Winning the real race with China

Discussion in 'Foreign Relations' started by Ray, Feb 23, 2014.

  1. Ray

    Ray The Chairman Defence Professionals Moderator

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    Winning the real race with China

    China is one of the two defining relationships for India today. It is high time we managed it that way.

    Our confusion about China is rooted first and foremost in geopolitics . An unresolved border issue has led to one war and periodic games of chicken. This conflict has defined how many, if not most, Indians think about China. In China however, few seem to be aware and fewer yet care.

    That confusion has been compounded by China's spectacular economic rise. Many Indians think our two countries are in a race for mindshare, respect, investment, regional influence and resources. Yet once again that perception is not mirrored inside China, nor is it the perception in other parts of the world.

    I would submit that we are running the wrong race. We are not just in a race against China; we are in a race with other countries to leverage China's extraordinary rise. Most other countries including the US, UK, Germany and even Russia have understood this. Unfortunately over the last decade, by imagining that we're in a "race" with China as virtual equal, we Indians have dismissed the need to engage with the country as the economic superpower that it is. No major economy has benefited as little from the rise of China as India. While our bilateral trade now is over $50 billion, the trade deficit is $28 billion and growing. More importantly, India exports raw materials like cotton and minerals while importing machinery, power and telecom equipment, making it virtually a colonial relationship.

    But there may be substantial opportunities for India to prosper from the rise of China. The opportunity to become a major manufacturing economy as wages rise in China and global companies look for viable sourcing alternatives is an obvious one. Creating policy incentives for growth-hungry Chinese manufacturers to manufacture in India rather than simply dump their products is another, and this is especially true for computers and electronic hardware where Chinese firms are world class and where India has a rapidly growing balance of payments problem. India could also hugely benefit from Chinese investment and expertise in improving our woeful infrastructure. In industries where Indian firms are world-class such as IT services and pharmaceuticals , a concerted effort must be made by Indian businesses and the government to crack the massive Chinese market which has so far been impenetrable. Of course all these will require an intense strategic collaboration collaboration between Indian businesses and government to craft an effective trade and investment strategy with respect to China and a reduction in the many hurdles to doing business in India.

    The point is simple. There are clearly areas where India and China will forever compete — for instance for regional influence, over sharing of river waters, or for access to energy and resources. However this should not result in us myopically overlooking the many areas where India must leverage China's economic success to achieve its own goals. With China co-opetition (a word derived from a combination of cooperation and competition), and not merely competition, is the name of the game as many other countries have shown. Perhaps closer trade and investment links will result in an interdependency that eases tensions in other matters. As one commentator put it, "Buy buy might become bhai bhai" (brother brother).

    The other point is that whether Indians think of China as friend or foe, we need to get to know the country better. As the old adage goes, "Hold your friends close and your enemies closer" . Our ignorance about China and more worryingly, our disinterest in discovering it is extraordinary and dangerous. Few educated Indians have any knowledge of Chinese history; we therefore fail to appreciate the humiliation of China by colonial powers and the history of our border dispute. This understanding is critical to developing a stable relationship. Isn't it time more Indians learned Chinese rather than French or German? Why don't we have more trade delegations or scientific exchanges? Why aren't we exploring city-city partnerships to learn the secret of how Chinese mayors run their cities so efficiently ? We need to become obsessively curious about our neighbour if we are to emulate its success.

    By acting as though China is just a hostile neighbour and merely another developing nation, India has done itself a disservice. There is a race to take advantage of China's rise; we can't afford to sit it out.

    (The writer is former chairman of Microsoft India)

    Winning the real race with China - The Economic Times
    ************************************************************

    Indeed trade between India and China should be a priority.

    But will trade solve the unresolved border issue has led to one war and periodic games of chicken? Isn't it too simplistic a debating point to justify the requirement to trade since both the issues are totally unrelated?

    The answer is trade, have greater people to people contact and yet not let the guard down!

    And importantly, build infrastructure and manufacturing base so as to be the new Mecca of world's growing business interests.











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    Last edited: Feb 23, 2014
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