China’s Technological Success in Manufacturing

Amitava Banik, BE (E&C), PGDM (Insurance Business)

China has for some time now been holding a position of technological significance in the world. It is a great success story for a country that is still counted among the world’s developing nations. Memories of the time it had been associated with inferior quality products have all but vanished. China has not only been extremely successful in making its products the “new normal” all over the world, but with its investments in cutting edge technologies, infrastructure and skilled manpower, it has started to edge into the hi-tech zone.

It is generally accepted that countries develop in successive stages from an agricultural economy to industrial manufacturing and then to a service-based economy. All major world economies have traversed this path. The transformation in India on the contrary, has been from the agrarian economy to a service economy, virtually jumping over the manufacturing stage. One of the primary reasons put forward by economists for this bypassing of the manufacturing stage in India, is the lack of progress of primary education in the country. Continue reading “China’s Technological Success in Manufacturing”

Does Chinese Public Opinion on North Korea Affect China’s Foreign Policy?

Niyati Shetty, Research Intern, ICS & 1st MA International Studies, Christ University, Bangalore

Over the years, Chinese public opinion towards North Korea has shown a downward trend with an increasingly negative opinions gaining ground. There are two aspects to public opinion – popular opinion and elite opinion. Chinese popular opinion about North Korea’s leader Kim Jong-un is reflected in his nickname ‘Kim Fatty III’ (Jīn Sān Pàng), widely used by Chinese netizens[1]. In 2013, after North Korea’s third nuclear test, a web search on ‘North Korea’ showed that the majority of the 41 million mentions were about North Korea being a security threat and urging the government to change its policies towards the country.[2] There have also been various incidents that triggered the Chinese public’s growing resentment against North Korea.[3]

Chinese elites and scholars have also been a part of this negative discourse against North Korea. Continue reading “Does Chinese Public Opinion on North Korea Affect China’s Foreign Policy?”

Pressing Pause: India’s Absence at China’s Belt and Road Forum

Shyam Saran, Member, ICS Governing Council and former Indian Foreign Secretary and Prime Minister’s Special Envoy

The successful conclusion of the Belt and Road Forum (BARF) in Beijing, which India chose to stay away from, has led to a chorus of voices warning that in doing so, India has isolated itself both regionally and globally.

With the exception of Bhutan, all the South Asian neighbours of India participated, as did countries India regards as its partners in resisting the Chinese dominance of Asia; these include the US, Japan, Australia and Vietnam. Japan and Vietnam are also countries of South East Asia, which, like India, have territorial disputes with China, but they did not consider those disputes reason enough to stay away. It may also be argued that India itself has not let its territorial disputes with China stand in the way of cooperating with it on matters of mutual interest such as the Asian Infrastructure Investment Bank (AIIB) or the BRICS Development Bank (DB).

India’s membership of the Shanghai Cooperation Organisation (SCO) will also present opportunities for regional cooperation with China and other member countries. These opportunities constituted a rationale for seeking membership in the organisation. So, did India make a wrong call in staying away from the BARF? Continue reading “Pressing Pause: India’s Absence at China’s Belt and Road Forum”

GST and Doing Business in India

Sacchidananda Mukherjee, PhD, Associate Professor, National Institute of Public Finance and Policy, New Delhi

A version of this article was originally published in Chinese as ‘商品和服务税对在印经商的影响’ [Shangpin he fuwu shui (GST) dui Yin jingshang de yingxiang], Diyi Caijing, 15 May 2015. This is part of a series by Indian scholars in China’s top business affairs news portal facilitated by the ICS. The English version follows below the Chinese text.

在经历漫长的等待之后,印度终将于2017年7月1日起推出商品和服务税(GST),实现统一税制。在四项法案(Central GST、Integrated GST、Union Territory GST、GST Compensation to States)通过印度两院批准后,将会形成GST征税行政框架以及执行规则。

预计GST改革委员会将于2017年5月为各商品指定税率。不同社会经济阶层所需承担的不同税负在很大程度上取决于细致划分下不同税率的商品与服务。目前,委员会已确定了四层税率结构(5%、12%、18%和28%),预计委员会还将公布一份简短的,包含了部分基础商品及服务的豁免清单。而对于低质货物(如烟草制品、汽水)及对环境有害的物质(如煤炭),除了征收最高税率外,还有征收额外的GST补偿税。由补偿税组成的税收收入将用于补偿邦政府在新税制实施头5年面临的税收损失。此外,委员会还明确了针对不同类别商品设定的相应的最高GST补偿税率,如对槟榔、豪车分别征收135%、15%的税,对每吨煤征收400卢比。不过具体到各不同商品的GST补偿税尚未明确。因进项税可抵免GST补偿税,因此不会产生针对补偿税的阶梯税率。 Continue reading “GST and Doing Business in India”

India’s Concerns about China’s Belt and Road Initiative

Ashok K. Kantha, Director ICS and former Indian ambassador to China

It is one of the most imaginative and ambitious programmes ever to be rolled out by a government. It represents a broad strategy for China’s economic cooperation and expanded presence in Asia, Africa and Europe, and has been presented as a win-win initiative for all participating nations. But for India, the connotations of China’s Belt and Road Initiative” are somewhat different. A flagship programme and the most advanced component of the initiative, the China-Pakistan Economic Corridor (CPEC), passes through Pakistan-occupied Kashmir, a region that belongs to India and is under the control of Pakistan. As a country acutely conscious of its own sovereignty-related claims, China should have no difficulty in appreciating India’s sensitivities in this regard. Continue reading “India’s Concerns about China’s Belt and Road Initiative”

Economic Ties with China: India Needs to Look Beyond Politics

Alka Acharya, ICS Honorary Fellow and Professor, Centre for East Asian Studies, School of International Studies, Jawaharlal Nehru University, New Delhi

There appears to be a world of difference between the images presented by India-China economic and commercial ties on the one hand and the politico-strategic on the other. Interactions and exchanges with representatives from both these domains are markedly different in tone and tenor—the former focus on the opportunities, openings, benefits and profits while the latter dwell more on the dangers, threats, challenges and disputes.

Prima facie, they appear to be working at different levels, according to their own—somewhat different—logic and rationale, and it does not look like they will converge any time soon in a more composite picture of this most critical of relationships in the world today. The political understanding at the highest level, which is committed to building a strategic and cooperative—and now more promisingly ‘developmental’—partnership, struggles with deep suspicion that runs through practically our entire strategic discourse. On the other hand, economic engagements have become the most dynamic and transformative aspects of the India-China relationship today. But this has to contend with the structural mismatch between the manufacturing strengths and industrial capacity of the two economies—and therefore, unsurprisingly, perceived by and large as a situation that works only to China’s advantage. The controversial and contentious political issues and the angry exchanges understandably garner greater attention.

Bigger Picture

And yet we must ask ourselves as to whether that is all there is to the overall picture. Continue reading “Economic Ties with China: India Needs to Look Beyond Politics”

Explaining China’s Belt and Road Initiative

Ashok K. Kantha, Director, ICS and former Indian ambassador to China

The Silk Road Economic Belt and the 21st Century Maritime Silk Road, launched in late 2013, is the signature project of Chinese President Xi Jinping. Now re-designated as the Belt and Road Initiative (BRI), it is one of the most ambitious programmes ever rolled out by any government. The Belt and Road Forum being held in Beijing on May 14-15 showcases its achievements to 28 foreign heads of state and government, as also delegations from other countries. No official participation from India has been announced so far. Backed by huge resources, BRI has acquired overarching importance in foreign policy and domestic domains of China. As it has Xi’s personal imprimatur, a wide range of ongoing projects and activities have been folded into the grand narrative of the BRI, with its contours still evolving. Continue reading “Explaining China’s Belt and Road Initiative”

Why China Cannot Replace the US

Shyam Saran, Member, ICS Governing Council and former Indian Foreign Secretary

We are currently at one of those rare inflexion points in history when an old and familiar order is passing but the emerging order is both fluid and uncertain. And yet it is this very fluidity which offers opportunities to countries like India to carve out an active role in shaping the new architecture of global governance.

The international landscape is becoming chaotic and unpredictable but this is a passing phase. Sooner or later, whether peacefully or violently, a more stable world order will be born, with a new guardian or set of guardians to uphold and maintain it. This could be a multipolar order with major powers, both old and new, putting in place an altered set of norms and rules of the game, anchored in new or modified institutions. Or, there could be a 21st century hegemon which could use its overwhelming economic and military power to construct a new international order, which others will have to acquiesce in, by choice or by compulsion. This was so with the U.S. in the post World War-II period, until its predominance began to be steadily eroded in recent decades.

As we look ahead, there are three possible scenarios which could emerge. Continue reading “Why China Cannot Replace the US”

Key Issues in Urbanization in China

Lu Ming, Professor, Antai College of Economics and Management, Shanghai Jiao Tong University

A version of this article was originally published in the Business Standard as Towards sustainable urbanisation in China’, 6 May 2017. This is part of a series by Chinese economists facilitated by the ICS.

China has received enormous dividends from its decades of urbanization, which provided labour resources for the development of its industrial and service sectors and rapidly raised the income of the Chinese people. A large number of Chinese farmers became part of the country’s modernization process, allowing for poverty alleviation in rural areas. At the end of 2016, the urbanization rate of China stood at around 57%

China however, continues to face serious impediments in the urbanization process.

One of these is China’s household registration system or the hukou, which connects a person’s right to access public services with whether or not he has a resident status in a locality. The reality is that some one-third of city dwellers in China are trans-regional immigrants who actually do not possess local household registration. As a result, they do not enjoy the same level of social security and public services as local urban residents.

This is a particularly serious social problem for China. Continue reading “Key Issues in Urbanization in China”

India and China: For a Change in Mindsets

Ravi Bhoothalingam, Honorary Fellow, ICS

In the previous article (“Why China matters”, May 2), we explored four reasons why China is important for India in our journey towards vikas for our citizens. Accordingly, the article argued that it is to India’s advantage to engage strongly with China on the economic front, whilst managing our various political differences. But what assets does India bring to the table in this engagement? What steps are needed to make it fruitful? Is it possible to think of China-India cooperation as having a larger — even transformational — effect on Asia if not the world? Continue reading “India and China: For a Change in Mindsets”