Background:- You might have heard it before, how do you tackle a bully… STAND UP to it !!! Unfortunately, “bullying” has been China’s geopolitical policy. The bully is backed by a trillion dollar economic muscle which it got by being the “Sweat Shop” of the world and of course no country wants prosperity at that cost of human rights violation and what not. Now, it just can not keep its hands in its pocket, because it is not in the very nature of bullies.
In diplomacy there is a saying that “Speak softly and Carry a big stick, you will go far” and that is what India needs to do now. To stand up to a bully you don’t need bravado, a “slap in the face” will do just fine.
Many though that when India could not get NSG, it was India’s loss, WRONG, China had to fire its bureaucrats because it faced the diplomatic isolation, almost all supported India, even Mexico and Italy after the PM’s visit. So China’s isolation is apparent.
It also knows that its sweat shops are going to be closed sooner than later, and you no need humans to assemble what can be done by machine now with a bit of Artificial Intelligence. Hence the OBOR initiative, to sell its products and dominate the region geopolitically.
Nevertheless, the bullying is back and lets get into the matter at hand.
Details :-
Nothing illustrates this better than China’s recent efforts to test India’s responses in the tri-junction of Sikkim, Bhutan and southern Tibet, where it is building a road from where it can threaten the Chicken’s Neck region of India, which connects India to the rest of the North-East. It destroyed some bunkers on the Indian side, and has trespassed into areas claimed by Bhutan. In the resultant standoff, it arrogantly reminded us of our 1962 defeat.
To which, Defence Minister Arun Jaitley mildly retorted that the India of 2017 is not the India of 1962. China has – not unexpectedly – responded that even China is not what it was in 1962, and will take “all necessary measures” to safeguard its territory.
The China of 2017 is acting like that T-Rex in Jurassic Park, which tests a different part of the electrified fence each time to check for weaknesses. It tests India repeatedly in areas of weakness, whether it is in Ladakh, or the North-East. In 2013, a platoon-sized Chinese army contingent pitched tents 30 km south of Daulet Beg Oldi and demanded that India demolish bunkers some 250 km south in Chumar as these were reportedly a threat to the Chinese. After a standoff, India appears to have obliged.
Something similar is happening in Doko La, an area held by Indian troops near which the Chinese are trying to build a road through Bhutanese territory. Indian and Chinese troops are in a faceoff because India is intervening on behalf of Bhutan, with which India has a 50-year treaty.
The Chinese are trying to test the status quo here for a simple reason: technically, they are not encroaching on Indian territory or territory claimed by India, but doing it with Bhutan, which has no power to resist. If Bhutan and India cave in to this bullying, China will have moved its borders forward a wee bit. It will start believing that in an eyeball-to-eyeball confrontation, India will, often, blink first.
To be sure, China is operating from its own sense of weakness, despite apparent strength. It knows that with every passing year, its hopes of becoming hegemon of Asia will diminish. Seen from the Chinese side, the window of opportunity for it to act is narrow.
First, China knows that it enjoys relative impunity right now thanks to the space opened up by Donald Trump’s confused policies. The US policy on Asia is no longer coherent, and India cannot count on the Trump administration to come to its aid if attacked by China. The EU is mired in its own economic woes, and Russia has been bought off with Chinese business deals. Japan is not a military power, but will start developing its own defence over the next decade. If China wants to force any issue with India, it must do so in the next five years.
Second, China knows that India’s own internal weaknesses will take a while to sort out. It could take nearly a decade for our economy and military preparedness to rise to a level where it becomes invulnerable to Chinese threats.
This can happen during the 2022-2025 period, depending on our rates of growth. Currently, China’s GDP is about five times India’s in nominal dollar terms ($11.8 trillion versus India’s $2.5 trillion, according to the IMF), but only 2.5 times in terms of purchasing power parity (PPP, with China at $23 trillion and India at $9.4 trillion). By 2022 or 2025, India’s PPP-based GDP will be half of China’s.
This is why China is trying to flex its muscles now, when India is in a position of relative weakness. Five or 10 years later, both the Indian economy and the military will be too big for China to confront through force of arms. And the US and Europe may also be in better shape than now to rein in China.
Third, China also faces internal vulnerabilities, and again the time horizon for offensive external action is narrow. Its population growth is decelerating, and now rises at the annual rate of about 0.5 per cent, against India’s 1.2 per cent.
China’s working age population has been declining since 2012, and will fall 25 per cent by 2050. This means both a steady rise in wages, which will worsen its competitiveness, and a fall in the growth rate in future.
In contrast, India’s demography is in a sweet spot, and the working age population continues to rise. These are positive indicators for future growth.
Another concern is China’s excessive internal debt, which is now reckoned at 260 per cent of gross domestic product (GDP). This forced rating agency Moody’s to downgrade Chinese debt in May, and is indicative of the possibility that as growth slows, the debt problems could get worse.
China’s belt-and-road initiative is intended to create growth outside China by offering its Asian and African neighbours soft loans, which, in turn, will create construction opportunities for Chinese firms.
China believes that it must act while India is still not big enough. To strengthen its bargaining power with India, it is also buying out potential allies in the neighbourhood (Nepal, Sri Lanka, Myanmar, etc). The intrusion in Bhutan is intended to convey the same message. The bully is telling that tiny kingdom that partnering with India can be injurious to your health.
So, what should India’s response be?
One, we must bide our time. This is not the time for belligerence. We must talk softly, and keep beefing up your military power so that China knows it will get a bloody nose even if it has more firepower right now. This means avoiding unnecessary rhetoric in the public sphere, including in the media.
Two, we must engage China diplomatically to convey the sense that its belligerence can only be counter-productive. China, in fact, does not need to be told that if it attacks India, the rest of Asia will gang up against it despite its blandishments. So, targeting India will not help it anywhere.
Three, we must attempt to drive a wedge between Pakistan and China, China is turning a blind eye to this, because it is using Pakistan to get at India instead of acting on its own – except by offering pinpricks in Ladakh and now Bhutan. But as Chinese investments in Pakistan, including the port of Gwadar, increase, Chinese workers will be under threat from Pakistan’s various insurgencies on the western borders, including the restive Baloch freedom fight.
India needs to keep its head down and focus on building its own internal military and economic strengths for the next decade. After that, China can’t do much. We have to talk softly, and grow the size of our stick in the next decade.
Bullies need standing up to, but there is no need to talk loudly or lose eye-contact in the process.
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Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.
This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.
It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.
The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.
Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.
India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.
More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.
An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.
India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.
Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.
And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.
A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.
We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.
We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.
In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.