Artwork: Chen Xia/GT
As bilateral trade between China and India hit an all-time high in 2021, Indian media reported that India has seen its dependence on many crucial imports from China worsen, finished products to intermediate products.
India imported 8,455 different types of items from China between January and November 2021, “an incredibly diverse list covering everything from a range of chemicals and electronics to automotive and textile components, 4,591 showed an increase” , reported The Hindu, citing data from the Indian ministry. Trade.
Apart from buying a record amount of finished goods from China, India “also relies on China for a range of intermediate industrial products, many of which cannot be bought elsewhere and are not made in China. India in sufficient quantities,” the report said.
Clearly, trade ties between China and India are strong, even though New Delhi has already tried to decouple itself from China in economic ties in recent months.
It showed that the strong economic complementarities between the two Asian emerging markets cannot be reversed by the political posture of New Delhi; and more importantly, India’s dependence on imports from China is objectively not a bad thing for the South Asian economy.
In fact, products from China, including finished and intermediate products, can benefit India’s economic development, especially in the long term.
China is the world’s largest manufacturing hub, offering quality products at competitive prices to global buyers, including Indian consumers who recorded a GDP per capita of 144 out of 194 economies, according to the data tracking platform StatisticsTimes. Com. By importing Chinese products at relatively low prices, more Indian consumer demands are met and the country has saved more foreign exchange reserves.
Meanwhile, increased imports of intermediate goods from China could boost India’s exports to third markets and thereby boost India’s manufacturing capacity and elevate the nation’s status in the world. within the global industrial chain.
Although many people around the world maintain high expectations for India’s economic growth and manufacturing development, what cannot be ignored are the multiple obstacles the country faces, from its protectionism longstanding, its insufficient infrastructure to its unstable political environment.
However, as major emerging economies in the world, India and China have different economic structures and are currently in different stages of industrialization. India’s manufacturing sector accounted for just 13% of its GDP in 2020, barely registering growth for years despite the Modi administration’s Make-in-India campaign. In comparison, the share of the manufacturing industry in the Chinese economy is about 26%.
In this sense, the Make-in-India campaign does not necessarily need to compete or surpass Made-in-China to be successful. Instead, the two sides could achieve win-win results by strengthening cooperation, not only by purchasing intermediate goods from China, but also through cooperation along the regional value chain.
The broader context here is industrial integration in the Asian region. China itself is a huge market and an economy undergoing industrial modernization. The unparalleled size of the middle class in China will consume huge amounts of foreign goods, and the country’s industrial modernization is driving the relocation of some of its low-end manufacturing capacity.
By strengthening economic ties with China, India could seek to gain more market share in the Chinese market; and at the same time, it could be better integrated into Asia’s regional development.
Standing on its way to becoming an economic powerhouse, New Delhi’s real problem is domestic protectionism and the voices of some Indian politicians stoking an anti-China atmosphere that negatively impacts government, rather than buying from China. which would benefit India’s economic growth in the long term.
The author is an editor at the Global Times. [email protected]