India or China: Who is the bigger loser?

With the current position of the army forces at the Indo-Chinese border, it is evident that the relation with China is definitely taking a troll. The trade deficit between the two countries is increasing in proportion almost the same proportion and India has been pushing it hard to somehow balance the two with increased exports than imports. Currently, the gap is estimated to be approx. US$ 52 Billion from India alone which constitutes to be 52% of the total trade deficit among all the countries trading with China.

The Hon’ble PM of India Mr Narendar Modi had shared this concern with the President of China Mr Xi Jinping during his last visit to India. It was also discussed that how India & China can be partners in the overall supply of mass-consumed goods to the world. It is to be noted that China is considered to be the World’s Factory because of its cost-effective methods of manufacturing the raw material.

The geo-strategic position of India & China has also been one of the major concern areas between the two countries. But, India has always been in support to maintain the cordial relationships with all its neighbours be it Nepal, Bangladesh, Bhutan, China & even Pakistan. Then what is the actual reason for this current clashes at the Indo-Chinese border?

Well, the reason clearly seems to be the drop in the trade volumes in the current time. Due to the lockdown situation, all the international borders are sealed and so as the ports. Now, consider a situation where the manufacturing can’t be stopped but the supply is unable to reach the market. And, to sustain the world’s largest population, China needs to keep supplying. Here, the benefit which China had due to the trade surplus has become the biggest odd for them. And, if India has survived for the last 5 months without the new imports from China, it is to be thought that India can survive in the future as well. Because if India is able to do so the GDP will automatically increase, the economic situation will improve and so as the employment levels.

Hence, the current tension at the Indo-Chinese border simply seems to be a measure by the Chinese government of taking the attention of their citizens away from the upcoming slump or vice versa by the Indian government of disapproving the Chinese products in India. But, China needs to re-think his action plan by analysing that who will be the bigger loser?

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