India has recently intensifiedtensions with China following a fatal border clash. There is a campaign toboycott Chinese products and Indian authorities are reportedly mulling highertrade barriers. These are undoubtedly suicide paths for India's economicdevelopment.
India seeking confrontation with China was largelydue to political reasons. The Indian government has chosen to continue easinglockdown restrictions despite the country's surging numbers of confirmedCOVID-19 cases - over 410,000 by Monday - showing its economy cannot affordfurther lockdown. While stirring up confrontation with neighboring countriesmay relieve some pressure from virus prevention efforts, it is also a result ofinternal political disputes between different parties seeking politicalinterests by instigating nationalism. However, intensifying confrontation withChina is a self-destructive choice for the nation's economy.
In terms of global value chains, India won't havemany choices left if it wants to boycott Chinese products, and would only bringhigher costs for its firms and customers. Additionally, some Indian industrialsectors rely heavily on supplies from China and are unable to operate withoutcooperation with China.
After months of lockdown, India has already seenserious economic fallout. Imports in April slumped 48.3 percent year-on-yearand exports dropped 33.7 percent year-on-year, according to official Indiandata. Foreign direct investment in April also reported a deep slide, down to$1.37 billion, falling 52.5 percent from the previous month, per data fromglobal economic data provider Trading Economics.
Under such circumstances, it is irrational forIndia to heat tensions or reduce economic ties with China as the two countriesare not in the same heavyweight class. China has been a top trading partner ofIndia for years, while China's exports to India have accounted for about 2percent of its total exports. Restricting imports or investment from Chinaunder globalized value chains is not simple for India as East Asian countries havedeveloped highly integrated industrial chains. The restrictions will inevitablyhinder its cooperation with other countries and worsen India's businessenvironment in the long run. And India will not develop a sound industrialsystem by restricting China, the most important link in global industrialchains.
It would be a rational choice for India to furtherinvolve itself in the cooperated development of Asian regional economies. Forinstance, India and China maintain high cooperation potential in the infrastructuresector, as China can offer ideal plans at the most reasonable prices to theworld.
By contrast, the economic synergy between Indiaand developed Western countries is now much weaker as major industrialrelocations from developed countries have been completed and India has notdeveloped sufficient capacity to replace China or other Southeast Asiancountries due to its insufficient infrastructure, less competitive labor forceand fatal flaws in its system reforms.
The US, under the Trump administration, has beenluring India to join its anti-China clique by inviting the country to attendthis year's G7 summit, forming a "G11," or by enhancing theIndo-Pacific strategy. Regardless of whether or not these strategies could evenbe effective, they are actually political or strategic moves to further the US'attempts to suppress China's development, and would hardly bring realisticbenefits to India.
Though pursuing tighter cooperation with China andother Asian countries could benefit India, economic cooperation must be builton the foundation of a benign relationship, which has been sabotaged by India.The country needs to devise rational economic strategies based on thecomprehensive assessment of its own capacity to avoid following a self-destructivepath.
The author is asenior research fellow of the Academy of Regional and Global Governance,Beijing Foreign Studies University and president of the Chengdu Institute ofWorld Affairs. email@example.com