The many elements of China challenge

China has emerged India’s largest and fastest growing trading partner during the past decade. India’s exports to China in the last financial year, 2019-20, were barely $16.6 billion, while its imports were $65.26 billion. India, thus, faced a 300 per cent trade deficit with China during the last financial year. Moreover, in strategic terms, the dependence on imports from China has been rising in key industries like pharmaceuticals, telecom and power. It would be very unwise to become excessively dependent on a China, which is becoming increasingly aggressive on its territorial claims.

China is, moreover, sparing no effort to undermine India’s relations with neighbours across the Indian Ocean. A new report published by the US State Department, titled The Elements of the China Challenge , spells out the road ahead that China has planned for extending its dominance of the global order

China’s takeover of the Hambantota Port was swiftly executed when Sri Lanka found that hardly any shipping vessels were calling on the port. Unable to repay its debts to China for the construction of the port, Sri Lanka had to hand it over to China. The port was built as an integral part of China’s “economic aid” to Sri Lanka. China tried out the same strategy in Maldives. It was foiled by economic and diplomatic efforts by India and the US, after the preceding China-backed government, was voted out of power in Maldives.

Beijing has been trying hard to take control of the strategic Kyaukphyu port in Myanmar, only to be kept at a distance on this project, by the astuteness of Aung San Suu Kyi and the Myanmar military. Myanmar’s leaders have further hedged their bets, by agreeing to India developing the nearby Port of Sittwe, as a maritime link to the Kolkata port for India’s landlocked North-East States.

The same strategy has been followed by China in its “aid” to Pakistan, for developing the strategic Port of Gwadar, located to the east of Karachi. Gwadar is being developed as a huge naval base that can accommodate Chinese warships and submarines. China’s strategic aim is to increasingly control the sealanes between the Straits of Hormuz in the West, and the Straits of Malacca, on India’s East Coast.

The CPEC factor

The entire $60-billion China-Pakistan Economic Corridor (CPEC), is designed to provide China facilities for access to the Arabian Sea, and across the shores of Persian Gulf. The CPEC also provides China access to, and presence in, Gilgit-Baltistan.

This strategy of “build and takeover” of ports and mines has been adopted by China also across the East Coast of Africa. China’s strategic aim is to invest in infrastructure, make East African countries financially dependent, and then utilise the East and Central African region’s vast mineral resources.

The same US State Department report mentioned above spells out details of the policy China is adopting to dominate global developments by using its surplus economic capabilities and technological advances. The primary focus of China has been in communications and infrastructure, where it does not use local manpower available, but brings in its own manpower to retain control of economies of resource-rich countries.

India assembles virtually all its electronic equipment, with an ever-increasing dependence on imports from China. The US State Department notes that China and Taiwan control 70 per cent of global integrated-circuit fabrication, which is vital to the digital economy, apart from advanced weapons systems, aerospace, artificial intelligence and other essential industries.

India has an official presence in Taiwan, normally headed by a senior/retired diplomat. But South Block gets shivers when deciding measures for promoting exchanges of official, industrial and business delegations with Taiwan. India has failed to take advantage of the economic opportunities Taiwan can provide, primarily because of ill-advised policies of being too concerned about implications of its actions on the relations with China.

Prime Minister Narendra Modi has expressed his commitment to building a “self-reliant” India. The more realistic way to achieve self-reliance is to collaborate with companies from with Taipei in Taiwan, and not just Shanghai in China. Business and economic decisions should be based purely on objective considerations, with a focus on attaining increasing self-reliance in business and industrial development.

The 5G threat

The US State Department report pointedly notes: “Since Huawei and ZTE are subject to China’s various national security laws that compel them to ‘support, assist and cooperate with the state intelligence work’, countries that use them as 5G vendors face growing threats to their network integrity, data privacy, economic stability, and national security. This is a fact that our security agencies have been acutely conscious of and must increasingly become an important element in economic policies.

These are factors that cannot be ignored any longer by India. We have only ourselves to blame if China believes that it can regard and treat India as a “soft state”, incapable of challenging China’s territorial ambitions. In the present context and given China’s dominant say in Pakistani policies, we should not be surprised if Pakistan stirs up tensions along the Line of Control in Jammu and Kashmir and even in locations along the international border, which are easy to infiltrate.

Moreover, given the close collaboration between Pakistan and China, we should be prepared for closer cooperation between them on Jammu and Kashmir. Given its own experience and continuing Russian distrust of China, Putin’s Russia is hardly going to place any trust in Xi Jinping’s China.

The US State Department report clearly spells out concerns which the US and many of its partners have about China’s policies. Given the statements by President-elect Joe Biden himself and members of his team like Anthony Blinken, who has been nominated Secretary of State, the new US administration will be hard-headed in dealing with China.

It will, however, make common cause with China on climate change. There will be significant changes from the Trump administration policies on a series of issues, ranging from dealing with European allies, Russia, Iran and on climate change. Relations with India will be accorded importance, because of the Quad partnership, though there could be some rumblings on developments in Jammu and Kashmir from sections of the Democratic Party.

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