Prime Minister Narendra Modi (L) with Chinese President Xi Jinping in Hangzhou, China. (Wang Zhou - Pool/Getty Images)
Snapshot
  • Like in the case of China, we need an Indian Dream.

    However, creating and pursuing a national dream will require big, bold decisions. Will we take them?

The pulling out of the Paris Climate Accord by the United States (US) has understandably led to international outrage. But what has received less attention is the enormous lament in Western media about the US abdicating “global leadership” to China. This lament isn’t without basis.

China has surely and steadfastly worked to realise President Xi Jinping’s Chinese Dream - "the great rejuvenation of the Chinese nation”, calling upon young people to dare to dream with the goal of making China a fully developed nation by 2049 the hundredth anniversary of the founding of the People's Republic. Along the way, they want to double the 2010 gross domestic product (GDP) per capita of $10,000 by 2020, and complete urbanisation of about 70 per cent of its population, or about one billion people, by 2030. "Modernization" means China regaining “its position as a world leader in science and technology as well as in economics and business; the resurgence of Chinese civilization, culture and military might; and China participating actively in all areas of human endeavour.”

The “dare to dream” exhortation by President Xi is the galvanising factor, the obsessive, ruthless focus on executing relentlessly towards that dream. And what is incredible is how China has understood the lay of the land, as it were, of international geopolitics and leveraged its economic and military might to further its agenda on all dimensions. It has understood some very important ground rules.

Dominance arises not just from the exercise of economic might. After all, there are many countries that are wealthier than it in per capita terms. Dominance comes from (a) setting and owning standards that everyone adheres to, (b) creating and running institutions that provide legitimacy, governance and regulate behaviour, and (c) owning markets. The West, especially the US, dominates the world today because it sets standards (from education and research to fashion, industry and software), runs institutions (from the United Nations, World Bank and financial institutions) and owns markets (thanks to the great consuming power of its population). China is seizing the opportunity it is now presented with, to dare to dream of global leadership. It is following the pattern laid out by the West.

Setting standards

- China has set its sights on achieving global stature in technology standards by 2020. This includes setting their own approach to intellectual property, technical standards for communications (mobile and WiFi) and video. Overseas companies have to accept these standards for doing business in China. And the size of the Chinese market is the carrot that drives foreign companies. It also provides an opportunity for indigenous technology companies to flourish. The meteoric rise of a company like Huawei and many other Chinese companies is a testament to this.

- The Academic Ranking of World Universities (ARWU), called the Shanghai Ranking since 2009, is now "the most widely used annual ranking of the world's research universities", according to the Economist. The objective is to benchmark Chinese universities to global standards, drive progress on the parameters used in the ranking to secure entry into the list of best research universities, which in turn will drive funding, top quality students and researchers and intellectual output for commercial and other benefits.

- In new areas like batteries and electric vehicles, China is setting tough standards in the hopes of becoming the dominant player in these emerging areas.

2. Creating and running institutions

- The Asian Infrastructure Investment Bank (AIIB), launched in Beijing in 2014 with 52 member states, aims to help build infrastructure in the Asia Pacific region. China holds the largest number of voting shares and is the largest investor with over $29 billion invested. Japan and the US are not members of AIIB, and several European countries have broken away from the G7 to join this bank. “The Chinese government has been frustrated with what it regards as the slow pace of reforms and governance, and wants greater input in global established institutions like the IMF, World Bank and Asian Development Bank which it claims are dominated by American, European and Japanese interests.” The Chinese government sees (funding of) infrastructure as a regional integration, economic platform and foreign policy tool. The One Belt One Road and Beijing-London train line are manifestations of this.

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- New Development Bank (formerly the BRICS Bank), proposed by India and headed by Indian banker K V Kamath, while proposed to be egalitarian among the member states of Brazil, Russia, India, China and South Africa, is headquartered in Shanghai. It contains a Contingency Reserve Arrangement whereby China will provide the largest share of a $100 billion fund: this means that it is not unrealistic to assume that China can and will become the NDB’s senior partner. “Now, rather than watching the Western countries that dominate the World Bank or IMF take credit for development projects in Africa, or Japan leading the Asian Development Bank in East Asia, China will be able to play a more significant role in global development through the NBD. The benefits to Chinese global influence are obvious”.

- “Nalanda University” or the Nanhai Buddhist College: to occupy the vacant Buddhist diplomacy space, and will link Buddhist centres in Thailand, Sri Lanka, Nepal and Cambodia. Wuxi, near Shanghai, has been turned into a permanent venue of the World Buddhist Forum by the Chinese government. China is actively creating institutions to further its Buddhist diplomacy, namely, the $3 billion plan to develop Lumbini (Buddha’s birthplace) in Nepal through the Asia-Pacific Exchange and Cooperation Foundation, a Chinese government non-governmental organisation.

Owning markets

For long, China has been the supplier to the world. It has built its position as the dominant manufacturer and supplier into an enormous competitive advantage as it has focused on itself as also a market. Through regulation, practices, funding and other ways, it has ensured that its enormous markets provide global scale opportunity for its own companies. Tencent, WeChat, Baidu are examples.

It has acquired technology and know-how by providing controlled access to its markets and become the leading market for automobiles to solar power and everything in between. It has built and launched its own commercial jetliner and acquired businesses across the globe in multiple sectors that leverage its supply-customer market leverage.

In 2015, Chinese leaders decided to build one of the world’s leading coffee exchanges in Yunnan. “The goal is to become the standard setter for coffee quality and trading, ultimately building the Yunnan Coffee Exchange into one of the world’s three largest coffee trading centers,” said one of the leaders.

China is working to also become a leading centre for the world’s metals and commodity exchanges. In May 2016, the vice chairman of the China Securities Regulatory Commission, Fang Xinghai, reiterated the Asian giant's ambition to call the shots in commodities pricing.

The above are but examples of the way China thinks of its role in the world of the twenty-first century. It has an articulated Chinese Dream, a Big Hairy Audacious Goal, the marshalling of state and private resources, capabilities and capacities towards achieving it. Including reviving Confucianism as a spiritual practice and propagating Chinese culture worldwide through over 500 Confucius institutes. “Behind the amazing economic surge that has lifted hundreds of millions out of poverty, there is no civic morality or national dream that unites Party and people. This is why Xi Jinping seeks to revive a popular pride in China’s culture and history, while simultaneously trying to root out corruption—in order to restore the Party’s morale and dynamism.” It has, as a consequence, lifted over 680 million people out of poverty between 1981 and 2010.

“Dare to Dream” an Indian Dream?

India, like China, is a civilisational state. We need an Indian Dream too. Our new tryst with destiny cannot just be touchy-feely romanticism and moralising. Our dreams have remained shackled to the tired rhetoric of the past. That needs to change. This is how we stack up against China.

Source: <i>The Economist</i> Source: The Economist

So, what is India’s dream? What is our Big Hairy Audacious Goal? And how are we thinking of achieving it? What are the standards, institutions and market exchanges we are working towards that will help India also set the terms of any global narrative?

There are opportunities to create global standards that everyone aspires to and has to be certified in areas like yoga, Ayurveda, generic drugs, food and education. In education, the Organisation for Economic Cooperation and Development set up the PISA rankings that Asian countries – except India – routinely top! What is the standard we wish to set for India? Given our huge student population and market opportunity, isn’t there an opportunity? In software development, we just followed ISO, CMM standards instead of creating our own for globally distributed software development at scale that our companies pioneered.

The idea for the NDB and Nalanda University were first mooted by us, but we couldn’t/didn’t take leadership the way China did. Even now, it isn’t late to create Nalanda University as an institution. As China focuses on the funding of hard infrastructure as a foreign policy tool, India has the opportunity to focus on the funding of soft infrastructure – software as an instrument of soft power comes to mind. Our world-leading low-cost space programme is another that needs to be developed into a global force.

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India’s large market size offers advantages as well. We have not created leverage for ourselves out of this. We are the world’s largest importer of arms. Shouldn’t we have devised competitive advantages out of this, like the Chinese have done?

We are fortunately taking baby steps now. We are the world’s largest producer of milk, cotton, various fruits and vegetables. Yet we aren’t players on the world stage because we don’t have the institutions that drive the standards and the market making exchanges. We cannot just be content to remain an attractive battleground for global players to battle for our consumers. We cannot just let our producers be dictated to. China has understood the competitive advantage offered by its role as a gigantic customer and supplier and has therefore decided to be part of, if not set, the agenda. And it has acted on mission mode for achieving the Chinese Dream.

It is high time we framed our questions in the light of our aspiration. We need to have specific objectives and milestones towards our goals. In the knowledge economy, we are uniquely placed given the abundant talent we have access to within and outside India. That talent needs to be freed up, energised to “dare to dream” to make India a developed country. We have to commit and drive change. We’re doing so already in renewable energy, so it is possible. We have to make India an easy place to do business (up from 130th rank! China is 78), drive the adoption of platforms like IndiaStack nationwide – and even overseas – for driving inclusion, transparency, efficiency and productivity. Enable easy access to funds and credit through tax incentives and reduced red tape; focused attention on education, skills training, research, job creation by enabling job creators to do what they do best. Let our small and medium enterprises flourish and form the backbone of the economy. In short, enable and entrust our people with the task of executing on the aspirational goal. However, all these require taking big, bold, “dare to dream” decisions. Will we?

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