The Hindu : Collaboration, not competition

Online edition of India's National Newspaper
Saturday, Jun 28, 2003

Opinion

Opinion - Editorials

Collaboration, not competition

THERE WAS AS much positive economic content to the Prime Minister, Atal Behari Vajpayee's visit to China, as political or strategic. While the latter two issues may take time to solve, there is scope and potential for immediate and significant progress in economic cooperation and stepping up of bilateral trade. The Prime Minister has touched on two very specific areas where the two `Asian giants' could work together for substantive gains — on WTO issues and in the field of Information Technology. With the two countries accounting for one-third of the world's population and offering the biggest markets to manufacturers, a greater synergy on their part to not just formulate a joint strategy, but also shape the response of the developing economies to issues of world trade, globalisation and liberalisation, could make a deep impact on the WTO and world trade. Similarly, marrying India's software potential and expertise with China's hardware competence and proficiency in harnessing the Chinese language in the use of the internet and computer programmes could make for a win-win combination. To start with, the private sector in the two countries and the Governments should build up a closer rapport and institutionalise their linkages to bring about a qualitative and quantitative increase in bilateral trade. Considering the size of the two economies, bilateral trade remains disproportionately low — in the region of $ 3 billion to $ 4 billion. The short-term objective should be to double the trade in two to three years.

On the WTO front, China being a recent entrant, should find it useful to engage India in closer consultations so that the two neighbours could evolve a joint approach on issues that affect both the economies. Given the fact that they have near-identical areas of strength — as in agriculture, textiles, IT, services and manufacturing to name a few sectors — it is possible to work out a mutually beneficial position, which will also be welcomed by other developing economies. The way in which industrialised countries are violating the spirit of the multilateral agreements, protecting sensitive sectors of their economies such as agriculture, while forcing developing countries to open up their economies to world trade, should make the latter stand up for their rights. The beneficial provisions of the Uruguay Round of talks have deliberately been kept to the last phase of implementation and the industrialised countries are now pressing for another round of comprehensive talks for further liberalisation of trade. Unless their share in world trade rises proportionately, the developing countries, especially the Least Developed Countries, run the risk of being marginalised.

In the realm of IT, some Indian companies have taken the first steps towards forging a partnership with their counterparts in China. Unless there is a frequent and high level of exchange of visits of not just the top names in IT, but also the small and medium players — who abound in China — a useful and sustained synergy cannot be achieved. Some of India's friends such as Singapore have already offered to play a catalytic role in cementing India-China economic ties. Indian companies must explore all avenues, including direct investment, partnership with Chinese firms and an entry through a known partner, to make their forays into China, even while inviting their counterparts to join collaborative ventures here. The objective of the exercise should be to team up for a mutually beneficial partnership; encourage healthy competition, but avoid unhealthy rivalry. But Indian industry should realise that it will not be a path of roses. There are major differences in systems, structures and approaches in China, which make it easier to work with local partners. It is possible that an impetus to economic cooperation will create a congenial atmosphere for the resolution of other bilateral problems and usher in an era of friendship between the two neighbours, who have remained cold to each other for too long.

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