US and PRC relationship & India

Hari Seldon · Post by **Hari Seldon** » 18 Nov 2009 20:04

Barack Obama on Wednesday made an obligatory stop at the Great Wall of China at the close of a three-day visit in which he also bumped against the “great firewall” of China.

Obama in Nixon’s footsteps at Great Wall (FT)

Much like Richard Nixon, the president who first travelled behind the “bamboo curtain” in 1972 and helped set US-China relations on the road to normalisation, the sight of the snaking 2,000-year-old stone wall failed to elicit Mr Obama’s most memorable words.

Mr Nixon famously said: “I think you would have to conclude that this is a great wall.” America’s 37th president went on to say: “... and it must have been built by a great people”. Much to Mr Nixon’s chagrin, the media only quoted the first half of that sentence.

Initially, President Obama repeated the same superlative he had used on Tuesday when visiting the Forbidden City and described the wall as “spectacular”.

But on being pressed by reporters on Wednesday, Mr Obama said: “It’s (the wall is) a reminder of the ancient history of the Chinese people.”

America’s 44th president, dressed in a black leather jacket and no hat in spite of the sub-zero temperature, then paused and added reflectively: “It gives you a good perspective on a lot of the day-to-day things. They don’t amount to much in the scope of history.”

Bah, idle banter....but here, PRC shows its true colors just like it did during the Beijing olympix.

One such day-to-day thing might have been the White House’s wounded response to the US media’s sardonic coverage of Mr Obama’s “town hall” event in Shanghai on Monday in which he took questions from Chinese students.

In spite of vigorous White House lobbying, the Chinese authorities refused to broadcast the event live on national television. Many of China’s internet users also reported difficulty in accessing the White House website, which theoretically made the streaming broadcast available to all of China’s 350m online subscribers.

US officials were incensed the US media chose to emphasise the “great firewall” aspect of the event rather than the fact this was the first time a president had been able to use such a platform in China, or that Mr Obama used the occasion to hammer home the pitfalls of internet censorship – though without mentioning China directly.

Some officials even privately suggested that China’s decision to minimise viewership was motivated by anxiety over the potential appeal of a young politician who came from nowhere to take the White House, partly on the back of his skill at appealing to the nation’s youth via the internet.

Wow, eh?

Sri Obama looks so cool, so elegant, so intelligent, so charming...ooooh
/s off

D Roy · Post by **D Roy** » 18 Nov 2009 20:15

its not hard at all.

India is sending a clear message- "listen up, G-2 watch your mouth , do your debt trap dance all you like, but don't mention India in your joint statement". Not to put too fine a point of course.

see by mentioning India ( and that too alongside Pakistan) the U.S and China are effectively trying to convert a bilateral meeting into a global condominium making overarching statements about third country relationships.

This is unacceptable.

Jarita · Post by **Jarita** » 18 Nov 2009 20:57

Obamas Chinese Family
http://news.yahoo.com/s/ap/20091118/ap_ ... ma_brother

Kakkaji · Post by **Kakkaji** » 18 Nov 2009 21:31

Are Chinese exports good for America?

"I think the U.S.-China relationship was the worst economic policy mistake of the last generation," said Scott Paul, executive director of Alliance for American Manufacturing, a coalition of small-to-mid-size manufacturers and some unions which has been a long-time critic of U.S. trade policy.

Paul and other critics argue currency manipulation by the Chinese to undervalue their currency, government subsidies to Chinese manufacturers and low wages paid to Chinese workers have put U.S. workers at an unfair disadvantage.

The Economic Policy Institute, a liberal think tank, estimates that 2.3 million U.S. jobs were lost between 2001 and 2007 due to the Chinese trade gap.

University of Maryland professor Peter Morici has written that this trade gap "threatens to torpedo the economic recovery and keep unemployment above 10 percent for the foreseeable future."

ramana · Post by **ramana** » 18 Nov 2009 21:42

Kakkaji, Those out of power have the privilege of voicing opinions. The financial metldown, the US bogged down in Af-Pak have created a situation that brought forward what was to happen latter in this century - rise of PRC, to the first decade itself. hence most of the countries who thought they had a few decades still left are scrambling to come to terms with this.

Indian elite thought they had till 2030 to get there and this was two decades before the event. So they thought they had plenty of margin. Turns out the margin got eroded. Hence the planitive article from KS after the heady speech by Shyam Saran in January 2009.

x-post..

It seems all options have evaporated leaving offering Indian intellectual capital (aka new coolies) to prop up massa. Welcome to Empire redux. And the sad thing is the Emperor is second best and can never get back to top. Forget Butterfly dreams and at least as caterpillars can eat the leaves, leaving grass to the grasshoppers(TSP).
Blue turban needs all the support he can get.

Jarita · Post by **Jarita** » 18 Nov 2009 21:47

Ramana,
Are you saying that this episode was a surprise to the Indian Elite??/

Singha · Post by **Singha** » 18 Nov 2009 21:48

I have to agree with Ramana sir's judgement. we dont have until 2030, we have until 2020 max to move our game into a higher gear and need to guard our flanks all the way.....

ramana · Post by **ramana** » 18 Nov 2009 21:55

Singha wrote:I have to agree with Ramana sir's judgement. we dont have until 2030, we have until 2020 max to move our game into a higher gear and need to guard our flanks all the way.....

No GD. Woh be chalgayae. Hence the scramble. India needs to close ranks in every sphere and try to be the best in all spheres. No longer notional perceptions are adequate. Only real working things.

You can see what I mean by notional concepts in the deterrence thread. A lot of time was lost by having deluded people in charge.

Jarita its a surprise to all over the world. Not just to Indian elite.
The added maya was the dance of the snake and scorpion - the $2T reserve and the captive markets. Folks thought that it was stalemate without realizing the snake has to bite the scorpion to end it while all the scorpion has to do is sting it and can do it.

Hari Seldon · Post by **Hari Seldon** » 18 Nov 2009 22:16

Jarita its a surprise to all over the world. Not just to Indian elite.
The added maya was the dance of the snake and scorpion - the $2T reserve and the captive markets. Folks thought that it was stalemate without realizing the snake has to bite the scorpion to end it while all the scorpion has to do is sting it and can do it.

Am not too sure about this, but PRC is as of now, no way any match for the USA - $2T or no 2T. What the PRC's labors collected in 20 years ($2T), the Fed reserve (conditionally) printed up in 2 days flat in Oct'2008.

IMHO, the coming crash in cheena will rival that of Japan in 1989, only wider. Too early to call permanent reset in power balances, IMHO. Unkil didn't win the cold war to yield power w/o firing a shot. We ain't seen nothing yet. By this time next year, unkil will have declared full fledged trade war against cheena, at the very least, if it hasn't already precipitated some other equal sized mischief elsewhere within PRC.

ramana · Post by **ramana** » 18 Nov 2009 22:19

Lets hope so, paarkalam.

vera_k · Post by **vera_k** » 18 Nov 2009 22:25

Thing is, if the PRC continues on its current trajectory, it will surpass US GDP in 2020-2022. Everyone has to hedge for this unless there is some super secret plan to slow this down.

ramana · Post by **ramana** » 18 Nov 2009 22:35

vera_k wrote:Thing is, if the PRC continues on its current trajectory, it will surpass US GDP in 2020-2022. Everyone has to hedge for this unless there is some super secret plan to slow this down.

We should worry about India only and not everybody. Yes you are confirming what I said about the event happening three decades earlier instead of 2050.

Anujan · Post by **Anujan** » 18 Nov 2009 22:35

vera_k wrote:Thing is, if the PRC continues on its current trajectory, it will surpass US GDP in 2020-2022. Everyone has to hedge for this unless there is some super secret plan to slow this down.

Yankee-cheei bhai bhai upsets a lot of equilibriums. Think Europe-US, Japan-US. Dont forget that EU and Japan are vast economies in their own right. On top of it, it does not even *replace* the current equilibrium with another equilibrium.

Okay Ombaba bows to emperor Hu. Then what ? Cheenis continue making lead toys, Amreeki continue to buy it and then commit economic harakiri within the next 20 years, flushing 250 years of struggle down the drain ? In essense Hu using his khazana to blackmail unkil into filling his khazana even more. Do you think that it is sustainable ? The current system *has* to be replaced by (atleast a medium term) sustainable system and Unkil knows that (lets give them credit, they are no fools)

No need to fear. The Yankee-Cheeni bhai bhai-ism will implode faster than emperor Hu can dish out mischief in "South asia". 3 more years of quagmire in A'stan, stagnating job scenario and everyone will be on the streets with pitchforks. You are seeing the "Daana" phase after the "Saama" phase. Everyone knows Bhedha follows next ....

Ananya · Post by **Ananya** » 18 Nov 2009 22:38

Why should we be worried by this joint statement statement , it is like any country saying that the storms in Staturn should calm down, who cares.

all we need to be worried abt ourself is

1. Strengthen the rule of law.
2. private entrepreneurship
3. Education and R&D
4. Setting global standards. No body can shake US in terms of RND. China ends up making boeing parts and boeing is designed in US and for all that matter everything , that china makes is designed in US , this is a acklowedged strategy that US follows so keep local inflation down and it works and will keep doing with every country .

lesson for INDIA is irr-respective of 2010 or 2020 or 30 as long we do not have have RND we will be in this same well ; for RND comes in education and for which massive investment and a complte overhaul must be made

America knows this too......

vera_k · Post by **vera_k** » 18 Nov 2009 22:41

People are thinking that the PRC will fold since it is cooking statistics. But what if the yuan gets reserve currency status due to the size of the PRC economy? Once that happens, it will not matter if the stats are fake since they can always print as much money as is required.

Anujan · Post by **Anujan** » 18 Nov 2009 22:44

vera_k wrote:People are thinking that the PRC will fold since it is cooking statistics. But what if the yuan gets reserve currency status due to the size of the PRC economy? Once that happens, it will not matter if the stats are fake since they can always print as much money as is required.

US had to win a world war before dollar became reserve currency ....

vera_k · Post by **vera_k** » 18 Nov 2009 22:46

Anujan wrote:
vera_k wrote:People are thinking that the PRC will fold since it is cooking statistics. But what if the yuan gets reserve currency status due to the size of the PRC economy? Once that happens, it will not matter if the stats are fake since they can always print as much money as is required.
US had to win a world war before dollar became reserve currency ....

But to go down that road, India or some PRC challenger has to be willing to fight one.

ramana · Post by **ramana** » 18 Nov 2009 23:01

X-post from the golbal econ prespectives thread:

prad wrote:back after a hiatus.

imvho, increasingly i find myself discarding whatever prophecies i have been hearing of by all sorts of economists, from D&G'ers to Bullish ones. at the end of the day, the economic situation in the US is in a state of flux. while the huge expansion of monetary base could lead to strong inflationary forces, there is another argument which says that even if all that money is lent out and the multiplier effect works its way, the end result will match the total money supply of pre-recession levels (the logic follows from the fact that entire trillions were wiped out by the housing crash; the official figure is at around $20 Trillion wiped out in the crash). the argument continues that therefore, the monetary expansion, if it takes effect in a few years, won't be felt beyond perhaps 8% inflation for a few years, which isn't really a cause for concern, at least not in the present circumstances.

the above argument is furthered by the strong deflationary forces that are already present in the economy right now. once again imvho, it is easy to ridicule Bernanke as printing-press economist, but as a student of the Great Depression he knows that the real factor is money supply. considering 20 Trillion was wiped out by the housing crash, he is worried that the money supply and credit crunch together will produce deflationary forces so strong that the economy will be pushed into a deflationary spiral a.k.a another Depression, with massive private sector collapses across all sectors with unemployment shooting into the 20's.

at the end of the day, Depression/Deflation is as frightening to Americans as Hyperinflation is to Germans. and therein lies the secret behind the bailouts and huge monetary expansion. at the end of the day, money supply is what matters and if there is a severe money crunch, Deflation will take effect.

but the current problem is Debt. there is too much debt in the private sector: households and businesses. this issue won't be solved by more debt. therefore, my prophecy is there will be lacklustre growth (2%) for the next few years. the debt situation needs to mellow out. unemployment will peak in 2010, and then will stay high for at least 2 years after that. as the debt problem starts mellowing out, only then will monetary expansion effect kick in. that is when you'll see inflation and that in turn will put a significant dent in the debt that has piled up. that is how i see the situation in US playing out.

of course, the above doesn't consider the possibilities of trade wars, etc. if all else is equal, then....^^^

having said the above, the current scenario that is playing out is new to the world. 2 years from now, for all we know, inflation in US might be 15%, a strong recovery might be well under way, and the world (most of it, at the least) might well accept inflation as a better demon than deflation.

or we might well be in the middle of a huge trade war with US showing China the middle finger with Tariff Walls.

or an asteroid could hit the Earth and we might all end up destroyed in the Armageddon that will follow.....

How does this impact the US-PRC relationship?

Jarita · Post by **Jarita** » 18 Nov 2009 23:06

Hari Seldon,
The common mans sentiment is also the sentiment of the elite in the US. Talk to the really senior analysts in the I-banks etc, and they all have the middle finger up. They will never pay back the debt because China subsidizes it's goods with a low currency. They view the debt as payment for welfar towards Americans who lost jobs due to controlled currency. They don't care.
Desi debtor-creditor model brings to mind the zamindar and poor farmer. This is a different model so hard for us to conceptualize.
What I am surprised by is the capitulation by Obama. Why? Or is it all an eyewash

KLNMurthy · Post by **KLNMurthy** » 18 Nov 2009 23:07

satya wrote:
In part, this statement works as a psychological leverage over India. Consider the mentality of the ruling class which is basically morally hollow but status-obsessed--they desperately want to be accepted as a junior partner of America, albeit with some level of respect & status--this is the meaning of the constant hankering after the "superpower" label, begging for Security Council seat, etc.
KVRaojee

Just cuz ToIet & co. says India is wana be super power & security council seat doesn't mean Indian leadership's thinking on same line or even its one of their goals ! Indian leaders never mean what they say and they never say what they mean .

I live in the hope that our seeming combination of ambition and passivity is all somehow deep-down chankian strategy. I think the reality is that we are passively riding the drifting currents of history instead of fighting to shape those currents. That itself may represent a wisdom on our part. Don't know.

vera_k · Post by **vera_k** » 18 Nov 2009 23:16

prad wrote:i ask the simple but forceful question, why will Yuan get the reserve currency status? everytime there is a financial crash in some corner of the world, every investor from Vancouver to Tokyo, Stockholm to Durban all flood to the US markets for US treasury bonds. you don't see them begging at the door of Beijing, do you? when that is the case, is there any valid basis to speculate on the Yuan as the global currency?

My thesis is that it is the size of their economy plus the potential growth past 2020 that will make it acceptable to people. When I say Chinese GDP will equal US GDP in 2020-2022 (based on IMF projections), it also means that the Chinese GDP will be far larger than the US GDP by 2030. As for Chinese thoughts on this, a casual search revealed this -

China's Yuan

Still, what is more or less a consensus among Western experts on China seems to have formed that the Chinese are on an unmistakable path toward challenging the dollar. What remains lacking is a political decision to shift from acting on the margins to making a decisive move, many experts say.

That resolve may be forming. A Chinese official said on May 20 that the yuan could be a serious reserve currency by 2020. Zhang Guangping, vice-head of the Shanghai branch of the China Banking Regulatory Commission, told reporters that this date would coincide with the timetable of making Shanghai an international financial center like London and New York. Turning Shanghai into China's money capital would be meaningless if the yuan were not convertible.

Jarita · Post by **Jarita** » 18 Nov 2009 23:19

Some random thoughts

Unkil would think like this

- Promise China a pound of India and other folks flesh; China absolves claims in the bonds (that is possible)
Basically, they pay back debt using other folks resources (the western conglomerate has always done that.
- Post that if PRC demands more, destroy them (harder option)
Use checks like Pakistan (which is like a leashed pit bull) to aggravate sep. movements in PRC, shift imports to Mexico and other countries

T'would be great for India to make counter moves and plan ahead
- Hurt unkil economically
Hold investments in check, shift purchases of defense etc to other countries, can we affect them in Africa
- Geo strategic position in Asia
Encircle Afpak using Iran and other central asian allies, recontruct relationship with Russia, ally with countries encircling dragaon, collectively derecognize PRC acquisitions

Just some random thoughts but need strong blocking and tackling

ramana · Post by **ramana** » 18 Nov 2009 23:30

Please do so.

Jitendra · Post by **Jitendra** » 18 Nov 2009 23:32

all India has to do is get corruption out of our midst. everything else follows.

kshirin · Post by **kshirin** » 18 Nov 2009 23:36

Good points made by both D Roy and Ananya. For the first time I am shaken over Obama. How can he align himself with the world’s largest autocracy, don’t long term values count for anything? Maybe he will make up during PM’s visit.
Obama’s waist length bow to another power seems to signal the US is over as a super power.
Education and RND – bang on target. China is trying every possible directive/incentive combination to get to where Japan is now, remember when Japanese goods were termed inferior like Chinese goods are today? They will get there, but we, who should have the competitive advantage a free society allegedly bestows to innovation, must not hamstring ourselves with punitive populism. We got to open up higher education in a big way, there is a huge domestic and foreign market which incidentally China has begun to tap! Why are we always running to catch up? Why cant our leaders LEAD?

Prem · Post by **Prem** » 18 Nov 2009 23:38

Yuan cant be a reserve curreny. Based on what, holding US Tbills as back up.

They have to go through solving their structural problems. Export and Government spending alone cant make them alternative to USA. The so called strengths of PRC economy is also their weakness. Japan said no to Uncle in 90s and now Chinese has followed the same footsteps . Lets see how they go though Japan, India and Euro to become susbstitute for Uncle Sam.

vera_k · Post by **vera_k** » 19 Nov 2009 00:28

prad wrote:so the assumption is the magic number of 10% growth will continue indefinitely?

Yes. The plan looks to be to keep this going by burying unsold goods in the desert if they have to.

Prem · Post by **Prem** » 19 Nov 2009 00:47

[quote="vera_k
Yes. The plan looks to be to keep this going by burying unsold goods in the desert if they have to.[/quote]
They will need to ship the surpulus to India when Massa crack down.Only way for China to challenge Uncle 's supremacy is to allign and reconcile with India.

csharma · Post by **csharma** » 19 Nov 2009 01:07

Alka Acharya writes in Deccan Herald.

http://www.deccanherald.com/content/366 ... tango.html

Harmonious India-China ties are crucial for the realisation of the Asian century. Analysts speculate that a rising India will make the triangular US-China-India relationship also of no mean importance in the reshaping international relations. That may well be so – but it is merely a scenario – and more importantly, a scenario which critically hinges on India’s rise materialising decisively over the next decade or so.

So the next decade is extremely crucial and Indian rise in the next decade will cement India's position as a player.

ramana · Post by **ramana** » 19 Nov 2009 01:16

prad wrote:
ramana wrote:Please do so.

ramana, for the sake healthy discussion, the onus is on you to first debunk a few of those assumptions before there is any point to posting more....

No need to get so uppitty just because I asked you to post them. You can keep your assumptions to yourself.

csharma · Post by **csharma** » 19 Nov 2009 01:20

Interesting article by Dr Subhash Kapila on India Russia Iran triangle.

http://www.southasiaanalysis.org/%5Cpap ... r3363.html

In the ensuing era where there is a global perception that US global power is declining and forcing the United States to harness China as an emerging global power, in a strategic United States-China Dyad, it would be strategically logical for countries which distrust United States and China singly or both together, to seek alternative strategic linkages.

The possible emergence of a Russia-India-Iran Strategic Triangle needs to be viewed in light of the above strategic trends which draw the United States and China together despite the deep cleavages that exist between them.

A possible Russia-India-Iran Strategic Triangle would be a formidable strategic combination to contend with, especially when no strategic cleavages exist between them. Such a combination could substantially alter the global balance of power and the Asian security landscape.

There have been reports of Europe getting annoyed by the US-China tango.

If the current summit between MMS and Obama does not yield anything tangible, India should look at alternative strategies. The only question can the alternative strategies provide a replacement for the weight of the US.

Interestingly, while KS is suggesting a US-India partnership for US to maintain preeminence, US seems to be using US-China partnership to achieve the same goal.

ramana · Post by **ramana** » 19 Nov 2009 01:48

Two articles from Pioneer

Layoff, irked India tells US

Bend it like Barack!

The joint statement by US President Barack Obama and his Chinese counterpart Hu Jintao has not gone down well with India ahead of Manmohan Singh’s visit to the US

They said the two countries will support the improvement and growth of relations between India and Pakistan

They also said the countries are ready to strengthen communication, dialogue and cooperation on issues related to South Asia and work together to promote peace, stability and development in that region

The statement also termed the situation in South Asia as a regional and global challenge

External Affairs Ministry said: “India is committed to resolving all outstanding issues with Pakistan through a peaceful bilateral dialogue in accordance with the Simla Agreement”

US Ambassador to India Timothy Roemer ducked the issue

To please China US slights India

sivabala · Post by **sivabala** » 19 Nov 2009 03:17

GoI is aware of the would be statement of Mr. Obama on US's stand on Tibetan issue. Thats why to up the ante, they let Dalai Lama to visit Tawang after a long hiatus. So GoI passed a message, preemptively.
However, Obama's statment on requesting Chinese to meddle with Indo-Paki Tango might have caught MEA officials with undies in hand.
To soften the ruffled feathers he announced a feast to Mr. MM Singh a month ago.

The message that is to be seen is:
1) He went and met Chinese officials.
2) But the Indian officials go to meet him.

Obviously the GOTUS's underlying equations are:
India not= China.
Pakistan == India.
If the MEA could not understand these equations then there is no wonder they can't understand the behavior of Pakitan, too.

vishwakarmaa · Post by **vishwakarmaa** » 19 Nov 2009 06:03

csharma wrote:Interestingly, while KS is suggesting a US-India partnership for US to maintain preeminence, US seems to be using US-China partnership to achieve the same goal.

Indian elites and experts like KS doesn't understand anglo-saxons. They are doing right thing by doing partnership with China. Two powers need each other to grow and keep their kingdoms.

Indian elites are totally wrong if they think India has arrived or is a "power". Its long way behind. I think they know it and crib about missed years.

Let me explain why "reality" is different from what most Indian elites like to think.

China has a youth much more inclined towards national services(both through force and will) compared to India(a victim of brain-drain). China is busy using its western educated youths to its own advantage and also has better R&D universities campuses than India which are not known in Indian media. This benefits china more that elites in India are unaware of technological advancements in China. They still live in delusional mode that china is about "copy" and "piracy".

That was true 20 years back. Not anymore. Such piracy stories were made to keep American kids into delusions, as part of perception management exercise in US corporate controlled media.(Same propoganda machine which was used to play-down Russian technology achivements,advancements from American public during 70's,80's). But now, USA has realised that China is not dying down and she has to accept rise of China which is genuine. So, even US media has started spilling the beans to american public and thats why we are seeing so many americans crying about sudden fear of China which they never expected!

The problem with Indian media elites is, they feed Indian public Western media stories since long but they have to forgot to update public about real china, who is technologically superior than India and has more skilled engineers than India. Indian public still think china education is all poor-quality thing. Its not so anymore.

Structurally speaking China is on a much more solid foundation than India in terms of superpower status.

First thing India needs to do is,
A) Bring a change in Indian psyche and change this "chalta hai" attitude.

Stop asking USA help on PAkistan and KAshmir. Solve it yourself, puppet!.
C) Make it compulsary for IIT-ians to work within India for atleast 4 years after they graduate.

These three would change India a lot. Learn from China.

Don't be jealous if your competitor(China) is more advanced. Rather appreciate and learn from it. The day Indians start doing so, will be good humble start towards getting ourselves ready. Honesty is lacking from Indian polity, rather fundoos have taken over policies, who lack senses.

Same fundoos(Indian policymakers) send their kids to western colleges and take pride in it. A characteristic of puppet country. Its similar to how small almost bankrupt African countries send their officers and kids to study in Indian colleges. Where chinese policymakers send their kids?

Those who have senses and courage appreciate their competitors, make friendship and learn their tactics, secrets.(which is what Obama is doing with China).

Indian policymakers and elites as a whole can't do anything better than buttering the West and gloating over false sense of "rented" power.

I hope the mods will take this post in good spirit and not loose senses and ban me. This is time for us to introspect and analyze the reality of US-China partnership and its implications for India. And the first thing we need towards that is honesty with ourselves and situation.

If you think I made some factually wrong statements above, please counter it. But ban is not good measure.

Masaru · Post by **Masaru** » 19 Nov 2009 07:20

vera_k wrote:
prad wrote:so the assumption is the magic number of 10% growth will continue indefinitely?
Yes. The plan looks to be to keep this going by burying unsold goods in the desert if they have to.

And here is how they intend to do it!
Huawei Rises to No. 2 Telecom-Gear Spot

According to Scott Siegler, a mobility analyst at Dell’Oro, Huawei was able to leapfrog Nokia Siemens to achieve 20% of global revenue in the sector as of the third quarter, partially because of strong sales of GSM equipment in India, as well as its recent success in the China market, where mobile carriers are expected to spend tens of billions of dollars over the next few years on 3G equipment.

Which Indian company has the scale and presence in PRC and exploited it to reach world No. 2? If the US turns protectionist they will find other suckers to buy their products, and seems like Indians are more than eager to line up. Already the India-PRC trade figures look much uglier than the US-PRC ones.

csharma · Post by **csharma** » 19 Nov 2009 07:25

American view on Obama's trip. Calls it harmful for US. Talks about the India disaster in detail.

http://shadow.foreignpolicy.com/posts/2 ... ate_events

Obama's Asia trip: a series of unfortunate events

Before President Obama and Chinese President Hu Jintao released their joint statement, Obama's Asia trip was underwhelming. But after the statement, Obama's foray into Asia went from empty to harmful.

Here, President Obama broke new ground in ways harmful to both American and Indian interests. India and Japan are the two countries within Asia that can check China's desired dominance. For now, China has less to worry about with Japan as the Hatayoma government sorts through its foreign policies. But India is a different matter. It stood firm against China's pressure when the Dalai Lama visited Arunachal Pradesh, an Indian territory claimed by China. Delhi was sending two messages. First, do not interfere in India's internal affairs; the Dalai Lama is free to visit anywhere in India. Second, Arunachal Pradesh is India's territory. China had been putting military pressure on the border region but the Indians did not back down. Delhi is also standing firm in its maritime competition with China in the Indian Ocean. The Indian Navy will not allow China to build a sphere of influence in that maritime region.

Beijing's India strategy is to tie it down in South Asia to stop it from breaking out as a major power. The strategy has three basic pillars. First, Beijing has supported Pakistan's nuclear and conventional military programs. Second, China wants an acknowledged sphere of influence in South Asia. And third, Beijing wants to resurrect the so called "hyphenated" approach to India. It thus needs the United States to again think of India as part of an India-Pakistan problem, rather than as an emerging great power.

During the Bush and Clinton administrations, Delhi and Washington negotiated an arrangement that acknowledged Delhi's global role and increasing influence. This arrangement is of mutual benefit. Pakistan matters less to India as Delhi expands its strategic horizons. As Pakistan's importance to India lessons, so will Indian-Pakistani tensions. But as India frees itself from the weight of its Pakistan problem it has greater maneuverability to increase its influence in East Asia. China is threatened by that.

Thus, China won a diplomatic victory by getting Washington to agree to "cooperate" on issues of peace and development in South Asia. If China and America work together on South Asian issues, such as peace between India and Pakistan, then China is the great power while India is simply another South Asian country that needs help from others to solve its problems. With the joint statement, Obama officially accorded India junior status in Asia.

We should not be surprised by China's positions. What is surprising -- and extremely problematic -- is that on these key issues Obama is acquiescing in them.

AnimeshP · Post by **AnimeshP** » 19 Nov 2009 07:36

Masaru wrote:
And here is how they intend to do it!
Huawei Rises to No. 2 Telecom-Gear Spot

According to Scott Siegler, a mobility analyst at Dell’Oro, Huawei was able to leapfrog Nokia Siemens to achieve 20% of global revenue in the sector as of the third quarter, partially because of strong sales of GSM equipment in India, as well as its recent success in the China market, where mobile carriers are expected to spend tens of billions of dollars over the next few years on 3G equipment.
Which Indian company has the scale and presence in PRC and exploited it to reach world No. 2? If the US turns protectionist they will find other suckers to buy their products, and seems like Indians are more than eager to line up. Already the India-PRC trade figures look much uglier than the US-PRC ones.

Anecdotal evidence ... Take it FWIW ...
Someone I know who is in GSM equipment sales for a large European co in India ... Huawei is heavily under-cutting all major suppliers on price .... my friends says that its almost as if the Huawei sales folks come up to a client and tell the client that he can decide what he wants to pay for the equipment (i'm sure its a bit exaggerated but gives you an idea as to why it has reached no. 2) ...

Masaru · Post by **Masaru** » 19 Nov 2009 08:47

AnimeshP wrote:
Anecdotal evidence ... Take it FWIW ...
Someone I know who is in GSM equipment sales for a large European co in India ... Huawei is heavily under-cutting all major suppliers on price .... my friends says that its almost as if the Huawei sales folks come up to a client and tell the client that he can decide what he wants to pay for the equipment (i'm sure its a bit exaggerated but gives you an idea as to why it has reached no. 2) ...

Classic strategy of gaining market share by pricing out competition and then charging the customer whatever catches your fancy! That is the broad strategy that PRC has been following for last 20 years. OTOH the fact that Huawei has significant backing from PLA won't hurt to underwrite some of the initial losses. Kudos to them on perfectly executing the strategy.

May be more relevant in the PRC-India economy thread but nevertheless

The more important question is where does this leave Indian telecom industry? For all the IT/CompSci/EE prowess why is there not a single Indian firm public/private to exploit opportunities inside the country? What are the long term economic and strategic implication of rent seeking business model that seems to be the only one that Bharti etc. can come up which literally ends up financing the rise of an arm of PLA?

This is a sure route to the Latin American economic morass; not one which will close the ever widening gap with PRC.

csharma · Post by **csharma** » 19 Nov 2009 08:50

From IPCS

http://www.ipcs.org/article_details.php?articleNo=3005

Obama in China

The joint statement issued by President Obama and President Hu during the course of Obama’s maiden trip to the People’s Republic of China has raised concerns regarding the future role of India in the region, as viewed, and calculated by the United States. Calling for a greater Chinese role in South Asia, including fostering improved relations between India and Pakistan, the joint statement effectively accords China an important stake in Indo-Pak relations. This runs contrary to New Delhi’s position that the India-Pakistan relationship is entirely bilateral and suggestions for its mediation or supervision are not appreciated. Such a statement, proclaimed by a close ally of India in conjunction with the nation most likely to challenge India’s aspirations in the global arena, certainly is an occasion to relearn that one axiom of international relations, “Nations have no permanent friends or allies, they have only permanent interests.”

Obama’s trip to China so far is significant not for the path-breaking agreements reached but rather for the limited strength displayed by the US. It is a reflection of growing Chinese clout, and American cognizance of this. Unlike previous Presidents, Obama did not receive the privilege of addressing the Chinese nation. The much advertised “town-hall” style meeting with Chinese students in Shanghai turned out to be little more than a well-screened, well-managed show. Somewhat oblique references to ‘free information flows encouraging creativity’ and ‘criticism as strengthening democracy’, was all that was said on the issue of freedom of expression and access to information. As for the human rights agenda which was reportedly an important issue for discussion, there was no sign of it. Apart from hoping that the Chinese engage in talks with the Dalai Lama, Obama steered clear of any allusions to riots in Lhasa or Urumqi that may have displeased the Chinese. He did however reiterate America’s commitment to the One-China policy and acknowledged that Tibet is a part of China.

Obama’s first visit to China came with many expectations. While we can only conjecture on American assessment of success or relative failure, it must be granted that Obama is not returning empty-handed. The US seems to have received an assurance of support on Afghanistan (arguably, one of the most pressing issues for the Obama administration especially as it looks for an exit strategy). By supporting Chinese aspirations in South Asia, the US can hope to revive the “responsible stakeholder” formulation in order to get Pakistan’s “all-weather” friend to exert pressure on it. China is still considered crucial in the resumption of the Six-Party talks and it has declared to work towards this. As China’s relations with American allies in the Pacific – Japan, South Korea and Australia- improve, it behooves the US to be amiable to the Chinese. Perhaps this amiability may be a starting point for a less contentious economic dialogue.

For the Chinese the visit may well be considered an astounding success. Not only did the American President refrain from emphasizing the human rights issue, he seemingly did not press for immediate commitments on Iran or North Korea (apart from a commitment to pursue dialogue and negotiations). Moreover, he acknowledged China’s productive role in South Asia, effectively declaring it a leader in the region. This in spite of what the Indo-US Nuclear Deal was believed to portend.

What of India? The outrage at the wording of the joint statement between Obama and Hu notwithstanding, India’s strategic community can hardly claim to be surprised. Idealists or not, our policy makers are not naive. Given the changed dynamics of the global order in this time of economic recovery, such bonhomie between the US and China cannot have been wholly unexpected. Fact remains that occupying a leadership position in South Asia is determined by the confidence and success of Indian foreign policy, not the proclamation of a joint statement. Prime Minister Manmohan Singh’s upcoming visit to the US will be a test of whether India accepts a suppliant’s role or asserts itself as a leader should.

In fact B Raman had written an article early in October regarding US supporting China.

OBAMA & CHINA: THE COMING SHOCKS ( WHAT I WROTE ON OCTOBER 6, 2009)

http://www.southasiaanalysis.org/%5Cpap ... r3510.html

The Obama Administration is showing signs of greater sensitivity to the concerns and interests of China than those of India. Reliable reports indicate that it is veering towards a policy of neutrality on the issue of Arunachal Pradesh, which has been a major bone of contention between India and China.

The Obama Administration seems to be thinking that all that it needs to do to humour India and soften the blow due to its steady reversal of the pro-India policies initiated by the Bush Administration is to accord the honours of a State visit to Prime Minister Dr.Manmohan Singh in November and play up the ceremonial honours accorded to him. In the last few days, officials of the US State Department have been briefing the media about the kind of honours which will be accorded to Dr.Manmohan Singh when he visits Washington. These are meant to show that there has been no change in the US policies towards India under the Obama Administration. The reality is that on every matter, which is of concern to India, greater attention is being paid to China's sensitivities and concerns.

Maybe they are thinking that given China's rise, India has no other option than to court US.

Another thing to consider is whether it makes sense for India to buy American weapons if US is appointing China the leader of Asia.
I guess the summit meeting next week will make things clear.

ramana · Post by **ramana** » 19 Nov 2009 09:15

I think it will be a trip that boosts trade ties but without any Indian compromises. Obama's PRC trip has ensured that.