- Prelims: Current events of international importance(India-US relations, Indo-China disputes etc )
- Mains GS Paper II: Bilateral, regional and global grouping involving India, Significance of Indo-Pacific for India etc
ARTICLE HIGHLIGHTS
- Globally, the most significant geopolitical event of 2022 was the Russian invasion of Ukraine.
- Second most important development of 2022 was the re-coronation of Xi Jinping for a third term as President of the People’s Republic of China.
INSIGHTS ON THE ISSUE
Context
Impact of Ukraine war:
- Globalization: It dealt a massive blow to globalization.
- Energy and grain markets were disrupted, an old contradiction(noted by John Maynard Keynes)returned.
Impact of appointment of Xi Jinping:
- It broke two interconnected norms of post-Mao China:
- Collective responsibility: replacing the idea of concentration of power in a single leader as during the Maoist era.
- Term limits for the party’s and nation’s head.
- For Xi, no one is ruling out a further, even life-long, extension in power.
Why is Chinese rise different from Russia?
- Economy: Unlike Russia, the 11th largest economy of the world in December 2021.
- China is the second largest economy and market of the world
- the largest foreign trader and one of the biggest receivers of foreign investment.
- China’s capacity to throw the international economy into trouble will go far beyond natural gas, oil and food grain.
- China’s, Taiwan argument: It roughly echoes Putin’s claim about Ukraine.
- Taiwan has no reason to maintain a separate independent existence(Taiwan was historically an integral part of China)
- Comparison of Ukraine and Taiwan:
- Unlike Ukraine, Taiwan is a first-world economy.
- In December 2021, Ukraine’s per capita income was a little less than $5,000, Taiwan’s was over $35,000.
- Ukraine’s GDP was about $200 billion, Taiwan’s over $820 billion, which included cutting-edge industries such as semiconductors.
- Russia-China comparison economically:
- Russia’s GDP at $5(one point five)trillion, China’s GDP in December 2021 was $17.7(seventeen point seven)trillion,
Priorities of Xi-Jinping:
- Chinese Specialists: More and more China specialists believe security over economics.
- International Security (Fall 2022): China’s economic model should indicate how, under Xi, security and economics are getting intermingled.
- Pearson, Rithmire and Tsai(chinese scholars): Xi’s economic system is best described as “party state capitalism”, to be distinguished from “state capitalism”.
- Political prioritization of firms in China:
- The SOEs(state-owned enterprises):were on top
- The foreign invested enterprises (FIEs): were next in importance
- Private local firms(called “ethnic Chinese enterprises)” (ECEs): They were at the bottom of the governmental hierarchy.
What does party state capitalism depict?
- Establishment of Communist party’s authority over firms in a very different way, especially via creation of party cells in firms and appointment of Communist party members on corporate boards
- Enforcement of political loyalty among private sector executives, including by punishment of those who seek business autonomy.
Concerns for India:
- Security Concerns:
- Growing cooperation between Pakistan and China.
- Increasing nexus between Nepal and China.
- Acceptance to China-Pakistan Economic Corridor by south asian countries.
- Leadership Roles in South Asia:
- It shows increasing Chinese presence in South Asia and its acceptance by the countries as a torch bearer for the region which India wants for itself.
- Economic Concerns:
- China has replaced India as the major trading partner of several South Asian countries.
- The share of India’s trade with Maldives was 3.4 times that of China’s in 2008. By 2018, China’s total trade with Maldives slightly exceeded that of India.
Way Forward
- If, according to China, China’s security or power imperatives required an invasion of Taiwan, the economic implications would be astronomical.
- Party state control: It becomes a huge security concern, especially for the US, as also Japan, if the party-state penetrates high-tech: 5-G telecom, semiconductors, robotics etc.
- Economics and security are not interconnected if party cells are created in textiles and footwear, but they are hard to disentangle if high-tech private firms become intertwined with the state.
- US’s chip ban on China: These chips have become critical to the evolution of “technologies of the future” in virtually all sectors ranging from pharmaceuticals, artificial intelligence to defense and weapons.
- China will have to produce these chips on its own, which can substantially delay its further industrial advance, unless US allies can step in to fill the void, which is highly unlikely but not impossible.
- India should keep in mind that China has moved to a security over economics mode, making a Chinese compromise less likely.
- China’s prime security focus, makes China-India border problems more or less manageable and remains wholly unclear.
QUESTION FOR PRACTICE
Q. How will I2U2 (India, Israel, UAE and USA) grouping transform India’s Position in global politics ?(UPSC 2022) (200 WORDS, 10 MARKS)
