As the People’s Republic of China faces an imminent threat of a complete economic decoupling from the rest of the world, strategic circles in Beijing have started drawing up plans on how to overcome the growing backlash from its main rivals. An interesting situation is building up here. While China seems to be still fighting the United States, it has completely given up the fight on the economic front with the other big China rival- India.
As per Reuters, China’s Commerce Ministry issued rules for a proposed list of “unreliable entities” on Saturday. This is a part of China’s bid to retaliate against the Trump administration’s move to impose punitive curbs on Chinese telecom major Huawei, apart from targeting Tencent’s WeChat and ByteDance’s TikTok. However, while Beijing is imposing countermeasures against Washington, it hasn’t even tried to fight India’s crusade of banning Chinese apps and other China-based business entities.
In fact, from the very starting, Beijing was more comfortable in waging economic warfare with the US. On the other hand, the Chinese government seems to be more interested in placating India though New Delhi has banned way too many Chinese apps and has probably been more proactive than even the US when it comes to punishing China.
After the US President Donald Trump had started a crusade against Huawei’s worldwide 5G ambitions last year, apart from imposing tough tariffs on Chinese goods, Beijing had vowed to take revenge. China has been looking to draw up a list of American firms, which the Chinese Communist Party will label harmful to Beijing’s interests.
China’s Commerce Ministry said that the list will help “safeguard national sovereignty, security and development interests, maintain a fair and free international economic and trade order, and protect the legitimate rights and interests of Chinese enterprises, other organizations or individuals.” This is supposed to be a tit-for-tat measure, as the US and other democratic regimes are looking to get rid of Chinese apps and business that are riddled with accusations of serious security risks.
However, Beijing is yet to publish any such list, even though the CCP mouthpiece, Global Times, had named Apple Inc, Cisco Systems Inc, Qualcomm Inc as potential targets. It had also claimed that China could suspend purchases of Boeing Co. airplanes.
China’s strategy is guided by expediency and harsh reality checks. Beijing does have some leverage to retaliate in case of the US. While Beijing has a lot to lose with Trump administration’s decoupling from China, the US itself has significant business interests in China that would suffer if the Dragon retaliates.
But in India’s case, China has no real leverage. Sino-India relations are largely asymmetric as China has massive business interests in India, but Indian businesses don’t have significant investments in the Chinese market. This means that if China wages full-fledged economic warfare with India, the damage on China’s side will be much more painful. Therefore, Beijing is holding back from engaging India on the economic front.
Moreover, China feels that it is done and dusted in the United States. Whoever comes at the helm of affairs in the White House, China will remain a strategic rival and therefore Beijing feels that a new-age US-China “Cold War” has started. As such Beijing doesn’t see any real possibility of a Sino-American rapprochement.
On the other hand, Chinese strategic circles have a different view of India. Beijing feels that despite the ongoing military standoff between India and China in Eastern Ladakh, Chinese businesses could still have a lot to do in India. China cannot really stomach India’s economic blows when its business entities are being already beaten black and blue by the Trump administration, and therefore it doesn’t want to engage India in economic warfare.
China cannot beat India on the economic front, and then Beijing’s vision of a “Cold War” with the US also forces it not to antagonise India too much and push it further towards Washington. Therefore, China may still be fighting hard in the US, but it has certainly given up the real fight in India.