October , 2019
India-China talks: An opportunity for Modi
16:18 pm

Buroshiva Dasgupta

The India-China meet in Chennai, though of a short duration, is of great significance. It’s the meeting of two major economies, which are growing at a faster pace than others in the world. But the talks will not be an easy one. There are thorny issues like Kashmir, Akshai Chin, and China’s indulgence towards Pakistan. But for any progress to be made, these need to be set aside for the moment – which is difficult – and the focus should be on economy.

Ten years ago, economists compared China’s economy with that of India and some even predicted India’s growth would be faster than Chinaʼs. But today, China’s economy is five times that of India, though ‘liberalisation of economy’ of both countries started almost at the same time. China is the undisputed manufacturer of the world. Japanese giants like Sony or the American Apple all have their ‘factories’ in China. The auto giants, both American and European, have their products manufactured in the Chinese soil. China is one of the biggest trade partners of India. In the last ten years, the trade has grown by $5200 billion. But while the Chinese imports into India have grown by $5000 billion, the growth of India’s exports to China has been $250 billion!

China’s economic ‘imperialism’ in the world needs to be understood more carefully. In the two continents – Africa and Australia – Chinese ‘help’ to their economy have made the country a dominant force. In Australia, for example, China today is a greater trade partner than the US or UK. Among the immigrants, there is one Chinese among 10 others. The affluent Chinese are buying up land at a brisk pace which has become a matter of concern for the Australian government. In Africa, the countries have received very low interest loans for development from China which, it is said, would be difficult for them to come out of.

If prickly politics is set aside, the Indian Prime Minister Narendra Modi may have a chance at convincing China’s Xi Jinping  into allowing more Indian goods into China,  especially pharmaceuticals and software. Chinese mobile phones have flooded the Indian markets; so have soft toys, knives, scissors, incense sticks, Diwali crackers and many other items, which where earlier the mainstay of Indian small scale industries. While India is slow in recognising that the small scale industries form the backbone of the country’s economy, the Chinese have cleverly penetrated into that market segment for some time now. The Chinese products are cheap and not of that low quality which characterised the earlier Chinese goods of the 1960s. Chinese labour skills are now world class.

In the process, Chinese labour is pricier than Indiaʼs. There is a chance that China will offload some of its backroom labour work in India. India needs to rethink whether it would agree to become a China’s Mexico. China has already made Pakistan a client state for its military products, which is again a matter of concern for India.

The 2019 Nobel peace prize has gone to Abiy Ahmed, the Prime Minister of Ethiopia for mending ties with its bitter enemy-neighbour Eritrea. Eritrea grew out of Ethiopia and they have fought violent battles ever since. If such a thing can happen elsewhere in the world, why canʼt Narendra Modi not patch up with Pakistan and ward off predators like China and perhaps even win a Nobel prize?




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