February 24, 2007

THE ONE THAT MATTERS:

India: Bush's forgotten triumph (Bill Emmott, 2/25/.07, Times of London)

In Bush's case, although foreign policy has been dominated by Afghanistan and Iraq, it may prove that his most important strategic move was the nuclear pact between the United States and India signed a year ago. [...]

In the West people have been obsessed by the threat from China, mainly to their jobs but also to their leadership in the world, and in the past few years have begun to add India to their concerns. If "the world is flat", in Tom Friedman's phrase, then even white-collar jobs can migrate to these enormous, low-cost producers. By the middle of this century Goldman Sachs forecasts that both China and India will have overtaken us all in economic output. They are a threat, so western thinking goes.

We can debate whether those forecasts make sense, or whether the political systems of either country will survive economic transformation. Yet this too is to miss the real point. China's growth is setting off a new power game in Asia that will in turn affect the world. And the country that feels most threatened by that growth and that game is not Britain, America or France. It is India.

If you talk to Indian military folk, or recently retired top diplomats freed from the restraints of office, the message is clear. India feels increasingly encircled by China's foreign policy and by its economic development.

China's vast hunger for energy and other natural resources has led it, as was noted copiously during President Hu Jintao's recent tour of Africa, to make investments and friendships, lubricated by aid grants and cheap loans, with resources producers in Africa and the Middle East. India has been doing the same, albeit on a smaller scale. But this trend has also brought Chinese influence into the Indian Ocean.

Chinese engineers are building a deep-water port at Gwadar in Pakistan and are working on a harbour in southern Sri Lanka. China has installed surveillance equipment on the Coco Islands off the coast of Burma, islands that India gave to Burma in the 1950s. China has been selling arms to Bangladesh and to Nepal. It has a contingent of troops in Sudan protecting its investments there. Pipelines and roads are planned across Burma and perhaps Bangladesh to enable China to reduce its dependence on the narrow shipping route through the Malacca Straits that connects the Indian Ocean to the South China Sea.

On his African tour, Hu also found time to visit the Seychelles, where he went neither for resources nor snorkelling. In due course China would like its naval ships to be able to call in on ports there.

None of this is directly hostile to India. It is all a logical extension of China's economic growth. But it makes India feel vulnerable, makes it sure it needs to make countermoves to maintain its position in its own neighbourhood and to guarantee its own access to natural resources, and makes it sure it needs to maintain its naval superiority over the Chinese fleet.

It also convinces Indian policy makers of the vital need for India's own economic growth to be sustained or even accelerated, in order to avoid being dominated by its already richer neighbour. And it means that India needs friends.

That is why Bush's nuclear pact with India makes such strong strategic sense. Having been estranged from India during the cold war, thanks to India's decision to build trade and military ties with the Soviet Union, America had been edging closer to India during the 1990s, and India had been encouraging that process. India doesn't want formal alliances, it doesn't want to confront China, and it doesn't want to close off its options. But it does need nuclear energy and it does want a close friendship with the world's superpower. The nuclear pact has given it both.


China is actually doomed for many of the same reasons that Mr. Emmott brilliantly demonstrated that Japan was twenty years ago, but this alliance will be paying dividends long after China implodes.

Posted by Orrin Judd at February 24, 2007 9:40 PM
Comments

Why precisely is China "doomed" if you don't mind?

Posted by: HL at February 25, 2007 7:11 AM

Why precisely is China "doomed" if you don't mind?

Posted by: at February 25, 2007 7:13 AM

For one thing a state run economy can't sustain itself. Infrastructure issues come to mind too.

Posted by: Bartman at February 25, 2007 9:12 AM

Demographics, artificiality, culture, and ideology:

http://brothersjuddblog.com/archives/toothless_dragon/

Posted by: oj at February 25, 2007 9:34 AM

Burma

I thought they'd changed their name to Myranmar (or something like that), and that it's cultural imperialism to use on old or anglicized name. (Then again, what ever happened to Zaire and Kampuchea?)

Posted by: Raoul Ortega at February 25, 2007 11:39 AM

China is spending 40% of its' GDP on infrastructure. The government controls less of the economy than France or Germany do. What will get them is what got Japan: poor governance and a very sick financial sector. Their capital controls are also contributing to a real-estate bubble and inflation. Additionally the lack of arable land, growing disparity between rural and urban wages and billion-plus population substantially reduces their ability to cope with shocks to the system.

Posted by: Ali Choudhury at February 25, 2007 11:55 AM

Ann uncreative culture, demographics and ethnic separatism too.

Posted by: oj at February 25, 2007 2:16 PM

Ali: 40% of GDP on infrastructure? The numbers I've seen are "roughly 9%" ($200 billion USD a year) But I don't know how reliable that is.

Two things I would like to add to Ali's and oj's posts are that the growth is primarily coastal and produces junk, taking away valuable resources that could produce more viable products. And thanks to its "one-child" policy it is one of the most rapidly aging countries of the world.

Posted by: Bartman at February 25, 2007 5:16 PM
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