In World Economy News 03/07/2017
Very little was expected in India from Prime Minister Narendra Modi’s visit to the U.S., and for good reason: Modi had gone out of his way to cultivate a personal relationship with Barack Obama, including famously pouring out a cup of tea for him and the cameras when Obama visited India. Modi is nothing if not a strong personality, and has a somewhat worrying tendency to reduce complicated bilateral relationships to personal ones. Whether he would hit it off with Obama’s successor — who could perhaps be politely described as “mercurial” — was a matter of frenzied debate in New Delhi prior to the visit.
As it turned out, Indian wonks needn’t have worried. Modi enveloped Donald Trump in a bear hug — something he tends to do — and whatever the American president may have thought of that, the bilateral relationship has clearly benefited from growing U.S. disillusionment with Asia’s other giant, China. The question for Modi isn’t whether he can get along with Trump, but whether he can manage the relationship better than Chinese leader Xi Jinping has.
After Xi’s own visit to America — which featured chocolate cake and missiles at Mar-a-Lago — many Indians worried that they couldn’t expect the Trump administration to appreciate that the rise of China meant that India and the U.S. were natural strategic partners. Indeed, hoping that Xi would pressure North Korea into scaling back its nuclear and missile programs, Trump has lavished the Chinese leader with praise and dropped his longstanding threats to punish China for allegedly unfair trade practices.
Even now, the U.S. president shows no sign of rethinking the somewhat intemperate remarks about India he made when withdrawing from the Paris Agreement. And he is unlikely to regret pushing Indian IT companies into a corner when it comes to temporary work visas. But, a few lines in the joint statement issued after Modi’s visit greatly reassured nervous Indian strategists:
[India and the U.S.] support bolstering regional economic connectivity through the transparent development of infrastructure and the use of responsible debt financing practices, while ensuring respect for sovereignty and territorial integrity, the rule of law, and the environment.
As many observers pointed out, the wording in this statement is startlingly similar to a quietly contemptuous statement from the Indian foreign ministry at the time of Xi’s mammoth “Belt and Road Forum” last month. India is deeply concerned about the implications for Asia of China’s big connectivity push — for good reason — and it appears that some in the Trump administration now agree.
Nor is this an isolated sentiment. I write this from Beijing, where a high-level Sino-American dialogue has just concluded, and even some Chinese diplomats are willing to accept that it was a disappointment. Recent tweets have made clear Trump’s frustration with China’s inability or unwillingness to rein in North Korea. Earlier this week, the State Department loudly condemned China’s failure to combat human trafficking. It now seems likely that the U.S. may follow India in declaring that the Chinese steel industry is unfairly dumping its output on the rest of the world.
China’s leaders appear to have played a strong hand of cards pretty badly. They were fortunate to deal with two leaders, Modi and Trump, who were looking for reasons to improve relations — if only so that they could stress to their voters that they were better dealmakers than their predecessors. Yet Modi was unsurprisingly miffed when the People’s Liberation Army decided to waltz into territory that India claimed as its own as he sat down with Xi on the latter’s visit to India. This week, Indian and Chinese soldiers got into another scuffle at the edges of the Indian state of Sikkim, with Indian troops apparently getting in the way of a Chinese road-building project. Regardless of who provoked whom, nobody in India is going to see this “jostling” while Modi met Trump as a coincidence.
It’s unclear how deep the disillusionment with China runs within the White House, or whether Trump truly believes that China “tried” its best to deal with North Korea. But having little to show for his investment in Xi isn’t likely to sit well with the transactional U.S. president. Neither are China’s overt attempts to draw a contrast with the Trump administration’s cavalier approach to U.S. global leadership, for instance on free trade and climate.
By contrast, Modi benefits from the fact that both U.S. and Indian military leaders and foreign-policy elites see the interests of their nations converging. And while he, Trump and Xi all put something of a premium on the restoration (or the construction) of national glory, the rise of India will continue to be seen as being in the U.S.’s larger interests in Asia. As long as Modi can keep Trump focused on this larger picture, rather than minor irritants such as tech visas, he will receive a very different welcome in Washington than his Chinese counterpart.
Source: Bloomberg
