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DR. ARINDAM ON CHINA

Lessons for India from the magic of overseas Chinese!

09 September 2013 | Dr. Arindam On China

The strength of the Chinese population can be gauged by the very fact that today around 19.3 per cent of world population is Chinese.

But then, such a figure based on the law of averages hides more than what it reveals. The figure that talks volumes about the Chinese sphere of influence, at least with respect to human capital, is that of 50 million plus overseas Chinese who are settled in various parts of the world and playing their bit in accelerating the fast-paced Chinese economy. Today, overseas Chinese not only pump money into the Chinese economy but also facilitate Chinese ambitions of global cultural and political colonisation. Overseas Chinese have made themselves inimitable in almost all spheres of influences – from heading many hard power areas by chairing vital positions in global forums, military and political institutions of many nations to being the face of various soft power areas of influence. One may not be well versed with the Chinese powers-that-be, but at the same time, very few would be not well versed with the likes of Jackie Chan!

The emigration of Chinese dates back to the Ming dynasty, but the real wave of Chinese diaspora started in 1840s when thousands of Chinese left China and made their way to the United States, especially after the discovery of gold in California. Initially, uneducated and unemployed Chinese labourers left their homes and moved to the US (for mining and railroad jobs); but then, during the late nineteenth century, the scenario changed. Instead of labourers, those were skilled and educated Chinese who moved out to avoid the ill effects of poverty and famine – which were haunting China in the late nineteenth century. However, this time the destination was not confined to the US or the West; many Asian nations suddenly made it to the destination list of Chinese. Among all the nations, Southeast Asia and Australia (apart from US) attracted the most Chinese. With more and more Chinese moving out of China, most of the big cities across the world saw a huge inflow of Chinese. Gradually, these people moved and settled down in a more organised manner and formed strong communities across the globe. So much so that most of the renowned cities (in almost all nations) have a China located somewhere – which today we call ‘Chinatown.’

A Chinatown by no means is just another shopping destination but is a hub of overseas Chinese in a particular city. This is one place where overseas Chinese and local residents both can find everything that China manufactures. It is basically a one-stop-solution for all overseas Chinese when it comes to purchasing Chinese products, and above all, being close to their roots. Given the economies it generates, it’s a fact that in many nations, Chinatowns are of mammoth proportions – for example, the Cherkizovsky Market was considered the largest market in Europe; in July 2009, the Moscow government decided to replace it with a Chinatown shopping centre. China is reportedly investing $1 billion in the construction that would give employment to 70,000 overseas Chinese directly and would allow China to sell products worth a whopping $5 billion. Leading the race, Dubai is all set to construct the world’s biggest Chinatown spread across an area of 800 hectare – it’s worth around $47 million! There are around four major, recognised Chinatowns in Africa, over 35 in Asia, over 30 in UK and Europe, 15 in Latin America and over 50 in the US and Canada besides hundreds of more such markets across the world. Most of the goods sold in Chinatowns are imported from China (thus, pumping back huge revenues into China). Additionally, millions of Chinese working in these communities remit more millions back home to their families.

The remittance doesn’t end here. Besides millions of dollars flowing in through non-official and unorganised channels (in smaller denominations), overseas Chinese billionaires donate millions to the Chinese government through official and transparent routes. Li Ka Shing has recently donated a medical university to China; many such donations and relief funds (during disasters) are common for China. The cultural and family ties play a major factor in this and the overseas Chinese are largely driven by the verve to do something for their motherland. It might not be a panacea, but this solidarity of overseas Chinese towards their families back home has helped the Chinese economy to a great extent. The 55 million overseas Chinese across 135 countries contribute nearly 60 per cent to the total Chinese FDIs! China’s total foreign reserves were around $194 billion and total FDI was $61 billion (in the year 2004) with a GDP growth of 10.7 per cent (in 2006). The preceding decade (1990-2000) too experienced a rapid progress with average annual growth rate of 9.6 per cent mainly because of its diaspora’s benefactor-effect. The contribution of overseas Chinese in development of their homeland is a matter of historical and cultural patriotism. Between 1985 and 2008, foreign investment in China reached a figure of $898 billion making it the foremost nation in the world to attract foreign investment for 18 consecutive years! OECD estimates reveal that a resounding 45 per cent of foreign investment in 2004 came from overseas Chinese. In 2010, the FDI figures rose to a record breaking $105.7 billion. By August 2011, China’s forex reserves had reached $3.2 trillion.

All thanks to the deep running cultural roots that create a propensity for the diaspora to invest or establish business networks with their hometown. In Jinjiang province for instance, many entrepreneurial initiatives have been taken based on not only the government compensation but also on the remittances from the overseas relatives of entrepreneurs! Therefore, migrant business networks are fully exploited by the diaspora with the help of cultural and ethnic linkages for the overall development of mainland China. In 2006, overseas Chinese sent $22.5 billion to China as remittance, a figure which is now estimated to be more than $50 billion every year. The Chinese diaspora generate more than $500 billion in Southeast Asia alone and are playing a very pivotal role in the development of the Chinese economy. A huge part of this money is being redirected as remittances and donations; and to this extent, this community helps in the formation of a bridge that allows overseas and domestic Chinese to share intellectual and investment know-how and thus opens avenues of business opportunities.
The diaspora too are received with conscientious warmth and encouragement by the Chinese authorities as cross border migration is greatly encouraged and their experiences are shared with the local population. The Chinese government realized that this point needs to be driven home with the diaspora – therefore, they opened up a special cabinet ministry to solely deal with overseas Chinese. As reparation to the damage caused by Mao Tse Tung during the cultural revolution by dissolving the ‘Overseas Chinese Affairs Commission’ (OCAC), the commission was reopened in 1978 with the name changed to ‘Overseas Chinese Affairs Office’. A new federation was also opened in 1978 (All-China Federation of Returned Overseas Chinese) to help the overseas population integrate with their families and help in the transfer of funds (read: remittances).
China also organises several conferences and meets that allow overseas Chinese to come together and expand their network. Almost every year, the Chinese government awards and honours overseas Chinese who contribute significantly to the Chinese growth story. China has in the past issued medals and certificates to around 100 overseas Chinese-funded enterprises and regularly honours eminent non-resident Chinese.
The government has also tweaked its policies to ease FDI and trade investments for overseas Chinese. The government further encourages philanthropic contributions and has started several banks all across the world to facilitate investments and remittances, which keeps adding to the $3 trillion Chinese forex reserves. The Office of Overseas Chinese Affairs on a regular basis organizes seminars, conclaves and meets to reach into the diaspora. Most of these events talk about investment opportunities back in China and about Chinese government policies that would support such ambitions. Starting 2003, this office started sessions on “Advanced Training for Young Generation Overseas Chinese Entrepreneurs.” These are sessions for select overseas Chinese youth to train them in entrepreneurship and leadership. Moreover, the Chinese government has set up over 70 business parks exclusively for overseas Chinese and have also eased their entries to numerous SEZs.
Well, the role of overseas Chinese in fortifying their homeland is not only multidimensional, it goes beyond conventional ways of sending money back home. Overseas Chinese today are bringing China to the world’s center-stage by helping the nation in spreading its reach in all avenues of geopolitics. In fact, unlike in India’s case, the Chinese government saw an opportunity even in the ‘Brain Drain’. Instead of perceiving this syndrome as an outflow of human capital, they saw it from a different dimension and called it “outsourcing.” This outsourcing shifted the expenditure on education from China to Western universities – thus, instead of China awarding scholarships to Chinese students, those were the Western universities that started awarding the same. China tapped these overseas Chinese students (and ex-students) to have an access to western technology and scientific breakthrough. China further created a window via which transfer of technology and skills was made convenient. Today, China is encouraging their students abroad to stay outside and assist the mainland in their technological ambitions. Their old strategy of “hui guo fuwu” (returning to serve the country) has now become “wei guo fuwu” (serving the country). Strategically, they have converted the loss of brain drain to their advantage! The Chinese government leaves no stone unturned to make Chinese comfortable in foreign countries.
The Chinese embassies distribute close to a million pamphlets to all emigrants where all possible Do’s and Don’ts are mentioned that would allow the Chinese to be safe and comfortable in a foreign land. The booklet also talks about the way a Chinese should interact and modulate oneself in order to keep their image and reputation (along with the country’s reputation) high! The success of this paradigm shift is evident from the fact that in 2005, more than 15,000 Chinese research papers were coauthored with foreign researchers. Today, China publishes arrays of journals and research papers, which are widely referred to in foreign universities. This has become possible due to the presence of overseas Chinese professors in almost all reputed universities across the world. Further, overseas Chinese students and communities help China organise exchange program and conclaves for ethnic Chinese speakers and thought leaders. The Chinese Student and Scholar Associations (CSSA), which is spread all across the world (there are more than 100 such recognised associations in the US alone), works as a ‘welcome team’ during the visit of any Chinese leader and lobbies for such above mentioned programs. These bodies are indirectly funded by the Chinese government. For instance, 75 per cent of the University of Tennessee CSSA funding in 2004 came from China while CSSA at North Carolina State University and other Ivy League schools too receive regular donations from Chinese embassies. The same Chinese students, after joining Western companies, facilitate Western-Chinese mergers and business deals; a few return back to China (after absorbing years of experience) to escalate Chinese firms to new zeniths. It’s an astute example of how the government’s vision and encouragement has helped the overseas population reshape their homeland’s economic map!
Overseas Chinese have enveloped many pivotal positions across the world, which directly or indirectly helps China in reaping benefits out of its diaspora. From the current president of African Union (Jean Ping) to president of the Philippines (Corazon Aquino), all are Chinese. So much so that one or the other Chinese has served as a premier or leader for almost all major countries in the world. As of now, more than 80 overseas Chinese are holding powerful political positions in the world besides holding several other political and administrative positions. Today, people of Chinese descent are serving as president, state councillor, ministers, advisors, secretary, governor, state treasurer, mayor, member of the city council, attorney general, lieutenant governor and many more in countries across the world. There are over 30 actors/actresses who are known faces in various movie industries across the globe – with names like Jackie Chan, Rosalind Chao, Jessica Henwick, Richard Loo and many more being the most expensive and sought-after celebrities of the world. This is not including more than 10 celebrated directors and 20 globally heard musicians.
The success of Beijing Olympics was quite vivid, especially given the number of medals China won. But then, there were a couple of Chinese athletes who were competing against their own country. Today, more than 40 globally recognised Chinese are playing for other nations too! To top it up, there are more than 50 successful businessmen, 25 established writers and authors, 20 famous scientists and engineers (including Nobel laureates) and hundreds of other global names who are doing their bit to make the heat of the Chinese dragon felt across the globe. Many of these people use soft power to influence the world about Chinese products, culture, ideologies and practise; one of them being the recent fad across the world – Feng shui. Actors through their movies, musicians through their music, artists through their art, writers with their books and businessmen thorough their products are bringing China to each and every home across the world. Lobbying by the overseas Chinese – the feeling of nationalism is so strongly embedded that their are protests against anti-China movements – is quite normal. During the Beijing Olympics, when a couple of groups started their protests against the games, there were these overseas Chinese community members who in return protested against such a protest – a feeling that is rarely seen in any diaspora community! In Canberra, processions in favour of the games comfortably outnumbered and dwarfed anti-Chinese sentiments. Similar support for mainland China was seen in Seoul, Nagano, Kuala Lumpur, Jakarta, Bangkok and Hong Kong. In almost all these cities, overseas Chinese students, communities and youth came out and demonstrated their support for Beijing Olympics, thus crushing any probable mushrooming of anti-Beijing Olympics sentiments!
These pro-China movements were supported by big names in the Chinese communities. So much so that one of the most loved overseas Chinese Hollywood actors, Jackie Chan, openly criticised these protestors! Further, one day before the Beijing Olympics opening ceremony, Chan personally unveiled an official Olympic music album named “Official Album for the Beijing 2008 Olympic Games – Jackie Chan’s Version” and also refurbished the Chinese image by talking positively about China to the international media network. Even the Chinese actress Zhang Ziyi supported Chan in his initiative. For the uninitiated, Zhang Ziyi is one actress who has metamorphosed the conservative image of a Chinese woman to a career-oriented and glamorous woman (who is in no way inferior to any Western women) and today is seen as a face of the Chinese women. Director John Woo (director of movies like Hard Target, Broken Arrow, Face/Off, Mission: Impossible 2 and many more) facilitated the Beijing International Film Festival where 60 Chinese films (including Hollywood blockbusters) were showcased, thus helping China in promoting their movie culture and businesses. China today is relying heavily on these established movie makers/ actors for their film industry. Chan and Ziyi who are well know faces in Hollywood are also working in many Chinese movies – thus providing the Chinese movie industry with that initial torque it requires. For that matter, Woo has directed many Chinese movies that have received critical acclaim in international forums!
Today, these expatriates have created such a wave that on one hand where all nations are encouraging their students and kids to learn English and then appear for TOFEL to make their way to Western universities, then on the other, the West is encouraging their kids to learn Mandarin. As of 2007, more than 30 million people were learning Mandarin. Confucius institutes have their branches today in almost all nations and are playing an important role in promoting Chinese Proficiency Tests (HSK) – the Chinese TOFEL. Teachers in China are even trained (and handed booklets) on how to teach Mandarin in Western countries!
The imperativeness of the Chinese has risen up to such an extent that in 2006, even the then President Bush declared the Chinese language to be a strategic language in the National Security Language Initiative; he allotted $114 million towards the promotion of this language – and this could not have been possible without the soft power created by the overseas Chinese and without their help in building a Chinese fashion in the West. Today, learning Mandarin, knowing Kung-fu, adopting Feng shui and using chopsticks are seen as elitist hobbies in the West – nothing can speak volumes than the wave that Buddhism has created across the world. And all this soft power helps China grow economically too, as the commodities that can make these soft powers tangible are all made in China!
China has always inculcated the passion of nationalism in their citizens. The 5,000 years old unshakable history echoes the way the country has successfully kept all Chinese, irrespective of wherever they live, under the same umbrella. The Chinese across the world still follow their culture and are known for their own unique ‘Chinese way’, which is quite vivid – one stroll down any Chinatown or watching a movie made on China... even by Hollywood, would be enough to prove that! As the Chinese are disciplined and connected to their roots, most of the overseas Chinese at some point of time paid back to their motherland. And this one cultural teaching has made China grow economically and intellectually. Thus, if the Great Wall of China represents how China is not very open to the Western culture, then the likes of Jackie Chan represent how there is a China in all spheres of life. Here is one country which is emotionally, strategically and diplomatically squeezing the maximum out of its expatriates and also has been successful in simultaneously keeping them united. Above all, it has kept the feeling of ‘Chineseness’ intact! I personally believe that keeping aside all the criticism over the Chinese hardline regime, India must try to learn from the positives they have been able to create! If India can replicate the positives of the Chinese while remaining the world’s largest democracy, it will become not only the world’s most powerful democracy but also the world’s greatest democracy.

DR. ARINDAM ON CHINA

China: Unofficial confessions of a shopaholic!

31 January 2014 | Dr. Arindam on Indian Economy

Natural resources have always been the moot point for many a conflict and have tempted Kings and kingdoms into conflicts and wars since ages. A quick journey across our history would be enough to realise that the mightiest regimes have made planned moves to conquer natural resources – be it precious minerals, radioactive elements, energy resources, drugs, water or even human power. Talking about modern history, countries like US, UK and other Western powers have invaded nations in search of human slaves to natural gas.
Amidst all this, the bad news is that the era of cheap natural resources is definitely far gone. Natural resources and illegal occupation are very closely linked together; yet the correlation is largely ignored. The one time champion and monopolist nation of natural resources today is finding it expensive to explore its own natural wealth and is rather depending on imports. As per the US Geological Survey, 2011, United States imports 93 per cent of its antimony and 100 per cent of its bauxite and indium, 50 per cent of its lithium, and astonishingly, 100 percent of its rare earth metals. In just two decades, the tables seem to have turned completely. Two decades ago, China was the largest oil exporter, and today it’s one of the largest importers. So much so that China’s consumption of essential metals has doubled in the last 10 years and is expected to double again in the next few years. Today, against all the odds, China has made its presence unshakeable in most of the Latin American and African nations. I have, in some of my previous editorials, written on how China is completely into Africa in all economic and non-economic sectors. And why not! Latin America and Africa are precisely the two continents, which still have enough natural resources to meet the global demands for years to come, and to make any country controlling these resources economically powerful for years to come. For instance, in 2007, China bought a 15,000 feet mountain in Peru for a whopping $3 billion. Mount Toromocho, which is spread across 138 km, has proved to be one of the most productive copper mines in the world and is reaping a profit that is almost 2000 per cent of the initial investment.
China is not leaving out promising opportunities even outside these two continents. China has recently signed a “laptops for pork” deal with Canada which will allow China to become a prominent player in the meat industry in no time. Simultaneously, China is exploring opportunities to make it big in the fertilizer industry. China, a few years ago, mobilised its state-owned enterprises to bid for PotashCorp (POT), the Canadian fertilizer giant which is the largest producer of potash and third largest producer of phosphate and nitrogen.
On a closer look, the entire resource-grab spree would reveal a couple of interesting and economically-intelligent strategies. China is tapping into the resources of those nations that are relatively weaker. In other words, they are entering nations that are politically weak and have poor governance (including India).
Moreover, these are precisely those nations where the West had never paid heed and had left them to their own fate. Various nations of Latin America, which were subjugated by the West through sanctions and regular invasions, and Africa where the West only went with an objective of plundering and looting, are the prime-interest areas of China. The dragon nation is offering countries in these geographies trade offers that are more than lucrative. Not only is China commercialising their dead industries but is also allowing them to develop support infrastructure. In any case, it’s a win-win situation for China from both the ends! Such deals give them free access to hinterlands and hidden resources and the support infrastructure removes the transportation bottlenecks too.
And interestingly, such huge deals are not hampering the domestic markets of these nations, unlike those nations where huge FDI can be disastrous for domestic traders. At the same time, learning from the mistakes of others, China too is concentrating equally both at home and abroad. Actually, its global resource shopping spree is to facilitate trade at the domestic front. Most of the nations where China has sealed bilateral ties have seen a huge influx of Chinese multinationals that are acquiring assets and resources from all directions. Going steps further, unlike the West which is mad over oil and oil only, China is buying everything from poultry to coal to copper to even scrap. And to top it all, Beijing has recently bought land in the United States to develop ‘special economic zones’ near the south of Boise, Idaho. China National Machinery Industry Corporation would build a 30,000 acre self-sustaining city in Idaho where it will establish numerous Chinese companies, outlets and would employ tens of thousands of Chinese workers. The same is also being planned in Milan, Michigan. In simple words, China is building a new Shenzhen in the heart of US.
Thus, China is going global and buying almost everything under the sun. The country recently bought AMC Entertainment Holdings, one of America’s largest movie chains, America’s biggest pork producer (Smithfield) and even vineyards in Bordeaux. Now the big picture – such purchases are galvanising the Chinese economy more strongly which will further help in making the yuan stronger, and this eventually would strengthen the already strong position of the Chinese domestic market on the global map. Plus, China is trying to route all manufacturing activity to their nation with the global supply chain channels essentially crisscrossing the Chinese geographies. Undoubtedly, this would leave all other nations at the mercy of China for global trade, and will definitely snatch away trading power from the West. It is undeniable. You can’t think of beating the Chinese anymore. In such a scenario, at a global level, global trade councils should draft trade policies that would focus primarily on nations with Chinese influence; and at a national level, countries should start aligning their trade policies towards the East.

DR. ARINDAM ON CHINA

China is all preparing for cyber war. India is still asleep!

29 March 2013 | Dr. Arindam On China

The People’s Republic of China may have initially missed out on industrial revolution that made the western nations what they are today and constrained China to an emerging economy in spite of its mercurial economic growth for the last three-and-a-half decades. But learning from the past, it is all set to become a front-runner in the virtual revolution, and is very ready to leverage maximum possible benefits out of it. In fact, it has gone a step further to set off cyber warfare with other countries in the congested and tightly competitive virtual world. And this time, it won’t settle for being a laggard, for it is heading fast towards its most cherished goal of becoming a global superpower!
Undoubtedly, the modern warfare is no more about the number of casualties or destruction of physical property. The new doctrines of war is all about attacking a nation economically and paralyzing it for years to come. An economically broken nation would not only destroy its human capital in the long run but would be politically fragile too. In order to showcase their supremacies, today, nations are not only stealing information that have high strategic value but also destroying trillions of data bytes in host servers, thus leaving victim nations at perils.
China has unleashed muscle-flexing exercises through the cyber world and the focus is straight at its favourite enemy, the United States of America. In the real world though, despite being a permanent member of the UN Security Council and a full-fledged nuclear power, China knows it well that it is still not at par with the western armament technology, especially to that of US, UK, France and Russia. The desperation to bridge the gap forms the cornerstone to China’s cyber warfare rationale. Time and again, it has attacked various military and intelligence websites – what we call espionage – to gain access to data, technologies, blueprints, strategies and geo-strategic coordinates. To a large extent it is successful too, as there are increasing concerns in US and UK establishments regarding the price they might have to pay as a result of this on-going cyber war. However, the cyber battle is not just confined to military espionage. It includes intelligence, economic and social espionage too. Back in 2010, computers at diplomatic posts of around 103 countries were intruded by China’s cyber-spies. Phishing attempts were also made on the American power grid, and its financial records and air traffic control systems.
In this context, the red dragon’s attention has been drawn to India as well. The reason is obvious. India is touted as the next fast-growing power in Asia and is seen as a prospective silicon hub – apart from China - in the region. It’s not that China can learn a great deal from India’s defense technology and military preparedness, but it can certainly steal some knowledge from India (both economic and military plans) and accordingly, frame strategies and counter-strategies at various levels.
A political tussle is on for quite some time in the South China Sea, where India and China are offering a quick sight of their respective naval might over issues related to oil exploration in Vietnam’s coast. Consider this: on June 30, 2010, the computer system at India’s Eastern Naval Command headquartered at Visakhapatnam was hacked by unknown agents, supposedly to learn more about the plan of action of the Indian Navy that is directly responsible for operations in the disputed waters of the South China Sea. Cyber forensic experts tracked the hacking route, and Beijing’s complicity was established. Translation – China hacked into the Indian Navy’s server to gain access to classified information. And this is not the first time such an attack from China has come to public light. Portals ranging from MoF websites to that of PMO have been hacked by Chinese virtual soldiers in the past. Going by such several incidences, China’s hacking expertise can beat the best in the world, while India’s will be beaten even by the worst! And being in the enemy radar of China there is every chance that the cyber-attacks will increase in future, with India being the sitting duck in the warfare.
It is indeed strange that despite a huge, talented pool of computer experts, India is staging such a poor show on this front. It is actually the weakness of our institutions – defense, defense production and defense R&D – in terms of their failure to optimally recruit and utilise intellectual capital in defending State secrets. Why can’t the incumbent government keep an army of hackers to defend the very nation and its State secrets? At least that is not being done on a priority basis, and earnestly so.
On the contrary, cyber hacking is a State-sponsored initiative in China. The government supposedly pumps-in a mammoth $55 million annually for this exercise. According to a Toronto University study, the Chinese Navy’s covert wing is directly responsible for the many acts of cyber espionage. Even terror outfits emanating from Pakistan and elsewhere, would have massive interests in gaining access to sensitive information that is delivered by Chinese hackers (State-sponsored or otherwise), that could come handy while plotting terror attacks on India. As dangerous as this suggestion sounds, the need of the hour is for India to pull up its socks and get stronger on the cyber defense front.
A specialised cell for cyber security is of utmost importance and the PM and Co. should realise the gravity of the situation. With India getting more automated and most of its communication processes now becoming digitalised, the repercussions of a full-fledged cyber war would send ripples across the entire nation and the system that runs the nation. If a Stuxnet-type worm or virus (that impaired Iran’s nuclear program in November 2007) were to attack servers across India’s stock markets, or those of the Indian Armed Forces or Utility centres, the nation would come to a standstill. [Of course, the confusion, fear, distrust, anger, helplessness and desperation amongst the people would be complimentary!] In fact, as per a recent study of the spread of Stuxnet worm by Symantec Corp., India is the 3rd-most affected nation by the worm with 8.31% of computers affected by it! [For Iran, the figure stands at 58.85%, while for Indonesia it is 18.22%; USA and Pakistan only have 1.56% and 1.28% of their computers affected by Stuxnet respectively.] Given that it affects systems that run on Windows 2000, Windows 7, Windows 95, Windows 98, Windows NT, Windows Server 2003, Windows Server 2008, Windows Vista, Windows XP – given the high penetration of Windows OS in India, the country is in clear and present danger of a cyber attack. Stuxnet is just an example. There are many more!
In this information era, when safeguarding information is as important as safeguarding borders, what India needs is a comprehensive defense policy that integrates virtual and real warfare. Forming numerous discreet bodies would be futile. Instead, formation of a centralised defense unit that has divisions capable of handling cyber and border security simultaneously is imperative. As of now, hacking into websites in India isn’t a tough ask. Actually it’s very easy if you ask a Chinese to do you a favour!

DR. ARINDAM ON CHINA

Could the China-Japan tensions initiate an economic boom for Japan?

06 December 2012 |Dr. Arindam On China

Just a couple of months back, the entire global media fraternity was talking about the next probable war between China and Japan over the issue of a small group of islands in the East China Sea. Just when people thought that the issue was cooling down, last month, a delegation of former US officials submitted a report to Hillary Clinton that the dispute could spin out of control and result into a military confrontation; add to that China’s recently declared intentions to deploy marine surveillance drones to track maritime activity around the cluster of islands from where the conflict originated. The entire issue is certainly far from over, with both the nations in no mood to step back.
There is, of course, nothing new in the conflict between Japan and China. Through centuries, these two Asian neighbours have been brutal to each other – politically, economically and militarily. The Japanese monarchy before World War II was notable for their imperialistic intentions – they invaded China in 1931 to mark the beginning of a violent, 14-year occupation of the land, finally retreating only after the World War II reversals in 1945. However, in the post-World War geopolitics, the foreign policy trajectory between the two nations has swapped its direction. Since the past few decades, Japan has sought to maintain a nice-guy image, while on the other hand, China has wanted to treat Japan slightingly. Japan’s cooperative and accommodative foreign policy acted as a silver bullet for its economy, which saw an unprecedented growth from 1950s till 1980s. That period saw Japan barging into the elite club of developed nations (the only Asian country to accomplish the feat then) and becoming a part of G-7, or the seven most industrialized states in the world. That’s a remarkable accomplishment, considering the fact that this was the same country that had literally been reduced to ruins in the Second World War and also the fact that none of its Asian counterparts could mirror Japan’s subsequent economic achievements. China, like Japan, started a new journey from 1949, when the Mao Tse Tung-led Communist Party of China overran the country and gained control on its governance. But unlike Japan, China, in the first three decades, emphasized largely on a military buildup. Amidst this journey of these two Asian giants, one thing represented permanency – that these two nations won’t walk hand in hand.
Interestingly, Japan’s ruling Liberal Democratic Party had promised before the 2009 election that Japan would be more muscular in its foreign policy and had hinted then on a shift from being a US-backed nation to being one with a more Far East integration, including with China. However, that didn’t happen. The recent happenings have in fact worsened the situation. The first, significant barrage came from the Japanese government in early September 2012, when they revealed their intentions to purchase three disputed islands in East China Sea – a move that led to their fragile relationship with China nose-diving in no time. China pledged to thwart Japan’s intentions, and in response, sent three fishery surveillance ships to the territorial waters near Senkaku, the group of islands in contention. In return, Japan adopted an aggressive foreign policy stance and announced that they would take the Chinese bull by the horn – by mid September, Japan had officially bought the islands.
This one issue over the group of islands has now been raising a fear that the machinery of foreign policy discourse may fail, leading to an all-out confrontation. A military confrontation between the second-largest and the third-largest economy can, of course, not only lead to massive disturbances in the region, but also destroy the current global power equation! An all-out war could destroy the economies of both the nations; not just that, the entire world would be a poorer place if by chance Japan and China fail in maintaining regional stability. Given the fact that both the countries have traversed through extended periods of sufferance in the last century which still haunts the souls of their citizens, it is important for them to pay heed to the destruction the probable military confrontation could bring.
China is talking of deploying drones and has never been a soft state. At the same time, Japan has always been a soft power, and they were quite content with such an image – because their economic glory was enough for them to brandish to the world. Japan’s post-World War II Constitution, in its Article 9, too promises never to maintain land, sea and air forces. Even though Article 9 has not been changed in principle, its interpretation has changed over the years! The overhauling of this contentious Article requires a two-third majority, which is becoming more and more probable. Some of the steps the current government has taken in this direction suggest the same. The government has eased a long-standing ban on weapons sale and has passed new laws permitting the launch of military space satellites. Further, Japan’s armed forces are more potent now in undertaking military exercises, which they frequently perform along with nations like the United States.
Despite the aggressive posturing by both the nations, one has to accept that an armed conflict between Japan and China has a remote possibility. What might in fact actually happen is that Japan’s assertion (and China’s equally aggressive response) can escalate an economic race in Asia. What could be in the pipeline might be a war of nations surely – but not a military war, rather an economic one. Japan’s aggressive intent, in all probability, is a figment of its two decades of economic stagnation and the eroded pride of its people. The robust manoeuvring of its foreign policy and the current sparring over the particular group of islands can bring back the spotlight on Japan; a clear message that Japan will not anymore step back and watch China overtaking it! Until a really immature step is taken by either nation, which might result into a real possibility of a war, a healthy competition between China and Japan should actually attract optimism instead of scepticism. Japan’s aggressive posturing and ongoing resilience should invite companies and investors to this nation and could eventually help in awakening the economic giant once again.
Thus, the economic race between these two powerhouses can shape up a rosy picture for the entire world. A booming Japanese economy can work wonders not only for the developing and emerging economies in Asia, but also for the entire world. It can portend Japanese FDI populating economies like ours, and even developed countries like America would experience the get-out-of-the-mess signals with its fourth-largest trading partner riding the crest. Even China could well be recipient of FDI largesse from Japan if the nation rises again. In other words, a renewed Japanese economy not only has the possibilities of increasing global economic and technological growth and competition, but could also open up new avenues of trade and commerce for the entire world. Of course, a non-consensus stage between China and Japan may lead to a full-blown war, but with mature economies around, war is something that is least likely to happen. And what is most likely to happen is the resurgence of the Land of the Rising Sun. And that is something the entire world awaits eagerly!.

DR. ARINDAM ON CHINA

Between the Indian customs department and the Chinese "kidnapping" traders, it's the Indian businessman who is getting sandwiched!

17 February 2012 | Dr. Arindam On China

The recent case of Indian traders being kidnapped in China has opened up a can of worms. Apart from the case revealing weaknesses in the Chinese judiciary (as I had highlighted in an editorial a few weeks back), it has also brought out in the open something that traders from India (and other countries) were facing for a long time but not speaking about openly. The big trade that happens between India and China is through the scores of wholesalers operating out of wholesale markets in India like the Sadar Bazaar in Delhi. These are not the big guys who prefer getting into litigation that easily; they also aren’t amongst those who operate with lawyers and bigger paraphernalia. These are smaller traders, though huge in numbers, who go to Chinese towns like Yiwu in particular and pick one or two containers of goods worth Rs. 30 lakh to a crore once every quarter. And they now fear entering China. The question is why? Can one incident of kidnapping shake up an entire community of traders, especially when China is such a good bargain for them? Or was this not that stray an incident after all?
Consider the case of Manish Rewari. He has been doing business in exactly the same town of China for years now. And swears by the advantages that China gives him in his business as he shows off a fascinating watch that he is wearing while narrating his story! He had first seen the same watch in a wholesale outlet in Karol Bagh (a shoppers’ paradise near Central Delhi). The shopkeeper quoted Rs.22k as the best price for the watch to Manish. Not be outdone like normal customers, this China believer – in his next trip to Yiwu – went around various shops and found out exactly the same watch. And the price for a single piece was Rs.2.5k; and for bulk order of more than a hundred pieces, Rs.1.2k per piece. A watch enthusiast, he picked up only one watch for his consumption.
If that sounded nice, just a trip before this particular trip, Manish’s experience was not as good. He used to work with a Chinese agent then. During his previous trip, he had struck a small deal and purchased goods for Rs.75k through the said agent. The agent took the money, delivered him the goods, but never paid the original seller. The next time, when Manish came and tried to directly deal with the seller, the moment he provided his old receipt with the previous agent’s name to show the price at which he had bought the goods in the previous trip, the seller pounced upon him. His grudge was that he had not received the money for that particular transaction. Manish very courageously tried to defend himself by saying, truthfully, that he had obviously paid up for the same. This he did despite knowing “that they [the Chinese seller] could pick him up and make him disappear”. His reasoning clearly was of no help because soon, there were scores of the seller’s people and henchmen who came from all around and surrounded Manish. Sensing trouble, Manish approached the nearby police, who in their very usual unfriendly manner told him in Chinese that they were there to protect only the interest of the Chinese. That’s when good sense prevailed. Manish knew that he had come for just three days and had a lot of deals to strike. And this would only get messy. And spending a few days in jail like a few others he had heard of was not a great idea. Manish grudgingly agreed to strike a deal with the disgruntled seller, and paid fifty percent of the pending money again as settlement (since it was too small an amount) and fortunately got away.

DR. ARINDAM ON CHINA

Why Chinese students come out at the top while Indians hit the bottom!

02 February 2012 | Dr. Arindam On China

A handful of weeks back, in the ACER PISA test – the OECD's annual global assessment of students' skills (for South and South East Asia) – India came second from the bottom defeating Kyrgyzstan while China topped the list. This acts as the final nail in the coffin of India’s dented education system. In spite of arrays of pan-Indian educational programs, India still has not been able to make education inclusive for all. On the contrary, China since the last four decades has been rolling out ambitious plans to revamp their education system, which is evident from the way they are storming into global rankings.
Chinese education is a very consistent blend of Confucian theories and modern concepts mixed with Chinese national developmental policies. Chinese education, unlike ours, focuses on both socio-cultural and political aspects of the nation. The current Chinese education system extends from the guidelines that Premier Zhou Enlai gave in 1974; guidelines that are popularly known as sì gè xiàn dài huà or the 'Four Modernizations'. And what are these? The education system in China revolves around agriculture, industry, technology and defense – that, as per the Chinese, are pivotal for the country’s development. China today has installed key schools meant for highly academically inclined students. China has adopted a policy of providing nine-year compulsory education to all with a special emphasis on vocational training and higher education. This nine year of compulsory education makes a child conversant with mathematics, science and Chinese literature.
Interestingly, even rural students undergo similar training; and by the end of the ninth year of education, the rural student is at par with his urban counterpart. Contrast this with India, where a high-school student is unable to solve a basic mathematical problem or frame a sentence on his own. Moreover, Indian rural schools are mired with problems of infrastructure and above all suffer largely from the curse of teachers' absenteeism. On an average, more than 30 per cent of teachers are found absent in rural schools. In order to curb this menace, China pays their teachers based on student scores. Thus, a large component of teachers’ salaries depends on their students’ performance. Yet, there’s a balance. The better the school (based on the students' score) more is the fees they charge, thus increasing competition and quality both at the same time. Back in 2007, an article published in BBC stated, “China is now the largest higher education system in the world: it awards more university degrees than the US and India combined... The rate of university expansion has been beyond anything [that] anyone in the West can easily imagine.”
Millions of Chinese students are now abandoning colleges and are opting for vocational schools. These vocational schools are backed up by Chinese industrialists and known for producing ready-for-job candidates. In 2007, China allocated 14 billion yuan to be spent on vocational schools over the span of four years. Vocational education in China, unlike India, is not just confined to manufacturing but encompasses sectors like information technology, tourism and medicine. Vocational training was introduced in China so that educated people wouldn’t have to face the brunt of unemployment and relevant skill development is achieved so that qualified individuals have guaranteed jobs. The government has also introduced projects like the State Project 211, State Project 895 and State Project 111, where special importance is given to top top 100 higher education institutes to enhance the quality of their graduates. The Chinese ministry of education is also striving to meet global standards by inviting the world’s best researchers to work in these institutions, thus attempting to benchmark internationally. India too stressed on higher education – particularly in the tertiary sector – but faced with strong impediments in terms of funding, India is falling in terms of percentage of overall spending. The private sector too plays an important role in India in assuaging the demand-supply gap.
Back in 2003, China invited foreign universities to set up campuses; India passed a similar bill seven years later. Foreign universities have not only brought in global teaching pedagogies into China but have also elevated the level of education in the country. Consequently, China is doing exceedingly well in global rankings of late! In 2009, the Paris based Organization for Economic Cooperation & Development, representing 34 countries, released its Program for International Student Assessment, where the Shanghai region outperformed everyone else to be the top performer in all academic categories! According to OECD, China’s success is more because of its special emphasis on elite schools (key schools) where one is expected to shine par excellence. In 2003, the Academic Ranking of World Universities (ARWU) ranking showed that there were 23 Chinese universities amongst 35 featured in total. The top 3 Chinese universities that entered the top 200 worldwide university ranking included National Taiwan University, Chinese University of Hong Kong and Tsinghua University. There are more on the list of the top 500, including institutes likes Beihang University (formerly known as Beijing University of Aeronautics & Astronautics) and Beijing Normal University, which entered the ranking for the first time.
In comparison, India produced a big blank sheet! Not only does India not figure anywhere in ARWU, but it is also invisible in the Times Higher Education World University Rankings and QS World University Rankings. India is way behind China in terms of even the number of universities. There are 545 universities in India compared to 2,236 in China. Even in medical colleges, there are about 630 colleges in China compared to 251 in India. The total enrollment in Indian universities is only 4.7 million compared to 11 million in China. The situation was similar some years back too when, in 2004-05, India churned out 464,743 engineering graduates while China produced 600,000 for the same year.
China has meticulously planned its education system development in a top-down format – from system development to grassroots level institutional execution. The system is mostly centrally controlled by the Ministry of Education at the top and at the lower levels by the provincial and municipal authorities. This policy led to huge increase in enrollment. The tertiary level students had increased from 8.5 million in 1998 to 23 million in 2006. During the same period the percentage of students in the age group of 18-23 studying in universities rose from 9.8 per cent to 21 per cent – the manifold increase has been stronger in arts and humanities than otherwise. The main objective behind China’s education policy is to sustain the rapid growth that its economy has been currently experiencing. The Ministry of Education (MoE) is also trying to bring the aged segment (who are above the age of 50) under the umbrella of literacy. This has been the case since almost a decade. For example, even in 2003, there were more than 2000 higher educational institutes (HEI) including 607 specially allotted ones for adults. The fresh enrolments in HEIs was recorded at 3,200,000 and total enrolment stood at 9,033,000. A massive 200,000 or 40.4 per cent of postgraduate students were admitted to research institutes, of which 38,000 or 19 per cent went for Ph.D programs and 164,000 or 81 per cent for Master’s degree programs.
As I said earlier, the people who are unable to pursue higher education are provided with the opportunity of vocational training courses at numerous centers across the counties and towns. The secondary schools too have set up vocational training centers to accommodate people who are left out of the system of higher education. There were 15,590,000 students enrolled in secondary vocational schools, an increase of 2,747,000 from 2000 at the rate of 3.95 per cent per year. The Chinese have not only emphasized on ‘scale and speed’ but also on ‘quality and efficacy’ of their education system – especially in trying to penetrate their education policies deep into China’s rural hinterland and county levels.
The broad objectives of India’s education system are similar – a Constitutional framework is also in place to provide compulsory education to all but on account of poor implementation, the provisions have only been on paper. According to National Alliance for the Fundamental Right to Education (NAFRE), in about 600,000 villages, the education imparted is only basic, literacy instruction by semi educated (often not even that) teachers! In higher education, 80 per cent of Indian students are enrolled in science, commerce, humanities and social sciences and only 20 per cent are enrolled in professional programs. To reconcile that, India’s Prime Minister in 2007 announced the setting up of 8 new IITs, 7 new IIMs, 20 new Indian Institute of Information Technology, and 5 new Indian Institute of Science Education; with the purpose of churning out greater number of people with professional degrees. Of these, many are still to even see their foundation stone being laid. Aping China, India did set up numerous vocational schools. Speaking of numbers, India has only 5,100 ITIs and 1,745 polytechnics (mostly dysfunctional) compared to China’s 500,000 VETs (Vocational Education and Training institutions). That’s not all, India’s vocational programs provide only 171 skills compared to over 1500 that the developed countries provide. India is still trying to de-complicate the course structure that is currently too complicated, thanks to 17 ministries that handle VETs and clearly without any co-ordination!! What’s worse, even the service-providers of this system are not fully equipped as merely 40 per cent of the instructors have undergone a full instructor-training course.
A quick glance through the objectives/mission mentioned on the Ministry of Education website of both the nations would be enough to gauge the comprehensiveness of their policies. China’s education missions are not only comprehensive but inclusive as well. Not only is India far behind in the number of quality institutions, but India is decades behind in framing the right kind of policies. China is turning its population into this huge advantage, while we are ruining this massive possibility. Given the burgeoning population that we have, it is an imperative to educate everyone – or else the dividends would soon turn into a liability, if they’ve not already turned into one!

DR. ARINDAM ON CHINA

The steel story! Will Indians finally use Chinese labour to surge ahead?

27 January 2012 | Dr. Arindam On China

I have very fond memories of a great patriotic politician of India (very few such men can be found amongst today’s politicians), Vasant Sathe. Apart from his very intelligent, practical and radical views on the tax structure, I remember how he always compared Korea to India to show how a small nation could surge ahead so fast while we kept cheating our countrymen. When I went to Korea recently, I couldn’t but help feel the same; I even wrote about this a few weeks ago in one of my editorials. In the week gone by, I had the opportunity to sit with a gentleman who is a consultant to a company called Electrosteel Steels Limited. He told me the most amazing story of a venture – for setting up a steel plant – by one Mr. Kejriwal near Bokaro on about 1500 acres of land. It is a steel plant being set up with a capacity of 2.2 million tonnes. Hearing the fascinating story (I’ll explain later on why I found it fascinating) of this plant made me remember Mr. Sathe again. Amongst various things, steel was of special interest to him – as should be to any politician with vision, for after the Stone and Bronze Age, it was the Iron Age that was decisive for building the comparative advantage for nations. And it was during the Industrial Revolution when the entire world saw and realised the power and economies that this metal could create. With the invention of steel, everythingchanged further. Today, almost all industries ranging from automobiles to defence use steel and related products extensively. Steel has been one commodity that to a large extent has been pivotal for economic development and social prosperity, and thus has been a key ingredient in the nation’s future plans. Mr. Sathe would always compare the Indian productivity to Korean productivity to explain the rot in the Indian system – and then, of course, he would invariably talk about China too. So today I thought I’ll dig a little deeper into some facts and figures about this key aspect symbolizing a nation’s development.
A recent Wall Street Journal report foretells decisive growth in China and India’s steel industry for 2012. The details are very interesting. India’s position in steel production is meek and lagging, mainly on account of government control, bureaucratic hurdles and red-tapism, coinciding with poor planning, unprofessional functioning, and poor productivity. Not just Asian countries like South Korea, but even countries like Malaysia have productivity standards much better than India’s. A research report titled “Indian Steel Industry: Outlook to 2012” predicts that Indian crude steel production will grow at a CAGR of 10% during 2010-2013. Still, India’s average consumption of finished steel is significantly less than that of its neighbours. Not only is India’s annual steel production capacity, in absolute numbers, far less than what nations like China and South Korea have; but the per capita consumption is also at a rock-bottom figure. A time-series analysis indicates that both India and China started their tryst with steel production approximately during the same time. Just after Independence, India’s and China’s annual steel production were at the same level. However, by the end of 1990, where the per capita steel consumption in China increased by 65 kg and touched a figure of 160 kg, India’s per capita consumption languished at 29 kg (an increase of just 7 kg per capita) by the end of 2003. As per the latest ASSOCHAM report, the per capita consumption of steel in India is only 35.5 kg per capita per year compared to 220 kg in China and 950 kg in South Korea.
The same goes for production too. China’s steel production increased by 105 million tonnes while that of India increased by just 7 million tonnes! As per the World Steel Association, India’s annual production of steel in 2010 was merely 66.8 million tonnes compared to China’s 626.7 million tonnes and Korea’s 58.5 million tonnes. Unlike India, which saw an increase in steel production by a shameful figure of 13.3 million tonnes, the Chinese steel production grew at a whopping 131.8 million tonnes in a span of just four years ending 2010. Putting this number in a different perspective, India’s population in 2010 was 17 per cent of the global population while the corresponding steel production was merely 4.5 per cent of global steel production. The same was not true for China and Korea. China’s contribution to global steel production in 2010 was more than 44 per cent and Korea’s was 4.13 per cent in spite of their population being 20 per cent and less than 1 per cent of the world population respectively.
Steel production capacity and consumption capacity of a nation (especially per capita), as I said earlier, speak volumes about any nation’s fundamentals. Both production and consumption has a direct correlation with infrastructure development. The steel industry, by any measure, forms the very foundation of almost all manufacturing units and acts as a backbone for industrial development. With India growing demographically, and the nation relying heavily on steel imports, it is imperative for our policy makers to increase steel production by leaps. However, our archaic and non-liberal industrial policies did not allow many steel plants to come up. Barring Tata Steel (that produced 23.5 Million tonnes in 2010) and SAIL (13.6 Mt in 2010), there are literally no big names in steel production. On the contrary, China and Korea both allowed an array of steel plants to mushroom in order to meet the growing demand and facilitate their hunger of infrastructural development. South Korea has two large companies namely Hyundai INI Steel and POSCO, which respectively produced 12.9 and 35.4 million tonnes of steel in the previous year; still, China’s more than 10 large steel plants seem to be far ahead in the race. Chinese steel plants like Hebei Iron and Steel (produced 52.9 million tonnes in 2010), Baosteel Group (37.0), Wuhan Iron and Steel (36.6), Jiangsu Shagang (30.1), Shougang (25.8), Shandong Iron and Steel Group (23.2), Ansteel (22.1), Benxi Steel (22.1), Maanshan Iron and Steel Company (15.4) and Valin Steel Group (15.1) are standing as stalwarts in the global steel sector. Going by these numbers, China’s biggest steel plant is twice as big as India’s biggest steel plant.
Most of India’s steel plants – that too, mind you, could be set up thanks to the then USSR which benevolently came and virtually donated most of the plants to us around fifty odd years back – are labour intensive and over a million people are employed in the Indian steel industry either directly or indirectly. However, this number has no correlation when measured against labour productivity. This huge number does not reap the desired results as the average labour productivity in the Indian steel industry is very low at 144 tonnes per worker per year. The productivity at India’s two biggest steel plants is more horrifying, with SAIL having a labour productivity of 75 tonnes per man per year while Tata Steel with has a labour productivity of 100 tonnes per man per year. This is against POSCO’s (Korea) labour productivity, which stands at a mind boggling 1345 tonnes per man per year. This simply means that a single Korean worker produces 10 times more steel than an Indian worker! No wonder then that Mr. Sathe used to be so much in awe of Korea. In the same light, India’s labour productivity in the steel industry has increased from 11 per cent to 16 per cent (during 2002-2008) while that of China has increased from 12 per cent to 23 per cent. China’s steel industry enjoys low employment cost (labour cost being $1.5 per hour) and equally low operational cost (low cost of energy, equipment and transport). According to studies, cost of incepting a steel plant in China is just 60 per cent the cost of starting a plant in Europe. Steel companies in India have to pay a huge interest on capital apart from managing high costs of electricity and transport. Overall, as per estimates, the cost of capital in India is 14 per cent per year compared to 5-6 per cent in China and 6 per cent in South Korea. The average energy consumption in India is 2 million kilocalories per tonne more than the global standard of 4 million kilocalories per tonne, which is a crying example of how outdated and inefficient our steel plants are!
Anyway, coming back to the fascinating story of Electrosteel Steels, here is why the story made me look into India’s steel situation and make comparisons vis a vis China in particular. This steel plant near Bokaro, being set up on about 1500 acres of land, has a planned capacity of 2.2 million tonnes. This is a private factory. No Indian company or technology can set up such a big plant before 4 to 6 years. But this plant is being set up in 18 months flat! The typical cost of setting up a plant would have been two times higher than what it is costing now to build this new plant. And yes, it seems a visit to this tract of land, which is being developed out of nowhere, is like visiting heaven compared to the typical steel plants that are set up elsewhere. The facilities for people who are setting up the factory are no less than almost five star.
Any guesses why all this? Well, that’s because those are not Indians who are setting the plant up. The entire plant has been contracted out to a Chinese company! So the Chinese firm has got 1200 odd Chinese workers, engineers and supervisors working day and night to finish the project on time! The Indians associated with the project say that the Chinese workers work most sincerely and their output is two to three times that of the Indian worker on a daily basis. The Indian worker just doesn’t want to work. And the Chinese? Even female Chinese workers work with equal zeal and passion. And guess what? The deal comes with another guarantee. If Electrosteel Steels can’t sell their produce, the Chinese will buy it back from them as well. What else could any businessman ask for??
Now are you still wondering why the Chinese are far, far, far ahead of us in almost every possible respect, and even in capturing businesses worldwide, including in India? Well, this is why. It’s a shame politicians in India try to take the name of China and India in the same breath. India is nowhere, absolutely nowhere in comparison to them. But it’s time we learnt from them and started doing something; else, even India and Indians will be not just importing Chinese technology but also getting their workers to work in India.

DR. ARINDAM ON CHINA

This is the pathetic reality of the Chinese judiciary!

05 January 2012 | Dr. Arindam On China

In November 2011, Wang Sixin, a law professor in the Communication University of China, opined, “In India, the common law tradition allows judges to begin litigation just based on a news report or a letter from a petitioner, whether [the petitioner is] a lawyer or not. China needs to adopt this practice.” This suggestion of his sounds quite ostensible considering a nation where freedom of speech and expression is highly censored and the judiciary has been used to further this dictatorship of the State. The same was the cruel case in Yiwu city with the Indian diplomat, S Balachandran, who was denied food and medicine despite his repeated requests that he was a diabetes patient; this went on till he actually collapsed and had to be rushed to the hospital. Balachandran was trying to present the case for the release of two Indians who had been kidnapped by Chinese traders because their Yemeni firm had not yet paid some dues. This blatantly ruthless and inhumane attitude displayed by the Chinese judiciary almost in connivance with the Chinese businessmen defines the attitude of the Chinese administration. Till a few years back, if you were a Chinese villager having more than one child, the government tractors would have mowed down your residence – an act that defines the Chinese sense of cruelty, or should I say Chinese torture. Needless to say, the poor villagers never got any support from the judiciary.
The Chinese judiciary has never been independent! In fact, it was in a muddle especially during the Cultural Revolution that curbed its functionality completely between 1966 and 1976. The jurisprudence was revived after 1976 and thence, a new legislation came into being by the end of 1980 under the purview of Organic Law of People’s Courts. Consequently, a new era began, marked by a paradigm shift in the country’s legal system! On the brighter side, the system was made very strong in order to encompass the entire nation under the judiciary system. The number of judges and associate judges, which was at meagre 50,000 in the 1980s was increased to 131,460 in the 1990s, and then again augmented to 258,000 in 2000s – an increase of 416 per cent! This means that the judges-to-population ratio of China is now around 1 to 8,600, which is in close range to the US ratio of 1 to 8,826 – something that we in India are attempting to dream about since the last 64 years!
Despite these impressive figures and massive infrastructure, the Chinese judiciary suffers from numerous problems that affect the very nucleus of the system. It is neither independent, nor are there any standards to determine their independence. The single State party’s influence doesn’t permit the judiciary to be impartial and unbiased, especially since the Communist Party of China keeps perpetually interfering with the court’s proceedings. Clearly, a non-democratic setup never had any space to acknowledge and appreciate the essence of a free and independent judicial system. Further, the funding of the judiciaries is not streamlined uniformly as more developed regions like Beijing, Shanghai or Guangdong have substantially higher disposal of resources than other regions. With better infrastructure, communication and salaries, these regions attract the best judges whereas the remote areas face veritable financial hardships – and lack of quality judges. This has forced many backward regions to augment litigation fees to discourage the parties from filing law suits! As of date, a discriminatory funding ploy by the Chinese government has led to a situation where the jurisprudence of certain areas has been pushed to the limit! In simple words, flow of funds is decided by the State depending upon the freedom the government wants to provide to a particular province. Thus, the remote areas are allocated less funds to ensure a weak judiciary that eventually deters citizens from filing suits and from protesting against atrocities. The residents of such targeted areas are kept entrapped in a situation wherein breaking rules would lead to serious perilous consequences.
Globally, the judiciary system – a true pillar of the economy – is kept independent of political interference and has absolute power with independent staffs that hail from no political party – be it the ruling party or the opposition or any third party. Contrary to this philosophy, China’s judiciary is not separated from its political process. There is no separation of power between the government and the judiciary! The National People’s Congress (NPC) reigns supreme there and has every right to undermine and destabilize the independence of judiciary. The judicial appointments (judges and jury members) are under the ambit of NPC and so is the supervision of it. Thus it is this ruling party that literally decides the person who would chair the court – or shall I say, would decide the fate of the aggrieved party. Putting things into a better perspective, one needs to have a political party affiliation to be a judge in China. As a quid pro quo, it is essential for the judges and the jury to follow the decree of party leadership and perform a variety of functions! The court also acts as a civil law magistrate and has to find evidence for any criminal prosecution that is being handled! A judge’s role is more like an intermediary’s, who explains the policies brought about by the government (or at least the legal side of such policies)! Therefore, performing the role of a judge – as it is being performed in most countries – is only a miniscule part of a judge’s assigned functions and not the prime duty. Alarmingly, a judge in China might not ever have given any verdict but might have performed other roles stated above! He might be merely a little better than a party worker, yet he is called a ‘judge’. In this way China has bloated the figure of its total size of judges – but in reality it is just a farce.
Most interestingly, the Supreme People’s Court (SPC) has to submit a periodic report of its functioning to NPC for approval and review. Thus, today, NPC is seen poking its nose in almost all judicial affairs and individual cases and manipulating the court’s decision. Local governments have the power to literally advice the court on cases related to the government and also forces the courts to bluntly dismiss any appeal that can be harmful during proceedings. Local courts rarely favour the public and most of the times, drag the cases for indefinite time period. The appointment of judges is also influenced by local governments which make it impossible for the courts to be impartial especially in remote areas where the government can’t reach frequently. The lower courts approach the higher courts for directly getting involved in judgments. This snatches away the opportunity of the litigant to appeal before the higher courts, which may have already given an uninformed verdict without giving the claimant a chance to present the case before the higher courts! In essence, these courts have puppets setup by the local government.
Such a near-collapse of the judiciary has led to blatant abuse of laws and rights. The faulty judiciary system had led to rampant human rights abuse and containment of freedom. Since the last two years, international human rights organisations and global forums have been increasing their pressure on China to contain their brutality (in the veil of justice) and increase the flow of freedom within the nation. In order to reduce international criticism, the government is now resorting to home confinement, abductions and kidnappings, instead of trials and officials arrests. This has not only allowed them to get rid of international pressure but also helped them in manipulating numbers when it comes to human rights abuse.
As per the Chinese Human Rights Defenders (an association of human rights’ activists and groups) more than 3,500 people were detained (unofficially) without any evidence in 2010, but this figure is again quite skewed as the actual numbers is still unknown; it is estimated to be above 5000. The poor funding of the courts and measly rewarded judges make the courts in China look primitive and non-functional. The paucity of funds hinders courts’ activities and enforcements. By end of 1997, about 2 million cases were awaiting enforcements! The quality of verdicts, the impartiality of the courts, and effectiveness of judicial procedures suffers badly because of funding problems. From the basic level courts in the hinterlands to high courts in provincial capitals – all are funded by the local governments – and invariably there is a vituperative slash in the earmarked funding whenever any verdict goes against the interests of the county and its local bosses! The funding mechanism of judiciary is totally fragmented; and this acts as an aberration to the very tenets of philosophy guiding ruling of the country! In China, the situation now is such that the entire judicial system is corrupt. It is a common practice for the judges to accept favours from the plaintiffs in exchange of partial judgments. As per the latest data available, more than 900 judges were punished for corruption in 2003 and 2004 and around 200 were prosecuted in 2007. However, the actual crime under which they were charged was largely kept secret. A few months back in 2011, three judges were even shot dead at a court in China’s southern Hunan.
With a sole objective to curb freedom, if on one hand the government has deliberately kept the judiciary weak, on the other hand they have graciously empowered the police forces. It was during the Cultural Revolution that the police reached the zenith of their power. In order to dismantle protests and gatherings, units from the police force were bestowed with powers that were above the law; and gradually they became the only arbiter. Police frequently even resorts to physically abusing lawyers and arrests them on false charges!
To curb any kind of protest or agitation within, China has increased salaries of internal police personnel; even as it continues to imprison political activists recklessly. More than $70 billion was allocated for public security in the last fiscal, out of which a large part was redirected towards internal security. So much so, the budget for internal security almost matches the budget for national defence spending. This one step ensures that the officials (especially the law keepers) would not misuse their power and would not protest against the government. They would only pick up arms against those who speak against the government and not otherwise. These officials are provided with the best of technology, weapons, censorship-equipment and extensive power. They are a set of individuals who are perceived above the law and have the power & authority to go to any extent. Any activity that can take a shape of a revolt or a protest is curbed at the budding stage itself – be it labour unions or disputes of groupism against the government or its machinery.
Since the last seven years, the government is holding protestors in undisclosed locations that are infamously known as the ‘Black Jails.’ These are not conventional prisons but are buildings that are under government control. From hotels to government hospitals to any building, anything can be used as Black Jails. The detainees are physically and mentally tortured and kept in animal-like conditions in these jails. And above all, the government don’t discriminate among detainees with respect to sex and age. Both the sexes are equally tortured and detainees range from the minors to elderly. Interestingly, most of these jail units are maintained by private security companies that work in close coordination with the local police. However, a few weeks back, the Chinese government had announced their intentions to crackdown on such prisons and security companies. But then, like always, this crackdown-move is mere tokenism, as the exact number and location of such facilities are still unknown and undocumented.
On the one hand, where the entire world is gradually banning capital punishment and is resorting to the same only in extreme conditions, China is going absolutely reverse! On an average, China reportedly executes more than 20 criminals every single day – that annually boils downs to thrice the number of executions that the entire world executes combined. To top this, China even understands how to economically utilise its prisoners for the nations’ advantage. China is one of those few nations who are also into exporting their prisoners to other countries. Since the last couple of years, China – on a contract basis – had deployed its prisoners for construction projects in different Asian nations. This again is a violation of human rights. Here, I don’t need to describe the atrocities that these prisoners go through while undertaking the job abroad. Most of these prisoners work for Chinese companies having their off-shore units in South Asia and Central Asia. The Chinese companies rarely employ the locals and rather prefer to ‘buy’ these prisoners at a lower cost from the mainland. This further saves them from national human rights laws that are laid down by the governments of other nations where these Chinese companies operate from.
In order to curb sharing of information and any political upheaval, the Chinese government has put strict censorship rules on various social networking sites – from YouTube to Twitter. In a well known example, during the recent uprising in Libya, if one were to have searched the term ‘Libya’ on the Internet from within China, few or nil search results would have been displayed. Even content related to Tiananmen Square massacre is heavily skewed with very less information available on the same. Similar censorship is applied for all keywords related to Tibet, Dalai Lama, Uighur, Ai Weiwei and other sensitive issues. The government controls and filters all troubling information being sought over the internet by using a firewall, which is sarcastically known as the “Great Firewall of China.”
The freedom of religious practice is also under a heavy scanner. All religious groups are required to register themselves with their respective province’s authorities. Members of unregistered religious groups – however minor they might be – are persecuted and illegally detained. In fact when it comes to illegal and arbitrary detentions and cultural censorship, it would be criminal to miss out the cases of artist and political activist Ai Weiwei, Zuoxiao Zuzhou, Liu Xiabao, Liu Xianbin, Ran Yunfei, Ding Mao, Chen Wei and Gao Zhisheng.
China’s constitution does ensure freedom of press, but then the Communist Party is the supreme authority when it comes to content creation. Around 70-80 per cent of all content in media has to be inclined towards the ruling party and any diversion may lead to legal prosecution. Moreover, under the Protection of State Secrets law, a media house can’t reveal anything that is perceived as secret by the government. Consequently, the government uses such acts to manipulate print output and coverage. Horrifyingly, any negative publicity may even lead to the death penalty as well. Zhao Yan, Shi Tao, Ching Cheong, Yu Huafeng, Li Minying and many others were arrested under the pretext of Protection of State Secrets, as their opinion pieces were critical about the government and functionary. Apart from them, many other journalists – the latest being Zhang Ping – have been forced to resign as they appeared to be a threat to the ruling party. Paradoxically, China’s constitution, under Article 35, promises freedom of speech, press, assembly and procession & demonstration; but then the laws are tweaked in such a manner that most of these promised rights have no meaning in reality.
There is no denying the fact that freedom and justice are selectively and discriminatively distributed in the nation. But if one goes beyond conventional thinking, then it would be clear that the laws laid down on paper are quite comprehensive for the larger good of the ruling party. Everything – from censorship, immediate detention, religious screening, strict laws against groupism, capital punishment and many other such stringent rules – without any iota of doubt has been successful in keeping anti-social elements at bay and in deterring any kind of social instability and unwanted disturbance. But then, the moot point here is not about the way freedom has been curbed, but the way the political leadership has been misusing & abusing these laws to their advantage. It is high time that they start giving some real freedom to their citizens.
I want to end by saying that it is perhaps up to the Chinese citizens to decide whether they want to stand up against such authoritarian collusion of the state and judiciary. But if citizens of other countries also start becoming victims of such authoritarian attitudes – as has happened with the Indian diplomat this time – then it’s time for the international community to join hands and strongly protest against this so that the pressure created forces China to look at human beings more humanely and with more respect towards human rights. This is one thing that China must do in order to make itself a true leader in this globalized world.

DR. ARINDAM ON CHINA

If we want a poverty-free India, every Indian politician must begin their career with a trip to China!

13 November 2011 |Dr. Arindam On China

When I went to China a decade back, what I saw hit me very hard. I felt that if all of us in Delhi were to work 24x7 for 25 years, it would still be tough to convert Delhi into Beijing. That’s the China I was expecting to see when I went there again last month. What I saw instead was an extra 25 years of growth in the last 10 years!!! If ten years back, there were gigantic roads but less cars, this time the roads were filled with American cars; brands which American companies haven’t even cared to launch in India! If the last time I saw high-rise buildings, then this time I saw ten times more of them! If the last time I was amazed with Beijing, then this time I realized that we couldn’t even become Guangzhou if we worked 24x7 for the next 50 years. I believe that every Indian politician must have a visit to China as a mandatory part of his induction process into the Parliament (especially the Communists of India who have also so shamefully cheated their respective states year after year), so that they are firstly aware of how they and their predecessors have cheated this country and secondly to know where a country can reach in no time!
They say now that the Chinese economy has caught up with the American economy. In our book The Great Indian Dream, we had written ten years back about the same concept; and today I write that the Chinese economy has left the American economy far behind. Their products are so undervalued that no kind of calculation can show the real value of their humongous economy! And come to think of it, even a few decades back, China was seen with lot of scepticism owing to their political structure and a gargantuan population which was increasing by the day! But when we look at the nation today we realize that it took China just a few years’ time to give this huge population a purchasing power and lifestyle that even many in the West are deprived of and to create an unfathomable miracle! What China did and is doing now is beyond the imagination of many nations; they created this gigantic economy by systematically planning at every micro level – and most importantly, taking its citizen along this growth path! Today, an average Chinese living in Beijing, or Shanghai is almost as well off as an average American living in New York or an average British living in London! So what exactly did China do?
Amongst a host of other things, China’s opening up of its Iron Curtain and freeing its economy from the shackles of central control in the late 1970s while still retaining its commitment to the poor literally brought about the miracle. Unlike in India, their very carefully planned liberalization allowed the nation to experience rapid strides in growth and above all lifted more than 500 million people out of poverty! Millions of peasants were granted freedom from the massive poverty by being allowed to follow their dreams. This freedom and shackle-free life led to rapid development in the manufacturing and service sectors in the last 20 years! All this came as a celebration of new hope for Chinese masses and a new beginning of entrepreneurial freedom! The new spirit and the new mission were well supported by increasing investments in infrastructure, education and various other social sectors that symbolized the Chinese rise in world forums and made China one of the most sought-after investment destinations. The freedom from poverty in turn also helped develop the agricultural sector – as the policy of ‘farmers can make their own economic decision’ led to millions of farmers’ poverty cycle being alleviated! The rural household income doubled from 343.4 RMB ($55) in 1978 to 735.7 RMB in 2003. Between 1990 and 2005 the average per capita growth of Chinese economy was a staggering 8.7 per cent (highest among major economies)! The World Bank’s stipulated poverty line of $1 a day in Purchasing Power Parity corresponds to around 2,836 RMB per year (as per 2007 estimate)! As per this definition, China’s proportion of population below poverty line was 64 per cent in 1981; this dropped to an unbelievable 10 per cent by 2004 (India still has more than 40% of its population languishing below the poverty line as per purchasing power parity)! That’s Chinese poverty eradication – an exemplary and remarkable performance which is often quoted as a miracle – and an inspiration and case study for all developing countries across the globe.
The poverty alleviation programs undertaken by the authorities in the last three decades have contoured the modern China that is sparkling with confidence. Today, every Chinese is free to travel to any city to try and make a living there (Of course, cities do have resident permits; holders of such permits get subsidies in health facilities etc). Yet, one cannot find a single, real, poor person in the cities. No beggars, no slums and nobody sleeping on the streets! When poor can migrate freely, cities are bound to have slums if real poverty exists. In China, people come to cities for a better life and not because they were dying in the villages. The programs for poverty alleviation in China are carried out in 592 key counties over and above 74 counties in Tibet. In the distribution of prosperity, the Central and Western counties were the weakest links always. To address the economic gap, the central authorities from 1986 issued subsidized loans to the poor people – that was augmented from 1.05 billion RMB in 1986 to 5.5 billion RMB in 1996! Similarly, the “Food for Work” scheme was another flagship program in China where government spent 33.6 billion RMB between 1986 and 1997. Unlike other parts of the world where most of such programs are littered with corruption, the Chinese were successful in creating productive assets like roads, bridges, dams and other infrastructures across the nation. In the agricultural sector, reforms in agricultural taxes and other fees were implemented to relieve the farmers. In 2000, all the fees were abolished and replaced with a single slab agricultural tax – and later on in March 2004, amidst fear of WTO repercussions, the central government decided to eliminate the agricultural tax completely within the next 5 years. In the same year, more agricultural subsidies were introduced, which was followed by increased spending on rural infrastructure amounting to $25 billion!
Finally, priority was given to improving transport infrastructure like building the expressways – these were increased from 147 km in 1988 to 25,130 km in 2002. In fact, it was not as simple as it sounds. Initially, the poverty reduction was uneven and was signified by widespread disparities between urban and rural population and also among different regions!
The coastal cities dotted with foreign funds and SEZs were responsible for the urban-rural divide that led to the cash-strapped hinterlands languishing behind. The problem was further compounded by the low skill level of masses, lower advancement of infrastructure, and dearth of proper transport!
Even rural areas did not have a homogeneous income and lifestyle distribution. The rural industries, which began after liberalization, were mostly concentrated in the eastern region – thus generating income gaps among regions. Realizing the plight of rural China, the government introduced the “three-farm policy” to augment the agricultural produce and to make the farmers richer. The strategy was implemented with increased investment in rural areas, introduction of modern technology of farming, providing clean and corruption free administration, and financial help to the farmers. There is every reason to believe that the Communist Party of China took it vert seriously. The Chinese Premier of 2001, Zhu Rongji mentioned agricultural reform as the first task in the work report at the National People’s Congress. This policy of agricultural reforms was reinvigorated in 2004 with the introduction of newly set policy reforms for the sector. As I mentioned earlier, in 2005, finally all taxes from the agricultural sector were abolished! This move was complemented by a massive drive to improve rural infrastructure, provide safe potable water, clean energy, and construction of roads to improve transportation and communication. With all these steps in place, there was an unbelievable rise of income among rural folks; and with the rise of purchasing power, improvement in social sector like education, health, and sanitation, curbing of rural migration, and transforming of the socio-economic environment became inevitable.
Most importantly, China had designed their poverty eradication flagship program in such a way that once people got out of the poverty bracket, they couldn’t fall back to the same state again in the future, which is unfortunately the case in many countries like India. With the amount of FDI flowing into China, the ever increasing employment opportunities and a booming manufacturing sector ensure that people become self-sufficient to maintain their levels of purchasing power parity. Thus, China has been able to not only alleviate poverty but also has made sure that its citizens make continuous improvements at the same moment.
China’s rapid progress that beats any other country in the world in poverty eradication, has been riding the wave of incredible growth not just in agriculture but also in manufacturing and services, where similar miracles have been witnessed! Between 1980 and 2002, the manufacturing sector registered the highest sector growth, with a compound annual boost of 11.3 per cent closely followed by the service sector with 10.4 per cent, while the agriculture sector between 2003 and 2008 experienced a massive growth rate of 18.4 per cent. The sector wise share of the total GDP on an average boils down to “industry” with 46.8 per cent, “services” with 43.8 per cent and “agriculture” with 9.6 per cent.
In the manufacturing sector, China hasn’t look back from the liberalization that commenced in 1978. By 1994, FDI flow in China eclipsed 6 per cent of GDP. Foreign firms entering the country brought with them new technologies, technical knowledge and modern management practices. During this time, Chinese exports of finished merchandise skyrocketed; and by 2004, the manufactured merchandise share exceeded 90 per cent of the exports.
This happened because of the brisk pace of industrialization – and as it is imperative in such a situation, the industrialization was also accompanied by financial market liberalization. High domestic savings led to enormous public spending on infrastructure and a huge pool of labour could be harnessed optimally by prudent labour reforms! From 1980s through 1990s, reforms to strengthen the pricing system and market institutions were implemented along with slacking of the State’s control on resource allocation. This was followed by banking sector reforms and reforms on public sector enterprises, leading to much of the State-owned factories being closed down. The government’s increasing decontrol over the economy led to rising private capital flow and comparative decline of public sector units. The share of State-owned units in gross industrial output value was only 28.2 per cent, a fall of 49.4 per cent over the previous two decades. During the two decades ending in 1999, private funds in gross industrial output value rose from a moderate figure to 56.3 per cent! Cumulative FDI those two decades was a staggering $400 billion! Thus, the high manufacturing sector growth was directly responsibly for steeply reducing poverty by directly creating employment for millions – this had a cascading effect on the higher purchasing power among China’s populace that fueled further growth!
The manufacturing sector growth was initiated by opening up foreign direct investments in specific ‘Special Economic Zones’ (SEZs) – and as a windfall, foreign funds started to flow. China opened up its economy using SEZs to every nook and corner of the country. All these together enhanced the investors’ confidence in China that turned the country into a manufacturing behemoth. Today, major brands across the world are now outsourcing their production through China! The coastal towns have been the jewel in the crown attracting an array of mammoth investments in manufacturing. For records, 90 per cent the said investments are private sector contributions, unlike popular belief.
The tertiary sector in China – often overshadowed by its much famed manufacturing sector – also developed rapidly in the liberalization phase, constituting 40 per cent of GDP, a figure that had grown from a mere 20 per cent at the beginning of the liberalization period! It is astonishing but true that from the mid 1990s onwards, the tertiary sector in China employed more people than either manufacturing or agricultural sector; employing 250 million people by the end of 2007. The number denotes 32.4 per cent of the entire employment roster and an augment of 20 percentage point from 1978. The two biggest components of the service sector are wholesale and retail (accounting for 7.4 per cent of GDP) and transport, storage and postal (accounting for 5.9 per cent of GDP). These sectors have a direct link with the manufacturing industries and form the front-runners in the Chinese export spree. After joining WTO in 2001, China claimed that it had liberalized in 9 service sectors and 84 sub-sectors that included construction, education and environment beside many other sectors in the same lines! As per data released by WTO, China’s exports of services touched $91.5 billion in 2006 with a rise of 23.7 per cent over the previous year making them the eighth largest exporter in the world! We all know China’s dominance in exports, but what is more surprising is that China’s imports of services has surpassed its exports as of 2006! The exact import figure reached $100.3 billion with a 20.6 per cent increase over its immediate previous year, ranking China 7th in the world! Total number of projects in 2006 was a humungous 15,024, an increase of 7.04 per cent over the year before, involving a capital utilization of $19.5 billion. In 2007, the total value of outsourced services was $465 billion – that subsumes IT applications with $90 billion, business processing with $170 billion, IT infrastructure with $85 billion and design and research with $120 billion, creating unprecedented employment opportunities for the Chines!
In fact, the Chinese plan has been so systematic, scientific and meticulous that one should not even think of comparing China with any other nation.
And in the same lines, it is foolish to even compare India with China. Except for comparable population, there is nothing worth comparing. In China, the investment rate vacillated between 35-45 per cent in the last two-and-a-half decades in comparison to India’s 20-26 per cent. And mind you, Chinese investment means real investments, unlike ours wherein a majority of it is sucked up by unbridled corruption and inefficiencies! Even though the Incremental-Capital-Output-Ratio has been similar in both nations, China’s investment on infrastructure is phenomenally larger than ours – India’s average of 2 per cent of GDP is paltry compared to 19 percent of China! No wonder, China is flooded with FDIs (being the second largest recipient of FDI in the world) which in turn provides enough revenue to further boost infrastructure investment and create mass scale employment opportunities.
Thus, they have created a cycle of fortune which India could not imitate. China’s growth pattern has also been different from that of India’s! China started with the development of its primary sector; and in the last 25 years, moved to the secondary sector, a move that made the country literally “the workshop of the world”! The enormous success of its manufacturing sector has ensured the doubling of employment and tripling of output in the last two decades. Comparatively, India jumped from the primary sector straight to the tertiary sector with little growth in manufacturing! In spite of the primary sector’s share in national income plummeting from 60 per cent in 1950s to 25 per cent in 2003, the sector still employs 60 per cent of the Indian workforce – this is causing low productivity employment for a majority of Indian labourers. The trade policy and trade pattern differs too. The relocative capital that entered China and thereby took exports to an enormous level, has been possible because of cheap labour, world class infrastructure, excellent transport facilities, and cheap housing, that substantially brought down labour cost. India’s public provisions on the other hand have been rather ordinary, which have not been able to buttress export oriented industries, resulting in lower level exports, investment and growth.
Consequently, India’s poverty reduction has been much less successful than China’s – as poverty is rampant and extensive with 41.6 per cent of the population lying beneath the international poverty line of $1.25 a day. India’s own version of poverty line, as recommended by the Planning Commission – of Rs.26 a day for rural population and Rs.32 a day for urban population – is all of a laughing stock. As compared to this, as I mentioned earlier, China’s proportion of population below the international poverty line is a mere 10 per cent!
India was almost better off than China even till the 1960s! But after fifty years, China is now a massive, real superpower which has the strength to even look down upon the Americans, while we are in a make-believe world and don’t even know what’s the true meaning of a superpower. We don’t even know where China has reached. If we want to change India, we need to take every Indian politician to China – from Sonia Gandhi to Rahul Gandhi to Lal Krishna Advani to Prakash Karat to Mamata Bannerjee... Because when they talk of poverty eradication, I find it a joke, for they do not even remotely know the meaning of poverty eradication or how soon it can be done – or how much of their type have betrayed this nation. They need to be taken to a city like Guangzhou and be taken on a crisscross ride on the city’s roads so that they can see how they could be traveling on those roads for three hours, and yet not come across any road twice – with only world beating infrastructure peppered throughout. Comparatively, they should feel dwarfed with their deeds (Bangalore, our pride, might finish only in the very outskirts of Guangzhou).
Our politicians should be taken to Guangzhou’s annual Canton fair (where I too went) so that they realize how to attract foreign buyers. Delhi’s so called trade fair complex “Pragati Maidan” looks like a prehistoric, dirty relic in front of the facilities at the Canton fair. Our politicians should be made to stand in front of the Bund Street in Shanghai and shown how one side of the street can be made into replica of Geneva which is ten times better, and the other side (with a river) can be made to look far better than New York’s skyline in only a matter of twenty years. And that’s why there are no revolts in China, which the capitalists keep dreaming of – while people in the West are today demanding to occupy the Wall Street. Because the lack of freedom of expression in China is similar to say in Dubai – where you can’t speak negatively about religious issues – in China, you cannot speak negatively about the premier (actually you can do that too, but it’s just that you cannot attempt a movement against the high command), but you can write about corruption in the government in the papers; you can criticize their policies; you can migrate from villages to cities; you can go abroad; you can even buy Gucci and drive a Mercedes! There are no revolts because every citizen of China sees a committed political party; they are seeing their brothers and sisters becoming better off by the day. And when they come to cities, they see how these are being transformed into leaner, more modern and bigger than the New Yorks and Londons of the Western world. It’s a shame that in India, we can’t boast of the same. What a gigantic betrayal of a nation.

DR. ARINDAM ON CHINA

There is nothing called a Free Trade Agreement!

31 January 2014 | Dr. Arindam on Indian Economy

The saga of shame of the Indian Commonwealth Games continues as more and more shameful skeletons tumble out of the cupboard. And it only makes my heart cringe. More so because I believe that sports is literally one of the key routes to a healthy nation. From child health to adult health – both physical and mental – sports has a great role to play, especially in today’s day and time where children are getting addicted to videogames and to the internet. To me, personally, the Commonwealth Games event – good or bad – was in reality a great opportunity for India to develop the Indian sports scene. Instead, we found it a great opportunity to plunder more and more money. And that’s what forces me to take a look at how the Chinese used the Olympics as a great leap forward and how they have over years made sports a way of life.
Compared to the Indian games, the 2008 Beijing Olympics actually spoke volumes about China’s commitment to sports. Not only did China refurbish the entire host city to welcome the game and honour the sport at large, but it also set a new record in its medals’ tally. But what was most noteworthy was the leap that China has taken in sports over the years. This unprecedented transition in Chinese sports gets largely visible when one compares the first ever entry of the Chinese to Olympics, vis-à-vis the way they stole the show at the 2008 Olympics. In 1932, during the Los Angeles Olympics, the Chinese representation was just a lone athlete who represented 450 million Chinese and came back home empty handed. Their tryst with the first gold medal happened 52 years later, again in the same venue; and from there on, there was no turning back. And finally, in 2008, a nation which was considered an underdog in many events previously, shocked the world by topping the medals’ tally with 51 gold medals (a jump from 32 gold medals in 2004 Athens Olympics and 28 gold medals in 2000 Sydney Olympics); they were followed by the US which had just 36 gold medals! But then, this jump in the medal tally didn’t happen overnight.
China started preparing its athletes for this event even before they started their infrastructural development (unlike our preparation, where during the CWG, neither was the infrastructure ready, nor did the sportsmen have space and facilities for training). As soon as the nation won the bid for hosting the 2008 Olympics, the government announced its most ambitious sports plan called “Winning pride at the Olympics”, which defined the number of gold medals China could possibly win in different events – after analyzing the strengths and weaknesses of their athletes. The government laid down clear cut policies and strategies to target sports and the number of gold medals that China needed to win in every sports event! The country also launched Project 119 and Plan for Olympics Glory – something that is very unique and equally strategic. The project defined how China could win 119 gold medals (a figure that was later increased to 122) based on their performance in the 2000 Olympics (as the bid for 2008 was won by China in 2001). The flow of funds was never a constraint. During the Olympics, the sports budget was increased to $700 million (an increase by $300 million) along with building specialized sports infrastructure at the Qingdao City costing $30 million. Interestingly, all women sports events received huge funding and got special attention (this is rare even in the West). No wonder, China won 46 gold medals in the ladies’ events (including team and doubles) in the 2008 Olympics!
For China, the Beijing Olympics was much more than a mere sporting event. It was China’s attempt to showcase their magnanimity to the world. The architectural marvel ‘Bird’s Nest stadium’ was a stepping stone towards the same. The iconic Bird’s Nest, even months after the event, draws hundreds of local tourists to stay back and get a feel of China’s preeminence in the world of sports. In fact, the Chinese government had a tough time convincing the IOC about their bid, as the IOC was quite sceptical on account of China’s human rights issues and resulting global protests against its political backdrop and governance ideology. So once China got the opportunity, they left no stone unturned. The sporting infrastructure was just one part to showcase the Chinese dominance – the final nail on the coffin was their ultimate medals’ tally, which literally shut every critic. Not only did they top the medals’ tally, but their athletes also broke several world records.
In fact, what made the Chinese achieve the unachievable is not just the result of targeted hard work but more on account of the basic orientation that every Chinese gets from the age of four. The Chinese government has pumped in enormous amounts of money into sports clubs and schools that are engineered to train kids in various kinds of sports. In Li Xiaoshuang Gymnastics School, for example, hundreds of students (between the ages of 4 to 10) are coached by seasoned trainers. This school boasts of producing several Olympic gold medalists as well. The staff here is recruited by the government’s General Administration of Sports and plays a pivotal role in choosing and identifying future stars. The system of selecting world-class sportsmen is very logically structured and is bereft of any nepotism and politics. Schools and sports training centers across China train millions of kids in different forms of sports from where stars are selected for professional provincial teams; and the best of all graduate to the national teams. These students undergo the most challenging (read brutal) conditions while training and that is probably the reason that they excel in most sports. Moreover, unlike in our country – where sportsmen are found selling medals and certificates for survival – the future of all these sportsmen is secured by including their names in the government’s payroll.
All sportsmen are on government salaries. As a matter of fact, the lifestyle of sportsmen in China is even better than that of their Western counterparts who mainly rely on scholarships and jobs for getting trained. In China, the story is completely different. The cost of training is borne by the government itself. The sport training institutes also take care of the psychological wellbeing of the Chinese sportsmen – something that is missing in most of the nations or comes at an additional cost. The Li Xiaoshuang Gymnastics School received a funding of $14 million over the last one decade which boils down to $1.4 million per year; and here we are talking about one such school. Going by estimates calculated by the director of the Institute of Physical Science, the Chinese government spends a staggering $7 million behind one single Olympics gold medal. This is evident from the fact that the government had kept all their resources and plans concentrated on preparing sportsmen for the Beijing Olympics prior to the Beijing Olympics games. At any point of time, more than 11,000 schools all across China train more than 6 million students in various sports at the elementary level, a pool from which around 500,000 are promoted and sent to any of the 3000 specialized sports schools. Out of these 500,000 sports trainees, around 50,000 are selected and trained at 300 senior training institutes.
However, I must here admit that in China, the training sometimes does get very harsh. Students undergo training for more than seven hours a day and under very stringent and strict guidance. So much so that outstation students are not allowed to visit their families during training sessions. Students are rarely given an option to choose their sports but are forced to practice the one which coaches and trainers perceive to be apt for them. But then, to address these loopholes, the National Sports Minister, Liu Peng, at the recent national work conference on protection of athletes announced a new plan that aims at improving career development, career transition and work atmosphere of Chinese athletes. The sports ministry has also drafted policies to facilitate a smoother career transition for retired athletes.
As of 2010, around 16 Chinese sportsmen were earning more than five million yuan (around $800,000) with Yao Ming leading the charts with 141.7 million yuan ($22 million). The total earnings of Yao Ming (including sponsorships) are estimated to be 250 million yuan ($39 million) per year. Even sportsmen like Liu Xiang, Guo Jingjing, Sun Jihai and Shao Jiayi earns around 70 million yuan, 15 million yuan, 10 million yuan and 6 million yuan respectively. And mind you, all these sportsmen hail from different sports, unlike India, where only cricketers are endowed with such impressive bank balances!
The sports infrastructure development in China didn’t stop at the Beijing Olympics, but extended beyond it. It would be more apt to state that the Chinese government gave infrastructure to their sportsmen on a platter, whenever and wherever they needed. Beijing alone has more than 25 sports venues which satisfy the requirements for all kinds of sports. Many more sports venues are scattered all across the nation and all major cities provide arenas for all possible kind of games. There are more than 200 state-of-the-art sports centers in China that not only produce some of the world’s best athletes but generate huge economies too. China now boasts of having more than 50 multipurpose sports stadiums and more than 10 motorsports venues. The economies thus generated is evident from the fact that the biggest stadium (Shanghai International Circuit) has a seating capacity of more than 200,000 people, while three of the next biggest stadiums can accommodate around 80,000 spectators each; and around 50 other stadiums can seat more than 50,000 spectators.
These stadiums and training modules are not just confined to or reserved for seasoned athletes and ambitious sportsmen. The government has had bigger and wider plans – a vision for a healthy nation wherein citizens acknowledge the value of sports. This August, millions of Chinese participated and celebrated an initiative that the Chinese government had started three years back – the national fitness day. A recent Women’s Health Survey by Tianjin Women’s Sports Association and Tianjin Sports University revealed that around 55% of all women surveyed are willing to attend fitness classes. The National Fitness Plan was drafted way back in 1995 with an aim to improve the health of people. It was meant to motivate citizens to practice one sport every day and get themselves physically checked every year. In the quest of achieving this target, China opened more than 850,000 gymnasiums and stadiums for public – most of them are free. This has subsequently made people more open to sports and also made children experts in different game forms of their volition and passion. Most of the residential communities are fitted with fitness infrastructure that allows people to practice sports in the vicinity of their residence. The increase in life expectancy over the years is a direct result of this fitness program and today, most of the citizens are learning non-conventional sports too.
In this year’s national fitness day that was held last month, more than 10,000 people played chess games in Shanxi University to celebrate the occasion and more than 1,000 people participated in the body-building show in Anhui province; this is besides the marathons and sports promotions events that took place all across the nation. The 2011 national physical condition survey conducted by the State General Administration of Sport showed that there has been an increase of 1.7 per cent in the number of people who met the national fitness standard since 2005. All in all, sports in China today is not only seen as a career option but as a matter of lifestyle!
Apart from Olympics, China also hosted the Asian Games in 2010 in Guangzhou – this was the second time that the games were hosted in the country, after Beijing in 1990. Guangzhou won the bid against competing cities like Seoul, Amman, and Kuala Lumpur – after an inspection by then Vice President of the Olympic Council of Asia (OCA), which finally awarded the games to Guangzhou in 2004. It was another portrayal of Chinese accomplishments, as Guangzhou went in for a complete renovation. Infrastructural facelifts spruced up the city – installing new subway lines, improving other forms of transport, new water treatment facilities, and building state of the art urban areas, nothing was left untouched. According to the mayor of the city, the authorities invested $18 billion preparing for the games and are estimated to have reaped five times the amount out of this investment!
One of the reasons behind the success of Beijing Olympics – apart from immaculate planning and execution for years, determination and patriotism – has been China’s ability to attract the best coaches from across the world to provide the most superlative training to its sportsmen. For the 2008 Beijing Olympics, as many as 38 foreign coaches were appointed from 16 countries for coaching 17 sports teams! Christian Bauer was the pick of the overseas coaches, coaching the Chinese fencing team. Under him, the Chinese won the gold in fencing after 24 years of Olympics effort. Another super-coach and harbinger of success was South Korean Jin Chang Bo whose training transformed the women’s hockey team from being a laggard to a team that reached the final match at the event. This may seem like rudimentary stereotyping, but conventionally, the short structure and short height of the Chinese people doesn’t portend well for them in competitive sports, especially in events like swimming where the height is one major factor – yet, under the guidance and training from Australian Denis Cotterell, young Zhang Lin (after being trained by Denis for several months in Australia) came out as the silver medalist in the men’s 400 metres free style. Some other international coaches to have served Chinese sports before and since Beijing Olympics have been Jim Lefebvre of United States for baseball, Jonas Kazlauskas of Lithuania for men’s basketball, Igor Grinko of Russia for rowing, Masayo Imura of Japan for synchronized swimming and Tom Maher of Australia for women’s basketball. All of them are reputed coaches and all of them met with resounding success with the Chinese teams.
As I mentioned, the Chinese association with foreign coaches extended beyond the 2008 games and most of them are still coaching Chinese players for upcoming international events, including the London Olympics! In the past, under Canadian coach Dustin Wilson, Chinese freestyle aerialist Han Xiaopeng won the gold in Winter Olympics 2006 – turning Wilson into a sports celebrity in China. The Austrian coach for speed skating has been a hit with the Chinese too. Chinese deputy chief-de-mission Cai Zhenhua reiterated the importance of foreign coaches to make China a sporting powerhouse – particularly in winter games where it is lagging behind the best! In a recently held World Athletics Championship, China’s performance was impressive with 1 gold and 2 silver medals – the credit given to the foreign coaches and the international knowhow they brought. These coaches brought the best training techniques that presaged over the local methods, to bring the best out of the athletes. In the World Athletics Championship, race walking coach Sandro Damilano of Italy, shot-put coach Kirsten Hellier and discus-throw coach Karl Heinz Steinmetz of Germany made China win accolades and medals. Steinmetz’ expertise helped Li Yanfeng win the first gold ever for China in the discus throw competition – a gold Yanfeng credited purely to Steinmetz for accomplishing the feat. Damilano’s achievement too was not less either – his critical advice and training helped Liu Hong win silver in the women’s 20 kilometer walk race. Clearly, China is leaving no stone unturned in inviting the best coaches on earth to assist their sportsmen. Their outreach for foreign coaches will continue till the London Olympics in 2012, where, according to Du Zhaocai (director of China’s Athletics Administrative Center), they have 7 to 8 important events before the main events where they would go all out for nothing less than gold!
Since the beginning, martial arts had always been the most sought after sports in China. However, with time, new and modern sports entered the mainland and the Chinese have welcomed these with open arms. So open, that today almost all sports events globally have at least one notable name that hails from China. Be it basketball (Yao Ming), table tennis (Wang Liqin), tennis (Li Na and Zheng Jie), athletics (Liu Xiang and Xing Huina), skiing (Han Xiaopeng) or volleyball (Zhao Ruirui). The country also hosts its own national games (in line with global games like Olympics) called the National Games of the People’s Republic of China.
China’s commitment towards sports goes beyond conventional methods of training. The mainland takes the entire issue as a matter of national pride and above all treats all sports equally without any prejudices. Outstandingly, the country focuses on those sports that have not reaped desirable results; and instead of ignoring and sidelining those games, provides better infrastructure and training facilities for the same. The Beijing Olympics was a case in point. Obviously, the Beijing Olympics generated huge revenues for China, but that was after China took the risk of investing billions. And mind you, such risk can only be taken by a nation which believes and is confident about returns and above all which believes in that particular genre of investment. It was the commitment and love for sports of the Chinese that made the government pump in billions for its development!
Last but not the least, Chinese players are now even infiltrating into the sphere of one-of-the most closely guarded fortes in America: the NBA championship! There is a renewed interest and passion for basketball in China – where almost a million basketball courts are being built across the country – resulting in Shanghai Sharks becoming a ubiquitous NBA team! The writing on the wall is clear – the American domination in world sports would soon be a thing of the past – as the Red Dragons are threatening to take the wind out of Uncle Sam’s sails.
That more or less sums up the massive difference between the attitudes and commitment towards sports of China and India. In China, sports is a passion, a matter of national pride, a way to healthy living practiced from childhood and a way to bring the nation laurels. In India, sports exists just to be milked by politicians to make money or show power. No wonder, the lone gold that we get once in a decade or so, becomes the highlight of the nation for years to come! In a land where one of its most revered sons, Swami Vivekananda, said long back that we go to heaven faster by playing football than by reading the Gita, it’s indeed a shame that we fight over making the reading of religious texts compulsory in schools, but don’t focus on making sports a way of life.

DR. ARINDAM ON CHINA

Overseas Chinese magic: Lessons for India

31 January 2014 | Dr. Arindam on Indian Economy

The strength of the Chinese population can be gauged by the very fact that today around 19.3 per cent of world population is Chinese. But then, such a figure based on the law of averages hides more than what it reveals. The figure that talks volumes about the Chinese sphere of influence, at least with respect to human capital, is that of 50 million plus overseas Chinese who are settled in various parts of the world and playing their bit in accelerating the fast-paced Chinese economy. Today, overseas Chinese not only pump money into the Chinese economy but also facilitate Chinese ambitions of global cultural and political colonisation. Overseas Chinese have made themselves inimitable in almost all spheres of influences – from heading many hard power areas by chairing vital positions in global forums, military and political institutions of many nations to being the face of various soft power areas of influence. One may not be well versed with the Chinese powers-that-be, but at the same time, very few would be not well versed with the likes of Jackie Chan!
The emigration of Chinese dates back to the Ming dynasty, but the real wave of Chinese diaspora started in 1840s when thousands of Chinese left China and made their way to the United States, especially after the discovery of gold in California. Initially, uneducated and unemployed Chinese labourers left their homes and moved to the US (for mining and railroad jobs); but then, during the late nineteenth century, the scenario changed. Instead of labourers, those were skilled and educated Chinese who moved out to avoid the ill effects of poverty and famine – which were haunting China in the late nineteenth century. However, this time the destination was not confined to the US or the West; many Asian nations suddenly made it to the destination list of Chinese. Among all the nations, Southeast Asia and Australia (apart from US) attracted the most Chinese. With more and more Chinese moving out of China, most of the big cities across the world saw a huge inflow of Chinese.
Gradually, these people moved and settled down in a more organised manner and formed strong communities across the globe. So much so that most of the renowned cities (in almost all nations) have a China located somewhere – which today we call ‘Chinatown.’
A Chinatown by no means is just another shopping destination but is a hub of overseas Chinese in a particular city. This is one place where overseas Chinese and local residents both can find everything that China manufactures. It is basically a one-stop-solution for all overseas Chinese when it comes to purchasing Chinese products, and above all, being close to their roots. Given the economies it generates, it’s a fact that in many nations, Chinatowns are of mammoth proportions – for example, the Cherkizovsky Market was considered the largest market in Europe; in July 2009, the Moscow government decided to replace it with a Chinatown shopping centre. China is reportedly investing $1 billion in the construction that would give employment to 70,000 overseas Chinese directly and would allow China to sell products worth a whopping $5 billion. Leading the race, Dubai is all set to construct the world’s biggest Chinatown spread across an area of 800 hectare – it’s worth around $47 million! There are around four major, recognised Chinatowns in Africa, over 35 in Asia, over 30 in UK and Europe, 15 in Latin America and over 50 in the US and Canada besides hundreds of more such markets across the world. Most of the goods sold in Chinatowns are imported from China (thus, pumping back huge revenues into China). Additionally, millions of Chinese working in these communities remit more millions back home to their families.
The remittance doesn’t end here. Besides millions of dollars flowing in through non-official and unorganised channels (in smaller denominations), overseas Chinese billionaires donate millions to the Chinese government through official and transparent routes. Li Ka Shing has recently donated a medical university to China; many such donations and relief funds (during disasters) are common for China. The cultural and family ties play a major factor in this and the overseas Chinese are largely driven by the verve to do something for their motherland. It might not be a panacea, but this solidarity of overseas Chinese towards their families back home has helped the Chinese economy to a great extent. The 55 million overseas Chinese across 135 countries contribute nearly 60 per cent to the total Chinese FDIs! China’s total foreign reserves were around $194 billion and total FDI was $61 billion (in the year 2004) with a GDP growth of 10.7 per cent (in 2006). The preceding decade (1990-2000) too experienced a rapid progress with average annual growth rate of 9.6 per cent mainly because of its diaspora’s benefactor-effect. The contribution of overseas Chinese in development of their homeland is a matter of historical and cultural patriotism. Between 1985 and 2008, foreign investment in China reached a figure of $898 billion making it the foremost nation in the world to attract foreign investment for 18 consecutive years! OECD estimates reveal that a resounding 45 per cent of foreign investment in 2004 came from overseas Chinese. In 2010, the FDI figures rose to a record breaking $105.7 billion. By August 2011, China’s forex reserves had reached $3.2 trillion.
All thanks to the deep running cultural roots that create a propensity for the diaspora to invest or establish business networks with their hometown. In Jinjiang province for instance, many entrepreneurial initiatives have been taken based on not only the government compensation but also on the remittances from the overseas relatives of entrepreneurs! Therefore, migrant business networks are fully exploited by the diaspora with the help of cultural and ethnic linkages for the overall development of mainland China. In 2006, overseas Chinese sent $22.5 billion to China as remittance, a figure which is now estimated to be more than $50 billion every year. The Chinese diaspora generate more than $500 billion in Southeast Asia alone and are playing a very pivotal role in the development of the Chinese economy. A huge part of this money is being redirected as remittances and donations; and to this extent, this community helps in the formation of a bridge that allows overseas and domestic Chinese to share intellectual and investment know-how and thus opens avenues of business opportunities.
The diaspora too are received with conscientious warmth and encouragement by the Chinese authorities as cross border migration is greatly encouraged and their experiences are shared with the local population. The Chinese government realized that this point needs to be driven home with the diaspora – therefore, they opened up a special cabinet ministry to solely deal with overseas Chinese. As reparation to the damage caused by Mao Tse Tung during the cultural revolution by dissolving the ‘Overseas Chinese Affairs Commission’ (OCAC), the commission was reopened in 1978 with the name changed to ‘Overseas Chinese Affairs Office’. A new federation was also opened in 1978 (All-China Federation of Returned Overseas Chinese) to help the overseas population integrate with their families and help in the transfer of funds (read: remittances).
China also organises several conferences and meets that allow overseas Chinese to come together and expand their network. Almost every year, the Chinese government awards and honours overseas Chinese who contribute significantly to the Chinese growth story. China has in the past issued medals and certificates to around 100 overseas Chinese-funded enterprises and regularly honours eminent non-resident Chinese.
The government has also tweaked its policies to ease FDI and trade investments for overseas Chinese. The government further encourages philanthropic contributions and has started several banks all across the world to facilitate investments and remittances, which keeps adding to the $3 trillion Chinese forex reserves. The Office of Overseas Chinese Affairs on a regular basis organizes seminars, conclaves and meets to reach into the diaspora. Most of these events talk about investment opportunities back in China and about Chinese government policies that would support such ambitions. Starting 2003, this office started sessions on “Advanced Training for Young Generation Overseas Chinese Entrepreneurs.” These are sessions for select overseas Chinese youth to train them in entrepreneurship and leadership. Moreover, the Chinese government has set up over 70 business parks exclusively for overseas Chinese and have also eased their entries to numerous SEZs.
Well, the role of overseas Chinese in fortifying their homeland is not only multidimensional, it goes beyond conventional ways of sending money back home. Overseas Chinese today are bringing China to the world’s center-stage by helping the nation in spreading its reach in all avenues of geopolitics. In fact, unlike in India’s case, the Chinese government saw an opportunity even in the ‘Brain Drain’. Instead of perceiving this syndrome as an outflow of human capital, they saw it from a different dimension and called it “outsourcing.” This outsourcing shifted the expenditure on education from China to Western universities – thus, instead of China awarding scholarships to Chinese students, those were the Western universities that started awarding the same. China tapped these overseas Chinese students (and ex-students) to have an access to western technology and scientific breakthrough. China further created a window via which transfer of technology and skills was made convenient. Today, China is encouraging their students abroad to stay outside and assist the mainland in their technological ambitions. Their old strategy of “hui guo fuwu” (returning to serve the country) has now become “wei guo fuwu” (serving the country). Strategically, they have converted the loss of brain drain to their advantage! The Chinese government leaves no stone unturned to make Chinese comfortable in foreign countries.
The Chinese embassies distribute close to a million pamphlets to all emigrants where all possible Do’s and Don’ts are mentioned that would allow the Chinese to be safe and comfortable in a foreign land. The booklet also talks about the way a Chinese should interact and modulate oneself in order to keep their image and reputation (along with the country’s reputation) high! The success of this paradigm shift is evident from the fact that in 2005, more than 15,000 Chinese research papers were coauthored with foreign researchers. Today, China publishes arrays of journals and research papers, which are widely referred to in foreign universities. This has become possible due to the presence of overseas Chinese professors in almost all reputed universities across the world. Further, overseas Chinese students and communities help China organise exchange program and conclaves for ethnic Chinese speakers and thought leaders. The Chinese Student and Scholar Associations (CSSA), which is spread all across the world (there are more than 100 such recognised associations in the US alone), works as a ‘welcome team’ during the visit of any Chinese leader and lobbies for such above mentioned programs. These bodies are indirectly funded by the Chinese government. For instance, 75 per cent of the University of Tennessee CSSA funding in 2004 came from China while CSSA at North Carolina State University and other Ivy League schools too receive regular donations from Chinese embassies. The same Chinese students, after joining Western companies, facilitate Western-Chinese mergers and business deals; a few return back to China (after absorbing years of experience) to escalate Chinese firms to new zeniths. It’s an astute example of how the government’s vision and encouragement has helped the overseas population reshape their homeland’s economic map!
Overseas Chinese have enveloped many pivotal positions across the world, which directly or indirectly helps China in reaping benefits out of its diaspora. From the current president of African Union (Jean Ping) to president of the Philippines (Corazon Aquino), all are Chinese. So much so that one or the other Chinese has served as a premier or leader for almost all major countries in the world. As of now, more than 80 overseas Chinese are holding powerful political positions in the world besides holding several other political and administrative positions. Today, people of Chinese descent are serving as president, state councillor, ministers, advisors, secretary, governor, state treasurer, mayor, member of the city council, attorney general, lieutenant governor and many more in countries across the world. There are over 30 actors/actresses who are known faces in various movie industries across the globe – with names like Jackie Chan, Rosalind Chao, Jessica Henwick, Richard Loo and many more being the most expensive and sought-after celebrities of the world. This is not including more than 10 celebrated directors and 20 globally heard musicians.
The success of Beijing Olympics was quite vivid, especially given the number of medals China won. But then, there were a couple of Chinese athletes who were competing against their own country. Today, more than 40 globally recognised Chinese are playing for other nations too! To top it up, there are more than 50 successful businessmen, 25 established writers and authors, 20 famous scientists and engineers (including Nobel laureates) and hundreds of other global names who are doing their bit to make the heat of the Chinese dragon felt across the globe. Many of these people use soft power to influence the world about Chinese products, culture, ideologies and practise; one of them being the recent fad across the world – Feng shui. Actors through their movies, musicians through their music, artists through their art, writers with their books and businessmen thorough their products are bringing China to each and every home across the world. Lobbying by the overseas Chinese – the feeling of nationalism is so strongly embedded that their are protests against anti-China movements – is quite normal. During the Beijing Olympics, when a couple of groups started their protests against the games, there were these overseas Chinese community members who in return protested against such a protest – a feeling that is rarely seen in any diaspora community! In Canberra, processions in favour of the games comfortably outnumbered and dwarfed anti-Chinese sentiments. Similar support for mainland China was seen in Seoul, Nagano, Kuala Lumpur, Jakarta, Bangkok and Hong Kong. In almost all these cities, overseas Chinese students, communities and youth came out and demonstrated their support for Beijing Olympics, thus crushing any probable mushrooming of anti-Beijing Olympics sentiments!
These pro-China movements were supported by big names in the Chinese communities. So much so that one of the most loved overseas Chinese Hollywood actors, Jackie Chan, openly criticised these protestors! Further, one day before the Beijing Olympics opening ceremony, Chan personally unveiled an official Olympic music album named “Official Album for the Beijing 2008 Olympic Games – Jackie Chan’s Version” and also refurbished the Chinese image by talking positively about China to the international media network. Even the Chinese actress Zhang Ziyi supported Chan in his initiative. For the uninitiated, Zhang Ziyi is one actress who has metamorphosed the conservative image of a Chinese woman to a career-oriented and glamorous woman (who is in no way inferior to any Western women) and today is seen as a face of the Chinese women. Director John Woo (director of movies like Hard Target, Broken Arrow, Face/Off, Mission: Impossible 2 and many more) facilitated the Beijing International Film Festival where 60 Chinese films (including Hollywood blockbusters) were showcased, thus helping China in promoting their movie culture and businesses. China today is relying heavily on these established movie makers/ actors for their film industry. Chan and Ziyi who are well know faces in Hollywood are also working in many Chinese movies – thus providing the Chinese movie industry with that initial torque it requires. For that matter, Woo has directed many Chinese movies that have received critical acclaim in international forums!
Today, these expatriates have created such a wave that on one hand where all nations are encouraging their students and kids to learn English and then appear for TOFEL to make their way to Western universities, then on the other, the West is encouraging their kids to learn Mandarin. As of 2007, more than 30 million people were learning Mandarin. Confucius institutes have their branches today in almost all nations and are playing an important role in promoting Chinese Proficiency Tests (HSK) – the Chinese TOFEL. Teachers in China are even trained (and handed booklets) on how to teach Mandarin in Western countries!
The imperativeness of the Chinese has risen up to such an extent that in 2006, even the then President Bush declared the Chinese language to be a strategic language in the National Security Language Initiative; he allotted $114 million towards the promotion of this language – and this could not have been possible without the soft power created by the overseas Chinese and without their help in building a Chinese fashion in the West. Today, learning Mandarin, knowing Kung-fu, adopting Feng shui and using chopsticks are seen as elitist hobbies in the West – nothing can speak volumes than the wave that Buddhism has created across the world. And all this soft power helps China grow economically too, as the commodities that can make these soft powers tangible are all made in China!
China has always inculcated the passion of nationalism in their citizens. The 5,000 years old unshakable history echoes the way the country has successfully kept all Chinese, irrespective of wherever they live, under the same umbrella. The Chinese across the world still follow their culture and are known for their own unique ‘Chinese way’, which is quite vivid – one stroll down any Chinatown or watching a movie made on China...
even by Hollywood, would be enough to prove that! As the Chinese are disciplined and connected to their roots, most of the overseas Chinese at some point of time paid back to their motherland. And this one cultural teaching has made China grow economically and intellectually. Thus, if the Great Wall of China represents how China is not very open to the Western culture, then the likes of Jackie Chan represent how there is a China in all spheres of life. Here is one country which is emotionally, strategically and diplomatically squeezing the maximum out of its expatriates and also has been successful in simultaneously keeping them united. Above all, it has kept the feeling of ‘Chineseness’ intact! I personally believe that keeping aside all the criticism over the Chinese hardline regime, India must try to learn from the positives they have been able to create! If India can replicate the positives of the Chinese while remaining the world’s largest democracy, it will become not only the world’s most powerful democracy but also the world’s greatest democracy..

DR. ARINDAM ON CHINA

It Is Now Foolish To Compare India To China. Rather, It Would Be More Sensible To Learn A Lesson Or Two From The Chinese!

06 August 2010 |Dr. Arindam On China

Recently, in terms of Gross Domestic Product (GDP), China toppled Japan to secure the second position globally, after US. In fact, China was very close to achieving this feat the last year itself, but fell short at the last moment. As per reports, if China keeps growing at its current pace, then by 2025, it should topple the US to become the largest economy of the world. Who could have imagined that an economy, which was languishing till about three decades back, has put itself in such formidable position? What is even more amazing is the fact that at a point in time when the world economy is still recovering from the global recession, China kept on growing. The growth has been such that in 2005, it first overtook Britain and France; then in 2007, it surpassed Germany to secure the position of the third largest economy of the world. It is not that the growth did not bring in iniquitous distribution of wealth; but then, at the same time, China has managed to pull out a staggering 600 million people out of poverty – a record which no other country has achieved so far.
Going by media reports, it doesn’t seem that many experts are appreciative of the Chinese growth. In fact even now, most in the developed world still cannot fathom the fact that China can be a serious contender in the new economic order. Much of this is owing to the fact that irrespective of its number 2 position, China still remains a developing country, as its current per capita is still 10 times lesser of that of Japan. But then, what most miss out on is the fact that China is in no hurry to prove itself. China has moved step by step in terms of consolidating its position. They have never bothered about the criticisms that they faced on humanitarian issues, or the kind of global cynicism that they faced by keeping their currency purposefully undervalued. Their objective has been very clear – which gets reflected in the manner in which they have planned every step. From the very beginning, China has been extremely scientific and systematic in its approach. And more than that, the growth has come out of great sacrifice collectively made by the Chinese citizens. China has systematically moved people into manufacturing and today China manufactures almost half of the global produce. Thus today, a Walmart retains the topmost position in the Fortune list by selling goods that are being made in China. And all this has not come in a day. It has been an outcome of years of planning. China today boasts of an investment which is a mind numbing 40% of GDP! Even at its peak, the US managed around 18%. Even countries like ours are managing 18%. Additionally, the Chinese investment mobilization has been far more prudent than any other country’s efforts. They have systematically invested in infrastructure, which not only created jobs, but also helped in creating a world class environment for trade. But then, their biggest credit has been in terms of the investments that they made in education. As per reports in 1998, around 3 million students were undertaking Chinese higher education; this increased to around 8 million in a matter of just 4 years. And investments have just not been in higher education – starting from English training, to vocational training to the investments that they made in science and technology. Such has been the outcome that their investments in education alone add up to almost 6% to their growth; and this would be sustained over a period of time. Today, China produces patents, the number of which is only second to the US! Not just this, they received severe criticism from all quarters when they pro-actively went ahead with their engagement with Iran. They did so not just with Iran to but with Sudan as well, for they knew that energy security is key to their dominance in global trade.
In order to have a better understanding of what the Chinese have achieved in the last two decades, one needs to compare it with India. The Indian economy, which used to be almost 80% of that of Chinese economy as recent as two decades back, now remains a menial 25%! While the Chinese feel underachieved at a staggering $4 trillion plus economy, we celebrated our $1 trillion mark! While sometime back there, China created history by hosting the greatest sporting spectacle, Olympics, we all know what we are doing to the Commonwealth games! Increasingly, any comparison between India and China is getting banal! It is not that we do not have our own advantages, but the Chinese have gone far ahead and are increasingly going farther. If reports are to be believed, we too would reach the number 2 position economically by 2040; but that too, if we keep growing between 8 to 9% year on year, which in itself is a huge challenge. It is now foolish to compare India to China; rather, it is more sensible to learn a lesson or two from the Chinese. Not just for growth, but more for the sake of those 300 million who have been languishing in poverty! .

DR. ARINDAM ON CHINA

Could the China-Japan tensions initiate an economic boom for Japan?

06 December 2012 |Dr. Arindam On China

Just a couple of months back, the entire global media fraternity was talking about the next probable war between China and Japan over the issue of a small group of islands in the East China Sea. Just when people thought that the issue was cooling down, last month, a delegation of former US officials submitted a report to Hillary Clinton that the dispute could spin out of control and result into a military confrontation; add to that China’s recently declared intentions to deploy marine surveillance drones to track maritime activity around the cluster of islands from where the conflict originated. The entire issue is certainly far from over, with both the nations in no mood to step back.
There is, of course, nothing new in the conflict between Japan and China. Through centuries, these two Asian neighbours have been brutal to each other – politically, economically and militarily. The Japanese monarchy before World War II was notable for their imperialistic intentions – they invaded China in 1931 to mark the beginning of a violent, 14-year occupation of the land, finally retreating only after the World War II reversals in 1945. However, in the post-World War geopolitics, the foreign policy trajectory between the two nations has swapped its direction. Since the past few decades, Japan has sought to maintain a nice-guy image, while on the other hand, China has wanted to treat Japan slightingly. Japan’s cooperative and accommodative foreign policy acted as a silver bullet for its economy, which saw an unprecedented growth from 1950s till 1980s. That period saw Japan barging into the elite club of developed nations (the only Asian country to accomplish the feat then) and becoming a part of G-7, or the seven most industrialized states in the world. That’s a remarkable accomplishment, considering the fact that this was the same country that had literally been reduced to ruins in the Second World War and also the fact that none of its Asian counterparts could mirror Japan’s subsequent economic achievements. China, like Japan, started a new journey from 1949, when the Mao Tse Tung-led Communist Party of China overran the country and gained control on its governance. But unlike Japan, China, in the first three decades, emphasized largely on a military buildup. Amidst this journey of these two Asian giants, one thing represented permanency – that these two nations won’t walk hand in hand.
Interestingly, Japan’s ruling Liberal Democratic Party had promised before the 2009 election that Japan would be more muscular in its foreign policy and had hinted then on a shift from being a US-backed nation to being one with a more Far East integration, including with China. However, that didn’t happen. The recent happenings have in fact worsened the situation. The first, significant barrage came from the Japanese government in early September 2012, when they revealed their intentions to purchase three disputed islands in East China Sea – a move that led to their fragile relationship with China nose-diving in no time. China pledged to thwart Japan’s intentions, and in response, sent three fishery surveillance ships to the territorial waters near Senkaku, the group of islands in contention. In return, Japan adopted an aggressive foreign policy stance and announced that they would take the Chinese bull by the horn – by mid September, Japan had officially bought the islands.
This one issue over the group of islands has now been raising a fear that the machinery of foreign policy discourse may fail, leading to an all-out confrontation. A military confrontation between the second-largest and the third-largest economy can, of course, not only lead to massive disturbances in the region, but also destroy the current global power equation! An all-out war could destroy the economies of both the nations; not just that, the entire world would be a poorer place if by chance Japan and China fail in maintaining regional stability. Given the fact that both the countries have traversed through extended periods of sufferance in the last century which still haunts the souls of their citizens, it is important for them to pay heed to the destruction the probable military confrontation could bring.
China is talking of deploying drones and has never been a soft state. At the same time, Japan has always been a soft power, and they were quite content with such an image – because their economic glory was enough for them to brandish to the world. Japan’s post-World War II Constitution, in its Article 9, too promises never to maintain land, sea and air forces. Even though Article 9 has not been changed in principle, its interpretation has changed over the years! The overhauling of this contentious Article requires a two-third majority, which is becoming more and more probable. Some of the steps the current government has taken in this direction suggest the same. The government has eased a long-standing ban on weapons sale and has passed new laws permitting the launch of military space satellites. Further, Japan’s armed forces are more potent now in undertaking military exercises, which they frequently perform along with nations like the United States.
Despite the aggressive posturing by both the nations, one has to accept that an armed conflict between Japan and China has a remote possibility. What might in fact actually happen is that Japan’s assertion (and China’s equally aggressive response) can escalate an economic race in Asia. What could be in the pipeline might be a war of nations surely – but not a military war, rather an economic one. Japan’s aggressive intent, in all probability, is a figment of its two decades of economic stagnation and the eroded pride of its people. The robust manoeuvring of its foreign policy and the current sparring over the particular group of islands can bring back the spotlight on Japan; a clear message that Japan will not anymore step back and watch China overtaking it! Until a really immature step is taken by either nation, which might result into a real possibility of a war, a healthy competition between China and Japan should actually attract optimism instead of scepticism. Japan’s aggressive posturing and ongoing resilience should invite companies and investors to this nation and could eventually help in awakening the economic giant once again.
Thus, the economic race between these two powerhouses can shape up a rosy picture for the entire world. A booming Japanese economy can work wonders not only for the developing and emerging economies in Asia, but also for the entire world. It can portend Japanese FDI populating economies like ours, and even developed countries like America would experience the get-out-of-the-mess signals with its fourth-largest trading partner riding the crest. Even China could well be recipient of FDI largesse from Japan if the nation rises again. In other words, a renewed Japanese economy not only has the possibilities of increasing global economic and technological growth and competition, but could also open up new avenues of trade and commerce for the entire world. Of course, a non-consensus stage between China and Japan may lead to a full-blown war, but with mature economies around, war is something that is least likely to happen. And what is most likely to happen is the resurgence of the Land of the Rising Sun. And that is something the entire world awaits eagerly!.

DR. ARINDAM ON CHINA

Chinese investments in Africa, a lesson for the world!

22 June 2008 |Dr. Arindam On China

As London burns and USA is downgraded with fears of another recessionary wave hitting the world, there is one thing that becomes amply clear. You can’t have a world full of inequity and live in peace. Never before in its history has the gap between the rich and the poor widened as it has in the last 40 years in America. And every right wing party has only worked hard to enrich the rich. Every time the Democrats have come back and tried to increase even half a percent of tax on the rich to use it for those marginalized by the markets, the Republicans have screamed hoarse. No doubt, Obama has knowledge about economics, but what is happening in America right now is a shame, especially the way right wing fanatics are making the scene look worse than it is. The problem in UK is however another side of the same coin. The whites were sitting happily claiming that the blacks and other minorities live better in UK than they would have in their country of origin. However, happiness is a comparative phenomenon, and when the gap between the rich and the poor grows, the poor hit back. It has happened in France and now it’s happening in London and around. The lesson is clear – if we don’t focus on decreasing this gap and have a global policy for the same, the world won’t see peace. And it has to happen at a global level with richer countries investing in the poorer nations. There is no other nation which is showing the way better than the Chinese are, by investing in Africa and helping it develop – no doubt with their own long run gains in mind. A look at the way they are going about it has huge lessons for Western nations as well as countries like India.
The Sino-African relationship dates back to beginning of 200 BC, when an explorer named Du Huan, during Tang dynasty, visited African countries (Sudan, Egypt and a few others) in pursuit of trade and commerce. The legacy that was initiated by Huan has never stopped. And particularly over the last few decades, the Chinese tilt towards Africa has been seemingly visible. Chinese premiers have been visiting Africa regularly since 1979 with Vice-premier Qian Qichen paying visits to more than 35 African countries between 1990 and 1998. If not this, what else could indicate Chinese intentions more but the fact that President Hu Jiantao made more than 17 visits to African nations during 2006-07 and then again, a four African countries’ tour in 2009 compared to just one visit to the US in the last 13 years! In all these years, the Chinese have consolidated their African engagement through their support to Africa during their liberation movements, which eventually took the shape of strategic partnerships in resource exploitation. Of course, most of the modern Sino-African ties have a shade of resource-grabbing rather than resource sharing.
The Chinese entry into its most sought after African investment destinations started intelligently behind the veil of “no-strings attached” (unlike the West, particularly the US, which mostly believes in aid tied with conditions). In November 2006, 48 African heads of state met at a conference in Beijing that aimed towards finalising numerous China-Africa deals. It was a meeting to step up investments in Africa. As per reports, by the end of last year, Sino-African bilateral trade crossed the $100 billion mark and is estimated to be growing by more than 40 per cent every year.
Interestingly, Chinese aid to Africa is far more than World Bank’s developmental aid to Africa.Amongst other African nations, Nigeria has been one of the most favourite destinations for the Chinese, and understandably so. Hu Jintao has made several visits to Nigeria and also has attended two joint sessions of the National Assembly of Nigeria (in 2004 and 2006). In 2004, China helped Nigeria to pitch for a UN Security Council seat; and in 2007, the Chinese even launched a satellite for Nigeria! China’s relations with its unequal crony Nigeria over the last four decades are substantial enough and their investments ran to the tune of $7.5 billion by the end of the year 2010. However, China could brandish its significant clout on Nigeria from the dawn of this century, when the first China-Africa ministerial conference took place in Beijing in October 2000. Although former Nigerian President Chief Olusegun Obasanjo could not attend the conference (and instead deputed other high-ranking delegates), a consensus on mutual cooperation in trade and commerce was reached, resulting in the China Civil Engineering Construction Corporation (CCECC) winning a contract to build 500 housing units for athletes in the African Games held in Abuja. In 2001, a mutual agreement was reached to establish corresponding trading offices in either country (called Nigeria Trade Office in Beijing and China Investment Development and Trade Promotion Center in Abuja). In the same year, Obasanjo made a diplomatic trip to China wherein a number of bilateral agreements were signed to boost trade, investment and mutual benefits. China created a storm in Nigeria by signing a number of agreements and accords in the following years partly because of mutual interests and partly because of a warm personal rapport between Obasanjo and Hu Jintao. In 2006, Hu Jintao reciprocated Obasanjo’s move by visiting his country with a number of windfall lucrative offers and MoUs that included financing infrastructure development to the tune of $500 million and providing an exporting allowance of 40 million yuan or $6.2 million to Nigeria.
Even though oil is one of the most important components of bilateral trade, Nigeria could satisfy only 3% of Chinese imports of petroleum overall (as per a World Bank report)! Yet, look at the figures almost half a decade back. Cumulative Nigerian exports to China in 2005 stood at $526.9 million, out of which exports of mineral fuel and lubricants accounted for $503.9 million (according to the World Integrated Trade Solution database)! Other composition of Chinese imports from Nigeria in the same year included crude matter like food & fuel worth $12.6 million, manufactured goods valued at $8.2 million and food and live animals worth $1.8 million. However, in reality the Chinese balance of payment figure against Nigeria is far impressive at $2.3 billion, clearly indicating the Chinese strategic interest.
During Hu Jintao’s visit, China placated some of Nigeria’s misgivings in health, education, communication and infrastructural development. China’s largesse in health included an MoU with a package of $0.55 million in 2006 preceded by a malaria rollback program, with the Nigerian government being a beneficiary of $2.62 million in 2002. Chinese $4.38 million involvement in the reeling Nigerian education system is also noteworthy – this includes the establishment of Chinese links with some of Nigeria’s educational institutes, thereby enabling China to export its distinct culture, legacy and ideology to Nigeria. An agreement called National Information Communication Technology Infrastructure Backbone was signed between the two countries as an infrastructure booster for Nigeria with China providing $0.054 billion export allowances. In 2006, China bagged a contract worth $2.5 billion in railway projects, for no less than a 25 year term – this included revamping of the existing system as well as expansion plans. The same did not stop at this. After the military junta of Nigeria was deprived of arms supply by the West in 2006, China followed up swiftly to meet its rising demand – by providing 12 Chinese version MIG 21s! Nigeria also bought a handsome number of J-7 fighters, even though the number was not disclosed. Other orders included maritime vessels, K-8 trainers and FC-1 fighters.
Most of the Chinese subtle invasion of Nigeria took place during the time when Olusegun Obasanjo was in power – a time when, in spite of cordial and inspiring bilateral ties between the two nations, there was surreptitious criticism that China was thrusting down its will down the Nigerian throat! Therefore, when Musa Yar’Adua succeeded Obasanjo to the top position, he reviewed the agreements by his predecessor and a few of them were immediately quashed! Consequently, the relationship between the two nations post 2007 veered from being a revered one to that of a struggle. It was a Nigerian backlash to heavily tilted trade imbalance in favour of China. In fact, the Chinese investment has been a little different than the West. Unlike the Westerners, the Chinese typically bring their own labour from their homeland, thus creating lesser jobs for the host country, and instead solving their own employment problem. But then, even now, against all odds, China is still investing in all strategic businesses in Nigeria. At present, China’s crude import from Nigeria is worth 13.2 million tonnes, which is likely to increase to 18 million tonnes by 2012-13! In 2010, China was awarded three oil refinery building contracts to the tune of $23 billion. That particularly has been one of the best strategic moves by the Chinese, to become the most favoured stakeholder of the Nigerian oil reserves.
Along with Nigeria, the Chinese entry into another strategically-located nation, Sudan, has paid well to China. China made its way into Sudan in 1995 and struck various oil-deals with the Sudanese government. Within two years, Sudan’s first oil refinery started its operation. Interestingly, this refinery was built by China National Petroleum Corporation (CNPC) and symbolised the “son of the Sino-Sudan” relationship. This year, during President Omar al-Bashir’s visit to their nation, China also promised multi-million investments in Sudan’s oil and gas reserves. Not that everything is always very clean. For the uninitiated, Bashir is wanted by the International Criminal Court for acts of genocide and war crimes in Sudan and has been accused of crimes against humanity in the Darfur region, where, since 2003, more than 300,000 people have died. Politically, China has been continuously supporting Sudan in the UN council and has used its veto power in the Security Council to save Sudan from international sanctions, embargoes and other political interventions. So much so that China even rejected UN Resolution 1706 and didn’t let the African Union peacekeeping troops enter Darfur. China did the same with UN Resolution 1769 and furthered vetoed against the arrest of Sudanese government officials. This was more to allow the continuous flow of China’s small arms to Darfur.
In spite of various sanctions and alleged human rights abuse in Sudan, China sold arms worth $500 million during 2003 and 2006, all in exchange of access to natural resources and oil reserves. In 2007, China purchased around 40 per cent of Sudan’s total oil production and also bought 40 per cent stake in Sudan’s Greater Nile Petroleum Company. As per am Amnesty International report in 2005, China sold $24 million worth military material to Sudan; the Sudanese government further imported ammunition and fighter aircraft equipment parts worth more than $55 million from the Chinese company AviChina Industry and Technology. This all occurred despite a UN-approved embargo on Sudan. Today, 90 per cent of small arms used in Sudan are made in/by China. The government imports these guns and then pushes them to the war torn zones of Darfur illegally using roads and rail-links constructed by Chinese firms. Currently, the Chinese control and possesses 40 per cent of the Sudanese oil industry (but unofficially, Chinese own virtually over 80 per cent of all oil produced in Sudan), and have stakes in all infrastructural development projects that are taking place in the vicinity.
But then, all Chinese involvement is not that exploitative. In Sudan’s capital city, in Khartoum, China is actively developing the city into a major real-estate hub and has recently announced its intentions to build an airport as well. China National Chemical Engineering Group Corporation tied up with various local companies to commence a chemical fertilizer plant in Sudan worth $500 million, which eventually will add more than 350,000 tonnes of fertilizer to China’s product catalogue. In the past couple of years, China has built several luxury hotels and apartments and has also sanctioned interest free loans to the country. This is after it waived off a previous debt of $6 million. As per the United Nations Conference on Trade and Development (UNCTAD), Sudan officially received $351.5 million as FDI from China in the year 2005; and on an average, more than 65 per cent of total oil from Sudan was (and is) exported to China. In return, Sudan latently was able to maintain an economic growth rate of 10 per cent – but this growth rate didn’t trickle down to the poorest of poor as even today, 90 per cent of Sudanese live on the poverty line. Most of the wealth generated is used for genocide and filling the personal coffers of the dictators.
Today, most of the oil trade is controlled by CNPC. Furthering their intentions, China also invested largely in Sudan’s infrastructure development plans. This served dual-benefits to China. Firstly, it allowed easy movement of resources in and out of the nation; and secondly, it allowed them to impose their area of influence over Sudanese resources. China, between 1997 and 2007, built several dams, rail-lines, roads and other buildings. Among all, the most prominent was the construction of a 1,000-mile long export pipeline that eased oil transportation to Sudan’s Red Sea harbour, from where it was directly shipped to China. Amidst all partnership agreements and accords signed between Sudan and China, the one that reaped the maximum dividends was the CNPC and Greater Nile Petroleum Company deal. However, when it comes to strategic benefits, China’s unrestricted access to Port Sudan Harbour is the most significant. Not only has it allowed China an easy access to Sudan but also to other east African nations. The port has further helped China in opening up trade links with Yemen and Saudi Arabia as well.
Both of these Chinese engagements – in Nigeria and Sudan – have been of great strategic significance and benefit to China, obviously in turn. On the one hand, while Nigeria opened ports and sea routes towards the West, then on the other, Sudan connected the East and eased trade for China. The two favourites may be poles apart, geographically, but are quite similar, strategically. Similar is the situation with other African nations as well.
Angola is estimated to be exporting 465,000 barrels of oil per day to China in return for multi-billion dollar aid. Like elsewhere in Africa, China is actively building up Angola’s infrastructure and transport network. Similarly, China’s investments in Zambia and Uganda have created hundreds of thousands of employment opportunities and have also helped these countries in their social infrastructure development. For that matter, the entire Malawi has been built by China – ranging from their parliament to luxury hotels to even a soccer stadium.
China FAW Group Corporation, the largest Chinese auto manufacturer, has invested $100 million in South Africa’s auto industry. This is owing to the fact that this region of Africa is experiencing a surge in auto demand. Around 1,000 Chinese companies have collectively invested more than $300 million in Egypt’s infrastructure and manufacturing sectors apart from investing profoundly in the economic zone of Suez. In 2008, the Chinese invested $6-9 billion in Congo’s copper and cobalt industry, besides making separate investments in Congo’s railways, roads, hospitals and schools. These Congo deals in return would fetch China nothing less than 10 million tonnes of copper and over 600,000 tons of cobalt. China‘s National Gold Group Corporation is all set to invest in gold related projects in Africa in the next couple of years. In the same light, China is also tapping vast reserves of blue gold in Africa. After owning tracts of oil fields, China is now eyeing the huge water reserves of Africa. China has struck deals with Congo to grow palm oil on over 3 million hectares of land, which as per International Food Policy Research Institute, is rich in water reserves. Undoubtedly, China is exploiting cheap labour available in Africa and is importing finished manufactured goods back to China. But then on the contrary, the Chinese exports are allowing Africans to enjoy and exploit technologies that were alien to this Dark Continent. Today, affordable cell phones, satellite television, computers, consumer durables and other amenities have become a common part of an African life. An Economist Intelligence Unit report reveals how Beijing firms destroyed Western telecom monopoly in Africa and gave Africans better and advanced telecommunication access. Today, rather than Western telecom giants, those are two major Chinese telecom giants – Huawei and ZTE – that are fighting it out in Africa.
Against all populist beliefs and pessimistic critics, the Sino-African relationship has opened up numerous new avenues of cooperation for all those African states that were in the past restrained by sanctions by Western nations (both implicit and explicit) and huge interest-based loans, which made Africa literally incapable despite being the resource-hub of the world. What needs to be underlined is that these are those Western nations that are yet to fulfill their aid promises to Africa and who in the past destroyed the very peaceful fabric of Africa – due to whom, corruption and tyranny today run in the genes of Africans. Expecting a lofty positive transformation from Africa would be quite utopian. Yet, strategic investments and subtle deals are making Africa the most sought-after investment destination in the world. If UNDP’s Human Development Index (HDI) is said to reveal the socio-economic progress of a nation by any account, then at least China should be applauded for being solely responsible for upgrading Nigeria and Sudan. From a Human Development Score of 0.250 in 1980, Sudan has moved up the ladder to 0.379 in 2010 while Nigeria grew from 0.40 in 2005 to 0.42 in 2010.
But as it is said, there is no free lunch. These very subtle deals are now painting Africa red, in their own Chinese ways! But then, if the West is not doing it, and if India cannot even dream of the same, then the Chinese involvement looks pretty fair. Yes, China is gaining strategic control of Africa’s natural resources; but at the same time, it sure is helping develop Africa’s social and physical infrastructure and creating jobs, thereby taking Africa single-handedly towards a better future – that’s more than what the rest of the world put together has been able to do!

DR. ARINDAM ON CHINA

This is the pathetic reality of the Chinese judiciary!

05 January 2012 |Dr. Arindam On China

In November 2011, Wang Sixin, a law professor in the Communication University of China, opined, “In India, the common law tradition allows judges to begin litigation just based on a news report or a letter from a petitioner, whether [the petitioner is] a lawyer or not. China needs to adopt this practice.” This suggestion of his sounds quite ostensible considering a nation where freedom of speech and expression is highly censored and the judiciary has been used to further this dictatorship of the State. The same was the cruel case in Yiwu city with the Indian diplomat, S Balachandran, who was denied food and medicine despite his repeated requests that he was a diabetes patient; this went on till he actually collapsed and had to be rushed to the hospital. Balachandran was trying to present the case for the release of two Indians who had been kidnapped by Chinese traders because their Yemeni firm had not yet paid some dues. This blatantly ruthless and inhumane attitude displayed by the Chinese judiciary almost in connivance with the Chinese businessmen defines the attitude of the Chinese administration. Till a few years back, if you were a Chinese villager having more than one child, the government tractors would have mowed down your residence – an act that defines the Chinese sense of cruelty, or should I say Chinese torture. Needless to say, the poor villagers never got any support from the judiciary.
The Chinese judiciary has never been independent! In fact, it was in a muddle especially during the Cultural Revolution that curbed its functionality completely between 1966 and 1976. The jurisprudence was revived after 1976 and thence, a new legislation came into being by the end of 1980 under the purview of Organic Law of People’s Courts. Consequently, a new era began, marked by a paradigm shift in the country’s legal system! On the brighter side, the system was made very strong in order to encompass the entire nation under the judiciary system. The number of judges and associate judges, which was at meagre 50,000 in the 1980s was increased to 131,460 in the 1990s, and then again augmented to 258,000 in 2000s – an increase of 416 per cent! This means that the judges-to-population ratio of China is now around 1 to 8,600, which is in close range to the US ratio of 1 to 8,826 – something that we in India are attempting to dream about since the last 64 years!
Despite these impressive figures and massive infrastructure, the Chinese judiciary suffers from numerous problems that affect the very nucleus of the system. It is neither independent, nor are there any standards to determine their independence. The single State party’s influence doesn’t permit the judiciary to be impartial and unbiased, especially since the Communist Party of China keeps perpetually interfering with the court’s proceedings. Clearly, a non-democratic setup never had any space to acknowledge and appreciate the essence of a free and independent judicial system. Further, the funding of the judiciaries is not streamlined uniformly as more developed regions like Beijing, Shanghai or Guangdong have substantially higher disposal of resources than other regions. With better infrastructure, communication and salaries, these regions attract the best judges whereas the remote areas face veritable financial hardships – and lack of quality judges. This has forced many backward regions to augment litigation fees to discourage the parties from filing law suits! As of date, a discriminatory funding ploy by the Chinese government has led to a situation where the jurisprudence of certain areas has been pushed to the limit! In simple words, flow of funds is decided by the State depending upon the freedom the government wants to provide to a particular province. Thus, the remote areas are allocated less funds to ensure a weak judiciary that eventually deters citizens from filing suits and from protesting against atrocities. The residents of such targeted areas are kept entrapped in a situation wherein breaking rules would lead to serious perilous consequences.
Globally, the judiciary system – a true pillar of the economy – is kept independent of political interference and has absolute power with independent staffs that hail from no political party – be it the ruling party or the opposition or any third party. Contrary to this philosophy, China’s judiciary is not separated from its political process. There is no separation of power between the government and the judiciary! The National People’s Congress (NPC) reigns supreme there and has every right to undermine and destabilize the independence of judiciary. The judicial appointments (judges and jury members) are under the ambit of NPC and so is the supervision of it. Thus it is this ruling party that literally decides the person who would chair the court – or shall I say, would decide the fate of the aggrieved party. Putting things into a better perspective, one needs to have a political party affiliation to be a judge in China. As a quid pro quo, it is essential for the judges and the jury to follow the decree of party leadership and perform a variety of functions! The court also acts as a civil law magistrate and has to find evidence for any criminal prosecution that is being handled! A judge’s role is more like an intermediary’s, who explains the policies brought about by the government (or at least the legal side of such policies)! Therefore, performing the role of a judge – as it is being performed in most countries – is only a miniscule part of a judge’s assigned functions and not the prime duty. Alarmingly, a judge in China might not ever have given any verdict but might have performed other roles stated above! He might be merely a little better than a party worker, yet he is called a ‘judge’. In this way China has bloated the figure of its total size of judges – but in reality it is just a farce.
Most interestingly, the Supreme People’s Court (SPC) has to submit a periodic report of its functioning to NPC for approval and review. Thus, today, NPC is seen poking its nose in almost all judicial affairs and individual cases and manipulating the court’s decision. Local governments have the power to literally advice the court on cases related to the government and also forces the courts to bluntly dismiss any appeal that can be harmful during proceedings. Local courts rarely favour the public and most of the times, drag the cases for indefinite time period. The appointment of judges is also influenced by local governments which make it impossible for the courts to be impartial especially in remote areas where the government can’t reach frequently. The lower courts approach the higher courts for directly getting involved in judgments. This snatches away the opportunity of the litigant to appeal before the higher courts, which may have already given an uninformed verdict without giving the claimant a chance to present the case before the higher courts! In essence, these courts have puppets setup by the local government.
Such a near-collapse of the judiciary has led to blatant abuse of laws and rights. The faulty judiciary system had led to rampant human rights abuse and containment of freedom. Since the last two years, international human rights organisations and global forums have been increasing their pressure on China to contain their brutality (in the veil of justice) and increase the flow of freedom within the nation. In order to reduce international criticism, the government is now resorting to home confinement, abductions and kidnappings, instead of trials and officials arrests. This has not only allowed them to get rid of international pressure but also helped them in manipulating numbers when it comes to human rights abuse.
As per the Chinese Human Rights Defenders (an association of human rights’ activists and groups) more than 3,500 people were detained (unofficially) without any evidence in 2010, but this figure is again quite skewed as the actual numbers is still unknown; it is estimated to be above 5000. The poor funding of the courts and measly rewarded judges make the courts in China look primitive and non-functional. The paucity of funds hinders courts’ activities and enforcements. By end of 1997, about 2 million cases were awaiting enforcements! The quality of verdicts, the impartiality of the courts, and effectiveness of judicial procedures suffers badly because of funding problems. From the basic level courts in the hinterlands to high courts in provincial capitals – all are funded by the local governments – and invariably there is a vituperative slash in the earmarked funding whenever any verdict goes against the interests of the county and its local bosses! The funding mechanism of judiciary is totally fragmented; and this acts as an aberration to the very tenets of philosophy guiding ruling of the country! In China, the situation now is such that the entire judicial system is corrupt. It is a common practice for the judges to accept favours from the plaintiffs in exchange of partial judgments. As per the latest data available, more than 900 judges were punished for corruption in 2003 and 2004 and around 200 were prosecuted in 2007. However, the actual crime under which they were charged was largely kept secret. A few months back in 2011, three judges were even shot dead at a court in China’s southern Hunan.
With a sole objective to curb freedom, if on one hand the government has deliberately kept the judiciary weak, on the other hand they have graciously empowered the police forces. It was during the Cultural Revolution that the police reached the zenith of their power. In order to dismantle protests and gatherings, units from the police force were bestowed with powers that were above the law; and gradually they became the only arbiter. Police frequently even resorts to physically abusing lawyers and arrests them on false charges!
To curb any kind of protest or agitation within, China has increased salaries of internal police personnel; even as it continues to imprison political activists recklessly. More than $70 billion was allocated for public security in the last fiscal, out of which a large part was redirected towards internal security. So much so, the budget for internal security almost matches the budget for national defence spending. This one step ensures that the officials (especially the law keepers) would not misuse their power and would not protest against the government. They would only pick up arms against those who speak against the government and not otherwise. These officials are provided with the best of technology, weapons, censorship-equipment and extensive power. They are a set of individuals who are perceived above the law and have the power & authority to go to any extent. Any activity that can take a shape of a revolt or a protest is curbed at the budding stage itself – be it labour unions or disputes of groupism against the government or its machinery.
Since the last seven years, the government is holding protestors in undisclosed locations that are infamously known as the ‘Black Jails.’ These are not conventional prisons but are buildings that are under government control. From hotels to government hospitals to any building, anything can be used as Black Jails. The detainees are physically and mentally tortured and kept in animal-like conditions in these jails. And above all, the government don’t discriminate among detainees with respect to sex and age. Both the sexes are equally tortured and detainees range from the minors to elderly. Interestingly, most of these jail units are maintained by private security companies that work in close coordination with the local police. However, a few weeks back, the Chinese government had announced their intentions to crackdown on such prisons and security companies. But then, like always, this crackdown-move is mere tokenism, as the exact number and location of such facilities are still unknown and undocumented.
On the one hand, where the entire world is gradually banning capital punishment and is resorting to the same only in extreme conditions, China is going absolutely reverse! On an average, China reportedly executes more than 20 criminals every single day – that annually boils downs to thrice the number of executions that the entire world executes combined. To top this, China even understands how to economically utilise its prisoners for the nations’ advantage. China is one of those few nations who are also into exporting their prisoners to other countries. Since the last couple of years, China – on a contract basis – had deployed its prisoners for construction projects in different Asian nations. This again is a violation of human rights. Here, I don’t need to describe the atrocities that these prisoners go through while undertaking the job abroad. Most of these prisoners work for Chinese companies having their off-shore units in South Asia and Central Asia. The Chinese companies rarely employ the locals and rather prefer to ‘buy’ these prisoners at a lower cost from the mainland. This further saves them from national human rights laws that are laid down by the governments of other nations where these Chinese companies operate from.
In order to curb sharing of information and any political upheaval, the Chinese government has put strict censorship rules on various social networking sites – from YouTube to Twitter. In a well known example, during the recent uprising in Libya, if one were to have searched the term ‘Libya’ on the Internet from within China, few or nil search results would have been displayed. Even content related to Tiananmen Square massacre is heavily skewed with very less information available on the same. Similar censorship is applied for all keywords related to Tibet, Dalai Lama, Uighur, Ai Weiwei and other sensitive issues. The government controls and filters all troubling information being sought over the internet by using a firewall, which is sarcastically known as the “Great Firewall of China.”
The freedom of religious practice is also under a heavy scanner. All religious groups are required to register themselves with their respective province’s authorities. Members of unregistered religious groups – however minor they might be – are persecuted and illegally detained. In fact when it comes to illegal and arbitrary detentions and cultural censorship, it would be criminal to miss out the cases of artist and political activist Ai Weiwei, Zuoxiao Zuzhou, Liu Xiabao, Liu Xianbin, Ran Yunfei, Ding Mao, Chen Wei and Gao Zhisheng.
China’s constitution does ensure freedom of press, but then the Communist Party is the supreme authority when it comes to content creation. Around 70-80 per cent of all content in media has to be inclined towards the ruling party and any diversion may lead to legal prosecution. Moreover, under the Protection of State Secrets law, a media house can’t reveal anything that is perceived as secret by the government. Consequently, the government uses such acts to manipulate print output and coverage. Horrifyingly, any negative publicity may even lead to the death penalty as well. Zhao Yan, Shi Tao, Ching Cheong, Yu Huafeng, Li Minying and many others were arrested under the pretext of Protection of State Secrets, as their opinion pieces were critical about the government and functionary. Apart from them, many other journalists – the latest being Zhang Ping – have been forced to resign as they appeared to be a threat to the ruling party. Paradoxically, China’s constitution, under Article 35, promises freedom of speech, press, assembly and procession & demonstration; but then the laws are tweaked in such a manner that most of these promised rights have no meaning in reality.
There is no denying the fact that freedom and justice are selectively and discriminatively distributed in the nation. But if one goes beyond conventional thinking, then it would be clear that the laws laid down on paper are quite comprehensive for the larger good of the ruling party. Everything – from censorship, immediate detention, religious screening, strict laws against groupism, capital punishment and many other such stringent rules – without any iota of doubt has been successful in keeping anti-social elements at bay and in deterring any kind of social instability and unwanted disturbance. But then, the moot point here is not about the way freedom has been curbed, but the way the political leadership has been misusing & abusing these laws to their advantage. It is high time that they start giving some real freedom to their citizens.
I want to end by saying that it is perhaps up to the Chinese citizens to decide whether they want to stand up against such authoritarian collusion of the state and judiciary. But if citizens of other countries also start becoming victims of such authoritarian attitudes – as has happened with the Indian diplomat this time – then it’s time for the international community to join hands and strongly protest against this so that the pressure created forces China to look at human beings more humanely and with more respect towards human rights. This is one thing that China must do in order to make itself a true leader in this globalized world.

DR. ARINDAM ON CHINA

While China is driving the African Safari, India is yet to board it!!!

22 June 2008 |Dr. Arindam On China

The world might not subscribe to China and its policies for many reasons but they definitely are worthy of credit for their amazing farsightedness. They have proved this time and again and are all set to prove it again. In the given scenario wherein crude oil prices are showing no sign of respite, each and every government is untiringly trying to secure themselves with respect to their ever growing energy demands, it is as if the Chinese had thought of this imminent energy crunch a long time back and had started planning accordingly. In fact, the way they are going about it is also worthy to note. Particularly over the last one decade, the world has been witnessing that a country, which has never bothered to look beyond its immediate neighbourhood was suddenly becoming very keen about Africa. Billions of dollars from China have been poured into countries, which otherwise have been a pariah for global investment. It is being reported that China’s trade with Africa has been growing at almost 40% since 2001. By 2006, the trade between China and Africa had already reached the magic figure of $50 billion. In effect, China has become the third largest trading partner of Africa after the United States and the European Union. To an extent, China has been able to productively engage even with Sudan, which otherwise had been reeling under a humanitarian crisis and a relentless civil war!! And all this, China had been doing with an underlying objective, to secure their energy demands. There is no secret in this, as one close analysis of Africa’s exports to China clarifies everything. According to an IMF report – In 2006, oil and gas accounted for over 60% of Africa’s exports to China, followed by non-petroleum minerals and metals at 13%. The report also states that Africa’s imports from China comprised mainly manufactured products and machinery and transport equipment, which together accounted for about three-fourths of total imports. This probably explains it all, and even the reason of China’s trade with Sudan, as after Nigeria, Sudan has one of the largest reserves of oil in Africa! But this trade has immensely helped even African nations, as in many of the African countries, along with the Chinese investments for manufacturing that is pouring in, China is putting effort to invest in the social and physical infrastructure of the oil rich countries in terms of setting up roads, hospitals, schools, and telecom facilities. For a beleaguered Africa, used to destruction through civil war, this trading relation has come as nothing less than a blessing. In the short run, nothing could have been a more win-win situation for both involved and especially for Africa. While the world continues to debate as to how ethical the Chinese investments in Africa are, and while India continues to ponder as to whether it should follow the path of China or continue with its own set of conflicting foreign policy; China quietly makes major inroads in Africa to make it as its next destination of manufacturing. In counties like Sierra Leone, Zambia, Liberia, Mozambique, Nigeria and Angola, China is setting up industrial zones. For not only Africa offers the right kind of market in terms of low cost Chinese products, it also offers very low cost labour for manufacturing. Yet, it is not always so straightforward whenever China is involved. There are allegations that China has been pumping in millions of dollars worth small arms into Africa, especially in Sudan to fuel the ongoing civil war in lieu of oil. Whatever the case might be, Africans don’t seem to be too uncomfortable with a Chinese presence. Contrast this with India. We’re a country having more historical connections with Africa than perhaps any other country. And probably, no other country has ever perhaps thought about the plight of Africa so selflessly as India. Yet, when it comes to give a logical direction to this emotional attachment for mutual benefit, India continues to lag behind and seems to be bereft of any direction. More unfortunate than this is the fact that India seems to have a reactionary approach with respect to Africa than a proactive one. Its approach is not because of its own urge, but seems more as following the footsteps of China (the recent overture in terms of Indo-African summit included). And while the leaders of more than a dozen African countries pledged their solidarity with India, they also know that many of the intended Indian investments would eventually get mired in red tape much unlike the way China does. When seen in retrospect, no other country has more leverage than India in Africa, given the huge population of Indian origin that one finds in abundance in Africa. In certain countries like Mauritius or South Africa, Kenya or Uganda, the Indian diaspora is the most prominent, richest and influential community of the country. Still, India – typically known for its proverbial habit of missing the bus – has failed to take mileage out of it. The Indo-African trade continues to be half of what China has with Africa. Irrespective of the allegations that China faces, it is certain that it is doing a far better job than even donor agencies. For the world knows that Africans are fed up with debt assistance and subsequent debt traps and are now looking for jobs and better quality affordable products complemented with a relatively better lifestyle. And this is a latent African opportunity that China has been able to engage with quite successfully!!

DR. ARINDAM ON CHINA

THE DANGEROUS DESIGNS OF THE CHINESE WILL COME TRUE IF INDIA DOESN’T START ACTING IN A COMMITTED MANNER IMMEDIATELY

22 October 2009 |Dr. Arindam On China

I’ve always been an admirer of China. I have also been an admirer of Mao Tse Tung – despite the scandalous (true or untrue) details of his private life – and believe that today’s China, good or bad, is an absolute direct result of his vision. What I have admired the most about China is the way they have been able to pull out millions of people from below poverty, in a matter of a few decades. This feat of China is unmatched in recorded history. What has made them achieve this unbelievable feat is their macroeconomic bottom-up model, wherein they focused on creating purchasing power directly within the poor. This has enabled them to become one of the formidable forces in the world today. They also know that if there is one nation which could pose challenges in the path of Chinese glory, it is India. So some time back, I came across an intriguing article, which generally got overlooked by most. It was reported by almost all mainstream newspapers that a Chinese strategist has contended that China should break India into 20-30 independent states! And this piece got featured in the new edition of the website of the China International Institute for Strategic Studies (CIISS), an influential think tank that advises Beijing on global and strategic issues. What made this article intriguing was the very fact that China, unlike India, is not a democracy where one can write anything howsoever frivolous and still get away with it. China is extremely strict about dissemination of information and when something as serious as this gets featured in a strategic think tank website, it could almost be said for sure that the statement carries an official approval.
What is more worrisome is the fact that the article also states that China should go about doing this with the help of friendly countries like Pakistan, Bangladesh, Nepal and Bhutan. And all of a sudden, this looks like a plausible option going by the kind of relations that India has with four of its immediate neighbours. Furthermore, the article ostensibly suggests that Bangladesh should woo Bengalis in India to form a separate Bengali nation independent of India, with the support of China! All this in just one article, which as I mentioned got featured some couple of months back. What is most shocking is the fact that China, in various ways, has already started taking its recourse towards disintegrating India in its own way. To begin with, it has started issuing separate visas to Indian passport holders from the state of Jammu and Kashmir, projecting that J&K as a state is separate from India. They went on to propagate the same by distributing handouts to visitors of Tibet, especially journalists who were invited by the Chinese government recently.
That’s not all. The perennial dispute with respect to Arunachal Pradesh’s ownership has pushed China to such an extent that in August this year, they stalled a loan from Asian Development Bank to India, which was to be deployed for the development of Arunachal Pradesh. What’s more, in this dispute, Google has been playing its own role: Google Maps in China feature Arunachal Pradesh as a part of China; Google Maps for India feature the state as a part of India; and show it as a disputed territory in the rest of the world. Over and above all this, China now has plans to build a dam across the Brahmaputra to divert some 200 billion cubic meters of water to feed the Yellow river on account of severe water shortage. This in itself has raised significant concerns for the states of Assam and Arunachal Pradesh.
All in all, China has been moving extremely strategically with a definite objective in mind. In fact, for this audacious thought and various moves of China, no one is to be blamed other than us. With national politics being highly fragmented, India seems to be becoming increasingly vulnerable, at least politically. National politics is so disoriented that it caters not just to regional needs but has also further moved down to cater to caste and class based agendas. Myopic viewpoints and self-centered objectives have created such a disillusion that no one seems to have any vision for the nation. No doubt, the Chinese are extremely astute to realize this and are dreaming of capitalizing on the same.
As it is, while Shivraj Patil was sleeping and changing his dresses, the Maoist Naxalite forces in India spread their wings in a manner that Chidambaram is finding almost impossible to handle despite his apparent strong words. Nothing perhaps is of bigger concern for India’s internal security than the Naxalites who are creating havoc in the areas they rule, not only by the night but increasingly by the day now. And now, the proposed governmental plan of spending Rs. 7,200 crores over the next three years on the poor people of the Naxalite infested region is utterly laughable and shameful. In the first place, Rs. 2,400 crores spent per year means approximately Rs. 1,200 per year, per family, which is as good as nothing. Add to it the fact that 95% of this money will be eaten away by government officials and the realization hits hard that India is doing nothing to tackle this huge problem which the Chinese would love to capitalize upon – and are indeed already capitalizing upon – given the first opportunity, to make their dream come true.
Dividing India into 30 different states is indeed a laughable idea. However, if India doesn’t act fast to tackle its internal threats like Naxalism, things might look drastically different in the near future. India needs to immediately increase its budget for removing poverty amongst the Naxalite infested areas by about 25 times as a first step towards thwarting these dangerous dreams of the Chinese. Simultaneously, it needs to take China absolutely head on in terms of various other Chinese talks, threats and desires. Only that will help India consolidate its position of an equal partner in this region that will dominate world politics in times to come.

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