Can China And India Afford A Trade War?

Both Countries Would Face the Dire Consequences of the Conflict

Both Countries Would Face the Dire Consequences of the Conflict

During the previous month, there has been a deadly battle on the Line of Actual Control, the disputed border between India and China. During the brawl between the two parties, three Indian soldiers lost their lives. The after effects of the conflict have begun to severely affect the technology, business, and commerce of both countries. Can China and India afford a trade war amid the coronavirus pandemic?

There are chances that the two most populous countries of the world might lose a lot than they think if this dispute wages on and becomes an all-out war.

Dispute between China and India

As there is growing tension between both countries, India has indicated that they are prepared to apply economic pressure on its neighboring country if the issue persists. There have been multiple reports that the Chinese shipment on large container ships are being held up at the designated Indian checkpoints. In one state, a multi-million dollar worth of Chinese shipment deals has been held up by Indian authorities. If these small but critical issues persist in the upcoming future, there is a chance that both countries might become involved in a war, but can China and India afford a trade war?

Earlier in the previous week, the Indian government has banned 59 Chinese applications that were commonly used across the country, including TikTok, ShareIT, UC Browser, and many more. These backlashes have reached a very high political level. The social media networking site Weibo have given a statement this week, which states that they have removed the account of Narendra Modi, Indian Prime Minister, after the request of the Indian government.

The response from the Chinese authorities has been very cautious until now. The country is strongly concerned regarding the recent application ban of more than 59 applications that are made in China, but no threat of retaliation has been given by the Chinese government. According to the Chinese Foreign Ministry, both countries should work alongside to resolve this issue as soon as possible. There is no evidence that supports that can China and India afford a trade war? Working together to solve the growing tension between both countries will help or else the addition of barriers by the Indian government might harm the interests of India.

Can China and India afford a trade war amid the coronavirus pandemic, but if the conflict between both parties prevails for a longer duration, no country will benefit from the situation.

China’s upper hand in the conflict

There are multiple evidences that supports that the Chinese government has an upper hand and plenty of leverage in the conflict battle between both countries. China has been a good and long tie trade partner for India, but can China and India afford a trade war while both countries are struggling with the coronavirus outbreak inside their region.

From the time period of April 2019 to March 2020, the Indian government has bought around $65 billion worth of products from China, which is 14% of the total imported goods of India. Meanwhile, the Chinese government has bought $16.6 billion worth of products from India, which is only 3% of the total imported good that arrived in China. The second-largest trading partner of India is China, due to which can China and India afford a trade war as both countries would suffer from the consequences.

Even though India does not have a major share in the import market of China, any conflict between countries, whether it is warfare, economics, or any other, would have a severe effect on China. China is also suffering a major backlash after imposing a new security law of Hong Kong as the country has lost its autonomy.

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