Love India, Love China Not

The US can't seem to know what to do about its love-hate relationship with China. So what's one to do when the rocky alliance sputters and stutters? Find a new love affair, it seems.

A Fortune article on Friday exposed the dichotomy in the rhetoric towards the two countries. It writes:

"On Tuesday morning, Treasury Secretary Henry Paulson gave a speech on China. It was called "Managing Complexity and Establishing New Habits of Cooperation" - a title that a therapist might borrow for a parents' lecture on coping with defiant adolescents.

On Wednesday morning, Paulson gave a speech on India. The title practically blushed with fresh love: "The Economic Power and Promise of India."

The frustrations trotted out against China are nothing new - unfair competition, the pegged yuan, counterfeiting of trademarks, food and product safety, pirating of intellectual property. The list can go on. India, on the other hand, is different. Its fortunes with the US are not yet so intertwined that sentiments have become corrupted - the potential, while unseen and unrealised, remains to be unleashed.

The article quotes Ambassador R. Nicholas Burns, under secretary of state for political affairs, saying: "Building a close U.S.-India partnership should be one of the United States' highest priorities for the future....Sixty years ago, our countries failed to chart a common course. Sixty years from now, no one will be able to accuse us of making the same mistake twice."

Ironically, India - target of the US' present affections - seem to have become quite enamoured with its suitor's unfavoured partner. Today's story in India's national newspaper The Hindu quotes Congress President Sonia Ghandi describing China's pace of change as “truly astounding and outstanding”. In what may be galling to US politicians, she said India had much to learn from China’s economic reforms and liberalisation.

Ms Ghandi, on a five-day China trip at the invitation of Chinese President Hu Jintao, called for more frequent interactions between the countries' scholars and intellectuals, and for joint projects which can become visible and powerful symbols of bilateral cooperation. She went on to say:

"I see only one possibility between our two countries — that of co-existence with cooperation."

If there was a better way to strike an arrow through the suitor's heart! Perhaps some research is in order to know what's the status between the US and these two countries.

According to the US Census Bureau, China is the US' number 2 trading partner after Canada, accounting for 12.2% of total trade. The US imports of China goods far outpaces its exports to the country however - a source of constant consternation for the US. In the first eight months of this year, US imports from China was US$205 billion compared to US$41 billion of exports.

In contrast, the numbers with India are much smaller. It doesn't even figure in the US' top 15 trading partners list. In the same period, US imports from India was US$16 billion against US$10 billion of exports.

The Fortune article notes that as with China, Paulson's modus operandi in India is to keep up public and private pressure to continue market-opening reforms. India's retail, consumer banking and the media are still largely closed to US companies, and Paulson said India needs a more "hospitable investment, regulatory and financial regime."

By all accounts, the US is hoping for a pliant partner to cooperate with it. But as China and India rise to become the world's largest and third largest economy respectively, it's hard to imagine the US always setting the tone in the global tussle for power and influence. On whose terms will it rest to be a "responsible stakeholder" in the global economy?

That's the problem with relationships. They are so unpredictable.