The overall growth of China as a nation and as an economy has propelled it as the most important and indispensable core of the supply-chain mechanics and logistics to the entire world
China’s spectacular growth, especially in the past 4-5 decades is very commendable. From the debris of loss during the World War II to the crippling civil war between the Nationalists and the Communists, the Cultural Revolution significantly changing their culture and demography, from world isolation and hatred to become world’s second most powerful nation, economy, and superpower, China has surely done something spectacularly right. While it’s governance model is a totalitarian dictatorship that took away individual human rights, it gave unprecedented financial prosperity to the majority of its citizens.
After the Chinese communist party and it’s People Liberation Army (PLA) defeated the Nationalist Government which was exiled into Formosa (Taiwan), Communist China occupied and grabbed territories and countries in its neighborhood, including Manchuria, Inner Mongolia, Yunan, Tibet, South Turkmenistan, and parts of India to create the massive country that it is today. Present-day China includes 60% of territories that do not constitute traditional Han Chinese territories. In the past seven decades of this New China, the discrimination against non-Han Chinese, their oppression, human rights abuses, and exploitation has enriched the Middle Kingdom of Han Chinese. The drastic differences and the development index of it’s Han Chinese population versus non-Han territories is almost 3:1. Yet the overall growth of China as a nation and as an economy has propelled it as the most important and indispensable core of the supply-chain mechanics and logistics to the entire world.
China is one of the leading technology innovators in the world today, thanks to these policies of the past few decades. The average per capita income has almost tripled during this time.
If we look back at the growth of China in the past few decades, especially since the early 80s, it had worked on 4 things Is:
- Investments – Massive amounts of investments were sought from Western democracies including the US, Japan, Canada, Europe, and Australia. The need for America and its allies to provide a credible alternative to the Soviet Union made them invest in China completely overlooking and ignoring its human rights record and its disregard for rule-based world order. These investments are in excess of $1.5 trillion USD.
- Infrastructure – By the early 80s, China and India had the same GDP levels. In 40 years since then, the Chinese GDP has grown six times that of India, on the back of massive and frenzied investment infrastructure, funded by the investments received from the West. Massive road and rail projects connecting even inaccessible areas like Tibet and Xinjiang, massive investments in dams and power generation assets, in urbanizing dozens of cities across the country, in its ports, in technology and communication centers, and last but not least, huge investments in the modernization of its armed forces over the past 3-4 decades, has made China a superpower with potential to challenge the status of America.
- Innovation – China consciously and meticulously invested in acquiring technology either by formal legal route or by deceits and stealing. It invested in a program called ‘Thousand Talents’ where, it bought loyalties from several experts in the USA and the Western world, and it also sent several Chinese professionals to the advanced universities and research centers to gain knowledge and also to bring back their secrets. By encouraging industries to move into China in the past few decades, offering them cost arbitrage, it helped it’s own workforce to gain experience and knowledge. China is one of the leading technology innovators in the world today, thanks to these policies of the past few decades. The average per capita income has almost tripled during this time. Tech giants like Apple, Cisco, and others have invested heavily in China, for this large talent pool rather than cost arbitrage currently.
- Intrusion – The Chinese not just acquired technology and attracted industry to their own country, they unleashed several programs to undermine, undercut and kill the local industries in several countries by dumping massive quantities of cheap goods at prices which are unsustainable locally. They used the fault-lines of democracies and unleashed social disturbances, industrial unrest, controlled policy apparatus, and heavily influenced political discourse to their advantage. They used local Communist parties and their affiliates, they bought the loyalties of several political parties, funded several NGOs and organizations that would disrupt businesses and governments in those countries. If we add the debt-trap diplomacy unleashed through BRI (Belt and Road Initiative) and the string of Pearls projects forcing several countries to yield large part of their sovereignty to China, the Chinese intrusion into the world order is complete.
India has to actively pursue the 5 which is in a Dharmic or rule-based environment, unlike the way China used them. We have to grow our infrastructure exponentially with massive investments from non-Chinese sources like Japan, the US, and Europe.
If we look at the road ahead for India, having to handle a mammoth expansionist aggressive bully called China, what are the options on the table for India? India has to pursue 4 things if it wants to effectively tackle China.
- Trade – While China took the advantage of WTO regime and other bilateral agreements to substantially increase their trade with India, they have on the other hand consciously created huge hurdles and challenges for Indian goods and services to access the Chinese markets. India has to use anti-dumping rules to impose punitive taxes on Chinese goods that are flooding the Indian markets, threatening the survival of Indian industries especially the MSMEs. Even among large industries like steel, cheap Chinese steel gave a crippling blow to the Indian industry resulting in massive job losses and accumulation of huge NPAs in the banks. This trade imbalance and defraying of the banking assets have to be addressed with all seriousness and might of the Government of India. Sectors where the data sovereignty, national security, and democratic life of Indians are threatened, China or it’s proxies have to be firmly kept away like rejecting any space to companies like Huawei, 5G technology, etc. India should also invite advanced non-Chinese players to freely come into India and set up their assembly lines in the country. Industries that were shut down because of agitations funded by Chinese money like the Sterlite copper plant in Tuticorin have to be reopened and exemplary actions to be taken against NGOs which create domestic trouble after taking Chinese money.
- Taiwan – India, Nepal, Pakistan, Srilanka, Maldives, and Bangladesh share the same DNA and culture. This familiarity was exploited by China to create adversaries in India’s neighborhood. Be it the ‘Jihadis’ of Pakistan, or the Communist Party of Nepal, or the Rajapakshes of Srilanka, or Abdullah Yemin of Maldives, China paid huge amounts to the forces in India’s neighborhood that understood India culturally and linguistically very well, and which could cause huge pain to India. For India to counter this, the biggest proxy weapon that India can take help from is Taiwan. Taiwan is extremely advanced in technology and a pioneer in microchip technologies as well as in data administration. India for far too long has been following the One-China policy and not giving enough respect to Taiwan so as not to antagonize China. This was one-sided graciousness while China never reciprocated it for India’s rightful claims either in Jammu & Kashmir or in Arunachal Pradesh. By being more vocal and friendly to Taiwan, India has to send a firm message that its One-china policy cannot be unilateral. China expectedly would make a lot of noise, and retaliate on several fronts- economic, diplomatic, psychological, technological, trade, and even potentially militarily. However, Taiwan could open doors and windows into the underbelly of China and the Indo-Taiwanese cooperation could replace China for several critical technology-related imports needed by India. Having the same language and culture like China, Taiwan could help us tackle China by handling its internal fault-lines and its underbelly.
- Tibet – In the 1940-50s Indian Posts and Telegraphs were servicing Tibet before the Chinese invaded. In spite of repeated requests from the Tibetan Government and His Holiness the Dalai Lama, the Nehru Government of those days allowed China to occupy Tibet. India actively recognized the Chinese right on Tibet, ignoring the pleas of the Tibetans. The “Hindi-Chini Bhai-Bhai” was a romantic concept bereft of sheer strategic thinking. Nehru’s soft-corner for communism and socialism resulted in a Dharmic Buddhist Tibet falling into the hands of brutal, irreligious non-believing communists of China. Successive governments have continued with this policy of giving unquestioned Chinese rights to Tibet. This policy has not yielded any tangible benefits to India in the past seven decades. It not just resulted in the Sino-Indian war of 1962, but also resulted in the loss of about 45000 sq.kms of Indian territory to illegal and brazen occupation by China. China has been constantly nibbling away at Indian territory slice-by-slice, year-by-year relentlessly since then. Their claim in Arunachal Pradesh still stands and even their acceptance of Sikkim as Indian territory has not stopped them from skirmishes at the Nathula area during the pandemic days of 2020. His Holiness the Dalai Lama has grown old and a whole generation of Tibetan refugees was born in India without having ever visited Tibet. After the departure of His Holiness Dalai Lama, an atheist, irreligious, and non-believing communist China wants to appoint his successor. In spite of over 50 years of Tibetan occupation and making massive demographic changes by resettling lakhs of Han Chinese in Tibet, China couldn’t completely control and assimilate the Tibetans into the Chinese narrative. By appointing a stooge Dalai Lama, China wishes to control the loyalty of Tibetan Buddhists to their advantage. India has to play a key role in supporting the Tibetans in exile, and the Government of Tibet in exile to choose their own Dalai Lama as per their ancient religious practices. The current Indian policy of recognizing the Chinese suzerainty over Tibet has to be reopened to cause discomfort to China. The Tibetan Government in exile could be given better government and diplomatic support by India. His Holiness the Dalai Lama and the Tibetan Government in exile should be seen more often in the Indian Government circles. The legitimate democratic right to protest and demand their rights needs to allow for the Tibetan refugees against visiting Chinese dignitaries. India should take up the issue of Tibetans’ right to religious freedom and autonomy to China, the USA, the UN, and other global organizations. Short of recognizing an independent Tibet, India could bring Tibetan rights to the center-stage and cause discomfort and unease to China.
- Treaties – Acharya Kautilya Chanakya had advised weaker countries to form strategic alliances to tackle larger aggressive and expansionist powers. India should pursue such strong alliances that could counter Chinese aggression on all fronts. The concept of G7 transforming into T10 should be taken advantage of by India. If the world’s largest ten democracies are able to come together, they can easily tackle the communist dictatorial ideologies through the power of freedoms, rule of law and individual rights. This is a conflict of ideologies and the ideology of democracy has to prevail over the ideology of totalitarian communism. India has to actively pursue other groupings that could stand up against Chinese hegemony and expansionism. Like the NATO alliance of Europe, India has to pursue a formal military alliance with likeminded and affected countries of the Indo-Pacific region. The QUAD which includes the USA, Japan, Australia, and India, should be taken towards a formal military alliance. Several countries in the region like Taiwan, Philippines, Indonesia, Korea, Vietnam, and others should be allowed to join this alliance to be able to collectively stand-up to China. These groupings of G10 or an Asian NATO could counter the Chinese influence in other regions like Africa and Latin America. On the economic front, these alliances could develop alternate logistics and supply chains among themselves thus reducing the dependence on China.
India has to actively pursue the 5 which is in a Dharmic or rule-based environment, unlike the way China used them. We have to grow our infrastructure exponentially with massive investments from non-Chinese sources like Japan, the US, and Europe. Our education system has to be overhauled to give a major thrust to entrepreneurship and innovation-focused education rather than the current employment-oriented education. India also has to intervene as a world player in support of a rule-based, fair-trade practices world order. By micro-managing our trade challenges with China, in substantially increasing our cooperation with Taiwan, nudging the Tibetan issue to the table, and by seeking strong treaties against China, India should not just be able to handle the Chinese hegemony, but should also be hope to other smaller countries which do not have the size and ability to stand up to the dragon.
It is in India’s hands, whether it grabs the opportunity, or misses it resulting in giving an advantage to China, only time will tell. There will only be rare windows of opportunity for a nation and has to grab it. If it wants a respectable growth and survival in the comity of nations.
1. The views expressed here are those of the author and do not necessarily represent or reflect the views of PGurus.