The birthday party in Beijing, marking the centenary of the Chinese Communist Party, was an event that showed the true place of ordinary Chinese. The future of the country rests only on one person, President Xi Jinping. “Xi dada” or “uncle Xi” as it is commonly called, now relies on a mixture of aggressive nationalism and economic hegemony to establish its grip on the party and the country. And in this, Xi would increasingly rely on the exercise of his power and influence abroad. The BIS, which has been praised by UN Secretary-General Antonio Gueterres for promoting equitable growth even as it has pushed nations into further debt, is said to be pursued more vigorously by China. Italy may be redesigning its BRI connection, but for Xi Jinping the program allows the largest and most secure connection to its own strategic infrastructure in the world, in addition to enormous political clout. Adding to the ever-growing BRI is the continued growth that the Chinese economy is expected to experience after the pandemic and the result would be significant economic costs to the world, especially India.
The BIS is a powerful vehicle for Xi Jinping which has enabled him to gain economic and political influence in important geographic areas. To contain its ability to inflict economic war and build infrastructure at vital bottlenecks, India, America and Japan will need a concerted effort to harness China’s economic strengths.
Beyond the immediate recovery and revival of its economy, India’s roadmap for determining its economic fate vis-à-vis China must focus on a concerted effort to be the backbone of the Fourth Industrial Revolution. Boosting manufacturing, exports with a clear focus on new trade deals will enable India to stand up against China economically. India will become the world’s third-largest economy by 2035. But long before that, New Delhi will be one of the central pillars of a collective effort to correct the biggest global economic imbalance of the century. India promises to be the economic stabilizer against China. But that will only remain a promise if New Delhi does not address some of the fundamental problems plaguing its economy. Unless India increases its economic stature, it cannot become the strategic heavyweight against Beijing, either in Asia or globally. This is all the more important since India’s role in controlling China is not limited to building its own economic weight. India needs to do more, both for some of its friends and fellow Quad members, Australia, and with allies like the United States. New Delhi and Canberra have become vocal critics of the Chinese state apparatus – which has shamelessly used trade and cyber warfare in the face of a global backlash. It is important that India, as a large economy, create pathways that could reduce Australia’s dependence on China for its exports. The pandemic has changed Canberra’s perspective on Chinese business practices, which historically did not share the concerns of other major economies. Trade between China and Australia has been largely focused on commodity exports. Thus, Australia had not felt the economic impact of China’s questionable practices, such as poor IPR protection, heavy subsidies to its state-owned enterprises, and dumping of goods below cost. , harming local industries. But after more than $ 3 billion in economic retaliation, Canberra is now keenly aware of the critical importance of ensuring that China does not arm trade. A free trade agreement between India and Australia will be mutually beneficial and serve the economic needs of both partners. It would also parallel the improvement of New Delhi’s geopolitical stature in the region and perhaps reduce some of China’s economic weight.
India’s role in any economic war to combat bullying from China will also include building stronger supply chain links within Quad and strengthening the US alternative to the BRI, the Blue Dot Network (BDN).
China has taught Japan several economic lessons over its three decades of spectacular growth. But if there’s one lesson Tokyo has learned the hard way from Beijing, it’s to use its aid program and project finance initiatives to exert tangible influence and direct political clout. For decades, Japan has been the largest provider of infrastructure funds in Asia and has provided generous amounts of aid. However, he failed to turn them into vehicles for deeper socio-economic clout and geopolitical influence. In contrast, Xi Jinping managed to use his favorite project, the BRI, as an instrument of world power. Japan had $ 357 billion worth of projects in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, compared to $ 255 billion for China.
To create an attractive alternative to the BRI, Washington and Tokyo must improve the scope and funding mechanism for Free and Open Indo-Pacific Construction (FOIP) and BDN. The BDN, which has both Japan and Australia as stakeholders, needs more clarity in its purpose than simply standardizing project lending standards. BDN must become an alternative vehicle for countries to access funds on a large scale. Even the purpose of the BDN needs to be clearer and it cannot be seen as supplanting the goals of the BIS, but rather as a substitute, and a superior. The broadening of the scope of the BDN and the active search for large private funds (pension funds, endowments) to participate in these projects will provide the necessary impetus. But for BDN and FOPI to thrive, there needs to be closer ties, not only with large private donors, but also with global financial institutions like the World Bank and others. This will act as a catalyst in creating a counterattack not only against the BIS, but also against the China-centric institution Asia Infrastructure Investment Bank (AIIB).
The future of war has moved away from traditional modes of conflict to more recent areas, such as economic warfare. China penalized Norway in 2010 when a known dissident Liu Xiabo was awarded the Nobel Peace Prize. Since then, an isolated China has doubled its economy.
The July 1 belligerence was not a harbinger of military clashes, but of severe economic retaliation unless implemented.
The opinions expressed above are those of the author.
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