The Economic Results of the Clash
India implemented extreme measures against China, and many believe that they are essentially sanctions. More than 100 Chinese apps have been banned, including the exceedingly popular TikTok and WeChat. More than that, equipment from telecommunications equipment makers Huawei and ZTE are prohibited as well. Furthermore, the government has increased the assessment of foreign investment and bidding on public projects by countries that border India.
However, many believe that these measures will have measurable negative impacts on the country. Like many other countries, India relies on China for many products, even if India does the manufacturing. This comprises 90% of its solar panels, 70% of its smartphones, and 60% of raw materials for drugs.
More than 13% of India’s imports in 2019 were on account of China, but China only directed 3% of exports to India in the same year. As such, India’s people are more likely to have hard times should the tie between India and China be broken.
Why Is India Still Determined to Break Ties From China?
Indian Prime Minister Narendra Modi’s government reaction to China is partly because of an adherence to popular opinion in the country. In June, Business Standard surveyed 32,000 Indians across the country, with 97% saying that they refuse to purchase Chinese products.
Still, the Indian economy is exceedingly important for the well-being of the nation and its people. However, the economic break from China suggests that India deems its powerful neighbor a threat to national security.
Can India Manufacture Enough Locally to Support its Economy?
According to the United Nations Department of Economic and Social Affairs’ World Population Prospects 2019, India is set to exceed China as the world’s most populous country around 2027. This means that the domestic market will be extensive. While population growth in a country with raging poverty is never considered a good thing, India’s growing middle class might be the answer.
With forecasts stating that India’s middle class will double from 300 million to 600 million in the coming five years, they might be able to support companies enough to forgo having to resort to free trade agreements with foreign countries to find sizable markets.
India has another important advantage, and that is its industrial base. India has numerous industries that make products ranging from everyday objects to nuclear bombs. More than that, Google is set to invest $10 billion in the country, and Apple started manufacturing the latest iPhone 11 in India because of the massive domestic market.
The country states that peace with India is of the utmost importance, as significant as the maintenance of peace in the South China Sea (SCS). Beijing faces multiple disagreements about the ownership of islands, reefs, and the surrounding sea.
There have been informal meetings between Prime Minister Narendra Modi of India and President Xi Jinping. The latter says that China will protect Chinese “sovereignty, territorial integrity, and maritime rights and interests, steadily advance the consultation process of the ‘Code of Conduct in the South China Sea,’ stabilize the maritime situation, properly handle border disputes between China and India, and maintain peace and tranquillity in the border areas.”
However, India has countered China’s statement that clashes have been completely eradicated at most locations on their border. India has appealed Beijing to focus on a true de-escalation of the situation.
Still, China seems to be keeping a very close eye on India’s key missile testing facilities. The Tezpur airbase in Assam and Dr. Abdul Kalam are both essential to India’s strategic and military capabilities. China seems to be doing this from Ruili county in Yunnan province which borders Myanmar.
This news comes from India Today’s Open-Source Intelligence Team, which took a close look at satellite images that indicate a new radar and monitoring facility. They believe that China is very willing to use space over Myanmar for ballistic missiles towards India, should they feel the situation deems it necessary.
This radar station was formulated in March 2018 after a stand-off between Indian and Chinese armies, which lasted 73 days in 2017. The station is situated only 3km from the Myanmar border, which seems to indicate that China wants to get the most benefit from its range.
The system utilized by this facility is well-known for its ability to discover stealth aircraft and ballistic missiles which are flying under the space limit. There has been an elevation of the radar recently, which will detect anything that goes higher than 2.5 km in height from India’s two locations.
Despite China’s proclamations that they are not too worried about India and that their diplomatic relationships have improved, they remain wary of an Indian strategic and military response. It seems that currently, China has become India’s prominent opponent, rather than the UK.
Still, there is debate on whether this move to economic independence from China is a good and long-lasting one decision that will benefit India in a big way. Only time will tell as India’s population grows exponentially.
About the Author
Adriana is a Journalist with a passion for reporting on business leadership, with a diverse interest in multiple industries.