolidate bilateral ties. Thus, the overall prospects for India-China bilateral relations are quite promising, provided that neither side misunderstands the intentions or capabilities of the other.
There has been much talk recently about the so-called “Copenhagen spirit” and India-China cooperation in multilateral forums after the climate change summit last December. There is nothing new in the “Copenhagen spirit”.
Climate change is an area where the two countries have cooperated very closely ever since negotiations on the subject began in 1991. As developing countries undergoing rapid industrialisation, the two countries share common interests and these are reflected in their stand in the negotiations. For similar reasons, there are opportunities for India-China cooperation on many other global economic and environmental issues.
However, this logic does not necessarily apply to all other multilateral issues. China has a permanent seat on the UN Security Council. In more recent years, it has also become a member of the Nuclear Suppliers Group and the Missile Technology Control Regime. Unlike India, China already has a seat at the high table. In these areas, therefore, its interests often do not coincide with our interests.
For example, there is no particular reason for China to be enthusiastic about our efforts to secure a permanent seat on the UN Security Council. Indian and Chinese interests may not always coincide in future when a rising India seeks inclusion in these or other exclusive policy forums. In some cases, China is not likely to extend active support to India though it may refrain from opposing our efforts in the interests of good bilateral relations. We will have to turn to other major powers to seek support or sponsorship.
How will polycentrism affect our immediate neighbourhood in Asia? The eminent American sinologist, John Garver, the author of an otherwise insightful book on India-China relations, maintains that there will be a contest between China and India for the so-called “spheres of influence” in our neighbourhood, in which China is likely to emerge as the winner. I have great respect for Garver’s writings on China, but I disagree with the “spheres of influence” forecast.
In the first place, it underestimates the role of other Asian countries. Not only Japan but also Korea, Indonesia and ASEAN (as a regional grouping) will certainly be major players in the Asian context. We will fail to understand Asian developments if we focus too narrowly on China and India. The rise of India and China is only a part of a larger historical development — the Asian Renaissance.
Moreover, Asia is not isolated from the rest of the world. Outside powers — above all, the US — will continue to play an extremely important role in Asian affairs. It would be a huge error to discount their influence. In addition to its economic influence, the US will continue to be the leading maritime power for the foreseeable future. It will be able to maintain a stronger naval presence in the Pacific and Indian Oceans than China or India, respectively.
The diffusion of power in a polycentric world will give the smaller Asian states a wider range of policy options on any specific issue, making it possible for them to avoid becoming excessively dependent on any single major power. There is no reason to expect these states to fall into anyone’s “sphere of influence”. A polycentric order will prevail in Asia, as in the world as a whole.
While the future is always shrouded in uncertainty, current trends suggest that the world is moving toward a polycentric order. By 2025, a number of major countries are likely to act as autonomous power centres. The US will continue to be the pre-eminent power, but China may begin to emerge as a rival and near-equal. The gap between the power potentials of the US and China may gradually diminish and this may also be the case in regard to the gap between China and India.
In a polycentric world, India’s traditional policy of non-alignment may take the form of a multi-directional foreign policy. Within the parameters of such a policy, priority is likely to be accorded to forging close ties with the pre-eminent power, the United
States.
The writer is a former Ambassador of India to China.
This article is based on the Prem Bhatia Memorial Lecture-2010
delivered by him at India International Centre, New Delhi, on August
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