Instead of picking fights over the Himalayas, New Delhi’s strategists should use this opportunity to leverage India’s advantageous position to support China in addressing its geographic challenges, as well as channel China’s technology to the West. Such a partnership could address Chinese insecurities, promote peace, and promise trillions of dollars of new economic value to both.
China risks being choked out of 40% of its market
40% of world GDP lies to China’s west (According to IMF data from 2019, world GDP was USD 87 trillion, and Europe, Africa, and Western Asia GDP was approximately USD 35 trillion [roughly assuming 1/3 of Asian GDP is in Central and South Asia and the Middle East]) covering Europe, Africa, South and Central Asia, and the Middle East.
The principal way Chinese goods reach these markets is through the Straits of Malacca, a slender sea lane controlled by staunch US allies Malaysia, Singapore, and Indonesia, and at its narrowest point is only 2.8km wide. Chinese ships are constantly at risk of being blockaded.
Fearful of this huge geographic weakness, China has put significant effort into rekindling alternative routes to the west -- including sandblasting the Karakoram Highway into Pakistan in the 1980s and desperately trying to dig a second “Panama” canal through Nicaragua. Plus of course, various silk route highway investments as part of the Belt and Road Initiative.
The more India challenges China across the Himalayas, the likelier China’s insecurity will result in an overreaction, just like the way Russia annexed Crimea from Ukraine in 2014 to protect its access to the Black Sea.
India mustn’t relent on valid land issues, but a smarter Indian move would be to turn the current fracas into a dialogue to support China in securing land routes to Western markets. This would put more pressure on Pakistan to cooperate with India on Kashmir and could be linked to enabling Indian businesses’ physical access to Xinjiang, Qinghai, and Tibet -- neglected markets which India could help transform over the next 50 years.
An opportunity for India
While China is in a technology trade war with the West, India’s tech players remain a trusted ally of Western governments and business. In the longer term, once suspicions over Chinese software-based surveillance backdoors have been addressed, the West may come to depend on both Indian and Chinese technology.
India plays a critical cost-saving and efficiency role through applications maintenance, systems integration, and services, and Chinese companies lead in e-commerce development and 5G.
For example, Huawei offers industrial 5G solutions which are more versatile than Western counterparts, and Chinese camera and display technologies are advancing quickly in areas such as 3D and virtual reality.
The global Covid-19 pandemic may be driving companies in the US, the EU, and Australia to re-shore support functions and seek technology self-reliance, but in the long term, India’s role to support major Western corporations is likely to sustain.
Indian technology players should exploit this relationship to find permissible Chinese technology routes to market, such as through white-labelling, channel and collaboration agreements, as well as expatriation of Chinese development capability to India. Everybody could win, creating Chinese and Indian jobs, and giving Western companies the best of technology advancement.
A shrinking labour market
China’s labour market will shrink by 200 million people by 2050. China’s working population peaked in 2011 at 925 million and, according to China’s Ministry of Human Resources and Social Security, is expected to shrink to 700 million by 2050, with growing skill gaps too.
India is best placed to meet this shortfall, as the natural long-term partner to Beijing as it seeks to address a supply-side headache in its quest to sustain the growing share of world GDP.
The smart strategy for India would be to recognize human capital as a long-term platform for Sino-Indian partnership. Collaboration would create significant demand for Indian resources in the next few decades and emerging digital technologies mean this would not require millions of Indians to migrate north, as the work could come to them through connected cable and mobile networks across the Himalayas.
Bangladesh has much to gain from improved Sino-Indian relationships, bearing in mind that from the Sylhet-Assam border, it is less than 250km to Chinese land, meaning that an Indian throughway via Arunachal Pradesh could one day open up Bangladeshi access to a huge and largely untapped market.
Mohammad Tufael Chowdhury is a British-Bangladeshi based in Melbourne. His book, Border Crossings: My Journey as a Western Muslim, is due to publish in London in 2021.