C3S Paper No. 0034/2016
The following paper is text of a presentation which was to be made by the author at the International Seminar held by C3S and the Dept. of International Studies, Stella Maris College, Chennai (“Changing Asian Landscape: Role of India and China”) on February 26 2016.
The headlines are dominated by the fact that China with its phenomenal growth rates is going to surpass the U.S economically within the next two decades. They also contend that China is an inevitable superpower, its global dominance is certain and it poses a serious challenge to U.S hegemony. Numerous scholars have also opined that although India is at least a decade behind China, its future growth trajectory will ensure that India will be a superpower by 2040-2050. It is projected that India will surpass China and the US to become the largest economy in the world by 2050-2060.
The author avers that it is not possible for China to become a superpower due to economic, political, social-cultural, historical and geographical reasons which it will be unable to surmount. Additionally, China lacks adequate soft power which is essential to be come to a superpower. Like China, India also faces a herculean task in becoming a superpower. However, it has the advantage of being a democracy and has soft power which needs to be properly harnessed and cultivated.
The biggest problem in China is the authoritarian and non-democratic government. In a country with a democratically elected government, citizens can vote out the incumbent government if it is unable to meet the needs of its citizens. CCP derives its legitimacy by improving the standard of living of the people and by protecting them (China) from external threat. In China’s history, an individual who can perform the above functions can become the king or ruler and failure to do so will lead to removal from the throne or power. CCP is cognizant of this and is mindful of fulfilling the functions.
There are big question marks on China’s future economic trajectory. Opinion is divided amongst analysts and economists whether China will have a hard landing. After almost three decades of double digit economic growth, economic growth declined to 6.9 per cent in October-December 2015, less than the government’s target of 7 per cent growth per annum. There is a broad consensus that the numbers are incorrect. Some economists and analysts opine that the economic growth rate is in the range of 3-5 percent.
There is realisation in China that the investment fueled and export led model of economic growth is unsustainable and has led to serious problems in the economic system. Unbridled investment in China has created real estate bubbles. CCP cannot allow it to go bust because it will have a disastrous impact on the financial sector and people’s wealth which will lead to economic, social and political chaos. Similarly, the government cannot allow the stock market to go bust. The government is trying to restructure the economy to increase domestic consumption and reduce investment which has led to reduced growth rates. Economic reforms might allow China to reach the target of 7 percent but it is difficult to undertake reforms due to vested interests. China’s economy is dominated by colossal state owned enterprises (SOEs). Most of the SOEs are loss making and a huge burden on the provincial and central governments. In a capitalist economy, these corporations would fail but the CCP cannot allow the SOEs to go bust because it would lead to unemployment which will result in social and political chaos and undermine CCP’s legitimacy. If the economic restructuring is unable to create employment or leads to unemployment, it will undermine CCP’s legitimacy and will lead to social and political chaos. Additionally, if economic restructuring fails, the government will have no option but to resort to the previous model which is not sustainable.
China’s problems are further compounded by historical, cultural and geographical factors. Historically China has considered itself as the ‘middle kingdom’ and countries in East Asia as its tributaries. It wants to retain influence in East Asia and is alienating countries in the region and losing soft power which will make it difficult for China to have allies. It is difficult for a country to become a superpower without allies. China has a vertical hierarchical social, cultural and political order. The prevailing world order provided by the US and espoused by almost all the countries is a neo-liberal order with democratic and liberal values. China, a non-democratic and authoritarian country cannot provide a neo-liberal order. In order to do so, it will have to democratise which challenges the position of the CCP. Additionally, as people in China become richer, they will demand more freedom of thought and expression which might ultimately lead to regime collapse. A regime collapse might also occur if the economic system fails which might lead to fragmentation of China. Social science in China is also underdeveloped and of low quality which constrains China from becoming a superpower.
India is also constrained by similar factors. There is deep scepticism regarding India’s future growth potential. India needs sustained economic growth of 8-10 percent for at least two decades to enhance its political, economic, diplomatic and military clout. In a democratic political system where governments do not last for more than five years, incumbent governments resort to populist measures which have a negative impact on the economy in the medium and long term. It is also difficult to usher in economic reforms in the absence of a majority government at the centre. Most of the state governments are inept and corrupt and even if the central government wants to undertake reforms or development in certain spheres such as education, it is unable to do so because it might fall under jurisdiction of the state.
India’s social-cultural system and its history and geography also impede India’s rise as a superpower. India is still a feudal or semi-feudal society. Like China, it also has a vertical hierarchical social structure. Additionally, India is plagued by the twin evils of caste system and increasing religious polarisation. This has an adverse effect on two counts. First, it hinders economic growth and development because resources are diverted toward populist measures and internal security issues. Second, the lack of unity and polarisation can be exploited by another country to foment domestic instability and stymie India’s rise. Due to cultural and historical reasons, India as a country and its people also suffer from myopia and lack of cohesive foreign and economic policy.
To become a superpower, a country first has to overcome it domestic problems, then become a regional power, followed by a global or major power leading to a superpower. Like China, India also has a flawed policy in its immediate neighbourhood. None of the countries in South Asia consider India as a regional power and try to resist India’s power by trying to balance India using external powers in the region. Thus, it will be difficult for India to have allies in the region and will find it difficult to extend its power and influence beyond the region. Additionally, it lacks a global focus and has limited global engagement.
India’s advantage over China is that it is a democracy albeit a flawed one and is riddled with economic, social and political inequalities. If India is able to overcome these obstacles and has a coherent economic and foreign policy and long term vision, it might not only become a superpower but might also supersede the US to provide a neo liberal world order. India’s model of a democratic developing country with a pluralistic society, cultural and religious heterogeneity and socio-economic cohesion will appeal to peoples across the globe.
(Dr. Raj Verma is Assistant Professor of International Relations and Foreign Policy at the School for International Relations and Public Affairs, Jilin University, China and Visiting Fellow, Institute for Defence Studies and Analyses, India)