The China challenge and how to meet it

China’s tech and strategic dominance is rising as India remains mired in structural gaps. India must invest deeply in education, R&D, and systemic reform to stay relevant

The China challenge and how to meet it

As China continues to rise in economic, technological and military might, and the US, wallows in self-harm, instead of competing, India has to redouble its efforts to build strategic strength at all levels, both in mission mode as it has been doing in key areas, but at a more general, systemic level, as well. In the latter task, India has been negligent so far.

A Chinese foreign ministry spokesperson dismissed, on 19 May, the notion that China gave Pakistan air defence support during the recent four-day hostilities between India and Pakistan, answering a question from a Bloomberg reporter. China has always strived to help India and Pakistan improve their relations, said the spokesperson.

A Global Times editorial published the next day was less diplomatic. Chiding Indian media outlets for what it called irresponsible warmongering, the editorial said that if China were actually involved in helping Pakistan, the outcome of the confrontation would not have been what it turned out to be.

The stridency of China’s assertiveness these days is what this article seeks to focus on, but let us note, in passing, that the import, probably unintended, of that comparison of what would have been with what actually transpired in the Indo-Pak confrontation, is not flattering to Pakistan.

There is reason for Beijing to feel buoyant. In the standoff with the US on tariffs, it was Washington that blinked. Trump claimed that Beijing has been seeking negotiations and that the US would be holding talks. Beijing flatly denied any such move from its side. The US did not care to contradict this statement, and proceeded to hold talks in Geneva. Both sides agreed to pare tariffs down to 10% for three months, with the US maintaining an additional layer of 20% imposed by the Trump administration in the name of dissuading Chinese exports of fentanyl and precursor chemicals.

That China allowed this to stand signals that it is a concession to Trump’s need to save face, and that this 20% layer would also disappear sooner rather than later. After all, the export of such chemicals is chump change for Beijing, compared to the totality of $439 worth of merchandise exports from China to the US in 2024.

The US has been threatening Asian economies against striking trade deals with China that would subvert the US effort to contain Chinese exports. Asian economies have rebuffed such threats. Negotiations for China-ASEAN Free Trade Area version 3.0 have just been completed. Japan is pushing back against Washington’s effort to rope Tokyo into an anti-Beijing partnership. For Japan, China is its biggest trading partner.

The EU is being wooed by China, dropping Beijing’s sanctions against EU functionaries for their criticism of human rights in China, and committing to build a very large battery plant, one by CATL, the world’s most advanced battery company, in Hungary.

When China promises to defend Pakistan’s sovereignty, to hasten completion of the Mohmand dam in Khyber Pakhtunkhwa, in order to mitigate the results of India potentially curtailing the flow of water from the Indus, Jhelum and Chenab rivers under the Indus Waters Treaty, when it actively promotes Bangladesh’s potential to host anti-India seaports and airfields, and when it treats the India-Pak exchange of fire as combat demonstration of its new breed of weapons, Beijing disproves its claim to be an equal well-wisher of both India and Pakistan. China’s interest is not so much domination of India by Pakistan as re-imposing the hyphenation with Pakistan that India has worked hard to shed. China does not want the world to treat India as an Indo-Pacific power, leave alone a global power. China wants the world to see India as playing in Pakistan’s South Asia league.

Chinese companies are pretty much out there with US Big Tech when it comes to artificial intelligence. China leads in the technologies and equipment of the Green Transition in energy, even as the US thrills to Trump’s moronic calls for babies to drill and drill. US sanctions have forced Chinese companies to develop their own capability in the most advanced microprocessors. A Chinese interlocutor told a visiting US expert how he wished the US would sanction the Chinese national football team. Huawei is the most notable protagonist in China’s giant leap forward in chip-making, but it is not alone. Advances in microelectronics and artificial intelligence make for advances in robotics.

China has the largest number of industrial robots deployed in the world. China’s autonomous driving experiments are closer to mass deployment than competing technologies elsewhere. In quantum computing and communications, China is at the frontier. In gene-editing and new drug discovery, China is forging ahead.

The Australian Strategic Policy Institute reckons that China is ahead of the US in 57 of 64 key technologies, and steadily pulling ahead in the rest. Trump is helping China along, cutting research funds in US universities, detaining and sending back foreign-born researchers, as part of its anti-immigrant drive.

The extensive use of AI in warfare, including in cyber attacks, and in guiding drones and supersonic missiles to lock in on targets by processing the signals from multiple low-earth orbit satellites, without the target realizing that they are being targeted, will prove decisive.

China is able to achieve its miraculous feats in technology by unleashing the creative potential of its massive population. Very often, observers trace the beginning of China’s dynamism to the Deng reforms. They err. In the early years of the Chinese revolution, Mao campaigned for and achieved universal literacy and healthcare. Women held up half the sky. The cultural revolution did much damage, but it also smashed the disdain of the scholars for manual work, heralding an era of sustained cross-pollination of technology and production. Sustained investment in mass education, and the nurturing of a high-quality higher education system have made China now the publisher of the largest number of best-cited research articles in a majority of knowledge fields. This has allowed China to catch up with the US and prepare to overtake it in the areas in which it still lags behind.

India is the only country with the scale of human resources to match China. But India wastes the bulk of its human potential, with dysfunctional education, reification of hierarchy in social structure and thought, killing the questioning of received wisdom, without which new insights are impossible. Social division on religious and caste lines, substitution of assumed ancient glory as compensation for lack of achievement in the present, and misallocation of resources to serve partisan ends rather than to holistically empower the nation hamper the universalization of excellence in the Indian population. India spends 0.64% of GDP on R&D. Israel and Korea spend more than 5% of GDP on R&D. The figure is in excess of 3% for the US and almost 3% for China.

Technology missions in identified strategic sectors are short-term solutions and are being set up. Startups are being promoted and funded to develop defence technology. But these do not get enough funds. Nor do established business houses spend on research and development. Amazon as one company has an R&D budget that is several times as large as India’s combined private and state sector spending on R&D.

India’s space and nuclear programmes show that India can do low-cost R&D and be highly effective. The 1,700-odd global capability centres in India, where the world’s biggest companies carry out R&D, show that India has plenty of talent. The point is to muster the political will to harness all these.

The government announced a Rs 100,000 crore corpus to fund R&D. Let these funds be tapped to set up contract research centres, call them Indian capability centres. Set aside, say, 5% of pension savings and life insurance premia for creating a giant fund that provides early- and late-stage capital for startups. Let the startups, funded by the national fund, use the Indian capability centres to carry out well-planned research, to solve problems identified in different strategic sectors.

In the meantime, the regular education system must become functional, schools teaching young people to be curious and critical, and to learn to learn, rather than to get marks. Universities must focus as much on creating new knowledge, as on teaching.

It is a tough, ambitious agenda. If only nation-building could be done just by alliterative slogans and thrilling rhetoric!