Journey to the West’ is a Chinese classic on the 7th century legendary pilgrimage of monk Xuanzang or Hiuen Tsang to the West i.e. India. This was the period of Tang Dynasty in China and Harsha Vardhana in India. By the Chinese monk’s accounts, India was a prosperous society and a major centre of learning, culture and arts. However, in modern times, Indians have a deep rooted suspicion of the Chinese who in turn have an attitude of indifference towards India.
US President Obama’s upcoming visit to India puts into focus the dynamics between the three key nations in the world: Tiger (India), Eagle (USA), Dragon (China). Here are the ‘sutras’ or threads of thought on the dynamics between the three countries:
Strangers across the Himalayas
Till 2013, the mention of India in Chinese media was few & far between. The border tensions were at best a footnote in Chinese newspapers. ‘String of pearls’ theory draws a blank among Chinese media. For the young Chinese, India is a nation far removed with the imagery of chaos, dirt and poverty. They have little or no recollection of the 1962 war or in contemporary times, the immense accomplishments of Indian businesses, technology and science. The Chinese believe their nation is destined to be the ‘zhong’ (centre) of the world.
Now the ‘Tiger’ (India) is stirring. President Xi’s trip last year has rekindled the Chinese interest. Indians too are gradually moving beyond the stereotypes of Chinese food, cheap goods and security encirclement. A trip by any Indian to the inland city of Chongqing, leave alone Shanghai, results in ‘shock and awe’.
The Dragon is flying
In the late 70s, Deng Xiaoping, the father of modern China proclaimed in a small fishing village of Shenzhen (2013 population: 15+ million) that it doesn’t matter ‘if the cat is black or white as long as it catches mice’. Since then, China has turbo charged growth with state-supported capitalism to become the second largest economy in the world.
The number of smart phones in China is twice the population of US. Chinese digital firms Baidu, Alibaba, Tencent (BAT) have a combined market capitalization of ~$500 billion. Chinese single’s day (11/11; akin to Cyber Monday in US) purchases exceeded $9 billion this year. 100 million Chinese go overseas on vacation. Chinese exports firms are world class, so are emerging start-ups across industries.
President Xi has a ‘China Dream’: a modern, strong nation that is respected across the world. His government is taking on the scourge of corruption, reforming the society viz. the ‘one child policy’, the household registration system or ‘hukou’; as also reforms of the shadow banking industry and domestic debt. Depending on various estimates, China will be the world’s largest economy within the next 10 years.
The Dragon eyes the Tiger, Eagle
China has a ‘love-hate’ relationship with America. USA is the biggest export market for China and in turn China is the world’s biggest holder of US treasury bonds. The Chinese would like to believe that the G-20 is in reality a G-2. However, the US pivot to Asia is perceived by the Chinese to be with the sole objective of containing their nation’s rise.
China has certain core interests that are essentially in the neighborhood. China has a historical commitment to Taiwan, South China Sea, Diaoyu (Senkaku) Islands along with Hong Kong, Tibet, Xinjiang. As long as India-US relationship stays clear of these issues, China will continue to openly engage with India on the economic front.
President Obama’s upcoming visit to India and attendance in the Republic Day celebrations has tremendous symbolic value for the Indians. From the Chinese point of view, they have watched this movie in the last decade: first with President Clinton and then with President Bush. PM Manmohan Singh’s strategic partnership with US resulted in the landmark nuclear agreement. However, in reality while India plans 20GW from nuclear power by 2020, China will be trebling capacity to 84 GW during the same period.
The ‘chatur’ Tiger
President Xi calls it a ‘historic mission’ to forge China-India partnership. PM Modi, hosted the Chinese President on his birthday balancing personal bonding with border realpolitik. Today’s India is 15-20 years behind China on per capita GDP as also urbanization, poverty alleviation. In the last three decades the poor (below $1.25 per day) population in China has fallen from 70% to below 7%. China laid over 10,000 kms of high speed train track in the last five years (more than Europe did in 30+ years). The Chinese economy is 4 times that of the Indian economy. Even at a ‘slower’ GDP growth of 6-7%, China adds an India in 4 years!
China has $4 trillion of reserves and its outbound investment is slated to eclipse in-bound FDI. Chinese firms like Huawei, Xiaomi, Haier plus the infrastructure companies are looking at India for growth. China, India, South East Asia (ChInSEA) are destined to be the drivers of global growth.
If the tiger is ‘chatur’, it will smartly gain from the Chinese (and American) capital, technology, and ideas.
The Dragon (China) is looking forward to partnering with the Tiger (India). It is wary whether President Obama’s pivot to Asia will be a spoiler. A pragmatic, progressive, open Indian nation, society will be best served by welcoming travelers on a ‘Journey to the East as well as the West’!