When I compare India and China, I see fundamental differences in how these countries have been led over the last century or so. The difference is aggressiveness vs subservience and purposefulness vs meandering along. there are those who would point to the latter qualities and say they are virtues. However, I find these qualities (if one may call them so) to have produced mediocre results.
Of late, there have been increasing comparisons between India and china in media and foray across the world. Indians have, of course, fanned this trend claiming how our societies are free, democratic and law based while china is none of the three. Of course, since we are all three, we are the better bet in the long term while china may dissolve into social and political disorder.
Scratch the surface a little and this propaganda seems to be true. After all the media is muzzled in china, so much of the real situation does not ever seem to come to the notice of the world at large. Their companies flout all law and the only thing that seems to work is “guanxi”. There is social unrest in the rural areas that bursts forth every now and then.
To all this, I have only one answer – leadership. the kind of determined national leadership that the Chinese have compensates for a lot of other drawbacks. Other smaller but important points that flow from this main point are continuity in leadership, a technocratic orientation to setting the national agenda and a commitment to purposeful but low profile action.
National security and national interest
Our series of missteps seems to go back to our pre-independence period. Indian leaders seem to be unable to grasp the importance of territorial integrity and military strength. While our leaders consented to partition, china swallowed up Tibet and east Turkestan. Historically, these areas are the Chinese equivalent of trans-indus Pakistan and Afghanistan i.e. they have been part of the main territory off and on and they seem to have a strong sense of identity separate from that of the main territory.
Ridiculously enough, India was all too happy to accord recognition of Chinese ownership of Tibet which was not only a buffer between india and china but also relatively Indic in its culture and orientation. Worse still, this recognition was given no strings attached. Now, India must go abegging when it comes to territorial discussions of Sikkim, Arunachal or aksai chin, let alone a future (and currently improbable) merger with Pakistan or Bangladesh.
Now comes the interesting part. after acquiring Tibet and east Turkestan, china pushed in han chinese by the truckload to strengthen their claims on this territory and to suppress local culture and ideas of nationhood. In short, the chinese concept of nationhood and territorial claim is based on its main population group – the han chinese. Contrast this with india where the idea of nationhood is divorced from the main population groupings by religion, ethnicity or region. In fact, our leaders revel in dividing us into ever smaller interest groups. On top of that, we create our own legal hurdles to mainlanders settling in kashmir and we are unable to protect mainlanders in the north east. The north east problem gets more interesting. There are now reportedly 3 crore bangladeshi immigrants there. Our politicians, however, in their masterful implementation of tammany hall immigration policies court the bangladeshis and encourage even more to come over by their pipsqueak reactions to the brutal murder of bsf officers trying to halt the immigration.
Look at india’s use of military power to protect its interests. After patel’s demise, the simla agreement and acquisition of goa are perhaps the only courageous things our leaders have done. Otherwise, we take our signals from the big powers and rush to conclude treaties in tashkent and elsewhere. We halt our weapons development and testing with one phonecall. In the meanwhile china goes to war with a much stronger and better equipped enemy (US) in korea to protect its interests and it maintains a stubborn line on taiwan against the whole world. Need i even mention the ridiculous panchsheel, the ’62 war or the arunachal dispute? In a wonderful use of logic, china uses weapons sales to finance its armed forces (in part) and further its weapons development – world’s protests be damned (anti-satellite missiles anyone?).
By these actions, or inaction, india has lost much of its clout in south east asia which is no longer indo-china. One shake of the head from china and we become mere spectators in ASEAN. A word against burma and suddenly the andamans are threatened by china. I dont even need to trot out tired and overused examples like the string of pearls strategy.
“it does not matter whether the cat is white or black, as long as it catches mice”
– Deng Xiaoping
The chinese, despite being communists sensed as far back as the 1950’s that capitalism was a more natural and pragmatic way forward when it came to the economy. Inspite of some scoffing by the USSR, they went ahead and liberalized their economy starting in 1979. They had no infrastructure and no money to build one. So they came out with a wonderful plan – create special export promotion zones along the coast.
Give companies incentives to produce there and export. Since the goods need not be transported, all that had to be done was to place SEZ’s near major ports. The first SEZ shenzhen was deliberately placed right opposite hong kong so it could take advantage of the economic, cultural and locational links with the then british colony. Compare this to india where we are still unable to resolve the SEZ mess. I am not even going to talk about nehruvian socialism or indra’s “garibi hatao”.
Another important decision was to encourage vertical integration through the bottom up approach. Take this example. The chinese did not know how to produce circuit boards (which was then done in malayasia). So the chinese began by supplying plastic chips to make the plastic baseboard the circuits would be built on. Soon, it was cheaper make the base boards in china and send them to malayasia. Finally, the circuit board production moved to china. However, the chinese did not stop there. Soon, mother boards were being made in china. It went on till entire computers and electronics goods were being exported from china. All this happened at a blistering pace in a span of 20-25 years. Compare this to india where any government encouragement for industry is a kiss of death (remember the budding electronics industry we once had?).
The chinese also knew that agriculture was not enough to support its vast population and that they needed to embark on a massive plan of industrialization and urbanization. So the chinese actually used agricultural taxes. No this is no typo so let me repeat agricultural taxes to finance this industrialization and urbanization spree. A lot of money was wasted, as people point out, since large chunks of this money found its way to inefficient sarkari companies. However, how is this any different from the indian scenario where tax payers have been scalped to keep ineffient sarkari industries running? the overall indian urbanization and industrialization policy has been much more inefficient. AND we have no agricultural taxes but lots of agricultural subsidies. Talk about stifling growth to preserve an older, overstaffed and less productive industry (agriculture).
We cannot secure enough oil or other raw materials for ourselves and actually fight china for how much iron ore and fruit they must accept from us so we can offset importing their cheap goods. Don’t get me wrong. Agriculture can be a good industry but it has to be run to proper scale like brazil, US or canada do it and this is an example of a producer of primary goods trading with a producer of secondary goods.
With the massive monies accumulated from their success, the chinese are now leaving us in the dust when it comes to infrastructure build up. There are roads, ports, power plants and railways galore. This infrastructure runs into the interiors and even to border areas where military mobilization and deployment is easier than ever. The china-arunachal border has roads. The india arunachal border is a five day trek. Telling example.
Even more telling is the fact that as china’s production costs go up, the industry is moving to – wait for it – south east asia. Primarily vietnam and thailand. Apparently those countries have their act together and we still don’t.
Government, society and human capital
China was one of the countries that invested in school education when india was in a mad rush to invest in universities. So, when it came to recruiting skilled labor for industrial production lines who won? We have now reached a situation where china is progressively ramping up higher education (and finding innumerable students willing to go to college) while india cannot graduate enough people.
Now, we face competition not just from the east but also from the west. Saudi Arabia and UAE are spearheading a middle-eastern education drive, establishing well endowed universities and inviting universities from the west to teach people. India in the meanwhile, implements controversial reservation policies and supports educational institutions owned by political cronies rather than institutions of some merit.
There are a lot of projections floating around that predict that india would be the number 2 or 3 economy in 2050. Hardly anyone pays enough attention to ask why? By that time, India would be the most populous nation in the world. So why would the chinese and US economies (or a combined european economy) be larger than india’s?
Chinese healthcare continues to be better than india’s inspite of some serious declines in the recent past. The Chinese population policies are better enforced and so more successful. India, for all it’s good intentions has been unable to translate plans into success.
Interestingly, people do not seem to realize that freedom of speech exists in china. For sometime now, china has followed a policy where cribbing is openly allowed but acting on the crib is not. You can criticize the government as long as you dont organize. For ideologically oriented people, this is enough to declare india better than china. What they fail to acknowledge is that both india and china have their spots. While china is more restrictive in granting personal and political freedoms, it is better led. In india, we have chosen our chaotic democracy and freedom and gotten inefficient governance in return.
So I return to my topic. With the current state of affairs, would India ever be a successful country or would we continue to be stupider than the china of today and china’s of tomorrow?