The US-China Byte Dance: Can India Foxtrot?
Fifty years back the United States, under Nixon ended the ‘containment’ of communist China.The US is wrestling with its past to confront its own demon Bhasmasura. The global reset affords India an opportunity to shift orbits.
By Shankkar Aiyar | Published: 21st March 2021 07:57 AM |
A story from Hindu Puranas has salutary relevance for contemporary geopolitics.
Bhasmasura, a demon, was an ardent devotee of Lord Shiva. For his devotion and penance he was granted a boon — the power to turn anyone into ashes by touching their forehead. Typically the demon decided he would test his powers on Lord Shiva who had to rush for cover and pray for help from Lord Vishnu — who donned the guise of a danseuse lured the Bhasmasura to touch his own forehead.
On Thursday, officials of the United States and China met in Alaska to ‘reset’ the most important bilateral relationship of the world. US Secretary of State Antony Blinken reeled out a charter of charges including amputation of democracy in Hong Kong, designs on Taiwan, persecution of Uighurs, cyber
attacks and economic coercion of its allies.
China’s top diplomat Yang Jeichi responded in kind warning the US to not “meddle in the internal affairs of China” and challenged the US global stature stating “the US does not represent the world; it only represents the government of the United States”.
One could say the United States is wrestling with its past to confront its own Bhasmasura. Five decades back the United States, under the Nixon doctrine ended the ‘containment’ of communist China, granting verily a boon to China.
In 1954, at the Geneva Conference, US Secretary of State John Foster Dulles refused to shake hands with Zhou En Lai. By 1971, Henry Kissinger sought the help of the notorious Nicolae Ceausescu and dictator Yahya Khan, befriended Zhou En Lai and paved the way for the ‘leader of the free world’ to hug China under Mao.
It is the United States which enabled the entry of China into the United Nations Security Council as a veto-wielding member in 1971, opened trade and investment flows into communist China, ushered the most favoured nation status in 1979, left Taiwan in the lurch under the “three no’s policy”, facilitated the transfer of Hong Kong from Britain via a bill authored by Mitch McConnell, and shepherded its membership into the World Trade Organization in 2001.
China leveraged the boon well. Since 1971 China’s GDP has shot up from USD 99 billion to over USD 15 trillion. Its defence budget at over USD 200 billion is second only to that of the United States. It’s the largest recipient of FDI — USD 140 plus billion last year.
China is the largest trading partner for the largest economies, is the world’s biggest exporter at USD 2.5 trillion dollars, boasts of foreign exchange reserves of over USD 3.2 trillion dollars and owns USD 1.09 trillion worth of US treasury bonds. The boon delivered 50 years ago has come to haunt the United States.
The US-China byte dance, the ricocheting rude rhetoric presents a challenge — and a long-term opportunity for India. The unalloyed fact of geopolitics is that there is scarcely an economy which can decouple from either China or the United States.
India’s construct of strategic autonomy is grounded in a geographic reality and pragmatic ideology. India’s biggest trading partners are US and China and the economic interdependency is complex and rests on cost efficiencies.
That said there is no disputing a long-term opportunity for India. Consider the geopolitical landscape. There is little likelihood of China limiting its suzerainty in Hong Kong and Taiwan or its ambitions in the South China seas, or mending its ways as regards to Uighurs, cyber espionage and attacks against countries.
While Blinken has stated that the relationship will be “competitive when it should be, collaborative when it can be, and adversarial when it must be” the tone of the two-day interaction implies a rough adversarial road ahead. Now juxtapose over geopolitics the global imperative for economic resilience. The emerging thinking across democracies is about a shift of dependencies outside of China.
There is no disputing that since the pandemic USD 4 trillion global trade is seen shifting supply base by 2025.Think Japan, think Korea, think manufacturing. There is also the contingency factor — countries would seek avenues to insulate their economies from any shocks that could follow intended and unintended consequences.
India as the largest democracy with a large domestic market, demography which supports flow of skills and labour has the opportunity to present itself as the alternative. This column has previously suggested a grouping of like-minded democracies and trillion-dollar economies — the #GT2 — to maintain strategic autonomy.
There is already a serendipitous confluence of factors — India’s role in vaccine supplies has built trust, its presence in the Quad lends credibility, the skill sets it has for the three ‘C’s, including critical tech and climate change, affords expansion of the template.
The question is: Can India foxtrot — take the long and slow steps along with the short and quick ones to reconfigure its policies? Can it liberate the factors of productivity from inspector permission raj to leverage the orbit shifting opportunity?
The fact that there is a tectonic shift underway is not lost on India’s political class. Much depends on what the political class chooses to invest its political capital on.
Shankkar Aiyar, political economy analyst, is author of ‘The Gated Republic –India’s Public Policy Failures and Private Solutions’, ‘Aadhaar: A Biometric History of India’s 12-Digit Revolution’; and ‘Accidental India’. You can email him at email@example.com and follow him on Twitter @ShankkarAiyar. His previous columns can be found here. This column was first published here