The right balance with China

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The right balance with China

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• Three meetings, one message: The Western world's leaders had three meetings in June 2021 with a clear message: the US wants to contain China urgently, but not all Western nations may play ball. The three meetings were of the G7 group, NATO and US-EU summit.
• Impact on world, and India: These developments will affect the entire world, and especially India, due to its friendship with US and physical proximity with China (and relations going downhill). Three things will matter now -

1. What success US gets in getting all allies on board in China strategy
2. Can an alliance of democracies against autocracies be formed
3. Can Europe counter China through deeds and not just words

• First signals: Europe has started taking some steps towards China, under US pressure. EU has launched sanctions, on human rights issues, for the first time. A French warship did exercises with US and Japan, in East China Sea. EU is working on tightening controls on Chinese tech firms (just like US). 
• Not so fast though: But not all European nations are seeing China as an 'enemy', and they realise the kind of benefits an economic engagement with China will bring. EU can see that despite all the friction, US-China trade is booming, and may touch $650 b in 2021 alone (a record). So "what's good for US will be good for the EU" too. Top US officials have spoken with their Chinese counterparts in past three months, stressing the need for "continued economic recovery". It's clear that US cannot break mutually beneficial trade relations at all.
• Complex matrix: So China is central in the scheme of US interests. India has to learn that US diplomacy is very good at sloganeering, e.g. "America is back". But Europeans are wondering if Biden will ultimately give way to the next Trump, in another 4 years, and "America First" will restart. Hence, Europe is cautious with its trade partner China. Also, China is needed to solve the climate crisis, and China isn't a power in EU. 
• No cold war please: Europe isn't interested in the "democracy vs. autocracy" turning into a new cold war. The West is hugely indebted, and US may not be able to create a real alternative to the BRI (Belt and Road Initiative). German leader Angela Merkel clarified that over-reacting won't help, though Russia-China nexus too is clear. "The right balance is needed".
• The right balance: Despite all the border tensions, India-China border trade boomed by 70% from Jan-May 2021, and China is importing more from India now. India has to remember that the West won't become an "enemy" of China in the traditional sense, and continue its business relations always. 
• American approach: President Biden is showing it will safeguard US-dominated global order, and that helps him cope with local Republican pressure. But it won't end the trade and finance relations with China at all. Same with the EU. So, laws of economics prevail. China, after all, is the largest trade partner of 120 countries.
• Summary: China can handle some amount of decoupling, or some tariffs. India has to carefully weigh its own pros and cons, and not blindly walk into someone else's battle.

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