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My Word 
Ekla Chalo!
Any Point Talking to President Hu?
by Rajinder Puri

Next week our Prime Minister is due to confer with President Hu Jintao during the latter’s India visit. The change after the Democrats regained control of the US Congress and Senate could affect India as well as China. This is a good time to assess therefore how that change could also affect ties between India and China.

Public fatigue and disenchantment with the Iraq war led to the Republican defeat in America. The disenchantment arose from the flawed attack on Iraq launched in President Bush’s first term. The error was glaringly evident when the attack was launched. One was impelled to write at that time that President Bush should somehow be prevented from getting re-elected. Why could not the US mainstream media see this obvious truth then? This raises doubts. Has the recent US media criticism of President Bush been motivated by the failure in Iraq alone, or also by some other factors? Such as the declared Bush objective to create a new Middle-East? Stabilization of the Middle East would require restraint in Israel’s territorial ambitions. President Bush was proceeding only haltingly in that direction. Did he in the process ruffle the feathers of powerful people?

Over and above America’s political parties there seems a powerful ruling establishment. It consists of big business which has developed unbreakable ties with China. The nexus between US and Chinese big business has been compared to two bodies joined at the hip. Economically, both must swim or sink together. Perhaps that is the reason why – nudging and shoving apart – no serious policy initiative by the Republicans or the Democrats can go beyond the framework of this nexus?

Within this framework President Bush, in his second term, evidently attempted a modification. He pushed the Indo-US nuclear deal. Beyond the transfer of nuclear energy, the deal implied a future strategic Indo-US understanding no less significant than what exists between America and China. If the N-deal comes through, a regional self-operative Asian balance of power could emerge between India and China. When Indian Marxists and others talk about US-China differences, they delude themselves. America and China previously were complicit in nuclear proliferation, in the emergence and growth of Al Qaeda, and even in various insurgencies relying on terrorism around the world. Often when China acted, America turned a blind eye. Evidence of this has been presented in the past. It bears no repetition.

So, what changes might one expect in US foreign policy after the Democrats won? The movement towards a new Middle East could accelerate – with an important difference: Israeli concerns might now be addressed more sympathetically. Also, a military pullout from Iraq would require an understanding with Iran. Therefore, US engagement with Iran should progress. A final settlement in Iraq could necessitate division of that country into three autonomous regions, held together in some kind of federation. The Sunni region is bereft of oil. Some oil revenue-sharing arrangement would have to be worked out. That may emerge as the main issue to be settled between the US and Iran.

Nearer home, even before the US election, the dilatory tactics of the Democrats on the US-India nuclear deal had led this columnist to bid the deal goodbye. The reasons given by US critics of the deal were hypocritical. Recently, Mr. Strobe Talbott expressed worry that making an exception in the case of India would encourage other nations to acquire nuclear weapons. If Americans seriously believe that the Nuclear Proliferation Treaty remains relevant, they live in a cuckoo-land of their own. After tacit complicity in the nuclear proliferation initiated by China and aided by Pakistan, it is brazen of Americans to sermonize on the dangers of nuclear proliferation. Nothing short now of total nuclear disarmament, monitored by a recognized world authority, can become a safeguard against future nuclear terrorism.

Given the reluctance of some American politicians on the nuclear deal, it seems clear enough what America’s big business would want. It would seek an expansion of its economic zone in China to encompass India and Pakistan. If that is achievable, India’s security concerns would hardly bother it. That is why it could be reckless for the Indian government to rely on US advice while dealing with either China or Pakistan.

Right now, China needs India more than India needs China. Separating economic ties from security issues is senseless. Unless and until there is total trust between both nations India cannot afford to lower its guard against China. Indeed, expanded trade could very well open the door to subtle subversion. China has perfected its technique of using trade and investment as tools to subvert democratic nations. It used them successfully against America. The technique involves attracting big business of a democratic nation with investment opportunities, providing cheap labor that ignores international norms. Once big business is hooked, the democratic nation is hooked. Big business is the most powerful influence on the politics of democratic nations.

China desperately needs to expand exports. India is a huge potential market. Indian big business would jump at the chance of making profit in partnership with China. Regarding China’s present domestic economic problems, corporate America is doing everything possible to help. The biggest current headache in the Chinese economy is its messed up banking sector. By year’s end China is committed to WTO to open its economy to foreign banks. Recently, critical reports were issued by leading US financial institutions, concerning the problem of nonperforming loans given by Chinese banks that endangered the long-term stability of the Chinese market.

So what happens? US big business steps in to help China, and of course itself, in a big way. The Industrial and Commercial Bank of China (ICBC) is expected to raise the largest initial public offering of nearly $22 billion after shares are made available to retail investors. The ICBC offering is just one in a series of public offerings involving Chinese banks into which Western investment firms have poured billions during this year. A foreign bank that buys into a Chinese bank gets access to tens of thousands of local branches. Once foreigners come in, they acquire a vested interest in working with the Chinese to make the financial system work. That has been the strategy of the US-China nexus all along.

So what should Dr Manmohan Singh tell President Hu? Simply this: for serious talks China must first get out of defence and security arrangements with Pakistan and Bangladesh; otherwise, ignoring America, India will chart its own course. Best of all, India should cancel President Hu’s visit. After the Chinese ambassador claimed Arunachal Pradesh as part of China, further dialogue is pointless.  

November 15, 2006

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