Opinion | Will Wuhan parley see China and India join hands against Donald Trump’s trade war?
The US president’s trade tiff with Beijing could collapse the globalisation trend, threatening China’s and India’s economic well-being, Mohan Guruswamy writes
Indian Prime Minister Narendra Modi and China’s president, Xi Jinping, are meeting once again, this time at Wuhan. The shadow of the Doklam stand-off is now subsumed by the larger shadow of the looming trade war and the threatened rollback of globalisation.
US President Donald Trump has fired the first shot with sanctions targeting US$100 billion of Chinese imports. If not checked, the consequent economic bloodshed might result in the collapse of the globalisation arrangements that set off the greatest expansion of the world economy in the last three decades.
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This equally threatens the economic well-being of China and India.
Clearly globalisation has benefited China the most, but India too has profited hugely from it. While China has a huge market for its manufactured goods in the US and had a trade surplus of US$245 billion in 2017, India had in the US last year an information technology market of US$120 billion.
The value addition of India’s IT exports vastly exceeds the value addition generated by China’s export of manufactured goods to the US. High economic growth rates in both countries are strongly tied to their US trade and to substantial trade surpluses with the US.