ARTICLE: “India Touts Its Democracy in Bid To Lure Investors Away From China,” by Marcus Walker, Wall Street Journal, 30 January 2006, p. A2.

ARTICLE: “China’s Draft Antitrust Law Sows Worries in West,” by Adam Cohen, Wall Street Journal, 30 January 2006, p. A12.

There has long been this school of thought (okay, maybe going a couple of years back) that says India overtakes China as investment target of the Old Core when the political going gets tough in China, because India’s done the hard stuff of democracy. It’s an interesting argument, one that the Indians themselves are selling hard right now this week in Davos at the World Economic Forum (which, BTW, is sounding more weirdly glitzy each year).

So India sells itself like a Hollywood comedy that’s done well in its first week of BO: “India: the world’s fastest growing democracy!” (like “Wedding Crashers: America’s #1 comedy!”). Doesn’t exactly turn India into “Titanic” overnight, but you get the picture. ‘

It’s a slick trick, and India should pursue it for all its worth. To me, that’s the real and natural sort of “containment” or balancing we should encourage India to pursue: just sheer competitiveness that pushes China harder on making its own lack of democracy up on top seem more palatable over time. China will eventually go democratic, but it will go that much faster with India egging it on—but not with the U.S. hectoring it from afar.

Count on the Chinese to be Chinese, I say, and count on them to be as greedy and concerned with maintaining power as anybody else. So expect them to move toward freer markets and freer politics only when they are forced to do so defensively—in an economic sense. Trying to force China to feel defensive on a political-military level is both dangerous (could lead to war) and counterproductive (we won’t get the reform we seek). But making them feel vulnerable on an economic basis is a win-win-win for us, China, and whomever’s giving them a run for their money.

With China coming out with a draft antitrust law that has some over here worried about its potential uses by Beijing to protect state industries there, India’s timing at Davos couldn’t be better. Turnabout is fair play.