Chinese window of opportunity

With china having emerged as the world’s largest goods trading nation, edging past the United States, India must weigh its eco-political options with greater scrutiny. The Asian superpower’s combined goods imports and exports reached a staggering $3.87 trillion in 2012, overtaking USA’s $ 3.82 trillion, according to their respective official estimates. Although presently the US economy, worth $ 15 trillion, is almost double the size of its Chinese counterpart, estimated to be about $ 7.3 trillion, China is poised to become the world’s largest economic powerhouse within a decade. Already a manufacturing giant, China’s relentless growth, coupled with its formidable military strength, has turned the tables not only in the splintered geopolitical stage of international relations, but has also pushed the hitherto wary Indian political and business class to change its dynamics with the golden dragon of Asia. Sino-Indian trade is expected to cross $ 100 billion by 2015, and this is good news for India, precisely because, our other two major trading partners, the European Union and the USA, are both experiencing some of the harshest conditions as far as their respective economies are concerned. With Barack Obama planning to shift jobs from India to salvage a depressed US economy and address the issue of unemployment, it is only likely that our preferred dependence on Uncle Sam is going take a big blow. Obama’s recent declaration that incentives like tax breaks for moving jobs overseas or lowering rate for manufacturers will be stopped should disappoint many in the Indian corporate sector, especially after the passing of the controversial FDI bill in the last winter session of the Indian Parliament.

Unfortunately, kowtowing to US diktats, is not going to reap as much benefits as envisioned by our blinded-by-IMF/World Bank government and business class. We must, therefore, explore the Chinese option more fruitfully and more generously. China also must do its bit as the superior power and must engage in facilitating regional and bilateral economic integration, while also aiming to foster South-South cooperation and development, leaving behind its propensity towards political belligerence and flexing its economic muscles in the wrong way. Although the official standpoint is about treading a cautious line, the ground reality is that Indo-China trade and investment relations have expanded rapidly over the past decade, indicating their real and potential complementarities.