Beyond Asian Century

The rapid economic growth of China and India is not merely about the prospects of an Asian century but also the transformation of other regions in the world.

The rapid economic growth of China and India is not merely about the prospects of an Asian century but also the transformation of other regions in the world.

A recent World Bank study, titled 8220;African Silk Road8221;, produces evidence from Africa on the extraordinary impact of China and India on the vast continent. The author Harry Broadman says African exports to Asia have tripled over the last five years. Asia has emerged as the third largest destination of African exports 27 per cent. Only the European Union 32 per cent and the United States 29 per cent are ahead. Although the bulk of current African exports to Asia are oil and natural resources, Broadman believes Chinese and Indian investments have begun to trigger the growth of processed commodities and light manufactured goods.

There are some negative effects as well. Import of cheap manufactured goods from China and India are likely to choke off Africa8217;s fragile domestic industry. Some of the Chinese business practices are already generating political opposition in parts of Africa. This is a warning to India, which must consciously try and build enduring economic partnerships with African states.

Greater China

When the Chinese President Hu Jintao comes to India next month, there will be reason to celebrate the breakneck speed at which bilateral trade has grown in recent years. Two-way trade between the two Asian giants is expected to touch US 24 billion this year. A few years ago the bilateral trade target of US 20 billion was set for 2010.

Having already crossed that target, China wants to reset an ambitious goal of US 40 billion for 2010. If India gets over its security paranoia, that is slowing down bilateral business, it could even touch US 50 billion by the end of the decade. Add to this the growing trade with Hong Kong and Taiwan, 8220;greater China8221; is all set to become India8217;s single largest trading partner.

Many Chinese

Even as it debates a false dilemma on expanding the economic ties with Beijing, the Indian security establishment appears to have lost sight of the fact that the Chinese universe is much larger than the People8217;s Republic of China.

Having never recovered from the shock of the 1962 border conflict with Beijing, the Indian security agencies have a difficult time differentiating between companies from China, Hong Kong and Taiwan. As a consequence, they simply recommend barring all Chinese companies from investing in India.

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Any one with a little sense of history would recognise that Chinese business networks outside China are among the most powerful forces that drive commerce and investment all across Asia. Without them Deng Xiaoping8217;s miraculous transformation of the PRC would have been impossible. Some like Hong Kong8217;s Hutchinson are already in India. Indonesia8217;s Salim group is now investing in West Bengal. But there many, many more Chinese business groups that can help accelerate India8217;s

economic development.

Singapore8217;s case

The Indian failure to reach out to Chinese business networks is being partly compensated by Singapore. At the weekend gathering in the city state of more than 1200 Chinese tycoons from around the world, Singapore was urging them to think bold and look beyond mainland China to invest in India. The occasion was the centenary celebration of the Singapore Chinese Chamber of Commerce and Industry, one of the most influential Asian business organisations.

The top 500 Chinese firms in the world are said to be worth more than US 900 billion. Given their dispersed location, India cannot reach out to them with the conventional country specific framework.

Instead, much like Singapore, India must reach out to these companies as a unique transnational network of entrepreneurs with a history and attitude of their own and a lot of cash.

Hu and Jiang

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The Chinese President Hu Jintao and his predecessor and presumed rival Jiang Zemin were seen at the same place on Sunday in Beijing for the first time since the crackdown on the so-called Shanghai clique began a few weeks ago. The occasion was the 70th anniversary celebrations of the end to Mao Zedong8217;s Long March, which propelled the Chinese Communist Party into power in 1949.

Shanghai, the political stronghold of Jiang, has been rocked by a corruption scandal, which saw Hu sacking of the powerful city party boss Chen Liangyu. Chen, a close ally of Jiang, was a member of the 24-member CCP Politburo.

Stepping up his campaign against corruption in the CCP and the government, Hu urged the cadres on Sunday to 8220;consciously resist money worship, hedonism and extreme individualism and other negative decadent erosion of ideology and culture8221;.

Hu has certainly put his opponents in the party on the defensive. But Hu8217;s long march against corruption has just about begun.