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Tuesday, April 19, 2011

Power shift. BRICS and a Chinese train to Germany

16 April 2011

Tarun Vijay

Dr Manmohan Singh has undertaken one of his most significant strategic journeys — to Sanya in the Chinese province of Hainan. The BRICS summit provided not only a much needed breather from the domestic politics but also an opportunity to reassert India's growing prowess at an international forum, which essentially is engined by the presence of China and India.

BRICS represents the best of the contemporary economic and strategic world. With Brazil, Russia, India, China and this year's new member, South Africa, accounting for more than 25% of the world's land mass and 40% of the population, it is guaranteed to command about 50% of the world's GDP by 2030. One of the BRICS constituents, China, has already surpassed the US in manufacturing and, India will have to follow suit. The significant part is, in spite of several political differences, BRICS nations have chosen to work together for a better tomorrow. That’s a different axis from the western domination. They disapprove of western action on Libya and want IMF and World Bank to accept the models BRICS countries are adopting rather than bulldoze their western ideas. In fact, Brazil’s President Dilma Rousseff said in Beijing that IMF and World Bank cannot have their Presidents rotated between US and Europe. Definitely the non-Europe, non-US axis is asserting and gradually the forum may not be just economic. The political weight and its assertions are already being felt. It’s the future and a major power shift from the west. The comprehensive 32-point joint statement at the end of the summit summarizes the message of the ‘emerged’ (not emerging economies, as James O’ Neil of Goldman Sachs, who coined the word BRIC, now prefers) economies that the world is multipolar and sunrise is an eastern phenomenon. India has done well so far in this forum and notwithstanding domestic democratic confabulations, the 2012 BRICS summit in New Delhi must present better Indian realities.

I am too eager to share the unprecedented feat of linking Europe with China by rail route, which just happened on the heels of the BRICS summit, which again underlines the ‘China Miracle’. Deutsche Bank Research said in a report that "economically, financially and politically, China overshadows and will continue to overshadow the other BRICs." It added that China's economy is larger than that of the three other BRIC economies (Brazil, Russia and India) combined. Moreover, China's exports and its official forex reserve holdings are more than twice as large as those of the other BRICs combined. In that perspective, some pension investment experts have argued that “China alone accounts for more than 70% of the combined GDP growth generated by the BRIC countries (from 1999 to 2010): if there is a BRIC miracle it’s first and foremost a Chinese one”. And this train epitomizes that.

On April 5, a container train from Chongqing in China arrived in Duisburg (Germany), 10,300km in 16 days, which is about half the time that would have been necessary taking the sea route. The route taken by the train went south of Mongolia, through Kazakhstan, Russia, Belarus and Poland to Germany. Previous test trains on several occasions have followed the entire route north of Mongolia taken by the Trans-Siberian Railway, which is 2,000km longer, but involves less customs formalities. Just look at the route the train took. It’s no less miraculous than a train from Mumbai to London or Kolkata to Tokyo. Karl-Friedrich Rausch, Member of the Management Board of DB Mobility Logistics AG the company that took up the challenge, said: “Most important of all, the time taken for the journey from China’s interior, the train’s arrival in the middle of Germany and the possibility of delivering the containers from here to their destinations quickly and safely.”

China has already surpassed the US in manufacturing. As Sanjaya Baru put it succinctly: ”China reported a manufacturing sector output estimated at US$1,995.40 billion in 2010. This was ahead of the US output of US$ 1,951.60 billion for the same year. It was also ahead of the combined manufacturing sector output of the next six countries in rank, namely, Germany ($618 bn), Italy ($315.2 bn), Brazil ($273.7 bn), France ($253.3 bn), South Korea ($239.2 bn) and the UK ($235.2 bn), which added up to $1,993 billion. India shared the tenth rank along with Russia with each country estimated to have produced $217.8 bn worth of manufacturing output. With total world manufacturing output in 2010 estimated to be US$100,783 billion, China's share was estimated to be 19.8 per cent, compared with the US share of 19.4 per cent. The last time China enjoyed this status was between 1700 and 1850. In 1850, according to some studies, Britain emerged as the top manufacturing nation of the world, yielding this status to the US in 1895.”

A few more snippets to underline the path China is creating. It must make us all sit up and think, what are we doing?

Maersk Line has signed an agreement with the Guangzhou Port Group on strengthening cooperation on the business in Nansha port area. Nansha port area is the focus of Guangzhou port's future development. The port has already handled more than one million TEU this year. The world's top 20 carriers operate 40 services to Guangzhou’s port facilities. Last year, it lifted 7.2 million TEUs, nearly two million was foreign trade cargo.

Ningxia's Wuzhong city to build US$1.36 billion on logistics centre

WUZHONG, a city in northwest China hinterland's Ningxia Autonomous Region, plans to build a CNY8.9 billion (US$1.36 billion) a trade and logistics centre, Xinhua reports. Construction is scheduled to be finished by the end of 2013. It is able to achieve a transaction value of CNY10 million and generate tax revenue of CNY750 million for the government.

AIRPORTS in southeast China province of Fujian handled 52,300 tonnes of cargo in January and February, up 8.5 per cent year on year, while their passenger throughput increased 16.2 per cent to 3.8 million, Xinhua reports.

Xiamen Airport recorded a cargo throughput of 35,200 tonnes, up 4.9 per cent, and a passenger throughput of 2.3 million, up 20 per cent.

Fuzhou Airport handled 12,500 tonnes of cargo, up 5.9 per cent and received 1.1 million passengers, up 11.7 per cent.

1,850-ton mobile crawler crane is the largest land-based mobile crane in the world with a lift and carrying capacity of 2,358 tons and is outfitted with a 400-foot main boom and a 160-foot jib. The crane is to assist in the construction of a nuclear power plant.

That’s China. And while we are discussing their presence in PoK and other matters, China has shown to the world the power of purpose. There definitely is one for China. Where is ours? While Indian presence and the role it has played in BRICS has to be commendable beyond domestic boundaries, still the gap is too challenging.

So while the Chinese train to Germany is moving fast to show its powered engines, India stands marginalised even in its pursuit to get a feeble yes for its security council membership from "friendly" China. It's clear Beijing wants us to remain an office to the world and not as a factory to this planet, like China. To dilute our case for security council, it clearly clubbed India's case with the rest of the three BRICS members, which was a surprise and a embarrassment to us.

Inclusion of South Africa has also raised eyebrows as Nigeria represents Africa more wholesomely than a comparably small and less significant SA. Our PM couldn't even take an assurance from the Chinese before resuming the defence exchanges that no repeat of the incidents like visa denial to Gen Jamwal would occur. The huge trade imbalance remains unaddressed. But these issues need a strong leadership with a clear head-on China policy. Just compare Hu Jin Tao's activism at Sanya with our PM's and you will understand the difference. To emerge leader of the amazing global power shift, India needs political and military sinews along with economic growth and a will to win.


Charan said...

Well written. Very well writtern. But I cannot agree that India should do what China is doing. China is following a resource hungry path to development which will lead to a painful collapse. They are following the foot steps of European Colonizers. This is not possible for us if we believe in Indians' (Hindus') traditional respect for mother nature.

Anonymous said...

to be honest, we just cant compare india and china. they are not in the same league as one indian expert said. india have come a long way and has to follow its own part and route instead ofm focusing too much and comparing itself with china. all india acn do is learn from china and apply it to its own domestic realities. no need of always comparing india and china, they are 2 different countries ands systems. china is still a developing country and still has lots of potential same as india. i think india can cooperate and be a partner with china, it will benefit india more than vice versa. china is already a global power but india is still a regional player, but with time india may become a global power as well if she gets to work othan than keep talking. with hard work, reforms, dedication and commitment india can surely be a global power, but for now we just have to wait and see.