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No Need to Compare India with China

No Need to Compare India with China

Author: MV Kamath
Publication: The Free Press Journal
Date: November 14, 2002
URL: http://www.samachar.com/features/141102-features.html

Nothing is more sickening than for some of our own intellectuals comparing the economic progress made by China in recent years with that of India, just to show how superior the Chinese are. And to add insult to injury we have the U.S. Ambassador to India Robert D. Blackwill joining the chorus. Addressing the Federation of Indian Chambers of Commerce and Industry in New Delhi recently Ambassador Blackwill pooh-poohed the idea that China has made impressive economic gains because it has an authoritative form of government that can easily change policy and redirect resources.

``What troubles me about this line of argument is that it seems to advance the notion that democracies cannot achieve economic reform rapidly leading to much greater prosperity'' he told the FICCI. To a certain extent, yes, he is right. A democracy CAN achieve great economic heights and as Blackwill himself admitted ``India is capable of high growth rates without compromising its democratic governance'' and ``the values of democracy and free markets are mutually reinforcing''. But that is scratching the surface.

It is not enough for a nation to practise democracy. It is necessary to control population growth, encourage work ethic, get constant infusions of foreign investment and keep down wages while enforcing long working hours. Blackwill told the EICCI that a decade ago India and China had close to the same per capita income while today China's per-capita income is about $ 900, roughly twice that of India. Blackwill went on to provide a wide range of statistics showing India in a very poor light.

Last year, he said, China attracted $ 47 billion in direct foreign investment nearly 21 per cent of the world's foreign investment going to developing countries, while India's FDI was about $ 4 billion, less than 2 per cent of that total. As for China's exports, Blackwill added, today it is over $ 266 billion or about 5 1/2 times India's current exports.

Why, one may ask, are foreigners rushing to invest in China? Why is the per capita income much higher in China? Why are people allegedly working so hard? How come population growth in China is under control?

Blackwill did not deign to answer. But here are some facts: Over 300,000 officials are employed by the family planning services in China to try to ensure that the number of people born each year is according to a pre-conceived national plan.

An upper age limit is set for young people to get married. No couple can have more than two children. Should a third child be conceived, the woman is forced to go in for abortion. Should India resort to such tactics, Blackwill will be the first to damn India for contravening Human Rights.

Should India even make an effort to control polygamy strictly, there will be a hue and cry that Hindutva forces are trying to hurt the minorities. Sure, China is attracting a lot of capital. In his book `The Chinese', Jasper Becker, a resident corre-spondent in China for a decade and currently the Beijing Bureau Chief for the `South China Morning Post' writes: ``Attracted by low wages and low taxes, small and large manufacturers from Taiwan, South Korea, Italy, the United States and elsewhere eagerly cooperated in providing the necessary equipment, capital, brands and marketing...'' It was exploitation of the worst kind; but such was American greed that Washington turned a blind eye to what was going on.

American-financed companies were making huge profits by exploiting cheap Chinese labour. The great champions of labour in the United States looked the other way; it was okay for Chinese workers to be underpaid and over-worked, as long as American companies made a fast buck. But then, thanks to over- production, demand slumped and, as a result Chinese manufacturers were faced with staggering amounts of unsold goods. Around 1999, hardly three years ago, unsold goods were as follows: 1.5 billion men's shirts, 300 million pairs of leather shoes, 20 million bicycles, 10 million watches, 700,000 motor cycles.

Faced with colossal losses, China has been trying to push these goods illegally into other countries, thus to India through the porous Nepal border and an equally porous Bangladesh border. Labour in China has no freedom. In Shenyang, according to Becker, workers were forced to subsist on handouts of just 129 yuan ($ 15 or Rs. 750) a month. Shenyang lies at the heart of China's rust-belt with a concentration of heavy industries and linked to the country's massive industrial- defence complex. Here, State-Owned Enterprises (SOEs) had gone on a spree manufacturing all sorts of goods and borrowing heavily from State Owned Banks (SOBs). Debts accumulated. The Non-Performing Assets of these banks presently total ``hundreds of billions of dollars enough to cripple the entire banking system''.

No doubt production figures show that China is far ahead of India. In addition half of China's loss-making S0Es are reckoned to be former defence plants, which went bankrupt forcing ``tens of thousands'' of unpaid workers, into idleness. The government strategy to convert these plants into consumer product manufacturing units failed. Becker writes that at this stage two American companies, Caterpillar and ASIMCO got into the act to help some of the plants. The objective was obvious: use low-paid forced labour to manufacture goods that could then be sold in the international market for huge profits. This is supposed generosity; it is an example of cynical and shameless exploitation.

Blackwill in his speech made no reference to the all-embrasive corruption in China. he should read the latest issue of `The Economist' (2 November) for more facts. The journal speaks of ``economic crimes'' committed by ``several prominent businessmen'' who had close links with Chinese officials. Such things pass for ``business acumen''. The rich get away fairly easily though presently there seems to be a crackdown. For the poor the laws are strict.

Becker reports that ``throughout the 1990s more people have been executed or sentenced to death in China than in the rest of the world put together and that experts outside China estimate that anything from 1.5 to 4 million people are in prison at any one time''. Under such conditions people surely will do anything the state orders them to do. In 1978 the Indira Gandhi government was thrown out for acts committed under the Emergency like forcible sterilisation. In China in 1989 the state launched a big drive in which 10 million people were sterilised in just one year.

In China, apparently, there is a permanent state of Emergency of which Blackwill seems to be unaware. Or, like his fellow Americans Richard Nixon and Henry Kissinger, unwilling to face. It is easier to lecture to Indians than to face grim facts.

Again, according to published reports conditions in the villages are so bad that one out of four adult males are migrating to the cities to get work and keep the people back home alive. The cities are thriving, but the peasant workers are kept under close observation.

Behaviour is monitored. A police chief in Yanshe told Becker: ``We are very tough. Anyone caught smoking on the street is fined and has to stand there wearing a yellow garment until he catches someone else violating the regulations''. Villagers just cannot misbehave.

Writes Becker: ``The national model for the urbanisation of the peasantry is Zhangjiagang, a county in southern Jiangsu. Here everyone must memorise and apply the detailed rules and advice laid out in a `Civilised Citizen Study Book'. It lists `six musts' and ten `must nots'... Inside every house, a framed list of rules hangs on the wall.

Every household is regularly inspected to see if it passes muster and neighbours are obliged to report (on their neighbours)''. If such rules prevail in India Blackwill will be the first to criticise India.

Yes, China has done well and we wish it luck. True, Indian cities are dirty, the peasants who have flocked to the urban centres observe no rules. But it is very hard in a democracy to enforce rules. Perhaps India should change its ways. ``To fight corruption the country needs men of character, not charlatans'' wrote Jay Dubashi the other day (2 Sept.) in this very paper. Quite true, but in a democracy things move slowly and law enforcement takes months if not years. This is not to say that the law does not work in India; it does, howsoever slowly. It does not mean that Indians are not corrupt.

Goodness knows corruption is rampant in the country. But in a democracy it is not very easy to nail the corrupt. But we do it in the United State, Blackwill will no doubt say. India, Mr Blackwill, is not America.

Much needs to be done in India to raise the country to greater economic heights. Addressing the Third India-US business sumit, Prime Minister Vajpayee admitted as much. But he pointed out that Indian economic reform has a human face. He said: ``The Indian economy is often identified with the elephant.

I have no problem with this analogy. Elephants may take time to get all parts of their vast bodies moving forward in unison. But once they actually start moving the momentum is very difficult to slow down, stop or reverse. And when they move, the forest shakes''.

There, Mr. Blackwill, is the answer for your doubts. Spare us your lectures.
 


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