This morning, Business Standard newspaper in India has an edit on China being the pillar of global integration. The edit is baffling, to say the least.
From Indonesia all the way up to Japan, South Korea and Taiwan, China has political disputes. No need to mention their disputes with India. Raja Mohan has questioned India’s unrequited ‘nice guy’ and constructive attitude towards China.
China has just been denied a ‘market economy’ status by both the United States and the European Union. If China has truly integrated with the global economy, it would not have been denied that status. After all, without the enthusiasm of the United States and the EU, China would not have become a member of the WTO. Just check out China’s zooming export growth after that. China has been a global integration and globalisation free-rider.
It has imposed severe restrictions on outflows of yuan. Personally, I have no problems with the last one. Sovereigns have to resort to it from time to time. But, conceptually, that is not integration. That is fragmentation.
If the West retreats from global integration, there will be a vacuum but no other pillar is ready to be erected. Hence, to call China a pillar of global integration is inconsistent with facts and hence, illogical.
India can still benefit from external trade but for that, it has to address its productivity blues and internal fragmentation of its production structure.
(This is the second time that I could not post my comments on their site. Strange or not? I am a premium subscriber to ‘Business Standard’)