Geopolitical Notes From India
M D Nalapat
ON October 01, 1949, Mao Zedong announced the birth of “New China”. Over the next few years, he systematically expanded the boundaries of the state founded by him, the Peoples Republic of China (PRC). Manchuria, Inner Mongolia, Tibet and Xinjiang were incorporated into the PRC, which today controls a larger area than any previous regime did during the four thousand years of recorded history of the world’s second biggest economy. During the 1960s,unhappy with the conservatism of several of the leaders of the Chinese Communist Party (CCP), Mao launched the Great Proletarian Cultural Revolution (GPCR). By the time the GPCR was finally called off a decade later, the CCP had been drained of most of its leadership, barring a few survivors such as Premier Zhou Enlai. Into the vacuum left behind stepped Deng Xiaoping, who after Mao was the second transformative CCP leader. In 1979, Deng began the economic reforms that would over the next two decades change the economy of China from Third World to Second World, thereby creating New China (or what may be termed 2New China).
Five years ago, Xi Jinping began the process of enforcing accountability for corruption within the CCP, a drive that is continuing. The purpose is to transform China into a First World power, in fact the top power in the world in terms of economic development and influence. By 2017, China’s economy was 70% of the US economy, and the gap between the two is getting reduced every year, in the process creating a New New New (or 3New) China, thereby making Xi the third transformative leader in the history of the PRC, after Mao and Deng. Since Xi took charge of the CCP, a noticeable change has been the steady substitution of cash in the form of currency with online methods of payment. Across China, millions of people are these days not using paper money at all, instead making payments through platforms such as Alipay that are going global. In India, the owners of Alipay (Ali Baba, run by Jack Ma) is the majority shareholder in PayTM, among the country’s most popular online payment systems. Prime Minister Narendra Modi is giving attention to the digitisation of procedures in India, and once bandwidth improves, it is expected that more and more of the country’s population will do what so many Chinese are doing these days, which is avoid using currency.
India is the home of “ayurveda”, a system of natural healing that is very different in its approach and methods from “allopathy” or systems of medicine first developed in Europe. This relies on methods such as surgery, which involves the cutting away of parts of the body. On November 8 2016, at precisely 8pm Prime Minister Modi announced the most radical economic surgery ever carried out in independent India, which was to make illegal at less than four hours notice almost all the currency then being used in India. An ultra-allopathic method that cut away and removed so much of the country’s currency was used in the land of natural healing and ayurveda, to applause from Bill Gates, who several officials say first planted the idea for the demonetisation (DeMo) within the Prime Minister’s Office, together with tech billionaire Nandan Nilekani, who has the distinction of being as close to the Modi government as he was of the Manmohan Singh regime.
Gates and Nilekani wanted all transactions to be transparent rather than obscured by the use of currency, and their suggestion was endorsed with enthusiasm by Governor of the Reserve Bank of India Urjit Patel, Revenue Secretary S K Das, National Security Advisor Ajit Doval and Principal Secretary to PM N Mishra. As a consequence of the unanimous advice that he received from officials around him that he go ahead with DeMo, the PM went ahead, with this columnist being among the handful who expressed the view that it was a measure almost impossible to implement without causing substantial disruption within the economy. Because the new currency notes (Rs 2000 instead of Rs 1000 earlier and new Rs 500 notes) had a size different from that of the currency they replaced, a lengthy and expensive reconditioning of ATM machines had to be done. In India, more than 70% of the employment is accounted for by the “informal” sector considered a danger to financial stability by Gates and Nilekani, and the November 8 measure severely impacted this sector, without fundamentally changing overall behaviour. Currency has come back into vogue as soon as it became available. It would have been better for the monetary authorities to have adopted a “nature cure” rather than a “radical surgery” method to get the people of India to exchange currency for online payments, the way such a change has taken place relatively painlessly in Xi’s China.
Under Xi, China is celebrating its ancient past, and an example is the Old Town of Pingyao in Shanxi province, which dates back more than two millennia. At great expense, around four thousand residences dating back to the Ming and Qing period have been restored, so that walking along the narrow streets of the Old Town, it is as though a time machine has been used to get back two thousand and more years. Hopefully the authorities will not allow electric carts or bicycles to operate in such streets, as their presence detracts from the solemnity of the ancient past of China. Close to the town is the Change Ning Castle, an ancient structure that has been converted into a hotel. The rooms and the surroundings have retained much of their original form, and it is possible for at least the Chinese guests to feel that they are part of the ancient merchant nobility when they stay in the castle, with its high walls and multiple floors, from which elevators have been banned to preserve authenticity. However, the staff, although courteous and attentive, dress in modern style.
They need to wear the same clothes as were worn three hundred years ago in this very castle, so as to more fully recreate the creative beauty of the past, the way Xi Jinping is working so as to ensure that his people understand and appreciate their heritage. This being China, there are high-speed trains every hour from Beijing or Shanghai to Taiyuan, the capital of Shanxi, from where a car journey brings the visitor to Pingyao, which also has its own railway station, although much smaller in size. Across the country, restoration work is proceeding in multiple locations, so that the ancient past comes back to life as a reminder to the Chinese people and to the world about the heritage of a country whose civilisation has followed the same trajectory as India’s, of surviving unbroken for thousands of years. These reminders of the past co-exist with Alternative Intelligence and other hi-tech industries which too are being encouraged. Should Xi succeed in his mission the way Deng Xiaoping did in the past, a “3New” China respectful of past millennia will grow into a formidable global force.
August 3, 2018
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