In his first year in power, Prime Minister Narendra Modi has had several interactions with the Presidents of the United States and China. While his instincts may tend towards democracies and transparent polities, he has been careful not to make extreme choices. His visit to China was a sober and sobering event, especially for those in the Indian system, ranging from former Foreign Secretaries to others who thought they were second-guessing BJP policy, who were arguing for a harder line on China and tough talk on territorial disputes.
While Modi made some of those points, he did not overstate matters. He realised he didn’t have the tools and instruments, military and economic, to follow up on rhetoric. Rather, he needed to give China a stake in the Indian economy, for mutual benefit, and build constituencies for India in China, in the Government and economic ministries of course, and in business and society. Indeed, this is precisely the policy he — and to be fair his immediate predecessors — have sought to follow with the US. In a sense, he has recognised he is operating in a G2 world, even if nobody can quite put it that way without inviting a negative reaction in India.
India’s best hope is that a decade or even more of sustained GDP growth, and a deft manoeuvring of opportunities that such an economic expansion as well as the competitive nature of the America-China relationship in Asia throw up, will allow it to reshape the global high table into a G3 by say 2030 or at any rate in the decade of the 2030s. This is Mr Modi’s grand strategy, his end game, call it what you will. It would be futile to deny India is not there yet, and is not even close. Never mind public discourse and an exaggerated idea of India’s importance.
What does a G2 world mean for India and Asia? This is a question being asked in many countries and capitals, from different vantage positions. A few weeks ago, a senior South Korean official was in New Delhi and was asked about the variance between private words (hard) and public texts (milder) that Seoul used about Beijing. He explained it as both a patriot and a realist.
South Korea’s big strategic goal for the near future, he said, was the re-unification of the Korean peninsula and a historic coming together of South and North Korea. This would be an iconic moment, comparable to the dismantling of the Berlin Wall in 1989 and the reunification of Germany. However, as the South Korean visitor observed, “German unification took place as the Soviet Union collapsed. Korean unification will possibly take place as Chinese power peaks in Asia. We have to be conscious of that.”
There is merit in those words. If India had begun its programme of robust economic modernisation in the 1970s, and not been thwarted by Indira Gandhi’s toxic policies, it could have afforded to ignore or even snub China. Beijing would have been peripheral to that process of industrial transformation. Today, China is such a large economy, flush with cheap capital and with capacities that make it the infrastructure provider of Asia, if not the world, that a Chinese role in and some sort of support for India’s economy is unavoidable. Of course, that role and that support must come only if it is helps both countries, and must be complemented by not infrequent political messages that convey to China that India is not and will never be an unquestioning ally. In a nutshell, that is Mr Modi’s task and his challenge.
In absolute terms, China is far ahead of India. In 2000, shortly after the previous BJP Government took charge in New Delhi, China’s GDP was double India’s GDP. In 2014, it was about five times as large. This is a legacy Mr Modi has to reckon with; he cannot wish it away and neither can today’s Indians. China’s GDP and composite national power have grown exponentially since 2008, as consequences of the financial crisis have driven Western economies and indirectly India as well into trouble. Between 2008 and 2014, China’s GDP has gone up two-and-a-half times. India’s has increased by only 50 per cent. Mr Modi has entered office with Chinese economic power — especially relative to other major economies — at its zenith.
Having said that, it is not as if China is without its problems and dilemmas. The post-2008 surge has culminated China’s 30-year economic revolution. However, the China of the coming decade is not going to be the same as the China of 2008-2015. Its growth is starting to taper, if not fall a few notches. As commodity demand and prices soften, Chinese steel producers and coal mines are left with idle capacities and restive workers.
The social compact that the Chinese Communist Party has put in place for the past two or three decades — high growth and prosperity making up for absence of robust political reform; revenue from wealthy regions and provinces subsidising and providing jobs to migrants from interior, poorer provinces — will be under stress. Of course, it is not as if China will necessarily face a defining crisis or collapse, but governance will be that much more testing. This will give India room, especially if the India market begins to gain importance for key stakeholders in the Chinese economy.
There are international factors too that will start to weigh down on China. In April, it overtook the US as the world’s largest crude oil importer. Buying crude from West Asia is critical to Chinese well-being; inevitably the security of the region will become a Chinese preoccupation. Most of the world’s nations are not powers, emerging powers, allies of powers, responsible actors and so on. Most nations are free riders. In the postwar period, the burden of free-rider nations and societies has been borne by the US. This made it the world’s paramount security provider, particularly in West Asia.
Now, with the US in one of its periodic bouts of strategic withdrawal and with its declining dependence on Gulf oil, the politics and security of West Asia and the Islamic world in general will increasingly become a Chinese concern. Chinese investments in Africa and the Arab world, and in the Indian Ocean, will need to be safe-guarded. This will open a whole new dynamic for Beijing. Becoming a superpower is one thing, fulfilling a superpower’s responsibility is quite another.