My experience has spanned the world both of business as well as human motivation and psychology. What is common to both these fields is that it considers human beings as the main agents of all decisions. It is people — individually or collectively — whose decisions guide the destinies of other people, businesses, or relations between nations — not the action of any impersonal State force or some inscrutable ‘laws’ of geopolitics. It is from this people-oriented angle that I approach today’s theme — ‘Why India and China Matter to each other.’

Where we are today

India and China are old civilisations, but relatively new nation-states. Over the last six decades, these two large and populous countries have come a long way, starting from situations of dire poverty. So, it is not surprising that both countries are regarded as upcoming global powers — China more so than India. Naturally, this phenomenon causes anxiety amongst those powers that have enjoyed dominance so far in global affairs. This anxiety is felt more in respect to China than with India, since China’s political system is seen as alien and authoritarian but also outstanding in its record of economic and social transformation. That combination makes it a formidable challenge.

India and China are very different, if you look at their histories as unified states, their languages, religions, or customs. Whilst there has been little discourse between them over the last five hundred years, the preceding two millennia saw greater connectivity including the spread of Buddhism from India to China. The vast difference between Sanskrit — the root language of most of the Indic world — and Mandarin in their linguistic structures are indicative of very different ways of thinking in the two respective cultures. But do such differences necessarily imply a trajectory of conflict? The answer is important not only for a Changing Asia, but the world at large. To these differences between India and China can be added more recent aggravations. Border disputes, incursions and other irritants have clouded political relations between India and China. The Sino-Indian (USD 76 bn) trade relationship is just one-third of the China-Korea (USD 236 bn) trade and even lower than China-Vietnam (USD 100 bn). Investments in each other’s economies are minimal, and there is little other connectivity. Indian tourists to China number about 700,000 per year, whilst Chinese tourists to India are only about 200,000. These minuscule numbers tell a dismal story, as they represent a mere fraction of China’s 84 million outbound tourists, or of India’s 18 million. Overall, the India-China canvas of engagement is narrow.

India and China are also profoundly ignorant about each other. Only a small core of academics and students study the languages and culture of the other. Other nations consider India and China as worthy of study, but to each of us, the other is terra incognita. The media in either country — given the nature of media — sees to it that the other is either exoticised or demonised. This promotes a state of underlying tension that is grist to the mill for vested interests. So, it is not surprising that the latest Pew Global Survey (2017) of attitudes of people in different countries finds that only 26 percent of Indians have a favourable view of China. (Only Japan and Vietnam score lower). To India, China is ‘the Other’. And to China, India remains an enigma and a conundrum.

Finding out What Matters

So, do these two countries really matter to each other? If the answer is ‘No,’ then the current situation is perfectly explicable. But if the answer is ‘Yes’, then it poses a puzzle — because people generally do act on something that matters to them. Love makes things matter, but so does hate — as Oscar Wilde famously said, “The opposite of love is not hate, it is indifference”. So, if China and India do matter to each other, but do nothing about it, we must ask why?

How does one know if a transaction or a relationship — personal, commercial or diplomatic, really matters? I suggest that to determine this, we engage unconsciously in a comparison of the potential future value of the relationship versus the past. If this comparison is positive, we do something about it; if not, we consign it to a lower priority. But this analysis must be objective — with external benchmarks — rather than just projecting the past trend line into the future. As the mutual fund salesmen say on TV: ‘Past performance is no guarantee of future results’. Let me test this approach, starting with the most familiar area — Economic relations.

India-China Economic Relations

Nearly twenty years ago, Thomas Friedman, in his celebrated book “The World is Flat” extolled globalisation. But since then, we have discovered that the world is not so flat; indeed, it is quite bumpy, and some powerful individuals like President Donald Trump are determined to make it even more so. The latest research findings about globalisation reveal some facts of great relevance to India and China: i.e. a country’s growth rate is generally higher the more deeply it is connected globally. But this relationship has some limiting conditions. India, for example, is only moderately connected (a rating of 78/140 countries in terms of total flows of trade, capital, information and people, as a ratio of GDP) worldwide. It is the least connected country in the BRICS grouping, with China being much higher. But in terms of breadth of connection — i.e. how widespread it is connected geographically, India ranks high (9/139). So does China. But breadth is not linked directly to economic growth, as is depth; on the contrary, great breadth imposes significant costs. India’s exports travel 6387 km on average against the world mean of 4862 km. To manage a wide export portfolio is demanding on financial as well as managerial resources. So, even for globalisation, a ‘Middle Path’ pays dividends. Globalise, but focus your efforts and pay greater attention to larger and neighbouring markets.

Applying this logic to both India and China, it becomes clear that greater and mutual economic engagement is in the national interest of both players. India would benefit by focusing its trade efforts on China and ASEAN as the most dynamic markets in the world. This would significantly reduce ‘breadth’ and at one sweep get India more deeply linked into two large and integrated markets. For China too, India presents a huge market with long-term growth potential, with opportunities for partnership and enterprise. India’s strengths such as marketing, management, consulting, law, I.T, pharmacological sciences, medicare etc are complementary to China’s own skill-sets, making it a good source for third-party export manufacture and for innovation. It also serves to reduce the ‘spread’ of China’s own exports.

Further, India has a huge deficit in physical as well as social infrastructure— roads, ports and transportation — whilst China has foreign reserves of over USD 3 trillion, and a proven record in building infrastructure. China’s cumulative investments in Africa are now testing the upper limits of country risk. In the West, Chinese investments face political opposition. For China, India is a safe investment bet, with its large market size, financial infrastructure, slow but sure justice, and political stability. An investment of just 4 percent of China’s reserves could raise India’s growth rate by 0.5 percent. Further, Chinese investment can offset, under the capital account, India’s large trade deficit with China on the revenue account. The match seems perfect, so what’s the problem?

The huge gap in tourism potential too can be bridged, given a coordinated thrust by Government and industry in aggressively bidding for the Chinese market. Sadly, we seem to be missing this bus, just as we missed the bus of Japan’s outgoing tourism boom in the 1970s and 1980s. But, it is fixable.

India has a serious unemployment problem. A large enough number of semi-skilled jobs can only be created at the lower end of the mass manufacturing sector, like textiles, toys, garments, leather goods etc, industries now being relocated out of China since they are no longer cost-competitive, to destinations like Bangladesh and Cambodia. There is still a window of opportunity, say about 10 years, before automation and robotics make this sector too, unviable for human employment. But India will have to move fast. All in all, what the above analysis shows is that India-China economic engagement is not only well below potential, but that, ironically, it could be a strong propeller for India achieving rapid growth with full employment.

Globalisation and a New World Order

Having mentioned earlier the many differences between India and China, we find that the opposite is also true, perhaps even more so. Blinded by the story of China’s amazing rise, we forget that China is still a developing country with a modest aim to achieve ‘a moderate level of prosperity’ by 2021. Its per capita income of approx. USD 10,000 is nearer India’s level of USD 2000, rather than the USD 60,000 of the USA. Accordingly, China and India share many problems, such as a high disease load, serious environmental pollution, water stress, soil erosion, adverse sex ratios, and a high social security burden.

Further, India and China will be the greatest victims of the global threats of climate change, pandemics, acidification of the seas, an energy crisis etc, all of which we need to manage whilst maintaining a robust development trajectory. Finally, man-made problems like piracy, terrorism, cyber-crime, adverse trade, investment and intellectual property regimes, and the control of big data by global multinationals (cf. Nandan Nilekani’s warnings), pose impediments to that very development trajectory. Indeed, in two separate multilateral trade meetings in Korea and Argentina, in October 2017, India and China were on the same page on issues like food security and intellectual property regimes.

It is clearly in the interest of India and China to collaborate whilst negotiating with the Western world (including Japan) in all these areas. And the record here has not been too bad, especially in the fields of trade and climate change. But the cooperation stops at the global negotiating forums. There is very little serious sharing of experience between the two countries on how each is tackling any one of these issues. From a businessman’s point of view, this is strange; one driver of corporate partnership, collaboration or even merger, is to harness the know-how and experience of the partner in his field of expertise. Reinvention of the wheel is a profligate waste of time and money. This takes us on to our third point: innovation and creativity.

Innovation and Creativity

Both economic growth and the solutions to the above catastrophic global problems lie in innovation and creativity. The era of gradual incremental growth is being superseded by one of increasingly disruptive innovation. In this environment, how well India is positioned to undertake R&D and implement its fruits, will determine our growth pattern. So far, India has looked westward for scientific innovation, with the occasional nod to Japan and Korea. But the latest trends in China regarding patent filing, R&D expenditure as a proportion of GDP, sourcing of high-quality talent from around the globe including overseas Chinese, investment in science and high technology and above all as a special focus of political attention, makes it very probable that China will emerge as a global pole of innovation in the next 10 years. India too has an impressive reservoir of scientific manpower, but we have so far not been able to leverage it to anywhere near its full potential.

When businessmen, scientists and sportsmen wish to attain a level of excellence in any field, they find that the formula that works best is a combination of competition and cooperation. Businesses compete fiercely in the market-place, but collaborate in matters of common interest. It makes eminent sense for India and China to do the same, particularly in areas not of interest to the Western world. Imagine the benefits to both countries and indeed the entire world if India and China could synergise the potentialities inherent in their complementary capabilities. Sino-Indian joint research programmes could invent a pollution-free car, a USD 20 computer, a USD 1000 home, vaccines for malaria, dengue and encephalitis, online education for the poor, water-conserving methodologies et al.

But why choose India and China as a special pair for this purpose, rather than any other country? The answer lies in the ecology that stimulates innovation. Creative organisations find that workforce diversity is the key to creativity. “Groupthink” does not generate new ideas, but diversity does. It is not a coincidence that Silicon Valley, the Greater Boston area, and the Cambridge (UK) Science cluster hold the largest number of patents per square mile. Incidentally, Indians and Chinese scientists populate many of these small innovative companies.

Let us come back to the root languages of the Indian and Chinese civilisations, Sanskrit and Mandarin respectively. These languages could not be more different in script, grammar, construction and syntax. The highly visual and character-based Chinese language stimulates different areas of the brain compared to the complex, grammatical and alphabetic language that is Sanskrit. Modern neurolinguistic theory has established that the structure of a language shapes the ways in which their speakers perceive and think about the world. Much like the operating systems in computers, languages work as an influencing tendency which when aggregated over large populations produces significant differences in ways of thinking.

If we carry this argument forward, we can state that, due to their unique heritages, India and China have each developed a set of capabilities which find themselves handily complementary to each other. Take a well-quoted pair: the much-vaunted abilities of China in manufacturing and India’s skills in software and IT. There are several other ‘natural fits’: China’s infrastructure expertise along with India’s management and consulting skills; China’s strengths in biological and chemical sciences alongside Indian skills in medicine; China’s pedagogy and India’s English-language strengths; the list can go on. Here again, the potential for joint innovation is great, but hardly tapped — yet another example of an opportunity that is on offer to both countries.

To summarise so far:

  • India and China do matter to each other in three distinct dimensions (at least);
  • Their different ways of thinking — when put together — can lead to creativity rather than conflict.
  • The actual position, though, is far below the potential. Why?

The current Sino-Indian relationship lands India with a ‘double whammy’. When the prevailing mood of mutual wariness results in low mutual engagement between two of the worlds’ largest economies, their peoples for go the many benefits and multiplier effects that would arise as a result. On the other hand, India is landed with all the costs of added security to face ‘the China threat,’ including a possible arms race which could seriously limit the massive effort required for India to lift herself out of poverty and backwardness.

What is to be done?

The way out is for China and India to re-imagine their relationship. For each of them, I argue, this task is primarily psychological in nature. For India, this is a ‘challenge of the head’; for China, it is a ‘challenge of the heart’. Let me explain.As Prof. Richard Thaler — the recent Nobel Prize-winner for Economics pointed out — human decisions are peculiarly subject to the dangers of being illogical, even when taken in our own interest, and especially when strong convictions are challenged. In such cases, the logical path is defeated by a convenient internal rationalisation created by our brain to preserve the closely guarded status quo (convictions). (Smokers, for example, rarely give up the habit in response to logical evidence.) Emotions thus trump logic. Consider how public sentiment in India towards China reflects a mix of feeling: betrayal and hurt at the 1962 “stab in the back,” envy about China’s astounding rise, and anger that China denies India its due respect. These feelings are understandable, but such attitudes affect politics, and encourage hyper-nationalist political and media posturing, thus impeding rational economic discourse with China even when in our national interest. Emotions win again.

It is the mirror image in China. Blissfully unmindful of its impact on India, China has always considered the border war of 1962, dimly recalled in its public memory, as a skirmish on a distant border. India, they feel, makes too much of a fuss — why not just move on and get down to business? To build friendship, China must display more understanding of India’s feelings, and harness its own diplomacy to respond with sensitivity to India’s concerns. In other words, China needs to show more of the emotional connect.

But emotions can neither be wished away, nor ordered into action, so what is the solution? A look at Korea, Vietnam and Japan is revealing. They all have serious problems with China; yet, their canvas of engagement with China across trade, investment, tourism and human connections is wide and still growing. 700 flights per week connect Korean and Chinese cities. India-China flights are 10 percent of that. How is this possible? It is because of these countries’ links with China through their common history and cultural heritage as part of the overall Sinic civilisational stream. The value of a civilisational linkage is that, despite surface contradictions, it sustains a deeper layer with commonality and harmony at the level of nature and humanity. It mixes thought and feeling, past and present. This underlying holistic approach enables broad-ranging engagement of people trans-nationally across many fields and vocations, thus mediating problems and points of conflict whilst placing them in perspective.

Civilisational Roots for a New Sino-Indian Relationship

The key to changing this unsatisfactory bilateral status quo, lies in re-examining lessons from the long history of India-China civilisational intercourse. A common and profound philosophical thread runs between the two countries: the belief that differences and variations between peoples are not sources of opposition let alone of enmity. Rather, they represent springboards of creativity that could add value to both cultures. “Harmony is not the same as uniformity” said Confucius, and indeed harmonisation can take place only when diversity is present. India’s philosophy of ‘Vasudhaiva Kutumbakam’ and its entire living culture too are celebrations of diversity. So, one can argue that, despite their many differences, India and China can draw strength from their civilisational wherewithal to manage their current contradictions, and hence to orchestrate their ‘rise’ to be peaceful. As George Yeo, former Foreign Minister of Singapore said: “We need a sense of history, of how much our forebears have benefited and learnt from one another. Without this humility and a profound respect for the contribution of others to our own well-being, we will suffer hubris and make terrible mistakes.”

This “sense of history” might tell us that when civilisations connect across a wide range of human activity, they learn to manage the entire gamut of emotions that plays out quite naturally across such a vast arena. Love, hate, conflict, cooperation, creativity, and teamwork are then all part of a holistic process. Expanding the touch-points between China and India, the sages of those times might tell us, could deliver the answer to our present problems as illustrated by the inspirational story of Kumarajiva.

The Story of Kumarajiva

Kumarajiva (344-413 AD) was born to Kumara from Kashmir and Jiva, a princess from the city-state of Kuche (now in Xinjiang). He studied in Kashmir and soon became adept in both the Mahayana and Hinayana traditions of Buddhism. With his multi-lingual background, he displayed a remarkable ability to explain and translate the Buddhist sutras. Even today, he is considered by the Chinese as the best-ever translator from Sanskrit and its dialects into classical Chinese. His fame spread so wide that he was kidnapped by a renegade general during his travels in Xinjiang, and after many adventurous years, delivered to the then emperor of China, Yaoxing, at his capital in Xi’an. There, Kumarajiva continued his labours, now as head of the Imperial Translation Bureau, and amongst his many works were the translations of the Diamond Sutra and the Lotus Sutra.

As a celibate Buddhist monk, Kumarajiva had no children. His disciples were enthusiastic, but not one had his genius for translation. As time went on, the Emperor Yaoxing worried — who would succeed Kumarajiva? Then, Yaoxing formulated a cunning plan. Summoning the ten most beautiful girls in Xi’an, he said: “Your country needs you. Go and live in Kumarajiva’s palace, and cater to his every wish, until further orders.” Sadly, history does not record the results, if any, of this interesting experiment. But it does note that when Kumarajiva was being praised lavishly for his talent, some months later, he remonstrated, saying: “I am like the lotus, you see only the beautiful flower that rises above the lake surface; but far below, its roots are deep in mud”. Was this a hint, a confession?

But history does record the method behind Kumarajiva’s uniquely powerful and effective translations. Firstly, he rejected the then-prevalent “concept-matching” theory of translation, which meant that every concept expressed in Sanskrit should be rendered in translation by its closest match in the Confucian or Daoist canon. Rather, he dug deep into the meaning and matched it with the right Chinese characters, using phrases, allegory or poetry where apt. Secondly, unlike other translators, he did not edit out as “fluff” the long, devotional and descriptive passages that Sanskritists use to adorn their work. He recognised its aesthetic as well as musical value, and rendered it through the correct choice of characters and their visual sequence, which is as important in Chinese poetry as is metre. This instinctive and masterly grasp of the essence of the Chinese ideographic language — yin-yi-yang — (sound/meaning/shape) popularised and thus accelerated the spread of Buddhism in China, especially the ‘Pure Land’ and San-Lun schools.

I like to dream that Kumarajiva’s remote descendants are still with us, in some corners of Xi’an and Kashmir. We need them more than ever, to bring about a similar meeting of minds between India and China in our times.

Mr Ravi Bhoothalingam is currently Founder and Chairman of Manas Advisory, a Consultancy practice focusing on Leadership Coaching as well as on business and cultural relations with China, Mongolia and Myanmar. He is an Honorary Fellow at the Institute of Chinese Studies, Delhi. This article is extracted from a lecture delivered by the author under the auspices of the Society for Policy Studies and the India Habitat Centre as a part of their “Changing Asia” Series, at the India Habitat Centre, New Delhi, October 30, 2017.

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