Pandemic’s Impact on Bilateral Relations – From the Bestselling Author on Sino-Indian Conflict

Doctor, bureaucrat, international cricket umpire, author, TEDx speaker, long distance runner – Dr. K N Raghavan has a penchant for navigating many fields simultaneously. His book on Sino-Indian conflict, Dividing Lines, was well-received and recognised as one of the best researched and unbiased works. Has someone who has held various posts with the Government of India, he has developed a deep interest and knowledge on the bilateral relationship between the two major Asian countries, India and China, and shares his take on the post-Covid impact.

Covid-19 pandemic affected China and India in different ways. Beijing was placed on the defensive due to the fact that the virus originated in Wuhan and authorities in China did not inform the outside world about the outbreak of disease during the early phases, which could have helped to contain its spread. The mindset governed the approach adopted by China during the last two years, including the belligerence shown towards Taiwan and the border clash with India, the battle to defeat the virus through the “zero covid” approach and the attempts to influence the rulings of international bodies like World Health Organisation.

India, on the other hand, came of out the pandemic and the period of lockdowns with minimum casualties. There was some criticism about the abruptness with which the first round of lockdown was brought into effect and the deaths around the national capital area created worries during the second wave. But, overall, India managed the crisis with poise and emerged without any serious damage.

Managing Economic Growth and Tensions at the Border

The biggest casualty during this period was the collapse of the measures initiated during the Deng Xiaoping era to shift the focus of relations from the disputed border to conduct of trade and commerce. This approach had yielded good results till 2008 when China started sending their patrol parties deeper into the disputed territories along the border, resulting in face-off between the forces of the two countries.  The clash at Galwan in June 2020, which resulted in the death of soldiers of both sides, was the culmination of the tensions that had arisen along the border. This was the first time since 1967 that lives were lost in border clashes between the two countries and the ensuing outrage ensured that stabilisation of relations would require considerable time and effort. The border has remained quiet since then, but the action of in China sending the vessel Yuan Wang 5 to the Sri Lankan port of Hambantota, despite India voicing their concerns to the host government, shows that Beijing is determined to keep the pressure on their neighbour in the south on tenterhooks. Response of Narendra Modi led government has been firm and consistent; India has neither yielded ground nor showed panic in the face of Chinese actions.

Both China and India faced challenges in managing economic growth during 2020, with the former clocking 2.24% and the latter trailing with -6.6%. China succeeded in riding out the first wave of pandemic quickly and getting their economy back on rails at top speed. However, the two countries showed smart recovery in 2021 with India recording 8.9% and China 8.1%. During the current year China is expected to grow at 5.5%, while India is looking at 8% growth. The impact of the “zero covid” strategy adopted by Xi Jinping and the prolonged periods of lockdowns on this score in the main industrial areas of Shanghai and Beijing have not yet been estimated.

The Strained Bilateral Trade Relations

This is further reflected in the figures relating to bilateral trade published by them. According to Beijing, trade between the two countries grew by 44% in 2021 to touch USD 125 Billion, which made China the largest trading partner of India. But India has refuted these figures claiming that trade with China amounted to only USD 115.42 Billion. Delhi also announced that USA had replaced China as the country’s largest trading partner with total trade of USD 119.42 Billion.  India’s dependence on China for manufactured products continues unhindered as can be seen from imports worth almost USD 95 Billion from that country. However, exports from India to China have remained static at USD 18-20 Billion during the last 3 years. Thus India’s big strides in this area during 2021-22, when total exports crossed USD 400 Billion for the first time ever, have left China aside.

The pandemic and its management adversely affected the image of China and many companies have reportedly started pursuing a “China plus one” strategy. In practical terms this means that they are looking at countries outside China also rather than continue with the present policy of putting all their manufacturing eggs in the Chinese basket. If this is pursued seriously by multinational companies presently having their production facilities in China alone, opportunities for major investments will arise in South East Asia and India. The coming years could also see Chinese economy face stress on account of slower pace of growth and burgeoning risky loans and poorly performing assets in various parts of the globe. In such a scenario, continuing to maintain hostile relations with a neighbour, who also offers the largest market in the world, over a few hundred kilometres of territory in uninhabitable terrains, makes bad business sense.

What is the way out of this impasse?

Friendly relations can be restored amongst two countries only if both will so and move towards this goal. In the instant case, onus lies more on China, as the larger state with more military and financial muscle, to extend the welcoming hand to India. China should pause and think whether, in the long run, they stand to gain more from supporting Pakistan, a state that is constantly teetering on the brink of collapse or by working with India, a market that is not only large but possesses an expanding middle class with an inexhaustible appetite for manufactured goods. India should realise the concerns that China has about their emerging bonhomie with USA. China, on their part, should understand the aspirations of India as an important global player and regional power in south Asia. Both countries should appreciate that the investment and employment opportunities and potential for growth that mutual co-operation and friendship offer are too significant and compelling to be spoilt by a dispute over a border that has never been delineated or demarcated.

Both nations should promote business at the expense of bellicosity, which will bring in rich dividends, not only financially but in fostering friendship as well.

K N RAGHAVAN was born in Kochi, Kerala, where he had his schooling. Having completed an MBBS degree from Government Medical College, Kozhikode, he was doing post-graduate studies in Physical Medicine and Rehabilitation at Thiruvananthapuram when he decided to sit for the Public Services Examination and joined the Indian Revenue Service (Customs and Excise). In the course of his career, Raghavan has worked in places as varied as Hosur, Coimbatore, Kozhikode, Kochi, Mumbai and Singapore. He was Commissioner of Customs at Kochi from 2012 to 2017, and is presently Chief Executive Officer, Norka Roots, Thiruvananthapuram. Like most Indians, Raghavan is passionate about cricket. A BCCI accredited umpire, he has umpired One Day Internationals. He has also authored two other books – The World Cup Chronicle and Vanishing Shangri La: History of Tibet and Dalai Lamas in 20th Century.

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