<B>T C A Srinivasa-Raghavan:</B> India-China - A tale of two spiders

How should sophisticated countries deal with others that have a huge body but a small brain?

For the last two and a half decades, the world has been transfixed by China and its steroid-induced economic growth. This fascination is not because whatever China has achieved has not been achieved by anyone else. It is because it was Communist China that has gone capitalist.

But the world has overlooked two very important things: the venomous politics of a Communist, one-party, dictatorship, coupled with the economics of a highly exploitative and aggressive capitalist-imperialist system. The singular focus on the successes of the latter has diverted attention from China's several weaknesses.

Thus, firstly, it has a highly vulnerable political system, if at all you can dignify it by that name. Politicking, after all, is very different from politics.

Secondly, it has a highly vulnerable economy, which is short of everything except dollars whose value is diminishing by the day. Today's trillion is yesterday's billion and will be tomorrow's million.

The combination of these two vulnerabilities has made China's 'Communist' leadership belligerent and aggressive - politely called 'assertiveness'. This, in my view, is the behaviour of a deeply insecure country, not a self-confident one.

Indeed, it seems to me that whenever 'Communist' Chinese leaders get bored, they lay claim to some other country's land. What would they do if everyone else started to reciprocate?

China backs up its ridiculous claims with hitherto untested military power - in 1979, little Vietnam bested it - and the implicit threat to use it if others don't surrender territory. But so far, it has just been threats.

Some answers to dealing with China can be found in the analysis of asymmetrical relationships by evolutionary game theorists who ask: what should a weak competitor do when faced with a strong (and 'assertive') one?

The spider game
The best illustration comes from spiders. Suppose there are two spiders competing for territory. There are four possibilities: both spiders are strong, both are weak, one is strong and the other is weak.

How should they communicate with each other when they get into a confrontation over territory? (Neither, by the way, is required to be truthful about itself.)

If the weak and the strong spider both think it is in its interest to signal that they are strong - by rearing up on two legs, as it happens, giving Mao's dictum of walking on two legs a new meaning - both will ignore the signal because its value is zero. Neither will, therefore, signal anything.

Or, only the strong spider could signal - which is what China keeps doing - and the other one keeps quiet (which is what India does). But this does not often happen, even with very weak spiders.

There are several possibilities as to what communication strategy each spider will follow. You can look it up.

The upshot for weak spiders is that they cannot gain anything by signalling they are weak. Equally, a strong spider also cannot signal that it is weak because it will get attacked.

This means that both will signal that they are strong - which inevitably means a fight. This is the bottom line.

Of course, a great deal depends on the willingness of the weak spider to fight. And the point is this: weak spiders do fight.

India's dilemma
India cannot signal it is weak. Nor can it signal it is strong when it is not and invite China to attack it.

Its only option is to bluff - which China does all the time - that it is strong by doing small things that put a doubt in China's mind as to its determination to fight.

As an unsure power, China just doesn't know what to do except to keep rearing up on its hind legs. But this throws India off balance as well because it doesn't know whether (or when) China might attack. The chances are small but nevertheless non-negative.

A tentative answer to the problem can be found in the investment strategies of firms when only two of them are competing and the profitability of each depends on the other's investment decisions.

Without going into the details, it can be shown that when the asymmetry between the two is very large, they carry on with their investment decisions because these have almost no direct impact on each other.

This is the situation between India and China because the asymmetry between them currently is very large. This means there is a strong case for cooperation - except that such cooperation will lead to India becoming stronger, which is not in China's interest.

Overall, therefore, India should stop expecting China to 'help'. It needs to keep China off balance by organising its adversaries.

This is exactly what it is doing - and there is nothing that China can do about it, except give money to, haha, that basket case Pakistan!