VR Logo

Competition or Collaboration?

During his visit, Weng repeatedly asserted that China and India are 'partners, not rivals'. Should such statements be dismissed as media hype?

Even before Chinese Premier Weng Jiabao's visit to India in April, the international media had gone to town about Asia's two giants. The world's two most populous countries, India and China, together account for almost 40 per cent of the planet's population and would become two of three largest economies (with the US) by the middle of the century.

Will the element of competition dominate relations between India and China or will the two collaborate more closely? The two countries are competing intensely with each other to purchase crude oil from international markets. Yet, India and China have not even begun cooperating in their search for hydrocarbon resources in different parts of the world. Will this pattern change?

In December, the US National Intelligence Council had remarked: "In the same way as commentators refer to the 1900s as the American century, the early 21st century may be seen as the time when some in the developing world, led by India and China, come into their own." In its March 3 issue, the Economist carried a special article in which the two countries were contrasted. Two of the sub-headings read: 'Sweatshops and technocoolies' and 'Two concepts of liberty'.

On April 27, the Financial Times of the UK published a special glossy supplement on 'Asia's emerging giants'. John Ridding, Editor and Publisher, Financial Times, Asia, wrote: "India's vibrant democracy has proved its ability to arbitrate between classes and social groups, but still faces the daunting challenges of urbanisation and alleviating poverty. While China's record on raising incomes is impressive, growing affluence without increased political representation may become a source of instability."

During his visit, Weng repeatedly asserted that China and India are 'partners, not rivals'. Should such statements be dismissed as media hype? Bilateral trade between the two countries has risen dramatically from US dollar 100 million in 1994 to US dollar 13.6 billion in 2004 -jumping by more than 75 per cent over the last two years. However, trade with India is only 1 per cent of China's international trade whereas trade with China is around 9 per cent of India's total world trade.

A few years ago, Indian businessmen were scared of cheap Chinese imports flooding our markets. One is not hearing such fears being publicly expressed these days. In fact, within a year or two, China is all set to displace the US as India's largest trading partner. Nevertheless, most comparisons between the two countries are unflattering as far as India is concerned.

In 1936, China's per capita income was 26 per cent higher than that of India. By 1977, this proportion had risen to one-third and China's average income is currently said to be nearly twice as high. One out of three Indians is illiterate against 6 per cent in China. Half the children in this country complete five years of elementary schooling whereas this proportion is almost 100 per cent in China. Still, this is not the entire story.

China is one of the most unequal societies in the world-a confidential study by its Academy of Social Sciences stated that over 90 per cent of that country's 20,000 richest people were related to officials in the government or in the ruling Communist party. More than 780 million Chinese farmers cannot till today own land or use land as security to obtain loans.

India cannot attract one-tenth of the US dollar 50 billion foreign direct investment that flows into China each year. But what is unstated is that the two countries classify FDI very differently. The IMF found that if China and India followed identical classification, China's FDI inflow would drop to 2 per cent of its gross domestic product against 1.7 per cent of GDP in the case of India.

It is clear that both countries have a lot to learn from each other. Each has to respect the other's strengths. Only then would a balance be struck between competition and collaboration.

(The author is Director, School of Convergence and a journalist with over 25 years of experience in various media-print, Internet, radio and television)