Coronavirus: Covid-19

The Post Pandemic World Order: Upswing Of The Decisive Frontrunner Of The Us-China Trade War

COVID- 19 flattered the persistence of social systems by questioning the concealed realities of the socio-economic and political culture, yet the global powers botched to response for these major questions including one protracted fragile question: who will be the decisive frontrunner of the US-China trade war. The post-Soviet international system survived from several financial knockouts including the traumatized financial crisis in 2008, and it has intensified the clash of titans: the US-China. Conversely, the modest riposte for the rudimentary question put forward by the paper lies in 2008 crisis; since many regional hegemons including Brazil, India, South Africa, Germany and Russia demonstrations the potentials of being the winner of the US-China trade war. However, out of all these potential players India hoisted as the long time frontrunner of global trade war despite being the late contestant of the race, thanks to the strategic routine of second layer trade opportunities.

With the COVID- 19, India seizes a distinctive opportunity by attracting western industries to plant manufacturing houses in India. There is a pushback against China by several countries; the Japanese government is giving incentives to Japanese companies to shutter the respective manufacturing plants in China. American companies followed by many other western companies are scheduling shutdowns. In that case, this would be the opportunity for India to attract investors who departure from China, transporting investments and transmitting technologies. India prepared for this opportunity since 2000 with much-needed reforms; now India could upsurge its trade footprint in midst of the US-China trade conflict, predominantly under the classifications on which the US has executed call-offs, and tariffs on China by diversifying the investment flows to yield benefits from the manufacturers which pursue alternative origination destinations. Yet India should be discerning in terms of picking winning industries since India’s share of the global export market is relatively trivial.

India a long time front runner in global industries such as pharmaceutical, chemicals and engineering, will concentrate more on opportunities coming from these industries. However, as economist K. Kundu cited; India is essential to move fast, through innovating policies and vibrant attention on infrastructure development, yet a lot more remains to be done urgently to seize these new opportunities. The exports from the US and China will become more expensive in the post-COVID world as the tariffs kick in, in that situation these manufacturers move into India and the rest of Asia. For instance, Taiwan industries containing FOXCONN- one of the prime integrated circuit technologies, a contract manufacturer in the world, who accumulates for establishments like APPLE, moved manufacturing houses into India from China in 2019 and it was to assortment of their manufacturing supply chain away from extreme reliance on Chinese production.  However, the massive triumph on FOXCONN in India encourages other contract manufacturing companies of APPLE and western world to plant the industries in India while shifting away from China in the post-COVID world since already the Indian states including Uttar Pradesh are equipped to welcome them.

Yet with the big C of the COVID, India requires to exertion on another C to conquest these opportunities and to be the beneficiary of over US $ 20 billion worth trade shift. The new C stances for CHALLENGES. According to the Ministry of Economics and Industries in India, the prevalent challenge would be the Indian Laws and Regulations on foreign investments. If the government of India is equipped to deliver space for the foreign companies by addressing the issues of fragmentation of the land ownership across several states, the global industries may have lawful, stress-free entree for properties to plant the manufacturing houses.  Since India has already developed major Industrial hubs and inner industrial circles in most of the states, the relaxation of laws and regulations in terms of land and labour will enrich the aptitude of Indian production scheme and it will hearten all the industries which move away from China to settle in India with the blessing of the USA.

However, the latecomer India will be the champion of the trade war between the titans: the US and China in Post- COVID 19 world order, therefore, India has to do more and do them urgently since the system of Kondratieff Wave will be transformed sooner and faster.

Author: Harsha Senanayake
The Author is is a researcher at Social Scientists’ Association- Sri Lanka and a visiting lecturer at the University of Colombo, Sri Lanka.Harsha serves as an AIPE fellow- TFAS USA. He has authored few books including The Changing Patterns of USA- Japan Security Relations:Case Study of Okinawa and The Human Security Discourse and Seeking Peace: Field Work Analysis Based on the Sri Lankan Civil War.

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