Countering Chinese moves

G Parthasarathy
Chancellor, Jammu Central University & former High Commissioner to Pakistan

Indian cricket teams have traditionally been sponsored by leading Indian business houses. And cricket has never been played in China. One was, therefore, surprised to learn that the sponsor for the Indian team this year was to be OPPO, a Chinese smartphone maker. OPPO had just won a five-year sponsorship worth over Rs 1,000 crore for the Indian cricket team, for 34 matches at home and abroad. The Indian smartphone market is rapidly expanding at 7% annually, at a time when smartphone sales elsewhere in the world have fallen by 6%. But it is not OPPO alone that sells Chinese cellphones in India. India’s smartphone industry is dominated by three other Chinese brands — Xiaomi, Vivo and Huawei, with some competition from South Korea’s Samsung. The combined sale of Chinese smartphones in India is estimated to exceed Rs 50,0000 crore. Chinese telecom companies openly and aggressively operate and compete in India. India’s concerns, however, arise from moves led by Huawei, for domination of its entire communications infrastructure.

Huawei is Beijing’s principal instrument to increasingly dominate global communications by promoting its 5G telecommunications networks. Huawei has over 3,000 employees in its Research and Development Centre in Bengaluru. The higher management and planning structures of Huawei, in India and elsewhere, are exclusively Chinese. As an Indian scientist remarked, Huawei, like other Chinese companies, uses Indians as ‘cyber coolies’ doing the routine legwork, while Chinese management personnel control, work out and implement policies. This is not surprising. It is an exploitative practice the Chinese use worldwide, particularly in developing countries. Their policy is one of ‘zero transfer of technology’. Cheap Indian labour will be used for high-priced Chinese 5G smartphones, while China makes ‘smart’ money! Huawei also has an agenda of promoting its expertise in AI in India, doubtless in a similar manner.

The Chinese are now in a no-holds-barred struggle with the US and some of its European allies for promoting their 5G networks and appliances worldwide. India is caught in the crossfire. It is time India understood and acknowledged that all its aspirations of being a significant high-tech player globally will remain a pipedream, unless it develops a self-reliant electronics industry, spearheaded with indigenous research and manufacture of semi-conductors and computer chips. We are unduly worried about Chinese expressions of concern at our cooperating with Taiwan in such areas. Moreover, it is time to see that we do not close any options, while seriously building a high-tech industrial base. We surely do not need a setup, where Chinese companies use India as a base for their assembling components and devices, and producing goods with Chinese brand names, while marketing them as ‘Made in India’. Lauding the concept of international ‘supply chains’ does not mean we become cyber coolies. It remains to be seen how we handle the introduction of 5G.

China’s economic interests in India are not confined to electronics and communications. It has also taken a keen interest in entering other key spheres like construction, transportation and energy. There has been substantial involvement in the power sector, too. Chinese companies appear set to provide an additional 20,000 MW across India. Chinese companies are now moving significantly into the solar energy sector in Andhra Pradesh. These companies have pledged investments of $3 billion in wind and solar energy development. While there is presently no reason to deny China a legitimate share in projects, when the bids are competitive, India should insist on giving preference to equipment designed and manufactured by its engineers and entrepreneurs.

China will inevitably remain mercantilist, while increasing its economic influence by using its surplus construction capacities for infrastructure projects abroad. Mercifully, our eastern neighbours like Bangladesh, Myanmar and Indonesia appear to understand larger Chinese objectives, and do take preemptive action to guard against Chinese ambitions. While Russia, weakened by falling oil prices and a growing Covind-19 challenge, appears reconciled to being a Chinese partner, the Russians are far-thinking. They will keep open their links with countries like India, Vietnam, and even Japan.

In these circumstances, one can expect significant changes in the present approach of the US and its European allies towards China’s assertive quest for dominating world markets. India must devise incentives to get these countries and their partners to view it as a good location for investment. We should also secure major investments in petrochemical industries from Saudi Arabia, the UAE and Kuwait. We are already a major exporter of petroleum and petrochemical products. China has been threatening its maritime neighbours on their maritime frontiers. India would, however, be well advised to avoid confrontational posturing. The Covid challenge has led to widespread anger across the world, at what is now perceived as China’s quest for hegemony. These sentiments need to be exploited.

India needs a more assertive approach to promote economic self-reliance. This could be undertaken in partnership with countries like South Korea and Japan. ‘Self-reliance’, which we discarded in favour of ‘globalisation’, needs to return to centre stage in our economic and strategic thinking. Self-reliance does not mean autarchy, or state-run monopoly. Nor does it require resort to excessive protectionism, which destroys our global competitiveness. At the same time, an annual trade deficit of around $60 billion with China is neither desirable nor sustainable, especially at a time when markets are shrinking.