Australia told to be partners, not adversaries, with China

Prime Minister Lee Hsien Loong of Singapore and PM Scott Morrison of Australia

Prime Minister Lee Hsien Loong of Singapore gives advice to Australia on China

“China is one of the biggest policy questions for every major power in the world. You need to work with the country. It is going to be there, it is going to be a substantial presence. You don’t have to become like them, neither can you hope to make them become like you. You have to be able to work on that basis, that this is a big world in which there are different countries, and work with others who are not completely like minded but with whom you have many issues, where your interests do align. There will be rough spots … and you have to deal with that. But deal with them as issues in a partnership which you want to keep going and not issues, which add up to an adversary which you are trying to suppress. That is speaking in very general terms, but I think that’s from Singapore’s point of view how you have the best chance of developing a constructive relationship and avoiding very bad outcomes.”

INTO INDIA has long campaigned for Australia to just calm down and deal with the massive regional opportunity (and challenge) that we face.

Such common sense. Calm, rational and accepting of reality.

Can Australia follow this advice?

Emerging Markets Guru Mark Mobius – India a 50-year rally

Emerging Markets guru Mark Mobius is bullish on India

Thanks to my friend Mugunthan Siva, Managing Director, India Avenue Investment Management for spotting this one!

“India is on a 50-year rally,” even when there are quick bouts of bear markets, veteran Emerging Markets investor Mark Mobius mentioned in an interview on Bloomberg Tv. “India is possibly the place China was once 10 years in the past,” he said.

A man of his word, Mark Mobius has allotted nearly half of his emerging-markets fund to India and Taiwan to assist offset a slide in China shares that has dragged down returns from creating nations as an entire.

Mobius’ bullish view on India clashes with these of analysts at Morgan Stanley and Nomura Holdings Inc, who’ve downgraded the inventory market after the benchmark S&P BSE Sensex Index greater than doubled from a March 2020 low.

“Individuals say emerging-markets look unhealthy as a result of China is dragging down the index, however they’ve got to have a look at different areas similar to India which can be going up,” mentioned Mobius, who created Mobius Capital Companions LLP after a profession at Franklin Templeton Investments.

The Mobius Rising Markets Fund has a mixed 45% of its portfolio allotted to India and Taiwan, with tech {hardware} and software program the largest holdings in these markets. Indian software program companies supplier Persistent Techniques Ltd. and eMemory Know-how Inc, a Taiwanese chip know-how supplier, have been amongst its largest stakes as of end-September. The shares have each greater than doubled this year.

8 things we need to know about India

Confident young Indians like these are driving new entrepreneurial spirit

CAUTION – generalisations are just that, and you will almost always encounter those who do not fit in this list. This is offered to assist those visiting India for business, education or tourism.

1. Successful and confident

Economic success has restored Indian confidence. Indian entrepreneurs are now recognized around the world and there is a national expectation that the next Bill Gates will be an Indian. This entrepreneurial spirit permeates the nation (most dream of becoming entrepreneurs) which is now confident.

2. Never forget rural people

Indian business and political leaders may live the urban lifestyles, but they do not forget the small towns and villages at the centre of rural life – and it’s not just the politicians with an eye for votes, with major corporates such as Infosys pouring resources and funding into village developments.

3. Avoid pointing the finger

Indians become instantly passionate when challenged on subjects like their high tariffs, especially if the challenge comes from the west. The message is, point the finger at India and you can expect a robust response.

4. Oceans of patience

Indians have oceans of patience which can drive westerners crazy, but it gives them a special strength in negotiations. This patience is derived from deeply held spiritual views such as impermanence – Indians are constantly reminded of the impermanence of this life, everything changes, and they can wait when often we cannot. Who has the advantage in this situation?

5. Not just an IT miracle

Do not be fooled with the view that the Indian economic miracle is just driven by call centres and IT. Important as these are, look also at insurance, energy, retail, clean technology, manufacturing, pharmaceuticals and even agriculture as areas where efficiency is producing startling results.

6. Not especially “Asian”

While India feels great about the success of “Asia”, in many ways it does not feel particularly “Asian”. First and foremost, Indians feel Indian, and to them that is vastly more relevant than being geographically part of Asia.

7. Remember the “Father of the Nation”

Whether dealing with the young or the old, in India never forget the “Father of the Nation”, Mahatma Gandhi.

8. Equity up there with democracy

Partly because of Gandhi, Indian leaders are more concerned with equity than with spreading democracy around the world – and cannot understand the enthusiasm of the USA and its allies to champion democracy in unlikely locations.

India now chasing trade deals – having resisted for decades

Indian PM Narendra Modi meets recently on trade with former Australian PM Tony Abbott

What has changed for India? It seems that having resisted trade deals for years, it now plans by the end of March 2022, to complete multiple quick-fire bilateral trade agreements.

Something has not changed however – the Indian government, distrustful of full scale FTA’s, is prioritizing “early harvest” pacts over comprehensive free trade agreements.

What has changed is the pandemic and the rise of China.

Therefore, the Indian government is focusing on strengthening the trade with G-7 nations with strong Indo-Pacific strategies and those with growing influence in central Asia such as the United Arab Emirates.

Australia, at a key position in the Indo-Pacific, is a high priority. As a fellow member of the QUAD, India and Australia have never been so close strategically and are keen to add trade now.

In large part, this is India’s push to do well as supply chain realignments take place – there is only a narrow window of opportunity to get these deals done.

How big is this? The government is negotiating bilateral trade agreements with 20 countries and expects to complete half a dozen deals, including those with Australia and Britain by this December and March 2022. 

India is ambitious – Mr. Piyush Goyal has set kept a target of US$ 400 billion for annual merchandise exports – almost 38% higher than US$ 290 billion achieved in last year and plans to achieve US$ 2 trillion annual merchandise exports by the end of this decade.

Outcome? Lots of deals that will not be quite world class Free Trade Agreement (FTA) but which will have some wriggle room.

India and the USA have very different world views – the 10 differences

Indian PM Modi meets with US President Biden in the White House recently

There has been a lot of talk recently about India becoming part of some formal military alliance with the US – in response to the rise and actions of China.

But is this likely?

Here are 10 key differences in the world view of India and the USA

New Delhi is wary that any formal alliance with the US could draw it into almost constant military activity such as the Iraq war

India prefers to do its own strategic deals on a country by country basis – rather than manage these through a dominant US strategic alliance. For example, India and Australia have a Mutual Logistics Support Arrangement allowing each to uses each other’s bases

Historically India has never agreed to open-ended commitments that might lead to future military involvement

Of the four countries speculated to be invited to join the Five Eyes security arrangement (the four are Germany, India, South Korea and Japan) – India is the only one of these four to NOT have a treaty alliance with the US

An example of differences between India and the US is Iran and the Nuclear Non-proliferation Treaty (NPT) – the US attacks Iran on the nuclear issue, sees the NPT as something to be enforced – but India has not signed the NPT itself and sees it as discriminatory

There are differences on the “threat” from China – the US is most assertive on freedom of navigation in the South China Sea while India has been quite reserved on this issue

India is more concerned about its Himalayan border conflicts with China than the South China Sea

India generally has little or nothing to say about human rights issues in other countries. Whereas the US and its allies such as the UK and Australia are constantly calling out human rights abuses around the world

The US wants “all in” commitment from allies but India has always been non-aligned and refuses to get drawn into “us versus them” views of the world. One current example is India is finalising a logistics deal with the UK while also negotiating a similar deal with Russia

India is content to be “the world’s biggest democracy” but is not evangelical about it, accepting that all countries are different – a sharp contrast to the US wanting to remake countries in its own image and championing democracy for all

Tony Abbott might have overstated it – but he is more right than wrong on India

Tony Abbott wants Australia to make a big shift towards India and away from China.

Despite some hysterical responses from two former Aussie PM’s, Tony Abbott has by and large got it right on India and we should work towards the closer relationship he believes is possible – and necessary!

Consider this verbal stoush:

“The answer to almost every question about China is India. Although currently not as rich as China … India is perfectly placed to substitute for China in global supply chains … India has revived the Quadrilateral Security Dialogue, and the first in-person Quad summit is expected before the end of the year. Under Modi, India has invited Australia to join the annual Malabar naval exercises that will soon involve India, the US, Japan, Australia and also the UK … It will be an impressive show of strength, demonstrating the democracies’ commitment to a free and open Indo-Pacific … If Australian business and officialdom were to make the same effort with India that they’ve long made with China, there’s potential for a ‘family’ relationship with India that was never likely with China.”

– Former prime minister Tony Abbott in The Australian (10/8/21)

“No, (Abbott’s comment) is just wrong. We all agree our relationship with India has been underdone over the years … India has got a very deep longstanding protectionist political culture. They weren’t even prepared to sign up to RCEP … You have got to be realistic about what you can achieve in terms of trade. They are different countries, different economies. We should be aiming to have much stronger deeper relations with India …  Every prime minister should and will do that. But the idea that can sort of delete China and insert India is just nonsense.”

– Former prime minister Malcolm Turnbull at a La Trobe University webinar (10/8/21)

“We have got to be deeply realistic about one thing (about the Quad). Is it the assumption of future Australian governments, like Tony Abbott’s view in today’s press, that the Indian navy is going to go steaming into the South China Sea to defend Uncle Sam’s interest if the balloon goes up over Taiwan? I think not   …  We need to ask some very hard military questions about the core strategic utility of this (the Quad) for the longer term … We need to go into this with wide eyes open, not the blithering idiot remarks we’ve seen from Abbott in today’s newspapers.”

– Former prime minister Kevin Rudd also at La Trobe University

“The one thing we should not be doing is saying to India, this is to line you up to be the next member of ANZUS to take on China. I agree with what Kevin said, that equally just plays into the paranoia of China … We have to just move gently, avoid extravagant language (with India) …  Frankly, extravagant claims of the type we were talking about a moment ago are not helpful.”

– Malcolm Turnbull again

“India is the world’s emerging democratic superpower and my god don’t we need another democratic superpower in the world right now. Isn’t it so important that a country like Australia do everything it can to ensure India does take its rightful place up there at the head of the world’s great democracies.”

– Tony Abbott, Australia India Address (17/8/2021) 

Well, what do you think?

India’s EdTech has a huge boost due to covid and home learning

Harsh Rajan and Nirmla Sankaran founders of HeyMath – an E-Learning, online Maths coaching institute in Chennai.

India’s online education sector has really taken off as the pandemic led to school closures and a big part of the 250 million school children switched to online learning.

Investors are attracted to the large number of startups and unicorns in EdTech.

It’s an industry that will be worth nearly $2 billion by next year and is producing unicorns such as Byjus and Skillmatics.

Even with this dramatic growth, online education is touching only a small fraction of the Indian education market, so the future is strong.

A further boost for EdTech is the new National Education Policy (NEP), which looked at addressing the challenges and extending the scope of right to education (RTE) to students aged 3-18 years, with a key recommendation to harness edtech through app-based learning, online student communities, and lesson delivery beyond ‘chalk and talk’.

According to estimates by DataLabs, there are a total of 4,450 edtech startups operating in India, spread across various segments such as test preparation, e-tutoring, online certification, skill development, online discovery, and STEAM kit and enterprise solutions.

Educational delivery will no longer be either fully online or offline but a hybrid blend of both worlds.

For countries like Australia, India has an appetite for almost all of the EdTech innovations coming through.

India speeding up solar power across Africa

Indian PM Narendra Modi meets with African leaders during the International Solar Alliance meeting – an initiative created by India.

India is taking a leading role in supporting the spread of solar power across Africa – where nearly 600 million Africans still do not have access to modern sources of electricity.

India created and leads the International Solar Alliance, which has 86 member countries including Australia – and is now attracting strong participation from Africa.

With drastically falling technology costs, renewable energy has become a cost-effective option of generating clean power all over the world.

The International Solar Alliance (ISA) was conceived as a coalition of solar-resource-rich countries (which lie either completely or partly between the Tropic of Cancer and the Tropic of Capricorn) to address their special energy needs.

The ISA will provide a dedicated platform for cooperation among solar-resource-rich countries, through which the global community, including governments, bilateral and multilateral organizations, corporates, industry, and other stakeholders, can contribute to help achieve the common goal of increasing the use and quality of solar energy in meeting energy needs of prospective ISA member countries in a safe, convenient, affordable, equitable and sustainable manner.

ISA has been conceived as be an action-oriented, member-driven, collaborative platform for increased deployment of solar energy technologies to enhance energy security and sustainable development, and to improve access to energy in developing member countries. The ISA has 122 sun-belt countries that lie between the two tropics as its prospective member countries and currently boasts a membership of 86 countries globally.

Despite a shift towards USA and Japan, India maintains close friendship with Russia and a “multipolar” world view

External Affairs Minister S Jaishankar along with Russian Foreign Minister Sergey Lavrov address a joint press conference, in Moscow. The visit was aimed more at reiterating the importance both nations accord each other.

India has long been able to see both sides of an argument in international affairs – and today is a champion of a multipolar global order.

This frustrates countries like the USA and Australia, which clearly see the world in terms of goodies and baddies – for them, the world order is either run by “us or them”.

India’s independent approach was seen in the recent reinforcement of its long held close friendship with Russia. At a time when the rise of China has pushed India into closer relations with the US and Japan, the Indian External Affairs Minister, Dr S Jaishankar held a three day visit to Russia, to reassure an old friend.

Russia could be described as India’s oldest and strongest allies since independence.

“I think what makes our working together so natural and comfortable is our belief in a multipolar global order,” Jaishankar said.

In the complexity of our pandemic world, “multipolar” could be something that takes us forward in peace.

Can India teach the west and China about co-existence?

With India’s role as a rising power, plus its long record of peaceful co-existence with multiple countries, can it help the west and China live together?

Here is the situation as outlined by Michael Spence, a Nobel laureate in economics, Professor of Economics Emeritus and a former dean of the Graduate School of Business at Stanford University:

“At the recent G7 and NATO gatherings, China was singled out as a strategic competitor, a calculating trading partner, a technological and national-security threat, a human-rights violator, and a champion of authoritarianism globally.”

Not a great recipe for co-existence.

Spence continues: “China denounced these characterizations, which its embassy in the United Kingdom called “lies, rumors, and baseless accusations.” The risks that such rhetoric poses should not be underestimated.”

Also not a recipe for co-existence.

He concludes: ” The real danger, however, is that officials on both sides seem to have embraced a zero-sum framework, according to which the two sides cannot simply co-exist; one side must “win.”

But India has long experience of getting along with all sorts of regimes and managing to see both sides of the argument.

As India plays a bigger role in global groupings, can it influence both the west and China to drop “zero sum” thinking and work to co-exist?