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| Sanjaya Baru: Chinese are coming! | | Don't worry about the PLA, it is PLU that want to cross the border |
| Sanjaya Baru / New Delhi Mar 29, 2010, 00:02 IST |
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The climate did change in Copenhagen. There is a new warmth in China’s tone towards India. The ‘new assertiveness’ of 2009, as Prime Minister Manmohan Singh put it, has given way to a new softness. On the eve of the 60th anniversary celebrations of the establishment of diplomatic relations between the two Asian giants, the mood may still be far from the ‘Hindi-Chini bhai bhai’ days of the 1950s, but, as the media has already noted, the slogan now is ‘Hindi-Chini buy buy’.
After the brinkmanship of 2009, on Arunachal Pradesh and Dalai Lama, both sides seem to want to return to a more normal template of pragmatic engagement. Both India and China are re-examining their relations with the United States, waiting to see what President Barrack Obama’s Af-Pak strategy, on the one hand, and his economic policies, on the other, really mean for them.
The Obama-Holbrooke view of “our terrorists vs your terrorists” has upset China as much as it has India. Why do you want us to help fight ‘your terrorists’ in the Af-Pak region if you will not stop encouraging our terrorists in Xinjiang, ask the Chinese. It is the same question India has asked for a long time, including of the Chinese who are still not on the same page with India in their understanding of who is a terrorist and who is a freedom-fighter.
The multi-polar world is here. Every pole in this many-sided dynamic equilibrium is constantly re-assessing equations with the other. In the ensuing global musical chairs, where friends and enemies change places all the time, enduring national interests will bring some players closer at one point of time and pull others apart at another. Right now, with the George Bush phase of the India-US embrace over and the United States pre-occupied with its own problems, the thaw in India-China relations has opened up new possibilities of cooperation between the two rising neighbours.
All this came through clearly from my interactions with various influential interlocutors in Beijing last week. Responding to complaints from India that China has built up a massive trade surplus vis-à-vis poorer India, with an imbalance in which India exports raw materials and imports finished goods, thanks in part due to non-tariff barriers against Indian manufactured goods, Chinese business and government leaders are now offering a way out. India should permit Chinese companies to invest and manufacture in India so that the value addition can be done in India and India’s manufactured exports to China can be stepped up.
Let us do more business and enable closer people-to-people (P2P) and business-to-business (B2B) contact, is the new government-to-government (G2G) message from Beijing. China’s policymakers understand that it is the P2P and the B2B aspect of the India-US relations that helped improve the G2G side. So let’s walk that route is what the Chinese seem to say. Are we ready for it?
The head of a Chinese steel company told this writer that he would be quite happy to stop importing ore from India if he could set up a manufacturing base in India where he could process the ore and import the steel! Will India bite? But, the Chinese have a caveat. Like the Japanese and most other foreign investors they too want India to become less bureaucratic, have better infrastructure and be more welcoming of foreign investors!
India may be prepared for the ‘hard power’ challenge of the People’s Liberation Army (PLA) but is it ready to take on the ‘soft power’ challenge of ‘people like us’ (PLUs) from China? China's diplomats and policy wonks complain that the Indian media focuses far too much on the assumed military threat from China without adequately recognising the economic opportunity. China is a growing market and a source of investment. It is both an exporting power and an importing power, a destination for and a source of foreign direct investment, they claim.
Since 2005 there has been a sharp rise in China’s outward investment, much like what we have seen in India. Studies show that at least till 2009 most of Chinese FDI went either to Hong Kong and Taiwan, or to tax havens or to South-east Asia and Africa. So the most important Chinese firms engaged in outbound investment were in fields such as energy, telecommunications and raw materials processing, with inward FDI in China located primarily in manufactured goods.
In 2009-10 China is shopping around the world for investment opportunities in a wide range of sectors including electronics hardware, aviation, tourism and banking and financial services. Stop thinking of China as only a manufacturing nation. It is fast emerging a major services economy too.
For an economy dominated by the government and the ruling party, China is a remarkably consumer-friendly place. China’s people-friendly face presents itself at the immigration counters at Beijing’s international airport! Compared to the aging, tired, slow and grumpy Indian immigration and emigration officials, visitors to China face a young, smiling and efficient staff sitting at counters equipped with four buttons that every arriving or departing traveller can press. The buttons are for “happy, satisfied, not satisfied, unhappy” — to denote the service quality of the official.
Thanks to the Beijing Olympics, the focus on the tourism and hospitality industry and now the Shanghai expo, China is rapidly improving the quality of its services sector — from taxis and taxi drivers to hotels, shopping malls and banking services. The day is not far off when China would want to enter India’s services sector — investing in hotels, banking and retail — leveraging its enormous skills in these areas.
In the past few years Indians have been learning to cope and deal with China’s “assertiveness” and its unfriendly face. In the next few years they may well find dealing with China’s friendly face equally challenging!
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