Post Covid, Time For India To Grab China's Chi

In the last fortnight, Philippines has filed two diplomatic protests against China over violations of international law and attack on Philippine sovereignty. In the first instance, a Filipino Navy ship was harassed by a Chinese warship. In the second, China set up two administrative districts in contested Spratly and Paracel islands - in a territory claimed by the Philippines as part of West Philippine Sea.

Last Friday, four Chinese coast guard ships sailed into Japanese waters around the Senkaku littoral in the East China Sea that China claims as its own - calling them Diaoyu islets. This was seventh such transgression this year, prompting Tokyo to lodge strong diplomatic protests with Beijing. The sinking of a Vietnamese fishing vessel earlier this month by a Chinese frigate in the South China Seas was part of a series of such aggressive acts by the Chinese that according to Vietnamese Coast Guard authorities have damaged or sunk over two dozen small and medium naval assets. The matter was serious enough for Vietnam to raise in the United Nations, as also for the Philippines to join in the protest.

Amid all this, speaking at an ASEAN summit on April 24, US Secretary of State Mike Pompeo raised the issue of a scientific report on Beijing's upstream dam operations that have unilaterally altered flows of the Mekong river, causing a drought-like situation in the riparian nation-states of Thailand, Laos, Cambodia, and Vietnam. Australia tasted the pungency of Chinese diplomacy last week after the Australian Prime Minister called for an investigation into origins of Covid from Wuhan. India has had similar concerns about China tinkering with the flow of Brahmputra in its journey through Tibet as Tsangpo.

Essentially, while the world has been busy fighting the Covid pandemic with its back to the wall, Spreader-in-chief China has been breathing fire in its neighbourhood - hoping to collect the Dragon Scroll like Tai Lung of Kung Fu Panda from the valley of peace. In this case the international waters from Japan to the Philippines to Malaysia and of course the most contested South China Seas.

The ongoing Chinese bullying reminds of an abrasiveness that was last shown perhaps by the United States of America at the peak of their power immediately after the end of the cold war. The Americans could at least put a veneer of ideology and idealism fresh from a victory over Communism. In the case of China its unadulterated resource grab.

Militarily, there is only that much that the world can do. The US has sent a couple of warships through the Taiwan Straits. India has supplied patrol boats to Vietnam, as also refurbished it's Petya class Russian frigates over last few years. Yet, as we watch much of the West lose its commanding civilizational heights to the pandemic, much more needs to be done to make sure that China does not become the new Globocop.

Japan has hinted at how it can be done. Of the US dollar one trillion pandemic stimulus package, it has marked two billion dollars only to assist corporations that might want to shift their facilities out of China. There is a reason why Italy was the first big Covid sufferer out of China - it gleefully participated in the Belt and Road project of Xi Jinping, and hence found itself at the nerve centre of a massive Chinese supply chain that spreads from Wuhan to Lisbon. Goes without saying, Europe too would recalibrate between what it sees as a Panda hug, but can equally be Dragon fire. In the case of America, an already combative Trump administration might scale up its contain-China strategy.

The way things stand, India seems to have managed to stay ahead of the curve in controlling the pandemic. If the mix of zone-specific lockdowns and reasonable relaxations can keep our numbers of infections and deaths below that of China by the time Covid has subsided, for a nation once described as a 'functioning anarchy' by a US diplomat, it would be no mean achievement. India has a real chance to claim a leadership role in the world.

There are a couple of policy stimulations that are immediately needed on the uptake - land and labour reform. Prime Minister Narendra Modi has tried his hands at both with limited success. An industry-friendly land law was in fact one of the first few policy initiatives of Modi in his first term in which he burnt his fingers due to opposition intransigence. Leaving it to States has not delivered intended results. Ditto for labour reforms that have been piecemeal at best.

While Nirmala Sitharaman stitches sectoral stimulus packages, and Reserve Bank gives fortnightly liquidity placebos, nothing would work like a hardnosed revisiting of the land and labour reforms. Taken together, various national governments and international organizations have announced stimulus packages to the tune of over US dollars 10 trillion already. If we can attract even one per cent of this, it comes to 100 billion dollars - more than the entire FDI of the last decade! As the world changes gears for the post-Covid drive, India has an opportunity of a lifetime to take the wheel.