After a year in which there were precious few high level political visits, China is now getting two in the same week: the UK Chancellor George Osborne and the Mayor of London Boris Johnson. The irritation at David Cameron and Nick Clegg's very public meeting with the Dalai Lama last year has now been replaced by an era of warmth and mutual understanding. That, at least, is what the press releases for these visits will have us believe. 

In fact, while the ministerial freeze has been on, the UK has been doing fine – having more than double the Chinese investment of any other EU member, and increasing its exports to China. Chinese visitors to the UK brought in £300 million last year – a formidable achievement in view of the highly unwelcoming visa regime the UK currently has towards people from China (something George Osborne has promised to reform while in Beijing). 

The UK and China are always keen to assert differences, but at heart they are pragmatic nations. They are both utterly at one in seeking growth, and they see in each other compatibilities that can be benignly exploited. For the Chinese, there are decent assets in the UK in the energy and manufacturing sector that are very reasonably priced, and which exist in one of the most liberal investment regimes in the world. For the UK, China is a vast market that its companies, small and large, need to conquer. Any tactical advantage in this battle for access is good in view of the competition that is going to come from other international companies, but also players inside China that want to find their way to the hearts of Chinese consumers. The next decades look set to belong to these consumers. The long term theme of Johnson and Osborne's separate visits is getting as close as possible to these new actors in global growth. 

Overcoming hurdles

Boris Johnson and George Osborne are unlikely to be publicly explicit about the challenges that British trade interests face in China, but in private meetings they have to be raised. The first is that China is becoming a master of indirect protectionism, and the treatment being given to companies ranging from GlaxoSmithKline down to small consultancies is getting harsh. The UK has a strong interest in the success of the EU in negotiating better trade access, from the right for companies to bid for government procurement in China to the perennial problems of state subsidies for Chinese companies and intellectual property rights protection. It is important to find smart ways to leverage the newfound interest China has in deploying its capital abroad, to give UK companies better deals in China. This has to be subtle work, but the primary interests in the UK are the same as our EU partners – having a liberal, rule-based, global order where China is far more integrated. 

There are also some domestic issues. Large trade missions to China have been happening since the reign of George the Third. Lord Heseltine led a vast army of companies in the early 1990s to Beijing. Trade missions have become an unquestionable part of the whole performance of UK politicians going to China. But just how much these achieve is debatable. A decade ago, in The China Dream, Joe Studwell poured cold water on some of the noisier delegations and what real business they did. Perhaps it is time for the UK government to give more support for small and medium businesses. Many of them will have to think about a China strategy if they are not already there, and will face a tough and time consuming task in making inroads in China. Some solidarity amongst them and with the government would be a big advantage. 

This impacts on the delicate business of how the UK undertakes its business and political relations with China in the first place. China is now the world's second largest economy on some measures, and George Osborne said his visit was to change UK perceptions of the country so that British people can see it as more than just an enormous factory producing cheap goods. For that to happen there needs to be a more dynamic, inclusive operation in the UK which cultivates links with Chinese business, rather than the ancient groupings of associations and dining clubs that prevail at the moment. These are good for the egos of those already doing well in China, but are not reaching out enough to the many in the UK who might find they can work in or with China. 

Academic understanding

There is a deeper values debate that China and the UK might have. Our history means that we have shared a lot of good and bad things. The UK needs to support as many young people in learning Chinese, visiting China, and knowing about China as possible. And the good news is that relations will be helped by the quarter of a million Chinese students who have studied in the UK and had experience of life here in the last 15 years. As much outreach to this group, many of whom are back in China and developing exciting careers, is important: each one is an invaluable ambassador for life here. Decades after the visit of Osborne and Johnson has faded from memory, it will be these people that truly shape the future. 

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One year after a transition at the top of China's Communist Party, a major party gathering − the third plenum − was held on 9-12 November, with Chinese officials preparing a 'comprehensive plan for reform' in the context of apparently slowing growth in China as well as social and environmental challenges.

The speaker will comment on the outcomes of the plenum and the debates which led up to it, and examine likely policy changes and their impact on developments in China.

Despite the hype surrounding it, the gathering of the country’s ruling elite in Beijing is likely to prize measured change over dramatic reform.

If there was a clearer idea of what makes China’s new elite leadership tick, then the Plenum of the Central Committee of the Communist Party that is about to be held in Beijing would not be such a big deal. But in a polity which privileges concealment over overt statement, it is viewed widely as the one chance for outsiders to see more clearly what the leadership aims to achieve. Expectations were raised by the October statement by one of the most staid members of the current Standing Committee of the Politburo, Yu Zhengsheng, that the plenum would presage a new era of reform.

In Chinese politics reform is a word that has a wholesome, positive air about it. But the question is where and when reform will happen and who will gain from it. The plenum is not like a party convention in the Western sense. It is not an eye-grabbing, media-dominating event that produces surprises. Comparing this year’s installment with the great Third Plenum of 1978 that heralded the repudiation of late Maoism and the embracing of the market, the non-state sector and foreign capital – all anathema before then – is misleading. The significance of the 1978 meeting was only obvious in hindsight. It took years for the scale of the radical transformation of the whole strategic direction of the Communist Party to be appreciated. That 2013 will prove a similar historic moment is unlikely, perhaps even impossible.

What is much more likely is that the highly tactical leadership now in charge will reaffirm its commitment to incremental reform. It will make some statements about the radical urbanization that China is about to undergo and say something about social welfare reform. China’s leaders will do what they have always done in plenums over the last three decades, namely set the broad parameters of politically permissible activity that provinces, ministries and other stakeholders will then need to implement.

This plenum will also have to produce something about the need to achieve greater egality and balance in the economy. It needs to answer some of the questions about how Premier Li Keqiang, in particular, intends to meet the goal of 'fast, sustainable growth' when a falling overall GDP figure looks likely. It needs to communicate to as broad a constituency as possible the arch-narrative of a world where the raw statement of growth on its own is no longer the be all and end all of government policy. It needs to say something about how the party is going to fulfill the increasingly complex aspirations of the Chinese people, aspirations that exceed purely having a materially good level of life and concern broader questions of well-being that vex the politics of all developed economies.

Observers will want to see some signs too of addressing the most sensitive issues. Yu Zhengsheng talked of economic reform. Reforming the economy is now a wholly uncontroversial mantra in China. However, it impacts on one enormously important issue that reaches beyond economics: whether wealth, prosperity and development benefit the few or are accessible to the many – in other words, good, old-fashioned questions of economic and social justice. At the heart of this lies the question of how state-owned enterprises have become vehicles of profit not just for the party state, but also for tightly knit networks of vested interests. Reforms that lap at the doors of these entities also creep into the space of powerful political players, who will resist any attempt to cut down their wealth, and who have the power to resist.

China’s new leadership is proving more confident than was expected and displays a high sense of historic mission. President Xi Jinping speaks increasingly like a politician who believes it is almost his historic destiny to sit at the centre of the leadership of a renascent 'rich, strong country'. The ultimate question for the plenum is not what outside observers make of it but what the vastly complex mixture of groups in China does. For them, a sign that the leadership is willing to take on some of the entrenched vested interests that penetrate the operations of some state-owned sectors to the core is critical.

This is likely to be couched in the language of more support for the market, which is the key channel in any attack on vested interests – through widening access to wealth and economic benefits, and support for the non-state sector and entrepreneurs. It is hard to see how deeper reform can occur without these two crucial elements. And it is through these that the attitude of China’s leadership to political and legal reforms – far more complex issues that, almost certainly, will not be addressed at the plenum but will lurk in the background − will become clearer. The leadership thinks it is too early to tackle these issues directly, but this plenum will still be part of the process for it to come up with ideas for how to transform not just China’s economy, but its polity too.

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China’s leaders set out their intention to push forward with policy reform following the Third Plenum. The full decision released on 15 November makes clear the aim to loosen constraints on the market, and suggests a dilution of state-owned enterprise influence. A new national security committee could also lead to greater policy integration between domestic security and international affairs.

The Third Plenum of the Chinese Communist Party’s 18th Central Committee took place in Beijing from 9−12 November. Initial reactions based on the communiqué released on the last day of the meeting were mixed. However, on 15 November the authorities published the detailed decision approved by the plenum, and an explanation given to the plenum by Party General Secretary Xi Jinping – in which he acknowledged major problems facing China.

These documents make the implications of the plenum much clearer. In sum, it offers a clear political signal that as China’s fifth-generation Party leadership enters its second year, it is intent on taking forward a ‘comprehensive deepening of reform’ across a wide range of issues. As an indication of the importance of this, a new high-level ‘leading small group’ will be established to coordinate and oversee this process. The decision spells out various new measures, and reiterates many which are already part of the government’s agenda.

More market in the economy

The most important material is on the economy, where the decision makes clear that the leadership envisages a ‘decisive’ role for market forces, and the establishment of ‘fair and equal’ competition in the economy. This will provide a guiding principle for policy-making over the coming years.

One of the ways of achieving this is to reorganize the functions of government. Here the decision reiterates the themes which the government has been working on since Premier Li Keqiang took over in March this year, namely reducing or removing the need for government approvals to businesses, freeing up the investment environment, and allowing businesses and the market to take the lead unless there is a strong reason for government intervention. Better governance is a wider theme of the decision, covering the judicial system and reforms to the party’s disciplinary organs which would clarify leadership and accountability in anti-corruption investigations.

SOE reform

A possible impediment to market reforms is the power of China’s state-owned enterprises (SOEs), and the original communiqué gave the impression that nothing much would be done about SOEs. However, the ability of these so-called ‘vested interests’ to stymie market reforms has been weakened by the targeting of a number of senior SOE-related cadres in the party’s latest anti-corruption campaign, which began at the end of 2012.

Further, the detailed decision suggests further reforms are in the offing. Although the relevant section of the document begins by restating the leading role for state ownership, a series of subsequent policy aims could serve to dilute it, such as ensuring equality in property rights protection and competition; developing mixed (state and non-state) ownership through cross-shareholding and bringing private capital into state-led projects; shifting from managing SOEs to managing state investments in enterprises; better supervision of SOEs which operate in natural monopolies; and removing administrative monopolies.

International affairs

The decision talks about further opening of China’s economy, but the vast majority of the issues covered in the decision are domestic in nature, and announcements such as a further relaxation of birth control policies have attracted most attention. Even the points on military and defense issues relate more to internal management than external capacity.

There was, however, one announcement which could have important implications for China’s foreign policy, which will be watched carefully outside China, the establishment of a ‘national security committee’. Xi said that this was being set up in response to external pressures to protect national sovereignty, security and development. He also cited internal pressures to maintain political security and social stability. It is too early to judge what the exact remit of this body will be, but it could lead to greater policy coordination and integration between domestic security issues and international affairs, at a time when China is playing a more important role across the international spectrum.

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Following the Third Plenum of the Communist Party’s 18th Central Committee in November 2013, the panel will offer their thoughts on whether the economic, political and social reforms announced, such as the relaxation of the one child policy and establishment of a national security council, signal a new era for China’s domestic and foreign policies. The speakers will consider how significant these reforms will be in comparison to those announced in 1978 by Deng Xiaoping following the Third Plenum of the 11th Central Committee.

Rapid economic growth and more widespread political stability have catalyzed increased international engagement with Africa in the past decade, as African states develop more significant roles in the global economy and political cooperation in geopolitics. Accompanying this is a shift in British engagement with African states from one with a development aid emphasis to one focused on trade and political cooperation.

HE Professor Kwaku Danso-Boafo will reflect on his time in London, developments in UK-Africa relations, the role of diplomatic engagements in informing and strengthening bilateral relations and the prospects for intergovernmental cooperation on African and global issues.

Attendance at this event is by invitation only.

This event will present the findings of the Transatlantic Academy’s new report, Liberal Order in a Post-Western World, which examines the future of international liberal order in a world shaped by the rise of emerging powers and a transatlantic community dealing with internal challenges. Produced by collaboration between scholars from Europe and North America, it recommends ways to build an enduring rules-based order for the 21st century.

This report serves as a record of the inaugural London Conference on Globalization and World Order, convened by Chatham House on 2–3 June 2014 at Lancaster House in London.

The London Conference has three aims: to be comprehensive in debating how best to manage the profound economic and political rebalancing taking place across the world; to go behind the headlines and debate the trends underlying and connecting current events; and to build an international community of experts with a shared understanding of the major challenges accompanying globalization.

This inaugural conference was fortunate to draw together high-quality speakers for each session, who offered perspectives reflecting their geographic and sectoral diversity. It benefited enormously from the ideas for themes, speakers and participants suggested by its steering committee. The conference would not have been possible without the generous support of its two founding partners – Accenture and Chevron – and its supporting sponsors – Bloomberg and Rio Tinto – as well as the generous cooperation that we received from the Foreign & Commonwealth Office in hosting the event at the historic Lancaster House in St James’s. And the quality of the debate, insights and ideas generated over the course of the conference was driven largely by the input from its 200 participants. Steering committee members, sponsors and participants are all listed in the next section, along with speakers’ details and the conference programme.

The report itself opens with a short essay which explores one of the main conclusions of the conference: the loss of trust that appears to be permeating relationships between governments, and between governments and their citizens, as a result of the pressures they are all under from the process of globalization. This is followed by the key insights from each of the five main sessions of the conference on 3 June.

The final section brings together the five papers written by members of Chatham House’s in-house research teams in advance of the conference in order to stimulate participants’ thinking. Even following an eventful six months since these were written, their insights and proposals retain an important salience for the future.

We look forward to hosting the second London Conference on 1–2 June 2015.

Robin Niblett
Director 

China’s rise was highlighted again recently by reports that World Bank calculations of purchasing power parity could put the Chinese economy ahead of the US this year. China’s global influence has clearly spread substantially over recent decades, though the extent and impact of the country’s rise remain debated, and its economic size is not yet matched by influence in other areas.

Within China itself, the idea that the country has become a major power has become stronger. Put alongside Chinese analysis of global flux, this has resulted in changes in China’s approaches to foreign and security policy.

The impact of these changes remain uncertain. As set out in a new report on China’s Global Personality , there are several debates in China about the country’s approach to international affairs: around the implications of its rise for its continued identity as a developing country, whether it should become more ‘revisionist’ towards international affairs, and how assertive Chinese foreign and security policy should be.

So far, China’s post-2012 leadership has taken forward a number of areas of policy change. Institutionally, the creation of a new National Security Commission, chaired by Communist Party General Secretary Xi Jinping, is likely to strengthen policy coordination and integration across a broad range of domestic and external issues.

The Chinese leadership has also promoted a much-discussed ‘new type of major power relationship’ in its approach to the US. The aim here is to avoid conflict between the US and a rising China, and to work towards a relationship characterized by equality, including in Asia – this therefore does not imply a desire to be a regional hegemon. The outcome, however, remains to be seen, and US responses so far have been cautious.

In dealing with disputes in East Asia, Chinese policy has become more assertive since around 2010, though the leadership has also set out its desire to deepen relations with its neighbours, and Beijing has been among the first to reach out to new Indian Prime Minister Modi. However, there are clear limits to this: relations with Japan in particular are likely to remain poor, and those with Vietnam have deteriorated substantially over recent weeks.

These issues are not simply bilateral, but should be seen as part of a wider renegotiation of regional order, involving not just China, but Japan, the US, and others. The last few years have seen changes in US approaches to the ongoing evolution of the international order and in particular to East Asia – the so-called ‘rebalance’ strategy, including ongoing – but slowing – negotiations for a trade and investment Trans-Pacific Partnership. And Japan’s security policy has been changing under Prime Minister Abe.

The idea of renegotiation can also be seen in the debates around institutions of global economic governance, such as the International Monetary Fund. Our research finds that China’s engagement with the existing international order remains strong, but there is also a growing element of gradual revisionism from China (and maybe others) within that order. China’s approach is consistent with the open and rules-based way that international institutions have developed, but it looks for its voice to be considered more in the setting of those rules.

The view from Europe

The implications of this analysis are that the questions policy-makers need to address should not be framed simply in terms of dealing with the rise of China and the changes in Chinese approaches this brings. Instead, the framework should be one which takes account of global flux and policy changes by other actors.

This means that there is space for European governments, for example, to engage in shaping the future global and regional order. In doing so, there could be particular challenges if strategic difficulties in the US-China relationship continue − the perceptions of opportunities and threats in Asia as seen from Europe may increasingly diverge from Washington’s. As China’s rise continues, it will not just affect relationships with China – Europe’s relationships with the US, and their stances on questions of regional order and governance in Asia, will also be called into question.

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How changing power dynamics will affect how the international order is constituted is one of the most fundamental questions facing the world today.  Whether or not the US itself is declining, the post-war liberal world order, which is underpinned by US military and economic primacy and supported by various global institutions, is evolving. However it is unclear what, if anything, will take its place.

Amitav Acharya argues that the age of Western hegemony is over. While the US will remain a major force in world affairs, he says that it has lost the ability to shape world order in  its own interests and image. As a result the US will be one of a number of anchors, which include emerging powers, regional forces, and a concert of the old and new powers, shaping a new world order.

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With extensive and diverse engagements across sub-Saharan Africa, China is one among a range of international partners that is evolving its policy and relations with African states. At this roundtable meeting, Ambassador Zhong Jianhua will discuss China’s interests in Africa, the challenges it has faced and how China cooperates with international governments and across sectors in Africa. 

The unprecedented victory of the Bharatiya Janata Party (BJP), led by Narendra Modi, in India’s general election was a milestone in the recent history of India, leaving a single party with a majority in parliament for the first time in 25 years and the ruling coalition with a clear mandate. Manoj Ladwa, who worked on Modi’s election campaign, will provide his insights into the campaign and assess why it worked so well. 

The panel will consider the policy implications of the election results and, among other issues, provide insights into how this might shape India’s business outlook and foreign policy over the next five years. 

As Nigeria celebrates one hundred years of unity, significant differences – real and perceived – remain between different parts of the country. This event marks the Nigeria launch of the Chatham House Briefing Who Speaks for the North? Politics and Influence in Northern Nigeria. Its author, Dr Leena Hoffmann, will discuss the effects of democratization and pacted politics on northern Nigeria, broader governance challenges, and how relations among decision-makers nationally have evolved.

Attendance at this event is by invitation only.

Nigeria’s prospects, with its rise to international prominence as Africa’s largest economy, are tempered by the many development and security challenges the country faces. While essential reforms in the power and agriculture sectors are underway, such efforts are balanced against the Boko Haram insurgency in the northeast, significant concerns around youth unemployment, and an increasingly contentious political environment in the run-up to the February 2015 elections. 

Dr Doyin Okupe, Senior Special Assistant to President Goodluck Jonathan, will discuss what steps the presidency is taking to address the country’s most urgent challenges, and how the political environment can be managed to overcome tensions that may impede progress.

Africa is now recognized for its vast potential as well as its political influence in international fora, and there has been a growing number of Africa-focused summits, with China, India, the European Union, South Korea and Turkey all hosting such events in recent years. The US has in the past given precedence to bilateral engagements in support of its ‘four pillars’ approach to implementing its Africa strategy. The first US-Africa Leaders’ Summit, held in August, marked a shift towards a complementary continent-wide engagement. 

At this roundtable, Ambassador Linda Thomas-Greenfield will discuss US policy and priorities in Africa and the significance of the summit for enhanced US-Africa relations.

Attendance at this event is by invitation only.

The umbrella revolution in Hong Kong, precipitated by the announcement of the decision on how to hold the 2017 elections for chief executive in September, has now sprung several leaks. The passion of the initial protests which convulsed the centre of the city, and which even heavy downpours of rain could not dampen, has evaporated. Street protests only get you so far. The activists have to engage now in the delicate art of politics and compromise. This is where either the real achievements are gained or everything is lost. Street protests belong to the world of theatre. They only make a difference if they give impetus and energy to what happens afterwards, in the establishment of long term arrangements and real outcomes.

The political vision of the leadership in Beijing about the Hong Kong issue is pretty clear. The idea that China talked about 'One country, two systems' on the basis of each part of this balanced clause having equal weight is now over. It was an illusion. In fact, for the Beijing leadership, there was only ever one important part of that four word phrase – the first two words. 'One country' trumps everything. And the preservation of their idea of that one country and its best future is key. A Hong Kong which would be able to march off with a political system increasingly at odds with that presiding just over the border was never on the cards.

Now both the Hong Kongese democrats, and the outside world, are relieved of their illusions, how best to deliver a future for Hong Kong in an age when the airy empty promises of its old colonial masters, the British, are no longer relevant. First of all, there has to be a shift in thinking. Like it or not, Hong Kong figures as a province in the thinking of Beijing leaders around Xi Jinping – a special province, one that has a unique status, and significant value for them, but a province all the same. In that context, it lines up with all the other issues and problems they have to deal with, from restive western provinces to fractious and demanding central ones, to placating the demands for more freedom and space of boom towns like Shanghai or Guangzhou. Hong Kongese have to think about how they relate to all these domestic issues, and pragmatically accept that they are irrevocably tied to a system that has to handle these – its success or failure in the management of this is also their success or failure. Hong Kongese have a vested interest in the Beijing government. They have to start thinking of far smarter ways of being allies in this, rather than camping outside of it and resting on loud declarations of their privileges. A sense of entitlement inherited from the British will get them no traction in China anymore, where there are far larger priorities and battles going on.

Current Chief Executive C Y Leung has been a failure in almost every respect. He has proven poor at promoting Hong Kong’s interests in Beijing, the one place where he needs to deliver – and even poorer at delivering palatable messages back in Hong Kong. That Hong Kongese at least have some form of representation in 2017 is not much, but at least it is something. A good politician could have made something of this, messaged it differently, and used it as a basis on which to build. But Leung simply wasn’t up to this. It is hard to see him having a political life after 2017.  In many ways, he is already finished.

For the protestors, they now need to think deeply about their future strategy. They have made their point, and at least proved that the myth of Hong Kong’s apolitical population can be safely consigned to a trash can. Having politicized the city, they now need to argue, mobilize and build constituencies to support developments beyond 2017. Business is important here – the one constituency the Beijing leadership probably listen to and take seriously – so having an engagement strategy with them is crucial. Framing a demand for better quality leadership in the future is all-important here, because business, political and social constituencies all want to see this. If the Xi leadership in Beijing insists on a system where only two or three people can go through and then be voted on by the electorate, then the protesters at least have the negotiation space to demand far better quality candidates than the ones that have led the city since 1997 and its reversion to Chinese sovereignty. All three of the chief executives so far have been disappointments. Hong Kong now has the right to ask for a better deal, and insist that the people put forward are at least up to the job asked of them – something that the current incumbent evidently is not.

Does all this prove that Xi Jinping is a strong, forceful leader? Perhaps. Perhaps not. One could argue that a really strong leader would have had the courage and vision to let Hong Kong adopt a more open system in elections after 2017, and the confidence not to fear kickback from this into the mainland. What it does show is that, underneath all the heat and noise, Xi is as risk averse as his predecessor Hu Jintao, and has taken, at least domestically, a very safe option. If he had gone to Hong Kong and dared to explain directly to the people there what the Beijing government’s thinking was on this issue, that would have been even more impressive. At most, we can conclude that the Xi leadership is not radically different from their predecessors, but just aware of a vast menu of challenges they need to face domestically, of which Hong Kong is one of the least important. Beyond that, recent events over Hong Kong have shed little light into the real soul of the current Chinese leaders. At most it has proved what has long been known: that if you really want to see what they believe and what they want, then you cannot do that from Hong Kong but have to look at what they do over the border. In that sense, and only that sense, Hong Kong continues to occupy a unique position as the last place in China where its leaders can truly be themselves.

This article was originally published by IB Tauris.

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The speaker will argue that President Xi Jinping's accretion of substantial political power has rendered him the most influential Chinese leader in decades. Still, there is much debate over how President Xi intends to wield that power, and to what end. The speaker will seek to deconstruct Xi's understanding of the nature of power, speculating on his likely game plan for his tenure and exploring the implications for China, the region, and the world in the first quarter of this century.

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On 26 January, President Barack Obama joined Prime Minister Narendra Modi as his guest at India’s Republic Day, in a reflection of the huge potential in the US-India relationship. The trip makes Obama the first US president to visit India twice while in office, and comes on the heels of Modi’s visit to Washington last autumn. Nevertheless, the heavily touted ‘transformation’ in bilateral affairs that these summits are supposed to herald is unlikely to materialize soon. Continued, active and deliberate effort by the two leaders could allow the relationship to jump forward, but given competing priorities, this moment seems destined to pass without the major advances many believe are possible.

Since the 2005 breakthrough nuclear deal which brought India into the non-proliferation tent, the opportunities in the bilateral relationship have been loudly extolled. Notably, the countries lack historical closeness − during the Cold War, India led the Non-Aligned Movement but leaned towards the Soviet Union. This means that there is ample opportunity to progress in a number of key areas – but also is indicative of the challenges.

Democracy

It is often said that India is the largest democracy and the United States the oldest. President George W. Bush saw India as a valuable partner in promoting democracy around the region and the world. India’s loud, raucous political system should be a good example of a vibrant democracy. However, India, like China, holds strongly to the primacy of sovereignty and as such has no wish to lead others to build new political systems or to impose them.

Economics and trade

India has a middle class that is, by some counts, larger than the entire US population. However, India’s regulatory system is complex, and its legal architecture slow and unpredictable. After recent Indian decisions such as the 2012 case where retroactive taxes were imposed on Vodafone, American businesses have been extremely wary. Tensions at a governmental level were also raised in America after India collapsed the WTO negotiations last July.

Security

Major strides have been taken in military cooperation, and there is space for more.  During Obama’s visit, the two leaders revitalized their Defence Framework, building on a 2005 agreement and subsequent progress led by then-US deputy secretary of defense Ash Carter. Carter’s likely confirmation as secretary of defense in the coming weeks is probably the brightest spot for the future bilateral agenda. But Indian acquisition processes do not align well with their American equivalents.  And the US is resistant to providing blueprints to technology, which the Indians want, preferring to build at home and sell the equipment on. These misalignments make progress in this area difficult.

Geopolitics

India wants to be considered a regional and global power, and America would dearly like to have India onside, particularly in light of China’s occasional muscle flexing. However, as illustrated by its uncritical stance towards Russia’s annexation of Crimea and its abstention from the 2011 UN Security Council resolution authorizing military action in Libya, India’s view on sovereignty and its historical non-aligned positioning mean that it too often fails to back up the US on divisive issues.

Environment

The environmental debates between India (as a representative of the developing world) and the US (representing the developed) have often been acrimonious, as the two sides take opposing views on where the principal responsibility lies in ensuring growth while limiting the environmental fallout. There are however opportunities in this arena to advance together through technology cooperation. India is the third-largest emitter of greenhouse gases (behind China and the US) and has significant and growing energy demands as it works to bring its people out of poverty. If the US and India could find a compromise similar to the recent agreement between the US and China, the impact could be significant both in environmental terms and in the demonstration effect to others.

Unrealized potential

Most of these issues are central to President Obama’s legacy and integral to Modi’s goals of restoring growth to India and putting it at the centre of global geopolitics. They should dovetail well with both leaders’ agendas. But in each case, the challenges, including the institutional bureaucracies, are preventing real breakthroughs.

If this bilateral relationship is to be transformed, Obama and Modi need to not just push their systems, but exert sustained pressure on them to overcome the long-standing obstacles. Unfortunately, given other agendas and historical legacies of distrust, such ongoing attention is unlikely. More likely, the relationship will continue to move ahead, but the huge potential will for now remain unrealized.

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The stunning victory of the Aam Aadmi Party (AAP) in elections to Delhi’s legislative assembly on 7 February is clearly causing reverberations around India’s political establishment, and has been widely interpreted as the end of Narendra Modi’s honeymoon period. While it is not a rejection of the prime minister’s development agenda, it highlights the reality that his Bharatiya Janata Party (BJP) has built previous electoral victories on a divided opposition.  Its implications may well spread far beyond Delhi.

Sensing Modi’s likely ascendency, many Western countries expended energy in courting him in the run-up to last year’s election. For the previous decade, many had ostracized Modi for his response to the 2002 riots that occurred in Gujarat while he was chief minister (CM). The belief that Modi was the likely prime minister, coupled with the desire to strengthen relations with India, as well as the fact that he had been cleared of complicity in the riots in each court case, meant that past concerns were put to one side. Underpinning this recalibration was a belief that Modi was a changed man; the earlier firebrand had transformed into a managerial technocrat, focusing on development issues — providing power to farmers for instance — in Gujarat.

The 2014 general election campaign did little to change that impression. The BJP’s success was built on a promise of development — house-building, access to sanitation and so forth. Progress has understandably been slower than many would have hoped. But the Delhi election does not change the fact that if successful strategies are put in place to begin delivering on promises made by, say, the third year of the current parliament, Modi may well be able to preside over a 10-year transformation of India.

Modi has also been wooing foreign investment. His bonhomie with foreign leaders, whether Chinese or American, is a powerful signal that India is open for business. India’s economic boom in the middle of the last decade was driven in part by positive investor sentiment. The subsequent realization that ‘red tape’ was still an impediment to business helped drive the slowdown. Recreating a feel-good wave could well boost economic growth; if it coincided with better governance, it could even become self-sustainable.

The Delhi election doesn’t change this, either. It reduces Modi’s air of invincibility and will mean that he faces genuine opposition, admittedly from a chief minister rather than in the Lok Sabha, the lower house of parliament. The fact that it is India’s capital will give new Delhi CM Arvind Kejriwal much greater prominence internationally than any other CM. But given that both Modi and Kejriwal won landslides on a platform that reflected an aspiration for change rather than a promise for some form of community-based redistribution gives them a (relatively) shared agenda.

If Modi’s vision is to be implemented, it necessarily requires cooperation with chief ministers. Clearly, that is easier if states are BJP-controlled, and BJP-controlled states can be used to test economic reforms. But if a vision is to be India-wide, there has to be some level of cooperation with the majority of states, which do not have BJP governments.

Until the Delhi election, the BJP had been performing strongly in recent state elections. It may well continue to do so and edge closer to a majority in the upper house of parliament, the Rajya Sabha. But one takeaway from both the general election and the Delhi election is that the BJP is far from a majority party. It won a majority of seats in the Lok Sabha with a little over 30 per cent of the vote. Its vote was concentrated geographically, and the opposition was divided. In the Delhi election, it won 32 per cent of the vote. The obvious takeaway is that a divided opposition benefits the BJP. If the economy booms, more parties are likely to want to join hands with the BJP. If it does not, and if the opposition was united (admittedly, a very big if), the BJP will struggle to win two terms.

An alternative takeaway is that the social base of the BJP needs to be widened. The reaction to US President Barack Obama’s recent speech, in which he mentioned the need for religious tolerance, suggests sensitivity towards communal issues. Delhi witnessed a number of small-scale communal incidents — including vandalism against churches — in the run-up to the state election. If such incidents were replicated in the run-up to the Bihar election later this year, the outcome may well be much worse.

Any switch towards a more Hindutva-focused agenda would seem likely to encourage the consolidation of non-BJP parties. A serious outbreak of communal violence while Modi is PM will be bad for India, but also troubling for the West. Having portrayed himself in a presidential manner, Modi would struggle not to take some responsibility.

Thus, sticking with a development agenda must be imperative. The Delhi election should be seen as a blip for the BJP, a demonstration of the value Indian voters place on development and reinforce the need to focus on delivering that development. While voters may be getting impatient, what’s important is where India stands at the time of the next election.

This article was originally published in the Indian Express.

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The speaker will argue that Chinese foreign policy should be viewed as an extension of domestic policy to a degree not seen in other countries. China's foreign policy aims to support domestic growth and employment, must be aligned with nationalist and narratives of ‘rejuvenation’ and the ‘China Dream’, and must help dilute hostile foreign values. The ‘One Belt, One Road’ project, also known as the ‘New Silk Road’, exemplifies this. The speaker will illustrate its origins and development, discuss how it promotes the Communist Party’s domestic agenda, as well as look at (secondary) geostrategic aims and difficulties. Finally, he will look at the lessons for Europe, and why and how this Chinese initiative should be welcomed.

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Professor Brown will examine how Xi Jinping has consolidated authority since becoming head of the Communist Party in 2012 and explore what his goals are for the future of China. Is Xi trying to cement his own power or protect the interests of the party by guiding it towards a more sustainable rule?

This talk will introduce the key arguments in CEO China: The Rise of Xi Jinping, the speaker’s full-length, English language study of Xi, his background, current position and core beliefs.
 

Much of the focus on China’s 13th Five Year Plan – its centralized and integrated economic guidelines for the next five years – has been on the estimated growth rate of 6.5 per cent, its lowest in recent history. This reflects the so-called ‘new normal’ of China’s development, as President Xi Jinping’s administration describes its aspiration for higher-quality growth in the context of a slowing economy.

But this growth target is an estimate, rather than a pledge. The emphasis on ‘ecological civilization’ – another of Xi’s signature buzzwords, referring to a broad set of approaches environmental protection – is striking. Further, by putting innovation and ‘green development’ at the heart of its ambition to create a ‘moderately prosperous society’, China has sent an important signal: that the country’s strategy for future prosperity in many respects converges with a shift away from its environmentally costly development model.

Environmental goals

The plan endorses a ‘vertical management system’ that will help overcome structural impediments to the local enforcement of environmental laws,  and of its 13 binding targets, 10 relate to the environment and natural resources. In the plan, China commits to an 18 per cent reduction in carbon emissions per unit of GDP from 2015 levels by 2020 and a 15 per cent reduction in energy consumed per unit of GDP from 2015 levels by 2020. It also re-commits to generate 15 per cent of primary energy from non-fossil sources and introduces an important new target of keeping energy consumption below 5 billion tonnes of standard coal equivalent by 2020. Underlining how air quality has become a major driver of energy and climate policymaking, it also promises a 25 per cent reduction in harmful PM2.5 particulates.

In short, the plan suggests that decision makers in China not only take seriously its UN pledge to see a peak in the country’s emissions before 2030, but also that they hope the country will be the leading supplier of low-carbon technologies. Among its non-binding targets are some significant innovation-related measures: to raise gross expenditure on research and development as a percentage of GDP to 2.5 per cent, from 2.1 per cent today; and over the same period to almost double the number of patents owned per 10,000 people, from 6.3 to 12.

Innovation

The document makes clear the principal driver of China’s economy should be innovation, rather than investment. Innovation, says the plan, ‘must be placed at the heart of overall national development’ and ‘integrated into all the works of the Party and the country’. There is emphasis on strategic areas at the ‘frontiers’ of science, ‘mass entrepreneurship’ through new models such as crowd-funding, and digital economy projects – what the leadership likes to call ‘Internet+’ – including around the Internet of Things, quantum computing and big data.  

Under China’s 12th Five Year Plan (from 2011 to 2015), the state focused on a defined number of specific technology goals in its ‘strategic emerging industries’. Renewable energies and electric vehicles, for example, were afforded specific preferential policies. By contrast, the new plan has a greater focus on ‘clean coal’ and hydropower in the energy sector; and while it doesn’t abandon solar and wind, it also suggests greater diversity in its overall approach, with more of an emphasis on reform of the energy sector, developing smart power grids and investing in energy storage technologies such as batteries and fuel cells.

Moreover, innovation in the plan is not framed as simply being about hardware – the commercialization of science and technology. Rather, the text reiterates that innovation should come in many different varieties: ‘theoretical, institutional, scientific and technological, and cultural innovation’. This raises the intriguing and hopeful possibility that the country’s planners recognize some of the challenges and opportunities the public, particularly in the form of newly vocal, engaged and connected urban constituencies, pose in the governance of innovation.

Policymakers – taking ‘social innovation’ seriously – could begin look at the public as technology users, incubators of demand-driven successes, and innovators in their own right. In a context of low public trust around food and agriculture in China, for example, organic cooperatives and ecological entrepreneurs have pioneered supply-chain innovations, typically facilitated by digital networks, to connect farmers with urban consumers looking for safer food. Lower-tech approaches to energy too – such as inexpensive solar water heaters, which garner a mention in the latest plan – have been driven by rural users and supported by local initiatives, rather than central government coordination or subsidies.

These approaches to innovation would present a quite different model than previous central government plans have encouraged. Whether in the plan’s implementation they are harnessed and given support might be critical to meeting China’s environmental goals, as well as its drive to create a more innovative economy and society.

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On the surface, the Indian economy is performing well, and the popularity of Narendra Modi, the prime minister elected on the promise of liberalizing reform two years ago, is holding up. Christine Lagarde, the managing director of the International Monetary Fund (IMF), has referred to India as a ‘bright spot’ in the slowing global economy. According to them, growth equalled China’s last year at 7.3% and has now taken the lead as the world’s fastest growing economy. Yet some joke that India’s prospects look brighter the farther away you are.

The panel will reflect on Modi’s two years in power and discuss what they think the government got wrong and what they got right. They will question whether India’s resurgence can be sustained into the future, and discuss what this actually means for the prospects of India’s 1.3 billion people, as well as the balance of power in Asia and beyond.

This event is organized in association with the Lee Kuan Yew School of Public Policy at the National University of Singapore.