India and China in the emerging global order

Speculating about the shape the emerging global and political systems are likely to take has become a much-visited area of analysis among those who have studied these systems for decades. Among those who have written on the subject is Richard N Haas. He stepped down at the end of June 2023 after serving two decades as the chairman of the Council on Foreign Relations. He has been a student of world affairs for decades. The New York Times sent a couple of journalists to interview him for a profile the newspaper was writing. He told the interviewers that in his views the United States is the reason why the global system at this time is in such turmoil. In his recently published book, The Bill of Obligations: Ten Habits of Good Citizens, he explores the reason why the country he served in several positions has drifted away from civility to angry discourse. Some of this is directed at China which the American thinkers view as the gravest challenge their country faces at this time.

According to some policymakers in Washington, one way of dealing with this is to align the countries of Asia with the United States to face China. India is foremost among the nations America is courting. This was one reason why the Indian Prime Minister was received with such warmth during his recent visit to Washington. But India, although having recently overtaken China, and is now the world’s most populous country and has a rate of economic growth considerably higher than that of China, is not in a position to challenge Beijing. The structure of its economy is very different from that of China. The latter has moved its large population and well-educated population into advanced sectors, in particular those that need expertise in information technology. But India is very different. Most of the Indian population lives in villages and small towns and is, at best, semi-literate.

The employment situation in India and how it is likely to affect its global role was examined in some detail by Alex Travelli and Hari Kumar in a study done for The New York Times. “India’s young and expanding population, with more students leaving school every year to start careers, is the envy of countries that face an aging citizenry and a shrinking workforce,” they wrote. “Its economic growth of about 6 percent a year is also a global bright spot. But the growth is not producing enough jobs. This has implications for the entire world. India must get more out of its work force if its economy, the fifth largest and knitted more deeply into the global exchange of goods and services each year, is to stroke growth elsewhere as China does.”

The Indian youth is looking for job security rather than contributing to economic growth and development. There is a strong preference for government jobs than for employment in the private sector. The state of Bihar in India’s northeast is a good example of the preferences the youth are working out. The state, with a population of 120 million people, had 281 job openings in the government. These jobs were filled by an examination for which tens of thousands of young people applied. The same is happening in many parts of India. From 2014 to 2022, Indians filed more than 220 million job applications with the central government. Of those, just 720,000 — less than one-third of 1 percent — were successful.

China was in a similar situation when, in 1976, Chairman Mao Zedong died. He had kept his country in isolation, a policy that was reversed by his successor, Deng Xiaoping who opened the Chinese economy to the world outside. Private money from foreign sources flooded into the country and went into the sectors that, using poor people, could produce cheap consumer goods for markets in the West. This fueled economic growth; for thirty years, the Chinese national income grew at an average of 10 percent a year, increasing 16-fold in size by 2011 when the country, now under new leadership, moved the work force into technologically advanced sectors. Labour-intensive parts of the industrial sector were moved to other countries. China led the development of global production chains that now dominate the world industrial sector.

India could replicate the Chinese model of economic growth and modernisation, but this will need many shifts in public policy. It needs to focus on the sectors for which its large labour force could produce goods and services for the world marketplace. Without more industry in places like Bihar, and a greater supply of capable and willing workers for the private sector in which enterprises use advanced technology, the great opportunity represented by India’s demographic moment in the sun will remain under a shadow. Washington is pressing the Indian leadership to produce goods and services where it could compete with China. It also wants to move India into the defence field where it could compete with China. Washington is working hard to keep China from becoming a serious competitor.

With America pushing India into the big league to counter China’s growing influence in Asia, policymakers are likely to be diverting their attention away from building the Indian economy. Narendra Modi is enjoying the role that has been assigned to him by President Joe Biden and his senior colleagues. He made a big deal of India’s chairmanship of G-20, which met in various cities in India. Along with the Presidents of China and Russia, Modi met in a virtual meeting of the Shanghai Cooperation Organization, the SCO, in early July. The leaders representing the three biggest powers were bidding to reshape the global order presently dominated by the United States. While thus engaged, they focused on their own problems. Putin, the Russian President, sought to project strength in the aftermath of the uprising by the mercenary group called Wagner. He also hoped for support for his war in Ukraine. For China’s Xi Jinping, the SCO summit was another opportunity to assail the United States by calling for an end to “hegemonism” and “power politics”. For Narendra Modi, the Indian Prime Minister, the meeting was yet another forum to signal his country’s rising stature and to land a jab at Pakistan by calling for all nations to unite in a “fight against terrorism”. For him, Pakistan’s support of the Kashmiris against Indian domination was terrorism.

Published in The Express Tribune, July 10^th, 2023.

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