India and China: Compete and cooperate

With a change in mindset, the two countries can carry out both in tandem. Are we bold enough?

In the previous article (“Why China matters”, May 2), we explored four reasons why China is important for India in our journey towards vikas for our citizens. Accordingly, the article argued that it is to India’s advantage to engage strongly with China on the economic front, whilst managing our various political differences. But what assets does India bring to the table in this engagement? What steps are needed to make it fruitful? Is it possible to think of China-India cooperation as having a larger — even transformational — effect on Asia if not the world?

Viewed from China’s perspective, India is an appealing investment destination. When goods and service tax (GST) comes into force, India will present itself to the world as a unified and practically seamless market of huge proportions. Given favourable demographics and good management, this market can grow annually at rates from seven to nine per cent for many years. India’s risk profile is also attractive, with a stable polity, reasonable regulatory and financial systems, and a reliable —if tardy — legal process. Its infrastructure may be under stress, but this very fact makes India a prime target for Chinese investment. And China’s experience and efficiency in the infrastructure realm make its investments particularly appropriate for Indian conditions.

Of course, India is culturally complex and not an easy place to do business. But the Chinese are used to difficult conditions and are not particularly fazed by hardships that might deter others. Chinese managers generally live quietly and modestly in foreign destinations and do not demand the cosseted lifestyles insisted upon by Western expatriates. Like their counterparts from Korea and Japan, Chinese managers are quite willing to get on to the factory floor or coalface, and put their shoulders to the wheel along with other employees. 

All investors, however, need a conducive environment to conduct their business. This is not limited to tax concessions or profit repatriation or even to “the ease of doing business”. Investors have human feelings and like to feel welcome in their host country, and so do their skilled personnel, who execute the projects. Despite our political problems with China’s government, we should ensure that Chinese people — whether investors, tourists, academics, students or employees — are offered the same level playing field as other foreigners. Here, we can emulate Sino-Japanese relations. Despite a serious maritime dispute and historical grievances, Japan and China have thriving and reciprocal tourism trade, student exchange and business relations.

Xi Jinping, Narendra Modi

Another plus for India is its facility with the English language. Allied to this facility with English is India’s higher education network. Labelling the Indian university system an asset might be considered premature, considering how it is overburdened and underfunded. But its sheer size and scale is vast, and its potential even bigger. Yet, the exposure of our educational system to foreign students and faculty is pathetically small. But those students from abroad, who have qualified as doctors or engineers from India have a lifelong memory of the country. This is a “soft power” that India had in abundance in historical times, when Nalanda, Takshashila and Vikramashila flourished as great universities. India welcomed students who came by sea and by land, to learn from the masters in medicine, mathematics, logic and philosophy. We must revive this great tradition and open our doors wider to foreign students. Nothing builds friendship better than an education undertaken at an impressionable age in a foreign land.

Another strong weapon in our armoury is India’s prowess in management skills. Today, we see several Indians (amongst very few non-Westerners) as CEOs of multinational companies. Recently, China’s Global Times admitted the country’s failure to harness Indian management and information technology talent in the course of its development journey. But what if we can now put together Chinese capital and Indian management? We could then create powerful world-class multinationals bringing new perspectives to corporate performance: India and China are both populous and afflicted with serious pollution problems, so perhaps these companies would prioritise human, social and environmental consequences along with profitability. The New (BRICS) Development Bank may be a harbinger of this new breed.

Once we remove our self-imposed conception of India-China relations as a uni-dimensional win-lose game, the imagination can take flight. We can cite different arenas where contestation, competition, collaboration and cooperation can all be at work, sometimes in the same place and at the same time. Non-state actors such as companies, sportspersons or scientists, do it all the time. Our companies could compete, but also form joint ventures. Neighbouring countries could see Sino-Indian diplomatic contests on their soil but also host their collaborative development projects. Our youth could compete in the Olympics but also explore the oceans and deserts together on study missions. China and India share huge problems like desertification, water scarcity, epidemic disease and housing shortages, to name a few. Collaboration in research and development could redirect energy and resources into these areas and improve the lives of 2.5 billion people collectively in the two nations.

It is not difficult to set up the mechanisms to make these ideas operational. But the real change is always within us — in our mindsets. Are we bold enough?

Is this vision of Sino-Indian relations a utopian dream? The same could be said in 1945 about Franco-German cooperation after three wars within a hundred years. We might well cite Goethe, who said, “Whatever you can do, or dream you can, begin it. Boldness has genius, power and magic in it”. We would do well to begin it now.

The series is concluded

The author is an independent company director and also Honorary Fellow, Institute of Chinese Studies, Delhi