Today the US administration is acting to redress the unequal trading relationship that has been in place with China for many years.
India must take advantage of this confrontationist shift and of the emerging new reality. How should India view and respond to this growing power rivalry?
India has choices but must exercise caution with their response to this trading spat. Those in the know suggest things will get worse before they get better. New flashpoints are emerging, moving from economic issues to the balance of power in South-East Asia.
This month we also had the 19th bilateral summit between Prime Minister Narendra Modi and President Vladimir Putin taking place. The summit ended with mixed feelings about the current state of the Indo-Russian relationship. An expected deal on the supply of the S-400 Triumf missile system did take place and other agreements aimed at further strengthening the economic engagement were signed but questions pertaining to the future of bilateral ties remains unanswered.
The US-China relationship is shifting to a more confrontationist position from a previous co-operative China policy that emerged during the time of President Nixon.
In 1972 when Nixon ended 25 years of no communication or diplomatic ties, this was the first step in normalising relations. Nixon’s aim was to gain leverage over relations with the Soviet Union by driving a wedge between the Soviet Union and China.
India must note that we are witnessing a similar situation only this time the US is targeting China and not Russia.
Several spheres of influence are likely to emerge which India should leverage without making an obvious anti-China posture in Indian foreign policy.
First, a new momentum could be built in India-China economic relations. The Chinese global rise should not be at India’s expense as a regional and global partner.
Spokesperson Ji Rong of Chinese Embassy in India stated that “China and India need to deepen their co-operation to fight trade protectionism”.
Second, India must address the trade imbalance. It is interesting to note that in the last 10 years Indian exports to China have remained constant at $10 million whilst the Chinese exports to India have risen from $25bn to almost $65bn.
Third, Trump’s trade war with China is not all about tariffs. China is taking undue advantage of the global governance structure and the real US target is to soften China’s attitude towards global accountability, transparency and remove barriers for foreign companies entering the Chinese domestic market.
The eventual aim is to check the Chinese technological advancement through “Made in China 2025”, which would threaten US supremacy in technology.
Fourth, India must act to deal with measures that are threatening Indian interests. India could emphasise issues with the US and Japan to balance out China’s outreach, mainly arising from its Belt and Road Initiative.
Questions need to be asked about China’s non-transparent project executions across the region and beyond, especially in Africa.
The US is also in dispute with its established partners, including the EU, Mexico, and Canada. India must widen its economic trade linkages, for example building co-operation with the EU.
China is trying to establish a new international system while the US wants to preserve its supremacy.
It is time for India to act.
Gordon is the former president and chief executive of BMMI. He can be reached at gordonboyle@hotmail.com