Will Xi Jinping make Narendra Modi an offer he cannot refuse, or will he flatter to deceive?

In his recent article, Professor Aaron L Friedberg of Princeton University has commented on just how secure President Xi Jinping might be in China. He remarks that in the two years since he was named general secretary of the Chinese Communist Party, "Xi Jinping has moved swiftly to consolidate his personal grip on political power. Xi has established "leading small groups," which he chairs, to handle the most pressing domestic and foreign policy problems.

Similarly, he has used speeches and skillfully orchestrated appearances to make himself the public face of the regime and its unquestioned leader. At his direction,the Party-State apparatus has launched a series of well-publicized corruption investigations targeting high-ranking civilian and military officials. "This commentary could easily be applied to our Prime Minister Narendra Modi who has moved swiftly to consolidate his position in New Delhi using similar tactics.

Friedberg adds "By most accounts, Xi now exerts greater control over the Chinese system than any leader since Deng Xiaoping. A recent analysis in the New York Times quotes an unnamed Chinese academic as describing Xi as the "emperor," while calling his colleagues on the Politburo Standing Committee merely "six assistants." The notion that China is governed by a true "collective leadership" is now little more than a polite fiction." Could this be Narendra Modi a few years from now? Perhaps. Narendra Modi definitely exerts more control than most of his predecessors, especially his immediate predecessor. Nehru had an aura when there were hardly any other political parties that mattered and unlike Modi he belonged to aristocracy with a self-ordained right to rule.

In either case, when Xi and Modi meet next week, it is apparent that two strong leaders, whose writ runs unchallenged in their own governments, will be sitting across the table to negotiate. Unlike Modi, Xi belongs to the 'born to rule' class and his father was a close associate of Mao and Deng. He is one of the 'princelings,' has had close connections with the PLA and today is estimated to have financial assets worth about US $ 375 million. This is a point of interest and is not a reflection of abilities of the two leaders. Xi's wife Peng Liyuan is a singer who was more famous till Xi became President. When Xi disappeared for about eleven days in September 2012, the rumour mills worked over time speculating what might have happened.

Their meeting takes place just after Narendra Modi's successful visit to Japan where he and Shinto Abe had a chemistry that was obvious. This translated, among other things, into a promise of 35 billion dollar Japanese investment in the next five years. The Xi-Modi meeting will be just short of Modi's meeting with President Barak Obama. So will Xi outdo Abe and preempt Obama or will it be flatter to deceive? However, that is for later.

American leaders interacting with the Chinese leadership recently found Xi Jinping to be running a highly individualistic style of leadership in contrast to that of his predecessor, Hu Jintao. All the decisions to raise issues with South Korea and Japan, the territorial thrust into the South China Sea were a result of Xi's decisions and not the result of a collective decision. India can expect China to remain aggressive and uncompromising on geo-strategic issues while pushing economic and trade issues.

When the two meet, Modi will know he is talking to a man who represents a country that is undoubtedly the most important rising power that has far surpassed India, is ahead of Russia, Japan, Germany, France and UK. Still the two most important rising powers will be talking to each other. Sure China today possesses the makings of a global power and both India and China look at each other across an undemarcated 4057 kilometre boundary, they have the two largest standing armies, both have nuclear weapons. However, India is way behind in many aspects of global trade, China is a global manufacturing hub with huge foreign currency reserves that give China very deep pockets. China does have the ability to influence some countries but it does not have the ability to influence many others, including ours, to do something that we would not otherwise do.

China has tried to do this in the Western Pacific in an effort to influence the smaller neighbours and write its own Monroe Doctrine vis a vis the US. This has not worked. When it comes to other global issues, ranging from Afghanistan, Iraq and Syria and the Ukraine crisis, the Chinese have played it low key. Even in the recent flood havoc in Pakistan, China has remained tightfisted.

It is true that in comparison with India, China is far ahead with its defence budget that is at least three times larger than ours, its ICBM capabilities are superior, a vibrant space, missile and cyber programme, its logistic and infrastructure capacities across the border in Tibet too are much more advanced than ours, and it has a growing Navy that can sail into the Western Pacific and occasionally into the Indian Ocean. China will have a huge presence in Gwadar, Pakistan, apart from current activity in Gilgit Baltistan but it is worth remembering that Pakistan is the only country in Asia that seeks Chinese assistance for its security. The rest turn to the US and the recent push in South China Sea and in confrontation with Japan has succeeded in alarming South East Asian nations, including Australia, who now seek a closer relationship political and economic with India as well.

China maintains its trauma with Japan over the Second World War and two months ago once again it commemorated the 77th Marco Polo bridge incident as the "War Resistance Against Japan." The state guided young frequently chant slogans like "Do not forget national humiliation and realise the Chinese dream", whatever that means with regard to Japan and other nations. This year's commemoration was said to have been the largest with President Xi criticising Japan for revisionism, even though Prime Minister Abe had sent out a conciliatory signal by making a ritual offering instead of visiting the Yasukini Shrine. The Chinese had toned down their anti-Japanese rhetoric in 2008 at a time when President Hu Jintao was to visit Japan, but this has been ratcheted up since Xi became president.

Despite being a P-5 member of the UNSC and of other key global bodies like the G-20 China keeps a low profile in international affairs. Its main concentration is with regard to Taiwan, Tibet and Xinjiang as security issues, the India border on bilateral matters, the South China Sea territorial claims, is extremely touchy in human rights issues, and will be adamant on Aksai Chin and Arunachal Pradesh while dealing with India. Its relations in West and Central Asia and in Africa and Latin America are transactional seeking resources and markets.

Despite its enormous wealth, China is a reluctant donor for overseas aid programmes, has increasingly relied on manipulation of international intellectual property laws rather than on indigenous innovation, spending barely 1.7 percent of its massive GDP on research and development as compared to 3.3 per cent by Japan. Of course this is much better than ours, but China is considered a global economic power. China is getting caught in the "middle-income trap" which can only be broken through innovation like the Japanese, South Koreans and Taiwanese succeeded. The lesson for us when we speak of 'Make in India' is that it has to be manufacture with a great degree of innovation and not merely reproduction under license.

Chinese overseas development investment has an interesting component. In 2012 its ODI was US $ 88.2 billion, about a fourth of the US ODI. A large percentage of this investment is parked in the safe havens of British Virgin Islands and Cayman Islands and the money belongs to the rich and powerful from China. Professor David Shambaugh, a noted China scholar from George Washington University, quotes the 2014 annual Blue Book on Chinese International Migration to say that since 1990 a total of 9.3 million Chinese had emigrated abroad along with US $ 46 billion. (The Illusion of Chinese Power, published by The National Interest).

China is not likely to give up its major strategic relationship with Pakistan, nor its interests in Afghanistan and the rest of our neighbourhood. On the contrary, one can expect a higher Chinese profile here. Xi will play for a greater economic role, offer symbolism like a new route to Mansarover to please the Hindu lobby, but move towards a relationship that is economic in content but fall short of a realisation of true political content. China is keen to pursue its maritime silk route project. Will Xi make us other offers we cannot refuse, something that outdoes the Japanese offer or overshadows what the Americans might offer. One doubts this. That will be our challenge but then as the Chinese say, every challenge is an opportunity.

There are some internal challenges the Chinese have to face as well. Its much vaunted economy produces primarily cheap low end products which are then sold in massive quantities abroad. The other quality products are manufactured according to Western standards for western and Japanese manufacturers. Apart from the giant energy companies there is a handful of Chinese multinational companies abroad of which only Huawei and Haier have employees who can interact in English with the rest of the world. Despite being the second largest economy its ODI is seventeenth in the pecking order. An economy growing at the pace that the Chinese has been doing is bound to create its wide income disparities and regional tensions. Nothing alarms the Chinese leadership more than internal disturbances and they tend to react with immediate and massive force. This is where China is most vulnerable despite stupendous progress in the previous decades. Corruption, restless provinces in Xinjiang and Tibetan regions opacity of practices, lack of political and legal reforms for which the CCP is to blame. The Party is particularly fearful after reports of Arab Spring exhibiting the normal fear of a closed society where a drop of freedom could become a tsunami. This is their weakness and our strength.

If India-China relations can develop along the pattern of Japan-China and China-US relations which are strong on economic and trade issues but there is hardly any political congruity, both countries will have made progress.


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