The India-China gap

May 2, 2016

By Ravi Bhoothalingam


First came China's 'technical hold' on the recent Indian move at the UN to declare Pakistan's Masood Azhar a terrorist. Next, the curious incident of India's grant of a visa to Uighur dissident Dolkun Isa (wanted under an Interpol 'red-corner' notice) only to revoke it within days. The oft-mentioned term 'trust deficit' seems an inadequate explanation to explain the sudden downward spiral in Sino-Indian relations. Perhaps we need to reflect more deeply about how India should manage this complex and multi-layered relationship.


Yet, the very same Indian government has shown its keenness to enhance Sino-Indian trade and investment flows. Right now, when Chinese investment and expertise are seeking less risky and more promising opportunities outside China, there is recognition that India must seize the moment to link these explorations with our own ambitious development trajectory. That can only happen when Asia's two largest economies engage in a more open and comprehensive manner across the whole spectrum of infrastructure, manufacturing and services.


But how does one engage whole-heartedly in economic terms if political relations are fraught? Is trust a pre-condition to doing business? Or can business and social relations be the route to building trust? The dilemma attains even greater scale: India and China intersect globally across many dimensions - political, environmental, trade, investment, tourism, etc - and also as rivals and partners, competitors and collaborators, allies and antagonists, depending on time and arena. How does one handle such complexity?


"Call a thing by its right name", advised Confucius, "or else whatever is said will not sound reasonable". Applying this method, let us start by looking critically at the word 'trust' - an absolutist term with a strong emotional charge. 'Trust' is a yes/no binary in that it is either present or absent. It brooks no division - you cannot possibly have '60 per cent trust' in someone. This absolute quality makes trust a currency favoured by politicians and religious god-men alike; both seek it as an act of faith from their followers, promising in return material prosperity and spiritual salvation respectively, often rolled into a single package.


On the other hand, scientists and businessmen - trained to be more sceptical - prefer the word 'confidence'. They acknowledge that the world is an uncertain place; to figure out how it works involves creating hypotheses by combining information of varying quality. The knowledge thus generated is then tested by observation, and assigned a 'confidence level' which can be quantified by well-known statistical methods. Unlike 'trust', 'confidence' is not only measurable but can be increased incrementally through human ingenuity and sustained effort. Here, it makes perfect sense to say that a new recruit in whom you had only a 60 per cent confidence level at the start, now performs his job at 90 per cent, after intensive training. This essentially optimistic approach that 'practice makes perfect' drives artists, scientists and sportsmen alike to performance which tests the limits of their potential.


A third term to consider is 'credibility'. This tells us about the level of consistency between promise and performance. Like 'confidence', credibility too can be built step by step, and is in fact enhanced through honest confession of failures whilst displaying humility in success. Weakness in a moral crisis can destroy credibility, but equally, setbacks present opportunities to re-build and indeed enhance it. Finally, credibility and reputation, unlike trust or confidence, are in the public domain. The nation as a whole gains when a large number of its citizens and institutions earn public respect and stature.


Where does that leave us on the India-China front? Accept that 'trust' between nations is a chimera that it is fruitless to seek. Rather, learn the arts of 'walking on two legs' and 'the correct handling of contradictions' - to borrow two of Mao's particularly appropriate phrases. One leg is to resolutely guard core Indian interests, with firm but measured steps that deter unwanted Chinese behaviour but avoid triggering an escalating descent into mutual detriment.The other is the planned deployment of confidence-building and credibility-enhancing measures in the many areas of common ground and mutual benefit.


Managing the contradictions between the diverse pulls and pressures of each leg requires that we eschew ideas of dramatic breakthroughs or grand gestures, and settle down to a humdrum but sustained slog in areas that can build mutual confidence and credibility.


Reducing mutual ignorance is the first target. Promoting the study of China, encouraging large-scale student exchanges, and making it easier for Chinese visitors, businessmen and scholars to travel to India for work or leisure, would be a great start, giving our tourism industry a well-needed fillip. In trade, we must move beyond whinging about 'non-trade barriers' and speedily set up joint government-industry task forces to conduct granular studies into China's markets and regulations, so that Indian industry can take advantage of China's shift to a consumption economy. These joint task forces can suggest improvements in dispute resolution, diligence, translation and inward investment services. Common concerns, such as water conservation, pollution, antibiotic-resistant TB, e-governance, etc, are potentially collaborative fields for R&D, where China and India can demonstrate leadership and innovation to generate benefits on a truly global scale.


As connections deepen between the countries, our capabilities to manage differences will increase greatly. So will mutual confidence and credibility. It will be a long journey, but the first step can be taken now.


Business Standard, May 2, 2016

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