Tying up with Taiwan

Tensions on India’s eastern borders flared up again recently over Chinese moves near the strategic monastery town of Tawang, located south of the McMahon Line, in Arunachal Pradesh. While Tawang was captured by China during the 1962 conflict, it withdrew after the war ended. The Chinese withdrawal was initially seen as an acknowledgement of Beijing’s de facto acceptance of the McMahon Line, as constituting its eastern borders with India. But subsequent events, like China’s intrusion in the Sumdorong Chu Valley, bordering Tawang in 1986, indicated a Chinese readiness to challenge the status quo. The present border tensions in Ladakh have occurred in areas adjacent to Tawang.

Like Japan and South Korea, India must develop a strong electronics industry if it has to succeed in becoming a hub of modern industrial production.

Optimistic beliefs about improving relations with China have been shattered, ever since the assumption of office of President by Xi Jinping in 2014. This, despite the warm welcome he received in India from PM Modi. China has, in fact, been showing growing hostility towards India. The recent manifestations of hostility were unprecedented moves to seize Indian territory in Ladakh, which faced strong Indian resistance. While there is ceasefire in Ladakh, China remains in possession of Indian territory. India is now facing Chinese attempts to intrude into Arunachal Pradesh.

India and China had reached an agreement on Guiding Principles for reaching a ‘package settlement’ to resolve differences on the border issue, on April 1, 2005. Both nations agreed that: ‘Both sides should, in the spirit of mutual respect and mutual understanding, make adjustments to their respective positions on the boundary question, so as to arrive at a package settlement of the boundary question. The boundary should be along well-defined and in easily identifiable natural geographical features to be mutually agreed upon by the two sides.’ It is, however, very doubtful if such a settlement can now be reached with China, which has land and maritime boundary disputes with virtually all its neighbours.

In dealing with present-day China, one has to bear in mind that President Xi Jinping is vindictive in dealing with his opponents, whether domestic or foreign. The use of force to control its self-declared maritime boundaries is a feature of Chinese security policy. The world was shocked by the manner in which Xi Jinping publicly humiliated his predecessor, Hu Jintao, during the recent Chinese Communist Party Conference. While differences between the most senior members of the ruling dispensation in China are only natural, senior leaders are treated with respect after they relinquish office. Hu Jintao was forced to leave the party function by security personnel, while Xi Jinping looked on coolly. Reformist premier Li Keqiang was, meanwhile, replaced — on the completion of his term — by a Xi Jinping crony, Li Qiang.

Xi Jinping appears set to carry forward his existing policy on India. ‘Salami slicing’ of Indian territory in Ladakh and Arunachal Pradesh will likely continue. While India has undertaken huge efforts over the past two decades to improve road communications in areas bordering China, more needs to be done. More importantly, one will have to see if Xi Jinping attends the G20 Summit to be hosted by India next year.

It is clear that New Delhi has been avoidably overcautious in establishing stronger business ties with Taiwan. It has been evident over the past two decades that India needed to develop a strong electronics industry, like Japan and South Korea, if it was to succeed in becoming a hub of modern industrial production and build a credible base for design, development and production of crucial semiconductors and computer chips. The Modi government has, however, now decided that it will move ahead purposefully in building India’s own modern electronics industry in cooperation with Taiwan, undeterred by apprehensions of Chinese reaction to such cooperation.

Shedding past concerns about earning Chinese displeasure by large-scale industrial cooperation with Taiwan, India has now formally announced that the Vedanta Group of Industries will soon lay the foundation stone for developing the vital semiconductor industry in Gujarat. The initial investment in the project will be $20 billion. Vedanta Resources, in partnership with the Taiwan telecom giant, FOXCONN, has indicated that construction work in Gujarat will commence soon and production is scheduled to start in 2024. This would open the door for establishing India’s electronics industry across the country. There are presently indications of interest in special clusters of electronic industries in states like Maharashtra and Andhra Pradesh. The electronics industry will complement India’s bustling IT industry. It would be for New Delhi to see that the growth of the electronics industry is spread widely across the country.

It is important to note that China no longer remains an exclusive partner for the development of electronics industries globally. Apple is in the process of moving out of China to shift the production of iPhones to India, while also working on iPads and HomePod mini devices in Vietnam.

China also no longer appears set to continue as the prime haven for US business, over four decades after Chinese leader Deng Xiaoping’s historic visit to Washington. Much will depend on how US policies on investments in high-tech industries are implemented in India.

It also remains to be seen how Xi Jinping succeeds in pulling China out of the misery its people are facing in dealing with the coronavirus.