Far from being the “quaint” perhaps even backward nations of a generation or two earlier, China and India are both now advancing both in terms of productivity, technology and a effective multi-million person workforce. China is the focus of much international investment, although as the recent Time-Warner pullout shows, not without some nationalist (no pun intended) setbacks. India has been advancing its educational systems, now turning out engineers, IT experts and other 21st century technological savants in some ways outpacing the Americans. With both nations primed to exert their influence on their region- primarily Southeast Asia (as a beginning) should we see these two as competitors or partners in an efforts to strengthen commerce in Asia as opposed to the Western nations, including, of course, the U.S.? We cannot remain as spectators.
The balance of power in Asia is not merely shifting to China's economic emergence, but the efforts of China and India to come to some sort of agreement and rapprochement, especially with the threat of Pakistan and its nuclear capabilities (and its Muslim extremists) lurking.
The People's Republic is both a marvel, economically and politically, as well as a potential threat, economically and militarily. “A nation with a fifth of the world's population has had a bad 500 years….And then, in the space of a few decades, it steps forward. Its economy grows at a rate for which the word `miraculous' seems too modest. Its culture shows a new vitality. Its armed forces modernize. And the rest of the world watches, impressed and nervous at the same time, wondering if the new giant still seethes with resentment….A friendly China?… a China that saw itself as a natural enemy of the United States? So: which will it be?” (Auchincloss et al 24)
Historically, there have been major differences between these two. In fact, diplomatic relations were severed often and the two nations were barely on speaking terms. “These differences are now being edged aside by growing economic links. Annual two-way trade has risen from a few hundred million dollars in the mid-1990s to $3 billion this year, and India hopes to see that rise to $10 billion within five years. Cheap Chinese toys, locks, and other consumer goods are flooding into India. Such competition is causing concern in Delhi; but Indian manufacturers are responding by setting up operations in China to turn out goods varying from tires to microwave ovens” (Anon 3). The Economist also points out some other recent developments that are bringing the economic needs of these two countries closer together: “India also worries about losing its status as Asia's leading producer of software. Though its software exports this year are expected to top $8 billion to China's $1 billion, China has been sending teams to learn the secret of India's success. Responding to the implicit challenge, Indian software companies such as NIIT and Infosys are moving into China. All this, says an Indian government spokesperson, is “adding value and content to the relationship” (Anon 4).
However, it is important to recognize that there are still problems between these two increasingly powerful nations. “The fact that relations between China and India today seem to be better than at any time during the last 40 years should not lead to the assumption that all the hurdles in the relationship have been overcome” (Mohan 317).
It is important to look back at some dealings with the People's Republic of China during the Reagan Administration, and some documents recently released to the public. Document 9 is a very meaningful Security document which covers the efforts of China to develop and test nuclear weapons. What is worrisome, in hindsight, is the assessment that “qualitative improvements that the Chinese are developing for their nuclear warheads will depend on both overt contact with U.S. scientists and technology, and the covert acquisition of U.S. technology.” (Richelsen Doc 9). This document was prepared only three days after the economic “rosy” friendship plan, outlined in Document 8, was sent by the White House. Still the assessment is that, even though China has become a nuclear power, compared to Russia, it is far too small to be considered a risk. Again, this seems to be proof of the Reagan Administration's concentration on the Russian “Evil Empire” and not be as concerned with the emerging Chinese atomic weaponry. But, documents now show that China, during Reagan's Administration seemed to have been getting covert help from highly placed American scientists. The document specifically states that the progress of their nuclear experiments may be “benefits they are deriving from both overt contact with U.S. scientists and technology and covert acquisition of U.S. technology” (Richelson Doc. 9). This news is not surprising. Yet, what is surprising is that there was little if any public announcement of having caught and punished those who gave overt technological help to the People's Republic of China.
Some investigations did bring out the fact that there seems to be a belief among U.S. intelligence experts that between 1986 and 1988, the Chinese stole sensitive U.S. nuclear secrets, including how to make a miniaturized W-88 hydrogen bomb. China successfully tested its own small hydrogen bomb in 1992. One can even consider this wishful thinking on the part of the Administration, feeling it can “persuade” mainland China to be far more amenable to overtures from the U.S. to be a more “friendly” power than Reagan might achieve with Russia. It is clear, therefore, that the Reagan Administration's priority is to defeat Russia, and somehow to neutralize China with friendly overtures.
Russia is now out of the picture, of course. Instead, one must face the Asian realities of China and India- as competitors and, in some cases, as partners. Pakistan, of course, has “the Bomb.” But, India provided its own nuclear capabilities ion 1998. At the time, India saw China as an enemy. “Just before the (nuclear) tests (in 1998) India's defense minister explicitly singled out China as India's ‘number one' security threat” (Frazier 6).
Looking to more recent efforts to capitalize on the enormous size and potential of China and India, please take note of comments made by an Indian economics:
“For the world at large, as well as for the neighbours (sic) of China and India, it is true that the incremental increase of what in China is called ‘comprehensive national strength'… will cause restructuring in global resource allocations, investment decisions, financial inflows and outflows, technology developments, and may affect the hitherto established power balance…For this, the first requirement is that India and China, as the two largest countries in the world, must be open to each other” (Ranganathan 6).
We should be aware that diplomats from both nations are now encouraged to speak to audiences in order to make them receptive to future cooperation. For example, the Chinese consul general in Mumbai recently said “…as the two largest developing countries in the world, China and India have extensive common interests in international political and economic arena. The friendship and cooperation between the two countries not only serve the fundamental interests of our two peoples, but also contribute to peace, stability and development in Asia and the world at large. Both of us favor a multi-polar world, both of us should shoulder the responsibility to maintain the regional and international peace, both of us should work together to protect the various interests of developing countries” (Song Deheng 4).
It is a somewhat disturbing fact that the U.S. foreign and economic policies toward India are balanced with the need to remain friendly with India's “enemy”- Pakistan. At the same time that India is moving toward better relations with China, the U.S. is still uncertain about how to deal with China. Chalmers Johnson, president of the Japan Policy Research Institute. has a theory:
“I believe that the contradictions and inconsistencies of American policy toward China are not caused by conditions in China. U.S. policy toward China is the same policy it has toward the rest of the world-namely, it wants a Washington-centered world, hegemony, to be the ‘lone superpower,' the ‘policeman of the world,' the ‘reluctant sheriff'… a world order that is American-inspired, dominated, and led” (Johnson 8).
Frazier (2000) provides some proof that India is moving closer to truly good relations with China, rather than an adversarial one. He cites the fact that “Many Chinese strategists now cite India's policy forbidding Tibetans in India to engage in political activities against China as an example that indicates a solid basis for bilateral cooperation” (Frazier 39).
Some political critics see India and China's improving relationship not so much a threat against the U.S., but proof that American policy has not been working as well in Asia. “India's approach to the management of tensions with China offers important lessons for other regional actors in how to manage relations (especially on sensitive issues) with China. New Delhi has handled Beijing more successfully than Washington has during the corresponding period” (Rahm 91). Rahm (2001) also points out that India and China have established and maintained regular reciprocal high-level personal visits between political leaders. Both states have improved trade relations and take care to compartmentalize intractable issues that continue to irritate long-standing tensions.
Once India and China move even more closely together economically, if not politically, the power of the world's two most populous nations will surely dominate Asia. The economic strength of Japan will wane. The emergence of economic facilities in Singapore, Vietnam and other Southeast Asian nations will fall under the dominance of India/China- a behemoth to be feared. What must be recognized is that a China-India economic alliance will create a presence in Asia, and perhaps elsewhere, that will affect the U.S. “As developing countries, both China and India are interested in gradually integrating their economies into the global trading system in ways that provide the necessary protection and transition time for their industries to adjust” (Yuan 4).
Despite all the closer ties, there is no doubt that in the coming years these two countries will challenge each other for some sort of economic domination in Asia, and then, worldwide. This struggle- and the eventual “winner” should be of concern to American business and our economic and foreign policies.
Given the background above, what should American priorities be concerning China and its attempts top form some sort of economic alliance with India. Some suggestions:
1. A major problem is that China as well as India is now turning out an engineering- and technology-minded young generation, willing to work at salaries far below that of the U.S. Some sort of international wage standard must be set up which no longer puts American, higher-salaried workers behind the eight-ball.
2. Some sort of détente, or entente must be formed to make certain that China, as well as India use their nuclear techno logy for peaceful purposes.
3. A way must be found to reduce the export-import gap which now makes the U.S. a world-wide debtor nation. The weakness of the dollar and low wages in China are a danger to American manufacturers. Here is an example to watch closely:
“To get a sense of how completely China dominates low-cost manufacturing, consider Wal-Mart. Wal-Mart is America's – and the world's – largest corporation. Its revenues are eight times those of Microsoft, and make up 2 percent of America's GDP. It employs 1.4 million people It is legendary for its efficient – some would say ruthless – efforts to get the lowest price possible for its customers…Last year Wal-Mart imported $18 billion worth of goods from China. Of Wal-Mart's 6,000 suppliers, 5,000 – 80 percent – are in one country, and it isn't the United States” (Zakaria 28).
4. As a result of China's Most Favorite Nation status, the U.S. and its internationally-minded industries must be given access to development of their markets in China.
5. U.S. Foreign policy cannot stand by while China and India form an alliance that sees Pakistan as a common enemy.
6. If Chinese students are permitted to come for an education and training in the U.S., equal opportunities for Americans to gain a foothold in China's growing technology and entrepreneurial emphasis must be offered by the PRC.
7. India cannot replace the U.S. in mutual trade agreements and sharing of information and facilities.
8. The U.S. must eventually make some effort to try to reunite Taiwan and mainland China. Even without American support, Taiwan is already setting up some business activities on the mainland. “Taiwanese business owners began setting up factories in Mainland China in the 1980s. The trickle became a flood in the past few years, much of it pouring into the Shanghai region, where 400,000 Taiwanese now live, and more than half of Taiwan's investment landed last year” (Meredith 194).
9. We need to come to terms with the fact that China is outpacing us, and every other nation in the world. We need to realize that low wages do not necessarily mean shoddy workmanship. “Two decades of reform, a more pragmatic Communist government, and the raw industry of the Chinese people have produced an economy growing faster than any other in modern history” (Newman 34).
10. While the President in his Singapore address (Nov., 16, 2006) warned against isolationism and protectionism, the fact remains that some sort of equalization is needed to guard the U.S. economy from losing even more manufacturing jobs to the cheaper Asian nations, especially China and India.
Given these priorities for harnessing in China's massive economic surge, the main question to be answered is: Should the U.S. fear the People's Republic of China? Given the books, texts and others written by so-called Western “Chinese experts”, the answer is Yes. Not military fear (despite China's nuclear capabilities). It is the fear that the enormity of China's population and its still-strict political control will not easily yield to pressures from the U.S., and perhaps the EU, to curb its low-wage practices.
In looking ahead to mid-century, one area of concern today that surely will play a larger role is China's increasing dependence on oil, which, at this point, it has none within its borders. “China's oil needs are expected to more than double over the next two decades to just over 14 million barrels per day, according to U.S. Energy Information Administration projections – roughly two- thirds of current U.S. consumption” (Marshall A 1). So, where will China turn? Currently, it is dealing with Iran (part of Bush's “axis of evil”). Will China's oil supplies be in line with nations more closely allied to U.S. interests? And if not, how will this be seen as a political and economic “brush-off” to U.S. priorities in Asia? It may be simplistic to say so, but if China 2050 is to be a fully developed instead of a developing nation, it cannot necessarily play to Uncle Sam's tune. China's Asian dominance must come from its ability to go one-on-one with Western interests and not give in to American or EU interests.
In the segmentation of defining China s a fully developed nation at mid-century, we can never overlook its political status- that of a Communist nation with no view toward reducing central governmental controls over nearly everything. “Chinese politics rarely announces fully fledged designs for future reform in the sense of a deviation from the existing ideology; for example, it avoids the term privatization in spite of several waves of privatization running across the country” ((Herrmann-Pillath 549).
China and India will continue to both compete and attempt some economically strategic alliances. But, regardless of the literature now available, the future is more guesswork than reality. What this research has shown is that, essentially, the true status of The People's Republic of China in 2050 is more guesswork than reality. Chances are economic growth will continue, and that China's dependence on foreign oil and foodstuffs will increase and that the priorities for upwardly mobile Chinese will be economic benefits rather than political change.
Perhaps the real problem that affects the U.S. is that, try as we might, we simply do not understand China- its traditions, customs, political and social priorities. China simply does not play by Western rules, and we need top accept that fact and live with it.
References:
Auchincloss, Kenneth; Klein, Joe; Levinson, Mark; Barry, John; Watson, Russell; Lin, Melinda; Wehrfritz, George; Elliott, Dorinda, and Oksenberg, Michel: “China on the Move” Newsweek, April 1, 1996
Frazier, Mark W.: “China=India Relations since Pokhran II: Assessing Sources f Conflict and Cooperation” AccessAsia Review, July 2000
Herrmann-Pillath, Carsten: “Cultural Species and Institutional Change in China” Journal of Economic Issues, Sept. 2006 Vol. 40, issue
Johnson, Chalmers: “The United States Should Not Try to Control China” San Diego: Greenhaven Press, 2001. Opposing Viewpoints Resource Center. Thomson Gale.
Meredith, Robyn: “Reunification, Chinese Style” New York: Forbes Oct 28, 2002.Vol.170, Iss. 9; pg. 194
Marshall, Tyler: “The Price of Asia's Growth; The U.S. is no longer the sole power that many nations look to for trade and protection” Los Angeles TIMES, Nov. 6, 2005
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Rahm, Julie:M.: “Russia, China, India: A New Strategic Triangle for a New Cold War?” Parameters, Winter 2000/2001 www.carlisle.army.mil/usawc/Parameters/01winter/rahm.htm
Ranganathan, C. V. “India-China Relations: Problems and Prospects” World Affairs, Vol 2, Number 2 (Apr-Jun 1998) www.ciaonet.org/olj/wa/wa_apr98rcv.html
Richelson, Jeffrey T. (ed.):”From Hostility to Engagement, 1960-1998 www2.gwu.edu/~nsarchiv/NSAEBB/NSAEBB19/
Document 9: “Nuclear Weapons Systems in China” April 24, 1984
Song Deheng “Speech on the Seminar on India-China Relations Today” April 2, 2005 mumbai.chineseconsulate.org/eng/xw/t191575.htm
Yuan, Jing-dong: “''Sino-Indian Relations: Perspectives, Prospects and Challenges Ahead''
Power and Interest News Report (PINR) March 30, 2005 www.pinr.com/report.php?ac=view_report&report_id=283&language_id=1
Zakaria, Fred: “Does the Future Belong to China?” Newsweek, May 9, 2005
No author listed: “Bridging the Himalayan divide; India and China. (China and India)(improving relations)” The Economist (US), March 30, 2002