Emotions are high in India and China after the Galwan Valley incident but foreign policy cannot be dictated by emotions, says Former Managing Director of World Economic Forum, Mr Claude Smadja. “The agreement between the foreign ministers of the two countries is a good start and both governments should build on that,” he says.
The breakdown of the US and China relations is permanent and India is a natural partner for the west, but India must not close the door on China, according to Mr Martin Wolf, Associate Editor and Chief Economics Commentator, Financial Times, London.
India can win the economic race against China in the end, if it opens up more, says Mr Harry Broadman, Partner & Practice Chair, Berkeley Research Group LLC; Johns Hopkins University Faculty.
Ms Nirupama Rao, Former Foreign Secretary and Ambassador of India to China USA & Sri Lanka, believes that India’s relationship with China needs to be reconceptualized following the erosion of trust between the two countries.
They were speaking at the 47th National Management Convention of All India Management Association (AIMA) on the emerging geopolitical disorder and India-China relations.
Mr Smadja said that the only way for India to have a balanced relationship with China was to bridge the economic gap quickly. He pointed out that in the early 1990s, both countries had per capita income of $380 but since then China has surged ahead and become substantially richer and militarily stronger.
Mr Wolf said that given the breakdown in the west’s relationship with China and India’s own geostrategic issues with China, India had three options: one, to remain neutral and play both sides; two, to build closer ties with neighbouring China instead of an unreliable USA; and three, to go with the west and accept the costs of breaking off with China.
Mr Wolf said that India’s best option was to play both sides and benefit from trade with both. “India is a partner the west wants, which is a big opportunity for India, but India must not close the door on China either,” he said. Self-reliance was not a viable option for India at the moment, as India was not an autonomous superpower yet. “India needs lots of trade. India needs to exploit the openness of the world ruthlessly, just as China has done,” he said.
On China’s aggression on the LAC, Mr Wolf said that the border situation between India and China was not irretrievable and a modus vivendi could be found. “India has to make up its mind about how to achieve peace, prosperity and security,” he said.
Ms Rao said that though the Galwan Valley incident had not spelt the death of India-China relations, there was significant erosion of trust and the public opinion in India had turned against China. “Now, the relationship has to be reconceptualized,” she said. Ms Rao suggested building of issue-based global coalitions to contain China.
Mr Broadman pointed out that Indian economy was on its way up whereas China’s economy was in a secular slowdown because of the strangling of competition and protection of state-owned enterprises. He said that FDI to GDP ratio in China had fallen from 6% in the 1990s to 1.1% in 2019 whereas India’s FDI to GDP ratio had risen to 1.1% from less than 1% in the same period. India should take advantage of that trend by opening up more, he suggested.