 "BS Manthan")
It would be wise for India not to make its strategy around ‘China-Plus-One’, the trend of global companies avoiding investing only in the communist nation and diversifying their businesses to other places, said three foreign and defence policy experts at Business Standard summit, Business Manthan, in New Delhi on Thursday.
The summit, organised to mark Business Standard's 50th anniversary, had a panel discussion on how India can avoid the West's China-Plus-One tag and play to its strengths. Former foreign secretary Shyam Saran moderated the discussion with former national security advisor Shiv Shankar Menon and former Indian high commissioner to the UK, Nalin Surie.
Kicking off the discussion, Saran said China-Plus-One was not about Western and global multinationals abandoning China, uprooting their facilities and shifting to countries like India. "Major multinationals aren't really moving away from China, except in a small way," said Saran, adding that Plus One had more to do with these businesses directing most of their fresh investments to other locations. "China-Plus-One is more about where the new incremental investment is going."
The three panelists concurred that China-Plus-One was either misunderstood as a wholesale movement away from China or at the least overplayed.
"No one talks of decoupling with China anymore, they only talk of de-risking," said Menon, adding "US-China trade is booming today. China-Plus-One is just about having additionality beyond Beijing."
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An actual decoupling from China, for both Western countries and India, is doubtful, the experts said.
China believes there is a steady deterioration in how the world is dealing with it. "They see the world as less and less of an opportunity," said Menon. "Chinese President Xi Jinping has said that the more we (China) rise, the more we will see opposition." According to Menon, Xi's solution to this is the "dual-circulation economy", based on internal consumption on the one hand and ensuring that other countries become dependent on China on the other.
India needs to develop in such a way that its dependency on China reduces, Surie said. Highlighting how difficult this task would be, Surie said that after the Galwan military clash between the two countries in June 2020, India's dependency on China for vital product categories and inputs should have ideally gone down. But, it had not.
The clash in Ladakh's Galwan Valley and the build-up of forces by both sides later strained New Delhi's ties with Beijing.
"We need to reduce this dependency," said Surie, adding, "Indian industry must cut down its dependence on China. And, the micro, small and medium enterprises sector has already been moving away from China to an extent in the past five years."
Surie cautioned, "This does not mean a closed economy."
The experts advised India to avoid following the China-Plus-One thought.
"As an Indian, I don't agree with China-Plus-One (tag)," said Menon, adding, "For me, that's a very weak basis to formulate Indian strategy on."
According to Menon, India's choice was not between import substitution and complete dependency on China. Instead, he proposed that India should adopt its own China-Plus-One strategy for imports, under which it would find alternative sources and diversify. "India needs a de-risking or China-Plus-One strategy for itself," said Menon.
Surie said, "I am not happy with the China-Plus-One tag. I don't think India is China-Plus-One. It has its own story." According to Surie, India needs to adopt an independent path and have self confidence. "We will not be able to go down China's economic growth path," he said.
