SINO-INDIA WAR OF 1962

“I hate war as only a soldier who has lived it can, only as one who has seen its brutality, its futility, its stupidity.” – Dwight D. Eisenhower

THE MOUNTAIN BLUNDER OF 1962

The world has tremendously changed since 1962, 1965 and 1971. Now, the world has become better and worst. With the Azerbaijan-Armenia war going on people have accepted the fact that war is the ultimate solution for the problems.

We, in India are crying for war. On social media, the so called Social media warriors cried out loud for war with China and Pakistan. People living in the comforts of their home are looking to launch a war.

On the other hand, Pakistanis are calling out names to Indians and telling them that, China will beat Indians to its core. Indians are inciting Pakistanis by telling them that this Winter, we will take back Pakistan Occupied Kashmir (POK). Some are providing theories about the strategy Indian Government is going to follow.

The Two-Front war is an option for the Indian government.

Let’s see what we are betting on and the mistakes of the Past Indian Governments

We have the highest number of volunteers in the world who are willing to join the Indian Armed forces without any compulsion on their part. There are no need to serve the Army under any compulsory provisions unlike- Israel, China and South Korea. We have a Tibetan origin citizens inducted in the armed forces and serving the country and are very good along the Mountain Terrains fighting along side.

We have come a long way since 1962, a blunder by then Prime Minister Mr. JawaharLal Nehru who was blind to not see the Chinese invasion as a threat, country who has just engulfed an entire nation ‘TIBET’. And asked the Generals of the army to keep an eye on Pakistan instead of China.The man who ran to the UN asking for peace refused to use Indian Air Force against China, sometimes it feels like Mr. Jawaharlal Nehru was under the influence of a foreign power who forced him to take these decisions on China that resulted in “THE MOUNTAIN BLUNDER OF 1962”.

Later, the Government of India recognised ‘TIBET’ as the part of China putting an end to the ‘TIBET Freedom Struggle’. Our own Defence minister told the Parliament during the UPA government tenure that, We didn’t make roads along the China Border to counter China from the threat of Invasion.

So as per him, the government policy was not to develop roads so that, if China invaded, they couldn’t get their heavy war machines inside India. But, we couldn’t understand one thing, how the Indian Armed Forces will get reinforcements and their heavy machinery along the border if we don’t have road in case of war.

All these years we have thought of the ‘MOUNTAIN BLUNDER’ and had a ‘RED RIBBON’ on our eyes when we talk about war. We are the major importer of substandard Chinese products and have a huge trade deficit with China.

The world has changed a lot
How come we never talk about Aksai chin glacier? Why do we only talk about POK?

Aksai chin is under the control of the Chinese PLA. But, in the Map of India, our schools taught about POK but never about the parts that Chinese PLA has illegally occupied and have captured many parts along Indian Border overtime during the last 70 years.

WHAT WAS THE COMPULSION OR CONSTRAINT?

They refrained themselves from using the Indian Air Force. What was the compulsion on the Indian Government that forced them to accept the annexation of Tibet into China even though Dalai Lama was given asylum in India. Why these government in the Past have bowed down to every whims and desires of the Chinese government without taking a stand against the Chinese aggression.

These so called Padma Shree awardees are a disgrace to the country and have did nothing to stop the Chinese from bullying us. We have been bullied for the last 70 years and now for the first time we understood how Fragile and spinelees the Chinese Aggression is because we took a stand for our country. And yeah it is the time to win back what is ours. We have a long history of Patience and an image of non-aggressor.

It’s time for the Chinese or Pakistanis to go on a cry for help to United Nations, not India. Not Today…! 

A test for the United Nations?

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To read on Sino-India war: https://economictimes.indiatimes.com/topic/Sino-India

 

Is the world becoming Anti-China?

The world as we know it today seems to be forming an alliance against China, mostly because of suspicions behind the widespread Covid19, due to which as many as 552K people succumbed to their deaths (as of 10/07/2020).

There were many accusations thrown at China, most of which were conspiracies like the Coronavirus being released and created on purpose, and some were serious accusations like the “late transmission of data about the virus to other countries”.

With all of this, Australia, backed by its neighbour New Zealand, was the first to demand a probe into the matter.

The European Union’s foreign policy chief also called for an “independent and scientific” probe.

Meanwhile, the US insisted on investigating on its own.

But this is not all, China’s relationship with Taiwan and India and its disregard for territorial sovereignty has already made people question its authority in the United Nation’s Security Council.

According to India Today, “most of those calling for China’s removal from the UNSC are Indians, clearly a result of the Chinese aggression at the Line of Actual Control (LAC) in Ladakh.”

When non-WHO member Taiwan, reached out for support from other countries for gaining membership in the World Health Organization, the countries who pledged support to Taiwan were shunned and threatened by China since it considers Taiwan to be one of its provinces.

People all across the globe are calling China out for its human rights violations. In August 2018, a human rights committee was provided with credible reports of China turning ” the Uighur autonomous region into something that resembles a massive internment camp”

 In 2018, Human Rights Watch revealed details about the Chinese government’s mass arbitrary detention, forced political indoctrination, torture, and mass surveillance of Uighur Muslims. 

According to HRW, people were being detained for reasons like: “His wife wore veils.” “He has one more child than allowed by the family planning policy.” “He prayed after each meal.”

More than a million people are detained and are forced to eat pork, drink, and pledge alliance to Xi JinPing.

The Human Rights Watch also slammed China for its treatment of Africans and discrimination against them in its Guangzhou Province.

Economically, the United States, Japan, and India have started to distance themselves from China.

The president of the United States, Donald Trump, has asked American firms to leave China.

Meanwhile, India has banned 59 of China’s apps and has tightened its foreign investment rules.

The US has also extended its ban on Huawei for another year and is asking allies to keep a check on Chinese Tech Giants.

Japan has set up a 2.2 billion dollar fund to help pull away from its companies from China.

 In its expansionist mind-set, China does not keep its relations with its neighbours ideal either.

Protests in Hong Kong have been going on for about a year against plans to allow extradition to mainland China.

Because of its increased naval and military presence in the South China Sea during the pandemic, and the territorial disputes over the Spratly Islands and Parcel Islands in the middle of the South China Sea, China does not have strong relations with its neighbours Taiwan, Philippines, Vietnam, and Brunei either.

China’s border disputes with Bhutan which was initially confined to Central and Western sectors is now expanding to the Eastern sector as well.

China is now claiming the Sakteng Wildlife Sanctuary which adjoins the Indian state of Arunachal Pradesh, as its territory. Since Bhutan is a close ally of India it does not have diplomatic ties with China. Many now claim that the move to claim Bhutan’s Eastern Sector was a bid to put pressure on India.

Even though the Royal Bhutanese Embassy in India has said, that the boundary between Bhutan and China is under negotiation and has not been demarcated, this power-flex comes off as a shock to India, which fears another dispute with China in the case of Arunachal Pradesh, after the LAC face-off in Ladakh which happened not even a month ago. According to Hindustan Times, India was backed by several countries including the US, UK, France, Australia, and Japan, in its border stand-off with China.

China’s unpopularity is not limited to countries and their governments anymore.

In April 2020, an internal report circulated by the China Institutes of Contemporary International Relations, a government-affiliated think tank associated with China’s top intelligence agency, concluded that “global anti-China sentiment is at its highest since the 1989 Tiananmen Square crackdown.”

With the world standing against China, it’s not hard to see whether its authoritarian regime will fall or not.

The question is, how soon?

                                                                – Aanandita Singh

INDIA’S MASSIVE TRADE DEFICIT WITH CHINA; LOWEST IN FIVE YEARS

India’s trade deficit with China sinks to $48.66 billion in 2019-2020 which is lowest in five years. Now what is the trade deficit? Trade deficit can be defined as an amount of imports of a particular country exceeding the amount of its exports. According to the data, exports to China in the last financial year stood at $16.6 billion, while imports accumulated at $65.26 billion. India and China are two very well-known countries with ancient Civilizations, their partnership in every major field like trades has made an ideal example since over 2000 years. But from the last few weeks the India- China relation has deteriorated. The main cause of the clash was a dispute over the sovereignty of the widely separated Aksai Chin and Arunachal Pradesh border regions. So, it can be assumed that this clash played a vital role along with lower imports and higher exports as the major cause of India’s significant reduction of trade deficit.

(Source: Times of India.)

The major imports from China cover electronic gadgets (clocks, watches, smart phones, calculator, laptop etc.) plastic materials (toys, plastic containers, bottles), sports goods, musical instruments, furniture, chemicals, irons, mineral source, metals and fertilizers.

Foreign Direct Investment (FDI) from China in India fell to $163.78 billion in 2019-2020 from $229 billion in previous monetary, the data said. 14% India’s imports are recorded by China and the major portion comes from critical pharma ingredients and telecom.

 India was able to captivate FDI worth $2.38 billion from 2000 to March 2020 but in April the government has narrowed the standards for FDI coming from the neighboring countries especially which share a land border with India like China.  As per FDI, any company or individual can steep in any field with the government approval.

Top sectors like metallurgical (USD 199.28 million), services (USD 170.18 million), electrical equipment (USD 185.33 million) which showed maximum FDI from China in the period of April 2000- March 2020.

Around 371 products have been identified for technical regulations. Out of 371, technical regulations have been assigned for 150 products worth $47 billion of imports.

The reduced imports from China also helped the U.S. extend its lead as India’s largest training partner against trade off $88.8 billion with US India straight with China was just $82 billion. 2019-2020 year’s trade deficit of India is almost similar to 2014-15, when the Narendra Modi took first post, but it was 34% higher than 2013-14, stimulating the government to suggest that the further steps taken in recent months have yielded results.

In that definite time when entire world has been put off financially due Corona virus pandemic accompanied by India-China war; in the standing of that point taking such steps like restricting the imports from China would be a great decision for India.

The Country and countrymen both are hopeful, at the same, of time what lies ahead in future.

“A large chunk of these originate from China. We will pursue import substitution,” a senior official said.

                                                                       Saswati Chattopadhyay

CHINESE APP BANS

                                            

List of Chinese apps banned

On 29th June 2020, the Indian government issued a ban on 59 Chinese Apps including, TikTok, WeChat, Xender, ShareIt, LIKEE, Helo, and CamScanner among others.

This ban has been implemented after a deadly clash between the militaries of both the countries that left twenty Indian soldiers dead. Satellite images also show that China has built new structures near the border region.

 The Ministry Of Information And Technology, has stated that, “ it has received many complaints from various sources including several reports about misuse of some mobile apps… for stealing and surreptitiously transmitting users’ data in an unauthorized manner to servers which have locations outside India.. Since this ultimately impinges upon the sovereignty and integrity of India, is a matter of very deep and immediate concern which requires emergency measures”

But it raises concerns beyond stealing of Users’ data. If Users’ data being safe was the only concern then why didn’t they ban the Zoom App – An app founded by Chinese-American billionaire, Eric Yuan. Despite being accused of stealing data and various privacy concerns, numerous times, all the app has been given are mere warnings. An Article on News18, says that since Zoom is an American company, located in California, it wasn’t banned.

But doesn’t it go against the statements given by the Ministry Of Information and Technology, which basically said, that they banned the apps because users’ data was being ‘misused’ ?

It proves that the ‘ban’ was supposed to be a “fitting” reply to China, as border tensions escalated, and wasn’t just a security concern.

Which brings us to two questions :

  1. Was India in a position to Ban Chinese Apps?

Most of the apps banned were highly popular in India. Topping the list was TikTok with over 100 million users just in India.

While many “TikTok stars” used the app to earn a living, there were several others who just liked having access to make content.

What made TikTok connect to its users was the fact that how easy it was to handle and to make content, which is why people who couldn’t create content on other platforms like YouTube because of the complications and the investments, could easily create content here.

TikTok really seemed to connect with the Indian Youth because many still are accessing it via VPNs.

While companies like Panda VPN are even advertising the fact that you can access all the banned apps via using them.

Many teens are trying to make apps to access TikTok without VPNs and they are very confidently posting their videos on social media.

The fact that people can still access these apps through VPNs while Chinese investors continue to profit off our people, shows how this ban was nothing more than ”a symbolic ban’.

The ban wouldn’t harm the Chinese as much as it will harm us.

Most of these apps had Indian Creators for whom this was their only source of income. Not to mention, many of these apps have offices and employees in India, whose jobs are at stake.

With the rising unemployment, and the falling GDP,  was it really necessary to put thousands of jobs and lives at risk, in the middle of a pandemic? Was symbolism really this important?

2. Is banning Chinese Apps enough ?

      “Tokenism does not change stereotypes of social systems but works to preserve them, since it dulls the revolutionary impulse.”

                                     – Mary Daly

A week ago, we were furious at our government, for the border situation with both China, and Nepal.

And for once, we expected the Modi government to do something. Because isn’t that what they have been flexing about all those years, with the Balakot Airstrike, or the Surgical Strike? A nation with Strong Military strength?

Instead, we were deceived by various media houses, and our government, who mentioned for weeks that there are no border tensions between India and China.

Instead, we were met with disappointment, as the Prime Minister himself turned his back on us, when he released a public statement saying that there has been “no Chinese intrusion” into our territory. That statement was used by the Chinese Government to shake off any responsibility about the death of twenty Indian soldiers.

Soon after receiving heavy backlash, the government released a statement that practically said “The Prime Minister didn’t mean what you thought he meant”. The video which was available on YouTube was of course edited, and the part where Mr. Modi said how there were no Chinese Intrusions was removed. Channels like AajTak, blamed the army, instead of the government.

I wish it stopped here, but it didn’t. Our government said almost 43 Chinese soldiers were killed or injured, to satisfy India’s collective blood-thirst, when no such number was revealed or verified from the other side. Which makes me wonder if soldiers are just numbers for this country?

Like in a game of Chess, you just count the number of pieces you killed of your opponent. And if it’s more than the number of pieces he killed, then you’re satisfied.

I wonder if our soldiers are nothing more than Chess Pieces to us.

I wonder if their death will ever mean something more than ‘revenge’.

 The government also said that no Indian Soldiers were captured.

The next day though, China released 10 of our soldiers.

 I wonder how the government would have explained the disappearances of these ten soldiers to their families had they not been released by the Chinese Government.

How do we trust a government that has deceived us at every given turn? How do we trust a government that takes the Army’s credit after a Surgical Strike to increase their polling numbers, but blames the Army for their failures?

And after all this, they decided to temporarily ban some Chinese apps.

I wonder why AliBaba wasn’t banned, or PUBG which is backed by Tencent?

As you might already have guessed, AliBaba is one of the biggest investors in the Indian market, and so is Tencent.

The act of banning Chinese Apps was nothing more than Tokenism. But look how well it has worked, no one is blaming the government for literally anything anymore. Not the diesel-petrol price hike. Not even the lack of response to China.

At the end of the day, you just have to ask yourself this, “has this all happened before”?

Have the bans happened before? In a different or similar context? With a different or same nation?

And if your answer is yes, I have a question for you. “When has it changed anything but our opinions?”

                                                                                                                                                  –  Aanandita Singh

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China: The rise of the World’s Factory

Napoleon once said, “Let China sleep, for when the dragon awakes, she will shake the world.” One of the most important economic and geopolitical phenomena has been China’s industrial revolution, which started 35 years ago. China’s rapid growth has perplexed many people, including economists. Moreover, it has ignited a new demand for raw materials across Asia, Latin America, Africa, and even the industrial West. Thirty-five years ago, China’s per-capita income was only one-third of that of the Sub-Saharan region of Africa. In contemporary times, China has grown into the world’s largest manufacturing powerhouse by producing nearly 50 percent of the world’s major industrial goods, including crude steel (800 percent of the U.S. level and 50 percent of global supply), cement (60 percent of the world’s production), coal (50 percent of the world’s production), vehicles (more than 25 percent of global supply) and industrial patent applications (about 150 percent of the U.S. level). It is also the world’s largest producer of ships, high-speed trains, robots, tunnels, bridges, highways, chemical fibers, machine tools, computers, cell phones, etc. In the early 1970s, China produced very few manufactured goods—a tiny fraction of the U.S. level. China’s manufacturing, however, started to take off around the 1980s, surpassing the industrial powers one by one, overtaking the U.S. in 2010 to become the No. 1 industrial powerhouse. The question that has been the most evocative is related to its enormous diaspora. A nation housing more than a billion people transformed itself relatively suddenly from a vastly impoverished agricultural land into a formidable industrial powerhouse whereas several nations have been unable to do so despite their more favorable socioeconomic conditions. Two conflicting views regarding China’s growth have been able to capture the attention of several researchers working on this topic. The first view explains China as a gigantic government-engineered bubble. It claims that this hyper-growth is not sustainable and sooner or later it will collapse as democracy is missing in China which has led to the absence of several important factors that are necessary to hold together such an extensive development of the nation. According to this view, the bubble will burst at the expense of China’s people and its environment. The second view sees the dramatic rise of China as a result of destiny while also claiming that the nation is returning to its historical position. China had been one of the richest nations and greatest civilizations from at least 200 B.C. to 1800 and would soon reclaim its historical glory. However, these views are not backed by thorough economic analysis but are instead based on either on prejudice or naïve extrapolation of human history.

The Industrial Revolution was one of the most important socio-economic events in human history. Before this, humanity lived essentially at a subsistence level confined in the so-called ‘Malthusian trap’. The Industrial Revolution transformed the living standards of humans by dramatically increasing the per capita income. However, it is also imperative to mention that the effects of the revolution were initially only felt in the United Kingdom. Due to this reason and because of the almost magical alterations in the living standards and national income, among other things, almost every nation tried to emulate the British Industrial Revolution. Stark changes were prevalent only in the Northern and Western Europe, the United States, Japan and the Asian Tigers, among others. According to the Institutional Theory, political institutions have been seen to play a key role in the sphere of these developments. For instance, Inclusive institutions that are prevalent in democracy advocate several restrictions on the elite class. Rule of law flourishes in these places and democracy allows the growth of the free market, free trade, private-property rights. This implies private incentives for wealth accumulation, innovation and growth. On the other hand, Extractive institutions that are prevalent in dictatorships (such as dictatorship) hinder not only freedom of choice but of protection of private-property rights and the rule of law, all of which leads to the lack of private incentives to work hard, accumulate capital and innovate. Such theories are however difficult to square with the facts. There are ample democracies with pervasive economic stagnation and continuous political turmoil, such as those of Afghanistan, Egypt, Iraq, Libya, Pakistan, Thailand, Tunisia and Ukraine, to name a few. Several extractive institutions have been economically strong, such as Germany (1850-WWII) and Russia (1860-WWII). The institutional theory also failed to explain the dismal failure of Russian economic reforms under democracy and shock therapy, Japan’s rapid industrialization during the Meiji Restoration, South Korea’s economic takeoff in the 1960s-1980s under dictatorship or Singapore’s post-independence economic miracle. Nor can the theory explain why under identical political institutions, property rights and the rule of law, there exist pockets of both extreme poverty and extreme wealth, as well as of violent crime and obedience to the law.

 To understand China’s transition, we must look closely at the historical development of China’s economy. The first attempt at industrially developing China was made between 1861 and 1911. It came on the heels of China’s defeat in 1860 by the British in the Second Opium War. In light of various unequal treaties imposed by Western industrial powers, the Qing monarchy that was then in control in China embarked on a series of ambitious programs to modernize the prevailing backward agrarian economy, which included the establishment of a modern navy and industrial system. Fifty years later, the government was deep in debt, and the effort turned out to be a huge failure. The nationwide demand for political reforms, followed by social turmoil, ultimately led to the 1911 ‘Xinhai Revolution’ that overthrew the “extractive” Qing monarchy and established the Republic of China, the first “inclusive” government in China based on Western-style constitutions. The new republic tried to industrialize China by emulating the U.S. political institutions, including democracy and the separation of powers. A famous slogan among the Chinese during this time was “Only science and democracy can save China.” Several revolutionaries of the educated elite opined that the failure to industrialize China and its overall backwardness was due to its lack of democracy, political inclusiveness and pluralism. But 40 years passed, and China remained one of the poorest nations on earth. In 1949, following the defeat of the republic by the Communist peasant army, a new government initiated the third ambitious attempt to industrialize China—this time by mimicking the Soviet Union’s central planning model. Thirty years passed, and the effort failed again. The reason for China’s three failures was not the lack of free-market and private-property rights as it is speculated that the Qing dynasty probably had in place a well-organized market system and private-property rights. Also, lack of democracy would not have been the issue as the government of the Republic of China was so inclusive that even members of the Communist Party were allowed in the government. Leader Deng Xiaoping initiated China’s fourth attempt to industrialization in 1978. This time the country refused to take advice from Western economists and it instead took a very humble, gradualist, experimental approach with its economic reforms. The keys to this approach have been to:

 1. Maintain political stability at all costs;

 2. Focus on the grassroots, bottom-up reforms (starting in agriculture instead of in the financial sector);

3. Promote rural industries despite their primitive technologies;

4. Use manufactured goods (instead of only natural resources) to exchange for machinery;

 5. Provide enormous government support for infrastructure buildup;

 6. Follow a dual-track system of government/private ownership instead of wholesale privatization; and

7. Move up the industrial ladder, from light to heavy industries, from labor- to capital-intensive production, from manufacturing to financial capitalism, and from a high-saving state to a consumerist welfare state.

 In the Mao regime, attention was mainly given to the capital-intensive heavy industries, whereas agriculture suffered neglect. Deng Xiaoping initiated reforms that were mainly concentrated on the agricultural sector as China was still an agrarian society, where a large section of the population was engaged in cultivation. The idea was to boost production by bringing in two landmark legislation: the household responsibility system and the dual pricing system (DPS). Production was severely deficient and the rural sector was capital-starved by 1970s. The late 1970s saw a slew of reforms that was meant to boost agricultural production. The then leader de-collectivized agriculture (dismantling the commune system) and started the household responsibility system (HRS), thereby dividing land into private plots. Under the DPS, farmers were able to keep the land’s output after paying a share to the state. This move enabled the producers of the rural areas to sell their produce surplus to the private market after complying with the output share that is to be given to the state. This eventually gave a massive shove to agricultural production led to an increase in the incomes by stimulating rural industry. The years 1978 and 1984 saw the growth of agricultural GDP at an annual average rate of 7.1 per cent, and the income growth in rural areas (almost 14 per cent per annum) increased aggregate demand in consumer and light industrial goods. Nevertheless, domestic expansion of the industry was limited and, as a result, imports were sought to meet demands. The import tariffs were brought down as part of trade reforms. However, rural reforms demonstrated that a rise in income would be inflationary if it is not for a corresponding increase in industrial supplies. The next phase of reforms accordingly focused on industries. But it was indeed agricultural reforms that kick-started the manufacturing revolution in China. Moreover, under the DPS the goods produced would be sold primarily at command prices, but to foster productivity, a small share of it would be sold at market prices in way of profit incentives. An empirical study has brought to light the fact that the impact of the reforms regarding agricultural productivity has been huge which was mainly due to the changes in the incentive schemes available in China. McMillan, Whalley, and Zhu explained that the effects of HRS also included a 32 per cent increase in total factor productivity (TFP) in agriculture.

This era also introduced massive institutional as well as structural changes in administration. China owes its economic reforms to these changes as well, and this came in the form of decentralization of power to local bodies. This time the provincial governments had been assigned to play an important role in both Chinese reforms and the ensuing high growth miracle. According to the Chinese Institute for the Reform of the Economic System, provincial governments in the 1980s were responsible for 37.8 per cent of total mandatory production targets. Chung and Lam claimed that decentralization was a key component of change. Provincial governments were expected to perform specific policy functions and decide legislative fine points. In 1979, legislative powers were granted to the People’s Congress of each province for the first time. As a result, provincial governments passed over 2,000 laws between 1979 and 1991. A majority of these laws were related to the various economic policies of that time. This set the stage for formulation and implementation of location-specific and endowment-specific reforms concerning various provinces. The provinces, by acquiring budgetary powers, have been seen to deal with trades up to $30 million. The cap was later raised to $100 million. In July 1979, the Standing Committee of the National People’s Congress passed the Special Economic Zones (SEZ) law, which opened China to the world. Rules regarding SEZs were made favorable to foreign investments and policies. Money began flowing in heavily. The coastal provinces of Fujian and Guangdong saw the creation of SEZs which in turn helped to further open China to the international economy. The success of the SEZs in enabling FDI-led growth led to the extension of the policy across China, as other local authorities rushed to establish their own Special Economic or Technological Development zones. Pieces of evidence show that much of the SEZ success in China has been led by provinces and their governments where foreign investors have come in direct contact with these local governments. Coase and Wang observed that the planning and developing of SEZs, which were transforming China’s economy since 1979, was part of the Communist Party’s adaptation towards capitalism by way of privatization, marketization, and expansion of international trade. Modern domestic manufacturing industry was one of the main concerns of the government and thus, they designed a policy to achieve that. These changes helped China to benefit from positive spillages and underwent value addition.

According to Yi Wen, by compressing several centuries of Western (and Japanese) development into three decades, China formulated its unique path to industrialization. Their journey can be separated into three major phases:

 1. 1978-1988: This phase can be claimed as ‘proto-industrialization’. It saw the sprouting of several rural enterprises (collectively instead of privately owned by farmers). Consequently, these enterprises acted as the engine of national economic growth during the first 10 years of economic reform. The number of village firms increased more than 12-fold (from 1.5 million to 18.9 million), village industrial gross output increased more than 13.5-fold (from 14 per cent of gross domestic product, or GDP, to 46 per cent of GDP), village peasant-workers grew to nearly 100 million by 1988, and farmers’ aggregate wage income increased 12-fold. Growth in the supply of basic consumer goods ended shortage in the mid-1980s and simultaneously solved its food security problem.

 2. 1988-1998: This phase can be termed as ‘first industrial revolution’. It featured mass production of labor-intensive light consumer goods across China’s rural and urban areas, relying mainly on imported machinery. China emerged as the world’s largest producer and exporter of textiles, the largest producer and importer of cotton, and the largest producer and exporter of furniture and toys, during this period. Rural enterprises continued their hyper-growth, and their workers reached 30 per cent of China’s entire rural labor force (not including migrant workers). Village industrial output grew by 28 per cent per year, doubling every three years (an astronomical 66-fold increase) between 1978 and 2000.

 3. 1998-present: This was the period that saw the beginning of the ‘second industrial revolution’. It featured mass production of the means of production. The rapid development also introduced a surge in the consumption and production of coal, steel, cement, chemical fibers, machine tools, highways, bridges, tunnels, ships, etc. In all, 2.6 million miles of public roads were built, including more than 70,000 miles of express highways (46 per cent more than in the U.S.). Twenty-eight provinces (out of 30) have high-speed trains (with a total length exceeding 10,000 miles, 50 per cent more than the total for the rest of the world).

The development of markets has always encouraged modernization of a nation. Market creation requires state power, correct developmental strategies and correct industrial policies. Researchers have noted that the Industrial Revolution in China has been driven not by technology adoption per se, but instead by continuous market creation led by a capable mercantilist government; the market creation is based on mutually beneficial trade instead of the gunboat diplomacy methods of earlier Western powers. From China’s experience, we can see that the development of an industrial market is a sequential process (from the agricultural and artisan stage to the proto-industrial market and so on). A nation, to start its development, must repeat earlier stages by clearly following the principle of organization in an orderly fashion if it wants to succeed. It is almost like learning a new trade; you never learn one haphazardly. China’s industrialization picked up not only the positives aspects of Western development but also the negatives, including rampant corruption and organized crime, unprecedented pollution and environmental destruction, rising divorce and suicide rates, widespread business fraud and scandals, low quality goods, pervasive asset bubbles, rising income inequality and class discrimination, frequent industrial accidents, etc. Various other challenges such as building social safety nets, completion of social and economic reforms in the health care and education sectors, finishing rural urbanization and agricultural modernization, establishing modern financial infrastructure and regulatory institutions, establishing a modern legal system are also to be met by China. However, as long as China follows the right sequence of economic development, these should merely be scant problems and not the same daunting structural obstacles like the Malthusian poverty trap or the middle-income trap faced by many developing nations. The rise of China provides a golden opportunity for many other nations to ride the ‘free China train’ that would help one to allow industrial and technological advancements. Nevertheless, the benefit a nation can reap from China’s rise depends entirely on its capabilities, worldview, developmental strategies, and the present industrial policies of that nation. Although the 21st century appeared initially to be shaping up as China’s century, the manufacturing sector has undergone massive changes, bringing new opportunities and challenges to business leaders. The prevailing pandemic has made it very much unclear as to which country will now dominate the global manufacturing market. It can be said that after three immensely successful decades of gigantic growth, China’s manufacturing engine has largely stalled. These changes in the sphere of manufacture have come not only as a result of the tepid economic situation of the world but also due to the realization of various industrialists regarding the difficulties one can face when depending on a single country for manufacturing and the consecutive geographical spread.

 – Sagarika Mukhopadhyay

Bibliography

 McMillan, John, Whalley, J., & Zhu, L. (1989). The impact of China’s economic reforms on agricultural productivity growth. The journal of political economy, 781-807.

 Sahoo, P., & Bhunia, A. (2014). China’s Manufacturing Success: Lessons for India. IEG Working Paper No. 344, pp. 7-11.

 Wen, Y. (2015, November). China’s Industrial Revolution: Past, Present, Future. Retrieved June 2020, from https://www.stlouisfed.org/dialogue-with-the-fed/chinas-industrial-revolution-past-present-future

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