Economic Survey on China: ‘Can India fill manufacturing gaps left by Beijing?’

The dynamics of India-China economic relations continue to be “extremely complex and intertwined”, the Survey noted.

The Economic Survey stated that considering the dominance of China in global supply chains, it may not be the most “prudent approach” for India to think that it can fill the spaces left vacant by Beijing in manufacturing. The dynamics of India-China economic relations continue to be “extremely complex and intertwined”, the Survey noted. Citing recent data, the Survey expressed worries on if China is even vacating light manufacturing.

The Chinese national flag is seen in Beijing, China.(Reuters)

It said, “The Chinese domination over the global supply chains across product categories is a key global concern, especially in the wake of supply disruption accompanying the war in Ukraine.”

The Survey added, “In the context of energy transition, China's near-monopoly over the production and processing of critical and rare earth minerals has already been a cause of global concern.”

The Economic Survey asked if it would be possible to plug India into the global supply chain without plugging itself into the Chinese supply chain. It said, “China’s dominance over a large number of product categories creates a risk of economic coercion, where the government restrains access to crucial inputs for political leverage. China’s dominance also has led to monopolistic practices which has considerably limited the space for new entrants to emerge as new manufacturing powers.”

On China, the Survey also said, “Between the last Economic survey published in January 2023 and this one, big changes are afoot in the geopolitical environment. The global backdrop for India’s march towards Viksit Bharat in 2047 could not be more different from what it was during the rise of China between 1980 and 2015. Then, globalisation was at the cusp of its long expansion. Geopolitics was largely calm with the end of the Cold War, and Western powers welcomed and even encouraged the rise of China and its integration into the world economy.”