India vs China

India, China and Pakistan, all of them have hundreds of nuclear weapons and missiles capable of carrying them. Nuclear weapons are capable of killing millions in a city but is not very effective against an army which is stretched across vast geographic area. In event of any war between them, the losing party will definitely use nuclear weapon against a large city of winning side. Since it will be swiftly followed by vast retaliation of nuclear weapons by the other side. Hence the losing side will probably dump all of its nuclear arsenal in one go, attacking as may cities as possible.  Hoping to destroy retaliation capability and morale of other side. But since the winning side expect the retaliation from the losing side, it will also not wait for other side to use nuclear weapon.

Hence if there is any war among India Pakistan or India China where more than remote region is under stake, then both side will use all of their nuclear weapons as soon as such war is inevitable. They will not only attack only the border areas but also all the major cities of each other.

Threat of punishment from a third party like USA or Russia, won't be a concern. As they would not want to be part of a nuclear war. And anyways after the nuclear war, the surviving country will be too weak to threaten them.

Hence there remains dynamic equilibrium between India and Pakistan and India and China. One side is mortal danger to other, but one of them cannot take action against the other.

Further there is an economic reason. All of the world economy and financial markets are interconnected with each other. Any major war would destroy global economy. India cannot beat China without suffering major financial meltdown itself.

Earlier countries used to fight each other to control other country wealth and resources. The winning country used to get loser minerals, resources and gold.

As recently as last world war, control over coal rich region of Alsace was one of reasons for war between France and Germany. But thereafter United States has shown you can exploit a country natural resources without firing a single bullet. China is following same principle. It controls vast resources in Africa. And its control over Pakistan resources is immense.

Ultimately what is purpose of control over a country. Suppose China gains control over country. It can get its coal at cost of production of coal. Now that country coal mines may eventually run over or it may become very costly. However free trade ensures China can buy coal from any country. In free trade all sort of buyers will bid for every coal production. Eventually price of coal of any coal producer will be only a fraction over its cost of production.

So China can buy coal from a country like say Vietnam and sell its finished product to them. It does not need to own the country. If Vietnam cannot produce coal at a competitive price, China may not even bother with Vietnam.

And what does China needs to dominate sell its finished product. It needs to make product of better price and better quality.

So what does China need to dominate a country economically.

It needs capacity to outbid all buyers of raw materials of raw material from that country to dominate its exports. And it needs to outbid all sellers of finished products into that country to dominate its imports.

Solutions to both of these problems is the same i.e. efficient industrial sector backed by superior technology, lower labor cost, lower transportation cost and government support.

Excellence in all these factors allows China to dominate raw materials imports and high value exports of other countries.

In fact China does it all so well that, for decades American and European companies are exporting their technology to China for low cost manufacturing of electronics.

Trade deficit between US and China remains at record level. Millions of American jobs have been outsourced to China. And all America could do was to beg China for buying American agricultural production.

If America is doing so badly then India cannot remain far behind. India imported 65 billion dollar of goods from China in 2019-20 and exported 16 billion dollar of goods to China during that period.

Chinese exports to India comprise smartphones, electrical appliances, power plant inputs, fertilisers, auto components, finished steel products, capital goods like power plants, telecom equipment, metro rail coaches, iron and steel products, pharmaceutical ingredients, chemicals and plastics and engineering goods, among other things, according to the Ministry of Commerce.

However organic chemical, ores, slag and ash, and mineral oils, mineral fuels and other industry products comprise India's exports to China.

China exports to India is mostly electronics and manufactured goods. However India exports to China is mainly raw materials. 

India is not some unindustrialised country. India auto industry, chemicals industry, pharmaceutical industry are one of the largest in the world. However semiconductor and electronics industry is non existent in India. 

Importance of semi conductor and electronics industry is only going to keep increasing day by day. If India wants to stand up against China. It has to create an ecosystem for semi conductor and electronics industry in India. 

It has not happened by market forces in past twenty years. It is not going to happen in future unless Indian government creates government companies in manufacturing of semiconductor and electronics industry. 

Instead of wasting thousands of crores every year running business where there are already world class private sector companies, like banking, mining and airlines etc, government should invest those money creating semiconductor and electronic manufacturing companies. 

Fifty years ago Indian government had set up steel manufacturing companies,  capital goods companies like BHEL and NTPC. All these have become one of the largest companies in India. 

Indian government should do the same for semi conductor and electronic companies and social networks.

It is inevitable that Flipkart and Amazon will have permanent influence in retail sector of India. Facebook and Twitter are accused of undermining elections in their own country i.e. America. How they can be trusted to not have bad influence on elections in India. 

Yes no government company has become successful in these sector. But only trying to ban chinese products or apps won't help. 

If India stopped buying electronics from China and only bought from other countries. Then at worst China will lose 5% of world market. Chinese companies will only keep on growing in rest of the world. India will not catch up with China in economic strength without developing industries of its own.

It takes one intelligent person to buy from China and label it as made in India. So only boycotting Chinese goods will not work.

A coordinated national strategy will be needed to develop Indian economy. Ultimately India need not beat China in a war. If Indian economy becomes very strong, even China may dump Pakistan for friendship with India.