China's Geo-economic Strategy to Counter India's Manufacturing Rise
UPSC Relevance
Prelims: International Relations (India-China), Indian Economy (Manufacturing Sector, Make in India, Supply Chains), Science & Tech (Rare Earth Elements).
Mains:
GS Paper 2: India and its neighborhood- relations; Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests; Effect of policies and politics of developed countries on India’s interests.
GS Paper 3: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment; Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth; Indigenization of technology.
Key Highlights from the News
The article argues that China is employing a "geo-economic manoeuvre" to disrupt India's growing manufacturing sector.
As part of this, Chinese engineers were withdrawn from Foxconn's iPhone manufacturing plants, aiming to obstruct critical technology transfer.
China is pressuring India's supply chains by restricting exports of rare earths, other critical minerals, and manufacturing equipment.
These moves by China also have domestic reasons. Due to weak domestic consumption, export revenue is essential for China to maintain its economic growth.
China's industrial overcapacity is being used as a weapon to sell at lower prices in the global market, thereby undermining industries in other countries.
India's projects like 'Make in India' face numerous challenges, including inadequate infrastructure, bureaucratic hurdles, and import dependence for critical components.
Countries like the US imposing tariffs on India makes things easier for China. This reminds India of the importance of true strategic autonomy.
The article concludes that if India wishes to become a global power, it should focus on its own foundational development instead of criticizing other countries.
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