Tag Archives: India

An Unintended Indian Consequence Of China’s Tainted Food

China’s problems with adulterated foods and medicines have shown up in India in an unlikely if sensational way. Our man in Delhi sends word that India’s sporting world has been consumed not for once with cricket but with eight of its top athletes failing drugs doping tests. These include three of the women’s 4×400 meters relay team that won the gold medal at the Asian Games held in Guangzhou earlier this year and at the Commonwealth Games in Delhi. They are currently competing in the Asian Athletics Championships in Japan but the failed tests followed a domestic meeting in Bangalore.

All eight–six female 400 meters runners, a female shotputter and a male long-jumper–tested positive for banned steroids. It is considered India’s worst doping scandal and the story has moved off the sports page onto the front and editorial pages of India’s newspapers as it involves star names such as Ashwini Akkunji, who as well as winning Asian Games gold with the relay team won the women’s 400 meters hurdles event. Turns out, though, that the source of the banned substance was kianpi ginseng supplements the coach of the runners, a now sacked Ukranian, bought or told his runners to buy during the Guangzhou competition. He wanted the women to take the supplement to aid with protein recovery after training.

Kianpi ginseng, an enhanced version of the plant, is reputed to be especially potent. Bodybuilders often use it to put on muscle. Previously the Indian women athletes had taken regular ginseng supplements but which were sourced from the U.K. and they had never had problems with doping tests. The first ones they took since starting to consume the Chinese ginseng they failed.

The clue to the source of the steroids apparently was that the one 400 meters runner who didn’t fail her drugs test didn’t take the Chinese ginseng as she gets hers from Amway. How the kianpi ginseng got adulterated and whether steroids are a regular part of the concoction that goes into a kianpi ginseng supplement pill or whether they were a spiked batch, intentionally or not, is unclear.

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Wen In India: Little Changed After The Check Books Move On

The agreement between China and India to set a goal of raising their bilateral trade to $100 billion from the current $60 billion is the very deliberately headline grabbing centerpiece of Prime Minister Wen Jiabao’s visit to his Indian counterpart, Manmohan Singh. Though it is Wen’s first visit to India for five years, the two men have met almost a dozen times during that time. So each will be well versed in the contentious border and security issues that come between the two Asian giants and frame their relationship with the other.

For all the conciliatory statements being made, and the open check book diplomacy being deployed by the entourage of 400 Chinese businessmen attending Wen, there has been no substantive progress on the difficult issues. Both sides say that more time is needed to work out their border issues, but they offered no crunchy deadline as they did with trade. A joint communique affirmed no more than that the two countries would “work together to maintain peace and security”. Wen told a business conference in Delhi that “there is enough space in the world for the development of both China and India and there are enough areas for us to co-operate,” but we see little to change our pre-trip assessment of the relationship as a partnership based on mutual mistrust and rivalry.

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China And India: A Partnership Based On Mutual Mistrust And Rivalry

Prime Minister Wen Jiabao’s visit to India is rife with sub-texts. He is leading a delegation of 400 businessmen, a larger commercial entourage than accompanied other recent visitors to Delhi, U.S. President Barack Obama, French President Nicholas Sarkozy and U.K. Prime Minister David Cameron. China, this says, is the country to do business with. Wen will then be going on to India’s arch-rival and China’s closer military ally, Pakistan. None of Obama, Sarkozy or Cameron made India a way-station on the road to Islamabad. And unlike in India, once he gets there, Wen will address Pakistan’s parliament. China, all this says, marches to the beat of its own strategic regional interests.

One is access to warm water ports in the Arabian Sea and Indian Ocean. Pakistan gives it the former and Sri Lanka and Myramar the later. One the well-worn principal of the flag following trade that suggests that both waters are ones where China eventually expects to be deploying its navy as well as its merchant marine, a prospect that will concern the U.S. as much as it does India. India’s Prime Minister Manmohan Singh sounded positively Japanese when he talked recently of China’s growing “assertiveness” in the region.

A second strategic Chinese interest is stability and friendly states along its borders. The one with India is long, 4,000 kilometers, non-continguous and disputed at more than one point. The two countries went to war over it in 1962. Distrust still lingers on both sides, and periodically surfaces, while India’s sanctuary for the exiled Tibetan spiritual leader, the Dalai Lama, since the 1959 uprising in Tibet, is a constant bane for Beijing.

Since that conflict China and India have abandoned in good part economies based on communist and socialist precepts respectively to become Asia’s two emerging economic giants. That, too, has created an uneasy long- and short-term rivalry. The trade delegation accompanying Wen will seek to buy off some of the Indian concern about the heavy surplus in China’s favor on the $60 billion of trade between the two countries. It is unlikely to do much for Indian complaints about lack of access to the domestic Chinese market for its (world-class) IT and pharmaceutical companies.

That is work for the politicians. China has hinted that it would like to start work on a bilateral free trade agreement during Wen’s visit, which will be the equivalent of pushing off the problem to a committee, especially as India has recently become more protectionist over its natural-resources exports for which China has heavy demand. It would, however, keep the focus on trade and let the genial Uncle Wen India is likely to see get off to Pakistan without becoming too embroiled in the difficult security and border issues and geo-political rivalry between the two countries.

In one sense the rivalry  is the regional mirror image of the co-opetition between China and the U.S. Even as Beijing and Delhi, as fellow BRICies, have co-operated in international negotiations on climate change, trade rules and reform of multilateral institutions such as the IMF, China has tried to hem in India’s nuclear program, kept it at arms length from the Association of South-East Asian Nations and sought to prevent it becoming a permanent member of the U.N. Security Council. For its part, India has developed a nuclear weapons program that Beijing sees directed at it as much as Pakistan, invested heavily in a blue-water fleet to protect its interests in the Indian Ocean and started to expand security co-operation with Japan and South Korea — all of which send messages of their own.

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Unvisited China The Common Point Of Obama’s Asia Trip

U.S. President Barack Obama’s current Asia trip isn’t taking him to China but China will be its recurring theme. The country sits at the heart of Washington’s Asia policy. President Hu Jintao will anyway meet his American counterpart twice, at the APEC and G-20 summits in Yokohama and Seoul respectively. Significant security and economic issues will be on their agenda, with China’s neighbors now seeing the U.S. as a more necessary counterweight to Beijing’s increasing regional assertiveness in both realms.

Free-trade is one area in which this will most immediately play-out with the U.S. seeking to advance its four proposed bilateral free trade agreements in the region, particularly the one with South Korea, which has the most chance of happening. The U.S. is also fiddling around with expanding the amorphous Trans-Pacific Strategic Economic Partnership Agreement (TPP) under its leadership. The TPP has a long-term aim of bringing all countries with a Pacific coast  into a free-trade zone, and is emerging in the eyes of some in Washingtonas an alternative to the pan-regional free-trade proposal of the APEC forum. America has a strong voice in APEC, but the grouping is informal and lacks an institutional mechanism to bring about any free-trade agreement.

Meanwhile, Beijing is looking closer to home, where its own voice carries more weight. It has thrown its lot in with the 10-member Association of Southeast Asian Nations (ASEAN) and its free trade plans that would include its members plus China, Japan and South Korea (who are also working on their own free-trade agreement). The so-called 10+3 will be up and running before any grander pan-Pacific arrangements, and possession, as they say, is nine-tenths of the law.

The counties of the Asia-Pacific account for 44% of global trade and 53% of global GDP so any free-trade initiatives in the region have global ramifications. Beyond the geo-politics, Obama needs more free-trade agreements in the region if he is to have any hope of meeting his promise to double U.S. exports by 2015. However, as the North American Free Trade Agreement (NAFTA) showed, free-trade agreements run readily into the realities of domestic American politics, too.

However this will all play out, it will do so against the backdrop of continuing trade and currency tensions between Washington and Beijing. While they may not get much worse they are unlikely to get much better in the coming months. Beijing is proving adept at shaking off Washington’s attempts at arm twisting over the revaluation of the yuan. Witness U.S. Treasury Secretary Timothy Geithner’s failed effort to get the G-20 to set targets for current-account balances. A lame-duck Democratic Congress might try to pass the Currency Reform for Fair Trade Act, which is aimed squarely at China. However, if it succeed, the U.S. Senate is unlikely to pass it and even if it did President Obama would most likely veto it ahead of the planned state visit of President Hu Jintao in January. The incoming Republican-controlled U.S. House of Representatives would likely let the legislation die on the vine, but not necessarily without some noise from some of its newcomers. Neither outcome provides balm for Sin0-American tensions.

Nor is there much to suggest that tensions over security issues will lessen with China even as they improve with some of the countries Obama is visiting. Beijing’s recent forthrightness in word and deed in the East and South China Seas has made its neighbors more appreciative of having the U.S.’s military presence in the region and heightened Washington’s awareness of the potential importance of that role to countries not always immediately seen as allies. Backing India to join China as a permanent member of the U.N. Security Council is another example in which Washington is bolstering the counterweights to Beijing. (India is due to take is seventh one-year term as a non-permanent member next year.)

Such a move won’t endear itself to Beijing, any more than did U.S. Secretary of State Hillary Clinton’s recent offer to broker a settlement of some of the regional maritime disputes. The brusque refusal by Beijing to take up Clinton’s offer and its extension of aid to Indonesia ahead of the U.S. president’s visit there indicates that it is fully aware of the shifting balance of influence in its backyard.

There is also a risk it will become more upset over Taiwan, always a potential flash point in Sino-American relations, after January if Ileana Ros-Lehtinen, a refugee from Fidel Castro’s Cuba and who supports increased arms sales to Taiwan, becomes, as seems likely, head of the Foreign Affairs Committee in the U.S. House of Representatives. She is partial to poking authoritarian regimes with a stick even symbolic ones.

While Obama plays his various parts as salesman and statesman on this trip, it is America’s relationship with China that shapes America’s relationships with his hosts.

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India-China Axis On Climate Change Moves ‘Green’ Closer To Trade Sanctions

This Bystander is keeping an eye on U.S. Secretary of State Hillary Clinton’s trip to India because it will provide an indication of how China and India are lining up on the climate policy debate. Or at least whether the U.S. is managing to put any daylight between the two countries’ position.

In short, it doesn’t look that she has. She was told flatly by Environment Minister Jairam Ramesh that there was no case for mandatory curbs on CO2 emissions. That mirrors Beijing’s rejection of binding cuts, and repeats the position expressed at the G8 summit in Italy earlier this month–a line Beijing and New Delhi are likely to hold at the U.N.’s Copenhagen conference of climate change at the end of this year. Instead, the two countries are pushing energy efficiency–witness the way Beijing has promoted green technologies in its economic stimulus package.

The reluctance to accept greenhouse gas emissions curbs on the part of China, now the world’s largest emitter of such gases, will make it more difficult for the Obama administration in the U.S. to press ahead with its cap-and-trade proposals, already running into domestic political difficulties, which will ease the pressure on China and India to change their tune. It also increases the chances that the U.S. will impose punitive tariffs on imports from other major greenhouse gas emitters. Though it is open whether that would change Beijing’s hard line on emissions, trade sanctions could, perversely enough, become the most effective means of forging international action on global warming.

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BRICs and Brickbats Over The Dollar’s Reserve Currency Role

Brazil, Russia, India and China meet on Tuesday in Yekaterinburg for the first summit of the so-called BRICs, the four leading emerging economies.

They see themselves as a leading voice for the developing world and as a counterweight to the developed world’s dominance in international economic matters as represented by the G-7. As such they want to want to boost their role as global players and increase their collective weight in international organizations.

So far, they share too little in common beyond large, fast growing developing economies to have acted as a bloc. One arena in which they might have been expected to exert collective clout and to speak as one for the developing world was the seemingly interminable Doha round of world trade talks. Yet the interests of China’s low-tech farmers were different from those of their Indian counterparts and far too different from those of Brazil’s high-tech farmers for there to be any unity.

There is one issue that is emerging, however, on which they could speak with a common voice, and it is one on which Beijing has already been a herald: the challenge to the role of the dollar  as the world’s sole reserve currency. Beyond the statistics commonly trotted out to describe the BRICs — they cover a quarter of the world’s land surface, are home to 40% of the world’s people and account for 15% of world GDP– is one highly relevant to this issue: they hold 42% of global foreign exchange reserves.

As well as giving repeated airings to its concerns about the falling value of the dollar on all the U.S. debt it owns, Beijing has switched $50 billion of its admittedly more than $1 trillion of reserves into multi-currency based bonds issued by the International Monetary Fund. Russia has moved $10 billion and Brazil’s central bank has just announced it is doing the same with a similar amount of its reserves. The BRICs want more say over the IMF and are putting a bit of the money at least where their mouths are, and Beijing in particular would be most pleased for the IMF emerge as more of a counterweight in the global financial system to the U.S. The issue will figure prominently at the meeting in Yekaterinburg, a town historically redolent of executing the old order.

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No 4 as No 1. Some Mistake, Surely?

Just ran across this Gallup Poll from earlier this month, asking Americans which of China, the U.S., the E.U., Japan, Russia and India is the world’s leading economic power, now and in 20 years. China easily tops both lists, a contrast to when Gallup asked the same questions in 2000 and the U.S. was the clear leader.

Yet look at the numbers for the size of those economies and the order is 1. E.U., 2. U.S., 3. Japan, 4. China, 5. Russia, 6. India, with the E.U. and U.S. being five times bigger economies than China. Even if you use purchasing power parity rather than nominal GDP, China is still third.

The disparity between perception and reality that the poll reveals may go someway to explaining why Americans and Europeans are turning so protectionist right now.

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Getting Off The Bottom Rung In India And China

Here is one of those snapshot statistics that throws into sharp relief an entire economy, or two in this case. It comes via journalist Rob Gifford, writing about Hefei in Prospect magazine.

There is one crucial difference between China and India, and a perfect example of it is coated in black tarmac and runs east and west through Hefei. China is a brutal place to live if you are on the bottom rung, but there is an exit. And, just as important, there is a real possibility of a job at the other end. India’s 1.1bn population is rapidly catching up with China’s 1.3bn. But India has only about 10m manufacturing jobs, compared with about 150m in China. So there are simply more opportunities in China to improve your life.

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