INSIDE OUT INDIA AND CHINA

LOCAL POLITICS GO GLOBAL

By William Antholis

Brookings Institution Press

Copyright © 2013 THE BROOKINGS INSTITUTION
All rights reserved.
ISBN: 978-0-8157-2510-7

Contents

1 Jigsaw: Counting to 1.3 Billion……………………………………12 Less than Perfect Unions………………………………………….93 China: Promised Lands, Heartlands, Badlands…………………………374 India: Forward States, Backward States, and Swing States……………..865 Power Politics, Inside Out………………………………………..1326 Differently the Same: Inside Out Diplomacy………………………….161Acknowledgments……………………………………………………189Notes…………………………………………………………….197Index…………………………………………………………….225

CHAPTER 1

JIGSAW:COUNTING TO 1.3 BILLION

ONE THIRD OF humanity is governed from two capitals, Beijing andNew Delhi.

People who work in finance often speak of the magic of large numbers.The same applies to politics. To manage the biggest challengesfacing the planet, China and India must be at the table. Steering theworld economy, combating poverty, slowing global warming, preventingnuclear war—these are big and hard problems. You cannotget there from here without going through these two giants.

Yet few in Western foreign policy circles think about the darkmagic of large numbers: what it takes to move two seemingly self-containedworlds. Connecting China’s 1.3 and India’s 1.2 billionpeople to the global economy—or protecting them from it—is nosmall task. And moving those billions to address common globalchallenges is even harder.

Imagine the challenge of solving a jigsaw puzzle made up of1.3 billion unique pieces. Start with the population of the UnitedStates. Add Mexico, Brazil, and the rest of North and South America.Then add 500 million people living in the European Union.That is about 1.3 billion.

India’s seven biggest states have the combined populationof about 740 million people. That is the same as the combinedpopulation of the seven largest industrial democracies: the UnitedStates, Japan, Germany, Great Britain, France, Italy, and Canada—alsoknown as the G-7. China’s seven biggest provinces are nearlyas large. Few Americans can name the seven largest Chinese provincesor Indian states, let alone who governs them and what theycare about. That includes many senior foreign policy professionals,political leaders, and business leaders.

By comparison, American and European diplomats, politicians,and business leaders intuitively understand federal politics and thebig differences between American federalism and Europe’s confederalunion. They know how the Electoral College chooses theU.S. president—including the role of red states, blue states, andswing states. They know that while all states have Republicans andDemocrats, each state has its own priorities and prejudices. Theyknow that Senate voting blocs shape treaties and military spending,and that New York, Texas, California, and Illinois bring differentstrengths to our national economy.

Trade negotiators know the basics. Senators from Iowa careabout corn subsidies. House members from northern Californiacare about intellectual property. Governors and senators fromWest Virginia, Louisiana, and Texas will fight efforts to regulategreenhouse gases. All of these officials face crosscutting economicpressures and complex public attitudes within their states. Counterpartsin Europe face similar puzzles but have an even more difficultchallenge since the European Union’s system is more decentralizedand therefore more cumbersome.

This book is for people who wonder about the inside of Chinaand India, and how different local perspectives inside those countriesshape actions outside their borders. Though my family and I spent fivemonths traveling in both countries to do research, this book is not atravelogue. Rather, it is an attempt to sketch how a few of China’s andIndia’s many component parts are being shaped by global forces—andin turn are shaping those forces—and what that means for Americansand Europeans conducting diplomacy and doing business there.

FIVE MONTHS, FOUR PEOPLE, THREE QUESTIONS

As my wife Kristen, my daughters Annika and Kyri, and I traveledacross China and India in early 2012, we asked three simple questions:How do Chinese provinces and Indian states work? How dothey blend local and national priorities and value systems? How dothey view some major global issues? I addressed these questions togovernment officials, political leaders, business people, journalists,academics, and nongovernmental groups. But our whole familyalso asked the same questions of tour guides, taxi drivers, schoolteachers,and waiters.

Some locals seemed surprised by these questions. In Beijing andNew Delhi, in Shanghai and Mumbai, in Chennai and Chengdu, inAhmadabad and Hangzhou, I would get the same response: “Whydo you care?”

I told them about my own small role, working in America’sfederal system. Over a decade ago, I served with the U.S. StateDepartment’s policy planning staff and then with the White HouseNational Security staff. I helped prepare Secretary of State WarrenChristopher and President Bill Clinton for dozens of meetings withforeign leaders. In addition, I worked on World Trade Organizationtrade talks, two G-7 summits, and climate change negotiationsat Kyoto and Buenos Aires. The voices of senators or membersof Congress from various states were a persistent reminder ofthe United States’ federal politics. At the White House, in particular,we spent as much time negotiating domestically as we didinternationally.

I also reminded my Chinese and Indian acquaintances aboutPresident Clinton and his own “provincial” past. Roughly twentyyears ago, he moved into the White House having served as governorof a small, landlocked, largely agricultural state with highunemployment. As the first president inaugurated after the endof the cold war, he became the first American leader to speak ofthe promise and the challenges of globalization. His geographicbackground was not his destiny, but his outlook was very muchshaped by where he was from.

That president often successfully navigated America’s federalsystem. As governor of Arkansas, he had led trade missions, includingin support of Wal-Mart, a local Arkansas company that wouldbecome America’s and the world’s largest retailer. As president ofthe United States, Clinton assembled coalitions of senators to balancethe national budget and to negotiate key trade pacts such asthe North American Free Trade Agreement and the launch of theWorld Trade Organization. His bipartisan successes involved quiltingtogether interests from a range of very different states.

At other times, he was unable to break domestic gridlock onnuclear weapons talks, trade deals, and a global climate changetreaty. Regarding climate change, for instance, I witnessed Democraticsenators from West Virginia, Louisiana, Nebraska, and Missourijoin with Republicans to help kill a national approach toprotect the climate. To this day, that stalemate still exists, and itstill crosses party lines. That is federalism at work—or not.

Nonetheless, innovative state-level successes also have defiedparty lines. In the last decade, Republican governors namedSchwarzenegger, Pataki, and Romney actually signed state-levelclimate change laws. Like President Clinton, these governors hadpriorities shaped by where they came from.

Europe’s own confederal experiment in sharing sovereigntyfaces its own challenges—ones that are crucial to the health of theglobal economy. Europe continues to produce breakthrough industrialinnovations in telecommunications, automobiles, high-speedrail, and renewable energy. Yet the European Union’s finances area wreck, and it is facing a major crisis about what richer, northernmembers such as Germany, the Netherlands, and Finland owe toItaly, Spain, and Greece—and vice versa.

Establishing and maintaining unified political systems across acontinent and across multiple and common belief systems is hardwork. When the phrase E Pluribus Unum—”from many, one”—firstappeared on the Great Seal of the United States in 1782, it was asmuch a hope as a statement of fact. Forging unum out of pluribusoften requires crafting compromises or forcing odd coalitions. Ourleaders often fail to put all the pieces together. Sometimes politicsmoves the process backward—the unum becomes pluribus, and thewhole becomes less than the sum of its parts. But occasionally wedo find a common good and reach a new consensus.

CHINA AND INDIA: FROM ONE, MANY

Americans and Europeans engaging with India and China cannotafford to treat these countries as monoliths. What happens outsideBeijing and New Delhi is essential to those countries’ economicand political futures, and also often directly critical to the West’sfuture as well. So how do things work in each place? How doeseach country perform those acts of compromise or synthesis? Whenand how and why do they fail? And who are their internal regionalleaders? Who might become the next Bill Clinton or George W.Bush—perhaps a former local leader who brings some of his orher region’s views to the nation’s capital? Again, geography isnot destiny: Clinton and Bush were from neighboring states, yeteach brought a very different philosophy to Washington. Still, theirbackgrounds did shape each of them in important ways.

To many professional diplomats and policymakers, China andIndia seem opaque internally. In political science jargon, bothnation-states are often described as “unitary self-interested agents.”Realist scholars of international affairs helped to shape this viewby focusing on the core economic and strategic interests of nations.More recently, other students of world politics have interpretednational behavior using microeconomic theory and rational choicetheory, assuming that states act the same way self-interested individualswould—as if nations had one mind and one interest.

There are good reasons for applying these assumptions to Chinaand India. It is no accident that diplomats use “Beijing” for Chinaor “New Delhi” for India. Both have streamlined foreign policysystems: in neither country does the parliament play a major role inforeign policy. Central governments are more powerful than in theUnited States or Europe. As a result, there is a tendency to think thatif one could simply convince central leaders of their own nation’sinterest, a single centralized key will unlock their enormous systems.

Of course, the reality is far different. The politics between centraland local forces in these places may differ from those of theWest, but they are no less complicated. In neither country is thecentral government completely in charge. In both India’s multipartydemocracy and China’s one-party “people’s republic,” a multicoloredmap exists that delineates not only territorial units but alsomultiple conceptions of the good life that need to be reconciled.

The power outside of their capitals has expanded dramaticallyin recent decades. Local governments have stepped forward, withglobal implications. Subnational leaders, in charge of country-sizedjurisdictions, now drive economic development. They make criticaldecisions about energy and natural resources. Their jurisdictionsare the proving ground for the rule of law—or lack of it. The mosteconomically advanced and wealthy places have begun to emergeinto the world’s awareness. Real challenges exist in the poorer oremerging provinces, but even there, success stories exist.

It is not just that these places are diverse. Local leaders are trulystarting to lead, moving these countries toward change from theinside out. And local leaders are becoming national leaders.

In coastal China’s fast-growing Guangdong province, formerparty secretary Wang Yang just oversaw a decade of sizzlinggrowth. He helped harness the global economy while also streamlininggovernment, protecting intellectual property, and cuttinggreenhouse gases. He was just promoted to vice premier, and somehope he will head China someday. Still, his experiments in politicaland economic reform struck others in China as too much, too soon.

In India’s state of Gujarat, Chief Minister Narendra Modi earneda reputation for bold leadership. He has overseen a decade of prosperityand has directed one of India’s most effective bureaucracies.Some Indians hope he might run the country someday. Yet his pathto becoming prime minister is not assured. He is loathed by manywho see him as, among other things, a Hindu communalist whosteered murderous anti-Muslim riots and who might bring India towar with Pakistan.

In India’s Bihar state and China’s Chongqing province, localleaders became national celebrities by fighting corruption and tacklingpoverty. Bihar’s chief minister Nitish Kumar and Chongqing’sformer party secretary Bo Xilai each aggressively prosecuted localhoodlums. Each used the very visible hand of state-led investmentto bring dramatic economic growth. Yet they did so in very differentways. Nitish Kumar has few peers in India for being an uprightadministrator and has become a model for addressing India’sendemic poverty. But his chances to someday run India are complicatedby the narrow reach of his Janata Dal (United) political party,which is based largely in Bihar and is only India’s fifth-largest party.Bo Xilai’s career came to a crashing halt when Bo, his wife, and atop lieutenant were caught in a web of corruption and murder.

The impact of these leaders can be global. They can promotecritical trade, investment, clean energy, and nuclear safety initiatives.Successful cooperation with foreign countries and companiesis often anchored in a few select states or provinces. Yet states orprovinces can also stall passage or fail to implement agreements. Inboth countries—in different ways—local strategies make it harderfor Beijing and New Delhi to lead.

Given this context, American and European politicians, businessleaders, media, and a range of civil society organizations must bemore nimble and nuanced in dealing with emerging giants thantraditional mental maps would suggest. Westerners must take localpolitics more seriously as a global matter and significantly revisehow they organize and think about the conduct of global affairs.

The stakes are enormous. Taken together, India, China, theEuropean Union, and the United States are home to half of theworld’s people, two-thirds of the world’s economic activity,two-thirds of the world’s greenhouse gases, and two-thirds of allnuclear power. Together the economic rise of China and India inthe last twenty years has lifted at least half a billion people outof poverty. In the next twenty years, those two nations are likelyto become the largest and third-largest economies, respectively.Already, they are the largest and third-largest emitters of greenhousegases on an annual basis. Furthermore, both countries havelarge stockpiles of nuclear weapons.

The rise of local leadership has led many to worry that a centralleadership vacuum exists within the four great continent-wideunions. This may have led to greater economic dynamism locally,but it does pose huge barriers to cooperation on global challenges.

This volume does not pretend to do the impossible by describingthe full range of local experiences in either country. Instead,it focuses on a few critical places where innovation is happening.In addition to providing a mental map for China’s provinces andIndia’s states, this book also will try to give a glimpse into the promiseand problems of local control. It describes what drives theseplaces and their political leaders—either toward the global economyor away from it. After examining a few key locales, it then looks atenergy politics and policy in both places, from the inside out.

China’s provincial experimentation has transformed the worldeconomy for the better. India’s local leaders are making some ofthe world’s most dramatic advances in human development. YetIndia’s paralyzed federal politics and China’s authoritarian effortsto control its provinces also will be a central plot line as eachnation evolves. These issues also will make it more difficult forthem to lead on global challenges. Americans and Europeans needto start learning how to work with local leaders if they are goingto address their own national priorities with these countries—notto mention global priorities.

CHAPTER 2

LESS THAN PERFECT UNIONS

WHEN CHAIRMAN MAO ZEDONG and Prime Minister Jawaharlal Nehruestablished China’s and India’s modern systems in the late 1940s,both feared the power of provinces and states. Over six decadeslater, China’s and India’s most dynamic locales have pulled thesetwo countries into leadership positions in the world economy. IfChina’s five largest exporting provinces were independent nations,each would rank among the top forty trading nations. India sendsas many highly skilled workers to the United States as the rest ofthe world combined—and half of those come from just four ofIndia’s thirty states. However, empowered local leaders are alsomaking these countries harder to govern.

The promise and problems of local power should not be toohard for Americans and Europeans to grasp. The U.S. Constitutionaims “to form a more perfect union,” and Americans demonstratenear-religious reverence for that document. Despite this lofty aspiration,federal and state authorities often have had a less than perfectrelationship. It took a civil war to forge the current union andstrengthen central power.

Still, a century and a half later, Americans continue to recognizethe need for states. They acknowledge a role for states to governthemselves and for states-as-states to tell the national governmentwhat to do. When U.S. negotiators engage in trade talks orinvestment agreements, they often are doing the bidding of senatorsfrom New York or California, Iowa or Michigan.
(Continues…)Excerpted from INSIDE OUT INDIA AND CHINA by William Antholis. Copyright © 2013 THE BROOKINGS INSTITUTION. Excerpted by permission of Brookings Institution Press.
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