THE CHINESE OPPORTUNITY

The Chinese opportunity

  China what does this country mean for India if you look at it from a historical point of view we Indians think of china as our enemy no 1 we fear the Chinese military establishment and we just don’t understand why china is spending so much on its military we think it’s all for us to destroy us to annihilate us that’s the view we hold about china at the same time we marvel at the economic success of china the progress that they have made and the economic superpower that they are now

Both these views are correct as well as wrong they have both pluses and minuses so let’s look at what we have achieved   we have established a well entrenched democracy where democracy has reached to the last mile at the panchayat levels we have a excellent judicial system a free press and the youngest population in the world but we have not achieved even 40 % of what china has been able to achieve economically but our achievements also very significant

Now let us look at both these countries together we have 2/5 of the world population we are the biggest markets no 1 and no 2 respectively for any goods if china is a manufacturing hub we are the knowledge hub of the world 

So what should we do should we keep on eyeing each other with suspicion or should we think differently?

Yes its time to think different and this government has taken the right steps in that direction but these small steps won’t do we need a sea change in our attitude towards china and the same has to happen from their side

If India and china come together they would create the biggest market for goods in the world and all the saarc nations also join them they can together uplift tens of millions out of poverty if we provide knowledge and they provide their production skills together this combination can become the most prosperous and strong trade bloc in the world 

And as far as the Chinese military ambitions go well it is aiming to be super power we also aim but we only think and china does we need not fear a military build up by china but need to build our defense forces up to that level but for that we need money which we don’t have and comes from increased economic activity and for that china is our best bet so working with china can be the solution to India defense preparedness

The world is now a safer place some minor wars here and there but a chance of major conflict are almost nil the reason! Nuclear weapons

India and Pakistan can have skirmishes but can never have a major war why because of nuclear weapons US and china would have minor battles of economy trade but no military war why because of nuclear weapons traditional warfare has now been replaced with trade wars the real power is not in weapons but in money if we are poor nation we are nowhere.

India and china are  the  two oldest civilizations in the world  with a rich culture and heritage both these civilizations despite being very strong have never attacked  other  civilizations the world can learn a lot from them it’s time to conquer the world not only economical but culturally and its possible when these two nations come together

THE MODI WIN - AFTERMATH

                                            The modi win – the aftermath

Well don’t take me wrong i have been a staunch supporter of Modi and continue to be but there are various question marks that are there which have risen after the win particularly with the Mode government raising the bar of expectations to a different level altogether.

But before we go there let’s examine the win in detail it’s an emphatic win no doubt considering the fact that the BJP has no presence in the south to get a clear majority shows how strong the Modi wave was its a vote for hope it’s a vote for change its a vote to get in the fast lane of growth that the people of this country see happening across the world and they feel left out it’s also a vote against dynastic rule against the thought that only one family has the right to think as to what direction this country is going to take  its win where the common man has said that no i am the rule of this country and i choose where my country goes .

The party BJP which was branded communal by all the other parties fought this election on the agenda of growth and development and all the parties tried their level best to make this election into a communal one and the people of this country Hindu and Muslim showed them their place it’s a historic election in that regard .

So no one least of all me have any doubt about the good intentions of Mr Modi  whatever he is saying whatever  his ministers are saying everything is right no one n doubt that but  is this all possible is it all so easy

Let us look at what narendra Modi is saying let us list out all the things and i am saying purely from an economical point of view firstly he wants industry and growth to be back he wants investment to come back into India  he wants to turn this country into a manufacturing hub he wants inflation to come down the way it is climbing up there seems to be no end to it he wants interest rates to come down he wants bullet trains he wants 100 smart cities the list is endless and its growing every day

But is all this possible 

I don’t think so

First  let us start with the interest rates the interest rates are cut by the RBI  and the PM can do nothing about except may be changing the governor  the rates are a function of inflation and it has not eased down and shows no sign of and what has the government done except to clamp down on potato futures which will have no effect whatsoever the first major step of the government to hike rail fares will have an cascading effect on inflation and you can expect it to climb further and you can forget any lowering of interest rates by the RBI for at least a year at the least and if rates don’t come down there is no fresh investment  because the cost of borrowing is higher  so no new  projects so managing inflation is the solution to but there seems to be no direction on the same from the government and frankly there is little that the central government can do mostly the mandis and markets are controlled by the state government and unless they do something nothing can be done  so it’s a difficult task and till now there seems to be no solution in sight

To turn this country into a manufacturing hub  is also a difficult task it’s not that the congress did not know that its manufacturing  that creates jobs they also knew it but could do nothing why because for that you need to change labour laws the Modi government has majority in look Sabha so there it is no problem but what about the upper house  and also what about the labour unions one  signal from the government that it is amending the labour laws and they will cripple the entire economy of the country why do you think it has not been done till now you will need a very strong will power to  do that and unless and until you do that you forget the dream of turning this country into a manufacturing hub

For 100 smart cities to be built for bullet trains to run you need investment and a government that is running into a huge defecit cannot make the investment on the scale that Modi is promising there is just no money if you make investment the deficit goes out of control and if you make no investments there is no growth it’s a very difficult task even by hiking rail fares you have not made the railways profitable you have just curtailed their losses railways has no money for bullet trains

So  i don’t think all this is possible and that to just with one budget the way the stock market is expecting crude is boiling  inflation is running out of hand  the monsoons’ are weak  but market is not cracking ask me because i have lost money  by betting on that  it should have broken down but it has not  the undercurrent of what this government will do in the budget is so strong that even with the writing on the wall that  it is going to be difficult task the markets are not cracking and they will not just crack they will fall into an abyss if this budget does not deliver which does not seem likely

So what i am saying is that take everything with a pinch of salt the reality is going to sink in and it is going to happen sooner than later .