China - SEMINAR REPORT

Chair: Maj Gen Dipankar Banerjee, Director, IPCS

Speakers: Mohan Guruswamy, Center for Policy Alternatives; Dr Partha Mukhapadhyay, Center for Policy Research; Dr Ravni Thakur, Department of East Asian Studies, Delhi University

 

Maj. Gen. Dipankar Banerjee

The book “Chasing the Dragon: Will India Catch Up with China” reveals that perceptions can never be the basis of analysis, but hard facts and data are necessary. ., This book authored by Mohan Guruswamy is a well-analyzed and substantial book that will provide the basis for comparing India and China’s comprehensive national power. One of two central questions that are raised in the book inquires if India would ever catch up with China? An answer to the question would be that this is indeed possible if India were to initiate and achieve dramatic improvements in governance.  Unfortunately our, political and administrative systems seem impervious to change and improvement. . Another noticeable fact regarding the book is related to the demographic advantage that India might have over China in the near future. The working age population will then be much higher in India than in China. Even so, unless this large population is empowered through education and health and substantive other improvements to be really productive, it may instead become an enormous liability. In fact, much of the African and Islamic World are facing precisely this problem. Young people with paucity of employment opportunities resort to arms to make a living. Hence, the country becomes engulfed in violence and insurgency. . The principal question that then emerges is how should India interact and deal with a China with respect to political and security dimensions in this emerging state of increasing asymmetry. These require a cautious and careful approach.

Mohan Guruswamy

This book was written on the basis of research that was initiated on a preposition by a former Indian Minister that India can overtake China. The results that the research yielded were startling and alarming. India would require 12 percent economic growth rate in order to catch up with China in two decades. In China, the process of decentralized governance is considered effective and efficient. The governance at grass-roots level in India requires significant improvement. The well-organized village councils in China have impressive planned measures for future planning., It is an imperative to realize that China had a high trajectory of economic growth, rated at 10 percent, even before the implementation of reforms. China had an edge over India with respect to the assistance it received from the Soviet Union. Participation in war turned out to be favourable for the Chinese economy. China has a higher Human Development Index and lower Infant Mortality rate as compared to India. Singapore has been an inspiration to China in carrying out capitalism with an autocratic system and attain higher rate of agriculture production while simultaneously succeeding in infrastructural development. India, in the meanwhile argued that Chinese pattern of governance is not acceptable to a democracy. Although India argues that developing an economy at the cost of humanity is not justified under a democratic system, the counter argument has been that the democratic government in India has not been anxious to reduce the escalating rate of starvation and malnutrition in the country. While India has a tiny upper class, a smaller upper middle-class, a large lower middle-class and a much larger lower class; China has a relatively large upper class, a small middle-class and smaller lower middle-class. When 30 percent Chinese live below the income of two dollar norm per day, 60 percent of Indians live below this norm. One quarter of India lives below the starvation line. Therefore, the need to empower the next generation in India is of prime importance. Had India had two percent more economic growth rate than the present pace, then indubitably, India would have crossed the economic growth rate of China. The key to improvement lies in the reforms of public administration and governance in India. The members of Indian Parliament should be willing to take timely actions.

Dr. Partha Mukhopadhyay

The Chinese success can be largely attributed to the structure of its political governance, in particular its local governance. This allows for a wide variety of solutions across the nation and strategies for economic growth are vast in China. For instance, Chinese cities have introduced a government performance evaluation system, which ensures the rapid and continuous economic and social development.  The primary achievement of the Chinese model is the drastic reduction of poverty.  The first decrease occurred in the 1980’s following the first reforms. The sharp and steady rise in agricultural production plummeted poverty in a relatively short period of time. Since 1995 there has been no further reduction and the agricultural performance has stagnated despite the massive growth rate. One feature of the Chinese political system is that the phenomena of the rural landless are absent. A characteristic of the collective agricultural scheme is the use of tools and the transfer of technology and receptivity towards it; this is rarely witnessed on Indian farms. In the late 1970’s the Chinese central government adopted a new agricultural production model and introduced this model to the peasantry as the Household Responsibility System. The system was intended to solve the problems of low productivity in rural China by providing peasants with “materialistic” incentives. In two ways the new rural incentive system started a gradual transformation of user rights. First, the system gave permission for peasants to work independently—not as a team or a collective—in order to fulfill state targets. It later encouraged peasants to make their own production decisions on how to fulfill state targets and to apply their knowledge in innovative ways. This expanded peasant user rights over the land. Second, this system was initially implemented in limited areas, and then gradually spread to almost all corners of the Chinese countryside.

In the past, China has restricted internal movement in several ways. Official efforts to limit free migration between villages and cities began as early as Mao Zedong’s tenure.. The movement of migrants from the rural to urban areas essentially fuels a demand at two levels: a need for a large number of young women workers (approximately 18 to 25 age) and a need for a large number of male construction workers. Dormitory accommodation as well as informal education has been established to deal with the influx of migrant workers.

China is failing on two fronts related to economic growth, one is the environment and another is land. In terms of the environment, public anger is increasing in response to the extensive and frequent environmental disasters occurring. Ultimately, if India is able to catch up with China’s high standard of economic growth it would be because China is unable to maintain it in the long term; if India can retain an 8% growth rate it is likely that it can catch up with China.

Dr. Ravni Thakur

China is not concerned about India catching up with it. In Chinese psyche, its economic and geopolitical competitor is the United States. It is critical to understand the dynamics of social stratification of China and what is happening within China. With respect to migration, household registration system or Hukou system, which records a person as a resident of an area and registers information on that person’s identity, does not exist in China anymore. China is becoming more like India in its pattern of migration. The outline of migration is regional. Labour contractors enlist workers as regional groupings. There are contractors and subcontractors involved. The labourers are often not paid and at times are deprived of basic living conditions such as  decent housing facility. China encourages government-run NGOs to look into developing social problems. Domestic labour was an alternative available to women, when the Iron Rice Bowl system seemed to be in jeopardy with 60 percent of 40 million who were laid off were women. 90 percent of domestic labourers presently are those who were laid off as urban workers and they face mounting racism in the country. Most of the migrant labourers are employed in the textiles and hospitality industries.

China has changed dramatically achieving miraculous heights, but at a great human cost. The migrants are losing out on social security and are explained that there is paucity of land to be provided for their facilities, when the land is actually leased out for further agrarian business. The splurge from household registration system has plateaued. Today, Chinese scholars and think-tanks reveal the irregularities that exist within China. It remains totalitarian and a controlled state, because of which it fails to be an international player. China is conscious of suppressing any voice of dissent in all mediums of communication.

Another critical issue concerning China is education. It is difficult to implement compulsory education in China due to wide regional differences. Today, a generational emergence of social classes is being debated in the country. The third vital concern currently in China relates to lack of social legitimacy of the Communist Party. The entrepreneurs are related and co-opted by the communist party. Chaos and instability is the worst fear of the party. Neo-left think-tanks claim that the party should discontinue from calling itself a worker’s and peasant’s party. There is disenchantment of civil society and intelligentsia with the party.

The fundamental difference between China and India is the fact that although China looks stable from outside it is not, while India is stable from within in spite of the fact that it is perceived to be unstable from outside.

Discussion
Comments/Questions

• The book, “Chasing the Dragon: Will India Catch Up with China” is a work of scholarship collected from different sources. It is an alternative assessment and a standard, succinct document to study micro issues of China. There is certain instability in Chinese growth rates and perhaps an alternative economic plan should be developed by Chinese planners to ensure stability. With 8% economic growth, it is possible for India to reach Chinese economic growth rate.
  
  
• China has transformed from an export oriented to a domestic consumption state, there is an increase in the government salary structure, efforts to boost the spending capacity of the middle class, health care is becoming commercial and less accessible to the common man today.
  
  
• Chinese data has always been looked at with a degree of suspicion and provincial economic growth varies with the central economic growth rates, while in India the data on economic growth rate is open to questioning and is therefore, seen as more reliable.
  
  
• China is not that interested in India’s growth. They are focused on the United States’ figures. The justification that the Communist Party of China uses to remain in power is that they deliver stability and growth to the population, while democracy offers chaos and more corruption as compared to India.
  
  
• China views democracy as a threat to economic growth. Therefore the better the Indian economy performs it will further delegitimize the Chinese political system as people tend to question the possibility of a positive relationship between economic growth and democracy.
  
  
• The use of nationalist pride and international assertion is becoming evident in China, particularly with the Olympics, Shanghai export, and the 1 October 2009 military parade, as a consequence of China’s rising economic growth.
  
  
• China makes huge investments in accumulating soft resources on other nations, while other nations find it difficult to acquire information on China as it is either censored or unavailable. China efficiently uses capital to experiment and improve its capacity in relation to other nations, while India remains less enthusiastic about learning from other nations and encouraging its population to be innovative.

Annapoorna Karthika, Research Assistant, IPCS
Email: annapoorna@ipcs.org

Tara Sarin, Research Intern, IPCS
Email: tara@ipcs.org