If India has to take on China, it must understand China and its future intentions – The Economic Times

Clipped from: https://economictimes.indiatimes.com/opinion/et-commentary/view-if-india-has-to-take-on-china-it-must-understand-china-and-its-future-intentions/articleshow/86661480.cmsSynopsis

With China well ahead of India militarily and economically, their argument for building strategic alliances – to counter China’s ‘wolf-warrior’ diplomacy and to buy India time to build up its own military and economic strength – makes sense. As the Aukus deal under which Australia will acquire nuclear submarines shows, if India is to get the latest defence armaments from the West, it may need to deepen its commitments against China and for the US-led West.

Ajay Chhibber

Ajay Chhibber

The writer is former director-general, Independent Evaluation Office, GoIWith Narendra Modi having just returned from the first face-to-face Quad meeting in Washington, the die is cast – India has thrown its weight into finding ways to contain China’s belligerence. With the Galwan attack in June 2020, Xi Jinping‘s intent towards China’s relations with India became clear. It was no longer interested in the peaceful management of China-India relations that started with Rajiv Gandhi‘s historic meeting with Deng Xiaoping in December 1988 and had stood the test of time.

Trade had since grown greatly between China and India – but heavily in China’s favour. India did not join Xi’s signature Belt and Road Initiative (BRI), but had become a leading member of the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank, both headquartered in China. India was keen to pursue peaceful relations with China, and focus on its economic development.

Riverfront Didn’t Swing Him
In 2014, Modi started a series of informal summits with Xi to try and deepen ties. As late as October 12, 2019, Xi and Modi met at Mamallapuram, Tamil Nadu, in the last of their informal summits. But despite a Covid pandemic, with the Chinese attack at Galwan, that peaceful coexistence disappeared.

China’s rising belligerence is not only towards India. It is also dealing very aggressively with Hong Kong, with its neighbours in the South China Sea, and with major trade partners such as Australia. Within India, a debate has ensued as to how New Delhi must respond to Beijing. Some argue that India must build even deeper economic ties with China so that the latter has a larger stake in India. Others suggest cutting off all economic relations and joining military alliances to confront China.

In their new, thoroughly researched book, Rising to the China Challenge: Winning Through Strategic Patience and Economic Growth, former ambassador to China Gautam Bambawale, former Finance Commission chairman Vijay Kelkar, former Council of Scientific and Industrial Research (CSIR) director general Raghunath Mashelkar, former Nasscom Foundation chairman Ganesh Natarajan, Aditya Birla Group Executive President Ajit Ranade, and Centre for Monitoring Indian Economy (CMIE) Director Ajay Shah argue for strategic patience and economic growth.

With China well ahead of India militarily and economically, their argument for building strategic alliances – to counter China’s ‘wolf-warrior’ diplomacy and to buy India time to build up its own military and economic strength – makes sense. As the Aukus deal under which Australia will acquire nuclear submarines shows, if India is to get the latest defence armaments from the West, it may need to deepen its commitments against China and for the US-led West.

The book argues that the Chinese model of high-quality infrastructure to attract FDI and large manufacturing is the key to China’s past growth. ‘India could emulate China in some respects… choose sectors where we could build a dominant position in the world.’ India must, however, not forget that in addition to infrastructure, it was the foundation of basic education and health that created the workforce for China to become the ‘factory of the world’. China now tops the world in PISA (Programme for International Student Assessment) rankings, which test students on mathematics, science and languages, while India has dropped out of the rankings altogether.

This Dragon is Riding a Tiger
China is clearly laying ambitious plans to catch up with, and confront, the West, especially in artificial intelligence (AI), ocean and space technology and biotech. Its 13th Five-Year Plan emphasises green growth and continued expansion of exports, selective imports, increased out-bound and in-bound investment, promotion of the international use of the renminbi, and enhance China’s role in global economic governance. India does not even have a plan any more, apart from a four-year ‘strategy’ called ‘New India@75’.

But China has chinks in its armour. The recent scare of a debt default by Evergrande, its largest property company – which many feared may become China’s ‘Lehman moment’ – has been papered over, for now. But it reveals the heavy reliance on debt-fuelled growth, especially after the 2007-08 global financial crisis (GFC) that has kept China’s growth engine revving and risks crashing down. Its ageing population is another worry that has now led to it reversing its one-child policy.

In its first burst of reforms in the early 1990s, India’s economy tracked China’s quite well. But since the GFC, the wheels have come off. Exports have slumped, and investment has crashed, and India was in a downturn even before the pandemic.

India has started the performance-linked incentive (PLI) scheme, with fiscal support to expand investment in 12 sectors. But it must also focus on the costs of doing business. Power and fuel, as well as credit, cost far more in India than in China, and land acquisition takes multiple times longer. These issues must be addressed along with India’s notorious red tape, which puts off long-term foreign investors.

This book argues that India must not despair, but take steps to revive growth and buy time through diplomatic alliances. India’s much younger and still-growing population can drive its growth if it can get its act together, think and act strategically. ‘If you know your enemy and yourself, you need not fear the result of a hundred battles,’ said 4th-5th century BC strategist Sun Tzu. If India is to take on China, it must understand China, and its future intentions much better than we have so far. This book would be a good place to start.

The writer is distinguished visiting scholar, Institute of International Economic Policy, George Washington University, US

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