India vs China at the G-20. Soviet Decline vs Russia Decline. Sadanand Dhume @AEI @Dhume. @GordonGChang. @PaulIGregory, @HooverInst.

Aug 18, 2016, 04:03 AM

08-17-2016 (Photo: Prime Minister Narendra Modi and Chinese President Xi Jinping at the agreement signing ceremony at Hyderabad House in New Delhi on Thursday. (Source: PTI)) http://JohnBatchelorShow.com/contact http://JohnBatchelorShow.com/schedules http://johnbatchelorshow.com/blog Twitter: @BatchelorShow

India vs China at the G-20. Soviet Decline vs Russia Decline. Sadanand Dhume @AEI @Dhume. @GordonGChang. @PaulIGregory, @HooverInst.

However, the “carrot and stick” maneuver adopted by China may be not able to guarantee India’s silence on the South China Sea issue during the G20. On the one hand, China’s “stick” seems useless. Although Wang hinted at an “eye for an eye” tactic, in truth China could not bear the cost of a rupture at the BRICS summit, which has been viewed by China as an important chance to enhance its “international positive image” around the world. Actually, China lacks an effective means to check India’s vital interests. Although India needs China’s help over the Kashmir clashes with Pakistan, China needs more cooperation from India, in areas ranging from the Taiwan, Tibet, and Xinjiang issues to counterterrorism. On the other hand, China’s “carrot” for India does not seem very attractive. India desires to be an elephant, not a rabbit. Joining the Nuclear Suppliers Group is important for India’s great power ambition, but given the limited international support for China’s South China Sea claims, it is very likely that India’s leader will talk about the South China Sea during the G20 summit once the United States or other states mention the topic. For India, the South China Sea issue is an important chance to unite a regional alliance against China’s expansion under the “One Belt, One Road” policy. Meanwhile, India’s growing perception of China as a threat is driving New Delhi to strengthen military ties with some U.S. allies and associates in the Asia Pacific region, including Australia, Japan, South Korea, and Vietnam.

http://thediplomat.com/2016/08/can-china-keep-india-silent-over-the-south-china-sea/

“…In the USSR case, declining rates of growth of GDP and TFP became irreversible after 1970. The ill-fated Gorbachev economic reforms made matters only worse. In the China case, the decline in TFP became pronounced in the early two thousands. With demographic factors allowing for little or no labor force growth, China’s GDP growth has been driven by unprecedented rates of investment. The declining TFP rates are therefore due to falling returns on capital, which Conference Board specialists blame on China’s “socialist-market economy,” which distorts economic incentives, deprives private enterprises of capital, and allocates state investment in favor of state enterprises. Whereas in the 1980s, China’s rates of return on capital were about average for BRICS countries (Brazil, Russia, India, China, and South Africa), current returns have fallen to about half. Interest rates on bank loans to large state owned enterprises remain around 6 percent, while private businesses pay 25 percent. Preferential terms for real estate developments have left Chinese cities with empty high rises with no buyers and opera houses with no opera….” http://www.forbes.com/sites/paulroderickgregory/2016/08/15/do-alternative-estimates-show-china-entering-a-period-of-stagnation/print/