• Home
  • Politics
  • Health
  • World
  • Business
  • Finance
  • Tech
  • More
    • Sports
    • Entertainment
    • Lifestyle
What's Hot

Trump Announces First Post-Tariff Trade Deal

May 8, 2025

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025

Top 10 Benefits Of Acupuncture

May 8, 2025
Facebook Twitter Instagram
  • Contact
  • Privacy Policy
  • Terms & Conditions
Friday, May 9
Patriot Now NewsPatriot Now News
  • Home
  • Politics

    Security video shows brazen sexual assault of California woman by homeless man

    October 24, 2023

    Woman makes disturbing discovery after her boyfriend chases away home intruder who stabbed him

    October 24, 2023

    Poll finds Americans overwhelmingly support Israel’s war on Hamas, but younger Americans defend Hamas

    October 24, 2023

    Off-duty pilot charged with 83 counts of attempted murder after allegedly trying to shut off engines midflight on Alaska Airlines

    October 23, 2023

    Leaked audio of Shelia Jackson Lee abusively cursing staffer

    October 22, 2023
  • Health

    Disparities In Cataract Care Are A Sorry Sight

    October 16, 2023

    Vaccine Stocks—Including Pfizer, Moderna, BioNTech And Novavax—Slide Amid Plummeting Demand

    October 16, 2023

    Long-term steroid use should be a last resort

    October 16, 2023

    Rite Aid Files For Bankruptcy With More ‘Underperforming Stores’ To Close

    October 16, 2023

    Who’s Still Dying From Complications Related To Covid-19?

    October 16, 2023
  • World

    New York Democrat Dan Goldman Accuses ‘Conservatives in the South’ of Holding Rallies with ‘Swastikas’

    October 13, 2023

    IDF Ret. Major General Describes Rushing to Save Son, Granddaughter During Hamas Invasion

    October 13, 2023

    Black Lives Matter Group Deletes Tweet Showing Support for Hamas 

    October 13, 2023

    AOC Denounces NYC Rally Cheering Hamas Terrorism: ‘Unacceptable’

    October 13, 2023

    L.A. Prosecutors Call Out Soros-Backed Gascón for Silence on Israel

    October 13, 2023
  • Business

    Trump Announces First Post-Tariff Trade Deal

    May 8, 2025

    Electric Vehicle Sales Nosedive As GOP Takes Buzzsaw To Biden’s Mandate

    May 7, 2025

    Tyson Foods Announces It Will Bend The Knee To Trump Admin’s New Rules

    May 7, 2025

    Federal Reserve Holds Interest Rates Steady Despite Pressure From Trump

    May 7, 2025

    ‘Wait Them Out’: John Kennedy Tells Larry Kudlow One Lie He Suspects China’s Telling US

    May 7, 2025
  • Finance

    Ending China’s De Minimis Exception Brings 3 Benefits for Americans

    April 17, 2025

    The Trump Tariff Shock Should Push Indonesia to Reform Its Economy

    April 17, 2025

    Tariff Talks an Opportunity to Reinvigorate the Japan-US Alliance

    April 17, 2025

    How China’s Companies Are Responding to the US Trade War

    April 16, 2025

    The US Flip-flop Over H20 Chip Restrictions 

    April 16, 2025
  • Tech

    Cruz Confronts Zuckerberg on Pointless Warning for Child Porn Searches

    February 2, 2024

    FTX Abandons Plans to Relaunch Crypto Exchange, Commits to Full Repayment of Customers and Creditors

    February 2, 2024

    Elon Musk Proposes Tesla Reincorporates in Texas After Delaware Judge Voids Pay Package

    February 2, 2024

    Tesla’s Elon Musk Tops Disney’s Bob Iger as Most Overrated Chief Executive

    February 2, 2024

    Mark Zuckerberg’s Wealth Grew $84 Billion in 2023 as Pedophiles Target Children on Facebook, Instagram

    February 2, 2024
  • More
    • Sports
    • Entertainment
    • Lifestyle
Patriot Now NewsPatriot Now News
Home»Finance»China’s Lesson for India on Weaponized Interdependence
Finance

China’s Lesson for India on Weaponized Interdependence

January 25, 2025No Comments5 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Email
China’s Lesson for India on Weaponized Interdependence
Share
Facebook Twitter LinkedIn Pinterest Email

Over the past few weeks, multiple reports have emerged suggesting that Chinese companies are restricting export of vital advanced capital goods and machinery to India. Indian manufacturers of electronics, solar panels, and electronic vehicles are struggling to keep up with their production, given the shortage in supplies of key machinery. After decades of failed attempts at industrialization, India is finally turning a corner with the rapidly growing electronics manufacturing services. But the recent moves by China could effectively stymie India’s nascent industrialization journey. 

At around $2,900 per capita income, India is still a lower-middle income economy, and needs a sizable manufacturing base to rise up the developmental ladder. China enjoys a position of dominance across most manufacturing sectors, and it is inconceivable to integrate with some of these production networks without having a deep trading relationship with China. If these de facto Chinese export restrictions are here to stay, it could amount to India’s gravest geoeconomic challenge since the sanctions imposed by the West following New Delhi’s successful nuclear test in 1998. 

The current Chinese export restrictions come on the back of a recent diplomatic rapprochement between the two countries. In early 2020, when China’s People’s Liberation Army (PLA) made their way into Indian-controlled territory along the disputed border in the northern region of Ladakh, it eventually resulted in lethal skirmishes between the two armies. Since then, the territorial dispute has continued to plague the bilateral relationship and left the Line of Actual Control (LAC), the de facto border, heavily militarized. 

During this period, India put in place an investment screening law for inbound investments from all countries India shares a border with – effectively targeting Chinese companies. Given India’s relative backwardness relative to China’s industrial capabilities, the investment screening measures, along with some import restrictions, were mostly symbolic rather than actual strategies to pressure China. Nevertheless, in both the economic and security spheres, the bilateral relationship had entered a phase of free-fall. In this context, the recent diplomatic thaw indicated a shift toward a less hostile relationship, if not a return to normalcy. 

See also  China’s Defense Minister Missing for One Month; No Answers in Sight

Given the emerging positive signals, it is curious why China would choose to block the exports of critical machinery to India right now and signal a return to the old normal. There could be three interrelated reasons for the recent Chinese actions. 

First, Beijing could be weaponizing India’s dependence on China. In a landmark 2019 research paper, Henry Farell and Abraham L. Newman argued that we increasingly live in a world of weaponized interdependence. They wrote, “proper participation in the world economy requires access to global networks” – such as access to Chinese capital goods imports for India’s manufacturing firms. The issue is that such networks create asymmetric dependencies, primarily because these networks are quite centralized, and it is cumbersome to create new supply chains over short-to-medium term. For instance, it is inconceivable to overnight replace either the U.S. capital markets or the Chinese market for intermediate goods. In that sense, through its unspoken export controls China would be leveraging India’s asymmetric interdependence on Chinese goods and machinery. 

Second, it is possible that China perceives India’s early industrialization success as a threat. Therefore, Beijing is counteracting that trend. In large part, India’s growing success in electronics exports – which now is its third highest export category – stems from anchor investments by OEMs such as Foxconn, Lenovo, BYD, and Wistron, among others, which have primarily responded to lucrative production linked incentives (PLI) by the Indian federal government. China might be trying to ensure that these companies struggle to expand their production in India, in turn, stunting New Delhi’s capacity to industrialize. 

See also  The IPO downturn is in the 7th inning and a real pickup could arrive soon, Sixth Street CEO says

A country’s effort to industrialize is a way to accumulate enough wealth to buy or develop adequate hard power to deter its enemy. This is precisely the kind of inner balancing India might be trying to do vis-a-vis China. In turn, Chinese export curbs could be seen as Beijing’s act of external balancing against New Delhi’s moves.

Third, with the arrival of President Donald Trump in the United States, the global geopolitical market seems to have suddenly become quite illiquid, and Beijing might be picking up some early leverage against New Delhi. Over the past decade, Beijing has struggled to look at the China-India relationship beyond the shadow of the China-U.S. relationship. From Beijing’s perspective, India is a U.S. ally in all but name. Thus, assuming that the Sino-American relationship is likely to deteriorate over the next few years, it makes sense for Beijing to also take some early steps against India – one of the United States’ central bets against China. 

Which of these three factors – or a combination of them – are responsible for the latest Chinese export curbs to India matters to the degree that it allows New Delhi to better interpret China’s perceptions of India. However, the unmissable underlying fact is that India will genuinely struggle to industrialize without some Chinese high-tech capital goods, and Beijing is looking to leverage that very critical dependency. This effectively leaves New Delhi with three options to resolve this geoeconomic conundrum. 

First, it can look for alternative sources of capital goods, but this might be either expensive or impossible over the short-run. Second, India can reorient its strategic orientation by signaling a more neutral position vis-à-vis the China-U.S. bilateral relationship. However, this might call into question the very raison d’etre of India-U.S. ties. Finally, India might choose to completely give up the United States and move significantly closer to China. This might help New Delhi rapidly industrialize using Chinese goods and capital, but it might lose its much bigger market for IT services exports to the U.S. 

See also  China Is Gobbling up Chile’s Energy Sector

India is unlikely to choose any one of these blunt options. It is more likely to try to find a middle path that will feature some stop-gap measures and diversification. Regardless, such geoeconomics challenges are likely to get more frequent as India industrializes further, and navigating them will require deft usage of statecraft. 

Chinas India Interdependence Lesson weaponized
Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Posts

‘Wait Them Out’: John Kennedy Tells Larry Kudlow One Lie He Suspects China’s Telling US

May 7, 2025

China’s Export Economy Under Trump’s Tariff Onslaught The Worst Since COVID

April 30, 2025

Ending China’s De Minimis Exception Brings 3 Benefits for Americans

April 17, 2025

The Trump Tariff Shock Should Push Indonesia to Reform Its Economy

April 17, 2025
Add A Comment

Leave A Reply Cancel Reply

Top Posts

Analysis: Private equity steps up lending as U.S. banks pull back

May 22, 2023

Ahead Of NATO Summit, Russia Intensifies Attack On Ukraine

July 12, 2023

Austrian banks unaffected by banking turmoil, finance minister tells Neue Zuercher Zeitung

April 9, 2023

John Fetterman Plans To Give Back Bob Menendez’s Campaign Donation

September 25, 2023
Don't Miss

Trump Announces First Post-Tariff Trade Deal

Business May 8, 2025

President Donald Trump announced Thursday the U.S. has reached a trade agreement with the U.K.,…

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025

Top 10 Benefits Of Acupuncture

May 8, 2025

Electric Vehicle Sales Nosedive As GOP Takes Buzzsaw To Biden’s Mandate

May 7, 2025
About
About

This is your World, Tech, Health, Entertainment and Sports website. We provide the latest breaking news straight from the News industry.

We're social. Connect with us:

Facebook Twitter Instagram Pinterest
Categories
  • Business (4,110)
  • Entertainment (4,220)
  • Finance (3,202)
  • Health (1,938)
  • Lifestyle (1,626)
  • Politics (3,084)
  • Sports (4,036)
  • Tech (2,006)
  • Uncategorized (4)
  • World (3,944)
Our Picks

European battery maker ACC in ‘exploratory’ talks about North American battery plant

August 2, 2023

A Triathlon Champion’s Positive Doping Test Jolts the Sport

May 2, 2023

Breitbart News Senior Writer John Nolte Publishes First Novel – ‘Borrowed Time’

September 14, 2023
Popular Posts

Trump Announces First Post-Tariff Trade Deal

May 8, 2025

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025

Top 10 Benefits Of Acupuncture

May 8, 2025
© 2025 Patriotnownews.com - All rights reserved.
  • Contact
  • Privacy Policy
  • Terms & Conditions

Type above and press Enter to search. Press Esc to cancel.