Since the global financial crisis of 2007-08, the economic backlash against globalisation has been increasingly evident. However, India was an exception as Mr Modi, the poster boy of the cultural backlash against globalisation, rose to power and prominence while retaining his image as the “Davos man”, the image of a globalized elite. Whether globalization is a boon or a bane is a controversial issue, but India has accepted it with ecstasy and has strived over the years to lift millions out of poverty by integrating the economy of India with the economy of the world.
The 2019 global Multidimensional Poverty Index (MPI), released by the UN Development Programme (UNDP) and the Oxford Poverty and Human Development Initiative (OPHI), exemplifies the fact that India has lifted 271 million people out of poverty between 2006 and 2016. Apart from the two backlashes against globalization—economic and cultural, in India, each time there is a military confrontation between India and China, a huge public reaction erupts against the Chinese products. As a military confrontation is going on the LAC, the same anti-Chinese sentiment is reigning supreme over the mass as a mark of nationalistic fervour.
India and China had been the lighthouses of civilization for centuries when Europe and America were shrouded in darkness. Europe rose to glory during the industrial revolution and America dominated the world in much part of the twentieth century and continues to enjoy prominence even in the twenty first century. If nineteenth century was the century of Europe, twentieth century the century of America, then certainly twenty first century is going to be the Asian century. The Asian century, a vision suddenly conjures up the names of two Asian giants – China and India. The cooperation and conflict between the two regional powers will define the Asian century and its course.
The relationship between the two countries is as old as history. The cultural, intellectual and trade ties go back to the days of the silk road. To forge an Asian partnership, the Prime Minister of India, immediately after the establishment of People’s Republic of China (PRC) in 1949, evinced the vigour and not only set up diplomatic ties with PRC in 1950, but also pleaded for the PRC’s membership in the UN. Yet, the issue of Tibet emerged like a thorn in the rosy relationship between the two neighbours.
India and China signed an “Agreement on Trade and Intercourse between the Tibet region of China and India” on April 29, 1954, which is known in the public memory as the historic Panchsheel Agreement to elevate the relationship to a new plane by resolving the bilateral disputes. These were the heydays of Indo-China relationship which was soon to plummet to new lows in 1962 with the Chinese invasion on India. The history of Indo-China cooperation and conflict is a chequered one, replete with instances of strong friendship and bitter enmity.
As China and the United States came closer after 1972 and India perceived a threat in the China-U.S.-Pakistan axis, it got attracted to create a strong relationship with former Soviet Union to balance the axis. It was in 1988, Rajiv Gandhi’s visit broke the ice and a Joint Working Group (JWG) was set up to explore solutions to the vexed boundary dispute.
Prime Minster Atal Bihari Vajpayee visited China in June 2003. The Joint Declaration expressed the view that China was not a threat to India. Special Representatives were appointed in order to provide momentum to border negotiations that had lasted for more than two decades, with the Prime Minister’s principal secretary becoming India’s political-level negotiator, replacing the India-China JWG. During Manmohan Singh government also the relationship went on in an upward trajectory.
But the last five years have seen increasing tension in Dhoklam and now in Ladakh, however, the rising tension have also been accompanied by political will to resolve the conflict and not letting the differences to escalate into dispute, the finest examples are two informal summits, first in Wuhan and second in Mamallapuram.
China is India’s largest trading partner, but China enjoys a huge surplus while India is having a trade deficit. In fact, the United States of America also has a huge trade deficit with countries like China and India. In a globalised world where economies have been intricately linked as never before, self-sufficiency is not something the nation-states strive for.
Trade enables a country to specialize in one aspect and bridge the gap in the domestic market by importing from other countries. Trade deficit with one country is not always a sign of weak economy. Trade deficit with China simply signifies that Indians buy more Chinese products than vice-versa. However, continuous trade deficits across all countries increase burden on the foreign exchange reserve and demonstrate a country’s inability to produce anything.
Social media and even in the streets of India, as an expression of anti-Chinese sentiment, a campaign is going on to stop buying the Chinese products as it will cripple the Chinese economy. But a close observation at some statistics proves this compelling argument illogical because while:
China accounts for 5% of India’s exports and 14% of India’s imports, India’s imports from China (that is, China’s exports) are just 3% of China’s total exports. More importantly, China’s imports from India are less than 1% of its total imports. The point is that if India and China stop trading then — on the face of it — China would lose only 3% of its exports and less than 1% of its imports, while India will lose 5% of its exports and 14% of its imports. (Indian Express)
Therefore, the idea of crippling Chinese economy is only a mere rhetoric without any substance; rather it will affect the consumers and producers in India adversely. Consumers would be affected because of the unavailability of the low-cost goods and producers will have to bear the burden because they can no more obtain the intermediate goods. Ultimately, the deterioration in trade ties will exacerbate the overall relation and confrontation will be more frequent than before on the frontiers.
Trade locks the countries in the web of dependency and assuage the tension; use of trade as a means of negotiation will give India more bargaining power. But if the mass sentiments on the streets of India are allowed to influence the foreign policy decision, then it will worsen the relationship and will have short-term and long-term negative consequences for India.
Foreign policy is designed to advance the interest of a State but never fashioned to gratify the voters on the street. Efforts to score brownie points will only take India and China closer towards a warlike situation, and the dream of an Asian century characterized by partnership between the two Asian giants will only remain in words in journals and academic text books.
To let the vision of Asian century see the light is a responsibility of both the powers and only a strong partnership between the two giants will determine the fate of Asia in the world. Nationalism is a rising phenomenon across the globe, which propels the country to look inward shaking off the global responsibility. It’s a critical period in the history of global governance where traditional powers are going more inward; but like every crisis, this also provides an opportunity where India and China can rise to the occasion and can transform their position from rule-takers to the rule-makers.
Coordination between the two countries will determine the fate of global governance and the role of Asia in it. Being Aatmanirbhar is always a great vision, but it shouldn’t come as a cost to the flourishing relationship. The policy makers in India have to remember that that the partnership between the two ancient civilization will give us the cockpit of global governance, however, China should also ensure that it rises peacefully.
The article was first published here.