To Be A Bull In China's Shop-4 Oct, 2010

To Be A Bull In China's Shop

4 Oct, 2010 0000hrs IST [ Gautam Adhikari ]

Washington: It's stretching a metaphor, but India's attempt to strut on the world stage increasingly looks like an effort by a clumsy adolescent trying to bluff his way into a global shop showcasing China's dominance. The lad looks out of place. But is the picture accurate? Has China gone so far ahead that catch-up is not possible?

That picture is the forlorn impression you might be left with if you were this far away comparing the images of the two emerging giants. Even the term 'emerging' is used less and less these days to describe the growing power and presence of China in the world. Whether in seminars on strategic scenario-building or conferences on global governance, on television talk shows or in newspaper columns, they have China on their minds. Other emerging powers are, well, emerging. China has arrived.

They talk now and then about the growing influence of the G20 or the impressive economic growth of Brazil or India, but for many Americans the world is effectively being led by a G2 comprising the two largest economic and military powers today. Just in the past week, influential pundits like Robert Kaplan and Thomas Friedman urged close attention, respectively, to China's massive naval build-up and its headstart over the rest of the world in using alternative sources of energy to cut back dependency on fossil fuels. Seminars galore scrutinise China's rapidly rising power.

News from India, alas, is not about growth and smart technology. It's about inefficiency and chaos, malnutrition and stinking cities. Crashing footbridges and stagnant pools of germ-breeding water, silly statements about how Indian standards of cleanliness differ from those of foreigners, and the sheer ineptitude that preceded the Commonwealth Games, these form one part of the picture. The rest is formed by long-running stories on runaway corruption and poor nutrition of children that place India woefully low on global scales of development.

That is a reasonable portrait of India's current plight. But before we sink further into depression, let's take a look at a few interesting possibilities not too far in the future.

Consider demography. China's Global Times, a state-sponsored publication, says that the spell of that country enjoying a demographic dividend will come to an end in 2015. India will continue to expand its youthful bulge which will make its average age 29 against China's 37 in 2020. In other words, India will have more productive workers of an active age than will China, which will feel a growing economic and social burden of age while India's productivity will steadily rise.

The World Bank estimates that China's growth will slow by 2015 when India's rate will surpass it. True, the state of India's infrastructure appears dismal today but heavy investment has begun in that sector, around $500 billion over the next three years, and that will contribute to hiking growth. And there are other signs investment bankers cite to suggest that in 10 to 15 years' time, India's economic potential may turn out better than China's.



Besides, there might be a democracy dividend. Many tend to blame democracy for all our ills but India has notched up fairly high-speed growth with democracy. Decades of inappropriate economic policies were more to blame for poor performance in the first three and a half decades of our independence than free elections or a free press.

Sure, the open squabbling in a democracy, magnified a zillion times in this age of talking heads TV, makes India's image difficult to manage. Free speech allows democratic valves to release pent-up frustrations. The media blares it out, which is one reason why the world knows so much about the organisational incompetence of the Games. China allows few valves for releasing emotions or allowing debate.

Which, some might argue, is what makes China so much easier to develop. Not quite. China suffered hugely in human terms over the decades because its people did not have legitimate means of expression or protest. The late Mao Zedong could let loose a disastrous experiment in the 'Great Leap forward' of the late 1950s causing the death of tens of millions in the countryside. He could unleash a 10-year stupidity he called the 'Cultural Revolution', which cost a million lives in the 1960s and '70s.

True, Deng Xiaoping rolled back the insanity and in the late 1970s and '80s, learning from Soviet mistakes, launched an economic perestroika without allowing glasnost. Today China is a model of apparently stable corporate authoritarianism. As some new books on the subject explain, the Communist Party is like a giant corporation that controls everything, with its Politburo acting as a board of directors.

But is such a management model a recipe for long-term stability? When demand in the open market rises many times, when social pressures erupt because of changing demographics, when an expanding middle class wants an increasing array of choice, and when perhaps galloping inflation once again rears its head because of mistaken policies or as yet unforeseen global conditions, will the model hold?

India, at first glance, looks a mess. Its leadership sometimes appears as incompetent as that infernal Games Organising Committee. But a more dynamic set of leaders, maybe a younger lot, might help us run better. The track ahead looks promising.

The writer is a FICCI-EWC fellow at East West Centre, Washington DC.