India, China, USA & World Around Us

India, China, USA & World Around Us

Dear Friends, too much is being said these days about India taking over China in growth. Recently, I read one such 'opinion' and had a brief smirk - not a good laugh. Basically, the comparison is flawed, illogical, almost absurd. Unless, off course, it is about growth of population where we are more likely to be the number one country - the most populous state on the globe in not so distant future.

To sum it up, we may recall that the then, US Prez Nixon visited China in 1974. While it is doubtful if USA benefited much by engaging with China but it is certain that the visit did much good to China. For long, USA was in need of a regular supply chain for goods of daily use which its industry was producing at prohibitive costs, mainly due to higher wages / lack of manpower. Another concern was emerging consciousness about pollution caused by industry. USA wanted to use the poor labour of China for producing cheap goods for its markets and also to preserve its environmental resources. At the same time, Chinese junta needed global recognition and also jobs for its growing populace, which was living in penury. China needed resources to maintain its Red Army and loads of Nukes.

Initially, everything appeared tailor made for USA. It had good arena for profitable investments, mass production of goods with cheap Chinese labour was helping its economy as well as its environment. 

But it made a grave mistake in granting unfettered access to Chinese goods in its markets and at the same time, it allowed its small scale industry to whither away which is hurting it today so sharply.

China benefited immensely because its people got jobs and it had a regular source of foreign funds.
Gradually, tables turned in favour of China and started going against USA, Europe and their global allies like Canada and Australia, etc..In due course, Europeans followed USA.

Moreover, the greatest benefit China obtained was that it was recognised as a global citizen so much so that it was made permanent member of UN Security Council replacing Chinese Taipei - Taiwan.

China utilised the opportunity to its best advantage. Its industry belligerently copied western products and brought out cheaper versions of goods to flood the global markets and succeeded to kill a large part of the competition. Off course, some good work too was done and today, it is even the leader in heavy / hi-tech machinery segment, having beaten even the time tested Germany's high tech industry.

In another smart move, Chinese kept investing a large part of export proceeds in USA itself, and now China controls almost 30% of global debt of USA (invested in Fed Bonds and like) Today, USA is so week that its President will think few times before making even a small comment on China's actions, and China has become so strong and arrogant that it hardly cares to listen to what anyone else says. The concept of copyrights and IPRs is of no concern to Chinese. They just do not care.

I remember having written once in a mail to my friends," you may call them slit eyes but a few pairs of them did look farther than the most ". We may bear in mind that when Nixon visited China at a time when both USA & USSR were realising the futility of Cold War. Drift was towards achieving a genuine 'detente' - which was unfortunately broken in 1979 when USSR invaded Afghanistan.

All along, China was careful to not to exhibit any partiality towards USA and nor hostility towards estranged Communist Brother USSR. Later, USSR disintegrated and the World realised that all the show of prosperity and advancement of Communist regimes was a sham. The mood today is that of despair due to recession, global terrorism, conflict, chaos, and almost anarchy prevails. UN has lost its credibility and the third world neutral blocks like NAM have since disappeared.

Chinese junta does not care much about dogmas. Its leadership has shown pragmatism by doing business efficiently with the West and at the same time it continues to deal with its populace in the most strict manner reminding one of the era of Stalinist Russia. Yet another anniversary of 1989 Tienanmen Square Massacre just went by without as much a word by Western drummers of liberty.

In the present case, a visit by Modi to Beijing (which he will need to undertake in next couple of years) will be essentially a business trip too but it will be laden with ghosts of the past ranging from border dispute and hostilities on border/ line of control, China's seething ire at India's patronage of Dalai Lama and their anguish at anti China activities of Tibbetans living in India, India's growing concerns at China's meddling in India's neighborhood, China's growing naval presence near our oceans, tinkering with our common water resources - the reported plan to divert Brahmputra waters to Chinese hinterland, their undue objections to our search for oil in Vietnam sea, and such issues.

Yet, there is growing realisation in the global leadership that cooperation and collaboration can only bring prosperity and peace in the world. There is much more need for such cooperation since the world today needs leadership. West has already dug itself too deep in to recession and profligacy that it seems to have lost the zeal to fight and middle east seems to be destined for a long haul of conflict.

Looking from that angle, we should hope that one day, India, China, and possibly Pakistan too, will not just start behaving with each other with some sanity but would really provide the leadership take the globe forward, and I am in favour of giving them a chance.