Tuesday 29 November 2011

China and India: Partners, not foes (China Daily)

By M D Nalapat
If you google "China and India", you can find headlines such as "China a threat to Indian hegemonic designs", "US regional initiatives could impact China-India relations", "India lags in construction of roads along border with China" and "South China Sea crucial to India's energy, security interests". These will give you the impression that China and India are rivals, which is exactly what the West wants you to believe.

It's true that China and India have had frictions, but so have other countries and their neighbors. The fact, however, is that Beijing and New Delhi have shown remarkable similarity of views on important issues such as World Trade Organization negotiations and climate change.

Being large developing countries with high rates of economic growth, both have a confluence of interests that ensures a common policy. Both are victims of the high commodity prices, raised artificially by speculators operating from developed countries.

Although much is made of the "higher standards of financial integrity of the developed countries" compared to China and India, the 2008 financial crash revealed the greed and malpractice in the developed world, which cost investors more than $4 trillion in assets. It was theft on a scale many times bigger than financial scandals in the rest of the world put together.

Indeed, London and New York are the homes of "vulture funds", which use the legal system of advanced countries to force poor countries to pay them huge amounts as "repayment of loans", most of which were usually spent on the salaries of expatriates from the very countries giving the loans, as well as on manufactures and services from the rich countries. Iraq and Afghanistan are examples of countries where American and European Union suppliers charge very high prices.

India and China both seek a global financial system that is balanced and driven by ethics, not greed. India has taken the first step toward recognizing the importance of China in global trade by making the yuan convertible, on the lines of the dollar, pound, euro and the yen.

In fact, the BRICS (Brazil, Russia, India, China and South Africa) summit in Sanya, Hainan province, this year decided that all five countries would work toward making their currencies convertible with each other. Such a step would boost intra-BRICS trade substantially.

India represents a big potential market for China. Compared to roads, ports and other infrastructure in China, those in India are primitive. India needs to spend at least $150 billion in infrastructure during the next five years, and a substantial portion of that can come from China.

It would be a boon to Indian consumers and Indian producers both if the country's pot-holed roads were replaced with the kind of modern highways seen in China.

As for high-speed trains, China now leads the world in this technology, which is why India has asked Chinese companies to build similar facilities in the country. It takes only 35 minutes to travel more than 120 kilometers from Beijing to Tianjin. The same distance could take more than four hours to cover in India, or almost the same time it takes a high-speed train to travel 1,300 km from Shanghai to Beijing. Chinese people can be proud of building a high-speed rail network, although like all pioneering ventures, it too has its teething problems.

When the global financial crisis broke out, the Chinese leadership gave a call to "Protect 8", that is, to ensure at least 8 percent economic growth. With Europe sinking under a debt burden that seems too heavy to remove and the US struggling with low growth and high unemployment, the fast-growing Indian market can help China maintain an 8 percent, if not higher, economic growth.

Apart from the huge demand for modern infrastructure, India needs energy, and lots of it. Chinese companies can set up power plants at a cost that is up to 40 percent less than that of their nearest international competitor, and India can benefit by asking China to do so. Housing is another sector in India, which offers a large potential market for Chinese companies, so too is telecom.

A coming together of China and India for mutual prosperity represents a nightmare for countries that want India to continue to buy their high-priced goods and not change to cheaper - and often better - Chinese substitutes. If China and India come together, their bilateral trade can reach $150 billion in three years.
Ancient India is the home of Buddhism, a faith that is widespread among Chinese people. Surely, the many marvels of India can attract millions of Chinese tourists who now prefer to travel to Europe.

It is a reflection of the low level of Sino-Indian interaction that there are more than 500 weekly flights to Japan - and South Korea - from China, compared to only a dozen direct flights between China and India even though they have more than a billion people each. Not only in tourism, but in education as well, cooperation will be helpful to both sides. It will, for example, be much cheaper for Chinese students to study English in India than, say, in the United Kingdom.

Close ties between India and China will be mutually beneficial, which is why leaders of the two countries are in contact to create a strategic Sino-Indian alliance. So we must not allow third countries with harmful agendas to block the coming together of two great countries.

The author is vice-chair of Manipal Advanced Research Group, and UNESCO peace chair and professor of geopolitics at Manipal University, India.

(China Daily 11/29/2011 page9)

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