Society for Policy Studies in association with India Habitat Centre held a lecture on the “The Miraculous Chinese Story: Lessons for India”
By Mr Pradip Baijal, former officer of the Indian Administrative Service and the author of “Containing the China Onslaught”(2019)
Chair: Cmde C. Uday Bhaskar, Director, Society for Policy Studies.
Date: October 22, 2019
Time: 7:00 PM
Venue: Gulmohar Hall, India Habitat Centre
‘Many lessons for India in China’s rise’
The much-touted Asian century is undoubtedly led by China and in the country’s phenomenal rise, there are many lessons for India. Pradeep Baijal, former Indian civil servant and author of ‘Containing China Onslaught’ (2019) dwelt on the miraculous Chinese story in the Changing Asia series lecture jointly organized by the Society for Policy Studies and the India Habitat Centre in New Delhi.
Focusing on the economic strengths of China, Baijal pointed out India and China, the most populous countries controlled 50 per cent of world’s GDP for 1800 years. That was also the time when the GDP of the other nations did not record any changes.
“Industrial revolutions, colonial exploitation and better management changed the world thereafter. 1760 brought in the first Industrial Revolution in Britain and the early 19th century brought the second Industrial Revolution in the US. Consequently, the GDP of Britain registered a huge change from 1 per cent to 6 per cent from 1750 to 1900, and American GDP increased from 5 per cent in 1820 to 30 per cent in 1970. And during the same period, without access to better technologies, and due to colonial exploitation, China and India went down to five per cent, a fall of ten times by 1970,” he noted.
He then went on to observe that by 1950s, the effects of the first and the second Industrial Revolutions were waning and both “India and China could decide their own fates.” In 1970, Mao Zedong came up with the plan of ‘hundred-year marathon’ and failed miserably in it. India too ended up with what is referred to derisively as the “Hindu rate of growth”.
“No one expected any changes thereafter, these countries not having any access to new technologies, advanced knowledge or capital, but GDP miracles did happen,” Baijal observed.
Drawing attention to the factors that made China achieve such remarkable growth, he said the Chinese growth story started when Mao took the decision of establishing ties with the United States. He convinced then President Richard Nixon who had a problem with India’s Prime Minister Indira Gandhi to collaborate with China. He had also promised Nixon that China will move towards democracy. But when that began to be done, the country started getting destabilized and in the end Mao once again convinced Nixon to let them continue the (non-democratic) arrangement.
“By the 1970s, the Third Industrial Revolution came with enough indications that Industrial Revolution 4.0 and Industrial Revolution 5.0 were on the horizon and they were all based on communication/IT technologies and for the first time the technology cycles were 20 overlapping years, unlike the earlier 100-year cycles of first and the second Industrial Revolutions,” he pointed out.
In 1978, Deng Xiaoping had also become the county’s Chief Executive. Though the technology went to both India and China due to globalization and the world becoming inter-connected, certain factors ensured that it was China and not India that would benefit from the third Industrial Revolution. The first and foremost was the US help that China received in terms of expanding its market and as well as in joining the WTO.
“One of the rationales towards this move was that US will be able to enter Chinese market and also to destroy Russia. At this stage, factories closed down in the US and all the factories were shifted to China. China acquired the world market because its prices were low and Russia had already destroyed itself,” he said.
Another reason that led to the drastic rise of China was an agreement that the country signed with the US in 1978 and Deng implementing it in a manner that benefitted only China. US did not realize the dangers of this implementation pattern. The American corporations did not oppose this as they were having a gala time due to cheap labour and the policy continued. Seven US Presidents supported this till Trump took measures to oppose, but two years after being President in 2016.
Baijal brought to attention an interesting report that Goldman Sachs came out with in 1990 that stated that Brazil, Russia, India and China have parallel growth rate. It was clear that the Chinese growth story had started in 1990. But in the years between 2005 and 2015, China took over the GDP of the US and it took over the world.
By then Deng was gone and Xi Jinping became China’s leader. While Deng was very particular that the world should not know of China’s growth, Xi was different. He wanted the world to know. At this stage Trump came and said that the US must contain China. But he had no idea how to.
He started imposing tariffs on Chinese goods. “When China started the process, they started manufacturing everything. These goods were not meant for China alone but for the world. So, when Trump started opposing the goods, China started the Belt and Road Initiative. Most strangely, India did not protest. Now India finally has a government that is talking of balancing China,” he said.