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Business News/ Home-page / So much for the ‘Chindia’ dream

So much for the ‘Chindia’ dream

The odds of China-India relations becoming less messy in the years ahead didn't look very good in Wuhan. Modi certainly should try to develop a bromance with Xi

Prime Minister Narendra Modi speaks with Chinese President Xi Jinping as they take a boat ride on the East Lake in Wuhan, China on 28 April.Premium
Prime Minister Narendra Modi speaks with Chinese President Xi Jinping as they take a boat ride on the East Lake in Wuhan, China on 28 April.

Narendra Modi’s recent pilgrimage to Wuhan, China, had a time warp quality that wasn’t hard to put one’s finger on.

It would not be a reach to insert the name “Manmohan Singh" into news items about Prime Minister Modi seeking a “new chapter" in relations with Xi Jinping’s China.

Or, for that matter, the name of Hu Jintao—Xi’s predecessor.

In late 2006, then-President Hu carried to India a “five-point proposal" to deepen political cooperation, business ties and trust. That was back when “Chindia" dreams were spreading the globe.

Modi’s time with Xi last week was yet the latest abrupt wake-up call from those imaginings.

Sure, there were obligatory statements about improved communication between the militaries to avoid missteps along the Himalayan border.

Agreements to work together for prosperity between the two most-populous nations? Check.

Pledges to strengthen trust? Of course.

Plans to talk again soon? Absolutely.

But just as during the 2004-14 Singh era, Modi is still talking about how to talk with China.

Time warp, indeed.

Things are speeding up, though, thanks to Xi’s new exalted status as, essentially, president for life.

China is moving at faster and faster rates to 2025 and beyond. By then, Xi’s government plans to lead in high-tech manufacturing and make Silicon Valley’s head turn.

Where does that leave Modi’s India?

Hopefully, freshly catalyzed to raise its economic game.

Modi’s team isn’t naïve. No one expects one of humankind’s most complicated and fraught relationships to be transformed by any one meeting.

One might’ve hoped, though, for Xi and Modi to forge a united front, even by stealth, against US President Donald Trump’s trade provocations.

Or that the “Trump effect" might prod Xi to pledge Beijing will stop kicking sand in New Delhi’s face.

How else can one characterize China’s arms sales to, and investments in, rival Pakistan? Xi’s Belt and Road initiative has Modi’s India feeling increasingly encircled.

Question is, will China’s leader for the next 10-to-20 years care how all this plays in New Delhi?

All Xi needs to do to hold power is keep growth moving at a rapid clip. Modi, by very sharp contrast, faces a 2019 general election. The asymmetry in power, influence and domestic political realities makes for fascinating theatre.

It also should have Modi redoubling efforts to retool the economy. Not just to counter China’s influence, but to raise living standards and ensure that the quality of India’s gross domestic product takes precedence over quantity. In geopolitical terms, New Delhi must brainstorm on the pros and cons of placating China. How far, for example, have Japan, South Korea or the US gotten with attempts at a China reset?

Ignoring China is no more plausible than antagonizing an economy nearly five times bigger than Modi’s. The Belt and Road and Asian Infrastructure Investment Bank gambits are remaking India’s backyard in ways huge and small. Yet, as 2019 beckons, Modi might find far more success doubling down on Asia’s democracies and like-minded economic powers beyond. True power, and prosperity, depends on picking the right friends. One option is a greater focus on the so-called quadrilateral dialogue between Australia, India, Japan and the US. Why not, too, flirt with joining a Trans-Pacific Partnership meant to counter China’s rise?

But true global power begins at home. Rather than rest on his laurels amid the next 12 months of electioneering, Modi could give his reform drive a second wind.

Xi and Trump share something primal in common: both men are more impressed by strength than anything else.

Nothing would turn Xi’s head faster, and improve Modi’s negotiating position, than bold steps to open key sectors such as retail, construction and aviation further to foreign investment. That’s key to increasing competitiveness and ensuring 7% growth enriches a critical mass of India’s 1.3 billion people. The same goes for cutting red tape, attacking corruption, streamlining industry and improving infrastructure to ensure “Make in India" has Xi’s “Made in China 2025" scheme looking over its shoulder.

Investors surely wouldn’t shrug their shoulders at any success Modi has in broadening the ranks of middle-class Indian consumers. Since May 2014, Modi has done a solid job changing the narrative on India. Whereas fellow Atal Bihari Vajpayee hawked an “India Shining" message during his 1998-2004 premiership, Modi put India on the road to realizing it. That is, as long as he hits the accelerator on land, legal, tax and other reforms.

Democracy is plenty messy, as Modi can attest and about which Xi can gleefully claim ignorance. But the odds of China-India relations becoming less messy in the years ahead didn’t look very good in Wuhan. Modi certainly should try to develop a bromance with Xi. But the more important relationship is with the audacious reform drive he rode to power aimed at spiriting India’s economy to a brighter future.

William Pesek, based in Tokyo, is a former columnist for Barron’s and Bloomberg and author of Japanization: What the World Can Learn from Japan’s Lost Decades.

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Published: 03 May 2018, 06:46 PM IST
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