A detailed overview of the relationship between India & China pertaining to the border dispute, geopolitics, trade, boycott movement and Covid-19.

“India sees itself as the southern branch of a four-petalled lotus, whereas China sees itself as the center”

                                         Shyam Saran

India and China have comparability to the extent that both the nations have kept their cultures intact as they shift towards modernity which invokes a sense of belongingness in the public.

China’s worldview as seen by the quote above is inherently hierarchical, China throughout most of history has been a self-sufficient and self-contained economy with marginal interaction and trade with foreign countries. However, in recent decades it has opened up its economy in a way that it has become an economic superpower leaving India far behind in terms of development.

Source: World Bank

A History of Deceit

Instances show how India lacked familiarity with Chinese strategic culture which created a lost sense of trust. Like in the early 1950s, when PM Nehru took up the matter of Chinese maps showing huge parts of Indian territory as a part of China, Zhou Enlai replied that the maps were old and not revised. He did not admit that they were wrong, yet created an impression that China accepted the boundary drawn on Indian maps. There is a certain subtlety to the Chinese use of deception, which has been biting us ever since the Nehru days. 

Similarly, China’s geopolitics in the region affects India both in terms of economic as well as military developments. Its ‘string of pearls’ strategy to pose its dominance in the Indian Ocean region, ‘Salami Slicing‘ technique to take over land and it’s debt-trap diplomacy with countries like Sri Lanka, threatens India. The One Belt- One Road (OBOR) project running through Pakistan Occupied Kashmir (POK) under China Pakistan Economic Corridor (CPEC) further portrays China’s provocative nature. Its varied take on terrorism, POK and India’s place in the security council reeks of hypocrisy making it difficult for India to trust China in matters of diplomacy.

The Border Dispute

India’s border dispute with China has been a major sore point in relations between the two countries over the past 70 years. India has found itself in an unexpected clash of arms mainly due to the dispute over it’s northern and eastern region. In the east, China claims around 90,000 sq. km area of Arunachal Pradesh which is administered by India in accordance with the McMohan line. While in the north, China administers approximately 37000 sq. km of region which is claimed by India. After the Sino-Indian war in 1962, there have been no concrete steps taken by both the countries to take over the disputed land. India and China also face each other in the Doklam region which is a part of Bhutan, but is administered by the Indian army to help Bhutan defend it against the People’s Liberation Army (PLA). Frequent stand-offs are routine in all regions. 

Source: Deutsche Welle

The most recent scuffle which started on May 5, 2020 were the stand-offs between the troops of both India and China. It broke out due to China’s opposition to India building a road network around the Pangong Tso Lake, besides building another link road connecting the Darbuk-Shayok-Daulat Beg Oldie road in Galwan Valley to the Line of Actual Control (LAC). It is believed that China has increased its military presence in the South China Sea and is engaging in skirmishes with its neighbours to divert attention from the existing Coronavirus issue. The stand-offs carried out for weeks until the most recent violent face-off on June 15/16 in which 20 Indian soldiers were martyred and although  there is no confirmation by Beijing, it is estimated that 43 Chinese soldiers were either killed or were seriously injured in the breakout.

Consumer Movement Against China

The recent guileful tactics adopted by China has affected people’s sentiment against Chinese products yet again. Another incident, PM Narendra Modi’s address to the nation on May 12, 2020 brought up a new ideology into light which was Atmanirbharta (self-reliance). The Prime Minister urged the people to promote local goods to boost domestic demand which will help India regain its economic pace in the Covid-era. 

All this gave fuel to the already ignited ‘Boycott Chinese Products’ movement in India. People like Sonam Wangchuk and co-operatives like Amul became vocal for this movement and the Confederation of All India Traders (CAIT), which represents 7 crore traders and 40,000 trade associations, called for a boycott of 3000 Chinese products. While some demanded the ban due to valid reasons like the Karnataka government which urged the Centre to pose a ban on mulberry silk coming from China to save domestic players from the cut-throat competition as China dumps its silk into the Indian market hence ruling out the competition, most of the people promoted the boycott in the wave of anti-China sentiment. The Indian government has not augmented any such movements for its juxtaposition with the ‘vocal for local’ initiative. However, the Indian government banned 59 Chinese apps citing ‘emergent threats’ to national security. Even though the government remained silent on the boycott topic, it became necessary for them to take action considering the incendiary nature of China and growing belligerence in public view.

Boycott and Pragmatism

As per the World Trade Organisation (WTO) regulations, a country cannot impose a full ban on imports from any country even if there are no diplomatic, regional, and trade relations with that country. So, a complete ban is ruled out even before considering it. However, it becomes necessary to show aggression towards China considering their sly geopolitics in the region. But a boycott battle cannot be the final solution. India’s trading account suggests that its imports from China are 7 times more than its exports to it. The largest bilateral trade deficit that India has, is with China amounting to $53.6 billion. Furthermore, India accounts for only 2% of China’s total export which would not be able to impact China on a larger scale. Vivo, Xiaomi, Realme and Oppo combined dominate over 60% of the smartphone market in India. Moreover, India’s potential to manufacture hydroxychloroquine (HCQ), which was in great demand recently as a possible cure for Covid-19, greatly depends on the Active Pharmaceutical Ingredients (API’s) for which China is a huge manufacturer and seller. China has a major market share in most of the key industries in India and has investments made into various Indian companies across all sectors of the economy such as Flipkart, Big Basket, Byju’s, Paytm etc.

Source: The Economic Times

Affordability of War

Though, both the countries wouldn’t want to engage in warfare while Covid-19 persists, recent developments have created a warlike situation at the LAC. For a county to be able to afford a battle, its internal economic strength should be heightened to be able to pump money for its armed forces. 

However, China has strategically timed these skirmishes when the Indian economy’s future looks frail. According to the data released by the Central Statistics Office (CSO), India’s manufacturing growth fell to a three-year low of 3.6%, down from 4.4% in the comparable period last year. IIP figures hit a 21-month low in March. Cancellation of orders due to Covid-19 had resulted in India’s merchandise exports contracting sharply, 60% from a year earlier to $10.36 billion in April. Commerce and industry minister Piyush Goyal said he expected the contraction in exports in May to be 30-35%. In addition to that, China’s devaluation games have further weakened the rupee. Usually, a declining rupee would have helped Indian manufacturers by making their products cheaper in the international markets. However, in comparison to a weaker yuan and China’s ‘economies of scale’ policy which makes their goods cheap, a more competitive rupee is unlikely to offset weaker demand going forward. Additionally, China and India compete in several industries, so weaker yuan meant more competition and lower margins for Indian exporters. Furthermore, India spends 2/3rd of its defence budget into paying salaries and maintaining establishments leaving minimal amount for upgradation.

All is not lost for India, when it comes to actually fighting the battle, the mountain regiment of the Indian army is considered to be the best in the world. India’s procurement of advanced weaponry from its western allies has given a boost to the capabilities of the army which even the Chinese experts accept. Moreover, India shows strong prospects for economic development in the next fiscal year which will bring India out of its vulnerability caused due to the Coronavirus.

China, although being superior to India in armed strength, the most powerful nations in the world have singled out China due to its inaction against Covid-19. China’s biggest ally remains its ‘Colonised’ Pakistan. 

Systematic Defeat is the Way

A war fought on Indian soil with any outcome would either way negatively impact the country. Moreover, in times of globalisation and being governed by the rules of the WTO, providing impediments to the trade across borders is not going to succeed, but a systematic movement towards self- reliance can help India lower its dependence on China. Well-thought abstinence against Chinese products over a period of time can only help.

China’s galling nature should be discouraged and India should strengthen its bond with allies that have similar perspectives on China’s geopolitics. India should confide in other democratic countries vexed by China’s inability to curb the pandemic and cash-in the opportunity of businesses turning to India in times of Covid-19. India can nudge its self-reliance ideology by boosting domestic demand and supply. Another aspect in which India needs improvement is R&D. India spends a mere 0.7% of the GDP in research compared to countries like the USA and China which spend 2-3% of their GDP into research. An increase in expenditure in industrial research and providing production-based incentives will bring down India’s cost of production. Diversification of the import basket and further liberalising the FDI regime can improve India’s chance at minimising Chinese dominance in Indian markets.

Finally, India’s current situation with China makes it imperative for Indians to retaliate against China’s conniving nature. Self-reliance plays a key role in India’s emergence as a superpower and preventing Chinese influence from spreading its roots in Indian markets becomes fundamental.

Sources:-

  • Central Statistics Office (Quick Estimates of IIP) 
  • World Bank (Public Data)
  • World Trade Organisation (Basic WTO Provisions)
  • How India Sees the World – Shyam Saran (Great Book, Highly recommended)
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Disclaimer

Views expressed above are the author's own.

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