The trouble with containing China

Synopsis: This article illustrates why it is difficult to contain China

Introduction

China is mounting a robust challenge with its “wolf-warrior” diplomacy and the vastly ambitious One Belt One Road initiative and String of Pearls.

To counter aggressive rising China, the new alliance (AUKUS) between Australia, the UK and the US, is formed.

However, according to the author, it’s difficult to contain China unlike Russia. Further, any change in Political status of China will have global ramification.

How has China developed in to a super global power?

China, has actively encouraged the monetisation of science and technology capability. Over 80% of its R&D expenditure comes from corporate sources, and it has a huge number of home-grown, high-tech, mega-billion businesses.

China has the world’s biggest, most diversified manufacturing base. It is a monopoly or near-monopoly player in many sectors, and a leader in cutting-edge research in genetics, aerospace, consumer electronics, supercomputing, etc.

Just as it has encouraged entrepreneurs to tap every overseas market, it has also encouraged its best and brightest to study abroad to ensure it stayed abreast of developments in every field.

Why it is difficult to Contain China?

Firstly, China has developed a mighty human resource and technological capability, Hence, China cannot be driven into poverty by an arms race.

Secondly, China is fully integrated into global economy and if it does undergo any catastrophic political change, the global economic costs will also be high.

It was already visible on what could happen to supply chains when China went into lockdown for one quarter last year. Also, the latest real estate bubbles like Evergrande will lead to an implosion in a massively-leveraged economy.

If the PRC thrives, there’s a problem. If it collapses, there’s also a problem. It induces suffering in both, those who consume it and those who don’t.

Source: This post is based on the article “The trouble with containing China” published in Business Standard on 25^th September 2021.