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Lessons China should learn from Doklam stand-off

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Dr Somduttahttp://www.drsomdutta.com
I am the former Vice- chairperson of NASSCOM Product Council and a member of the core management committee of Women Entrepreneurial Platform - NITI Aayog. Simultaneously, I am also on the Advisory Board for BloombergQuint. Apart from this, I am also the Founder & Director of Unspun Group, Digital Leadership Institute (DLI) and IRA – House of Designers.

When erstwhile Prime Minister Jawaharlal Nehru had visited Beijing in October 1954, he had coined the phrase ‘Hindi Chini Bhai Bhai’ with expectations running high that leaders of the world’s two most populous nations could build a bilateral relationship based on dignity and respect. India was a new and messy democracy, while China an impoverished communist dictatorship. Culturally, politically and socially, they were worlds apart, yet, for a brief period in 1950s, China and India came together in the spirit of the above saying. Things changed rapidly in 1962 when India lost a border war to China and has since resented and mistrusted its neighbour to the north.

Like Mao and Nehru, subsequent leaders have constantly tried to strengthen bilateral relations, voicing support for expanding economic ties and pooling efforts as BRICS and advocates of the diffusion of global power. But, always caught up in domestic nationalism and blinded by ideological doctrines. Leading Mao to backstab Nehru. Great friendships are easier declared than sustained. Border disputes like the recent Doklam event and an economic rivalry between the two nations have time and again strained relations.

Cultural and economic relations between China and India date back to ancient times. China’s “One Belt, One Road” program which is also denoted to as the Silk Road is the nation’s most ambitious projects that intends to connect the disparate regions in China’s near and distant neighbourhood through a massive program of infrastructure building. The Silk Road not only served as a major trade route between India and China, but is also credited for facilitating the spread of Buddhism from India to East Asia.

Through World War II, India and China had played critical roles in stopping Imperial Japan from progressing. After the Brits left, the bone of contention between the two countries were a series of violent border incidents after the 1959 Tibetan uprising, when India had granted asylum to the Dalai Lama. India’s Forward Policy had placed outposts along the border, including along the McMahon Line, the eastern part of a Line of Actual Control proclaimed by Chinese Premier Zhou Enlai in 1959.

On 20 October 1962, China caught India’s ill-equipped army napping by launching a surprise, multi-pronged military attack across the Himalayas which inflicted such immense psychological-political shock on India that created gloom and a defeatist mindset in India, and forced its army to retreat to very defensive positions. From then, relations between contemporary China and India have been characterized by border disputes, resulting in another 2 military conflicts —, the Chola incident in 1967 and the 1987 Sino-Indian battle. In early 2017, the two countries clashed once again at the Doklam plateau along the disputed Sino-Bhutanese border.

Geographically China and India are connected at the Himalayas with both sharing borders with Nepal and Bhutan that act as ‘safeguard’ states. India’s relations with China marked a new low last year with India’s adversary Pakistan, laying the China-Pakistan Economic Corridor (CPEC) through Pakistan-occupied Kashmir. Through its plentiful economic benefits and opportunities, the unprecedented CPEC may be changing Pakistan’s business and economic landscape rapidly but is infringing upon the sovereignty of India. India has been opposed to the CPEC corridor, as it passes through parts of Kashmir that India claims as its own and accuses Pakistan of illegally occupying. China also has a dispute with India over Arunachal Pradesh where the former recently intruded into Indian territory to start a road construction before being challenged by Indian security forces which was however amicably resolved through existing border management mechanisms.

In 2008 both countries had successfully rebuilt their diplomatic and economic ties. This led to China becoming India’s largest trading partner, enabling the two nations to extend their strategic and military relation

But, like they say the pursuit of excellence is a never ending process. China flexed its manufacturing muscle far and wide to become a worldwide leader and long before India could comprehend what was happening, China had cleverly used India as a point of entry to bigger, better markets. China is leveraging the Indian population to create an economic cushion for themselves which signifies that the market is already prepped. All we need to do is use this buying inclination to our advantage. The foundation of framing the buying mindset is already laid, all we need to do is replace it with India commodities. Additionally, in order to encourage Make In India, a national government procurement policy has also recently been approved that will give more preference to locally made goods and services. This step will give a substantial boost to local manufacturing and services sectors, thereby creating more jobs, the need of the hour.

The solution to India’s trade deficit is clearly not a boycott of Chinese goods, but a more efficient domestic industry. China has also emerged as India’s largest trading partner after it replaced the United States in March 2008. When India initiated its comprehensive reforms in 1991, the level of bilateral trade between the two countries was insignificant as the trade basket was restricted to a limited number of products. However, within a short period, China has become India’s single most important trading partner, source of imports and 4th largest export market with India’s bilateral trade with China hoisted at $71.48 billion in 2016-17. India imports $61.3 billion worth of Chinese products while it exports just $10.2 billion worth of goods to China.

Recently, Doklam is again in news, with the standoff turning into a grim battle of nerves. Chinese foreign ministry spokeswoman Hua Chunying said that the Doklam plateau belongs to China, and India should have “learnt lessons” from the standoff last year. This came after India’s ambassador to China, Gautam Bambawale, said the Doklam standoff took place as a consequence of Beijing trying to alter the status quo in the region. Though the Chinese government feels the Doklam incident should have been a lesson for India, it is in fact the other way round.

Here are a few lessons that China should learn from India:

  • India will no longer be intimidated by China. With an able leadership the Indian military can easily tackle situations. India may trail behind in certain aspects, China is getting guarded by India’s advances in FDI, technology and manufacturing. India’s closer military ties with the U.S. is another major concern of China. China has realized that India holds great potential and if it is able to tap it effectively, India could emerge as a major threat to China. China has been encountering dwindling foreign exchange reserves whilst India is antagonistically moving forward as a ripe destination for investment.
  • China should also be scared of India overtaking it in manufacturing in the long term as labour costs in China are rising. China should pay more attention to India’s increasing manufacturing competitiveness which may still be in its nascent stage of developing export-oriented manufacturing industries, but we have great potential to emerge as a regional hub for labour-intensive industries.
  • Also, India has a better pool of technological talent with heightened interests in foreign research and development centres. However, high-tech firms are turning their attention from China to India due to the latter’s relatively low labour costs. In order to maintain its innovation ability, one option China has is to attract high-tech talent from India, which, with a highly skilled talent pool is turning out to be progressively appealing.
  • When India launched 104 satellites, breaking the Russian record of 37 satellites being placed in orbit at one go, China agreed that they could learn from India in space technology. India is fostering low-cost technology that has takers in the west and is constantly working toward cracking its massive technical capacity in other segments too.
  • Whilst China’s stance towards India keeps changing, they need to understand that India has the might to overpower China. India is projected to achieve its highest annual GDP growth rate of 7.9% over next 8 years, overtaking China.

My final words…

The Asian heavyweights demonstrate sharp contrasts in terms of their political systems, economic models and social structures, despite their common aspirations for greater stature on the world stage. They have also sustained a connexion that has been burdened by history but also offers encouraging opportunities in the current global scenario. While the implications for the rise of China have been widely debated, scholarly attention has been devoted to the rise of India or to how these two Asian great powers perceive each other’s ascendancy. How both the nations deal with their futures as intensifying powers will decisively shape international relations. Only time will tell.

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Dr Somduttahttp://www.drsomdutta.com
I am the former Vice- chairperson of NASSCOM Product Council and a member of the core management committee of Women Entrepreneurial Platform - NITI Aayog. Simultaneously, I am also on the Advisory Board for BloombergQuint. Apart from this, I am also the Founder & Director of Unspun Group, Digital Leadership Institute (DLI) and IRA – House of Designers.

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