How
India Should Meet the China Challenge
Instead of erecting new barriers, it should be looking to deepen
trade and military ties with fellow democracies.
By
July 14, 2020, 10:00 PM GMT+10
It’s hard to find a China
dove in Washington these days. In New Delhi, it’s impossible. After a
brutal, high-altitude skirmish in Ladakh last month left 20 Indian soldiers
dead, anti-Chinese fury has surged on the subcontinent. There’s talk of
consumer boycotts and investment bans; the government appears to be slow-walking once-routine approvals for Chinese imports.
Recently, authorities even booted goofy-video platform TikTok off of Indians’
phones, along with 58 other Chinese apps.
The anger is
understandable. China enjoys a massive surplus in trade with India, has
invested heavily in its more modern and capable military, and is steadily encroaching upon its rival’s traditional sphere of
influence in the Indian Ocean, as well as along their disputed land border. It
poses an unmistakable long-term challenge.
But restricting
trade, as Prime Minister Narendra Modi’s government seemed inclined to do even before this latest
clash, would be a hopelessly misguided response. A new protectionist
wave will only hurt ordinary Indians when they can least afford it, raising
prices for consumers in the middle of a pandemic, depriving companies
of key inputs and choking off much-needed investment. Given that India is only China’s 16th-largest
trading partner, moreover, such measures are unlikely to strike fear into
Beijing.
Instead,
India needs to be doing the opposite: expanding trade with other nations. Even
absent long-term competition with China, that would be a precondition for the
kind of growth that India needs to create tens of millions of jobs
for young workers and to lift many millions more out of poverty. The worsening
rivalry between the two countries only makes meeting that challenge more
urgent. The good news is that there’s a clear path forward for
India — and, increasingly, an opportunity.
Most obviously, India
needs to finally develop an export-led manufacturing sector, as China
and other East Asian nations have done, and work diligently to join global
supply chains. With many multinational companies now looking to diversify
production outside of China, India should seek to fill the gap
by implementing long-delayed structural reforms to lure new manufacturers.
Any new trade barriers — say, restricting Chinese investment in sensitive
technologies such as 5G or reshoring production of critical goods, including pharmaceutical ingredients — should
be carefully targeted.
At the same time, India’s
greatest geopolitical advantage over China remains the number of potential
partners it has. New Delhi’s foreign-policy mandarins would be wise to shed
their traditional suspicion of external alliances and deepen the country’s military and economic
ties with Australia, Indonesia, Japan and Vietnam — all of whom
share fears of Chinese bullying. India should also be working with the
U.K. and Europe to shore up international rules and institutions. Above all, it
should intensify its cooperation with the U.S., which remains the only power strong enough to provide India with the
weaponry, intelligence and diplomatic support it will need to resist China’s
incursions.
There are also things India
can do on its own to bolster its position in the years ahead. It should focus
on modernizing a troop-heavy military that’s weighed down by salaries and
pensions, for instance. It should work harder to improve relations with its neighbors in South and
Southeast Asia, including by treating its own Muslim minority better. And
indeed, it should continue to engage with China where it can, especially
on efforts to combat climate change.
But even a nation of India’s size and history cannot take on a
rival like China alone. Only an economically vibrant country, working with
fellow democracies within a reinforced international order, will have a
fighting chance of protecting its interests. India’s leaders should need no
further reminder of that fact.
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