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How China is losing its fight against India

Updated: Dec 6, 2020

If you don’t know about the on-going stand-off between India and China, I have bad news - you may be living under a rock.

Border tensions and economic clashes between the two mammoth nations have been escalating since early May, and they don’t seem to be ceasing anytime soon. We hear about how ‘boycott China’ just won’t work, and how hurting China as a concept is unrealistic through the media, but we don’t know how much our actions are in reality affecting the Red Dragon, which is to a certain extent due to the secrecy the country is known for.

China is the second-largest economy in the world, with close to 14 trillion dollars in annual GDP. India is heavily dependent on the country – with almost 18% of our total imports coming from China, and less than half of that percentage being exported. This phase of negotiations has long been coming for the two countries – it is widely known that China barely tolerates its economic partner, while India has always approached its counterpart with good faith in relations. Prime Minister Modi and the Minister Of External Affairs Jaishankar have both made it comprehensively clear that they are done messing around, and will take a strong stance on China – and they’ve acted on it too.

From proscribing almost 60 Chinese apps to editing FDI policies to block Chinese investment in Indian undertakings to calling out China’s constant blocking of India’s permanent entry into the UNSC through structural reform, our actions have been significant but slow in impact. Recently, India also refused to join the largest trade pact in the global economy, the RCEP (which aims to remove trade barriers among its 16 members for the seamless flow of goods and services) on the very real basis that a China-headed trade agreement would hurt more than benefit us at this stage. So, how is China really being affected by New Delhi’s incessant policy and economic attacks?

Firstly, anti-Chinese sentiments have had more ramifications on Chinese business than previously thought. China is known for its confidentiality and does not ever release figures relating to its economic prosperity (or lack thereof). However, it has been estimated that Tencent, the Chinese Multinational technology conglomerate, has lost almost 1 billion dollars in revenue behind anti-China sentiments, and SME component businesses (manufacturers and distributors of electronic components) have been affected even more. A report from The Hindu reflected on this, showing reduced lead times and increased settlement on prices (basically, desperation for sales) from Chinese vendors, which demonstrates that although India is struggling to find alternatives to its dependency on China, this reduced trade has affected the country to a large extent as well. Trump may be leaving office, but his trade war against China has resulted in scars that will not go, and actions that will affect the country for years to come (such as Apple’s decision to shift 6 production lines located in China to India).

Secondly, China is attempting to play a stealthy game of foreign relations and is losing this too. Many analysts from dominant media houses such as The Times of India and Indian Express have hypothesized that China’s end-goal is to remove any developing economy that could replace it with regards to economic trade with richer western countries, which India is already succeeding at.

For years, China has coveted the position the US holds as a global superpower, and this was just one of the steps to that path. However, bad debts, spoilt relations, and the blocking of growing countries are actions resulting in reduced Chinese power in the sense that its 18th-century approach - capturing land, threatening territory, taking over whole countries, etc. – is falling short of what the President of The Republic of China Xi Jinping, dreams it to be. China’s favored strategic move is to loan large amounts of money to small, mostly Asian economies - including Sri Lanka and Pakistan - resulting in their long-term indebtedness to the country. However, large influxes of money on bad investments and slow economies have started to impact the deficits and financial stability of China. Moreover, Russia, Europe, Japan, and various other countries seem to be inclined to support India in this conflict, which can affect China heavily, although the US’s uncertain position on the same may backtrack this now that Trump is no longer a part of The White House.

China is a country with a stronghold on its people, its secrecy, and its wrongdoings. There is no doubt about the fact that China is finally receiving heat for the same. Be it the US favoring India in trade pacts due to faulty agreements with China, India-Japan ties, or the general distrust of the large country due to its actions (conquering Tibet, building islands on international water, building structures encroaching on our borders, torturing Uyghur Muslims – you get the point), China is facing distrust, outright protest, and general outcry from the international community for its actions. The managed economy format has helped them repress distrust, outcry, and generally any threat to its power, but the country has, for far too long, used this to their advantage to cause havoc on the global economy and its stability, not unlike many other globally prominent countries.

China’s power is extensive, and it will mostly take years for us to be even half as dependent as we are now on the country – but we’re getting there, and inflicting more hurt than they show, for the sake of prosperity and larger growth of the Indian economy.

-Rudri Mehta


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