A China Gazer’s Random Musings – No. 2

Kishan S. Rana (IFS Retd.), Emeritus Fellow, Institute of Chinese Studies, Delhi

China in Africa

As a second secretary at the Indian Embassy in 1963-65, I occasionally visited Peking University (Beida), always in the company of African diplomats, who went to meet students from their countries at that great institution. I sometimes accompanied a friend from the Egyptian Embassy, circumventing the tight surveillance that we as Indian Embassy officials faced. That first indirect exposure sparked my interest in Africa. Little did I anticipate that I would spend nearly ten years in Africa (Algeria, Kenya and Mauritius and, later Namibia).

How is China seen in Africa? Given that in 2016 China committed itself to US$100 billion by way of credits and loans for African states – significantly more than the World Bank – what has been the impact? Glib talk about neo-colonial actions aside, the reality is rather complex.

I reviewed a book in 2014: China’s Second Continent: How a Million Migrants are Building a New Empire in Africa (2014), by Howard W French; he speaks Chinese and lived in China for some years, before travelling to a dozen African countries to write his book; he presents a micro-level picture and reveals contradictory, paradoxical trends. Other examples:

  • China does not impose standards of human rights and quality of governance, as do Western countries in their aid to Africa. India too does not apply those OECD criteria.
  • The number of English-speaking African students in China now, 50,000 in 2015, surpasses their number in the US or the UK; the main sources are Ghana, Nigeria, Tanzania, Zambia and Zimbabwe but France draws an even higher number of French-speaking Africans, i.e. 95,000.
  • China has become Africa’s largest trading partner, especially in its quest for resources. It gets 22% of its crude oil imports from Africa, second only to its imports from West Asia and North Africa (‘Middle East’).

China continues to enjoy a high reputation in Africa, despite verified cases of exploitation of raw materials and mismanagement of aid projects, some Chinese projects are blatantly exploitative. At least one African country does not want Chinese investments, i.e. Botswana, with barely 2 million people but possessing among the richest mineral resources on the continent, much of the country is unexplored. But in contrast, the new Zimbabwe under President Mnangagwa remains in China’s thrall and has actively sought investments.

Foreign students: India and China

Data on foreign students in India has been scarce, and for years a figure of 35,000 was in currency. We now have information for 2015-16, when the number reached 45,424, according to the just-published ‘All-India Survey of Higher Education, 2015-16’. We can extrapolate from that a rough figure of around 55,000 for 2018. Not bad, considering the near-total lack of marketing.

Our key challenge is that no agency in New Delhi is responsible for attracting foreign students. Neither MEA nor the HRD Ministry seems to understand that student exchanges are a key element in the accretion of soft power. And it earns good foreign exchange too. And consider that the number of Indian studying abroad is over 350,000. Why does India not bother about that mismatch? We do not realize that foreign students are also an important source for the country’s foreign exchange earnings, and for service industry employment as well.

The number in China was 445,000 in 2017 – this information is closely tracked and published widely in foreign journals.

Tax rates and national income

China’s tax to GDP ratio is 30%, which is a fairly high figure, providing the government with ample resources for its ambitious actions. The developed country average is 42.8%. [India’s tax to GDP ratio was just 16% in 2016, having cranked up slightly from the figure of 14% a few years earlier; this is at the heart of the Indian government’s resource dilemma; GST will now surely push up the tax-GDP rate by a few percentage points].

Chinese billionaire Cao Dewang publicly said that the cost of production in China is higher than in the US. His company, Fuyao Glass bought a General Motors plant in the US and said that the tax on the manufacturing is 35% higher in China than the US. The World Bank estimates that China’s total tax on profits is 68%, which is two thirds higher than in high-income countries. China is now working to simplify its tax system and to tighten the net on those that avoid taxes. [Again, the contrast with India’s much lower effective rate of corporate tax is striking].

Internet companies, access and national governance

Have you wondered that in India we sometimes buy into international media – read Western – narratives in rather uncritical fashion? China’s rigid stance towards Google, Facebook, Amazon and the others is one example. As a result of officially imposed barriers, many of these companies cannot operate in China, so that near-universal apps such as WhatsApp and search engines like Google are blocked, leaving it to the ingenuity of users to find ways to circumvent the Great Firewall. But behind this, there is another story that is directly relevant to India.

Akash Prakash explored this in a recent perceptive article on 28 November 2017 in the Business Standard, ‘China’s internet and India’s IT’. China forced its own companies to innovate to fill the vacuum, producing the likes of Weibo and WeChat, and Alibaba, which have proved themselves agile and inventive, addressing what is today the world’s largest internet consumer market, at 700 million, larger than those of the US, Europe and Japan combined.

In effect, we have given away exploitation rights to the world’s second largest internet market to global companies, without really gaining anything substantive in return. The missing element: in my view, this has at least in part been due to the lack of a well-thought strategy as the foundation of Indian policy actions.

But there is another facet to the Chinese experience, the tightening of the ‘Great Firewall’ as part of the Xi regime’s domestic restrictions. Many Chinese, including especially students, have circumvented domestic internet controls through ‘virtual private networks’ (VPNs, run from HK and elsewhere) to access Google, Facebook and other banned sites. They are facing new restrictions. Now foreign companies and embassies also confront shutdown of their VPN access Five international companies and two embassies told Financial Times that their VPNs have been shut down; they have been advised to use government approved VPNs, which they fear would expose them to surveillance. A related story is how Apple in China has been pressurized into removing from its App Store some 600 VPN applications, which it had been selling, and the Android App Store is in the process of doing the same. Small Chinese companies that sold VPN software have also been closed down.

A more rigid internet control regime fits the more authoritarian style that the Xi regime is currently implementing, closing down the few remaining avenues for free expression. Does this foretell tighter controls over academic expression as well?

Male-Female Imbalance: India & China Demography

Both India and China face a relative scarcity of girls, in relation to the number of boys. Against a natural ratio of 105 males at birth to 100 girls, the actual ratio in China in 2015 was 119:100 – the ratio in India was a little better at 115:100. In both countries, this is a consequence of a traditional preference for the male child. This means a shortage of brides at the marriage age.

It is also intriguing that while in the North Indian tradition the bride’s family pays a dowry to the groom and his family, though this is now illegal, the Chinese tradition has been for a ‘bride price’, paid to the female and her family. Has a scarcity of brides in India eroded, or become one factor in reducing the prevalence of the practice of dowry? It may be a change element.

In China, the bride price has risen sharply, from an average of a few thousand Yuan two decades back to Yuan 200,000 and more (Yuan 6.5 = US$1).

We also need to note that the India story is under rapid evolution. The just-published 4th National Family Health Survey 2015-16, based on a survey of over 600,000 households has thrown up significant new demographic trends (the 3rd Survey had covered 2005-06).

Main points:

  • The sex ratio at birth for girls, against 1000 boys, has risen from 915 to 919. I understand that means, when we convert the statistics to a male-to-female ratio, for every 1000 girls, 1093 boys were born, a very distinct gain over the earlier sex ratio of 1150 as in the 2011 Census, though some give that number as 1120, (the Chinese figure was 1190 males). The Beti Bachao campaign is working, slowly.
  • Among adult women (aged 15-49), literacy has risen in ten years from 55.1% to 68.4%.
  • The total fertility rate (TFR, children per woman) shows dramatic fall from 2.7 to 2.2. This is just short of the baseline for a zero-growth, stable population of 2.1. [Between NFHS 2 and 3, the fall was only 0.2].
  • Infant and child mortality rates have also fallen sharply, but there exists the potential for further improvement, compared with other countries in South Asia.

This suggests that the demographic transition in India is more rapid than in China and that we could hit a stable population figure sooner than many expected. This deserves deeper study.

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