Us, US, the Chinese entanglement and global march

Beijing’s march as the numero uno trading and economic giant seemed unstoppable after India refused to enlist on China’s Belt and Road Initiative (BRI) and Donald Trump turned his back on the Trans-Pacific Partnership. Both countries did not seem to have an alternative while China began unfurling rail and road networks across the heart of Asia and Africa and started setting up ports on the rim of the Indian Ocean. What was a security threat in South China Sea became a politico-economic challenge in the wider Asia-Pacific.

Then came 5G, and suddenly the worst fears of the western camp were coming true. A manufacturer of spoons and tyres was now entering the rarified domain of cutting-edge technology from where the West has traditionally earned its butter.

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The answer to both the challenges posed by China has to be necessarily intertwined. India and the US are today looking at Artificial Intelligence, Smart Manufacturing and Development Finance as the three pillars to increase value chain efficiency.

India’s approach with advanced nations on next generation partnerships has been similar. With Germany, it sought collaboration between Platform Industrie 4.0 and the upcoming Indian Smart Manufacturing Platform. It becomes easier to join high-end, highly efficient global value chains once industries of both countries come on the same page on standardisation, test-beds, business-models and digital ecosystems.

In contrast, the US is pursuing a similar goal but in a more political manner. A brand new organisation, US International Development Finance Corporation (DFC), has been set up, the US State Department announced, “at a time when developing countries are incurring dangerous levels of debt from state-directed investments”, thus leaving no doubt who it considers as its rival. The US answer to China’s BRI has largely gone under the radar because it has recently been launched with a budgetary demand for $729 million.

This suits India fine for out of its eight priority areas, one is Asia-Pacific. India has some ambitious connectivity projects up its sleeve. The DFC — also backed by Japan and Australia — should be of assistance in large project management where Indian capabilities are not so high. The DFC will give a Blue Dot tick to projects compliant with several benchmarks, which will increase financing from US and West Asian funds.

While India happily goes along with the US and its Asia-Pacific allies Japan and Australia in countering China on the BRI and security, it is reluctant to pursue a zero sum game. Boris Johnson has already set the template. Johnson reportedly withstood Trump’s threat to cut out UK from the Five Eyes worldwide snooping programme if it let China develop 5G networks. Johnson’s obduracy has to be understood in the context of Britain’s departure from the EU and its requirement for Chinese finance. India’s needs are different.

As for fears of spying, India is already investing heavily in quantum cryptology. It also realises that eavesdropping is not a Chinese prerogative. In fact, today’s basic structure for telephony and Internet data, including root servers, is overwhelmingly US-owned and based. Combined with the fact that the US is known to collect data of over one billion conversations daily, India realises the need to build its own firewall; a selective boycott is more of a political strategy than a security imperative.

Having suffered the same technology denial regime from the West as China, India will also be looking at developing its own capabilities. As a second best option, it would collaborate with whoever is ready to open its secret chest of source codes.

— Sandeep Dikshit

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