04/23/2007, 00.00
CHINA – INDIA
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In search for hitherto elusive co-operation

Economic experts and business people meeting in Boao urge the two Asian giants to work together more. China stresses the importance of ‘Asian values,’ an idea closely related to economic considerations and environmental imperatives.

Beijing (AsiaNews/Agencies) – China and India need to work together much harder to develop industry and fight pollution as well as re-energise ‘Asian values’, leading businessmen and economists warned yesterday at the Boao Forum held in Hainan over the week-end.

“Since ancient times, different civilisations have developed in Asia through mutual influence and integration and formed a tradition that values harmony,” said Wu Bangguo, chairman of the National People's Congress.

His words reflect China’s increasing emphasis on ‘Asian values’ like respect for authority, pursuit of economic success, the family and the power of the community over the individual.

Analysts however have pointed out that some of ‘Asian values’ like the family belong to Western civilisation as well. They also noted that the emphasis on economic success, not to mention respect for authority, may be less a function of social utility and more a need of those who hold political and economic power.

Still old animosities and mistrust remain strong and have so far prevented closer co-operation between the two Asian giants. Memories from the border war of the 1960s have not completely faced. China’s close ties to India’s historical rival Pakistan are still seen with suspicions in Delhi. And the net result is that two-way trade is just US$ 25 billion, with investments only a fraction of that figure.

“The economic relationship is far from what it should be,” said Alan Rosling, the executive director of Tata Sons, India's largest conglomerate. “The numbers are ridiculously small . . . there is no serious relationship yet.”

Peking University economist Lin Yifu said that whilst he expected the mainland to continue posting annual growth figures around 9 to 10 per cent, with India's figures in the range of 7 to 8 per cent, the challenge for them will be to make sure that growth is inclusive, especially since both are competing for foreign, especially Western, investments.

Unless close attention is paid to their relationship, the two could move further apart given their very different economies.

Whilst small and medium-sized private mainland enterprises lacked access to funding through the state-dominated banking system, small Indian entrepreneurs struggled with poor infrastructure. By contrast, the mainland's system promoted rapid infrastructure development, but India's reforms were promoting an expanding private entrepreneurial class.

Differences apart, co-operation on the environment is crucial for both countries, especially since both are the major source of pollution in Asia. This is especially true for China where global warming and climate change could devastate the country’s development through droughts and desertification but also increased flooding.

For instance, Beijing's first official survey of climate change, which involved years of work and dozens of ministries and agencies, warns that “[c]limate warming may have serious consequences for our environment [. . .] as China's economic sectors, such as agriculture and coastal regions, suffer grave negative effects.”

The report asserts for example that by the end of the century, glaciers on the Qinghai-Tibet highlands that feed the Yangtze River could shrink by two-thirds. Unless steps are taken, water scarcity and increasingly extreme weather could reduce nationwide crop production by up to 10 per cent by 2030. Wheat, rice and corn growing capacity could fall by up to 37 per cent in the second half of the century.

It is also expected that China will soon overtake the United States as the world’s greatest polluter with the highest levels of carbon dioxide emissions from factories and cars.

Despite the dire warnings the report rejects emissions limits arguing that the “direct consequence will be to constrain China's current energy and manufacturing industries, and weaken the competitiveness of Chinese products in international and even domestic markets.” Instead, the report recommends China pursue international agreements, including ones with rich countries.

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