Shivshankar Menon Gets It All Wrong
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Shivshankar Menon Gets It All Wrong

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by Prasenjit K. Basu

The two key pathologies that undermine the credibility of Menon’s book are, first, a tenuous grasp of economics; and, less forgivably, an unrelenting bias in favour of China. These pathologies were endemic to the Nehruvian diplomatic corps, faithfully reflecting Jawaharlal’s own blind spots.

Shivshankar Menon belongs to India’s foreign-policy royalty. Grandson of independent India’s first foreign secretary (K.P.S. Menon) and nephew to another (K.P.S. Menon Jr), he himself served not only as Foreign Secretary for three years (2006-09) but also as National Security Adviser for the next four (2010-14). In “India and Asian Geopolitics: The Past, Present”, he consequently writes with authority and panache about the fraught history of India’s relationship with China, and about global geopolitics viewed through a Nehruvian prism.

Unfortunately, the elegance of the writing cannot compensate for the hollowness of his thesis—that nonalignment (or “strategic autonomy”) has always served India well, and that India must continue to engage “with both China and the United States, not choosing sides, and having better relations with each than they have with each other”. He glosses over the inconvenient fact that the US and China had far better relations with each other than either had with India between 1971 and at least 2015. And that India was obliged to abandon nonalignment in all but name by signing the Indo-Soviet treaty of 1971.

The two key pathologies that undermine the credibility of Menon’s book are, first, a tenuous grasp of economics; and, less forgivably, an unrelenting bias in favour of China, which frequently leads him to see issues through China’s lens, sometimes to India’s detriment. To be fair, these pathologies were endemic to the Nehruvian diplomatic corps, faithfully reflecting Jawaharlal’s own blind spots.

The China tilt is evident in Menon’s dismissal of the term “Indo-Pacific” as “dangerously out of touch with reality”, replacing it with the old “Asia-Pacific”, despite the fact that “Indo-Pacific” specifically embraces India, while all previous Asia-Pacific institutions established since the 1990s had excluded India (at China’s behest). Astonishingly, Menon commends ASEAN’s unwieldy East Asia Summit as a better forum to address security concerns “from east Africa to the western Pacific”, even though China has effectively subverted ASEAN itself by using its economic leverage over Cambodia and Laos to destroy ASEAN’s ability to take a common stand on the South China Sea.

The “1996 Taiwan Straits crisis” is one that Menon returns to repeatedly. This crisis was caused by China firing missiles into the Taiwan Straits to intimidate the electorate during Taiwan’s first democratic election, called by the late incumbent Lee Teng-hui, who transformed Taiwan by democratizing all levels of government there.

Rather than address this as a conflict between democracy and communism, Menon focuses on China’s view of Lee “as a potential leader of an independent Taiwan”, and the US response of sending “two aircraft-carrier groups to the waters east of the Taiwan Strait”. He implies that China’s subsequent aggressive actions in the South China Sea—linking rocks and shoals to artificially create islands that will vastly expand China’s exclusive economic zone at the expense of Vietnam, the Philippines, Malaysia and Indonesia—are a natural response to China’s comeuppance during the 1996 crisis.

On economics, he favours the Keynesian institutions that prevailed between 1945 and 1971, without acknowledging what precisely they entailed: fixed exchange rates (implying pegging all currencies to the US dollar) without free movement of capital across borders. He even attributes this to a mythical David (rather than John Maynard) Keynes. The Reagan-Thatcher era is dismissed as “market fundamentalism”, a valid critique of some of its financial aspects but also one that unshackled the potential of emerging economies like Taiwan, South Korea, Singapore, Malaysia, Thailand, China and India as they embraced globalization.

Menon spends no more than a sentence on China’s problems of industrial overcapacity, to which Premier Wen Jiabao first drew attention in March 2007. The liquidity glut unleashed in the aftermath of the global financial crisis of 2008 proved a boon for China, enabling it to nearly triple its steel, aluminium, cement and car capacity over the next decade, thereby globalizing its problems of overcapacity. These had first emerged because of the propensity of China’s banks to lend unlimited amounts to state-owned enterprises, even if the latter had previously defaulted on loans. By June 2003, half of all loans on the books of China’s state-owned banks were non-performing.

In the year 2000, world steel production was 840 million tonnes; in 2020, China alone produced 1,053 million tonnes (up from 128 million twenty years earlier), while the rest of the world produced 811 million tonnes. China exported surplus steel below production cost to the rest of the world, the classic definition of dumping. Chinese producers in new industries like photovoltaic cells for solar energy similarly received unlimited loans, and excess Chinese production depressed global prices. It was insanity for the rest of the world to trade with China as if it was a normal market economy, when it clearly wasn’t. Former US President Trump took countervailing measures in the third year of his presidency—just as President Obama had imposed anti-dumping duties on imports from China in his final year.

Perhaps unaware of these complexities, Menon advocates India joining the “Regional Comprehensive Economic Partnership (RCEP), led by China”, excoriating the Modi government for not doing so. Menon acknowledges that India already has a free trade agreement (FTA) with ASEAN. India also has FTAs with Japan and South Korea, and is close to concluding one with Australia. Joining RCEP would effectively amount to an FTA with China (and New Zealand), without any additional safeguards against China’s pervasive non-market practices. Already, Chinese products enter India thinly disguised as ASEAN-made.

Joining RCEP would be tantamount to allowing even more aggressive dumping of Chinese products into India. Menon perpetuates the canard that India has turned inward under Modi: in fact, the Modi government has targeted small tariff increases on products suffering from Chinese dumping, while reducing other import duties. In 2021, India’s export growth has considerably outpaced China’s, as it did in 3 of the past 6 years.

Menon extols Nehru’s vision of an “area of peace in Asia” as the only outcome worth pursuing. But he acknowledges that this area of peace was disrupted by Pakistan going to war within 10 weeks of Independence and Partition in 1947, and that China violated Asia’s peace by its invasion of independent Tibet in October 1950.

Understandably, given his grandfather’s key involvement, Menon celebrates India’s role as peacemaker in Korea, asserting that the July 1953 “armistice was very close to what India had proposed two and a half years before”. While India relayed “messages from the Chinese to the United States…Nehru’s efforts had convinced Truman that ‘Nehru has sold us down the Hudson.’” There is nary a mention of the fact that, even as Nehru was loftily playing peacemaker between the US and China, the latter was busily building a highway right through Aksai Chin, which was (and still is) shown as part of India in our maps. Having ignored its construction, Menon slips this in much later: “Two Indian patrols sent out in 1958 to check on the Aksai Chin Highway were detained by the Chinese”. Who built this highway and when remain mysteries to the reader.

Despite the mention of “Asian geopolitics” in the title, the book remains obsessed with China (and its perspective on the region), while barely mentioning Indonesia, or the possible strategic importance of Japan and South Korea today. Nehru missed a great opportunity to join an economic confederation in Asia proposed by Japan’s Kishi Nobusuke in 1956. Menon does mention this little-remembered proposal that Nehru dismissed as a stalking-horse for American hegemony. South-east Asia responded positively, and the Japanese corporate presence across that region remains ubiquitous and beneficial to this day.

Predictably, given his Sinocentric perspective, Menon is dismissive of the Quad, preferring that India join RCEP despite 70 years of relentless hostility from China. During the Nixon-Mao dialogue in 1972, Mao spent more than half the time discussing his hostility toward India; yet India’s policymakers seem oblivious to this strategic reality.

Menon believes the US is a declining power, and that western economic involvement in East Asia is diminishing, “except in Singapore and Vietnam”. In reality, ASEAN’s and China’s export sectors are dominated by “western” companies, including those from the US, Japan, Europe and Taiwan, freeing up domestic capital for technology sectors that China seeks to dominate. On Pakistan, Menon laments that “we are a long way from the promise of the 2004-07 period, when India and Pakistan appeared close to addressing the issues between them”, neatly forgetting that the spirit of that period was disrupted by Pakistan’s terrorist attack on Mumbai (26 November 2008). Contrasting with India’s feeble non-response then, the Modi government’s robust response to Uri and Pulwama has considerably reduced terrorism since.

The US remains the global leader in innovation, and the Quad presents unique complementarities between India’s software and pharmaceutical expertise, US technology, Australian minerals, and Japan’s still-formidable corporate footprint (ranging from Toyota and Honda cars, electronics brands Sony, Panasonic, NEC and Hitachi, to mass-market Uniqlo and venture investor Softbank). The Quadrangular economic relationship, coupled with India’s labour reforms, are helping shift China-centred supply chains to India, while Japan’s partnership in infrastructure and the green transition help India exceed its commitments to the 2015 Paris climate agreement.

Menon chooses not to appreciate any of this, instead ending with formulaic excoriations of today’s India. His book is sadly emblematic of the vacuity of the Nehruvian approach to diplomacy—subservient to China, suspicious of the US, and clinging to nonalignment despite its manifest failures.

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