The slow and steady Indian economy that has registered its fastest growth in recent years has started to unnerve some in China.
In China there is saying that “Don’t be afraid of being slow, but be afraid of standing still” (不怕慢，只怕站). As the Chinese economy struggles to keep pace, the slow and steady Indian economy that has registered its fastest growth in recent years has started to unnerve some in China. A recent study entitled “As long as India’s manufacturing industry rises, it will pose a security challenge to China” published by Gao Xirui, a doctoral candidate at the Department of Politics and Public Administration, University of Hong Kong generated a lot of heat on Weibo. In fact, the article was first published in the “South Asia and Southeast Asia Studies” in 2023 originally under the title “Strategic Choices, Policy Making and Security Challenges of the Rise of India’s Manufacturing Industry to China.” During my recent visit to China, when I raised the issue with some intellectuals of repute affiliated to a top think-tank, they refuted the claim by pointing out that “the article doesn’t reflect mainstream viewpoint” in China. Nonetheless, the article has been carried out by various websites including the Yunnan Academy of Social Sciences, the Guancha and many others.
Gao argues that currently in India the decline of the centre-left Fabian socialism of the yesteryears have been replaced by Hindu nationalism and neoliberalism. The most prominent manifestation of this is India’s embrace of the US against China on the one hand and India’s close cooperation with Japan under the Indo-Pacific framework on the other. He further posits that India’s manufacturing industry may not pose a severe industrial and economic challenge to China even if it rises completely, but it will pose a security challenge (安全挑战) to China as long as it continues to register a robust growth. The security challenge of the rise of India’s manufacturing industry has been termed as a “black swan” (黑天鹅), “two basic problems” (两个基本问题) and three “grey rhinos” (三个“灰犀牛) event that would pose a challenge to China’s “secondary strategic direction” for some time to come. Therefore, he suggests that China must attach importance to and face up to the rise of India’s manufacturing industry and make preparations for long-term response.
China’s manufacturing was certainly a “black swan” moment for the US as it initiated deindustrialisation in the late 1970s and shifted its facilities to newly “opened up” China. It was the manufacturing driven and export oriented economic growth that bridged China’s economic as well as technological gap with the US. According to Jin Canrong, professor of international relations at China’s Renmin University, the total output value of China’s manufacturing overtook the United States in 2010, exceeded that of the United States and Japan combined in 2016, and surpassed combined output of the United States, Japan, and Germany in 2018. He posits that with the 2018 growth rate of China’s manufacturing industry which was 6.1% at that time, China’s manufacturing industry will account for more than 50% of the world by 2030. According to Jin, after 2030, there would be only two manufacturing powers in the world—China and the foreign countries. In another article, Jin Canrong argues that the greatest achievement of the New China is China accomplishing industrialisation in just 70 years, which took the West 300 years. The industrialisation China realised is the largest in human history. In the UK, it was industrialisation with a population of 10 million people, in the US with 100 million but in China it is the industrialisation with a population of 1.41 billion people. Today, China’s total manufacturing output is equal to the sum of the Western G7. This is the source of our confidence (底气), the productivity and foundation of the great rejuvenation of the Chinese nation.
Gao in his article maintains that it is the “extremely fast development speed” that has caused cognitive differences between India and China. Quoting World Bank data, he says China’s manufacturing value added in 2021 was 4.87 trillion US dollars comparing India’s 443.91 billion US dollars, which could be abridged provided India accelerate reforms and its growth potential. Although China has completed industrial upgradation from low-end, medium-end manufacturing and labour-intensive industries to high-end manufacturing and capital-intensive industries, but China still needs low-end and medium-end manufacturing and labour-intensive industries, maintains Gao. He maintains that if the supply chains are diversified and moves to countries such as India, Vietnam, Mexico and Bangladesh, it would mean that China has been “partially replaced” （部分取代）by these countries and China would cease to be the “world factory.” India can only replace China if it develops labour-intensive industries, gradually shifts to capital-intensive industries, and “walks on two legs” with manufacturing and service industries and develops an export-oriented economy. However, as long as India’s manufacturing industry rises, regardless of its strategic intentions to be pro-China, anti-China or both, objective security challenges will be shaped. If it is only regarded as an economic event and its political and security attributes are ignored, it will be a misjudgement.
Gao’s argument is in sync with many others in China. In an earlier article entitled “How China perceives India’s Rise” published in February 2024, I had quoted Li Guangman, who argues that China must not help countries accelerate their development in the areas such as transportation, electricity, steel, agriculture, photovoltaics and other infrastructure and industrial chains for short-term economic benefits, let alone transfer some of China’s advantageous industries and industrial chains to India. The Times Bole article also favours protecting China’s core competencies in emerging industries such as digital economy and intelligent manufacturing in the process of supply chains relocation to India. The author cautions that the transfer of the entire industrial chain from China to other countries must be avoided.
Gao argues that security research on India in China primarily focuses on India’s Grand Strategy and foreign policy. Scholars rarely discusses the security impact of the rise of India’s manufacturing. Given the containment of China by the US and its allies, the security challenge posed by the rise of India’s manufacturing industry to China is not imaginary. India’s economic strategy has driven the rise of its manufacturing industry and served its national security. Therefore, the rise of India’s manufacturing industry belongs to the scope of security research and should be considered as a security factor to examine the security challenges it brings. The content of India’s current strategy is: “Engage America, manage China, cultivate Europe, reassure Russia, get Japan into play, expand neighbourhood.”
China will be the focus of India’s strategy, and “engagement” (接触) and “borrowing power” (借力) indicate that the United States and Japan are new strategic variables. At present, India has a more favourable external environment than China, and this external environment is determined by the soft power combination of geopolitics, international politics and ideology. Changes in the external environment have given rise to changes in India’s traditional non-aligned strategy. Gao doesn’t consider the US as an ally of India because of the asymmetrical relationship. As regards the Indo-Pacific strategy, he believes there is a serious mismatch between the costs that the United States can use for the “Indo-Pacific Strategy” and its expected benefits, and there is also a huge gap between the overall strength of the United States at this stage and its ability to pay the costs that can be used for the “Indo-Pacific Strategy” India just wants to use the United States to maximize its own benefits and minimize costs.
The above mentioned “Black Swan” event according to Gao puts China in a two-front dilemma (两线困局). Today, largest concentration of industrial capital happens in China. It is also the region with the best industrial supporting facilities. Therefore, the US intends to create instability, even a limited war around China so as to effect capital withdrawal from China. Since India requires massive technical capital for its development, instability in China’s surrounding areas will naturally bring benefits, which would create favourable conditions for India’s manufacturing.
Two basic problems relate to India demonstrating confidence with the take-off of its manufacturing, and its collaboration with Taiwan on chip manufacturing. The former would propel India’s defence industry, infrastructure and cybersecurity etc. sectors, the latter that has already created some anxiety and influence on the mainland, would further cause “status anxiety” (地位焦虑)in the mainland. Both would disrupt the development pace in the mainland. The “three grey rhinos” Gao refer to are: India-US partnership, India-Japan security cooperation, and India’s intervention in China’s internal affairs such as Taiwan, the South China Sea and Xinjiang etc. issues in the garb of with the so-called “democracy vs authoritarianism” narrative. Strangely Gao has selectively left out the Tibet issue.
Under the current international political situation, India is China’s main strategic rival in the secondary strategic direction (次要战略方向) according to Gao, however, in future we may witness the merger of the primary and secondary strategic rivals. If that happens, it would become the biggest strategic challenge for realizing the great rejuvenation of the Chinese nation. As regards some of the responses from China, Gao suggests that tactically, China should make security preparations for the short-term challenges posed by the Modi government. Strategically, in response to India’s long-term rise, China should uphold the standpoint of developing countries and the global South. From the perspective of the “independent path of modernization of 35% of the world’s population” China should welcome India to adopt a non-zero-sum game mentality and expand cooperation among developing countries and the global South.
B.R. Deepak is Professor, Center of Chinese and Southeast Asian Studies, Jawaharlal Nehru University, New Delhi.