Inside Out India and China: Local Politics Go Global

6. Differently the Same: Inside Out Diplomacy

161 CHAPTER SIX DIFFERENTLY THE SAME: INSIDE OUT DIPLOMACY CHINA IS NOT only Beijing and Shanghai; India is not only New Delhi and Mumbai. The United States and Europe need to understand the range of important localities in the world’s two largest nations, and they also must actively engage with those local communities and their leaders. On too many issues, American presidents or corporate CEOs have had productive talks with Indian and Chinese counterparts but are then disappointed because a regional leader opposes making a deal or refuses to implement a central government directive. And on a few key issues, important innovations are happening at the local state or provincial level that could usefully transfer around the world. The opportunities are enormous—especially when one considers the range of local developments taking place. At least half a billion Chinese and Indians have moved into modernity in the last twenty years alone, and that number will increase in coming decades.1 However, those successes have happened in certain regions and not in others. That will also be the case in the future. To influence these nations on major public policy issues or to cultivate their massive internal markets, one cannot simply make a single call to their political or financial capitals. DIFFERENTLY THE SAME: INSIDE OUT DIPLOMACY 162 A CEO or cabinet secretary may think it easy to craft a “China strategy” or an “India strategy,” given two political systems that, on paper, appear more centralized than those in Europe or the United States. In fact, China strategies and India strategies may be harder to design, let alone implement. Addressing a continental union requires understanding local economic, political, and cultural realities in cities such as Chengdu or Chennai, country-size jurisdictions such as Guangdong or Gujarat, or vast regions such as Inner Mongolia or Uttar Pradesh. Within China, Chengdu is as different from Guangdong as both are different from Inner Mongolia —just as Berlin is different from Barcelona and both are different from Brussels or Belgrade. In fact, in some ways, a Chinese province such as Guangdong may be more similar to the Indian state of Gujarat than it is to another Chinese region such as Inner Mongolia. Policy agreements, trade laws, or marketing strategies need to take that into account. Such deals can be hammered out in each nation’s capital, but negotiators need to know how—and where and by whom—policies will be implemented and executed. GETTING TO KNOW LOCAL SYSTEMS AND LOCAL LEADERS By and large, the rise of local politics has been a positive force in both countries. It has helped many local regions grow their economies . But each system has its own strengths and weaknesses, and these will persist into the future as well. China: Province-By-Province Reform In China local experimentation has allowed some provinces to prosper, even if the central government is now trying to help less advanced provinces to catch up. Guangdong, Shanghai, Jiangsu, and Zhejiang took advantage of decentralization, liberalization, and local government entrepreneurialism. Now they all are struggling to produce globally competitive, higher-value-added goods and services. To do that, they will need to decrease the role of state-owned enterprises—or at least modernize them—and make DIFFERENTLY THE SAME: INSIDE OUT DIPLOMACY 163 financing more accessible and transparent. As they try to liberalize, these provinces are also on record as trying to implement a new wave of environmental and social regulations. And if that were not enough, the coast’s political leaders have begun to experiment with granting a broader range of political rights for citizens to engage in public life, as well as civil liberties to protect citizens from arbitrary government action. That three-part economic, social, and political agenda will push these provinces to make changes that seemed like a luxury only two decades ago. And they will have to do all this while subsidizing the growth of inland provinces. Those lagging inland provinces do appear to be making up lost ground, but they have a long way to go. Heartland success stories tend to be tales of state-led growth. Local governments have been major players, even more so than on the coast. The sustainability of inland growth—economically, environmentally, and politically—is not just a local concern, but a global one. Right now, the nature of progress in these areas is difficult to judge. Statistics are unreliable...