• Monday 26th August 2019

The ‘Asian Age’ and role of China and India

  • Published on: July 17, 2019



  • BY RAVI BHOOTHALINGAM

    Why do some civilizations or nations flourish and others fade out? Professor Joseph Needham had an answer. Needham is well known to the Chinese people for his monumental work Science and Civilisation in China. Before becoming a world-famous sinologist, Needham was a renowned biologist who believed that over the long term, evolutionary logic influenced human behavior. His work in Chinese history led him to identify the critical factor for civilizational success as the right balance between competition and cooperation. Nations or empires which achieved such a balance with their neighbors (and even rivals) learned valuable lessons: Too much competition was destructive, too little could stifle creativity. Similarly, too much cooperation created dependence, but too little created isolation. So, how would Needham’s “long view” play out in India-China relations?
    First, for a nation to flourish, its leaders must have an inspirational vision for their country. This quite clearly exists in the case of both China and India. President Xi Jinping’s vision of the “Chinese Dream” and China’s national rejuvenation has caught the imagination of the Chinese people. In India, newly re-elected Prime Minister Narendra Modi has reiterated with vigor his vision of a “New India,” for a nation where 50 percent of the population is already under 25 years of age.
    Second, fundamentally, India’s and China’s visions are not in conflict with each other. Both visions focus on the prosperity and all-round development of their peoples. Both nations speak the language of peace and mutuality in international relations. Most importantly, the existence of powerful external threats to the visions of both countries is a strong motivator for China-India cooperation.
    These threats are not geopolitical; rather, they are existential, such as climate change and antibiotic-resistant epidemic disease, each of which could decimate the world population, of which China and India’s combined share is 40 percent.
    While India’s and China’s visions might be non-conflicting, could the actual steps taken by the two countries to attain their respective goals create friction between them? This has indeed happened, and there are several examples of such problems. These issues should indeed be managed, but without losing sight of the central goal – to defeat the existential threats. That requires strong economic muscle and radical scientific innovation.
    For this, India and China must recalibrate their competition/cooperation balance through mutual harmony and by avoiding serious differences – “No family quarrels when a storm batters at the door,” to quote an African proverb.
    Third, how can India and China build such economic muscle and scientific innovation? For a start, this requires broad and deep economic engagement between China and India, the first and third largest economies in the world on PPP terms according to the World Bank. There are obvious advantages for India, whose economy (one-fifth the size of China) is about a decade behind on the development curve, and can thus benefit from Chinese investment, enterprise and technology. I outline here five key advantages that China can derive through a deep economic engagement with India on the bilateral, regional and global levels.
    First, the China-proposed Belt and Road Initiative is ambitious and has been widely welcomed, but it has also rapidly increased China’s overall risk profile. Added to China’s internal debt, excess capacity and high capital output ratio, this means that China’s future investments must be less risky and earn better returns. India fulfills these conditions. India can absorb huge investments in infrastructure, and its political stability, well-ordered financial system and legal backbone reduce investor risk. India’s large market also makes it possible to reap the benefits of economies of scale and thus increase return on capital.
    Second, China is a complex country, and so is India, in different ways. But Chinese industry – earlier in telecom and now also in the e-commerce space – has experience of how potential sales and profits in India are next only to China in volume and growth. Today, China also has the opportunity to manufacture in India as well as import from India at lower costs, thus generating large-scale local employment, a win-win result for both countries.
    Third, at the regional level, the Regional Comprehensive Economic Partnership (RCEP) provides an opportunity for China, India, Japan and ASEAN to accelerate the growth trajectory of Asia, already the fastest growing region in the world. Being first-to-market is the key today in most businesses, so intra-Asian trade is likely to grow faster and more profitably than trans-continental business. Therefore, to accommodate India’s need for a transition period within the RCEP accession process will be a small price for China to pay, in order to create the largest free trade area in the world, especially in these days of mounting protectionism.
    Fourth, also at the regional level, Chinese and Indian plans to develop connectivity and regional infrastructure should be better coordinated to minimize operational and governance costs. Neighbors will then see that these two countries can cooperate, as well as compete. This will be a valuable and new experience for all concerned.
    Last, modern science has the same lessons as Needham’s work in history. In his remarkable book Gene Machine, Nobel Prize-winning chemist (and current president of the Royal Society) Prof. Venki Ramakrishnan remarks: “…the distinction between competition and collaboration is not so clear-cut…even when scientists are competing, they are actually using one another’s advances…and are thus collaborating…” Thus, there is huge space for China-India collaboration in R&D and innovation in shared problems such as water scarcity, chaotic urbanization, high disease burdens, age/gender imbalances, and many others. Only scientific innovation can generate common and cost-effective solutions for the above-named existential problems that could otherwise overturn our national visions. When even the US and the Soviet Union could collaborate in space at the height of the Cold War, why should there be such hesitation on the part of India and China?
    Hopefully, the two leaders can reset the competition/collaboration balance between the two countries, and generate powerful and creative ideas for a new path in India-China cooperation.

    (The author is treasurer and honorary fellow at Institute of Chinese Studies based in Delhi. The article is his speech delivered at the Eighth World Peace Forum in Beijing on July 9, 2019. [email protected])
    (Global Times)

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