The
report that Chinese President Xi Jinping will be bringing investment offers of
over $100 billion is seen as a riposte for Japan’s promise of putting in $35
billion into India over the next five years.
Narendra
Modi’s recent visit to Japan was invested with all manner of strategic
significance by analysts suggesting that this could well be the beginning of a
new strategic coalition to check the rise of China.
However,
the outcome of the visit was a tad disappointing. India and Japan failed to
sign the long-negotiated nuclear deal, or give any clearer indication of the
future strategic partnership such as a defence cooperation pact, of the kind
India has with the United States.
Narendra Modi’s recent visit to Japan was invested with all manner of strategic significance by analysts suggesting that this could well be the beginning of a new strategic coalition to check the rise of China. Pic/AFP
Let us
look at the metrics: India-Japan trade stands at around $19 billion per annum
in contrast to the India-China trade at $65 billion (Japan-China trade is
around $350 billion).
Japan is
India’s fourth largest investor, having put in about $16 billion since 2000. In
2011, India and Japan signed a Comprehensive Economic Cooperation Agreement,
but it has not had the desired impact on trade growth.
India is
the largest recipient of Japan’s Overseas Development Assistance, having got
some $16 billion worth of loan assistance mainly in the infrastructure and
energy areas along with a commitment of some $38 billion.
China has
been a bit player in India till now. But, earlier this year, at the first
India-China strategic dialogue, Beijing offered to invest $300 billion in
India’s 12th Plan infrastructure requirements, which were estimated at around
$1 trillion. Now, comes Mr Xi with his $100 billion.
None of
these offers Japanese or Chinese are altruistic. Both follow the logic of
market economics. Investing in India provides an outlet for Chinese and
Japanese infrastructure construction giants who cannot build anymore at home.
Both the countries have a surfeit of new and relatively new highways, railroads
and bridges and are looking around for projects in the under-developed world.
But they
are also part of a geopolitical competition which pits China against Japan and
its ally, the US, in East Asia. India is being seen by Japan and the US as an
important counterweight to the rise of China. They do not expect India to be
some kind of a military ally, but they believe that a strong India, which has
its own set of problems with China, will offset the increasing gravitational
pull of Beijing in the East and South-east Asian region.
China has
a somewhat limited aim keep India as a neutral in their real battle that for
pre-eminence in East Asia, where they are pitted against the Japan-US combine.
India has
no real stakes in the conflict, and it is not as if Japan supports the Indian
position on our borders with China or Jammu & Kashmir. Yet, New Delhi needs
to handle the issue with a great deal of care, and balance the pros and cons of
any particular course. We can, as we are doing now, parlay an equidistant
posture into obtaining investment and technology from both China and Japan. We
already have difficulties with China over our border. Buying more enmity by
getting involved in the East Asian power struggle would compromise our security
situation, because China is much stronger than India, both economically and in
military terms.
However,
given our weakness relative to China, we also need to think of friends we may
need if China were to turn up the heat against us. An autonomous posture
requires a strong military posture, which is what India does not have. And,
unless it reforms and restructures its national security system, it will not
have in the next decade.
While the
Chinese are eager, the Japanese seem to be getting ready to miss the Indian bus
once again, to go by their reluctance to press on with the nuclear deal. In the
1990s, when India opened its economy, Japanese companies kept hemming and
hawing, and coming up with all kinds of demands, including concessions on
importing special food for Japanese expatriates in India. Meanwhile, the
Koreans stole the march and established themselves across the country. This is
despite the fact that a Japanese company Suzuki had nearly a decade’s advantage
over everyone else in the Indian market.
The same
could happen again. While Japanese companies like Toshiba and Hitachi are
important in the nuclear power business, there are equally good Korean and
Russian options available, and the Chinese are not too far behind. As it is,
India must also contend with geopolitical unreliability of the Japanese and the
Americans. Rich and powerful countries, like rich and powerful individuals, are
usually more concerned about themselves. So, in our times of difficulty, Tokyo
has ignored us. But, as it is now finding out, its American allies are not as
firmly behind them on the Senkaku/Diaoyu Island issue as they would like.
So,
India’s best bet is to take what it can, from wherever it comes and build up
its infrastructure and keep its geopolitical head down, at least for the next
decade. Indeed, we have been too squeamish in accepting Chinese investments.
Beijing was not fussy about accepting Japanese and western investment and
technology to build up its own infrastructure and manufacturing capabilities in
the 1980s and 1990s. Yes, there are areas like telecommunications where
discretion would be the better part of valour, but if the Chinese money and
Chinese companies want to build roads, railways, bridges and industrial zones
in the country, they should be welcomed.
Mid Day
September 16, 2014
The
report that Chinese President Xi Jinping will be bringing investment
offers of over $100 billion is seen as a riposte for Japan’s promise of
putting in $35 billion into India over the next five years. - See more
at:
http://www.mid-day.com/articles/india---a-counterweight-to-the-rise-of-china/15606168#sthash.1JJ6Q612.dpuf
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