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A paranoid India and a confident China?

A V Rajwade | November 13, 2006

As New Delhi prepares to welcome the Chinese President, it is useful to place the relationship in a somewhat longer perspective. These are not only the two largest and fastest growing countries in the world, but also the world's oldest surviving civilisations, who have contributed so much - Volume I of Will Durant's monumental "Story of Civilisation" is titled Our Oriental Heritage: India and China", acknowledging the
Europeans' debt to the two cultures.

China was probably the most advanced country and seafaring nation in the world until the 15th century - that is when it turned inwards with the emperor ordering that all ocean-going vessels be sunk, so as to avoid contamination by barbarian foreigners.

China's renaissance had to wait for the revolution of 1949 and, economically, for Deng to throw away all socialist dogma and embrace international trade and investment, in the
late 1970s.

Historically, India was probably the world's most advanced civilization at an earlier era. Our greatest export to China was Buddhism. Our own economic renaissance began around the same time as China's, when economic liberalisation started in the early 1980s.

While we have registered an average growth rate of say 5.5-6 per cent per annum, for the last quarter century, the Chinese rate has been near double digits. Six per cent compounded for 25 years increases the economy by 330 per cent, while nine per cent per annum results into growth of 760 per cent.

On a per capita basis, the difference is even more striking because the Chinese have adopted a one child policy for long. China has already become a major global economic and political power, way ahead of us.

Various facts are manifestations of China's power. For instance, China was able to gather 48 African government heads for a summit in China earlier this month, the US needing Chinese help to contain North Korea's nuclear ambitions and hence, beingĀ forced to respect Chinese views about sanctions on Iran, and so on.

Be that as it may, a series of media reports about trade and investment issues between India and China lead me to wonder whether we are becoming unduly paranoid. Take, for example, the case of Cadmus Communication of US, wanting to invest in a subsidiary in India through the Hongkong special administrative region of China.

It is being delayed because of security considerations! This reminds me of an interview with Mrinal Sen, the famous film director. At one place, he talks about Bhuvan Shome, one of his acclaimed movies, which had been financed by the Film Finance Corporation.

After the movie was ready, FFC's managing director alleged Sen had violated the contract - because the length of the movie was a little less than contracted! This is a classic example of how bureaucracy handles issues, completely overlooking objectives and perspectives in perverse pursuit of triviality and irrelevance.

There is a danger that the ever-increasing powers being given to the bureaucracy to deny (or at least delay) clearances for foreign investments, particularly from China, from the angle of "security considerations", of "sectoral and locational threats", and so on, will be exercised similarly.

While the cabinet has overruled country specific security investigations, in practice, this might only mean that every foreign investment proposal would also be subjected to the same drill and delays.

Are we really worried that other countries are out to colonise or sabotage India? If 150,000 American troops cannot control Iraq, are not the days of imperialism really over? And, should we not have enough confidence to welcome foreign investment instead of thinking about East India Company every time, and creating "security" questions?

The worry is also whether anyone in the system has the guts to halt fruitless enquiries, once security questions are raised. Indeed, the paranoia about Chinese investments and supplies is a point on which I completely agree with the stand of the Left.

Supplies to telecom, employment of Chinese technicians, port contracts, quite apart from investments have all been hit. Contrast our attitude with the Chinese welcome towards Indian investments, most of them cleared at the city or, at the most, state levels.

Yes, we fought a war with China in 1962, over a still pending boundary dispute. While "patriotism" requires us to blame Chinese border incursions for the war, less partisan analysts, including Neville Maxwell, the then Delhi correspondent of The Times of London, have described it as "India's China War".

But whatever happened in 1962, is it not time for us to end, or at least bypass, nationalistic rivalries and border disputes and promote economic interdependence wholeheartedly?

It took France and Germany 150 years and four major wars to learn this lesson. Surely, we should do it faster and cheaper?
Budget Graphics | Budget 2005-06: Complete Coverage

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