Date
23 October 2017
Officials pose for a picture during an India- China Business Cooperation Conference in New Delhi in November 2014. The two Asian giants have vowed to boost economic links, but much of the potential remains unfulfilled. Photo: Bloomberg
Officials pose for a picture during an India- China Business Cooperation Conference in New Delhi in November 2014. The two Asian giants have vowed to boost economic links, but much of the potential remains unfulfilled. Photo: Bloomberg

‘Chindia’ dream: Challenges and opportunities

In a previous column, I had outlined how China and India can gain from working as a team under “One Belt, One Road” initiative.

Now, I want to point out several issues that need to be resolved before we can realize the “Chindia” potential.

The first one would be the political conflicts between the two countries, such as those stemming from the Sino-Indian War in 1962.

Many Indians still have bad memories of the confrontation while many Chinese generally look down on or even discriminate against Indians.

Although the main target of Chinese nationalists is not India, a key target for Indian nationalists however remains China. It is basically impossible for the two sides to agree to a settlement of the boundary dispute.

The border dispute issue also involves the conflict of Kashmir, which in turn hits China and Pakistan’s “all-weather friendship”, and is thus even more difficult to be resolved.

India is also where Dalai Lama’s Central Tibetan Administration is located.

As China is increasingly emphasizing the importance of sovereignty, the “Tibetan separatist” issue will continue to cast a shadow over Sino-Indian relations.

However, Indian Prime Minister Narendra Modi has been pragmatic since he took the reins of his nation last year. For instance, he canceled a meeting with the Dalai Lama prior to a China trip, as he did not want to provoke Beijing.

It seems like Modi is learning from China’s wisdom which is to separate economic and political issues. 

Meanwhile, some problems go beyond the governmental level.

Among the challenges is getting the private sectors of the two nations to work together.

Chinese companies carry a long-standing image of showing little interest in fulfilling corporate social responsibility, and driven instead only by profits.

But firms in India, a democratic country with a high level of populism, have to bear other issues in mind. For instance, even a minor labor dispute in the country can turn into a storm.

Chinese companies have never been good at promoting locals to management level, or pass on technology to overseas employees.

Such practices may cause repercussions in India, even more serious than those in Africa.

Also making Indians unhappy is China’s low import of Indian products, even as the larger neighbor continues to dump goods into India.

Chinese businessmen, for their part, are worried about the continuity of India’s policy. There are concerns that policies may change depending on who is in power.

Meanwhile, the “China Threat Theory” that has gained currency in India — largely to the popular discourse in the Indian media — could also deter mainland investors.

Many local governments in India restrict foreign investment legally, and Indian ports in general do not welcome Chinese investments. If the central government in New Delhi is not able to take down these walls, Chindia is not going to work.

A more practical way to make Chindia work is let local governments from both sides develop relationships first.

India is a country of huge diversity, and its states all have certain degree of autonomy.

We must bear in mind that Modi’s reforms in his home state of Gujarat were, in fact, a key campaign theme in India’s 2014 general elections. 

Some local officials may support Chindia but some remain skeptical.

Once some success stories are seen, they will pave the way for broader level of cooperation between the two nations.

– Contact us at [email protected]

RC

Associate professor and director of Global Studies Programme, Faculty of Social Science, at the Chinese University of Hong Kong; Lead Writer (Global) at the Hong Kong Economic Journal

EJI Weekly Newsletter

Please click here to unsubscribe