OPINION- 'The second wave can have unintended strategic impact on India in global context'

Recent days and weeks have characterized China’s assertive actions and behaviour at global stage as a superpower resting speculations on being held as a source of Corona virus or multinationals pulling out of China. This is happening at a time when India is in muddied waters of second wave of Covid 19. This may partly explain for China showing no hurry to pull its troops back from Ladakh border or shrugging off Indian policy actions on limiting Chinese investments.

 

Chinese economy, the world's second-largest, grew by 18.3 % in Q1 2021 on base of $ 16 trillion annual GDP though on lower base effect. Chinese economy is set to surpass US by 2026-2028 which is minimum 5 years earlier than anticipated. US economy grew by 8.3% in Q1 2021 on base of $ 22 trillion annual GDP with no signs of slowness. Immediately post the $ 1.9 trillion coronavirus bailout bill, President Biden launched a $ 2.2 trillion proposal to shore up crumbling U.S. infrastructure. The bill could accelerate the US economy and set a global battle with China over resources.

 

China has confidently tamed its erstwhile digital poster boy Alibaba group, with $ 2.8 billion fine for distorting Chinese digital and financial markets and ironically inviting gratitude from Alibaba in return. Chinese regulators warned leading 34 internet companies to play by rules including Tencent, ByteDance, Baidu, JD.com, Meituan, Pinduoduo and Kuaishou.

 

Chatter of resentment against Communist party or Xi Jinping’s authoritarian streaks has vastly reduced. Hongkong celebrated its first national security education day on 15th April to imbibe patriotism in school children and general populace and Chinese airplanes roam in Taiwan airspace with impunity. Clearly, world has yet to understand China better but that’s for another column.

 

 

China is asserting global leadership in another strategic humanity challenge on Climate change. Xi didn’t meet John Kerry, U.S. climate envoy while he was in China last week compared to his reception in India. At same time, Xi spoke to Macron and Merkel, his French and German counterparts in a virtual summit on Climate matters receiving compliments on Chinese steps on climate reduction. US seems keen to have Xi joining the 22-23 April climate summit called by President Biden than the other way round. China loomed large in Biden’s meeting with the Japanese PM Yoshihide Suga last week in White House on almost every aspect from economy, human rights, semiconductors and others.

 

 

Climate change technologies like carbon and methane sucking, low energy consumption data centres and electronics etc shall be among most valuable technologies of the future. Increasing reliance on chips shall eventually lead to greater climate impact. The poster child of semiconductor industry and one of developed world’s rainiest places, Taiwan is ironically facing its worst drought in 50 years, shutting off irrigation across tens of thousands of acres and compensating farmers for lost income in order to keep its water guzzling semiconductor industry humming.

 

President Biden met 20 top business executives on chip industry's challenges impacting global manufacturing with plans to help them fix the semiconductor shortage with his new $ 2 trillion infrastructure bill which includes $ 50 billion for semi-conductors. US has relied much on Asia specially Taiwan for semiconductors exposing structural and national security vulnerability. Currently, U.S. has only 12% of global semiconductor production capacity, down from 37% in 1990.

 

 

Chinse and US global manoeuvring coupled with Russian foreign minister Sergei Lavrov landing in Pakistan after 9 years with chatter of developing strategic trust, China signing $ 350 billion deal with Iran spread over 25 years, impending US withdrawal from Afghanistan and Chinese influence visible in military takeover of Myanmar have material consequences on India’s strategic choices. Unfortunately, this is happening at a time when India is struck with a large second wave of Covid infections distracting national leadership with unpredictable consequences in short to medium term.

 

 

As India has felt the need now to support vaccine makers with bold backing, it must also take similar steps in AI, clean tech, blockchain etc in far better coordinated and bold ways. As US didn’t hesitate to block key raw materials for making vaccines while being a global leader, we must act boldly to protect our interests balancing our desire to expand global influence. Many key technology policies like AI, blockchain, comprehensive cyber security, data protection, chip design and manufacturing etc have been in works for long time compared to good progress on PLI on electronic parts manufacturing. It has led to global companies stealing march over potential homegrown companies for AI solutions using data of millions of farmers which should rather happen with a robust policy framework in place.

 

Key national strategic technology policies should be decoupled from the general political dynamics and be led by an integrated technology policy leadership. If President Biden can consider US high tech related policies worthy of being in national security and development agenda with bold goals and determination, India can take a leaf from the book. The current government has shown will and capacity to take bold decisions in past with strategic intent and hope they will demonstrate the same will in context of India’s leadership in technology.

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