Indo-China ConflictApprox Read Time: 6 minutes
India’s border infrastructure is making China uncomfortable:
- Till some years ago, it was only the Chinese side that was building high-altitude roads at the border.
- Over the past few years, India has worked to improve its border infrastructure.
- India now has the infrastructure that will allow it to deploy troops and equipment much faster than it could have earlier.
This led to Chinese violence against India in Galwan valley:
- India’s ability to build good-quality roads in the area and having an airstrip at that altitude is the main reason for the current Chinese aggression at Galwan.
- This can be seen from the fact that a major Chinese demand is for India to stop further construction in the area.
India is expected to initiate some moves to curb Chinese imports and investment:
- India de-escalated as per the agreement, but China built up its forces at Galwan.
- The retaliation measures to the Chinese aggression mooted include:
- Curb on Chinese imports—of India’s $184-bn trade deficit in FY19, $53.6 bn was with China.
- Curbs on Chinese firms in India.
These moves will have limited impact:
- While there is no harm in cancelling some contracts, barring some Chinese firms, they will have limited impact.
- Just 3.1% of China’s total exports, for instance, are made to India, and it is unlikely that Chinese investments in India are a much larger share.
Some of these moves could even impact India:
- While China may not hurt as much as we’d like, higher import duties on Chinese products will impose certain costs on India as well.
- Around 45% of India’s electronics imports come from China, it is 65-70% in the case of pharmaceuticals API, 28% in the case of fertilizers etc.
- Restricting supplies from China will certainly raise prices for Indian users and, in some cases, there may not even be alternative suppliers readily available.
- For example, China accounts for three-fourths of global battery manufacturing capacity, so India’s ability to move to electric vehicles is critically dependent on China.
- In fact, around half of Indian imports from China are intermediate goods that India processes for the local or exports market; restricting Chinese imports, therefore, will also have job implications.
China will also hit back curbing India’s exports to its market:
- China will almost certainly reciprocate, and this will also hurt India considering China is India’s third-largest export destination.
China’s power is directly related to its high GDP:
- Military power:
- Much of China’s military prowess is directly related to its GDP.
- So, while China spends a lower share of GDP on defence than India—1.9% versus 2.4%, respectively—at $250 bn, the absolute value is almost 4 times that of India’s at $67 bn.
- Social infrastructure:
- While India spends just 3.5% of GDP on health, China spends 5.2% – a higher proportion of a GDP that is five times higher.
- As a result, World Bank data shows that:
- While India has 0.9 doctors per 1,000 population, China has 1.9
- It is 4.2 hospital beds per 1,000 population in the case of China versus 0.7 for India and, in the case of nurses and midwives, it is 2.7 and 1.7, respectively.
- Research & Development:
- China has 1.3 Mn domestic patent applications versus 16,300 in the case of India.
- In 2018, China installed 154,000 industrial robots versus less than 5,000 in the case of India.
- Since this, in turn, boosts China’s ability to be competitive, the gap between its economy and India’s is only getting wider; that, in turn, boosts its military capability even more.
India can counter China only with higher GDP:
- At current levels, India’s ability to inflict economic pain on China is limited.
- Also, considering that military might come from economic might, India just has to get down to it and fix the economy first if it wishes to even contain China.
- For example, India’s ability to build top-quality roads in the Galwan area is also a function of its growing GDP and the greater abilities—including the possibility of using higher-quality supplies and equipment—that you get as economic prosperity rises.
Conclusion: Indo-China Conflict
- Containing China is not a one-time or even a one-term exercise, it will take decades of painstaking reform.
- It is important for the government and the opposition to realize this, and come together to make India economically much stronger.