India has No Alternative But to Deal with the People’s Republic

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.