Dr Ashwani Mahajan
Chinese new Prime Minister Li Keqiang is visiting India from May 19. Recently India’s Minister of External Affairs Salman Khurshid had also visited China. Immediately before his visit, China had trespassed Indian Territory and came 19 kilometers deep in Ladakh, challenging India’s sovereignty. Though government claims that issue is over after withdrawal of China’s troops from Ladakh India has paid big price for the same, as Indian Government has conceded to their demand of removal of Indian camps from Indian territory itself.
China, as a neighbour is increasingly becoming a nuisance for India. After 1962 war, it has officially trespassed Indian Territory over 500 times. China has also been causing trouble in the form of floods, for India by building dams on Brahmaputra at several places. It has also been encouraging insurgency in various parts of India, by supplying arms and ammunition to the insurgents. More important is the fact that China has been trying to encircle Indian Territory by making military bases around India (from various territories, other than China’s own). This is all part of China’s policy of scaring India.
After imposing war on India and illegally taking possession of more than 42 thousand square kilometers of India’s territory, China has always tried to create border disputes with India. By way of aggression deep into India’s territory; questioning Prime Minister’s visit to Arunachal Pradesh, constructing air bases in Pakistan occupied territories and pricking India in all possible ways, China has always been inviting ire of Indian people. Now trespassing deep 19 kilometers into Indian territory in Ladakh and questioning Indian Army’s presence in the area, China has directly challenged India’s sovereignty, which cannot be tolerated in any manner.
Indian government has not been fulfilling its duty in protecting the national interests by giving appropriate response. Even media also has not been doing enough to raise this issue and registering the seriousness with Indian people, against unjust aggression on part of China. Rather, by calling China, a ‘dragon’, Indian people are being scared, as if we cannot face or counter China. Indian foreign minister has actually irked Indian people, by his silence over Ladakh row, during his official visit to China. While not rising to the occasion, Indian government’s, body language is that of a ‘scared government’. Now when Chinese premier is visiting India, our government needs to change its face and show prudent firmness and strength.
Chinese Economy in Doldrums
Perhaps armed attack is not required with China. We can deal with China, by intimidating China, not by our military might but by our economic might. However, perhaps Indian leadership is not ready for the same. We do have military might, but perhaps we do not need to demonstrate the same. What we need is the political will, which the present incumbent government lacks. Post slowdown in USA, China’s economy is in doldrums. We know that China’s economy is dependent heavily on foreign demand. USA and Europe have been big markets for Chinese products. Slowdown in these economies has caused havoc for Chinese economy too. In addition, China’s economy, which was growing at the rate of 14-15 per cent in the past, has slowed down to nearly 8-9 per cent. Latest IMF’s estimate says that is 2013, China in expected to grow at 8.3 per cent. Infrastructural development has come to a halt. Chinese government may not concede, but the fact is that China is facing worst ever inflation, causing rise in costs in industry and cost of living. Government is no longer in position to give any major subsidy to industry, as it is facing the problem of fiscal deficit. Chinese goods are becoming dearer day-by-day and demand for Chinese goods is at decline. General economic condition is China is not in good shape any more.
Need to Make Strategy to Intimidate China
India has never attacked any nation, nor have we intimidated any nation in the past. But when China has been indulging in scaring and pricking India, challenging our sovereignty, Indian people cannot remain silent. We cannot tolerate challenge to our self-respect. We have to deal with enemies firmly. We should not forget that India is third largest economic power after USA and China. We not only have atom bomb, we have missiles too with range beyond Beijing. Our armed forces have the capacity to face any eventuality. Therefore there is no need to be scared of China.
However, we can use other measures, which may be termed as economic measures, or more specifically economic sanctions against China. Today we are importing nearly US$56 billion worth of goods from China; however, we are exporting merely US$ 16 billion worth of goods to China. Most of the import from China comprise of consumer goods, electronic, project goods, telecom equipment, infrastructural goods etc. Exports from India are mostly iron ore and other minerals, without any value addition. Goods, which we are importing from China, ranging from consumer goods to project goods can easily be replaced by domestic production.
India does not stand to gain by exporting its scarce resource, namely, iron ore etc. Today trade deficit with China has reached more than US$40 billion. In addition to imports and exports, Chinese companies have been taking contracts for various projects in the country. It has been observed that Chinese companies are interested more in contracts at locations of strategic importance, putting India at security risk. Even security experts have also warned against such attempts by Chinese companies. Persistent efforts by China in raking border disputes and illegally occupying Indian territory gives ample reason to Indian government to declare China as an aggressor and enemy nation. By declaring China an enemy, Indian government can impose ban on imports and exports from and to China and on Chinese companies getting award of contracts in India. Sensing economic importance of India for China, it is significant that China also played down the recent border standoff in Ladakh ahead of Premier Li Keqiang’s visit to India, saying that the two sides have the ability to prevent such issues from affecting overall growth of ties, while working ‘’very hard’’ to find a solution at an ‘’early date’’.
Though, Ministry of Commerce has been talking about ‘China Strategy’, in the wake of rising trade deficit with China and thereby imposing ban on import of telecom equipments and power plants and some Chinese products. However, in the past also such talks had been made, without making any headway in that direction. Issue of security risks due to import of Chinese telecom equipments were also raised, but without any concrete action.
By mere showing, an intention to do the same can change the attitude of Chinese policy makers, as China cannot afford to lose a huge Indian market. Until the time India declares China an enemy nation, we can definitely go ahead in imposing ban on Chinese products and Chinese companies on security and health issues. India stands to gain in two ways, one that China would be penalised for its immoral acts and two, India’s trade deficit, which has reached US$ 200 billion in 2012-13, would be taken care of, though partially.
(The writer is Associate Professor, Department of Economics, PGDAV College, University of Delhi.)