US-India Evolving Strategic Partnership
4. Meanwhile, at the international level the United States has made its stand clear in support of India as on early 10 Feb, 2021. The US says that it is monitoring the situation along the Line of Actual Control (LAC).What has to be noted is the timing of the finalisation of the descalation negotiations. India and China on February 11 announced an agreement for disengagement on the north and south bank of Pangong Tso to cease their forward deployments in a “phased, coordinated and verified manner”, which will “substantially” restore the situation to that existing, prior to commencement of the stand-off last year. As can be seen, the US position became clear on 10 February. Immediately, the Chinese realised of a clear American stand. Consequently, they immediately agreed for complete disengagement on the following day. Therefore, one can clearly conclude the linkage between the two events i.e. the American stand and the decision for descalation. Had the Americans dilly-dallied and had they used unnecessary jargon (like Trump used to do) that would have then changed the discourse of this disengagement. This has been the second driver to usher this détente.
5. The third driver has been due to India’s drive to pinch the Chinese economy, which is undergoing India’s ban on many Chinese products and services. Trade and procurement curbs targeting China is being planned. The government is also increasing scrutiny of Chinese investments in many sectors, and weighing a decision to keep out Chinese companies from 5G trials. Thus, by default; India is reducing the trade deficit with China. This China does not want, so as to lose a major leverage on India. India’s biggest leverage is its market, which has emerged as one of the important overseas markets for Chinese companies in the technology space and in telecom. For TikTok, one of the 59 apps banned, India is the biggest overseas market with more than 100 million users according to estimates. While the parent company ByteDance reported modest earnings of $5.8 million in 2018-2019, its first full year in India, company officials said the move could cost billions of dollars in future revenue. Chinese finance magazine Caixin can be quoted here that “ByteDance is anticipating a loss of more than $6 billion, most likely more than the combined losses for all the other Chinese companies behind the other 58 apps banned in India.” A move to restrict Chinese companies from India’s 5G rollout would also have the similar effect of costing hundreds of millions of dollars in potential revenue. The message from Delhi is it cannot continue trade and investment relations as normal if China does not agree to return to the status quo of April before its incursions along the LAC began. Nevertheless the above, in actuality there is a huge trade imbalance with India in favour of China. In addition denying Chinese imports cuts on Indian manufacturing volume especially in the auto and the Pharmaceutical sector actually boomerangs for India. So who is at disadvantage? China or India. Remember, China is competing with the USA.Therefore lessening of trade with India makes China lose a geo-political edge globally and especially against America, the main competitor.
Geo-Political & Geostrategic Compulsion
Fourth reason in the order of priority is China’s ambitions of being a super power and that it may not like to fritter away its resources in conflict with India, which ultimately may benefit the United States only. Therefore Chinese may like to conserve their potential and be called as positive nations for world peace rather than a war mongerer. Thus there is a geopolitical compulsion which will tie down China.
Lastly, even geo-strategically a warring India-China will be a constant impediment for all Chinese trade routes going through Indian Ocean as well as the land routes through Tibet-CPEC as well as pinning down more than about 20 PLA divisions equivalent along the LAC.
Finally, China is going to buy and wade time till at least 2027(Xi Jinping has already declared to have a modern army by this date).It has already conveyed that Ladakh and Arunachal Pradesh belongs to them. Therefore, India will have no other option but draw alliances rather than stand alone to face China as well as modernise its Armed Forces and upgrade its nuclear deterrence arsenal. India will have to show a comprehensive growth to face the dragon in times to come.
Views expressed above are the author’s own.
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