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Information deficit hurts India-China opportunity

Published: 22nd October 2013 11:24 AM  |   Last Updated: 22nd October 2013 11:24 AM   |  A+A-

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As the top leadership of Asian giants India and China warm up and get into a dialogue over the next two days, the world would be watching closely for any positive signals emanating from the talks, or how both are keeping up the ends of their bargain.

Prime Minister Manmohan Singh is expected to raise many issues close to India's national interest. In a statement before departure, the prime minister said he will discuss with his Chinese interlocutors ways and means to consolidate the common strategic interests. And as part of the "strategic communication between leaders", he would raise issues of concern with a forward-looking and problem-solving approach.

The heightened interest on the India-China dynamics is precisely because of two reasons. There is a view, particularly among a section of the strategic community, that China's recent willingness to have good relations with India is a response to the global strategic context Beijing is confronted with-- the US rebalancing towards Asia and the resultant balance of power, especially in the resource-rich South China Sea.

Added to this is the historical baggage of the 1962 war, the issue of security concerning the unsettled 4,057-km-long border and the kerfuffle over it, that keep affecting the overall atmosphere of friendship and cooperation.

But beyond this dominant narrative, there are compelling domestic factors that are shaping the relationship. Both India and China are focussed on the modernisation and development of their respective economies. Both sides are aware of how critical the stability of their partnership is for peace and development in Asia and the world.

And inside India constituencies have come up, especially in the Northeast, asking for greater cooperation with neighbouring countries, including China. Just before Chinese premier Li Keqiang's visit in May this year, a member of parliament from Arunachal Pradesh argued in favour of accepting stapled visas for Indian citizens in the state who would like to visit China to promote opportunities for growth in the region.

China is already helping India's industrialisation, supplying equipment in the power generation and telecom sectors. And there are many in the country who believe the global financier could boost India's infrastructure development, and bilateral cooperation would open up space for regional economic integration.

On the table this time would be the Bangladesh-China-India-Myanmar (BCIM) economic corridor, which aims at strengthening trade and investment, leading to negotiations on a regional trade agreement.

"The aim is to complement the two economies. This is of great significance as we can link South Asia and East Asia. This will be conducive to regional connectivity," said Hua Chunying, foreign ministry spokesperson, ahead of the prime minister's trip.

"The infrastructure docking in the region will forge a very huge market," says Yao Wang, executive director of the Bao Forum, and neighbouring countries will benefit from the next phase of China's economic growth. "They can benefit from China's domestic market and infrastructure interconnections in Asia."

Significantly, the prime minister's visit to Beijing is taking place at a time when China is seeking a rebalancing in its economy, shifting from a production-oriented economy to one centred around household consumption. China's new generation of leaders no longer favour investment-led growth and are pushing for a consumption driven one and making policy adjustments to reduce reliance on investment and exports.

The development holds a lot of significance for India and Indian companies desiring to do business with China. For, manufacturing in China is facing the challenges of rising wages and other factor costs. Also, a new upper middle class is emerging in the country.

These trends are a product of China's rapid development and technological upgrading, and they will encourage the migration of labour-intensive industries to labour-surplus countries, creating an opening for India. Economists say the consumer goods sector and low-cost countries would benefit from the changes and could lead to collaborations.

India's strong services sector would gain as services are relatively underdeveloped in East Asian countries. Access to a large market such as China could give the sector a boost.

Trade and investment, which represent the most dynamic aspect of India-China relations, have generated a lot of concern recently because of their skewed pattern, favouring China. But this can be addressed by India exporting value-added products and China starting manufacturing in India.

It is reported that the prime minister would suggest tie-ups between the two countries to trade into third countries.

Despite all these possibilities, India-China cooperation is not growing as it should, because of a "trust deficit" between the two sides.

Rana Mitter, professor of history and politics of modern China at the Institute for Chinese Studies at Oxford University, says the two neighbours need to talk much more than they do now. The two "have a greater role to play in the region but they really don't talk to each other as much as they ought to," Mitter told The Business Standard newspaper recently.

Historians also find a lack of interest in improved understandings of the other civilization as somewhat ironic, although interactions between the two go back some 2,000 years. A century ago, Chinese and Indian intellectuals spoke of a pan-Asian sentiment that tied the two together and would provide alternatives to Western culture and its forms of social, economic, and political organization.

The "trust deficit" is then fed by an "information deficit". In both countries, understanding of each other's history, culture, and much else remains "quite shallow among political elites and professionals, to say nothing of the public," a group of Western scholars pointed out at an Atlantic magazine forum in May coinciding with Li's India visit.

"This too often results in a distorted view of how Indians perceive China and how the Chinese look at India. News outlets, blogs, and other foreign policy forums are dominated by non-specialists who nonetheless speak with authority and credibility on how India should handle relations with China and vice versa.

"Most often, hawkish views grab the headlines," said Mark Frazier of the India China Institute at The New School, New York City.



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