Reduce China’s $50 bn India trade surplus

It is not surprising that Beijing has reacted with fury to the visit of His Holiness Tenzin Gyatso, the XIV Dalai Lama of Tibet (HHDL), to Arunachal Pradesh. Although he took refuge in India in 1959 and has since then not been allowed to even visit his homeland, HHDL is still vastly more influential among the diminishing Tibetan community in Tibet than the local Chinese Communist Party (CCP) leadership. For the CCP, a monopoly over power is at the core of its philosophy, and the party cannot tolerate even the slightest threat to its sole control of the levers of authority. Understandably, for history has shown that when the reins of authority in an authoritarian system go slack, a meltdown of power occurs fairly soon after such a softening. President Vladimir Putin of the Russian Federation is correct when surmising that the collapse of the Union of Soviet Socialist Republics (USSR) became an inevitability once Communist Party of the Soviet Union (CPSU) General Secretary Mikhail Gorbachev took resort to force off the table when dealing with both internal disturbances as well as unrest in the satellite states of the USSR in East Europe. Once the populations of restive Soviet republics such as Latvia, Estonia and Lithuania got courage because of Gorbachev’s adherence to Mahatma Gandhi’s dictum of non-violence, it was not long before the spirit of separatism spread to other parts of the vast country, which imploded with not even a whimper in 1991. This was similar to the way the regime of Alexander Kerensky was replaced by the Bolshevik Party led by Nikolai Lenin in the closing weeks of 1917, which marked the beginning of the “dictatorship of the proletariat”, the proletariat being defined as the Communist Party of the Soviet Union. What began with Lenin, ended with Gorbachev, and the sudden emergence of China as being the only significant communist power has made the CCP very cautious about any dilution of its prerogatives, and not coincidentally a tendency to believe that what is good for the CCP is great for everybody else. Hence, if the CCP wishes that the Dalai Lama not visit Arunachal Pradesh (which is called “South Tibet” in China, although a more accurate term would be “South of Tibet”), then the only duty of India is to carry out this wish in full. Clearly, the Narendra Modi government cannot allow its policies, especially those relating to a part of the country, be dictated to by China or any other power.

India has a trump card vis-à-vis China, and that is the intolerable $50 billion surplus that Beijing has in its trade with this country. Part of the reason for this may be because of Lutyens officialdom, for example in the way tourism from China has in effect been discouraged all these years, until PM Modi intervened. However, much of the blame lies with China, which even blocks such world-class products from India as Information Technology as well as pharmaceuticals from being

allowed to compete freely within the People’s Republic of China. Such barriers are all the more indefensible in the context of the red carpet given to imports from China. The flood of items from across the border has led to the closure of thousands of factories and the loss of hundreds of thousands of jobs. It is time the Commerce Ministry became pro-active in this matter, and took steps to ensure an end to unfair competition. If China does not consider India worthy of membership of the Nuclear Suppliers Group, it is surprising that so many businesspersons in India (unobstructed by government) are falling over each other to import stuff from China. As for Chinese companies in India, given the soft corner of Beijing for Masood Azhar, there is need for security agencies to look more closely at their functioning and see whether all is as it should be. India should treat China exactly the way Beijing has treated Delhi for all too many decades, and a good way to start would be to reduce the annual trade deficit from a ridiculously high $50 billion to a more manageable $35 billion in the first instance.