Below the American Radar: China and India (nuclear rivals) spar on trade, global status, terrorism

chinaindia-ccThe growing Indian trade deficit with China is becoming a front and center issue on the subcontinent. There are increasing calls for boycotts of Chinese goods from New Delhi. China has responded by insulting its regional rival saying that India can only “bark” about the deficit.

I mention this development because we see two highly centralized governments that oversee crony economies, with a history of warfare and with nuclear weapons, squaring off as Asia continues to stagnate economically. If things were to get worse on the economic front there is a good chance that tensions will rise. Highly crony countries are more susceptible to international pressures as they must respond to constituencies that benefit from insular trade policies. That is one of the reasons why free trade, real free trade not TPP-like crony trade deals, are a good thing. Real free trade promotes stability.

Given that the Philippines has just pivoted away from its traditional “ally” the USA and now is officially looking to China the grumbling on either side of the Himalayas is particularly interesting. China now has positions on both flanks of the South China Sea. We don’t like this. President Duarte in Manila has changed the Pacific equation. American eyebrows are more than raised.

All of this adds up to a potential flash point if the Chinese economy goes from stagnation to deterioration, and/or the tensions between Russia and the USA continue to rise post election.

Just an area to pay attention to.


The BRICS summit and all the talk about terrorism, seems to have pushed some buttons and not just those across the Line of Control. This time, it was our neighbours across the Line of actual Control who seem to have swallowed some sour grapes. After India took the opportunity of the BRICS summit to call Pakistan “the mothership of terrorism” and also slammed China for preventing action against Pakistani terrorists, China today adopted passive aggressive means to take revenge.

China’s state-owned newspaper, ‘The Global Times’ published an article today in which it used very distasteful, but none-the-less expected from the Chinese, language to declare that India can do nothing to overcome the growing trade deficit between the two countries. To quote the chine government’s mouthpiece, the article claimed that New Delhi can only “bark” about the growing trade deficit between the two countries and do nothing…

…Leaving aside the blatant racism of the Chinese towards Indian labourers, there are blatant errors in the logic provided by some government official via the Global Times. Many in India fear that calling for a ban on the consumption of Chinese goods is an ‘ultra-nationalist approach’ and not feasible for Indian trade. However, while analysing the trade disparity in the existing geopolitical scenario a clear picture free from “jingoism” starts to form.

Really? I hear jingo bells all over.

Click here for the article.