A pivot to China?

Till 1750, the Asian giants produced half of global economic output before gunboats and colonisation reshaped trade, and subsequently production and consumption. There is now a consensus that the locus of global wealth is again going to be in Asia. The implication of the interruption, or reversal, has not been explored as the strategic dimensions continue to be seen through a Western prism.

Western analysts focus on the relative decline of the U.S. rather than on Asia’s re-emergence. The underlying assumption is that the world needs global institutions, rules and agreements to solve problems that countries cannot solve on their own, while not addressing the question that has now come centre stage — who sets the worlds standards and for what purpose?

Containment, relevant during the Cold War, is not proving effective in Asia with China emerging as the largest global economy. Alliances are also losing relevance in Asia as countries are gaining influence more because of the strength of their economy than the might of the military. Moving away from global rules, for example the climate agreement, questions their relevance for meeting global concerns.

Globalisation, driven by the ‘Washington Consensus’, dominated global policymaking, with the World Bank, International Monetary Fund and World Trade Organisation as the institutional centres of gravity. Developing countries have complained for decades about the ‘terms of trade’, ‘conditionalities’ and intellectual property rights linked with trade sanctions. The limits to trade liberalisation are now also being raised in the West.

David Ricardo’s arguments of comparative advantage of countries and Adam Smith’s emphasis on competition creating wealth are not relevant in today’s knowledge-based, urbanised world of middle-class consumers and global value chains. The problem is not trade, which has been happening for over 2,000 years, but the nature of recent rules going beyond facilitating commercial transactions.

Donald Trump, recognising global trends, is reviewing the role of the U.S. based on alliances, rules and values. He prefers an “America First” approach, wants to “reset” ties with Russia around “mutual respect”, and wishes for the “strongest relationship” with China, with trade as the foundation of bilateral ties.

Asian views

The thought leadership for shaping global politics, with Asia restored at its economic centre, should revert to the 2,000-year-old pattern of commercial transactions, with trade rules limited to standardisation and dispute settlement. Asian prosperity is more than a geo-economic or geopolitical concept, underlined by President Barack Obama’s failed attempt to prevent Asia from setting the new rules for trade.

China and India have much in common, if we move out of the Western frame, as both are civilisational states whose contours were shaped by major snow-fed rivers. In both states, no strategic thinker advocated conquest of lands outside this sphere, in sharp contrast to Western strategic thinking on control of the seas, security alliances and rules pushing common values as the best way of organising international relations.

In political thought also, Amartya Sen has pointed out, religious tolerance and human rights are not Western concepts. Chinese civilisation has had a more secular orientation than any other civilisation. In Indian political thought, authority was based on the interests of all. In both civilisations, the king was regarded as guardian and not creator of the law.

The Asian giants have yet to reconstruct international relations theory around a global vision of sharing natural resources, technology and prosperity — issues they have together fought for over 50 years in the United Nations.

India’s strategic priorities

China took advantage of global value chains shaping long-term economic calculations, redefining global power and securing a head start over India. China will remain the world’s largest producer of goods and India can be the largest producer of services. The services sector will be the real driver of future growth in Asia, with affluence concentrated in cities, giving a younger India future advantage.

India has the capacity for global leadership as the hub of the new knowledge-based order, including new pharmaceuticals and crop varieties, as it is the only country with both extensive endemic biodiversity and world-class endogenous biotechnology industry. Along with global leadership in software-led innovation, foundation of the new low-carbon digital-sharing economy, India is developing low-cost solutions for urbanisation, governance, health and education problems. Sharing solutions to common problems as a new form of international relations will provide legitimacy to reshape the global order with sustainability as the defining value.

China is keen to have India on board its One Belt, One Road (OBOR) initiative for connectivity-led trade in Eurasia. It has suggested a free trade agreement and both countries recognise the synergies for achieving the ‘Asian Century’. India’s knowledge-based strengths complement those of China in infrastructure and investment. India should seek to ‘redefine’ OBOR, adding a stronger component for a ‘Digital Sustainable Asia’, and for Eurasian connectivity to have two nodes, as has been the case throughout civilisation.

A mutual recognition of ancient special interests in the South China Sea and the Indian Ocean should be a strategic objective. This step will enable an understanding on issues like membership of the Nuclear Suppliers Group, global terrorism, and Gwadar, which are irritants in the development of stronger ties. Prime Minister Narendra Modi must recognise that trade will trump security.

Mukul Sanwal is a former UN diplomat and currently Visiting Professor at the Tsinghua University, Beijing, China.

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Printable version | May 5, 2021 4:32:44 AM |

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