The first anniversary of the death of 20 Indian soldiers of the 16 Bihar Regiment, including its Commanding Officer Colonel B Santosh Babu, during the Galwan Valley clash with the People’s Liberation Army is being marked by claims of an apparent rupture in India-China relations. Since June 16, 2020, the completely baffled Indian officialdom and commentariat have been searching for Chinese strategic objectives in reviving the terrible memory of the 1962 defeat. Well, after a year, it has to be accepted that the Chinese objective was to establish Asian hegemony, destabilise Indian dominance in South Asia, highlight the limits of the US power and hence the futility of Quad — and still continue to remain India’s most important trade partner. Have the Chinese achieved their goals? If we assume trade to be the single biggest determinant, then the answer ought to be in the affirmative.
Despite the Galwan clash, the Chinese expanded their share in the Indian smartphone market from 71 per cent to 75 per cent in 2020, thus conclusively disproving the theory that the lure of the Indian market would be a deterrent to Chinese military pursuits. In fact, it is now the Indian market that is dependent on Chinese telecom instruments, electronic instruments, components and consumer goods, computer hardware and peripherals, and pharmaceutical ingredients. The latest trade figures put out by the Ministry of Commerce and Industry show that we imported goods worth $65.21 billion from China in 2020-21, topping the charts, whereas our US imports were not even half of that value at just $28.86 billion. Sure, we export more to the US and hence have a trade surplus, but the trade deficit of $45.9 billion with China tells the real story of our dependence on Chinese manufacturing.
Even when our import bill fell by about 17 per cent, the Chinese goods as a share of our total imports only grew in the year of the standoff at the Line of Actual Control. No wonder the Chinese believe that India has no option but to gulp its pride, lick its wounds and carry on with the India-China trade to ensure that our digital economy, telecom connections and computer terminals remain hooked and running. In fact, it is high time Indian economists started taking a hard look at the generational losses the country incurred in stymieing its manufacturing by entering into the World Trade Organisation regime gamed by American investors and Chinese manufacturers. While China became the global manufacturing hub in the last couple of decades, India was reduced to a glitzy global shopping mall buying cheap Chinese goods and remaining happy about it.
But then, bilateral trade is not the only defining factor; and the Chinese perception of the Indian reaction is not entirely correct because India had, at least in the last few decades, completely forgotten the 1962 debacle and started believing in a benign China. India’s security apparatus was forever preoccupied with its western neighbour, convincing itself that China is a friend. Even this writer, as late as in 2018, wanted to believe that India could remain a swing state in a simultaneous and mutually exclusive, opportunistic relationship with the US and China. That was what Indians wanted to believe — that a growing China will not be a threat but could actually help us also grow. Doklam was the first jolt, which India did not understand, and then came the territorial aggression in Ladakh. With the death of those 20 bravehearts, India began understanding Chinese designs.
Finally, the Gwadar-to-Xinjiang China-Pakistan Economic Corridor has begun making military sense as we confront the Sino-Pakistan arc in the subcontinent from Doklam to Gwadar. To this should be added the sea arc from Gwadar port to Hambantota port in Sri Lanka to the third largest Bangladesh port, Payra, which is being developed by the Chinese. Reuters had in 2014 reported the docking of a Chinese submarine and a warship at the Colombo port, where China is now developing the Colombo port city project on reclaimed land. China’s encirclement of India is a reality that has dawned on Indians thanks to the Galwan martyrs.
Once we acknowledge the land and the sea arcs for what they are, there are two ways to respond to this encirclement: Acceptance of China as a superpower while still trying to play the opportunistic swing game between the two competing global superpowers for investments, military concessions and regional peace; or complete rejection of the Chinese hegemonic claims in the neighbourhood and an attempt to build itself as a counterweight that the world would respect. The emerging Indo-Pacific alliance becomes crucial in this context. But the problem here is the complete lack of self-belief: Let alone pensioners in the US or Europe, how many Indians would be willing to invest their life savings in Indian companies?
It is not easy for a society in which the rule of law is becoming increasingly arbitrary to convince itself and others of its destiny. For instance, anyone who wants to invest in northern India ought to look at Delhi’s satellite cities of Noida or Gurugram as prime destinations; but then, what would they see? From auto-rickshaws parked in the middle of a flyover, rickety buses stopping where they want, “wrong-side driving” (a Gurugram contribution to the English language) to mob lynching over cows, civic unrest, police cases against journalists and the threat of eviction to digital companies like Twitter. All this is not going to lure the fleeting dollar, which has easier and better destinations. Unless we rewire ourselves to get plugged into the Anglo-Saxon economies and reignite our manufacturing dreams, we may get squeezed by the Sino-Pak military corridor. It is also time for reflection for all those WTO champions who ridiculed local manufacturing, asking why India should reinvent the wheel — well, if you don’t have your own wheel, you will get crushed under the neighbour’s.
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