Whether the economic tumult in China in recent weeks represents an overdue market correction or a more significant inflection point is a matter of debate. But one clear message is just how profoundly wrong is the long-running argument that China enjoys a decisive “autocratic advantage” while India is excessively burdened by a “democratic disadvantage.”
The most basic lesson of the Chinese and Indian cases does not turn on the differences between political systems. Rather, it is about the common difficulty of enacting systemic reforms in large, complex countries outside the crucible of intense crisis.
Indeed, the danger now in Delhi is that the current growth pickup will permit official hubris to crowd out good policy intentions. One detects more than a whiff of overconfidence when Jayant Sinha, the minister of state for finance, declares that “It is India’s moment” or boasts about India being on the verge of leaving “China behind as far as growth and development matter.” These statements are not only at odds with the more somber sentiments of the Indian business community, but are all too redolent of the easy talk about the coming “Indian Century” that the Singh era specialized in.
The following post is based on an address I delivered at the Shanghai Maritime Strategy Research Center two weeks ago.
The punditry gods were smiling when Beijing and New Delhi declared 2012 as the Year of Sino-Indian Friendship. After all, it was a most curious designation, and not just because 2006 had received the same appellation with little to show for it. Indeed, the Chinese that year revived their territorial claims over all of Arunachal Pradesh, a state in India’s remote northeast that lies along their long-contested Himalayan border and which Beijing now insists on calling “South Tibet.” Even more striking was that the Chinese chose to make this an issue on the eve of President Hu Jintao’s visit to New Delhi in November 2006, the first such visit by a Chinese head of state in more than a decade and one that was meant to highlight growing bilateral cooperation.
Given this track record, the 2012 designation was all the more peculiar, especially since it coincided with the 50th anniversary of the 1962 border war between the two countries. The event, mostly ignored in China, reanimated bruised memories in India and two former foreign secretaries, Shyam Saran and Kanwal Singh, took to the opinion pages to warn (here and here) about China’s aggressive designs. Representative of the media reaction was the Deccan Herald, a Bangalore-based newspaper, which cautioned its readers that “China is a hydra-headed monster with massive expansionist plans across South Asia.”
The uneasy juxtaposition of the dates neatly encapsulated the contending factors – increasing economic cooperation mixed with ulcerating historical animosities and an intensifying strategic rivalry – that tug at New Delhi’s relations with Beijing. Continue reading →