Author: M V Kamath
Publication: The Free Press Journal
Date: February 1, 2001
Li Peng, considered the second
most important man in China has come and gone making some right noises.
In all he spent nine days in the country. The belief is that he would not
have wasted nine long days in India if, in the end, he had nothing to offer
to India or get from India. What possibility could have been his intention
to visit India? May it be said he is not the first to visit this country
in the last few months. A slew of delegations have already done their job:
*In September 2000, a delegation
arrived to study the government's management of the HIV/AIDS programme.
*In November a delegation arrived
in India from the Chinese Oceanic Administration to make its own studies
for a week.
*In December, the president and
CEO of the China Grain Reserves Corporation headed a team to study India's
grain marketing system.
*In the same month a atop level
defences forces delegation met its counterparts in India at a seminar in
Manipal, Karnataka for exchange of views.
*An accounting delegation has come
to study banking operations, another to study tourism and aviation and
a third to discuss the Indian experience in dealing with domestic laws
and WTO regulations.
One would imagine that China has
much to learn from India. From whatever information is available it is
the other way around. Some 27 million people visited China in 1999. In
contrast India attracted hardly 2.48 million of whom Sri Lankans alone
made up for 1,20,000 and India is the world's largest democracy! Why doesn't
it attract more visitors? Where have we failed?
Again, according to one estimate
China has received $5 billion as remittances from its own expatriates and
some $42 billion in foreign investment. In contrast, India received $10
billion from NRIs and barely $6 billion in foreign investment. Why doesn't
India attract more foreign investment?
One obvious answer to that is the
ways of our bureaucracy. We are still getting over the Enron debacle. Our
politicians are more eager to line their pockets than help foreign investors.
Our labour costs are high. An average Chinese worker gets 15 US cents a
day as wages or about six rupees a day or loss Rs. 200 p.m. With that kind
of cheap labour why should not China flood the, world market with cheap
goods? But let this Chinese goods: quality-wise they are often world class.
So what is the result? Consider the cost of a few Chinese items and compare
them price-wise with similar products. A Chinese pencil battery, costs
Rs 2.50, an Indian equivalent Rs 6. A Chinese world radio costs Rs 140;
an Indian equivalent Rs 1,000. A Chinese cordless phone costs Rs. 1,300;
an Indian equivalent Rs. 2,000. A Chinese lock costs Rs. 65; an Indian
equivalent Rs. 200 ... and so on. How can one compete with China in the
circumstances? When China turned towards a capitalist economy, Deng Xiaoping
told his countrymen to keep a low profile and work hard. They have followed
his advice. More importantly, the level of taxation in the Chinese economy
is much lower than in India. According to the World Development Report,
the tax revenue of the Chinese government in 1998 was only 5.7 per cent
of GDP as against 8.6 per cent in India. The higher percentage only adds
to the cost of production in India. Ergo, China can capture practically
any market. China has a healthy balance of payments situation vis-a-vis
most countries but importantly with the United States. China outpaces India
in practically all departments. If India's GDP is $ 450 billion, China's
is $980 billion. India's foreign exchange reserves are a bare $35 billion
whereas China's is $158 billion. Our imports ($59 billion) cost us more
than our export earnings ($47 billion). China has a very favourable balance
of payments (about $42 billion). If India has 69 TV sets for every 1600
people China has 272... and so on. "We should sit down and find out why
we cannot do what China is doing" recently wrote the economist Jay Dubashi
(The Free Press Journal, 25 Dec. 2000). Of all the people he should have
known. It is India's working force which is indiciplined and pampered.
Factory workers at the Maruti Car Factory recently went on a prolonged
strike when the average wage of a Worker was over Rs. 20,000. And consider
this: The government owned Hindustan Fertiliser factory in Haldia employs
1,550 men and maintains an elaborate personnel structure, I complete with
trade unions and canteens but more than a decade after it was set up (after
seven years of construction) at a Cost of $1.2 billion it has produced
no fertiliser at all! The workers get paid for doing nothing! This is 'in
the Communist-run state of West Bengal home of corruption, indicipline
and indifference. The new chief minister of the state, Buddhadeva Bhattacharya
was forced to look into the matter of his own secretariat (Mantralaya)
were clerks came at their own convenient hours and left at their even more
convenient hours, putting hardly a couple of hours work, if that, Chinese
leaders must be laughing at us. But for all that, India is doing well enough
for China to make study of our ethos. It says that it is not our enemy
and entertains no evil inventions against us. In an interview to The Hindu
(14 Jan) Li Peng 'condemned international terrorism in the strongest possible
terms, "terrorism of all descriptions in any region and any, part of the
world." And he said: "China is willing to cooperate with all countries
which are against terrorism. Of course India is one of them." India is
faced with terrorism from Pakistan. What is China doing about it except
say nice words to us?
Li Peng, undoubtedly, has gone all
out to woo India, but to what purpose? Consider what the same gentleman
said in 1999 when he visited Islamabad in April of that year. He vowed
"trustworthy and reliable" friendship with Pakistan, "no matter how the
international situation changes." China and Pakistan, he said will "always
support and assist each other." China certainly is aiding Pakistan. It
has sold Mill missiles to Pakistan, is now building a 300 megawatt nuclear
power station and while it expressed rage over India's Pokhran tests it
is among the few countries that proclaimed "understanding" for Pakistan's
explosion of nuclear devices in the Chaghai Hills. And, incidentally, China
has rejected an Indian invitation to 'participate in the International
Fleet Review which is scheduled off Mumbai from February 15 to 19. So far
27 of the world's 29 major navies have agreed to participate in the review.
Is the Chinese rejection of India's invitation on account of India's not
having invited Pakistan?
Li Peng believes that his bilateral
talks with India have shown a consensus on resolving boundary disputes.
But a resolution of the dispute is still pending. According to reliable
reports, China continues to annex parts of Ladakh bit by bit. During Pakistan's
Kargil encroachment, Chinese military patrols were reported sporadically
to challenge Indian forces in various parts of Ladakh. Actually, in 1999
Chinese troops were reported staging aggressive military manouvers in the
Twang Sector. In October 2000, the Arunachal Pradesh chief minister Muku
Mithi categorically stated that Chinese have been violating the Line of
Actual Control (LAC) in the north east section. Now Li Peng says that maps
have been exchanged between Chinese and Indian officials and things are
moving. It must be an extraordinary slow movement if no solution to the
boundary dispute has been found in the last fifty years but more especially
after the recent visit to China by both our President K R Narayanan and
our foreign minister Jaswant Singh. The proof of the Chinese goodwill-pudding
is in resolving the border dispute. Once this is satisfactorily done, all
else will follow, such as increased bilateral trade encouragement of tourism,
promotion of tie-ups in the software' department, etc. etc.. On Kashmir,
China has nothing to say that satisfies Delhi. In the matter of India's
aspirations for, permanent membership of the Security Council, Beijing
is dragging its feet when it was India that stood steadfastly by China
on the matter of Beijing replacing Formosa. India is happy that Li Peng
has come and it is being touted that this is a sign that the worst of the
recent downturn in bilateral relations lies behind us. It must be understood;
however, that agreement on the LAC is not the same as an agreement on the
border itself, that as long as Chine supports Pakistan in every possible
way, one, always has reasons to doubt Beijing's bona rides. It is interesting
that China's official media has already bailed Li Peng's visit as a "complete
success". Li Peng himself told The Hindu: "We have fulfilled half of the
programme but I think we have already achieved more than half of the expected-results."
Delhi, incidentally, has been silent, Is Li Peng's success also India's
success? New Delhi has sent three tangible signals to Beijing: that India
is not targeting China with nuclear war heads that it will not be a part
to any US, hostility towards China and that it is interested in a quick
resolution of the border issue. So, what next Mr. Li?
