China’s Dragon, Africa’s Lion and India’s Tiger

Nigeria’s Central Bank Governor recently commented that “Africa must shake off its romantic view of China and accept Beijing as a competitor as much as a partner capable of the same exploitative practices as the old European colonial powers.”

Their effect on Lanka’s Asiatic Lion

Nigeria’s Central Bank Governor recently commented that “Africa must shake off its romantic view of China and accept Beijing as a competitor as much as a partner capable of the same exploitative practices as the old European colonial powers.”

Governor Lamido Sanusi reflects the growing number of senior African bureaucrats who fear that Africa’s emerging industries are being drowned in a sea of cheap industrial products from China. He further said: “Africa is opening itself up to a new form of imperialism, China takes from us primary goods and sells us manufactured ones. This was also the essence of colonialism.”

In 2012, trade between China and Africa totalled US$ 200 billion. Up by 20 times to what it was in 2000, when China first committed itself to a policy of accelerated engagement with the African continent. An estimated one million Chinese are today resident in Africa, up from a few thousand a decade ago.

Sanusi goes on: “China is no longer ‘a fellow underdeveloped economy’; China is the second largest economy in the world, an economic giant capable of the same forms of exploitation as the West. China is a major contributor to the de-industrialisation of Africa and thus African underdevelopment.”

Predatory trade practices

Sanusi says that Africa must respond to Chinese predatory trade practices such as currency manipulation and subsidies, which gives Chinese exports an advantage. He comments: “The days of the Non Aligned Movement that united emerging nations after colonialism are long gone. Africa must realise that China – like the US, Russia, Britain and Brazil and the rest – is in Africa not for African interests but its own. Engagement must be on terms that allow the Chinese to make money while developing the continent, such as incentives to set up manufacturing on African soil and policies to ensure employment of Africans.”

Between Africa’s Sahara desert (in the North) and the Kalahari Desert (in the South) lie many of the raw materials desired by China based industries. 90% of Chinese imports from Africa are minerals. 30% of Africa’s imports from China are machinery and electrical goods, textiles, chemicals and plastics and rubber. China is Africa’s top business partner, with trade exceeding US$ 166 billion.

China’s Trade Minister Chen Deming says China’s direct investment in Africa exceeds US$ 14.7 billion. Chinese funds also flow into Africa from tax havens the world over, totalling altogether over US$ 40 billion, according to China’s Ambassador to South Africa. The Dragon and the Lion are certainly engaged.

Chinese domination

Before the European imperialists arrived in Asia it was China which dominated the Asian continent. In the Sung era (960-1126), the Chinese had a massive bout of technological innovation, gun powder; movable type and sternpost were all discovered. This resulted in a huge surge of economic activity in the 10th to the 13th centuries.

The discovery and adoption of a variety of rice which permitted two crops a year from well-irrigated land led to massive surpluses being produced. On the industrial side, one scholar estimates within a few years of the battle of Hastings in England (1066), China was producing as much iron ore as the whole of Europe centuries later.

When Italian adventurer Marco Polo was in China at the end of the 13th century – ‘a sort of black stone’ – coal was being burnt for providing heat. Chinese sailors in Sung dynasty times already used the magnetic compass. Naval expeditions were using huge seagoing sampans to reach the Persian Gulf, Aden and East Africa in the 15th century.

Admiral Cheng Ho arrived in Galle in 1410 with a fleet and kidnapped the local ruler and his family and left behind a plaque in Chinese, Tamil and Persian commemorating his visit. It is now in the Galle Maritime Museum. Gavin Menzies in his book ‘1421 – the Year the Chinese discovered the World,’ says that there is evidence that Admiral Cheng’s fleet sailed West from Galle to Calicut and on across the Indian Ocean to Malindi on Africa’s East coast and Sofala near Madagascar and even rounded the Cape. This was the height of Chinese oceanic power.

Thereafter China turned inwards – the Confucian tradition, the overconfidence and arrogance buttressed by great resources and remoteness, made it difficult for China to learn from outside. In the early 15th century the Ming dynasty by imperial decree forbade Chinese ships to sail beyond coastal waters. Chinese shipyards lost the technological capacity to build the big oceangoing sampans. Admiral Cheng Ho’s ground breaking voyages were forgotten.

This vacuum was filled by European explorers who heralded the European colonisation of Asia, in search of spices. They were competing with Arab traders who held the monopoly up to then. On the Indian subcontinent also there was no large naval power, compared with the Cholas or East Asia’s Sri Vijaya empires of earlier times. From around 1500 to the time of World War II, Europeans dominated the sea lanes of Asia. The Dragon was caged.

Asian imperialists

There always have been apprehensions over Asian imperialists. As way back in 1947, Ceylon expressed concerns over domination of Asia generally and South Asia specifically by India’s Tiger and China’s Dragon. The issue was raised at the Asian Relations Conference held at New Delhi in March-April 1947. The Ceylonese delegation expressed concerns that small countries in Asia might be faced with aggression, not necessarily political, but economic and demographic, by their big brothers like China and India.

Ceylon was at the time was having a running battle with India over the nationality of the Indian plantation workers and traders living in the island. Although China had made assurances that Chinese immigrant communities would never seek political power in other Asian states they were resident in, the subsequent history of Malaysia, Singapore, Philippines, Indonesia and Thailand, present a contrary story.

The Burmese delegation spoke of apprehensions of Brown or Yellow exploitation replacing White colonial exploitation. As Mao famously said “there is nothing new under the sun,” these issues still dominate the region.

BRICSa rising

International economists have been for some time heralding the rise of the BRIC countries – Brazil, Russia, India and China – and the very aggressive role they are playing in wielding influence among the world’s poorer developing nations. The term was coined by Jim O’Neill of Goldman Sachs.

The BRICs matter because of their economic weight; they are the four largest economies outside the OECD. They are the only developing economies with annual GDPs of over $ 1 trillion. Other than Russia they sustained better growth than other countries during the recent recession. China has become the world’s largest exporter.

Intra BRIC trade has soared: Chinese-Indian trade is projected to reach $ 60 billion in 2010. China spewed 6.5 billion tons of carbon monoxide into the atmosphere in 2008, the world’s largest, Russia is third and India fourth. All four BRICS are among the world’s largest accumulators of foreign reserves, accounting for 40% of the world’s total.

Today the Republic of South Africa has joined the BRIC club, further strengthening the grouping. BRICSa leaders met recently in South Africa with their finance ministers to plan a BRICSa Bank, to rival the World Bank and ADB.

In the Cold War days, the third world was the exclusive playground of the USA and the USSR in competition, which led to poor countries taking cover with the Non-Aligned Movement, which was led by, among others, India, Sri Lanka, Cuba, Yugoslavia and Libya.

The Non-Aligned Movement itself does not seem to have comprehended that change is the only constant in the real world, as so brilliantly expounded 25 centuries ago by India’s greatest son, Gautama Siddhartha the Buddha at the Deer Park at Saranath in India, today’s Sahet Mahet.

China’s Dragon and India’s Tiger

Within the BRICSa grouping China’s Dragon and India’s Tiger are playing a particularly unique role. China’s rise as an economic powerhouse was preordained from the day Deng Hsiao Ping unshackled the economy in 1979.

Chinese capitalism re-manifested itself, last seen in the pre-revolutionary days in Shanghai and Hong Kong, private businesses, affluent consumers, humming export factories, stock markets which are the darling of investors and Chinese bureaucrats and officials in business suits, a change from Mao’s tunic.

The China price is something no other nation-based manufacturer can match, as the Shanghai World Trade Fair shows. China, however, has abandoned Deng’s advice ‘China should adopt a low profile and never take the lead’ for a much more aggressive international posture. The Dragon unleashed.

But there are some signs that the Dragon is ageing – the one child policy also had taken the edge out of the China low cost labour. Reforms enabling farmers to cultivate land independently, as against the old commune system, and the ability to sell the crop for a market price, discourages rural folk from seeking jobs in coastal factories.

The Indian Tiger’s rise was much more gradual. From the time, the troika of Finance Minister Chidambaram (currently Finance Minister again – some say potential PM), and Finance Ministry officials, Man Mohan Singh (current Prime Minister) and Montek Ahluwalia (current Deputy Chairman of the National Planning Commission) convinced Prime Minister Narasimha Rao (a scholar who knew 16 languages) to open up the Indian economy, the rise has been slow and sure, with some dips.

It has been said that “in India there are no full stops, only commas!” Indeed Delhi’s chatterati quipped that the PM actually had said, “I am not personally enough of an economist to judge for myself, but I am convinced that if all three of you agree on this, it must the only way forward!”

Business Week commented: “Rarely has the economic ascent of two still relatively poor nations been watched with such a mixture of awe, opportunism and trepidation. The post war era witnessed the economic miracles in Japan and South Korea. But neither was populous enough to power worldwide growth or change the game in a complete spectrum of industries. China and India by contrast, possess the weight and dynamism to transform the 21st century global economy… Never has the world seen the simultaneous, sustained takeoffs of two nations that together account for one third of the planet’s population.”

India and Sri Lanka

Surviving in the shadow of the Indian Tiger has been and always will be a necessary evil for all South Asian countries. This has been so since time immemorial. Sri Lanka’s rulers and pseudo rulers have polished the art of playing up to Big Brother and surviving by exploiting India’s phobias, both real and imagined, to a supreme level; it is the essence of the very survival of the nation state.

One need not go back to ancient history of the visit of the traders Thappassu and Bhalluka to Tiriyaya, Arahat Mahinda Thero, Sanghamitta Theri and the Shri Maha Bodhiya sapling, the Chola invasions, the Nayakkar kings of the Kandyan Kingdom and before. D.S. Senanayake entering into the British Bases Agreement and S.W.R.D. Bandaranayake abrogating it, Kachchativu, the Sirima Shastri Pact, Rohana Wijeweera’s lecture on Indian Expansionism (one of only five), Indian assistance in 1971, Sri Lanka permitting Pakistani troops to be ferried to East Pakistan through Colombo in “civilian” PIA aircraft during the Bangladesh liberation war, the nexus between Prime Minister Indira Gandhi, RAW and Prabhakaran’s LTTE, Rajiv Gandhi and J.R. Jayewardene’s Indo Lanka Agreement and the 13th Amendment to the Sri Lanka Constitution and the IPKF, assassination of Rajiv by the LTTE, Chief Minister Vartharaja Perumal’s Tamil National Army, the regular pilgrimages to pay obeisance to the regional viceroys in New Delhi by Sri Lankan Presidents, Prime Ministers, Ministers and bureaucrats, on which Nanda Godage, formerly of the SL Foreign Service, who has served at the regional viceroys court, has commented adversely upon.

The recent shenanigans at the UNHRC at Geneva and the grandstanding in Chennai by the DMK and the assaults on Sri Lankans, the raid on DMK’s M.K. Stalin’s residence by the India CBI, the banning of Sri Lanka cricketers from IPL matches in Chennai, are all part of the interplay.

China and Sri Lanka

The Chinese Dragon’s influence is more recent, if Admiral Cheng Ho’s visit in 1410 is discounted. But in ancient times there have been contacts – the earliest recorded mission from China to Sri Lanka took place during the time of the Han dynasty’s Emperor Ping (1-6 CE). Between the first and 10th centuries, Sri Lanka’s kings, it is recorded, sent at least 10 missions to the Middle Kingdom.

In the fifth century the Buddhist scholar Fa Hsien visited the Maha Vihara in Anuradhapura, at this time that the Meheni Sasuna was introduced to China from Sri Lanka. Archaeological evidence at Anuradhapura, Polonnaruwa and especially Yapahuwa has turned up Chinese artefacts such as ceramic ware and coins belonging to the Sung dynasty.

It is thought that Chinese sea going sampans would have berthed at Gokanna, the modern Trincomalee, and gone cross country to Anuradhapura to trade with traders from the West, Jews, Moors and Europeans, who also came to Anuradhapura overland after their vessels docked at Manthai, the modern Mannar. The South West and North East monsoon winds would have propelled these vessels. Dependence on monsoon wind power meant that the traders would have been compelled to stay in Sri Lanka during the inter monsoon period; their prolonged presence would have a substantial impact.

Anuradhapura had a separate area for European traders, designated by royal edict and special taxes were levied on foreign traders, at the ports of Manthai, Gokanna, Magampura and Anuradhapura. The pair of guardian lions at the bottom of the ascent of the stairs to Yapahuwa bears a striking resemblance to ancient Chinese sculptured lions.

Whatever the ancient history, how can one discount the Rubber Rice Pact, the initiative to settle the border war between India and China, the BMICH, the assistance provided in the war against the LTTE, ships, aircraft, weapons and armaments, NORINCO’s go down at Boosa in Galle of T56s and ammunition, which were supplied on a payable when able basis, the Nelum Pokuna Centre for the Performing Arts at the former CMC grounds in Colombo, Hambantota Magampura Harbour, Mattala Airport, International Conference Centre, Norochcholai, loans, equipment and grants for ‘Maga Naguma’?

African Lion and Chinese Dragon

New Chinese President Xi Jinping, after the BRICSa summit, visited Tanzania and the Democratic Republic of Congo after South Africa. He spoke of the twinning of the African Lion with the Chinese Dragon!

China is the largest donor to Sri Lanka, Myanmar and also Cambodia. China also has pledge vast assistance programs to Africa. In November 2009, former Prime Minister Wen pledged $ 10 million in cheap loans over a three-year period, debt forgiveness, new hospitals, professional training for 15,000 Africans and doubling of aid.

When Sudan, not exactly a model state by objective standards of human rights and governance standards, could not meet a deadline for repaying $ 34 billion in foreign debt, it turned to China, India and Gulf-based lenders for a bailout. India also has bailed out Tanzania with special from credits. Between 2008 and 2009 when total Foreign Direct Investment in Africa fell by around 30%, due to the worldwide recession, the flow of funds from China, albeit starting from a low base, increased by 80%.

BRICs as aid donors

BRIC assistance generally has been criticised by human rights activists, for propping up rulers who are serial violators of human rights and whose governance standards are far from acceptable, because most of the aid is tied, the lack of competitive bidding, negotiated prices, dated technology (highly damaging to the environment) labour and equipment imported from the donor country.

Further this ‘assistance’ is more often than not in the form of loans at near commercial rates, which have to be repaid from national tax revenues years later, if no debt forgiveness is available; debt forgiveness also creates a culture of dependence.

But it is not all not necessarily negative, Deborah Brautigam, in a recent book, ‘China’s Role in Africa,’ says that the emergence of the BRICs as aid donors is as important for poor countries as was the fall of the Berlin Wall for Eastern Europe. The BRICSa Bank, notwithstanding the fears of Chinese Dragon’s domination, will be a game changer in the international finance sector.

In 1431 Admiral Cheng Ho left a prophetic inscription on a memorial stone, on the banks of the Yangtze estuary: “The countries beyond the horizon and at the ends of the earth have all become subjects to the most western of the western or the most northern of the northern countries, however far away they may be.”

Mao was right: “There is nothing new under the sun.” Watch out for the interplay between the Dragon, the Lion and the Tiger; its effect on Sri Lanka’s Asiatic Lion will be decisive.

(The writer is a lawyer, who has over 30 years experience as a CEO in both government and private sectors. He retired from the office of Secretary, Ministry of Finance and currently is the Managing Director of the Sri Lanka Business Development Centre.)