- The global community is aware of how the relationship between India and China has panned out in the last few years owing to the latter’s incursions on the Eastern borders along the line of actual control. Despite efforts to normalize the strained relations through several rounds of diplomatic and military-level peace talks, no concrete progress has been made, except for a few concessions here and there. During the pandemic, the entire world altered the way China was looked at as a manufacturing hub. Many big companies opted to move their base from the Communist Party-controlled state apparatus to other Southeast Asian countries to set up shop. India was being looked at as a possible viable option.
PC: Navbharat Times
- This is where China sensed trouble and initiated moves to safeguard its interests. Since then, Beijing has weaponized several economic interdependence mechanisms. One such weaponization move comes of late as Beijing orders the pullout of Chinese engineers working at iPhone manufacturer Foxconn’s Indian factories. While their strength is less than 1% of Foxconn’s employees in Tamil Nadu and Karnataka, they play crucial engineering roles. India is left with no alternative but to counter through the expansion of Indian engineering beyond IT. China’s move is aimed at disrupting production at these factories and comes on top of Beijing delaying the delivery of critical machinery to Indian operations. This is plain economic bullying. Who will stop China?
PC: WorldFirst
- China is using its manufacturing heft to undermine any moves by international players to relocate their production bases to third countries like India. With the US & China locked in a strategic-economic tussle, notwithstanding recent attempts at trade war de-escalation, countries like India are getting squeezed. Vietnam just agreed to a trade deal with the US that involves accepting a 20% tariff on Vietnamese exports to the US and an even higher 40% tariff on goods transshipped through the Southeast Asian nation – the latter aimed at stymying Chinese exports to the US via Vietnam. Thus, the US is trying to leverage its market size to get concessions from its trading partners, while China is trying to leverage its manufacturing capacity to keep its trading partners locked into Chinese supply chains.
PC: Discover Engineering
- China has delivered massive scale and achieved engineering expertise in a wide array of intermediaries and components after being admitted to the WTO in 2001. The resultant outcome is that Chinese tooling engineers today are the best in the world. China also refines 90% of the global rare earths. As regards India, the Chinese supply of APIs, electronic components, chemicals, and magnets, etc., is gargantuan. India’s PLI schemes have shown promise. But more needs to be done to set up indigenous manufacturing supply chains. A closer look at education is imperative. India produces around 1.5mn engineers annually, with only 10% of this number expected to secure jobs in 2024. Materials engineers for industrial manufacturing should be scaled up to meet challenges. Otherwise, India will continue to be vulnerable to Chinese bullying.
