Prime Minister Narendra Modi is all set to undertake yet another, but by now familiar, string of three-nation tour starting with China on May 14 that takes him to Mongolia and South Korea before he heads home to be in time for the celebration of his first year in office. Though Modi seldom likes to be compared with India’s first and most popular Prime Minister Jawaharlal Nehru who etched his name in the global arena by fostering India’s sui generis foreign policy of non-alignment, the indisputable fact is that Modi takes the task of swaying external powers seriously by his own brand of diplomacy.
In an increasingly integrated international political economy, no nation can afford to remain isolated or tethered to one set of big power bloc to the dismay of the other equally powerful blocs. After wooing the United States, Australia and European nations, not to speak of most of the neighboring South Asian and Indian Ocean countries, Modi is now riveting his gaze on the Middle Kingdom, to be followed by two state visits to Moscow before the end of this year! In his eclectic quest to cultivate new allies and strengthen extant ones with panache, Modi would find China a different power that has visibly but unobtrusively taken centre-stage in the comity of nations in recent years by its sheer economic heft and military clout. Now, it is spreading its massive chest of foreign reserves to invest in disparate countries in Africa, South America and in Europe and in the rest of Asia, not to speak of its growing economic engagement with the United States, Russia and Japan, despite frayed relations of the past.
A little known fact, according to China Daily, is that the trade volume between China and Russia hit $ 95.2 billion in 2014, well-nigh touching the $ 100 billion goal set for 2015 by Chinese and Russian leaders in 2011. China’s economy has crossed the $ 10 trillion threshold and is ranked second in the world, after the United States. The double-digit economic expansion that the Middle Kingdom has clocked ever since Deng Xiaoping unleashed the entrepreneurial forces — even as he maintained the façade of state control — has been the envy of every country.
But this giddy growth cannot continue forever as the consequences of high growth have become unmanageable in terms of reckless consumption and cognate pollution, which have exacted human cost in terms of health-related problems. That is the reason why the Chinese Prime Minister Li Keqiang’s work plan for 2015, unveiled at the National People’s Congress in March, engineered the country’s gear shift to a “new normal” of seven per cent economic growth.
Chinese scholars from the Fung Global Institute, Messer Andrew Sheng and Xiao Geng, contend that efforts to adjust to China’s ‘new normal’ go beyond policies designed to sustain economic growth. They said reforms must aim to underpin inclusivity, advance environmental sustainability, promote innovation and boost competitiveness. This exact four-pronged approach is the bedrock on which the new normal paradigm for development of China is being built brick by brick without any crick or concussion to the ordinary denizen or the larger economy!
With China heading a brand new $ 50 billion global financial institution, the Asian Infrastructure Investment Bank (AIIB), it is eyeing the enormous infrastructure opportunities across developing and emerging Asia to fund through this new institution. The triumph of this new-born infrastructure bank is a testament to the world’s craving for long-gestation and capital-intensive infra projects, where there are not adequate lending institutions of global genre other than the traditional ones such as the World Bank and the Asian Development Bank or the other regional development outfits. But the latter institutions invariably imposed programme-based project lending that cost the borrowing countries dear in terms of prohibitive compliance price and resistance from local people, who were ousted by such projects as in the case of the construction of huge dams.
The popularity of the AIIB, meticulously brought to being by Beijing, is seen in the fact that by mid-April a total of 57 countries were approved as founding members. Given the fact that the global economy is moving at a glacial clip with recovery remaining wobbly or rickety in most of the rich world and there is an unmet and unconscionable demand for infrastructure investment in Asia in general and India in particular, wisdom lies in New Delhi cuddling the dragon closely to ensure better connectivity and enhanced self-development capability, leveraging the Middle Kingdom finances at a relatively cheaper cost.
China has proposed the “Belt and Road” initiative that is likely to be a significant part of its economic and overseas development plans for years to come. This coupled with the Silk Road Fund for bolstering infrastructure construction and improving connectivity across the regions would help participating countries, including India, to benefit greatly if the bargaining parleys are held to mutual advantage. Beijing policy wonks have reassured the prospective beneficiaries of the AIIB that though China remains by far the largest fund provider for the Bank as also the “Belt and Road Initiative”, these projects have been and would be carried out in concert with other countries.
Besides, China does not seek veto power in the projects, unlike the egregious examples set by multilateral lenders such as the ADB, the World Bank and the IMF. Writing in the China Daily, a researcher in international strategies at the Party School of the Central Committee of the Communist Party of China in Beijing, Zhao Lei, argued that “the AIIB and ‘the Belt and Road Initiative’ are new manifestation of a community of shared interests. Since the two China-led projects are opposed to hegemony and privileges, they should help establish fairness as the supreme value in Asia and beyond”.
If the set values are more than the paper on which they are written and are scrupulously treasured and revered by the Chinese leadership, participating countries will have comfort enough to cozy up to the schemes to embrace them for implementation to tone up their connectivity and infrastructure development before long.
As Modi meets his counterpart and also President Xi, he would have first-hand experience of how the Chinese leadership and the people of China really warm up to him, so that all the stakeholders in a sustainable bilateral relationship can bury the hatchet and herald a halcyon phase for mutual gains. — IIP
G. Srinivasan
