US and PRC relationship & India

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Christopher Sidor
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Re: US and PRC relationship & India

Post by Christopher Sidor »

RajeshA wrote:Published on Aug 20, 2011
By Chad Pergram
Enter the Dragon: Fox News
Bruce Lee called it the art of fighting without fighting.
....
....
India is China's biggest rival. It's located in the same neighborhood, is also a nuclear power and boasts a similar population.

And unlike China, India is also the world's largest democracy.

It's clear that the United States bet on India as its ally versus China. :-?
Two things that are not answered by this post are
First of all what happens when China/PRC becomes democratic? It is inevitable. The current form of governance in China is an anomaly.

Second why should we help US contain/balance China for US interests? We need to balance China for our interests and not US. These are two distinct things, but it seems that many people take to understand that they mean the same thing.

The current tension on Sino-US relationship reminds one of the japanese-US tensions of 1980s. If China is so called "stealing" US manufacturing jobs, then India is also "stealing" high paying service jobs. If China's export-oriented model of manufacturing is unsustainable, then so is India's model of IT/Services, which is again based on low-cost-model.

The bottom line is that China and US are two kittens/cats fighting it out. We should be the monkey and sit it out. If required we can always enjoy the show. For instance read and see the video about the recent brawl on the basket ball court in China. It will be entertaining.
ramana
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Re: US and PRC relationship & India

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Nightwatch 24 Aug 2011
India: The Indian Army is planning to deploy a mountain strike corps with two new divisions of 1,260 officers and 35,011 soldiers headquartered in Zakama in Nagaland and Missamari in Assam, Press Trust of India reported on 23 August. Senior army sources said the army is in talks with the governments of Assam, West Bengal and Bihar states to build the mountain corps headquarters. The Army also is planning to deploy ultra-light howitzers and light tanks along the Line of Actual Control in Sikkum and Arunachal Pradesh.


Comment: This is the latest announcement in a series over the past two years that indicates the government continues the incremental, long term buildup of Indian forces opposite China.
svinayak
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Re: US and PRC relationship & India

Post by svinayak »

Can this be taken as direct challenge

Is it within the range of the Brahmos mk3 from the border. Can this be taken out at upper edge of Tibet - the farthest from the Indian border.
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Re: US and PRC relationship & India

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Book Review of Kissinger's On China


Compromised: Henry Kissinger’s China Syndrome
Gordon G. Chang

http://www.worldaff airsjournal. org/articles/ 2011-JulyAugust/ Chang.html


On China
Henry Kissinger (New York: Penguin, 2011)

In his sweeping new book, On China, Henry Kissinger seeks “to explain the conceptual way the Chinese think about problems of peace and war and international order.” To do so, he surveys China’s history from ancient times to the present, analyzes the country’s troubled relations with foreigners, admires the strategies of its policymakers, and expresses hopes for America’s ties with Beijing.

When Kissinger writes about China’s past, he displays a subtle understanding of the country. When he relays his conversations with the endlessly fascinating Mao Zedong, he dazzles us. When he considers the future, however, he flounders.

Read On
Around Asia

Gordon G. Chang
Follow the inside track on China, North Korea, and other Asian nations every week with Gordon Chang'sWorld Affairs blog. And On China is, in reality, all about future relations with Beijing. The master strategist picks his subject well, because America faces no more important external challenge at either this moment or for the foreseeable future. As Kissinger notes, “The relationship between China and the United States has become a central element in the quest for world peace and global well-being.”

As part of this quest, Kissinger articulates a vision of “a Pacific Community,” which he describes as “a region to which the United States, China, and other states all belong and in whose peaceful development all participate.” The concept, based on the Atlantic Community formed after the Second World War, would both “reflect the reality that the United States is an Asian power” and respond “to China’s aspiration to a global role.”

Nonetheless, in his more sober moments, Kissinger implies there is not much possibility of ever reaching across the world’s largest ocean to form this grand community. Indeed, he even admits that simply creating a “partnership” between Washington and Beijing would be difficult. A more likely development is what he calls “co-evolution,” which means that “both countries pursue their domestic imperatives, cooperating where possible, and adjust their relations to minimize conflict.” The most he says about this scaled-down goal is that the two sides should “attempt to elevate familiar crisis discussions into a more comprehensive framework that eliminates the underlying causes of the tensions.”

As his tentative language reveals, Kissinger’s hopes for the future of Sino-American relations are more about what should not happen than what should. And what should not happen?

First, relations between the United States and China should not degenerate into a zero-sum game. In contrast to his few airy sentiments about regional community organizing in the Pacific area, he devotes pages to analyzing what happens when great nations compete without inhibitions. For this, he focuses on the late-nineteenth- century story of the rise of more than three dozen sovereign German states, which formed first the loosely organized German Confederation and then a powerful nation in the heart of Europe, thereby irrevocably changing a once-stable European system.

Kissinger shows that the English saw that conflict with Germany was inevitable, not so much because of Berlin’s avowed intentions but because of its growing strength. The British Foreign Office, therefore, viewed formal German assurances as meaningless. As early as 1907, diplomacy became ineffective, and war almost inevitable. “The crisis of the system was inherent in its structure,” he writes in what are the most thoughtful pages in the book.

Kissinger then takes his penetrating analysis of Europe’s changing dynamics a century ago and applies it to relations between China and the United States now. Although he notes in the epilogue to his book that “even the most precise analogy does not oblige the present generation to repeat the mistakes of its predecessors,” he clearly worries that America and China are following the path that England and Germany took a century ago.

To avoid the hardening of attitudes, Kissinger gets to the second thing that should not happen in Sino-American relations: Washington should not seek to change the nature of the Chinese state. His review of millennia of history is really an argument that China is too big, too proud, and too independent for outsiders to influence. For Kissinger, the issue is not whether we Americans would prefer China to be a functioning democracy—we certainly would—but whether we can actually make it one. Even if we could, he asks what price we are willing to pay to achieve this objective. And there is one more thing: any attempt to change China’s system of governance “is likely to involve vast unintended consequences.”

Kissinger sensibly argues the “best outcome” for us is to combine two approaches to diplomacy. “Realists,” he tells us, should recognize that policies must incorporate American values, and “idealists” should be patient. The fundamental problem with Kissinger is not his abstract formulation of mixing realism with idealism but the fact that realism so dominates the mix. On China presents many opportunities for him to affirm enduring American values, and he declines all of them.

Moreover, Kissinger declines to condemn China’s leaders for their brutality. It is bad enough that he endorses the Communist Party’s general rationale for continued authoritarianism, but it’s even worse that he goes one step further and suggests that the protestors in 1989 provoked the regime to engage in mass slaughter. And on this matter, the most that he says is, “This is not the place to examine the events that led to the tragedy at Tiananmen Square; each side has different perceptions depending on the various, often conflicting, origins of their participation in the crisis.”

Kissinger adopts the same non-judgmental posture—which is a disguised way of siding with the status quo of Chinese authoritarianism—when referring, for instance, to a series of recent crises over China’s borders with India, Japan, and neighbors surrounding the South China Sea: “In each case,” Kissinger writes, “there is a version of events in which China is the wronged party.”

Such statements represent a troubling abdication not only of judgment but of analysis as well. First, Beijing’s attempt to assert sovereignty over areas under the control of others is not some diplomatic sideshow—it is China’s principal national goal at this time. The crises Kissinger lists, therefore, reveal a fundamental trend of Chinese aggressiveness. Second, most of the crises to which he alludes involve matters where China’s territorial claims are either weak—such as those involving the Senkaku islands administered by Japan—or just plain ludicrous—as in Beijing’s claim that the entire South China Sea is a Chinese lake or its inability to renounce sovereignty over Indonesia’s Natuna islands. In all cases, Beijing is attempting to change the status quo, actually employing force in some cases or even entering waters administered by other nations, thereby threatening the peace.

And it is not just other territorial claimants that have experienced Beijing’s new belligerence. In March 2009, Chinese vessels and aircraft harassed two unarmed US Navy surveillance ships in international waters in the South China and Yellow Seas. None of these incidents warrants mention by Kissinger in the book. And they should: the Chinese actually tried to steal a towed sonar array of the USNS Impeccable, thereby committing an act of war against the United States. China’s increasingly disturbing tactics make it hard to see, even in a Rashomon-like vision of moral relativity, how China might be considered “the wronged party.”

In the only other reference to these series of hostile acts, Kissinger writes, referring to neighboring nations, “China’s relations with almost all of them have deteriorated over the past one to two years—a trend the Chinese leadership is seeking to reverse.” Unfortunately, the weight of evidence points away from Beijing’s trying to improve relations. In fact, relations with its neighbors have soured, although Kissinger fails to say so, because of China’s overt hostility. On China simply refuses to criticize Chinese leaders, even in the face of obviously bellicose conduct.

It is striking, and even a little sad, that such an intellectually powerful figure as Kissinger, who has been unafraid of making judgments and acting on them over the course of a remarkable career, could suddenly lose his voice on the subject of China at one of the most consequential periods in its long history. He apparently believes, based on his long review of history encapsulated in On China, that it would be inadvisable to irritate the country’s sensitive leaders. Yet as he seeks to avoid geopolitical conflict, he is perpetuating the very conditions for it, continuing decades of perverse incentives.

The United States, following Kissinger’s own policy prescriptions established in the 1970s, has often failed to speak out loud about unacceptable Chinese conduct. In fact, Washington has often rewarded Beijing, even during periods of especially unconstructive behavior. So the Chinese, suffering no penalty, have naturally continued their antagonistic policies. Then, all too often, we rewarded them still more, all in the name of pursuing “friendly” ties. As long as we continue this dynamic into the indefinite future, as Kissinger essentially suggests we do, China has less incentive to become a responsible member of the international community.

Our failure to speak out about Beijing’s conduct could have horrific consequences. Writing about nukes at the end of On China, Kissinger says, “The spread of these weapons into hands not restrained by the historical and political considerations of the major states augurs a world of devastation and human loss without precedent even in our age of genocidal killings.” Yet he doesn’t find space in 530 pages of text to talk about China’s transfer of nuclear weapons technology to Iran, which continues to this day, or its direct assistance to Pakistan’s bomb program, which began in the mid-1970s. There is not one reference to either China’s continuing direct support for North Korea’s nuclear weapons program or Pyongyang’s sales of technology to rogues.

Nuclear weapons pose the only existential threat to the United States, but we have, over the span of three decades, applied Kissinger’s notions and subordinated the critical goal of stopping proliferation to that of integrating the Chinese into the international system. What’s the point of trying to include them in the community of nations if they have been trying to destabilize that community by spreading the world’s most dangerous technologies?

Kissingerian notions of cooperation or co-evolution with China sound wonderful in theory, but the point is that Chinese policymakers are not buying into them. At least Kissinger notes in this book that the United States cannot play a generous game without reciprocity. If Beijing sees the United States as an adversary, the United States, he notes, will have to do the same.

What is missing from this book is not so much the correct analytical framework—no one is against good relations as a theoretical matter—but a factual context. How does Washington seek close ties to an arrogant authoritarian state that shares no strategic goal with us and that is, among other things, supplying weapons to the Taliban in Afghanistan and insurgents in Iraq, launching cyber attacks against the Pentagon, maintaining predatory trade practices in clear violation of its international obligations, permitting its flag officers and senior colonels to talk in public about waging war on the United States, engaging in the largest espionage campaign against America in history, threatening the democracy of Taiwan, backing Pakistan’s campaign of terror against India with diplomatic and material support, and bolstering almost every rogue state on the planet?

Kissinger disparages those who believe “a constructive long-term relationship with nondemocratic states is not sustainable almost by definition,” and he has trouble with the notion that “true and lasting peace presupposes a community of democratic states.” Yet the fact remains that democracies almost never go to war against each other and that the challenges Beijing poses are not merely those of a rising power but are ultimately rooted in its increasingly corrupt and hard-line political system. And as Kissinger, to his credit, states earlier in the book, “Some congruence on values is generally needed to supply an element of restraint.”

History does not provide any examples of sustainable friendships between great-power democracies and large autocratic states. So Kissinger is taking a large leap of faith when he proposes long-term cooperation between Washington and Beijing. Although the book is not called On India or On Japan, the famed statesman still owes it to us to explain why we should not move closer to New Delhi or Tokyo—or both—instead of Beijing.

As Kissinger notes, Chinese strategists see the first two decades of this century as a “strategic opportunity period” for China. That means, unfortunately, we can expect a risk-taking Chinese policy, especially because Beijing’s leaders perceive the United States to be in terminal decline and no longer able to oppose their ambitions. We are, in their view, no longer “a paper tiger.” Instead, they think we’re really “an old cucumber painted green.”

In these circumstances, relations with Beijing are bound to be tense, and it’s time for us to create a new paradigm, not continue the one Kissinger helped design eight American presidents and four Chinese leaders ago, and which he seeks in this book to paint green.
Gordon G. Chang is the author of The Coming Collapse of China and Nuclear Showdown: North Korea Takes On the World.
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Re: US and PRC relationship & India

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India wants to prevent another 1962 war with China
According to Roemer, Narayanan remarked that he wishes to continue a discussion he began in 2007 with Secretary (Robert) Gates about India's efforts to "contain" China, adding "half-jokingly" that it might not be possible to have such a discussion now since the US and China have since become "big buddies."
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Re: US and PRC relationship & India

Post by ramana »

A wise man said

Greenspan: Kissinger = US Economy : US diplomacy

Eventually all will realize how these two shortened the American century to decades.
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Re: US and PRC relationship & India

Post by ramana »

Bending the Potomac
Bending the Potomac
The United States today needs India more than before, and it shows, says N.V.Subramanian.

19 September 2011: Facing decline and unprecedented strategic challenges from China, is America trying to build a bigger constituency of support for itself in India than before, and aiming to become the "natural ally" it has shied of being so far? It would appear so. But India should not give up on its essential non-alignment, and persevere at a "peaceful rise" as always.

Mirthful as it would appear given Pakistan's state failure, there was a time even after the end of the Cold War when the United States hyphenated India and its benighted neighbour. They were equal partners of the US, Washington liked to say, even as Pakistan was an older ally. India smarted at the comparison which was without merit. But it could not alter the equation.

9/11 changed that but not entirely. At a personal level, US presidents were keener on India. Who wouldn't? But it did not translate into policy benefits for India, even including George W.Bush's Indo-US nuclear deal. Whatever the China angle of the deal, it certainly meant to kickstart the US nuclear industry with precious nuclear-reactor orders from India.

Which is partly why the US went about the deal with India in an underhand manner, with the terrible complicity of the Manmohan Singh government and the nuclear scientific establishment. Parliament was repeatedly misled about specifics of the deal. It was a lie that the deal promised a "clean waiver" in respect of ENR technologies binding on all the NSG countries. And that the deal was rotten was proved by the July 2008 corrupt confidence vote to enable its passage in Parliament.

The deal was bad but key political parties opposing it, including the BJP, were privately supportive of it, because America could not be antagonized. The US was in decline, and the decline stared in the face. But it was not good policy to challenge the US.

Anyone with political ambitions in India has known that for a long time. Arjun Singh's lasting regret apparently was that his ideology prevented him from getting close to the US and therefore to the prime-ministership that was as consistently denied to him as to L.K.Advani. Knowing how critical American support was to their careers, Indian politicians have thronged the US, especially during the summer, the last two to make such prominent pilgrimages being Pranab Mukherjee and Arun Jaitley.

It was in this background that Narendra Modi was written off becoming any bigger than the Gujarat chief minister, which is a considerable achievement in any case. The liberal refrain was that since the US would deny him a visa, he couldn't be India's prime minister.

Almost no one pointed out that if -- that if -- Modi became PM, the US would give him a red carpet welcome. It is not just about Modi becoming PM in the normal course of Indian parliamentary politics, when the sworn-in head of government acquires legitimacy, whether anybody likes it or not. It happened to Rajiv Gandhi despite his horrible post-1984 riots' statement and it would repeat with Modi -- if he became PM. In a quite different vein, America has never been uncomfortable with odious dictators, and these men were/ would be duly elected.

But there was a second factor. America had declined and India had risen. The old equations had changed. Not only could India not be hyphenated with Pakistan, it had to be put in a separate bracket, perhaps, as time went by, even higher than the EU.

Even before the CRS report came out in favour of Modi, this writer gauged that the US-won't-give-Modi-a-visa formula would not work any longer. And the CRS report was more generously extolling of Modi than expected, underplaying the 2002 riot allegations against him, portraying him as Rahul Gandhi's chief competitor for the 2012 general elections, and gently running the Gandhi scion down. It is true that the Congressional Research Service report had a good word, too, about Nitish Kumar.

In the end, it is not about Narendra Modi or Rahul Gandhi or Nitish Kumar. It is about India, and how its spectacular entrepreneurship and growth have compelled the US to seek an altogether higher level of friendship with it.

Most people would have forgotten the US's indirect support to Anna Hazare's movement, with the American state department saying it was watchful of the hunger protest. It was a warning to the Manmohan Singh government not to break it up like Ramdev's earlier satyagraha.

But it was also an attempt, according to this writer, to woo India's massive middle class. The US could ride roughshod over objections to the nuclear deal articulated by a section of the thoughtful middle class, but no longer.

America knew that the huge Indian middle class was the best vehicle for closer Indo-US ties; this middle class had been brilliantly co-opted by Anna Hazare; and, therefore, Anna Hazare had to be supported to win this middle class over more deeply and permanently.

There has been one other recent US move calculated to reap Indian goodwill. The listing of the Indian Mujahideen (IM) as a terrorist group by the US has come very promptly.

The Indian government, knowing it, may not even have commenced the diplomatic process to have the IM proscribed internationally. And, possibly without asking, the US designated IM as being linked to Pakistani terrorist entities. One year ago, such proscription would have been hard to come by, and Pakistan would not have been charged at all.

What gives? Narrowly, US-Pakistan relations have broken beyond repair, with its PM being refused an audience with the American president, and the foreign minister, the decorous Hina Khar, getting a harangue about the Haqqani network and LeT from Hillary Clinton.

But, of course, the biggest factor is India's great rise, which urges the US to deal with the country on a higher plane. And in this rising ride, all the boats get lifted, including those of Modi, Nitish, etc. Indian politicians are sharp to figure which way the wind is blowing. Certificates from the US are going to matter less and less, with America itself looking to India for solicitude.

Nevertheless, India and its politicians should not lose their heads. India's non-alignment made its great peaceful rise possible. There is a long way to go. There is little need to alter this course. And a word of final warning. India will elect its prime minister. The PM will not be made in the United States.
Yes they are not made but they are only appointed.
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Re: US and PRC relationship & India

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http://www.indiainfoline.com/Markets/Ne ... 5249280575

India can sustain 8-9% growth over next 30 years: FM

India Infoline News Service / 18:26 , Sep 22, 2011

Indeed, we seek your engagement in all aspects of economic activities in India, and likewise look for similar engagement for Indian enterprise in this land of opportunities.

Following is the text of the Address of Union Finance Minister Pranab Mukherjee at USIBC-FICCI Round Table Meeting at Metropolitan Club in New York,USA on 21st September, 2011.

“I am extremely pleased to be here this evening and have this opportunity to share some thoughts with investors, business leaders and industry captains of the two countries and the global community. Indeed, we seek your engagement in all aspects of economic activities in India, and likewise look for similar engagement for Indian enterprise in this land of opportunities.

No country has been immune to the contagion from the fallout of global financial crisis in 2008. Though the economic downturn was moderated and growth resumed in the second half of 2009 in most economies, the pace of recovery remained uneven. Advanced economies grew more slowly than before, while emerging economies like China and India led the way, with Latin America and Africa following closely. It appeared that policy makers had learnt their lessons from history by honing and harmonising the use of macro-economic policy and keeping markets open. At the same time, countries in the developed and the developing world adopted revival strategies, in keeping with the needs of their respective contexts, though with varying degree of success.

Developments in recent months have been less encouraging. There is widespread apprehension that even the tepid global economic recovery that we have seen so far is stalling. Slowing global aggregate demand, unresolved Euro debt crisis, high commodity and oil prices, inflationary pressures and stressed currencies have shaved 1 to 1.5% off global GDP in the past six to eight months. Growth in most advanced economies has declined in the second quarter of 2011 and emerging markets are witnessing a combination of moderation in growth and rising inflation. Uncertainties continue to persist.

Advanced economies, the Euro zone and the US, are seized with sovereign debt problems. This is making financial markets nervous. There are structural constraints coming in the way of advanced economies returning to their trend growth path. As a result, their fiscal position looks increasingly unsustainable. Despite the aggressive fiscal and monetary policy, unemployment continues to be at its highest in many advanced countries.

Emerging markets recovered quickly from global slowdown, but are facing elevated commodity prices, inflation, moderating growth and volatile capital flows all at once. Central banks have been forced to raise policy rates repeatedly, potentially compromising growth in the short-term. It is true that emerging economies are relatively better placed with regard to their public debt and fiscal deficit due to their stronger growth momentum and relatively robust banking systems. Their downside risks are on account of high oil and commodity prices and volatility in capital flows, partly due to the easy money policies in advanced countries.

It is against this backdrop, India as one of the largest and among the most dynamic emerging economies continues to be a key driver of global growth. After a GDP growth rate of over 9% in the three years leading to the crisis, a slowdown to 6.8% in the crisis year of 2008-09, followed by strong recovery of over 8% in the two years following the slowdown, India has demonstrated its resilience and the capacity to overcome adversities in its development path.

There is a consensus among analysts that India has a remarkable stretch of growth over the next thirty years
. Several reasons support growth to be sustained at a high rate of 8 to 9% per annum. First, the savings and investment ratios have gone up in the last few years and are reminiscent of the high growth East Asian economies. Secondly, India’s working age population is young with over half the population is in the twenties. Thirdly, growing middle class incomes have led to self sustaining buoyancy in domestic demand, particularly in the rural areas. Fourthly, India is making rapid progress in infrastructure, both social and physical and along with better access to cutting edge technology is likely to see improvement in productivity. Although these are the primary factors for India’s dynamic growth, there are many other drivers of India’s growth story including the energy and vibrancy of our entrepreneurs, strong services sectors, emerging knowledge spheres and sunrise sectors and growing number of engineers and scientists.

India`s economic progress is not only a key factor of stability in the global economy, but also a source of immense economic opportunity for the world. India presents a rapidly growing market with a large and growing middle class. India has a population of 1.2 billion which translates to that many numbers of potential consumers. As high growth trajectory is sustained, with a corresponding increase in the disposable incomes from expanding work force and increasing wages, India will become one of the largest consumer markets in the world by 2030. In infrastructure sector alone our investment needs over the next five years 2012-2017, which happens to be the period of India’s Twelfth Five Year Plan, stand at US$ 1 trillion. We expect 50% of this investment to come from the private sector. These developments create major opportunities for companies both domestic and foreign.

We are not taking this future for granted. Indeed, in a globalised world where developments from one part of the world are being rapidly transmitted to the other, we cannot afford to do so. We are aware that we have to consciously work towards realizing our developmental goals and national aspirations. Even while pressing the accelerator for growth, our priority is to make growth inclusive and sustainable, focusing on a broad-based strategy that encompasses all three sectors – agriculture, manufacturing and services. We are working on a strategy that provides ample opportunities for people to grow and climb the ladder of productivity and knowledge towards higher incomes and well-being.

The economic reforms initiated during the early 1990s have borne good results for the Indian economy. We have taken steps in recent months, to take this process forward.

Legislations have been introduced in the Parliament to address some issues in the financial sector including insurance, banking, and pension sectors. We have set up Financial Sector Legislative Reforms Commission to review financial sector laws with the objective of bringing them in tune with current requirements and global best practices. An apex-level Financial Stability and Development Council has also been established to strengthen and institutionalize the mechanism for maintaining financial stability.

We are working to build a policy consensus on a number of pending issues such as introduction of Goods and Services Tax, a new and facilitative National Manufacturing Policy, further liberalisation of FDI, including in retail, deepening and strengthening financial markets for long term investments.

Our new foreign trade policy is ambitious and aims at doubling exports to $500 billion in the next three years. The policy is backed up with a range of progressive measures including facilitation of investments, simplification of administrative procedures, streamlining of clearances and customs duty systems to name a few. As the Indian export sector continues to transform from low-value added goods to capital and skill intensive and technology rich manufactured products, doubling of exports in three years is not only attainable, but is well within our reach.

Better infrastructure development in new townships is the focus of investment now and would be for sometime in the near future. A recent study by McKinsey estimates that by 2030, 65 cities will have a population of more than one million and would account for 600 million of India’s population. The share of GDP from these cities could rise to 70%. Over the next 20 years, cities would require a capital expenditure of $1.2 Trillion, opening up huge opportunities for investment for foreign investors and capital equipment manufactures. The installed power capacity is expected to increase by five times over the next two decades to maintain a growth rate of 8 to 9%.

Sizeable portion of investment in infrastructure in the future is expected to be from the private sector and we recognize that the development of domestic long-term capital markets is critical for private sector investment in infrastructure. We have taken several measures in this context including establishment of Infrastructure Debt Fund, reduction in the withholding tax from 20% to 5% and exemption from income tax; permitting Indian Mutual Funds to directly attract investments from foreign investors; increase in ceiling for investments by FIIs in corporate bonds from USD 15 billion to USD 40 billion. We intend to introduce the new Direct Tax Code in the next financial year.

Long term investment opportunities have opened up in the Delhi Mumbai Industrial Corridor and the Delhi Mumbai Dedicated Rail Freight Corridor. Along these corridors, nine mega industrial zones each covering 200-250 square kilometres as well as three ports and six airports in six States are envisaged. A US enclave within one of the mega industrial zones would be an excellent ecosystem for ramping up manufacturing in high technology sectors that are currently emerging. New products and designs originating from these zones could meet the demands of the domestic markets as well as other vibrant proximate markets in Asia.

For India, sustainable development is a necessity. Long-term perspective plan on energy and the ambitious National Action Plan on Climate Change seek to increase the share of clean and renewable energy in the energy mix and increase energy efficiency across the economy, promote development objectives while also yielding mutual benefits for addressing climate change effectively. The Government has launched a National Solar Mission and is committed to establish a strong manufacturing base in this field. In November 2009, Prime Minister Manmohan Singh and President Obama launched a Clean Energy and Climate Change Initiative to advance cooperation in clean and renewable energy, and energy efficiency. Solar and Wind energy expansion offers opportunities for green tech companies in US for building long term partnership with industry in India.

India USA economic relations are getting stronger and are more robust than they were a decade ago. At the core of the US India Economic and Financial Partnership launched last year is the well grounded recognition to generate common response through convergence of each other`s strengths in the field of innovation and technology.

The US is the largest source of technical collaboration for Indian companies. There is tremendous potential for closer collaboration between educational institutions of our two countries and what is required is a jointly forged key to unlock this potential. There are at least 100,000 Indian students in US universities today. As India moves ahead with the educational reforms envisaging expansion and up gradation of the educational infrastructure, US universities can actively engage in India.

India`s economic partnership with the United States is built on a strong framework, based on mutual benefit. Our ties are growing rapidly. Today, the US is one of our leading trade partners and a major source of investment. High growth in India would continue to deliver positive spillover effect for the US. Between 2002 and 2009, US exports to India have quadrupled and the US services tripled. Last year, US-India trade in goods witnessed a 17% growth. Currently, India is only the 12th largest trading partner of the US. So, there is a long way forward in moving together for harvesting mutual benefits.

We have institutionalised the US India Economic and Financial Partnership with regular engagement at highest levels in Government. I have no doubt that the private business and commercial engagement will continue to be the key driver of bilateral economic cooperation even as, we, at the Government level, explore fresh areas of collaboration.”
Jai Ho!
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Re: US and PRC relationship & India

Post by ramana »

X-posted...
paramu wrote:http://www.caseyresearch.com/articles/d ... money-dies

TGR: Many pundits and economists still project growth in China, albeit at a lower rate, and anticipate further expansion of the middle class.

DC: The 21st century will be the Chinese century, but the distortions and misallocations of capital that have occurred over the last 30 years—notwithstanding the truly phenomenal progress the country has made—are serious and have to be washed out. I am a huge bull on China for lots of reasons, but I am bullish for the long run. I think it is going to go through the meat grinder over the next 10 years. I don't know how it will come out; maybe China will break up into five or six different countries. Actually, that would be a good thing. Most of the world's nation-states are artificially constructed and too big to be manageable as political entities.

TGR: Your outlook on China fits right in with something you've been saying for years—about this being the "Greater Depression," which is also the topic of your upcoming presentation at the sold-out Casey Research/Sprott Inc. "When Money Dies" summit next month in Phoenix. Your opening general session talk is entitled, "The Greater Depression Is Now." We are now four years into it, based on your 2007 start date.

DC: Actually, depending on how long a historical scale you look at, you could say that, for the working class in the U.S. anyway, the depression started in the early 1970s. After inflation, after taxes, their take-home pay hasn't risen in real terms for 40 years. But the definition of a depression that I use is "a period of time during which most people's standard of living drops significantly."

Net savings shows that you're living within your means and putting aside capital for the future. In the U.S., people have been living above their means for many years—that is what debt is all about. Debt means that you are borrowing against future production, which is exactly what the U.S. has been doing.

Can go in the geopolitics thread too.
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Re: US and PRC relationship & India

Post by ramana »

A lecture from a US professor
Professor Peter Rodriguez, Ph.D., "China, India, and the United States: The Future of Economic Supremacy" [The Great Courses]
TTC | 2011

You are living at a critical moment of change for the world economy. A moment that will be defined by the economic trajectories of three key players. A moment whose outcome will have a deep and lasting impact on the way you live.

Recent years have seen a dramatic, unprecedented transformation in the landscape of the global economy. And the catalyst of this transformation—destined to create a new economic order that will scarcely resemble that of the last 300 years—is undoubtedly the rise of China and India. Both nations, which represent around 37% of the world's population, have experienced a rapid surge in annual economic growth of 7% to 10% in the last decade alone—a growth rate that is nothing short of miraculous.

Just as important as this amazing story are its implications for the United States. Long seen as the central driving force behind the world's economy, the United States is emerging from the greatest recession in more than 80 years. For the first decade of the 21st century, its average per capita income growth was a paltry 0.53% per year. As China and India continue to gain a dominant foothold in the 21st-century marketplace, America's role in it will continue to evolve in unprecedented ways.

Knowing what to possibly expect from the future of the global economy presents an enormous opportunity for you to better prepare yourself for the momentous challenges and possibilities of tomorrow. Now you can, with China, India, and the United States: The Future of Economic Supremacy. This provocative six-lecture course, delivered by noted economist and award-winning Professor Peter Rodriguez of the University of Virginia's Darden School of Business, is your opportunity to preview what the next few decades of the global economy may look like. Offering you pointed looks at the economic past, present, and possible futures of these three powerful nations, these lectures will have you finally grasping the intricate nature of our world economy and the driving forces responsible for where it will stand in years to come.

Get Answers to Pressing Questions about These Economic Giants

In the last 20 years the incremental economic growth of China and India has been the equivalent of adding another United States to the world economy—and it could happen again in just 12 years, or even fewer. The implications of such a statistic demand to be better understood, and Professor Rodriguez's lectures are the perfect way to witness just how these three economies have gotten where they are today.

Central to this course are revealing answers to some of your most pressing questions about the current state of the global economy and its future.

• How long will the United States remain at the top of the global economic ladder, and what will happen when that time passes?
• What economic, political, and cultural forces are responsible for China's and India's spectacular growth over the last two decades?
• When and why might China's and India's rapid annual growth rates slow down?
• What strategies and policies can these three nations undertake to weather the current global recession?


Discover the Future of the 21st-Century Global Economy

In addition to bringing you up to speed with the economic stories of these three world powers, China, India, and the United States: The Future of Economic Supremacy also provides you with insights into the next decades of the world economy and the new economic order currently being forged. Throughout the lectures, Professor Rodriguez uses his keen economist's eye to report ideas, trends, and possible outcomes you can expect to see as China and India continue to reach (and possibly even supersede) the economic power of the United States.

Here are just a few of the many predictions and possibilities you'll explore in depth.

• China's particular challenge to sustain solid economic growth, more so than the two other countries, will be highly political in nature.
• India cannot rely solely on information technology to continue growing; rather, it must also achieve global prowess in manufacturing to truly strengthen its internal and external economic power.
• The United States must reemerge as a global exporter and must retain its preeminent status in financial markets to ensure its near-term economic future.


Most important, you'll investigate how the great changes in the coming years will also bring with them a range of benefits and opportunities for each of these three countries. According to Professor Rodriguez, the coming decades of the new global economy will be a bumpy ride, but there is much to remain positive and hopeful about for the United States and the rest of the world.

Learn What to Expect—Before Everyone Else

In addition to being a skilled educator whose awards include Princeton University's Teaching Excellence Award, Professor Rodriguez possesses significant real-world business experience working with multinational companies, including Rolls Royce and Visa. This know-how, combined with his vast knowledge of global macroeconomics and international business, makes him an authoritative guide to this pressing subject and its implications for your future.

So join him for this chance to find out, before everyone else, just what to expect from the economies of China, India, and the United States. This course is a piercing look at the economic future being shaped right at this very moment.
ramana
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Re: US and PRC relationship & India

Post by ramana »

Based on released papers, the Allies had a simple strategy to win in WWII. It was:

- Defeat Germany and then Japan.

Similarly India now needs to
- dissuade PRC and draw TSP and defeat it.
TSP unfortunately is on this path and is not ready to see reason.

US is not a factor nor ever was. It goes with the winner.

Dissuasion of PRC requires various tactical elements wgich can be developed.
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Re: US and PRC relationship & India

Post by Christopher Sidor »

^^^^
Ramana I think that we should put China first. We have to first defeat PRC and then reclaim the "Northern Areas" and Chitral of NWFP from Pakistan. Please note that PoK has been excluded, for the simple reason that India gains no strategic advantage from capturing it, unlike Northern Areas and Chitral.
With regard to PRC our aim should be reestablishment of Tibet as a sovereign entity and possibly of East-Turkistan too. Only after this aim has been achieved, then we should contemplate about Pakistan. And if Pakistan were to slip into a mini-civil-war then we should abandon it to its fate.

It is China which should come first. Pakistan is a luxury, which does not deserve the importance that we assign to it.
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Re: US and PRC relationship & India

Post by devesh »

first time i've heard PoK gains no "strategic advantage" for India. this is surely grade-A madrasa logic. without taking PoK, India's position in CA remains weak. and taking PoK also kicks out PRC from there. to say it has no "strategic advantage" is like saying "why we need a mouth? there are other holes in the body. they should suffice".

sorry for the sarcasm.

and how do you intend to venture into East Turkestan without taking PoK???

dreaming of facing PRC in Tibet and ET without taking back PoK is something that I would only come up with under the influence of some powerful hallucinogens.
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Re: US and PRC relationship & India

Post by ramana »

CS, Please think it over again and post. My post wasn't some random thought that floated to the top. Over a decade of thinking in in it.
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Re: US and PRC relationship & India

Post by svinayak »

Christopher Sidor wrote:^^^^
Ramana I think that we should put China first. We have to first defeat PRC and then reclaim the "Northern Areas" and Chitral of NWFP from Pakistan. Please note that PoK has been excluded, for the simple reason that India gains no strategic advantage from capturing it, unlike Northern Areas and Chitral.
With regard to PRC our aim should be reestablishment of Tibet as a sovereign entity and possibly of East-Turkistan too. Only after this aim has been achieved, then we should contemplate about Pakistan. And if Pakistan were to slip into a mini-civil-war then we should abandon it to its fate.

It is China which should come first. Pakistan is a luxury, which does not deserve the importance that we assign to it.
India cannot "defeat" PRC. Nobody can,
India needs to take care of its interest and also expand its area of interest
India has to control the geography which has high strategic value
India has to have an expansionist agenda
India has to free Tibet for security interest and its area of interest
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Re: US and PRC relationship & India

Post by RajeshA »

Among key emerging powers with which we will work closely are India and Indonesia, two of the most dynamic and significant democratic powers of Asia, and both countries with which the Obama administration has pursued broader, deeper, and more purposeful relationships. The stretch of sea from the Indian Ocean through the Strait of Malacca to the Pacific contains the world's most vibrant trade and energy routes. Together, India and Indonesia already account for almost a quarter of the world's population. They are key drivers of the global economy, important partners for the United States, and increasingly central contributors to peace and security in the region. And their importance is likely to grow in the years ahead.

President Obama told the Indian parliament last year that the relationship between India and America will be one of the defining partnerships of the 21st century, rooted in common values and interests. There are still obstacles to overcome and questions to answer on both sides, but the United States is making a strategic bet on India's future -- that India's greater role on the world stage will enhance peace and security, that opening India's markets to the world will pave the way to greater regional and global prosperity, that Indian advances in science and technology will improve lives and advance human knowledge everywhere, and that India's vibrant, pluralistic democracy will produce measurable results and improvements for its citizens and inspire others to follow a similar path of openness and tolerance. So the Obama administration has expanded our bilateral partnership; actively supported India's Look East efforts, including through a new trilateral dialogue with India and Japan; and outlined a new vision for a more economically integrated and politically stable South and Central Asia, with India as a linchpin.
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Re: US and PRC relationship & India

Post by Jarita »

Kissinger also wrote good stuff on the latest book on Rajmata by Rani Singh. Called her remarkable etc
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Re: US and PRC relationship & India

Post by Christopher Sidor »

devesh wrote:first time i've heard PoK gains no "strategic advantage" for India. this is surely grade-A madrasa logic. without taking PoK, India's position in CA remains weak. and taking PoK also kicks out PRC from there. to say it has no "strategic advantage" is like saying "why we need a mouth? there are other holes in the body. they should suffice".

sorry for the sarcasm.

and how do you intend to venture into East Turkestan without taking PoK???

dreaming of facing PRC in Tibet and ET without taking back PoK is something that I would only come up with under the influence of some powerful hallucinogens.
Northern areas is the what is referred to as "Gilgit-Baltistan" province of Pakistan. POK is the rest of occupied Kashmir, i.e. the area between the district Neelum to Mirpur. Generally we tend to mix up these two entities.
While "Gilgit-Baltistan" is precious and invaluable due to is geographical location and population (predominantly Shia), the same cannot be said of POK, its geographical location and population (predominantly sunni of west-punjabi extraction). If we wish to carry out our end game in East Turkestan then we need Northern Areas or "Gilgit-Baltistan".
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Re: US and PRC relationship & India

Post by devesh »

this is a fake distinction between PoK and Northern Areas. all the Kashmiri land occupied by Pak is PoK. we need to take it all back. I don't see why the NA distinction has to be made. it only adds to more confusion. PoK == PoK.
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Re: US and PRC relationship & India

Post by RajeshA »

Christopher Sidor ji,

Pakistan-occupied Kashmir (PoK) consists of both Gilgit-Baltistan and "Azad Kashmir". We can use any of the designations depending on what we mean. "Azad Kashmir" however should be used in brackets. Or one can say Western Jammu to "Azad Kashmir"!
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Re: US and PRC relationship & India

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Getting Northern Areas makes sense. Northern Areas + chitral give us a land corridor to Afghanistan and eventually to central asia and beyond thus eliminating our need to depend on Iran for access to Afghanistan.

No such advantage can be foreseen by capturing "Western Jammu". Rather if these areas remain with Pakistan, we can generally see their living standards decline. They thus can become a living-walking-talking example of what happens to people who believe in misguided theories. The LoC in "Western Jammu" is historically the line separating the areas under influence of "Muslim Conference", the pro-Pakistani grouping and "National Conference", the pro-India grouping. Over the past 50 years other groups have mushroomed in between, but the distinction still stands.

Off course we will have to contend with the fact that people of Gilgit may not want to merge their districts with current J&K state and might want a separate province of their own. But that is well not a deal breaker. We should not forget, we lost Gilgit to Pakistan due to two reasons
1) The Treachery of certain British colonial officers.
2) Our lack of enthusiasm to reclaim this territory vs GoIs zeal in reclaiming "Western Jammu".

I think we have gone OT w.r.t current thread. Maybe we should move this to the "Future Scenario of Indian Subcontinet" thread.
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Re: US and PRC relationship & India

Post by ramana »

Yes, please stick to thread topic.
Thanks, ramana
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Re: US and PRC relationship & India

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ECONOMIC TIMES
12 OCT, 2011

China's recall Of 1911: Implications for India

BY C UDAY BHASKAR

A hundred years may be a brief temporal punctuation for an ancient civilisation like China or India but the commemoration of the 1911 Xinhai revolution that overthrew the Qing dynasty in China may be deemed an event of tectonic proportion for Asia, in particular and the world by extension.

Two millennia of imperial rule had come to an end - and Asia's first republic was born. The 1911 Revolution began as an armed uprising on the evening of October 10, 1911, when Xiong Bingjun, a soldier in the New Army engineering battalion fired the first shot in Wuhan that signalled the start of the 1911 Revolution. Thus ended one of the most enduring autocratic regimes in the world, established by Emperor Qinshihuang in 221 BC. Successive emperors held the Chinese people in thrall for centuries and the last imperial dynasty was the Qing Dynasty, which came to power in 1644 AD and which the 1911 Revolution displaced .

However ownership of the 1911 revolution is bitterly contested between Beijing, capital of the People's Republic of China and Taipei that represents the Republic of China. In Beijing, President Hu Jintao extolled the 1911 Revolution and described it as "a thoroughly modern, national and democratic revolution." He also recalled the contribution of Sun Yat-sen, the leader of the revolution, as "a great national hero, a great patriot and a great leader of the Chinese democratic revolution."

President Hu noted that the 1911 Revolution had shook the world and ushered in unprecedented social changes in China. While the last assertion is accurate - that China rocked the global boat and has ushered in extraordinary socio-economic changes in a milieu that that had kept its people in servitude or deprivation of different type - Beijing's claims on 1911 and the reference to 'democracy' are untenable.

The Chinese Communist Party had little to do with 1911 and its credentials to being democratic are invalid. As the parallel celebrations in Taiwan have demonstrated, it was the Sun Yat-sen and Chiang-kaishek team that laid the foundations of the Republic of China and the transition from imperial rule to democracy - or a semblance of it that Asia's deeply entrenched feudal DNA has differently nurtured.

The Republic of China itself under the Chinese Nationalist Party was hardly the model democracy that 1911 had envisioned. Mainland China and ROC adopted different paths after the vicissitudes of World War-II, culminating in the triumph of Mao's Long March in 1949.

Ever since, Taipei and PRC have staked their exclusive claim to both Chinese nationalism and normative political identity.

A hundred years later, the two Chinas have evolved on different trajectories and clearly Beijing has impressive numbers on its side and the global endorsement of its brand. Diminutive Taipei is the more vibrant democracy - after the lifting of martial law in 1987 - and remains the intractable 'other' that Beijing has not been able to subsume or ignore.

Whether Beijing is celebrating 1911 and the birth of the democratic impulse in Asia, or 1949 - wherein the Communist Party morphed into the new imperial dynasty is moot and this is the point of relevance for India.

Anniversaries have their own import in the collective psyche of a society and states recall and embellish them in the pursuit of the abiding objective of monopolising power.


For India, this October will mark the run up to the 50th anniversary of the humiliating defeat of the 1962 border war with China. It is fortuitous that Prime Minister Manmohan Singh addressed the combined military commanders on Tuesday - October 11 - and while there was no explicit reference to China in the PM's remarks as available in the public domain - the narrative and self-image that is being burnished in Beijing as part of the 1911 centennial commemoration is of abiding relevance to the Indian national security and military apex.

PRC has a self-image and historical national narrative that is predicated on selective exclusion of facts and history and carefully nurtured collective amnesia. Thus in PRC's recall of the last 100 years since 1911 - the excesses of Mao's Cultural Revolution and the Great Leap Forward when millions died or were displaced finds no mention. Tiananmen of 1989, which had a Gandhian democratic texture to it has been totally obliterated in the main exhibition at the UN in New York and this is the characteristic of PRC and by extension the PLA that Delhi will have to decipher and manage.

Like Taiwan being an intractable 'other' - democratic India that is now also exuding signs of sustained economic growth is an existential challenge to the idea of China conceived by Mao in 1949. Managing this entity which oscillates from benign panda to belligerent dragon is the challenge for the Indian political apex. :mrgreen:

This can be better done if India exudes both tangible military capacity and the political determination to maintain a non-provocative but equitable posture in its bi-lateral dealings with Beijing. This can only happen if the current dissonance within the Indian fauj and its policy neutral, subaltern institutional status receives the undivided and unmediated attention of the PM.

The writer is a former director of the Institute of Defence Studies & Analysis.
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Re: US and PRC relationship & India

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http://business-standard.com/india/news ... us/451971/
Sanjaya Baru: China, India and the US
Their geo-political differences will be managed, given the geo-economics of an inter-dependent world
Sanjaya Baru / New Delhi October 10, 2011, 0:26 IST

Far too many analysts and commentators around the world view the China-India-United States trilateral relationship as a zero-sum game. This view is promoted by the fact that on several recent occasions, when two of the three have come together, the third has been worried about losing out. When the US and China issued a joint statement with a shared view of South Asia, during US President Barack Obama’s visit to Beijing in 2009, India was upset. When China and India stood as one at the Copenhagen climate conference in 2010, the US was upset. When the US and India come together on maritime security in the Indian Ocean, China is upset.

This paradigm shaped Chinese response to the India-US agreement on cooperation in civil nuclear energy and US-India maritime exercises in the Indian Ocean. It shaped many Indian anxieties in the aftermath of the trans-Atlantic financial crisis when US analysts began to float the ‘G-2’ theory of a condominium between China and the US aimed at ‘managing’ the global economy. So dominant was this view within the corridors of the US state department in the early days of Hillary Clinton and in the year after the Lehman collapse of September 2008, that one of Ms Clinton’s aides, former US deputy secretary of state Jim Steinberg told this writer in September 2009 that India should just stop whining about US-China relations, grow up and come to terms with it.

Mr Steinberg equated early 21st century China to early 20th century United States and the US to early 20th century Britain. A view that this newspaper’s columnist Arvind Subramanian has echoed in his book on the eclipse of the US dollar by China’s Yuan and the growing ‘economic dominance’ of China. While Washington DC is now conflicted on how to deal with a rising China, both those who think China can be a friend and those who think China will be an enemy advocate policy options that India cannot feel too comfortable with.
Similarly, in China there are the US-haters who see India as an American cat’s-paw and US-lovers who like the G-2 idea of working with the US to run the world, and view India as a supplicant at their shared high table.

All these ‘zero-sum game’ views have the common failing that they can become self-fulfilling prophecies. If things can go wrong, they will. China, being the fastest rising power with more at stake, has the highest stake in stability but will be most prone to making mistakes, if it believes its own fears.

I say this because a recurring theme of Chinese interlocutors in bilateral diaologues that I have been involved in over the past three years has been that the US and India are ‘ganging up’ against China. But India, too, can make mistakes if it does not have a realistic view of China-US relations.

Every time a Chinese interlocutor asks me as to what India seeks from its friendship with the US, my answer has been that India seeks nothing more than what China has sought over the past three decades from its relationship with the US, namely, a win-win relationship that would help India’s economic growth and development.

The reason Chinese analysts would not easily accept this explanation is that China’s own relationship with the US facilitated the destruction of the Soviet Union. Since China played the zero-sum game of using its friendship with the US in the period 1979 to 1989 to facilitate US victory in the Cold War, the Chinese fear the US may use India in a similar manoeuvre to contain and weaken China.

The past, however, is not always a useful guide, especially in a changing world. The trans-Atlantic financial crisis of 2008 has changed the world. The US is renegotiating many of its relationships in the context of an economic crisis and in the new world of the growing economic clout of both ‘emerging’ and ‘re-emerging’ powers.

It is now clear that uncertainty will grip the world economy in the near term and can have unforeseen consequences. No one country is so well positioned to imagine that it will rise while others fall. China of the 2010s is not the United States of the inter-war years. Much less the world.


Indeed, the fundamental change that has taken place in the post-Cold War world is the increased inter-dependence between nations and economies. While those who measure power focus on changes at the margin — the changing relative weight of individual nations — those who seek to wield power would rather look at absolute weight and at inter-dependencies. In both terms, the US and China recognise that they are locked in a relationship of inter-dependence that they cannot unilaterally alter in the near term. This is even more true for India.

The zero-sum theory of the trilateral relationship belongs to a paradigm lost, that of the Cold War. In the post-Cold War world of economic globalisation, the levels of inter-dependence between China, India and the US are so high and important for each of them that a trilateral relationship can yield win-win outcomes.

The time has come for a China-India-US trilateral dialogue that can re-assure the world, and Asia in particular, and create an economic and political environment of stability that can only benefit all.

Geo-political analysts attach greater weight to the politics of conflict between the three nations than to the economics of their inter-dependence. This new inter-dependence can yield a win-win trilateralism that can have beneficial consequences for Asia and the world economy.
The author does not relaise that PRC wants India to fall and make is easy for other countries to choose the winner.
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Re: US and PRC relationship & India

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India should not get involved in any trilateral US-China-India dialogue. As far as India is concerned there are three bilateral issues at hand, India-China, Indo-US and Sino-US. We should not reduce our elbow room, on some fancied altar of multilateral dialogue.

If we do agree to such crazed idea and set a precedent, then Islamabad will be hopping on its feet and pushing for a Afghanistan-Pakistan-India trilateral dialogue.

All these trilateral or multilateral dialogue serve only one purpose, to reduce negotiating space. We need to take initiatives on the Indo-china relationship are independent of US. Ditto for Indo-US relationship.
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Re: US and PRC relationship & India

Post by RajeshA »

I think, India should in fact get into the trilateral dialogue, in both Russia-China-India and USA-China-India frameworks.

India has nothing to lose and a little something to gain! Whatever deals USA and China will make in order to screw India, that they will do irrespective of whether such a dialogue takes place or not! Such a dialogue gives India added publicity as a power, which is good when one's image is important. Such a dialogue setting allows India to present herself as in the league of China and USA for all external entities.

What we however should not allow is to depend on this dialogue framework to benefit India in security matters! India would have to look for her security interests outside any promises made in this forum.
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Re: US and PRC relationship & India

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Shyam Saranji lets it rip.
BUSINESS STANDARD

Shyam Saran: The myth of Chinese invincibility

The country’s economic policies are unsustainable even in the medium term

Shyam Saran / October 19, 2011

A self-defeating mood of pessimism and passivity has become endemic in the United States and western Europe, thanks to the continuing global financial and economic crisis. Accompanying this is an almost irrational belief in China’s inevitable ascendancy and invincibility. China’s apparent confidence, even bluster, is contrasted with the indecision and disarray among the leaders of liberal democracies. An insidious notion is taking hold in western societies and intellectual elites that perhaps the Chinese model of political authoritarianism and guided capitalism is proving superior to the open, free-wheeling and plural democracies, which only a decade ago was being celebrated as the only model validated by history. This doctrinal infection is beginning to spread in India as well, despite our continuing success as an emerging and vibrant economy. This is dangerous. It engenders the seductive allure of a dictatorial polity as a panacea for our numerous economic and social ills. It persuades us to more readily acquiesce to an emerging world order that is assumed to be dominated by China. In his latest book, Eclipse: Living in the Shadow of China’s Economic Dominance, Arvind Subramanian appears to suggest that the world reconcile to the inevitability of China’s overwhelming power. We in India need to do our own sums and make critical judgements, based on an independent scrutiny of the assumptions that underlie such exaggerated forecasts.

China has sustained higher GDP growth rates much longer than other economies that traversed a comparable stage in their growth trajectories, such as Japan and the Asian Tigers. The key drivers of this growth have been the consistently high rates of fixed investment and rapidly rising exports. From 1979 to 2009, China’s fixed investment grew from 35 per cent of GDP to 45 per cent, while export turnover grew from five per cent of GDP to 30 per cent. Consumption, on the other hand, declined from 60 per cent of GDP to less than 40 per cent. Currently, it is even lower, at 33.8 per cent, according to the latest China Year Book. The spectacular rise in China’s exports was possible only because consumption grew both in the US as well as western Europe, much beyond the trend line, fuelled by rising housing prices in the US and by the growing sovereign debts of prodigal governments in Europe. For example, in the US the normal consumption levels were around 66 per cent of GDP around the last quarter of the 20th century. By 2007 they had reached 75 per cent, unsupported by the income-generating capacity of the US economy. A reversal to trend line would require massive and painful rebalancing, which cannot but impact China’s main export market. The speedier the relative decline in China’s exports, the greater the pressure to compensate through seeking alternative markets in emerging economies and simultaneously raising domestic consumption. How feasible is this?
In 2009, personal consumption in the US was estimated at $10 trillion, in western Europe at $7.5 trillion and Japan at $2.5 trillion. Two of the largest emerging economies, China and India, together accounted for the same level of consumption as Japan. There is no way that rising demand in China and India could offset a significant fall in consumption levels in the West and Japan for several years to come, even if they were to grow at double-digit rates. In any event, to expect China to reverse course in a short time frame and raise its consumption level from the current 34 per cent of GDP to the more normal level of 50 to 55 per cent in Asian countries is unrealistic. Maintaining high growth rates would, therefore, require the continuance of the current investment-oriented strategy, to compensate for declining level of exports and stagnant consumption. This will further exacerbate the already serious problem of over-capacity, particularly in the important construction sector and compound the associated issue of rising non-performing assets in the Chinese banking sector. Housing investment in China is about 25 per cent of all fixed investment and, therefore, a critical driver of growth. Any retrenchment in this sector would not only drag the economy down but also generate spread effects on the supply industries such as steel.

What is obvious is that in a highly interdependent and interconnected global economy, China’s economic and trade imbalances are as serious and threatening as are those afflicting the West. China cannot escape the vulnerabilities generated by the inevitable global rebalancing that is taking place, painfully, sometimes by reluctant choice, sometimes by compulsion. No economic model capable of indefinitely suspending the laws of economics has been created so far in history. China is unlikely to prove an exception. A linear extrapolation of past growth trends into the future is an erroneous assumption to make. China is and will be a great and powerful country and it has achieved incredible success. However, it is more likely that in the coming years it will see significant deceleration in its growth while the rest of the world will not be standing still. The relative power balance within the next generation may continue to see a steady shift in the centre of gravity of the global economy from the transatlantic to the Indo-Pacific but there is likely to be a steady diffusion of power rather than its concentration in China alone.

India’s strength lies in its relatively balanced economy, much more domestic demand driven than China. It has a high savings rate given its favourable demographics and an investment rate of about 35 per cent of GDP, which is what one should expect at this stage of a country’s development. Our consumption rate is also close to the normal trend line of almost 60 per cent. If there is an imbalance, it is in the unusually high contribution of the service sector to our GDP growth, estimated at 58 per cent against China’s 40 per cent. India’s manufacturing sector needs to grow much faster and so must exports of manufactured goods. These adjustments are well within the realm of possibility and are, in fact, beginning to happen. In the longer run, the resilience of the Indian economy will prove to be a far greater asset than its ability to deliver Chinese-style double-digit growth. And I believe Indians would any day accept two per cent less GDP growth if this is the price they must pay for the privilege of living in a plural, free-wheeling and liberal society.

The author is a former foreign secretary.
He is currently chairman, RIS and senior fellow, CPR
BTW he gave very long talk to Arun on all our important talks a year ago.
RajeshA
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Re: US and PRC relationship & India

Post by RajeshA »

Published on Oct 19, 2011
By Iqbal Jafar
India’s tryst with destiny: The News (Pak)

Code: Select all

http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=73237&Cat=9
Considering that much that will happen or not happen in this century will depend upon how India, China and the US interact with each other, this question is of crucial importance not only for the more than three billion people of South and East Asia, but also for the rest of the world.

The answer to this question is now no more a matter of speculation. There are clear signs, especially after the recent visit to India by Ms Clinton, that the US is trying a replay of the old game of escalating an arms race the US can afford but its adversary cannot.

The former Soviet Union fell, or was pushed, into this trap, and after a 40-year arms race collapsed due to the strain of investing hugely in such expensive military toys as a “blue water navy,” ICBMs, and the fanciful tools of “Star Wars.”

That game has begun again in right earnest. China is being pushed to the same route as that taken by the Soviet Union, except that this time round India is being groomed as a partner, in place of Nato.

All sorts of incentives have been given or promised to India to join the demolition squad – membership of the Nuclear Suppliers Group, leadership of Asia-Pacific, and other delightful goodies. Persuading India to play a more assertive role, Ms Clinton told her Indian audience that “this is an ambitious agenda, but we can afford to be ambitious.”

For starters, both China and India have begun building a blue water navy – the most expensive military enterprise – in addition to other “modernisations” of the armed forces. This is inevitable. The dynamics of this lethal game are such that, once it is begun, the players cannot but become prisoners of the response imperative, and go on helplessly till there is an economic collapse of one of the adversaries.

Now, why should the US be playing this dangerous game? The reason is not an official secret. Influential scholars like Samuel Huntington, think-tanks such as the American Enterprise and intelligence gurus like George Friedman have made it quite clear that the US will not allow the emergence of a rival power.
The US has three possible rivals-in-the-making: Russia, China and India. Russia is being taken care of by Nato and some East European states that have been enticed by such toys as anti-missile defence system.

This is of course a familiar recipe, but what the US intends to do with the other two rivals is nothing short of a stroke of genius. If things go as planned, the other two rivals – India and China – would themselves sort each other out.

By this reasoning, once launched as competing rivals, with a dispute to be resolved, a leadership to be captured, resources to be accessed, and military capability to be enhanced, India and China would race towards an economic and social collapse due to unproductive use of resources. But this trajectory of events can be changed.
And then the Paki hope shines through:
Now that India is well defended with its nuclear arsenal and the third-largest standing army in the world, it can safely come to terms with its neighbours in a peaceable mode, and launch a global peace initiative that the world desperately needs. India, then, should think of its “tryst with destiny” as a moral superpower, for that too is a Nehruvian dream.

If that dream doesn’t interest the Indian leadership, the wheel of fortune may take another fateful turn in the sixth decade of this century.

Maybe the Chinese, whose thinking is geared to a long-term view of the future, have calculated the odds against them and come to the conclusion that the US has been in this dissipative game for far too long and would collapse first, along with India whose burden of mass poverty is too heavy to let it sustain this wasteful game for long. Interesting times indeed, as the Chinese might say.
Vipul
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Re: US and PRC relationship & India

Post by Vipul »

US NSA to visit China and India, signaling shift from G-2 to G-3.

As strategic signaling goes, this one is fairly direct and uncomplicated. President Obama is sending his National Security Advisor Tom Donilon to China and India on a two-nation visit this week, indicating that his administration has moved past the G-2 idea involving only the United States and China to a G-3 formation that includes India.

"Donilon's visit underscores this administration's commitment to growing US leadership in Asia, and our work with emerging powers, such as China and India, as a core component of this commitment," the White House said while announcing the visit. The statement accentuated Washington's resolve to boost its primacy in Asia while treating China and India on a similar footing, formally sidelining a school of thought that sought to bracket US and China in a G-2 tie-up while consigning India to a subsidiary regional role.

The G-2 idea was first introduced by the American economist C. Fred Bergsten in 2005, primarily as an economic relationship because the US and China were the two largest economies and biggest trading partners in the world. But other thinkers like Cold War strategist Zbigniew Brzezinski and the historian Niall Fergusson imparted geo-political heft to it, suggesting US and China could band together to solve the world's problems, including Pakistan's issues with India, ignoring the fact that China itself had problems with India.

Like the Clinton administration, the Obama White House too was smitten with the idea briefly at the start of his presidency, but there has been a course correction over the past several months. While President Clinton acknowledged China's interests in South Asia, the Obama administration has now made it known that it equally recognizes India's stakes in East Asia and had been quietly stiffening New Delhi's resolve to reclaim its influence and role in the region.

In fact, the schedule and agenda for Donilon's travels makes this quite clear. In Beijing, Donilon will meet Chinese leaders and policymakers, including Vice Premier Wang Qishan and State Councilor Dai Bingguo, and "discuss a wide range of bilateral, regional and global issues of mutual concern," according to the White House.

Donilon will then travel to India for meetings with Indian leaders including his Indian counterpart Shiv Shankar Menon to "review recent developments in the US-India strategic partnership, and discuss ways to advance key elements of the relationship, including both countries' participation in the upcoming East Asia Summit," the White House said.

The East Asia summit is scheduled to be held in Bali, Indonesia, in the third week of November. President Obama, Prime Minister Manmohan Singh, and China's Premier Wen Jiabao are expected to attend, along with leaders from 16 other countries, including Japan, South Korea, and Vietnam, all leery of Beijing's growing clout.

The burying of the G-2 idea and drawing India into the overall Asian security and economic matrix is attributed to Secretary of State Hillary Clinton who, in a landmark speech in Chennai earlier this year, made no secret of Washington's expectations that India would play a more assertive role in the region. In a 'Foreign Policy' commentary she wrote this month, Clinton said Washington is setting its sights on "enhancing coordination and engagement among the three giants of the Asia-Pacific: China, India, and the United States."

Conceding that "there are still obstacles to overcome and questions to answer on both sides," Clinton however said "the United States is making a strategic bet on India's future -- that India's greater role on the world stage will enhance peace and security...that India's vibrant, pluralistic democracy will produce measurable results and improvements for its citizens and inspire others to follow a similar path of openness and tolerance." The poke at China was unmistakable.

"So the Obama administration has expanded our bilateral partnership; actively supported India's Look East efforts, including through a new trilateral dialogue with India and Japan; and outlined a new vision for a more economically integrated and politically stable South and Central Asia, with India as a linchpin," she added.

The commentary pointedly did not endorse the G-2 idea or treat China as a US equal, instead referring to it as one of the most prominent emerging partners of Washington.

Over the years, the East Asia forum, first proposed by Malaysia, has become a platform to balance China's influence, and some strategic thinkers have suggested that both China and India, along with US, Russia and Japan, should be part of a "concert of powers" that will play a stabilizing role in Asia.
ramana
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Re: US and PRC relationship & India

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See the challenge of PRC to India is different than the mutual love fest between US and PRC. And hence all these hint, hint, wink wink are symptoms of mote in someone's eyes and shouldn't be mistaken for genuine changes.
Prem
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Re: US and PRC relationship & India

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http://blog.american.com/2011/10/india- ... -to-china/
India stands up to ChinaBy Sadanand Dhume and Julissa Milligan

series of recent events underscore this message. During meetings with Vietnamese President Truong Tan Sang earlier this month, Indian Prime Minister Manmohan Singh reiterated plans for the state-owned Oil and Natural Gas Company to begin joint oil exploration with Vietnam in a contested block of the South China Sea claimed by both Vietnam and China. During Myanmar President Thein Sein’s visit to New Delhi last weekend, India extended a $500 million credit line to Myanmar for infrastructure-development projects. This announcement is likely to increase Chinese heartburn caused by Myanmar’s abrupt decision to halt a $3.6 billion Chinese dam construction project on the Irrawaddy River in late August. In September the Indian foreign ministry called for China to halt infrastructure and development-related projects in Pakistan-controlled Kashmir, which India regards as part of its territory. Reinforcing the message on borders, PM Singh visited the northeastern Indian state of Arunachal Pradesh twice this summer, underscoring Indian sovereignty over territory that the Chinese call southern Tibet.These decisions display India’s unwillingness to succumb to Chinese military and diplomatic pressure in the region. China balked when India and Vietnam announced joint oil exploration plans earlier this summer, declaring the plan “illegal.” The People’s Daily, mouthpiece of the Communist Party, warned both countries to be cautious of jeopardizing their economic relationship with China over “small interests in the South China Sea.”This display of firmness is a welcome sign that India will not submit to China’s unreasonable demands in Asia. Ahead of next month’s East Asia Summit, it ought to bolster the confidence of smaller countries in the region that are also facing growing Chinese pressure.
ramana
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Re: US and PRC relationship & India

Post by ramana »

Vipul, There is a lot in that one head line.
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