Narendra Modi, Xi Jinping show India and China are ready to carry globalisation torch despite differences

One was speaking in New Delhi and the other in the Swiss Alps, but two voices in two corners of the world struck a similar note on Tuesday, both suggesting that the burden of free-market capitalism is now Asia's to bear, as the West battles a rising tide of anti-globalisation populism.

There are hurdles, of course; India and China will have to come to terms with the trajectory of each other's ambitions. It won't be an easy marriage, if at all. But judging from what Prime Minister Narendra Modi said while inaugurating the Raisina Dialogue, just a few hours after Chinese President Xi Jinping's hour-long address at Davos, it won't be a stretch to conclude that both Asian leaders eye the vacant spot of global economic leadership.

 Narendra Modi, Xi Jinping show India and China are ready to carry globalisation torch despite differences

Xi Jinping and Narendra Modi. AP file image

Xi's speech was more direct. Though China would like the world to believe that its 6.7 percent (estimated) GDP growth is driven mostly by domestic consumption, truth is its economy is far more dependent on free trade than Beijing is ready to admit.

There remain concerns, however. The International Monetary Fund told Reuters about "ongoing risks to the Chinese economy, including its high reliance on government spending, record lending by State banks, and an overheating property market". As the world's top exporter, Beijing will be hit the hardest if countries hide behind trade barriers and if globalisation is seen as the root cause of all evil.

While the shadow of a credit bubble looms large over its economy, China, driven by a low-wage, enormous workforce, has become the global factory for low-cost products which it badly needs to market. It must have noted Donald Trump's protectionist rhetoric with horror.

In his first media interaction since becoming the president-elect, Trump declared, "I will be the greatest job producer that God has ever created."

He moved swiftly to back up the claim. He warned German auto giant BMW to get ready for a 35 percent tax if it plans to import units from Mexico into the US. He slammed Ford and Fiat and asked US auto behemoth General Motors to fall in line, wasting no time in claiming credit when GM announced plans of investing $1 billion in its American factories to "create or retain 2,000 new manufacturing jobs".

Trump has not made any attempts to sugarcoat his disapproval of China either. During his election campaign, the tycoon-turned-politician vowed to impose a 45 percent tariff on Chinese goods to "correct the trade imbalance", which according to 2015 figures, stands at a massive $367 billion. He has also charged Beijing with undervaluing the Yuan by about 15 to 45 percent to gain an export advantage, and has accused it of putting millions of Americans out of work.

In this backdrop, Xi Jinping positioning himself as a globalisation crusader has perhaps more to do with dire necessity than idealism. Nevertheless, his words portend the drawing of a new global order, one where Asia will carry the torch for a multi-polar world.

As Xi issued a passionate defence of free trade because "no one will emerge as a winner in a trade war" and warned that protectionism is akin to "locking oneself in a dark room" which cuts out both "light and air along with wind and rain", the elite crowd of bankers, CEOs and politicians nodded in agreement.

"There is a vacuum in global leadership. Xi sees it and he seizes it. If the US does take a more mercantilist route, overall the Asians and Europeans will have to combine to preserve global free trade," Wall Street Journal quoted Carl Bildt, the former prime minister of Sweden, who was present among the audience.

Back in New Delhi, Narendra Modi was making a similar point while cautioning against stiff barriers on movement of trade and people. Speaking at the second edition of Raisina Dialogue, a seminar on geopolitics organised jointly by Observer Research Foundation and the External Affairs Ministry, Modi warned that barriers will increase and not decrease income inequality. It is no less ironic that both Modi and Xi delivered their speeches on a day when British Prime Minister Theresa May advocated a "clean Brexit".

Modi highlighted the fallacy of the new millennium where technology has brought countries and people closer, but yet there is a rising sentiment against trade and migration. "Physical borders may be less relevant in this age of bits and bytes. But, walls within nations, a sentiment against trade and migration, and rising parochial and protectionist attitudes across the globe are also a stark statistic. The result: Globalisation gains are at risk and economic gains are no longer easy to come by," he said.

The result of this dangerous tilt towards exclusion is greater "instability, violence, conflict, extremism, exclusion and transnational threats continue to proliferate in dangerous directions", he added.

The Prime Minister's harshest words were reserved for Pakistan, but the ones obliquely referred to China are more interesting. Acknowledging the fact that India must cope with the scope and extent of China's rise, Modi stressed that both nations must highlight areas of convergence while working simultaneously on areas of divergence for a better working relationship.

"It is not unnatural for two large neighbouring powers to have some differences. For peace and progress in the region, both countries need to show sensitivity and respect for each other's core concerns and interests," he said, the words carefully weighed not to bruise China's fragile sensitivity while red-flagging India's concerns over its revisionist attitude.

China may be ahead in the race for global economic leadership, but India enjoys greater trust. Within this framework lies huge opportunity for both nations.

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Updated Date: Jan 18, 2017 15:07:12 IST