This is a novel contribution to the growing literature on the rise of China and India. Instead of focusing on internal changes in these two massive economies, Shalendra Sharma's approach is to analyze how China and India have adapted to globalization and benefited from their links to international markets. Its theoretical perspective thus centers on the globalization process. Sharma also presents extensive empirical data to explain the transformation of these two states once the basic directions of policy were decided.
The strength of the book is in the first four chapters, which concentrate on the transitions these two societies made as their leaders recognized that they needed to move from autarchic, centrally directed economies to ones that relied more on external markets. The book is far less persuasive in Chapters 4 to 8, when it uses this globalization approach to deal with recent foreign policy choices by decision makers in Beijing and New Delhi.
Sharma's initial chapters are important because they provide a statistical base for understanding the more recent economic surge, as well as a superb summary of the man-made impediments to growth imposed on China and India by their respective governments in the 1950s and 1960s. Mao Zedong's aspirations for a collectivist society ended in the disaster of the Cultural Revolution. (Because Mao died in 1976, he never saw the sharp shift in policy that his successors implemented). In India, Prime Minister Jawaharlal Nehru's conviction that government should control the “commanding heights of the economy” led to the strangulation of entrepreneurial activity as businessmen had to cope with the “Permit Raj.” By showing this in detail through the presentation of hard data, Sharma also lets the reader see what a truly transforming experience growth has been for China since 1979 and for India since 1991. In China, roughly 400 million people have risen above poverty in 30 years, and, in India, a middle class of more than 150 million has been created in 20 years.
The author's comparison of the Chinese and Indian approaches to accelerating growth and adapting to a global economy is also very informative. As he notes, Deng Xiaoping had consolidated power by 1978, and he determined China's direction from Beijing, even though the process itself required the creation of greater regional and local autonomy. The most critical early decision that Deng made was to dispense with the agricultural communes and to use the market as a way to raise rural incomes before the rise of the urban and modern sector.
In India, the process was much slower, started 12 years later, and was constrained by powerful interest groups that prevented a full liberalization of the economy. Sharma is optimistic that India will continue on its path to a more open, competitive economic system, though it remains to be seen if the path toward globalization will continue in India if the international economy loses momentum or there is growing restiveness from the disadvantaged in Indian society.
Yet, what Sharma has done in the first half of his volume is to place China and India in a broader theoretical context, noting that even these enormous economies have, ultimately, accommodated to the international economic scene. Hence, this volume takes work on China and India beyond country studies and places it in a branch of international relations pioneered by Stephan Haggard (Developing Nations and the Politics of Global Integration, 1995) and others a decade and one-half ago.
The global integration theme is compelling in describing China's economic development strategy and encapsulates the aspirations of the Indian elite as well. However, it is less effective in explaining recent foreign policymaking by the Chinese and Indians. Both states are already major powers, and their national leadership groups want to expand their respective national influence on the world stage.
If global integration were the principal objective, neither Beijing nor New Delhi would be consumed with debates about space surveillance, missile modernization, and development of aircraft carrier task forces. Moreover, if economic growth were the dominant objective, China would drop Pakistan as an ally and focus on India, which is surely the more important market.
It is on these strategic and national security issues that Chapters 5 to 8 are wanting. Sharma's discussion of Sino-Indian relations does address its competitive elements, but the China-Pakistan connection receives only limited comment. Likewise, China's successful effort to block India's membership on the United Nations Security Council is passed over lightly. These are significant problems for the “globalization” hypothesis because if China really wanted India fully integrated into the world economy and global institutions, Beijing would encourage and not discourage Indian participation in international bodies.
Moreover, there is only limited reference to China's efforts to build a string of naval and air facilities on India's periphery. Improvements at the multipurpose facility at Gwadar in Pakistan, the Hambantota base in Sri Lanka, and the port in Dacca, Bangladesh, are all paid for with Chinese funds, and are a clear indication that Beijing intends to project power into India's current sphere of influence. This effort by the Chinese is a bold warning to India and cannot be dismissed merely as support for port facilities for commercial use.
Likewise, Sharma's review of U.S.-Indian relations tends to focus on the technical aspects of the interaction, rather than its current strategic implications. The George W. Bush administration would never have gone ahead with the July 2005 civilian nuclear agreement if there was not at least a minimal understanding between Washington and New Delhi about strategic interests. These issues are not analyzed sufficiently, nor can they be fit into a theoretical approach that concentrates predominantly on economics and global integration.
Although many aspects of U.S. policy toward Afghanistan and Pakistan have changed since the book went to press (and will thus not be discussed here), the basic dilemma the United States faces in South Asia has stayed the same and needed more attention in this volume. How can the United States strengthen its ties with India while simultaneously dealing with the Taliban and Al Qaeda in Pakistan? Due to the focus on global institutions, the book avoids fully addressing critical issues like these.
The final chapter, analyzing long-term relations between China and India, does an admirable job of surveying environmental, energy, and human rights/democracy issues. What it fails to do is note that Sino-Indian relations have actually been on a serious decline since the high point of Prime Minister Wen Jiabao's visit to New Delhi in 2005. Although it is true that President Hu Jintao has since been to India and Prime Minister Manmohan Singh has been to China, on a whole host of issues the relationship is deteriorating. The Chinese have reraised their territorial claims to Arunachal Pradesh; Beijing is now issuing visas separately to residents of Kashmir to distinguish them from other parts of India; there is a blatant competition for influence between India and China in Burma and much of Southeast Asia; and China is making clear its preference for Asian regional integration efforts that exclude India. All of these actions by China and India can be explained quite well by traditional balance-of-power politics. These moves are not compatible with the “global integration” framework that defines this volume.
In sum, this is a carefully documented and informative volume. It identifies the primary factors shaping China's and India's approaches to the global economy, and the global integration thesis fits well for those activities. Nevertheless, since both China and India are already major powers and plan to remain, and to behave like, great powers, one needs a different theoretical perspective to explain many of their foreign policy choices.
