A couple of years ago, a satire of People magazine’s annual ‘Sexiest Man Alive’ issue was splashed by China’s leading newspaper, People’s Daily. Any country with a free press would have spotted the story for the hoax it was, but not the staff at the Communist mouthpiece. The Onion, the irreverent US publication, had put, of all people, Kim Jong-un, the pudgy North Korean leader at the top of its list.
It would be strategic as well as polite for the Indian government to take the Chinese at their word, however, and entice them to invest every billion we can get out of them, even if the reality is closer to $ 5 bn. Given the recurrent problems with our state electricity boards that charge well short of what power costs to produce and our many private-public partnerships in highways that have gone bust, perhaps only the Chinese could make money in such businesses. They certainly have the right experience having built roads such as the highway between Colombo and Galle and in Africa. Then again, if the Chinese state-run companies’ businesses here fail (as is more likely) they will not be able take the roads with them and we will have scored an important commercial victory over a much savvier rival.
Dealing with the — how can I put this impolitely – xenophobia towards foreign investors displayed by sections of our bureaucracy would give Mr Xi’s nationalist government a taste of its own medicine: Over the past several months, anti-trust investigations have made life difficult for a host of foreign companies – including Microsoft, whose software is widely pirated in that country anyway – so to be accused of dominating the market is a bit rich. Pity also Daimler Benz, who must think Communism has reached a sorry state when its biggest proponent argues that Mercedes are too richly priced. Thus, the contest between our bureaucrats and their bureaucrats promises to be special.
When Mr Xi became president a couple of years ago, he was seen as a reformer, both in economic and political terms. The economy’s addiction to investment despite the rising risks it imposes on banks suggests he has failed thus far. The belief that he might be a political reformer seemed to rest entirely on the fact that his father, Xi Zhongxun, was a liberal who led the economic reforms in Guangdong, and had suffered considerably during the insanity of Mao Zedong’s Cultural Revolution. He seemed a 21st century kind of leader with a popular folk singer for a wife.
Beijing’s long-game diplomacy praised by Henry Kissinger amounts to little more than hyper-nationalism and the bullying of neighbours such as the Philippines and Vietnam. In the aftermath of yet another border dispute between China and India a couple of years ago, the retired diplomat T.P Sreenivasan wrote in The Indian Express, “The Chinese reputation for inscrutability is (China’s) greatest blessing. A bewildered world, including India, spends more time deciphering its motives and intentions rather than responding to them.” We must take full advantage of China’s expertise in building infrastructure and accept their soft loans while realizing that even more than usual caveats apply. But, let’s be clear-eyed about why Mr Xi is offering to help. When push comes to shove, the US and Japan will be much more steadfast friends. In fact, it will likely be China doing the shoving.