THE CHINESE CONNECTION
A character in Chimerica, London’s “play of the year”, calls China “a nation that’s gone from famine to Slimfast in one generation”. Britain and the US have profited from even more drastic social and political change, especially in their response to China, in a much shorter time. Observing all three countries, I would expand Manmohan Singh’s memorable comment at the start of his political career as finance minister that “we need to show the same pragmatism as China to drive the Indian economy” to “we need to show the same flexibility as China, Britain and the US to rescue India from its financial woes”.
Take the Sino- American equation. Last year saw a decline in Arab, Canadian and European investment in the US. China alone kept faith. Apart from US treasury bonds worth $ 2 trillion, Chinese investment of more than $ 6.5 billion marked a 12 per cent increase since 2010. China wanted to invest more. Wu Jialing, head of Rails Corp and China’s sixth richest man according to Forbes, took Barack Obama to court for vetoing his plan to set up a wind farm in Oregon. Obama’s objection was only because of a nearby air force base. Otherwise, his Vice- President Joseph Biden spoke for both when he said, “We welcome, encourage and see nothing but positive benefit from direct investment from Chinese businesses and Chinese entities. It means jobs.”
The British are equally enthusiastic. Extolling a major deal with China, George Osborne, the chancellor of the exchequer, gushed, “It is a vote of confidence in Britain as a place to invest and do business.”
The UK needs $ 325 billion for infrastructure by 2015. With $ 3.5 trillion reserves and a $ 160 billion R& D budget, China is the most likely partner. It already owns 10 per cent of Heathrow airport, onethird of London’s smart Canary Wharf business development and a slice of Thames Water which serves 14 million Londoners. Magnates like Hong Kongbased Li Ka- shing, regarded as Asia’s richest businessman, and Wang Jianlin, China’s second richest man, have mopped up swathes of infrastructure, power plants and water and sewage authorities all over the country.
Beleaguered India can learn much from all this. China attracted $ 253.4 billion in FDI last year against India’s paltry $ 19.8 billion. China is also the world’s sixth largest source of FDI. If managed properly, Chinese capital would give China a stake in India’s political stability and economic growth. The Chinese state’s two main props— the Communist Party of China and the People’s Liberation Army— would take care not to alienate an India that con- trols China’s national savings. Moreover, the returns on investing in Indian manufacturing could offset the slowdown of China’s own manufacturing and export- led economy.
India’s Ambassador to China, Subrahmanyam Jaishankar, had this in mind in February when knowing China’s appetite for investing abroad, he organised a meeting to sell the idea of FDI for India. Of course, investment in India must be different in motivation and structure from China’s investment in Africa. But Britain and the US provide examples of rule- based cooperation without grabbing natural resources, endangering security or exercising undue influence once attitudinal hurdles are overcome.
Britain shows the way. One shouldn’t be surprised if David Cameron apologises to China for the lapse at the recent Edinburgh Festival Fringe when the first prize for jokes went to “I heard a rumour that Cadbury is bringing out an oriental chocolate bar. Could be a Chinese Whispa”. The English have purged their language of Confucius- he- say jokes and cracks about the Chinese and even invented rational explanations for Prince Philip’s well- publicised “slitty- eyed” remark.
Despite the mythology they weave about themselves, the British can be accommodating… when accommodation pays. Cameron was at great pains after meeting the Dalai Lama to assure the outraged Chinese that his ministers had strict orders not to break bread with the Tibetan pontiff. Queen Elizabeth’s 1986 visit to China was even more telling. Noticing the usually chain- smoking Deng Xiaoping’s restiveness at the state lunch, Her Majesty told an aide he could light up, though the English normally severely forbid smoking at table. Condoning another breach, the queen did not move so much as a muscle when Deng expectorated noisily into a spittoon a yard away.
I was reminded of those social solecisms at the first night of the Shanghai Ballet’s performance of
Jane Eyre. Undaunted by the red, white and gold grandeur of the London Coliseum, the young Chinese in the high- priced boxes on either side of the stage let out wolf whistles of appreciation at the end of each set. The British organisers didn’t bat an eyelid.
“Paris is worth a mass” as France’s 16th century king Henry IV, leader of the Protestant party, said when he converted to Catholicism to ascend the throne. The rupee in free fall merits an equal gesture.
China attracted $ 253.4 billion in FDI last year against India’s paltry $ 19.8 billion. China is also the world’s sixth largest source of FDI.