CHINA PLUS ONE STRATEGY (Syllabus: GS Paper 2 – IR)

News-CRUX-10     1st April 2024        
Samadhaan

Context: According to top former Indian diplomats, India must recently prioritize following its own path to becoming a developed economy instead of opting for fast-track development through a China-plus strategy.


China Plus One Strategy

  • About: It promotes diversification of business operations beyond China while retaining a presence in the country.
  • Western Investment in China: Over the past three decades, Western businesses have heavily invested in China due to its low labor and manufacturing costs and expanding consumer market.
  • Risks of Over-Reliance on China: Heavy reliance on China for business interests poses risks amid geopolitical tensions and unforeseen disruptions.
  • Origin: 2013, 
  • Aim: To mitigate risks by investing in additional countries and diversifying supply chains.


India benefit from China Plus One strategy

  • Cost Advantage and Skilled Labor Pool: India offers competitive wages and a vast pool of skilled labor, making it an attractive alternative to China for multinational corporations seeking to reduce costs.
  • Government Incentives and Local Production: India's PLI (Production-Linked Incentive) initiative incentivizes local production and technology localization, thereby enhancing India's manufacturing capabilities.
  • Progress in Corporate Accessibility: India has made significant progress in enhancing corporate accessibility, simplifying operations for businesses looking to invest in the country.
  • Learning from China's Successes and Challenges: Indian businesses can learn from China's successes while addressing challenges such as supply chain disruptions and uncertainty to effectively capitalize on the "China Plus One" strategy.


Samadhaan