India as the new East

History is the only tentative guide we have for the future. It is due to a great ignorance of history that European statesmen like Emmanuel Macron and Olaf Scholz are committing the grave mistake of appeasing bellicose and imperialist authoritarian states in the name of peace and in fear of a new “Cold War”. Even as Europe stands at arm’s length of the cusp of total victory against Russia, Scholz and Macron cower back in fear and pretension and throw Putin a lifeline. Scholz says that ties with Putin can be normalised once again. It looks like a pathetic scene where the predatory and parasitic bear has been butchered and ends up limping only for the victim to throw it some food hoping it will change its behaviour. Delusional.

There is only victory to fear in Western Europe but the euphoria of the winds of change is hardly felt. Eastern Europe, on the other hand, knows very well the price of victory against Russian imperialism to the extent that they have joined the European Union and even NATO to preserve their freedoms. A victory against Russia would be a victory for human rights, rule of law, and democracy, but the socialists of today have given up their international solidarity for guarded nationalism. Yet, denying the fact that the world has become more peaceful with more democratic states abiding with an international rules-based order is also denying the historical origins of our democracies. We can allow Putin to get away with war crimes and send the message that as long as you have a nuclear arsenal, you can wage murderous and genocidal campaigns with impunity, or, we can restrain all the authoritarians in the world and effectively end a lot of human misery by simply defeating Putin. Scholz and Macron prefer to give up the Western victories of the Cold War to take us back to the imperial age.

Apart from having an irrational fear of Russia, Scholz and Macron also have an irrational fear of China, and this is also partly why Emmanuel Macron claimed earlier this year that France would not intervene if China invaded Taiwan. Scholz and Macron have this irrational fear that we will starve without China’s economic growth and this is why we have to engage with it at all costs. Recently, Scholz even made an exhibitionist visit to China along with German industrialists to strengthen economic ties. This delusion of China’s indispensability is also rooted in the ignorance of history and the naive assumption that China will remain the global economic leader behind the US for the foreseeable future. The biggest geopolitical delusions in the 1970s were to believe that Soviet Union would never collapse and that China would never surpass the Soviet Union’s economic and military power. Nowadays, Macron and Scholz make similar mistakes.

Someone in the left corner of Europe seems to understand things differently from Scholz and Macron and there’s no coincidence with the fact that this person happens to be of Indian descent. UK Prime Minister Rishi Sunak has claimed that the golden age of relationships with China is over. Sunak made his statement in direct reference to China’s human rights abuses, authoritarianism, and bellicose imperialism. Sunak should know very well enough the risks and the problems which come with living next to a bellicose neighbor such as China, but what’s more fundamentally striking is that Sunak’s plea for intolerance to authoritarianism is backed by the historical experience of his Indian heritage. India has taken a very different path from China during the Cold War and comparing the two nations today one could see striking differences. China is the second biggest economy in the world while India trails in the 5th place, however India has remained until today a democracy inspire all its challenges and imperfections. Since independence India has developed its diverse populace and spread its culture across the world far more deeply than China could. The intermingling of Indian people with our societies is much more regular, engaging, and common than it is with closed and insular Chinese communities. India and Indians with all its imperfections and problems are free and could create a Rishi Sunak. China, on the other hand, trades with us based on fears and nuclear arseneals.

History is much the wiser. It would be delusional to think that China will remain the second biggest economy in the world just as it would have been delusional to think that the bland and decaying Soviet Union was invincible. China will present itself as high and mighty and Xi Jinping can purge and humiliate his allies in the Party in front of the whole world for all of us to witness his power, but at the end of the day, China’s state-controlled economy is a fragile debt bubble as big as 250% of its GDP.  An economy belted by the corruption and thuggery of the state and a regime that risks revolution if it fails to get its basic economics right doesn’t sound alluring to foreign capital either. And to top it all, China needs to spend even much more to ever get near the military supremacy of the United States. Apparently, playing the act of the communist rogue state in global politics comes with a hefty price tag. Who would have thought?

Apart from teaching us the lessons of the Soviet Union, history tells us something else about China. History tells us that China’s position as the lagging economic leader of the world is a rather new history and the supremacy of liberal democracies in the economic and rules-based order in the world order is relatively a new epoch. If we were to map the whole history of global champions it looks as if the democracies are leading and will continue to lead. And judging by how many centuries China was the leading economic power of the world, the US is only getting started. What does this history tell us about China today? It tells us of the probability that India would supersede it and China would become a faltering power like Russia after the Soviet Union collapsed.

I find one particular comparison between China’s and India’s economic growth striking. If we are to watch their export history, we see India at a stage where China was when it started its exponentional phase.

 

 

 

 

 

 

 

 

 

The simple question to pose here is which country’s exports will grow at a faster rate? And as we can see, China’s dependence on exports is being offset by services while in India its dependence on exports is increasing. China’s challenges to change from an export-led economy to a services-based economy is going to be a grueling task. Meanwhile, India’s struggles for economic growth seem to be fairly easier as capital leaves China for greener pastures and industrialists are looking for a new industrial base. The US, as the leading nation with FDI outflows, has the upper hand in this economic game and the process by which Western industrial capital is diverted out of China by political methods is a slow and ongoing process – a case in point is chip-making. At the same time, ‘India’s imports from China are increasing drastically while its exports to it are decreasing. and if we go on and on, it all adds up so logically as if China has barely any leverage at all to play economic boss in the region. Rishi Sunak seems to be aware of this as he doesn’t seem to be as desperate as Scholz and Macron to beg for cheap stuff from China.

History has a fantastic way to creep up on you so unexpectedly. India is positioned to be the next big thing in Asia. It is a fledgling democracy and a growing economy and holds a basic democratic structure with rule-of-law. China, on the other hand, bears the signs of a waning power of the past and a Soviet Union in the making. I think I know where I would place my bets.