August 21, 2007EconomyForeign Affairs

Who’s Japan’s client?

It’s about power relationships (of which trade and economic relationships are but components)

This is an archived blog post from The Acorn.

Those fretting about such things as independence of India’s foreign policy’ and strategic autonomy’ in the context of the India-US nuclear deal must be looking in the wrong place. Writing on his blog at the International Herald-Tribune (via IEB), Daniel Altman declares that India is Japan’s client state. Much like Sudan is to China.

Why? Because the Japanese government is happy to underwrite India’s growth, in return for a share of spoils’. Surely, a flagship $100b project to build an infrastructure corridor from Delhi to Mumbai should make India a grateful client; willing to do Japan’s bidding.

Altman’s argument makes a nice sensational headline. But it’s also absurd. That’s because for much of the last decade, Japan underwrote China’s growth’ for a share of the spoils and is nowhere near to acquiring Chinese clients. In fact, although Japanese firms are beginning to show more interest in India, Japan’s trade with China still ten-times larger than that with India.

So why did China not become Japan’s client? More than cultural or historical reasons, China did not become a client’ state because of the relative power relationship. And the reason why it is absurd to suggest India will be Japan’s client is the same. If underwriting a country’s growth to share the spoils’ is all that is necessary to secure a client state, then the United States should have become China’s client by this time.

Apart from the fact that the argument came from an economist and a publication of some reputation, there’s little to say about it. Indeed, it is in India’s interests to deepen its economic and strategic engagement of Japan, for this relationship has the potential to underpin the new order in Asia.

Afterthought: Is India the client of Mauritius?

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