Speech titled "India and China in the 21st Century" by the PrimeMinister at the Chinese Academy of Social Sciences, Beijing
Premier Wen Jiabao recently spoke in Singapore about howit was only with openness and inclusiveness that a country can become strong andprosperous. In the past few decades, China has benefited from opening itseconomy to the rest of the world, and so has India.
India is changing and I would like to acknowledge that the success of China hasbeen a stimulus to change. This process began in the 1980s and was intensifiedin 1991. In our system change can only be brought about through public debateand it takes time to build a political consensus. However, I am happy to saythat in the 16 years that have elapsed since 1991, successive governments inIndia have carried forward the reform process, with the result that today Indiais on a high growth path.
Our economic growth during the last five years has averaged over 8.5% per year.This is unprecedented, and has created confidence that we can do better. We areaiming to raise it to 10% per year in the near future. There is a palpable senseof confidence in the country and optimism about the future.
The Indian economy has demonstrated resilience in meeting the challenges posedby globalization. In the last two decades, our industry--especially large andmedium industry--has restructured to become globally competitive. This processis continuing.
We have, over the past few years, been able to create an environment conduciveto creativity and enterprise. This is symbolized by the success of ourinformation technology sector in world markets. There are other sectors that arealso emerging. Pharmaceuticals and auto-components are both highly competitive.Indian multinationals have emerged that are investing abroad. I am happy to saythat many of these companies are investing in China.
A few weeks ago, our National Development Council, which includes the CentralGovernment together with our States and Union Territories, approved India’sEleventh Five Year Plan covering the period 2007-2012. The Plan seeks to buildfurther on the growth momentum already created to reach 10% growth by 2012. Butit also recognises that growth alone cannot be the goal of a planning process.
We also need to ensure that growth is inclusive and equitable. We have toaddress the problems of inter-regional disparity and specifically, urban-ruraldisparity, revival of the agriculture sector, limited availability of land, andthe lack of mobility of those employed in agriculture to productive jobs inindustry. This is what we mean by inclusive growth. It is somewhat similar towhat is called harmonious growth in China.
We have decided to make important structural shifts in the Plan to address thecritical constraints that hold us back from achieving our objective of fasterand more inclusive growth. As far as growth is concerned, the biggest prioritymust be the development of infrastructure, including infrastructure in ruralareas. We propose to increase investment in infrastructure from 5% of GDP in2006 to 9% by 2012 relying on both public and private investment.
Education, including skill development, is another major priority. We propose totriple the share of Central government spending on education and skilldevelopment from less than 8 per cent of total plan expenditure in the TenthPlan to over 19 per cent in the Eleventh Plan. In fact, more than half of totalgovernment budgetary spending has been earmarked for agriculture, education,health and rural development, reflecting our emphasis on inclusive growth.
Sustainability of development for a country of India’s size is another keyconcern. We need to address critical challenges relating to energy, food andwater security, and climate change. These are challenges that China faces aswell.
India’s domestic and foreign policy priorities areclosely linked. The primary task of our foreign policy is to create an externalenvironment that is conducive for our rapid development. Our policy seeks towiden our development choices and give us strategic autonomy in the world. Theindependence of our foreign policy enables us to pursue mutually beneficialcooperation with all major countries of the world.
The establishment of peaceful and cooperative relationships in our neighbourhoodis an intrinsic element of our foreign policy. We realise that our destinies arelinked by geography and history. Both India and China seek tranquillity andstability in our immediate neighbourhood and extended region.
We recognise that the world is evolving and developing features of multipolarity.It is natural that major powers, bound together by economic interdependence,will seek to cooperate with each other to mutual benefit. India and China mustbe part of this cooperative framework.
I look forward with optimism to the future and the role which India and Chinaare destined to play in the transformation of Asia and the world. This optimismis based on my conviction that there is enough space for both India and China togrow and prosper while strengthening our cooperative engagement. History showsthat our two great civilizations, flourished for centuries, side by side,interacting and influencing each other.
The Strategic and Cooperative Partnership for Peace and Prosperity that weestablished in 2005 seeks purposeful engagement covering a wide range of areas.At the same time, we recognise the obligation we have to put behind us disputesand problems that have troubled our relations in the past.
The boundary between us is peaceful. We are both determined to keep it so whileour Special Representatives seek a settlement of the boundary question. In April2005, during the visit of Premier Wen Jiabao to India, we agreed on a set ofPolitical Parameters and Guiding Principles for the settlement of the boundaryquestion. We are confident that those Principles will guide us to a mutuallysatisfactory solution of this issue. We have also agreed to set up a mechanismto look at trans-boundary rivers, and will make a success of its work.
We are satisfied with the results of our efforts so far and are convinced thatthe potential for India-China relations is great and will be realised.
Where do we go from here and what is our vision for the 21st century? Yesterday,Premier Wen Jiabao and I have agreed upon our Shared Vision for the 21stCentury.
The starting point is the recognition that India-Chinarelations impinge not only on the welfare of the people of the two countries,but also influence regional and global trends.
We are at an exciting point in history when the centre of gravity of the worldeconomy is moving towards Asia. Just as the world economy was largely aboutwestern nations in the twentieth century, it could be largely about Asia in the21st century. By the mid-21st century, Asia may well account for more than 50percent of trade, income, saving, investment and financial transactions of theworld.
We must ensure that India and China cooperate in creating a world of positiveexternalities and mutual prosperity, rather than one based on balance of powercalculations and animosity. This involves India and China working togetherclosely to ensure a global order in which our simultaneous development will havea positive influence not only on our own economies but also on the rest of theworld.
I would like to highlight some key focus areas for the future.
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First, we must bridge the "knowledge gap" between India and China. Weneed to make much more sustained effort to ensure proper awareness of eachother. This not only applies to our culture and history but also to contemporarydevelopments. We need to have more people to people contacts to removemisconceptions and prejudices. We need a broad based comprehensive dialogue atthe level of intelligentsia, media, non-governmental professionals and theworlds of culture and the arts.
Second, we need to expand our cooperation in a broad range of functionalsectors. This could include learning from each other’s national developmentalexperiences. We would like to learn from China’s success in the creation ofphysical infrastructure, strategies to provide productive employment outside theagriculture sector, and poverty alleviation. Other areas for potentialcooperation are science and technology, public health, education, institutionbuilding, water resource management and disaster management.
Third, we should harness our complementarities and synergies in the areas oftrade and business. India’s growing consumer market, skilled human resources,and software excellence together with China’s own large market, itsmanufacturing prowess and cost competitiveness provide the platform forexponential growth in our economic ties. China is already the second largesttrading partner of India. Yesterday, we agreed to set a bilateral trade targetof 60 billion US dollars by the year 2010.
Asia is today more integrated than ever before in terms of trade in goods andservices and investment of capital and knowledge. In the East Asian Summit andother fora, we are discussing several constructive ideas for an open inclusiveeconomic architecture from the Indian Ocean to the Pacific. We look forward toworking with China in this pursuit. I have spoken before of an Asian EconomicCommunity and am glad that progress is being made in that direction.
In pursuing these initiatives we will do it the Asian way--avoidingconfrontation and building trust, confidence and consensus. It is only in anenvironment of peace that prosperity in Asia can be sustained. India and Chinahave an important role to play in building peace, security and stability in theregion.
At the global level, our two countries should be at the forefront of theemergence of a more democratic global order and of multilateral approaches toresolving global issues. Today’s international institutions, like the UNSecurity Council, no longer reflect reality and must be democratised.
We have had useful experience of cooperating in the effort to bring about asuccessful conclusion of the Doha Development Round of the WTO negotiations,placing the development dimension at its heart. This experience enables us tointensify our efforts to create a more open and equitable trading and financialarchitecture.
The environment is humanity’s common heritage. The rights of our people to afair chance to improve their lot cannot be abandoned because of environmentaldamage caused by others who followed a path which has squandered the earth’sresources.
Burden sharing has to be fair and must take into account historical emissions.The recently concluded Bali Conference provides a framework for futurecooperation on this basis. India and China should continue to work together tostrengthen international cooperation on this basis.
The rapid growth of India and China will lead to expanding demand for energy. Wehave no choice but to widen our options for energy availability and developviable strategies for energy security. We can do much more to jointly developclean and energy efficient technologies through collaborative research anddevelopment. India seeks international cooperation in the field of civiliannuclear energy, including with China.
Another area which merits our attention is food security. Global trends in foodproduction and prices, and changing patterns of consumption are going to putincreasing pressure on the availability and prices of basic food items. Thesetrends pose major challenges for how we manage our food economy in the yearsahead. Our interests are common and we can learn from each other in thestrategies we follow.
Perhaps the greatest danger to our development comes fromextremism of all types, whether in the garb of religion or on the pretext ofrighting historical wrongs. Recent developments in our neighbourhood havebrought home to us again the imperative need to collectively fight terrorism andextremism in all its forms. As large and diverse societies, we are well placedto demonstrate the benefits of moderation and peaceful co-existence. The rise ofnon-state actors, often based on intolerance, and narrow conceptions ofidentity, is a threat to all civilized nations.
The responsibility for the further development of India-China relations is ashared one. Our governments have an important role to play. But we must alsolook to you, the intellectuals, thinkers and scholars of China to lead the wayby working closely with your Indian counterparts. It is through a free flow ofideas and sharing of different perspectives that our two societies can buildupon the edifice of our civilisational links.
