US-China trade deal will go through; sandwiched between super powers, India must learn to plan, invest to protect its sovereignty

  • Despite the best efforts and pressures, USA has not been able to force or impress China to open its virtual world where America wants to dominate

  • On top of it, China's US dollar reserves are nearing $3.5 trillion and its e-commerce market is now reaching $5 trillion

  • The US needs China to accept some of its terms to keep its head inside China, and China will do all in its ambit to avoid it

India walked out of the Regional Comprehensive Economic Partnership (RCEP) and is exploring a deal with the USA. Let’s go a little back in time. Over the past few months, we have seen bullying and strong posturing from the US about showing China the door, and China has retaliated back equally, giving the world an impression that both are equal for now and there is no fun in trying to bully each other.

For the world, we are made to believe, that the two nations are breaking their trade and going their own way. The arrest of Huawei executive, barring of Chinese companies from the US market, tariffs on Chinese goods—all point to the same direction. However, we need to see the facts underlying the tough posturing of China and the US. When we dig the facts, China seems to have an upper hand and appears a more matured nation with a stronger plan, built over half a century, whereas, USA has been issuing circumstantial threats with knee-jerk reactions.

 US-China trade deal will go through; sandwiched between super powers, India must learn to plan, invest to protect its sovereignty

File image of Britain and China's national flags. Reuters

Let us see who depends on whom? Today, the world and the wars, both are driven by wealth (trade). We can see that from the history of wars in the past two decades. The nature and definition of war, warfare, and wealth are changing. Earlier, the wars happened for capturing geography, now it is for capturing and controlling the economy. Earlier, it used to be the land for which people fought, then it was oil, and now it is for the virtual world and its ecosystem (data is the new oil); and finally, we will fight for clean air, water and space.

The definition of wealth is also changing. Look at the BRF (belt and road initiative from China). It is not about controlling trade, it is about controlling trade routes and a new form of building another East India company!

So, why can’t US just rub off China and show it the door? The reasons are not just the current trade dependence, but also the future market for US products and services in China. US still does not have much to do in China’s virtual world, and it desperately needs access to grow the US economy which is floundering. Google, Facebook and Twitter don’t work in China. The Chinese tech gadget market is stronger than the US. Major US brands have been brought by China. Alibaba is another success story for US to worry.

Despite the best efforts and pressures, USA has not been able to force or impress China to open its virtual world, where America wants to dominate and make its next big bang and also to control the world virtually for trade and security reasons. At the top of it all, China’s US dollar reserve are nearing $3.5 trillion and its e-commerce market is now reaching $5 trillion. Besides, China has entered into a ‘controlled slow-down’ to boost its dependence on domestic consumption, and not be overly dependent on exports. This means China is well on its course, and this is a big worry for the USA. It needs to ‘force’ China to accept some of its terms to keep its head inside China, and China will do all in its ambit to avoid it. Despite hectic lobbying and other trade tactics, USA continues to fail in securing its foot in China’s web economy.

China, which used to be an imitator is now an innovator. This has been a big fundamental shift. Be it research or patents, China has left America behind and this is the real cause of worry. China has not only questioned America’s supremacy but also shown it the thumb, and it’s for real for those who have looked at the achievements in education, research and patents in China.

In 2000, the US President, Bill Clinton said, ‘In the new century, liberty will be spread by cellphone and the cable modem’. He was trying to influence and impress China to open its internet market to the USA. But all successive US Presidents have failed to achieve that goal. China has its own, and perhaps better versions of Google, Facebook and Twitter, which are homegrown giants. 5G tech is more advanced in China. All these give reasons to worry for the Global Big Brother, whose supremacy had been unquestioned after the collapse of the USSR. In fact, going by the pace of developments in China, I am of the opinion that we will move towards a new Cold War era between China and the USA, and China will emerge as a new leader post-that second Cold War.

India has lessons to learn, and we are in quite an opportune position. We are sandwiched between two superpowers and India has the wherewithal and the time during this Cold War period to emerge as the winner. But today, America has our ‘controls’. Today, it can shut our payment gateways, social media, tech transfer and we, as a nation, will come to a grinding halt! We know how independent India is after more than seven decades of getting freedom. China can cut off Active Pharmaceutical Ingredients (API) supplies and the death rate due to lack of essential medicines will go up multiple times. India has failed to invest in critical areas and become independent. India should develop its own ecosystem than falling back on shortcuts through international agreements, which puts the future of 1.3 billion at the mercy of two foreign expansionist powers which masquerade as Indian allies.

Given the compulsions with the US, the US-China trade deal will happen, and it has important lessons for India. India achieved freedom in 1947 but not independence! We have a long way to go, and we need to plan and invest for protecting our sovereignty

(The writer is a leading public policy expert and author of the book ‘Your Vote is Not Enough’. He tweets @rajendragupta)

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Updated Date: Nov 15, 2019 15:13:29 IST