Two years ago, Jairam Ramesh himself led a campaign urging Indian power generation companies to buy equipment from Bharat Heavy Electricals Ltd (BHEL) and not from Chinese companies, which were selling at 30% to 40% less price. There was a whisper campaign that the Chinese power equipments were inferior. However, power producers like Reliance Power and GMR had no complaints. In fact, after Jairam Ramesh persuaded BHEL to offer a better price to Reliance Power, it was found that Chinese equipment was still cheaper by 30%. As the minister of state for power then, Jairam Ramesh proposed that the Chinese must be forced to set up operations in India and value-add up to 30-40% here before selling power plants to domestic power producers.
I asked the head of General Electric in India whether Chinese equipment was indeed inferior. He told me that General Electric had fully transferred technology to the Chinese and they were adding more than half of Indias total capacity every year! So what is wrong with Chinese equipment?
Let us face it. We are suspicious and even paranoid about China. There is no point blaming the home ministry alone for it. This suspicion has permeated the entire government. It is fuelled by strategic experts who are encouraged by the establishment, that is the ministry of external affairs, to constantly generate more suspicion about China. Clubbing China with Pakistan is the biggest disservice strategic experts do to this nation.
Actually, we are still totally unsure how to deal with the Chinese. Here is a classic example. Recently FE published a report based on the minutes of a meeting held by the Foreign Investment Promotion Board under the ministry of industry. There was a foreign investment proposal from the Chinese telecom equipment company, Huawei, which has presence across 40 countries in the world. Huawei also powers the telecom networks of half of 14-odd telecom operators in India. However, the government has observed in the minutes that Huawei is a company promoted by an officer of Peoples Liberation Army and has the capability to remotely manipulate the equipment it supplies to operators. Mind you, in the past this company has supplied equipment even to public sector companies such as BSNL and MTNL. This would certainly qualify as paranoia, for Huawei has a huge research centre at Bangalore powered by Indian minds. It has registered a large number of patents in telecom hardware earned by these very Indian minds. So why would Indian IT professionals work for a company run by the Peoples Liberation Army? Am I being paranoid?
Indeed, paranoia can also be part of conscious policy. British Historian Paul Kennedy describes the USs foreign policy approach to China brilliantly. He says American foreign policy towards China is marked by schizophrenia. One half consciously wants to convert China after Americas own image. The other half is paranoid that a morphed China will become a huge threat. So at least there seems to be a method in their madness. Is there one in ours?
