The Hindu Business Line : ‘Cooperation’ with Beijing

The Prime Minister, Dr Manmohan Singh, and the Chinese President, Mr Hu Jintao… New Delhi’s support can help China further its global economic campaign.

Ranabir Ray Choudhury

There can be no two views on the proposition that economic cooperation between China and India should be backed to the hilt. The problem, of course, lies in its effective implementation. Very recently, the two countries have been engaged in an economic dialogue, the all-round hope being that New Delhi and Beijing would work out something to their short- and long-term advantage, which would be especially useful now when the world economy is beset by a severe recession.

While the harbouring of hope on such matters is unexceptionable, it remains to be seen whether the latest exercise will progress beyond ‘cosmetic’ developments instead of ‘real’ progress which, among other things, would enhance the economic presence of the two Asian giants in the international sphere not to speak of meaningful bilateral spin-offs.

Border conflict

The scepticism is not a flash in the pan, in a manner of speaking, but is the result of the evolution of India-China relations in their totality since the 1950s when, immediately after Bandung, Beijing launched on a concerted policy of ‘combating’ the very ‘idea’ of India on the international stage for reasons which, at that point of time, were clearly linked to a strategic world-view of Great Power relationships, particularly in the Asian context. In fact, the policy was such a strong element in the overall external policy of Mao’s Communist China that it led to the 1962 border conflict, one which ended in Beijing being able to tell the world at that juncture that the power to be reckoned with in Asia was China and not India.

Till the late 1980s, when the Cold War between the US and Soviet Russia was being waged relentlessly, Beijing used the border problem with India to great effect. Clearly, in such a situation, there was no role for any policy of cooperation between the two countries. Indeed, Beijing’s “alliance” with Islamabad was a direct result of the general effort to “weaken” India, a function which the Chinese made the policy of cooperation with Pakistan perform effectively.

‘confronting’ India

It can be said that, till the end of the Cold War, Communist China’s ideological imperative forced Beijing into a policy of sustained diplomatic (laced with military) confrontation with India which, among other things, led to the development of a deep-seated “anti-India” mindset among the Communist Chinese bureaucracy, which extended upwards to the senior-most positions in the Chinese Communist Party. After all, the policy was enunciated three decades earlier when the senior party leaders of the nineties were young and in their formative stage, the policy of “confronting” India being infused in their bones, becoming an integral part of their psyche.

China’s ‘economic birth’

It is within such a mental framework that, at the end of the last century, the Chinese Communist focus began to shift to “economic warfare” at the international level, when it was felt at the highest party levels that in the post-Cold War world set-up power would flow not out of the barrel of a gun but out of economic domination of the international marketplace.

What this meant was that China had to open up to the outside world economically speaking, allowing people with funds and production expertise to set up shop in China itself, which would not only lead to the “material development” of specific geographical regions of the country but would also inject into the international consciousness the view that China was economically (as well as militarily) vibrant. In other words, China’s “economic birth” would mainly be import-driven with “crude” production activities such as the manufacture of steel, etc being pursued internally with the focus being mainly on volume.

It is against this altered Chinese strategy of improving its position in the world that India-China economic cooperation will have to be seen, quite clearly its worth being wholly determined by the advantage Beijing can get from such an association in helping it to further its much larger global economic campaign. There are in fact two specific levels at which this evaluation from Beijing’s perspective can be made, namely, the strictly bilateral economic exchange and the multilateral aspect which is dominated by the exigencies of international trade diplomacy.

Throwing caution to winds

At the bilateral level, as events have shown so clearly, the Indian side has been on the defensive, not merely because of the historical overhang (which unfortunately just cannot be brushed aside) but because of the very unconventional trade tactics being used by Chinese players to register their presence in foreign markets. Indeed, Chinese economic aggression in the world market today has been characterised by indiscriminate use of the pricing weapon which, more often than not, has thrown caution and convention to the winds.

Admittedly, this has resulted in immediate “territorial” gains, in that markets have been literally taken over by Chinese traders and products albeit at a price which is only now showing up in the huge financial imbalances marking the entrails of the Chinese economic system. New Delhi’s policy of caution is, therefore, well justified, one of the offshoots of which has been the exclusion of anti-dumping issues from the recent talks between the two sides on economic cooperation. This apart, New Delhi has shown a hyper-sensitivity to the security aspect of Chinese investments, which is perhaps the best proof of the huge footprint which the past bilateral relationship has left on the present and on the future.

Strategic competitors

From Beijing’s point of view, New Delhi’s usefulness in the economic domain lies principally in the international sphere, in the extended trade diplomacy that is currently being conducted between the developing and developed economies, a struggle in which the long-term stakes are high and in which India can play an important role given its emerging economic strength. China is well aware that India’s economic stock is high in Western capitals and that, therefore, New Delhi’s support — even just being seen to be bracketed with New Delhi — can help it win campaigns which can turn out to be important building blocks in the attainment of its ultimate goal of “economic domination”.

This is the big canvas in which the ongoing India-China economic cooperation efforts figure, the resultant advantage to India depending on New Delhi’s ingenuity in being able to protect domestic business interests from unfair Chinese trade initiatives, on the one hand, and using the clout of China in breaking down trade and business barriers in the developed world, on the other. Essentially, the two economies are strategic competitors who should now be in cooperation mode on the world-stage working towards knocking out the heroes of the past on whom the sun seems to be setting.

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