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An elephant in the dragon boat race?

As America retreats from the world stage, an India-China partnership could reshape global trade and political alignments. China's new brand of white knight economic imperialism is changing the power balance as it doles out money for development while firmly controlling the reins as creditor-in-chief.

By VIJAY VERGHESE
Hong Kong, May 2018

The Modi-Xi thaw has focused on trade, agriculture and tourism

The Modi-Xi thaw has focused on trade, agriculture and tourism rather than 'irritants' like border standoffs, Tibet, and the outlawing of Pakistan terror outfits.

AS CHINA’s ‘One Belt One Road’ snakes out around the globe deftly fashioning a network of countries irrevocably tied to the mother ship, it is clear that Asia’s red dragon is stepping briskly into the vacuum created by the withdrawal of the mercurial Trump administration from the international stage. It has provided a magnificent opportunity to flex soft power.

As the USA turns its focus to walls and insular populist nationalism, each presidential tweet shredding state department policy fine-tuned over decades, China – once an inscrutable communist recluse modelled much on Stalin’s autarkic socialism – has transformed itself since Deng into an outward leaning capitalist economy with some lingering socialist attributes.

Vijay Verghese

Vijay Verghese


The two leaders focused on trade (opening up China to Indian agricultural and pharmaceutical exports) and tourism rather than 'irritants' like China’s block on India’s induction to the Nuclear Suppliers Group and Tibet. Interestingly, it was India that in the 1950s staunchly defended China’s right to be included in the UN with a seat at the Security Council

Much of this has to do with survival. This is no master race push for lebensraum or ‘living space’ – as the Germans argued when they annexed Austria and later when they ‘liberated’ the Sudetenland from the Czechs – but is of no less map-altering import as China surges beyond its borders seeking to contain, shape, pamper and enrich its 1.37bn people with a new brand of white knight economic imperialism, doling out money for development while firmly controlling the reins as creditor-in-chief.

And what of its great rival south of the Himalaya? India’s nonaligned policy authored by the first Prime Minister Jawaharlal Nehru, smarting from the excesses of colonialism, struck a hugely responsive chord among newly independent nations from Indonesia and Egypt to Yugoslavia and Ghana. The 1961 Belgrade Summit brought into being the Nonaligned Movement, which sought separation and neutrality from both the West and the East as the cold war ramped up. The movement fended off attempts by Cuba’s charismatic Fidel Castro to bring it into the socialist fold and eventually grew to include almost 70% of the United Nations membership.

Yet, in a fit of anti-Congress pique and drawing much from the fascist playbook, India’s ruling Bharatiya Janata Party and its saffron cohorts are intent on burrowing ever deeper into recondite obscurantism. Hindutva fundamentalism (abhorrent to many Hindus) has been unleashed to marshal the mob and marginalise minorities. In rubbishing both Nehru and Mahatma Gandhi and their inclusive secularism, the BJP ‘tamasha’ (or drama), is squarely aimed at creating and securing a pliable voting base using a highly emotive tack combining faith, history and heroic legend (much of it doctored), and past ‘foreign’ transgressions (to ignorantly point fingers at Muslims, Christians and others).

As celebrated Indian politician and author Shashi Tharoor writes in his recent book Why I am a Hindu, “Unfortunately… the votaries of Hindutva seem to take pride in Hinduism the way in which one might support a football team as a badge of identity, rather than a set of values, principles and beliefs…” The seeming disarray in India is at odds with China's pragmatic long march out. Yet both countries face pressures at home that would hobble lesser governments. And they have more in common than many would like to think.

As India’s hostile inward push for lebensraum continues with its very own ‘football hooligans’ in the vanguard, its government, like China’s, is faced with the task of coping with a 1.3bn population, much of it below the poverty line. People have to be fed, clothed, and put to work. Modi’s expected economic miracle has failed to materialise thus far and much of his efforts are now directed abroad where, between the hugs and handshakes, it is clear that India’s historical moorings are changing.

Trump’s hardline Iran stand has slowed India’s Persian Oil-Belt And Road campaign as it quietly taps into one of the largest reserves of oil (Iran and Central Asia) while helping fund and develop the Chabahar deepwater port connected to the 7,000km North South Transportation Corridor

The pivot towards America has potential rewards as it pushes for a permanent Security Council seat and as a bulwark against China with whom India fought and lost a humiliating war in 1962. China continues to threaten its long and hazily demarcated 3,500km Himalayan boundary. Yet there is a sizeable American spanner in the works as India tries to resupply its ageing Soviet-era military aircraft and defence equipment amidst growing sanctions for Russia (historically India's staunchest ally). This is one reason India has turned warmly to Israel.

Modi and Xi Jinping sought an informal thaw in Wuhan late April with a flurry of largely unscripted meetings that were remarkable for what was left unsaid rather than the actual discussions. The two leaders focused on trade (opening up China to Indian agricultural and pharmaceutical exports) and tourism rather than 'irritants' like China’s block on India’s induction to the Nuclear Suppliers Group, Tibet, border standoffs, and the outlawing of Pakistani terror outfits. Interestingly, it was India that in the 1950s staunchly defended China’s right to be included in the UN with a seat at the Security Council (then held by the Republic of China or Taiwan).

Somewhat atypically, Chinese media splashed Modi across the front pages, calling the meeting a historic ‘reset’. While Indian Foreign Secretary Vijay Gokhale worked to bring about an India-China rapprochement post-Doklam, the Indian government had been quietly laying the groundwork – some of this revealed in a leaked official circular late February asking government officials to stay away from events marking the 60th anniversary of The Dalai Lama’s arrival in India.

Having granted deracinated Tibetans safe harbour and Indian citizenship for over six decades, the government is now seeking to position the Dalai Lama as a respected ‘religious leader’ while soft-pedalling his role as the Tibetan temporal head. This turnaround is a frank exhibition of realpolitik by Asia’s two giants partially prompted by a consolidation of tenure for Xi (for life) and Modi (reasonably assured of a second term) as well as growing American unpredictability.

Trump’s hardline Iran stand has slowed India’s Persian Oil-Belt And Road campaign as it quietly taps into one of the largest reserves of oil (Iran and Central Asia) while helping fund and develop the Chabahar deepwater port on the Arabian Sea. Chabahar is connected to the North South Transportation Corridor developed jointly by India, Iran and Russia (with Azerbaijan and Kazakhstan now onboard), a 7,000km land-and-sea corridor linking Mumbai with Chabahar, Baku, Astrakhan, Moscow and St Petersburg. A motorable road to Afghanistan completes the linkage opening up several landlocked economies to the Indian market while Iran secures a safe deepwater port farther east. Bandar Abbas in the Persian Gulf is considered perilously close to the Saudis and vulnerable to blockades.

Having granted deracinated Tibetans safe harbour and Indian citizenship for over six decades, the government is now seeking to position the Dalai Lama as a respected ‘religious leader’ while soft-pedalling his role as the Tibetan temporal head

Chinese Belt And Road aspirations in this region include a highway through the Pakistan badlands of Baluchistan – troubled by separatist insurgencies – leading down to the southern deep-sea port of Gwadar. While China remains a staunch ally of Pakistan it has arguably less stomach for the jihadi mob lining much of its prized economic corridor to the Arabian Sea. India, which has thus far stayed out of the Belt And Road grid (mulling instead an American, Japanese and Australian partnership with similar aims) and deeply concerned about a Chinese highway running through portions of Kashmir it historically claims, could conceivably offer an alternative – a route through Indian Kashmir down to Gujarat. Bringing China on board offers gains in dealing with Pakistan (a fence in sore need of mending) and Afghanistan.

India and China have to tread carefully as they expand their economic sights and despite the bellicose sabre rattling both recognise there is no upside to conflict. The Line of Actual Control (LAC) – effectively a de facto demarcation – can slowly become a soft border permitting of trade and cultural exchange. This could be achieved with some possible give and take with India surrendering its claims on Aksai Chin in Ladakh in exchange for Chinese assurances on Arunachal and other eastern flashpoints. This has been sounded out in recent years by senior Chinese diplomats

Internationally, China, with the largest standing army in world (estimated at a little over two million) and often cast as a neighbourhood bully, has been deft with diplomatic overtures.

With the US in retreat, China has quietly but dramatically expanded its participation in UNESCO, the World Bank, the International Civil Aviation Organization, the International Telecommunication Union, and global peacekeeping. It understands the potential of soft power as it seeks overseas friends and markets. The Communist Party’s very survival, and not just pride, depends on sustained growth to keep its population acquiescent. There is no room for any distraction, least of all a clash with its southern neighbour.

Meanwhile, the BJP’s brawling domestic Hindutva face, openly intolerant of Islam and dangerously slap-happy, may not survive the rigours of global realpolitik and could well find itself covered with a heavy burqa as India engages with the Muslim populations and austere regimes of Iran, Afghanistan, and Central Asia. The economic imperative may force a political reassessment for India and potentially help bridge sectarian fissures. As they say, money talks.

The Modi-Xi thaw marks the beginning of an economic convergence that could change Asian and global alignments with far-reaching implications.

Vijay Verghese started out as a reporter for the Times of India, a national daily, in 1979. He moved to Bangkok and thence to Hong Kong in 1984 as editor and publisher of a range of news, business, travel and lifestyle publications including Business Traveller, HOLIDAY Asia, and Asian Business. He launched Dancing Wolf Media in 2002 and runs the online magazines SmartTravelAsia.com and AsianConversations.com when not dabbling in avatars, music and virtual guff.

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J Blumenthal (7 May, 2018) – USA
A very absorbing read and a sense of optimism. I believe though India has significantly more problems to overcome, not least, the bullying domestic agenda. The news has not been good lately. But if India and China can come together they would be a force to reckon with. I doubt the United States would be keen to see that.
Anju Chandna (5 May, 2018) – UK
Great article Vijay. Wonder if the changing demographics of China (and India) has anything to do with this new courtship?
Anup Kuruvilla (4 May, 2018) – India
Enjoyed this article...very lucidly written...what is surprising is the relatively small coverage a meeting of such dimensions received in the international press...so much for their impartiality and objectiveness.....glad you covered it......

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