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Shashi Tharoor former Union Minister and MP
In June 2020, the intrusion of Chinese People’s Liberation Army (PLA) troops along the border in India’s Ladakh region led to bloody clashes between the two sides, in which 20 Indian soldiers were killed. The result was that relations between India and China reached their lowest level in decades and there was a long military standoff. Now that the two have reached an agreement, many in India will still be reluctant to rush to celebrate.
India slowed down approval of Chinese investments to show its determination after the 2020 violence; tightened visa approvals for Chinese citizens; And canceled direct flights between the two countries. Additionally, India also toughened its stance on Chinese territorial claims in the Pacific and made clear political signals that could have angered China, such as warmly responding to the Taiwanese President’s congratulatory message after Modi’s third term. Give. Whereas China opposes all official talks with Taiwanese officials of countries with which it has diplomatic relations.
The recent agreement shows that India has got the message it wanted to convey to China. But was India more eager for a deal than China? In fact, India’s economic policy seems largely convinced that far from pursuing a strategy of disengagement with China, India should tap Chinese capital to bridge its investment gap.
With trade between the two countries reaching an all-time high despite political tensions, it is not surprising that India’s business community was reportedly putting pressure on the government for a deal.
In July, the government’s Chief Economic Advisor openly advocated a strategy that would increase Chinese investment in India and deepen India’s participation in Chinese supply chains. Over the past few months, there have been several indications that an agreement is on the way to end the Ladakh standoff.
On 12 September, External Affairs Minister S. Jaishankar had remarked that about 75% of the ‘disengagement’ problems with China on the LAC in eastern Ladakh have been resolved. The same day, National Security Advisor Ajit Doval met Wang Yi, director of China’s Foreign Affairs Commission, in St. Petersburg, indicating an agreement. China’s ambassador to India was also giving positive signals. And finally, a compromise was reached.
But concerns remain. When Modi and Jinping met on the sidelines of the BRICS summit just days after the agreement was announced, their respective ministries gave very different statements. While India described the agreement as a step towards a ‘multipolar Asia and a multipolar world’, China referred only to a ‘multipolar world’. The implication was clear: China is supreme in Asia.
A clear pattern can be seen in China’s behavior: it presents new facts, deploys troops in places where it can intimidate India, and seeks to weaken India through protracted diplomacy. At the same time, it also encourages India to increase its dependence on Chinese imports and lures Indian business-leaders to invest.
Despite this, the recent rapprochement between the two sides is unlikely to yield the expected economic benefits. China has done nothing to reduce India’s huge bilateral trade deficit – which is set to grow from $70 billion in 2021 to $101 billion in 2022 – nor has it reduced the barriers Indian companies face in accessing the Chinese market. Have done.
China invests in low-value industries here, not in technology transfer areas, while Chinese companies are trying to acquire sensitive sectors in India. Rapprochement with China will also make India less attractive for global companies. Looking at China’s long track record of weaponizing the economic weaknesses of other countries, it seems that India should proceed very cautiously in the matter of China.
Looking at China’s track record of weaponizing the economic weaknesses of other countries, it seems that India should proceed with caution. Unless China shows good intentions, it is not right to celebrate the agreement. (© Project Syndicate)
