Forever developing

China's developing country status must be questioned

Speaking at the recently concluded summit of the Brics nations in South Africa, the President of the People’s Republic of China, Xi Jinping, insisted that his country “was, is, and will always be a member of the developing world”. It is unlikely that Mr Xi was expressing grave scepticism about future Chinese growth, and revealing a belief the country would be stuck in the middle-income trap. If not, how should this statement be interpreted? It is, more than anything else, a declaration that no matter how rich China becomes and how much its interests diverge from those of developing countries, it nevertheless expects to be forever regarded as the leader of the developing world. In any superpower competition with the liberal democracies of the West — the rich world by definition — China expects, through its “developing-country” status, to be able to call upon the support of the Global South.

For India, this should be viewed as a threatening trend. India has already suffered in the past, such as at global climate-change conferences, by allowing itself to be bracketed alongside the world’s highest emitter of carbon. China’s smokestack factories seek protection from pressure to decarbonise by hiding behind the far lower emissions, in total and in per capita terms, of developing countries like India. It is not in India’s interests that such sleight of hand be allowed to continue. Moreover, India has the duty to ensure that its common interests with multiple other emerging economies — from giant nations such as Brazil or Indonesia to smaller countries in sub-Saharan Africa — are defended at the global high table. These interests include a decentralised and inclusive global economic system. This implies broader reform of finance and supply chains, which may not be in the immediate interests of either the West or China. These ideas will need to be put forward by genuine developing-country coalitions, not those organised in Washington or Beijing.

India no longer vocally supports China’s position as a leader of the developing world, or its self-identification as a developing country. It, however, stands by the principle of self-determination of such issues. The time has come to question what the payoff for India is in such a principle. Recognition of China’s outsize weight in the global economy and its swift graduation to the upper half of the income distribution is overdue. The International Monetary Fund now estimates that China has a higher per capita income than Argentina, Malaysia, Mexico, and Turkey, and is only $1,000 or so shy of some less prosperous eastern constituents of the European Union.

But self-declaration as a developing nation allows it to retain privileges at the multilateral level, including at the World Trade Organization. India must now question what the advantages are to its development path of retaining a system that provides a strategic competitor with such benefits. Global development has taken a straightforward path: Poor countries attract capital and technology, become richer, and turn into investors in the development of those right below them on the ladder. No country can expect to be a developing nation forever even as the facts on the ground contradict that description. China should not be an exception.