The USA is determined on punishing China for its sins as the coronavirus pandemic has infected over 4.3 million people and resulted in the death of over 3,00,000 people. The United States alone has reported over 1.5 million confirmed cases and more than 88,000 deaths. With the Presidential election around the corner in November, it is likely that the American election will be fought on who will be able to hold China accountable for the pandemic.
Leaving no chance, the Republicans led by President Trump have adopted an increasingly hawkish stance against China. If Trump’s recent statements are anything to go by, the USA is all set to cut-off its ties with China by getting closer to India, Taiwan and Vietnam as it attempts to checkmate China in its own vicinity.
In a recent interview with Fox Business News, Donald Trump sent tongues wagging as he hinted on cutting off all ties with China by stating that he doesn’t want to speak with Chinese President Xi Jinping. “I have a very good relationship [with Xi], but I just, right now I don’t want to speak to him,” said the US President. The two leaders haven’t spoken since February 7 and the bilateral relations have been at a free fall since then, as the USA is persistently drilling China over its opaque handling of the outbreak. From pushing for an international investigation in the Wuhan Institute of Virology to cutting off the WHO’s funding for sliding with China and blinding the world to the impending disaster, Trump has done it all.
The US-China trade war appeared to have ended as the two countries had inked a new deal in December last year before the outbreak of the virus. Expectedly, the status of the deal is now up in the air. Trump’s often anti-China tweets signal an impending US action on China.
As I have said for a long time, dealing with China is a very expensive thing to do. We just made a great Trade Deal, the ink was barely dry, and the World was hit by the Plague from China. 100 Trade Deals wouldn’t make up the difference – and all those innocent lives lost!
— Donald J. Trump (@realDonaldTrump) May 13, 2020
For the USA to punish China, it is paramount to choke the country in its vicinity and the USA realises that and hence, is seeking deeper ties with India, Vietnam and Taiwan. A top US Senator, Thom Tillis recently presented his 18-point plan to hold China accountable for the pandemic.
The important aspect of the Tillis’ plan is to move the manufacturing supply chains from China and forge deeper military-strategic ties with India, Vietnam and Taiwan.
It is clear that India is instrumental in any US plan to hold China accountable and needs to make the most of the opportunity as the US is actively pushing American companies to shift their supply chains from China to India. US Secretary of State Mike Pompeo said that the country is working with its “friends” to restructure the global supply chain. “We’re working with our friends in Australia, India and Japan, New Zealand, the Republic of Korea, and Vietnam to share information and best practices as we begin to move the global economy forward,” said Pompeo at a press conference.
He further added, “Our conversation certainly involved global supply chains, keeping them running smoothly, getting our economies back to full strength and thinking about how we restructure the supply change chains to prevent something like this from ever happening again.”
Pompeo said that the United States is willing to work closely with India, as it helped the United States in critical times. “One example of our work together is with India. It has lifted export bans on critical medical supplies, including pharmaceuticals, used to treat some COVID-19 patients,” said Pompeo.
On the other hand, the US seems to be endorsing India for US companies to shift to in the event of their exodus from China. “India can quickly become a favourable jurisdiction for more of the industrial activities that are happening currently in China,” Thomas Vajda, assistant secretary of state for South Asia in the US Department of State, said in a meeting. He also said, “Government relations between the two countries will be supportive.”
Meanwhile, Prime Minister Modi has signalled that the government is ready to do whatever it takes to attract the firms exiting China and deeply integrate India into the global supply chain, which will weaken China. The Prime Minister discussed the strategy to attract these companies with ministers and top bureaucrats. Over 1000 companies from the USA, Japan and South Korea have expressed interest in India and the government is in touch with them as we speak. In fact, Apple has moved its operations by 20% from China to India, which will lead to large scale unemployment in China.
According to the latest Bloomberg report, India is developing a huge land pool to lure firms moving out of China and looking to translocate elsewhere. The report further states that according to people in the know of things, a total area of 461,589 hectares has already been identified across the country in a bid to attract MNCs that will be looking for new sites once they shift their operations out of China. Several Indian states have also, very quickly, scrapped many labour laws that needed reforms. This move was aimed directly at foreign companies exiting China.
With this major shakeup in the world economy, only time will tell, how successful India is at attracting companies moving out of China to set up their base in India.