Context: Our approach towards China should be guided by rationality and enlightened self-interest and that means not letting commercial ties snap
Challenges in tackling China:
Misguided Confrontation followed by Capitulation: A containment strategy, such as that pursued against the former Soviet Union, is unlikely to succeed.
China’s economy is intimately intertwined with the world’s, unlike the Soviet economy, which ring-fenced itself and its satellites in Communist Eastern Europe from global trade and investment flows.
India’s Economic Dependence on China: While India is not much important to China in terms of trade, restrictions, if imposed by China, could hurt valuable investments in India:
The flow of Chinese investments in India, both direct, and indirect, such as the from Asian Infrastructure Investment Bank (AIIB) which invests in public infrastructure in India.
Decline of Pax Americana: Weakened by the folly of misguided wars, a financial crisis, and now a global pandemic - the United States appears to have been brought to its knees.
Banking on the US, therefore, does not remain a safe bet for India.
Way Forward: Structural Reforms
Focus on Diplomatic Push: to ensure that China plays by the rules, cooperate with it where possible, and allow commerce to continue alongside stronger protections for human rights and national security.
Indisputable for India: The US, still the world’s richest and most powerful nation, can afford to flirt with economic warfare with China,
For India, such an approach to China would be sheer folly.
Actions Guided by Rationality and Enlightened Self-Interest: and not by emotionalism and a desire to strike back for the sake of old wounds (defeat in 1962 war) that have yet to heal.
Need to remain engaged with China on the economic front, since India has much more to lose than China if trade and investment ties fray badly.
Enhance Military Capabilities:
Maintain a hawk-like vigilance at the border: creating such a show of strength at the Line of Actual Control (LAC) to deter future adventurism by China.