India will lose geopolitical battles against China with a weak economy

China's GDP in 2003 was $1.4 trillion. Its about $9 trillion now. China's new leader Xi Jinping signed fresh deals to import modern jets, submarines and other deals flashing its $3 Trillion of forex reserves. The Chinese have been aggressive in their diplomatic efforts across the globe which is backed by the confidence they have in their economy. Compare this with that of Indian foreign policy which has faltered with tiny states in its neighborhood, be it Maldives, Nepal, Bangladesh ,Myanmar or Sri Lanka. In all these countries, India faces only one factor, China. The same holds good for the South East Asian Countries and Africa where the scramble to gather resources is well and truly on. India so far has only its "soft power" to show for but no concrete policy or the money spent to carry any influence with these countries.

Let us first consider the sub continent which is our backyard. China has made heavy inroads in all these countries developing roads, ports, railways and also providing weapons. China has made a new road named friendship road from Tibet to Nepal which undermines India's security. China has made roads, ports and railways in Bangladesh, Sri Lanka, Myanmar. It has invested in the Maldives. China has a head start in the oil and gas resources in Myanmar and set up a surveillance system on the Coco islands that can track India missile tests. No surprises then when China claimed that the Agni V missile had a much longer range than the 5500 kms claimed by India.



Let us consider trade relations with each of the SAARC countries with China and compare it with India.

1) Sri Lanka

The total bi-lateral trade value between Sri Lanka and China topped US $ 3.2 billion, which is the highest in the history. Sri Lanka’s exports to china have increased by 5.9% to $ 162 million in 2012 in comparison to 2011. China’s exports to Sri Lanka reached over US$ 3 billion in 2012.

Investments from China to Sri Lanka were likely to increase this year as against US $ 243 million recorded in 2012. The cooperation in the infrastructure sector also made great strides. Major projects, like Mattala Rajapaksa International Airport in Hambantota, Putlam Power Plant, Colombo-Katunayake Expressway, Colombo Lotus Tower, South Container Terminal of Colombo Port, Extension Lines of South Highway from Pinnaduwa to Godagama and the railway from Matara to Beliatta and some road construction projects like, A9 to Jaffna were all working well.

Compare this with India which has $4 Billion trade and does have other projects, but many of them have been half cocked and plagued with trouble due to the Tamil issue which has not allowed India to fully realize the potential with Sri Lanka. Sri Lanka has come up with many incentives for investment in their county so much so that an official in China said that Sri Lanka was the best investment destination in South Asia and even better than ASEAN!

2) Bangladesh

Bangladesh represents one country which has dramatically fallen out from India's grasp as far as trade goes. China's trade though heavily lopsided in its favor now stands at $7 billion a year while India stands at just $2.5 billion again with trade completely in Indias favor. Almost all of Chinas exports to Bangladesh have come at India's expense which traditionally exported all such items like textiles, machinery etc to Bangladesh. China has been aggressively wooing Bangladesh providing it space for exhibitions in trade fairs. Bangladesh has offered to China a duty free zone to relocate some of its industries that face competition issues due to rising labor prices in China.

3) Nepal

Chinas trade with Nepal stands at $2 billion which is again heavily in its favor. This represents a huge jump in trade between the two countries although India still remains the largest trading partner of Nepal at $4 billion. China has been wooing Nepal aggressively, It has made land ports to facilitate trade between the two countries and China is investing in infrastructure development in Nepal.

4) Maldives

Maldives has been firmly on the Chinese horizon in recent times. Although India has always been the largest trading partner, China has now the same trade figures as India at about $70 million. More importantly, Chinese tourists now constitute the largest group in Maldives. China has also extended big loans to Maldives. India has done the same but the recent change in the government and the coming in of the Islamist government there has seen India's influence wane in the country.


Looking at the African stage, China has aggressively expanded its influence in the dark continent. Today China has displaced the US and Europe in Africa to become the continents largest trading partner at near $200 billion. The balance of trade is equal as China has heavily invested in the natural resources in Africa and imports oil, copper and other raw materials to feed its huge manufacturing base. There is a Chinese diaspora in Africa which takes care of Chinese investments which includes roads, ports, dams, railways and more recently, manufacturing units which have Chinese managers with African labor. Compare this with Indo-African trade at about $75 billion though India has had historic and traditional ties with the continent and the presence of large Indian origin population in the continent.

South East Asia too shows that China leads India by a long way. China is ASEANs largest trading partner. Trade between the two stands at over $400 billion. Compare this with India' trade of $80 billion. Both India and China now have a free trade agreement with ASEAN but while China's trade has been growing dramatically, India has been quite slow.

From all this, the most common factor is that China runs large trade surplus with each of these countries being largely an export driven economy. The other fact is that the rate of increase of trade is also very high at over 20% generally to over 35% with countries like those of ASEAN. This has allowed it to run up large forex reserves which it is using all over the world in key strategic areas to expand its influence for both trade as well as military and strategic objectives. China has used its large surplus to develop infrastructure in Africa, South Asia and the poorer countries of ASEAN. Contrast this with India which is a net importer and India's $300 billion reserve is not good enough for it to buy influence all over. Add to this India has some issue or the other with its neighbors. These neighbors have now realized that they can play the China card in its relations with India and China has obliged these countries readily and expanded its influence in the region which is of great importance to it for both its energy security as well as trade it ships its goods to Middle East, Europe and Africa.

India has been trying to increase its influence in the South East Asia where many of the countries in the region have territorial disputes with China. But even then, China's trade and investment in these countries far out strips India. With Vietnam, China has a trade of $7 billion while India has $4 billion. China is heavily investing in Cambodia and Laos.

Even after India started economic reforms, it has progressed slowly. Lots of hurdles to trade and investments and regulations has meant that its not easy to do business in India. This has held back faster economic growth in India. China has relentlessly marched on it its economic progress to become the second largest economy in the world and on course to be the largest by the end of the decade. Chinese leaders have shown single minded focus of fast economic growth while Indian leaders lack any foresight or vision to develop the country and are often seen come out with populist, unsound and unwise policies to meet those populist schemes. India herself lacks world class infrastructure and the expertise for it to build infrastructure abroad. Even if India does undertake projects abroad, they are slow to complete. China on the other hand has built world class infrastructure in its own country and has the expertise to execute major projects world over and dwarfs the rest of the wold in infrastructure development. China's willingness to do business with rouge regimes, gives it a major advantage. Just like how the west found it easier to work with dictators while preaching democracy everywhere. Hard cash,weapons for rouge regimes or massive loans and infrastructure development for poor countries is too much for any of such nations to refuse practically.

For India to succeed diplomatically and in geopolitics it is imperative that it grows economically and very rapidly at that. Right now China outspends India in every sphere to "buy" influence which in many cases is detrimental to Indian national security but there is nothing that India can do about it unless it can match China dollar for dollar. India's "good image" will then be an advantage to compete with China.
 

Comments

For India to grow economically, There are various VETO powers by the unelected that exist within the country that need to be nullified via awareness among our citizens. few example:
1) NGO Veto
2) Judicial activist Veto
3) Cultural Marxist Veto
4) Single source Veto

There is sufficient evidence to prove that these veto powers are deliberately subverting our discourse. No matter how 99% of us intend to make india a better country, we always seem to fall short because there are distractions being deliberately created to keep us from having meaningful conversations. it's these meaningful conversations that in turn make way for meaningful actions. how are we to take meaningful actions, if 99% of public discourse revolves around arbitrary anecdotal events that happen somewhere in some corner of our gigantic country.

India needs a new narrative that circumvents these domestic Veto powers, The new narrative should be such that even if veto powers try to meddle they end up looking like idiots. at this point in time, i don't see such a new narrative that can secure our future for rest of the century, being presented to the public. even if there is one, i don't see it.

This new narrative need not necessarily come from Govt or Political parties.
 
For shorter team, India and China are not in competition to each other. West had tried hard to play divide and conqer. But Dhoval is smart, India will play the neutral politics here.
1. For longer term it is good for both, and i think Both country kind of agree it internally, except some time egoism comes and both side need face saving in international and domestic audience e.g Doklam, Dlai Lama etc.

2. There is a reason that china and india never went to war after1962.
 
China's debts are astronomical and is on par with the US. The following article is an understatement but provides enough glimpse into the financial crisis awaiting Beijing.

China's debt tops 300% of GDP, now 15% of global total: IIF


To get into a geopolitical tussle with India therefore would be foolish. China is locking horns with the United States, Japan, Southeast Asia, Australia and India at the same time. You think Beijing will succeed?
 
This economic argument is starting to wear thin. China is doing everything they can
from preventing Indian economy from growing to a point where India can challenge
China.
 
China with USD 20 Trillion GDP has manufacturing sector of 50%

India with USD 3 Trillion GDP has manufacturing sector 15%

Hence China manufacturing sector is 2200% bigger than ours.
 
Let us talk about this topic after Trump forces the death of Brand China. Right now only half the job is done by the Coronavirus. Rest need to be done by Trump with import duties on Chinese imports. With import cash cut back, Chinese will not be as big a dragon as they now appear.
 
Meteor BVRAAM and SCALP cruise missile consignment have already begun arriving in India.
 
China with USD 20 Trillion GDP has manufacturing sector of 50%

India with USD 3 Trillion GDP has manufacturing sector 15%

Hence China manufacturing sector is 2200% bigger than ours.
That is because all the do is manufacturing and innovation. When we spoke about call centers, they already had advanced factories churning out components, shoes, clothes, needles, tractors, tanks, machines, parts, tools, and anything else man-made under the sun. Basically, they used their ignorance of English to their advantage, traded in commodities, and made billions while our government was brainwashing Indians into thinking that we have some sort of an advantage learning the language of the colonial masters of the Congress party.
 
China with USD 20 Trillion GDP has manufacturing sector of 50%

India with USD 3 Trillion GDP has manufacturing sector 15%

Hence China manufacturing sector is 2200% bigger than ours.
‘That $20 trillion is PPP figure and $3 Trillion is a nominal figure. No comparison.
 
This economic argument is starting to wear thin. China is doing everything they can
from preventing Indian economy from growing to a point where India can challenge
China.
I would disagree to a certain extent. Indian policy makers are also to be blamed. India needs to think and start small. Capture the manufacturing market for commodities that are needed for daily use. Then, move on to bigger things. Mr. Abhijit Mitra Iyer referred to this in a podcast with PGurus and I agreed. Why is India traying to attract high end industries only? Few months ago, the PM spoke about toy manufacturing in India. It is these small things, if done early, will benefit Indians in job creation and relative poverty line to move up the charts.

The other problem I see is the Amitab Bachan-Laawaris syndrome that is pushed by the communists in India. Socialism as it is today in India, simply communism, needs to end. This is the biggest hurdle in India's progress. I have faith in Indians that they will see this through.
 
I would disagree to a certain extent. Indian policy makers are also to be blamed. India needs to think and start small. Capture the manufacturing market for commodities that are needed for daily use. Then, move on to bigger things. Mr. Abhijit Mitra Iyer referred to this in a podcast with PGurus and I agreed. Why is India traying to attract high end industries only? Few months ago, the PM spoke about toy manufacturing in India. It is these small things, if done early, will benefit Indians in job creation and relative poverty line to move up the charts.

The other problem I see is the Amitab Bachan-Laawaris syndrome that is pushed by the communists in India. Socialism as it is today in India, simply communism, needs to end. This is the biggest hurdle in India's progress. I have faith in Indians that they will see this through.
I completely agree with you. I mean we could start with smaller, simpler things that we already make. PVC pipes, construction trucks, sporting goods, tools and instruments, stationery, mass produce eco-friendly consumer durables (like edible cutlery from a startup in Bengaluru, bamboo-based plastic substitutes, vegan leather), artificial furniture, toys, printing machines, water containers, plumbing goods, mid-tier medical equipment, dental equipment..etc.

Even state-backed companies can make things like thermal power plants, hydro-electric dams, railway stations, railway coaches, train tracks, locomotives, roads, etc.

There is a lot of this that we already make. If the government was to assure 24/7 power and say that companies that export will get no export duties for the next 10 years, the rest will be taken care of by Indian businessmen. Imagine the scale of exports that would shoot up across India. I can imagine Neelkamal plastic furniture maker to go bonkers and quadruple his production.

The IAS babus that advise our ministers are a rot. The global market conditions want a substitute for China and they don't mind paying slightly higher for a lot of substitutes. China banked on American consumerism while India can supply more to the new emerging markets in Africa, Southeast Asia, central & East Europe, Latin America, etc. and still make a lot of money.
 
There is a lot of this that we already make. If the government was to assure 24/7 power and say that companies that export will get no export duties for the next 10 years, the rest will be taken care of by Indian businessmen. Imagine the scale of exports that would shoot up across India. I can imagine Neelkamal plastic furniture maker to go bonkers and quadruple his production.
South East Asians thought the same thing last 80s & early 90s. See what happened to them later?

The IAS babus that advise our ministers are a rot. The global market conditions want a substitute for China and they don't mind paying slightly higher for a lot of substitutes. China banked on American consumerism while India can supply more to the new emerging markets in Africa, Southeast Asia, central & East Europe, Latin America, etc. and still make a lot of money.
If India can't beat China in American market - which is one of the two most competitive markets (another one is - China), how can India beat China in other markets?

Africa, the market is much closer to India rather than China, currently 16% of her imports come from China while only 9% from India.

Southeast Asia, India just reject RECP because she is losing money in this part of world.

Central & East Europe?
Let's look at Poland, 9.82% from China. India? 0.67%.
Then Turkey, China - 9.09%, India - 3.15%.

South America:
Brazil, as an example, China - 20.5%, India - 2.38%.

The point I want to make is: American market is the best school to improve your industries capabilities from management to R&D. If you want to beat Chinese, win the battle in US first.
Just look at your own success in IT, it started in USA!
 
Chinese are unlikely to win in the Himalayas.......Reasons:

1) They have 1.8 million military force which is mostly (80%) positioned in the east not in the south in Tibet compared to 1.4 million Indian force of which 60% in positioned towards Himalayas to beat the Chinese.

2) India has 50,000 strong and well equipped army waiting at the Himalayan passes to stop them dead in their tracks.

3) Indian military hardware is much superior to the Chinese

4) Chinese have fought no war in last 50 years hence their conscript soldiers will run as soon as they see the guns firing at them from the other side.

5) Their much touted missile force is impotent in the mountains as compared to Indian missile which can hit them on reverse slopes.

If the matter escalates beyond the Himalayas, then:

6) India has full control of Indian Ocean and the Choke points of Straits of Malacca. It cut off their 70% oil supplies. A small force sent by the Chinese will meet their watery graves. Surprisingly their own copied submarines and aircraft carrier are no match to Indian submarines and aircraft carriers.

7) Chinese have no naval warfare experience. This will be their first and last naval engagement.

8) Chinese are afraid of the deep blue and their sailors will be hard pressed in any naval engagement

Also, Strategically they will be hard pressed because:

9) One single defeat and their prestige is doomed for a generation.

10) They copy and reverse engineer military hardware of Russia and US origin which will fail when they need it most.

11) Their allies except Pakistan will say goodbye as soon as they watch hostilities begin.

12) As a member of QUAD, a great amount of influence will be exercised on Pakistan not to intervene in India-China fight. Should they intervene, there is a good chance that will loose POK.

13) When the Chinese are loosing the fight, they will threaten to bomb the Indian cities. India has Agni -5 to bomb Shanghai, Peking and Guangdong etc. in a big way. That will be the end of Chinese industrial and consumer goods domination. India will loose some but Chinese ambition will be killed in the infancy.

and many more.......

Hence beware of Chinese propaganda of superiority. They have non. They have a lot of export cash which is in European and American banks hence becomes useless in the war.
 
South East Asians thought the same thing last 80s & early 90s. See what happened to them later?



If India can't beat China in American market - which is one of the two most competitive markets (another one is - China), how can India beat China in other markets?

Africa, the market is much closer to India rather than China, currently 16% of her imports come from China while only 9% from India.

Southeast Asia, India just reject RECP because she is losing money in this part of world.

Central & East Europe?
Let's look at Poland, 9.82% from China. India? 0.67%.
Then Turkey, China - 9.09%, India - 3.15%.

South America:
Brazil, as an example, China - 20.5%, India - 2.38%.

The point I want to make is: American market is the best school to improve your industries capabilities from management to R&D. If you want to beat Chinese, win the battle in US first.
Just look at your own success in IT, it started in USA!
The scale is a lot for US. Americans consume a lot and the sheer scale of expanding capacity would take a toll on our industrial system. Plus, as a democratic nation, we cannot whip the population into doing stuff. That's why communist countries with state capitalism as models are much easier to improve.

One area where Indian companies have an advantage over Chinese firms is the engagement with local economies. All Chinese projects and projects manufactured and developed in the last 2 decades have seen them using only their own resources while avoiding spending any of the contract money in African nations. This is unlike Indian companies that engage the local communities and create jobs in those countries. Whether it is making simple three-wheelers or complex factories, we create jobs for the locals.

What I am saying is that now an economic situation has come where these countries are looking at an alternative even if it is not the exact copy or efficiency of Africa.

China's economic model is impossible to copy without turning India into a totalitarian state - something that is almost next to impossible unless a WW3 is around the horizon. Even then, it will always revert back to a democratic model where the efficiencies of a centralized totalitarian country will never be achieved.
 
Chinese are unlikely to win in the Himalayas.......Reasons:

1) They have 1.8 million military force which is mostly (80%) positioned in the east not in the south in Tibet compared to 1.4 million Indian force of which 60% in positioned towards Himalayas to beat the Chinese.
60% of our troops stationed in the eastern sector? Where did you get that figure from? We have only started movements of our logistics in the last 1 year after Galwan clashes. Before that, the border was only manned by ITBP due to inactivity.

2) India has 50,000 strong and well equipped army waiting at the Himalayan passes to stop them dead in their tracks.

3) Indian military hardware is much superior to the Chinese
You're talking like a kid; quantity is a quality of its own and they have quantity. It would be foolish to underestimate them. Preparing with overestimation is far better.

4) Chinese have fought no war in last 50 years hence their conscript soldiers will run as soon as they see the guns firing at them from the other side.

5) Their much touted missile force is impotent in the mountains as compared to Indian missile which can hit them on reverse slopes.
What makes you think that this is going to be a full-contact warfare? China knows their weakness and most likely they will try to hit cities that are much inside Indian territory, like Leh, Kangra, Shimla, etc. in the north and Gangtok, Tawang, Itanagar, Guwahati etc. in the East.

Chinese believe in shock and awe techniques and will try something foolish like that to escalate the war because that's the only way their internal squabbles will stop.

If the matter escalates beyond the Himalayas, then:

6) India has full control of Indian Ocean and the Choke points of Straits of Malacca. It cut off their 70% oil supplies. A small force sent by the Chinese will meet their watery graves. Surprisingly their own copied submarines and aircraft carrier are no match to Indian submarines and aircraft carriers.

7) Chinese have no naval warfare experience. This will be their first and last naval engagement.

8) Chinese are afraid of the deep blue and their sailors will be hard pressed in any naval engagement

Also, Strategically they will be hard pressed because:

9) One single defeat and their prestige is doomed for a generation.

10) They copy and reverse engineer military hardware of Russia and US origin which will fail when they need it most.

11) Their allies except Pakistan will say goodbye as soon as they watch hostilities begin.

12) As a member of QUAD, a great amount of influence will be exercised on Pakistan not to intervene in India-China fight. Should they intervene, there is a good chance that will loose POK.

13) When the Chinese are loosing the fight, they will threaten to bomb the Indian cities. India has Agni -5 to bomb Shanghai, Peking and Guangdong etc. in a big way. That will be the end of Chinese industrial and consumer goods domination. India will loose some but Chinese ambition will be killed in the infancy.

and many more.......
Come on dude, give an objective analysis here.

Hence beware of Chinese propaganda of superiority. They have non. They have a lot of export cash which is in European and American banks hence becomes useless in the war.
If the Chinese localize the conflict to India, West will ignore the whole conflict. Their concern is South China Sea and the pacific. All that the Chinese have to do is to declare that they won't invade Taiwan and focus fully on attacking us. The US, UK and much of the NATO world will just sit quietly and ignore us.

What makes you think that Western banks will freeze Chinese money when the Chinese are holding dollar bonds?
 
China will win if the rest of the World is fragmented. And India in particular will loose to China if India maintains its foolish Nehruvian non-aligned mentality...
 
China will win if the rest of the World is fragmented. And India in particular will loose to China if India maintains its foolish Nehruvian non-aligned mentality...
We are anything but non-aligned at this point. We are strategically more aligned with the West than we were ever in our history. The only place where we won't get on their boat would be to target Russia - that's not our enemy and we don't want to tarnish our relations with them. Let's hope that the US learns to keep the cold war mindset away from modern-day pragmatism. Kissinger did a number on their paranoia.

China being a common threat for us all (including France, which has territories in the Pacific and Indian Oceans), is a welcome platform to stand united.

In fact, I really look forward to the Philippines modernizing their forces and targeting the rogue fishing boats that are occupying your islands. Something tells me that drones armed with guided missiles would do a better job at scaring these warmongers away.
 

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