"WHERE IS CHINA HEADED"

(Talk delivered at the India International Centre, New Delhi on July 21, 2009)
 
Where is China headed? And by extension, where is the world headed? Because China in today's world is such an important country that the direction that China takes is going to affect the world. A professor who was supposed to be here today and who was recently in China told me that generally speaking even the Chinese do not know where they are headed.

The subject is very vast and very complex. Nevertheless, I think there are some unmistakable trends, and I am going to focus on those trends that give an indication of the direction that China is likely to take. Eleven years ago, just after the meltdown of the East Asian Tiger economies, I had made a presentation "Dealing with China in the 21st Century. For the growth of China, I had taken three models using terms from astrophysics: The Steady State Expansion Model, The Dynamic Expansion Model, and The Implosion Model.
And you can see them here in the diagram. At the bottom, the ones on the right are both dark and ominous. They represent the Dynamic Expansion Model and the Implosion Model. I think we can definitely rule out the Implosion> Model, and between the Steady State Expansion and the Dynamic Expansion models, I believe, China is moving towards the latter, the Dynamic Expansion Model. And why both these models were shown in dark is because both connote violence, the implosion as well as the explosion when any country expands very fast, much too fast.


    The talk I gave on China last year where some of the ambassadors present today were also present was on this very date July 21, few weeks before the Beijing Olympics. And we thought at that time that should the Olympics in Beijing go well to the satisfaction of the people of China and the Chinese government, China may decide to show a different face. The Olympics have gone off very well, the professional competence, the medals tally, the way it was organized and even the blue skies over Beijing; maybe it was the last time that there would be blue skies over Beijing, dazzled the world. It was an amazing show of competence from that country.             However, after such success we again pose the rhetorical questions: "Will China become benign or is it likely to flex its muscles"? I believe it is going to be the latter case. Recall that just ten years ago, say in 1999, the US was undoubtedly the world's undisputed power. It took less than a decade for the uni-polar moment to fade. This has to be compared to China's trajectory from 1989; there was Tiananmen, and on to 1999 and 2009.


    Seeing the condition of the global economy, the West hopes that wealth, globalization and political integration will turn China into a gentle giant panda rather than a dragon. This I have taken from The Economist just about ten days ago. What fanciful thinking. Several millennia ago, Chanakya, writing in the Artha Sasthra had said, and I quote: "It is the nature of power to assert itself". (Unquote). Throughout recorded history, I couldn't find a single case where a powerful country didn't assert itself. It is not only applicable to countries; it is also applicable to individuals. China is now a very powerful country. It is in the nature of such countries to assert themselves. This has been what all the great powers in the world have done so far.


    I have divided my talk into main headings that include:  'Where is China Headed?' and more importantly how is it affecting the world or likely global outcomes, followed by India juxtaposed to China.

So Where is China Headed? Unless democracy deficit shatters China's cohesion on the scale that Tiananmen might have done, if the Chinese had not ruthlessly suppressed the fledgling opposition, Beijing is undoubtedly headed toward super power status. While its amazing economic take-off in just over a decade might not be able to overcome indefinitely the fundamental contradiction of a market economy subserving the monolithic communist dispensation in a globalised world, however, for the time being it is serving its purpose admirably. Of course the unrest in Xinjiang would have come as a jolt to the Chinese government. China is an emerging super power. It is not yet there. Why then has the leadership chosen to prematurely disclose its hand? Recall the advice that Deng Xiaoping had given to his successors while handing over power to them. He had said: "for the next 25 years if the Americans look you in the eye, look down". Those 25 years takes us to 2015 or 2020. China is now not only able to look the Americans in the eye, sometimes it is the Americans who are looking down. In the post-Deng era, especially after Tiananmen, the Chinese leadership being monolithic generally tended to be cautious rather than being overly adventurous externally on a global scale. From Deng to Hu there appears to have been a sort of consensus that overt hegemony might be detrimental to world peace, in the process adversely impacting China's growth. This might still be the trajectory that China's leadership might prefer. However, there are indications that change in thinking might be taking place. Could it be that China started extending its power more vigorously linked to its financial power because of the perceived decline in US power after Iraq? China is still cautious about its image, especially in the West and with nations it wishes to target. It would tend to avoid the type of conflicts that accompanied the rise of great powers in the past. But it is not in the least bothered about India. Why? I will attempt to answer this when I discuss India and China in juxtaposition towards the end of my talk.      The not so subtle attempts at extending its power on the global arena might be due to the decline in US power and the accompanying economic crisis in the Western countries, not excluding Japan. It is best explained by 'plate tectonics'. Whenever two continental plates collide, there is a phenomenon known as subsidence. When one plate goes under, the other plate comes up. Something like that may be happening on the global scale when we talk of the two giant powers of today - USA and China. The subsidence is taking place to some extent, from the side of the US plate, in a manner of speaking and the rise is automatically that of China. It might have decided to grab the opportunity that had presented itself because windows of opportunity do not last indefinitely. Ex-president Jimmy Carter's NSA, Mr. Brzezinski has proposed a new G2 model where America and China get together to tackle the financial crisis, climate change and other major global problems. Today the USA seeks China's assistance on several global issues and as you know Mrs.Hillary Clinton who is here in India these days, charming the Indians or trying to charm them, had first gone to China to take a bow towards the Chinese leadership. Today, as I said, USA seeks China's assistance on several global issues, lately in Pakistan and Afghanistan as well. So having chosen to flex its muscles, what has China been doing that tends to alarm its neighbors and the world?     In the recent decades it has been noticed that China is able to rapidly achieve whatever it undertakes on a war footing. The latest example was the Beijing Olympics. It has started flexing its muscles by following a policy that includes demographic swamping internally (in the western extremities of the country) and financial swamping externally to meet its goals. Then there is the rapid militarization. I won't go into details of the mounting defense budget. The new Jin class submarines armed with long range missiles, the nuclear missiles, planning to go in for aircraft carriers, heightened naval ambitions and so on. These are very well documented. Add to these the determined push into the Indian Ocean, big talk of dividing the Pacific into spheres of influence, unilateral extension of its boundary in the South China Sea, offering help to Pakistan in case of conflict with India. As was the case with western colonizers and the Multi National Corporations after African countries became independent,. China's aid to Africa is exploitative, extractive and ecologically destructive. According to one estimate, up to a million farm laborers will be working in Africa in 2009. The figure might include Chinese labor involved with mining extraction. China's official media is on an India bashing spree. In one piece reproduced in India from the People's Daily, somebody wrote "India harbors a mix of awe, vexation, envy, and jealously in the face of its great neighbor".


    I will not elaborate on the String of Pearl's theory around the Indian subcontinent. It too has been well documented. Then we know the important aspects relating to Pakistan, Gwadar Port in Baluchistan, the linking up with Kashgar, the great dream of Peter the Great coming into the warm waters of the Indian Ocean, the great game of yesteryear being revived. Well, Peter the Great's successors have had to retract but the Chinese are able to follow up on that and from Kashgar via the Karakoram Highway, in the Northern Areas and via Baluchistan on to Gwadar, the dream would stand realized were it not for the Americans sitting in Afghanistan. China has opposed India's UN move on Mohammed Masood Azar, the Jaish-e-Mohammad founder to put him on the terror list. Earlier it had intervened to keep the Jamat-ud-Dawa chief, Hafez Saeed off the UN terror list for a long time. Other instances - the opposition to the nuclear deal, the ADB loan to Arunachal and the UN Security Council seat for India. Beijing's desire to advance its military capabilities is fairly obvious. Going well past the 2004 China's white paper the 2009 white paper has graduated to strategic projection operations. The 2006 Quadrennial US Defense Review has warned that the pace and scope of China's military build up is already putting the regional military balance at risk.
     I come now to the important issue of Taiwan. I am choosing my words with care. It is my considered opinion that the contentious Taiwan question might well be settled soon for all practical purposes. They say "cometh the hour, cometh the man". I want to add , "cometh the event". Both sides have taken hold of this historic moment, since the 2008 advent of a friendlier Taiwan President. Let us examine the changes that are setting in very rapidly. I believe China might have to some extent de-alerted its military forces opposite Taiwan and that is the reason that on the offshore islands of Quemoy and Matsu, which received the greatest pounding from 1948 up to the 1960s, for the first time the Taiwanese have pulled back the bulk of the garrison from these islands and now Chinese visitors freely visit those islands. The Taiwanese President has reportedly announced, in a very bold step, that with effect from 2015 there will be no military conscription. The three transits have been worked out satisfactorily, direct flights, shipping and mail. Tourism is on the increase as also cross-border investments. Once China is able to incorporate Taiwan, peacefully as seems likely even if it takes many years, it might feel that it had reached its optimum size, which would be possible for China to digest without developing uncontrolled, indigestion or fissiparous tendencies. After the incorporation, whenever it takes place, China may go in for a strategic pause lasting several decades. It would coincide with the period that could be utilized by Russia, the EU and India, to put in place a non-confrontational system that acts as a barrier to further Chinese expansion into the surrounding countries and regions. That is one way of looking at it.

    The other way is that a modus vivendi has been worked out that puts a wholly different perspective on the Taiwan issue. The Americans are relaxed; this had become very contentious just about a year and a half ago. I am again stating it is my considered opinion that de facto Taiwan could soon stand incorporated with China. They are not going to carry out a military invasion. They are very comfortable with Taiwan as it is with the cross-border integration. So what are the implications of this for India and the world? I had already mentioned that the Chinese appear to have de-alerted the military forces opposite Taiwan. The latest equipment program for their warships states that excluding ships deployed opposite Taiwan, they are going to build all other warships with strategic air defense capabilities; they appear to have have excluded what is happening opposite Taiwan. And these forces, which represented the cutting edge capability of Chinese PLA, could be redeployed.

     The 450 or so missiles that are already there and the rate of deployment of about 20-30 missiles annually opposite Taiwan might be reduced. Some forces could move opposite Vietnam because the Chinese have not forgotten the lesson that the Vietnamese gave them in 1979. Just as the Chinese refuse to forget that lesson, they say India is forgetting the lesson that they administered to India in 1962. In fact one American diplomat who should have been here today and who was also with the Secretary of State told me that last week when she was in Beijing, and when they spoke of India, the Chinese had reportedly said "India was no problem as 1962 could be repeated anytime". A sizeable portion of these strategic forces and the missiles could well be put into Tibet and Xinjiang. There is already an asymmetry between India and China and this is going to go up much further.     Implications for the world: when Japan, Australia and other countries start realising that  in the not too distant future de facto Taiwan might be incorporated with China, then the entire security situation in the near Pacific and South China Sea changes and we might see something different coming up in the years ahead. Like I said, China is now no longer interested in invading Taiwan and Taiwan will not declare unilateral independence and it's the perfect modus vivendi.**

    Nevertheless, there are problems that China cannot wish away. Remember the June 4, 1989 crackdown on Tiananmen Square. How often can the communist party repeat massacres on this scale? You all remember Mao and his Cultural Revolution and the Great Leap Forward. How many million lives were taken? How long can the genocide in Tibet and Xinjiang go on? This is an aspect that does worry the Chinese leadership.      The preoccupation with order and stability can become fairly obsessive leading to regressive policies after each phase of partial openness or liberalization. It is always in fits and starts; I can give several examples, internally within mainland China, in Tibet, in Xinjiang and in many other areas. Chinese leadership is clearly worried. For example, a Stability Preservation Office has been recently set up with a growing body of stability, preservation and information officers armed with a mandate to suppress elements that endanger stability. There are plans to establish a countrywide network that acts as the eyes and ears of the government 'to investigate early and resolve early'. It is a new force that has been set up.

     Political protests in Iran have again unnerved China's leaders, minimal coverage has been given to it internally. The exercise of smooth elections in Indonesia couldn't be lost on the Chinese people; again not much coverage compared to the rest of the world has been given to this in the Chinese press. For most countries in the world, France, India, UK, US - take any of them - when there is a crisis, it is a crisis for the 'country'. But for China the crises are different. The crisis is taken as a crisis for the Communist Party of China, which is for all practical purposes above the country. It is the country.
     There is the big dilemma for the Chinese Communist Party in the face of global recession linked to ecological degradation. As opposed to political parties' leaderships in democracies, the monolithic Chinese communist party has to keep the lid on. For them it is invariably all or nothing; there is no  middle ground for them. Also the fragile state of the economy further casts doubts on the ability of the largest borrower in the world (USA) to pay back its creditors, a point, which has been highlighted by the head of the Chinese central bank, the largest buyer of US treasuries. China may become the number one global economy in the next 20 years, according to Goldman Sach's O'Neil who coined the acronym of BRIC- Brazil, Russia, India and China.  Possibly, in that same period, BRIC countries as a group will carry a much larger economic weightage. Over 200 million young people within the country are today comfortable with the Chinese government and the Party. They do not wish to disturb the system politically; and those have prospered form the backbone of the middle class and this is the stability pillar for the Chinese leadership. Now can it repeat the process with the next 200 million people out of the billion or so, who are still left behind and what about the next 200 million after that and so on recurring? Because that will only be possible with double digit growth for the next decade or more or very high single digit growth rate. Can it be sustained? There is a national dimension, as well as a global dimension should a repeat of the pattern of the last 20 years be tried. As somebody said, "There is some sort of a cruel paradox there. On one hand it does seem like you want to say to China and India grow your economies so that you have a greater capacity to adapt to climate change and buy more western goods in the process. On the other hand it seems that such high growth will exacerbate the effects of climate change. It seems like the growth that creates adaptive capacity is racing against the growth that is aggravating what the adaptive capacity is needed to protect against".

    So I come to the ecological ramification of China's growth, for China as well as the world. I think this is the most important part of my talk. It is oft-mentioned that the West now looks to China to prop up its financial system and the Chinese economy to stimulate the global economy. Let us examine the implications. China has only 121 million hectares of arable land left from 130 million hectares. It has approximately 800 million  farmers. China faces severe problems posed by rampant desertification, polluted rivers and depleted ground water reserves. By 2020 China will have 130 million cars, by 2035 even more cars than the US. Taking into account that China obtains over 70% of its energy needs from coal and that it typically uses 6 to 7 times more energy to produce a dollar of output than the developed countries, the extent of the calamity that may engulf China, and by extension, the world, becomes clear. According to China's own official estimates, the effects of chronic pollution, large- scale damming and climate change have combined to  further exacerbate the situation, where 70% of the country's rivers and lakes are polluted to some degree, with 28% being too polluted even for irrigation or industrial use. A recent World Bank report estimated the health cost related to outright air pollution in urban China in 2003 to be between 157 billion to 520 billion Yuan, that is about 70 billion dollars, depending on the method of calculation used.  It means up to 3.8 percent of GDP. Faced with this critical situation, the Chinese government has little choice but to start taking serious measures to counteract and slow down environmental degradation even if it means putting brakes on economic growth. There are obvious lessons for India to draw as it pushes towards matching economic growth at the pace that the environment may not be able to sustain. To elaborate, one may take only an example or two by way of illustration. Should China and India adopt only few of the consumerist habits of the average US citizen, it would mean the adding of such numbers of automobiles as to create a global inferno. The accompanying increase in energy consumption and waste generation would reduce the two countries to becoming environmental graveyards and junkyards. To give another example, the Chinese people, right up to the 1980s were mainly poultry consumers. Many of them have changed their habits to become beef-eaters in the Western mould. It requires one ton of grain to raise a ton of poultry. Whereas a ton of beef requires 8 tons of wheat. Already grain shortages are anticipated in China in the coming decades. A Wall Street Journal article published in January 1999 (and things have become worse since then) said that by 2030 China's grain shortage would assume such proportions that the country would require to mop up all the grain surpluses in the world to meet its grain requirements. Economic planners must take heed before the two countries are irreversibly mesmerized by the great American dream, a dream of which the end result would be the ecological destruction of the planet. Studies carried out by the World Bank have made stunning revelations. When Thailand doubled its GDP, its industrial pollution load went up ten times. Similar expectations from India - it is a collective march to folly. If the West and the more advanced developed countries are unable to bear some pain now, they would have deprived the next generation of partial life support and the succeeding generations would be left with no life support. For the dangers that we face from ecological destruction go way beyond the mere problems of national security. We are talking of climate change, something that is much more than national security. The planet is dying and it is being strangulated due to the chemical pollution of the soil, the toxic waste entering the ground waters in most countries. Large portions of the planet are becoming azoic and certain natural cycles are being irreversibly destroyed. They cannot be reactivated, no matter what you do. Species extinction and habitat destruction are much greater threat than the climate change that people are talking about. The problem has to be looked at by humanity as a whole. Today the talk should not only be about what India should do, what China should do, but what the world should do. There is very little time left and everybody should start looking at this aspect that the ecological destruction of the planet is preceding at a pace which will leave no choice for the succeeding generations. Every country, lemming-like, has been talking about fiscal stimulus based on what happened in the 1930s depression. It's a different ball game now. In the 1930s depression there was no threat of the type we are talking about of the ecological devastation of the planet. There was no threat of climate change and things had not come to such a pass that we were not left with many choices. Today you have got a choice, this global recession has given you a choice: to lighten the footprint of man on earth and yet every government is pledging, going into deficit, printing currency to increase consumption of the same commodities that have got the world into this mess.  The world is producing 80 million cars per year. It is time to bring the figure down to 25 million or 40 million. Yet in every country, including China and India, leave alone the Western world, you are asking people to buy more cars, to trade in their bicycles for cars. We are headed towards global destruction much faster than we imagine. Global warming has become the lowest priority problem among Americans, according to a new Pew survey. Another Pew survey showed that China, the world's biggest emitter, cares even less than the US about global warming. Just 24 percent of Chinese population regards global warming a very serious problem making China the world's least concerned country. In the UK an opinion survey showed that most voters think that green taxes are raising cash rather than saving the environment. And seven out of ten are not willing to pay more taxes to combat climate change. To sum up this part of the presentation, overall one can say that China is heading towards becoming a world power primarily, so far that is, through its financial muscle as opposed to military might. This could change in the next five to ten years. So how is it affecting the world or the likely global outcomes? I will just flag off some of the main points, they don't require elaboration.

    China's military occupation of Tibet nearly 60 years ago has contributed enormously to the military and ecological insecurity of the eastern half of Asia. The horrendous effects of large-scale deforestation in the earlier decades linked to soil erosion, water pollution and spillage in water bodies of nuclear pollutants will take their toll on the Indian subcontinent, Southeast Asia and even in China itself for tens of thousands of years. Some of the ecological devastation is irreversible; and now, as I said, more forces that are opposite Taiwan and more missiles are going to come into Tibet. China has lately become conscious of the havoc that has been caused, but it will take aeons, paleontological aeons, to undo the damage, if at all. Its occupation of the Tibetan plateau puts it in a position to use water as a weapon of war in the coming decades. It was suspected of causing floods in the Sutlej in Himachal Pradesh in the 1950s, although no definite proof can be given, as China has never allowed joint inspections. China's inability to curb its ally North Korea's nuclear missiles programs could force South Korea and Japan to increase military expenditure and exercise their options which to date, might have been put on the backburner. I am talking about how it is affecting the world.

    We need to spend some time on the much-heralded Shanghai Cooperation Organization (SCO). The 'Go West' policy was announced at the 16th party congress as the Interfax news agency reported in 2005. The policy objective is often simplistically depicted as China's interest to pursue both the Russian and Central Asia's energy sources. But the strategy is more complex. It is to ensure population settlement in the west and thus reduce the territorial vulnerability of western China and also build up a long-term base for a productive workforce, a prerequisite for making significant inroads into the region's oil and gas fields, and exploiting its other natural resources. As I had mentioned earlier, portions of central China and areas towards the east, when global warming comes up in the next 20-30 years, they will become uninhabitable. The move to the west is irreversible. Within Central Asia, although Russia was the co-prime mover in setting up the SCO, the real beneficiary from the pact has been China. Examining it in depth, the Chinese gains accruing from SCO individually and across the board are far greater than the benefits that have come the way of Russia or the other Central Asian countries that are currently forming part of the SCO. For example, China said very little in public of Russia's move into parts of Georgia last summer. Russia is making a strategic mistake if it equates China's public silence with tacit acquiescence to its claim to privileged interest in the post-Soviet Republics. Many of these are located on China's western flank. Proof of China's discomfiture was first seen at the 2008 summit of the SCO. President Medvedev, pushed the SCO to recognize the independence of Abkhazia and South Ossetia but the SCO demurred. The group's Central Asian members - Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan would not have stood up to  Russia without China's support. At this year's SCO summit, the brief appearance of  Iran's disputed president-elect, Mahmud Ahmedinejad may have gained all the headlines, but China's announcement of 10 billion dollars fund to support the budget of financially distressed former Soviet Republics which followed head on after 3 billion investment in Turkmenistan and 10 billion investment on Kazakhstan provides more evidence that now China wants to shape events across Eurasia. So far China's rulers have regarded the emerging strategic competitions with India, Japan, Russia and the US as jostling for foreign influence in Central and South Asia. China's strategic imperative would be to ensure that no rivals acquire a dangerous preeminence in any of its border regions.

     Now going on to global reactions to China's muscle flexing: Russia is very sensitive to US moves into the old Soviet backyard. Ultimately the same thing is going to happen with China. Australia published its first defense paper since 2000. It did not do so for eight years. It envisaged a big boost in weapons purchases for the navy and these were estimated to cost 75 billion dollars. The French are setting up a naval base in the Gulf. Of course, some of it has to do with the American policy in the Middle East. I feel a lot of it has to do with the projected Chinese naval base in Gwadar on the Makran coast. Ostensibly, it is only the US that has the capability globally to deal with China in its global trajectory, aspirations and ambitions. When China Rules the World, the Rise of the Middle Kingdom and the End of the Western World is the latest book by Martin Lark; you must have read it. Along with the rise of China, the writer has also foretold a steep decline of the west, with which I would like to disagree. The last part of this presentation is India juxtaposed to China. Let me start with a few expert opinions from earlier books. Experts place China's assent to military superpower status at par with or almost at par with USA to the period 2035. When that stage is reached China could very well announce or tacitly start adopting a Chinese version of the Monroe Doctrine in Asia. In some respects it is already doing so. Most countries in China's neighborhood and especially Southeast Asia are already factoring Chinese sensibilities in their foreign policy projections. If the Chinese domination is not more overt or marked, it is solely due to the significant US presence in Asia. As to how long the presence lasts after alternate energy sources have been found or global dependence on Asian hydrocarbon reserves declines is anybody's guess. For demographic reasons akin to those of Japan and Europe, Russia too would have suffered considerable erosion in its geopolitical mass. By that time it would be well on the cards that China would have demographically expanded fairly massively into Asiatic Russia, Siberia, Kazakhstan and Tibet. By fair means or foul, Taiwan too would have come under Chinese sway, if not politically incorporated like Hong Kong as a province of China. Outer Mongolia would have remained only nominally independent.

    The perception is that a strong India with strong economic ties with ASEAN automatically becomes the balancer and stabilizer for Asia. Looking ahead, India has to build up its military strength in the coming decade. While it cannot hope to meet China's capability in a hurry, it can nevertheless, ensure that it is able to call a halt to the Chinese push to the south of the Himalayas.  In the years to come practically all of China's neighbors other than some in South Asia would be happy to see India develop into an economic as well as military counter to China. Should it fail to live up to these expectations, India would have given a free run for China to dominate most countries in Asia and especially Southeast Asia. To some extent, Africa, Europe and Japan too could start feeling the heat. Unless India becomes conscious of its responsibility to itself, its neighborhood, Asia and the world and improves its military capability in a significant way; it might suffer military setbacks on its borders and loss of standing all around in the world. To be allowed to live in peace and harmony, India will have to increase its defense spending for the foreseeable future. It should be realized, however, that no matter how much it advances in the economic field, even if it were to overtake China at some point in time, India does not nurture the ambition to become a military superpower. Historically India eschewed such role; there has never been any defense paper from the very beginning that would indicate that India aspired to become a great military power. Even in the future, for generations to come, India's strategic reach would be limited to the Indian Ocean region and the subcontinent and its neighborhood. Seeing its size, and in not nurturing a larger or strategic global military vision, India stands unique in the comity of nations.

    India's election 2009 was a dire warning for the Chinese leaders, extensively covered around the world, downplayed in China. Reasons are not far to seek; because the Chinese people with the advent of the internet are making comparisons. And there have been three elections - Iran, Indonesia and India - in China's neighborhood and it is making them uncomfortable. The second rhetorical question that I posed last year was, 'what happens to the Tibetan diaspora should China settle its boundary dispute with India?' The question can be put on the backburner indefinitely because China has no intention of settling its boundary dispute with India. I repeat a strong India providing a semblance of balance in Asia and in global forums would be welcomed by the world. Countries or  groupings like the European Union, ASEAN, Russia, Japan and Australia would feel reassured if India provided balanced mult-polarity, a term one can use in Asia if not the world. In its absence there would always be a lurking dread of further hegemonic aspirations from China, immediate or latent.

    And now I am going to read you something from a very much respected statesman of Asia and the world:  "A militarily muscular and self-confident India will at once become more outward looking and economically open and energetic. In the event it is also likely to be more understanding of its subcontinental neighbors and serve the largest strategic purpose of containing China by introducing in South and Southeast Asia an indigenous geopolitical balance, the absence of which is forcing the countries of the region to kowtow to Beijing". It is Mr. Lee Kwan Yew, who made this statement. I close this talk with the following remarks: Should China and India decide to join hands to map out their collective march to a more rational world order, assuredly the world would have turned the corner towards a better future for the human collectivity. For unless there is progress beyond competing national interest between China and India, to planetary interests there can be little hope for lasting peace on the Eurasian landmass or for the global order, to meet the challenges and aspirations of the 21st Century. 'Which Way is China Headed' is a question that has now been put on the backburner. China is perhaps the second most powerful nation after the US today. It has a great civilizational heritage. Nobody can foresee the outcome, 20 or 40 years hence. Much will depend upon the path that China follows. Will it continue to be a frenzied push towards American style consumerism or would there be a strategic pause to re-evaluate its options, a conscious turning towards its civilizational past as the well-spring of its future progress. Unless it does so, like its all-weather friend in India's neighborhood, China's transition to a stable democracy may be equally messy.
Thank you.
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** (Since the talk in July 2009 a big question mark has now been put on the whole issue with the announcement of the US military package for Taiwan and the vociferous Chinese reaction to it. Evidently the Taiwanese would not like to be physically taken over by the Chinese).