Page 12 - The Inidian EYE 073021

OPINION JULY 30, 2021 | The Indian Eye 12

“China plus One”:

supply Chain resilience Initiative

and Beijing in Indo-pacific area

Jagannath p. panDa

upply chain management
has been a subject of ex-
Stensive study over the
past decade, especially with the
rise of China as a manufactur-
ing powerhouse and the global
supply chains becoming in-
creasingly China-centric. This,
coupled with China’s increas-
ingly revisionist and authoritar-
ian behaviour in the region, has
highlighted the vulnerabilities
resulting from dependence on
a single source for manufac-
turing. COVID-19 has served
as a reveille and showed that
extensive dependency on Chi-
na vis-à-vis supply chains is not
limited to smaller nations but
also major global powers such
as the United States (US), In-
dia, Japan, Australia, South Confederation of All India Traders members protest against Chinese products and
Korea, and others. This realisa- launch the China Quit India campaign at Sadar Bazaar in New Delhi (ANI)
tion has advanced an immedi-
ate focus on the idea of “China Southeast Asian states, amidst tariffs Washington has imposed trade war.
Plus One” in the global supply the pandemic. Similarly, the on Chinese items is critical in Indian government has
chain (GSC) network, espe- Supply Chain Resilience Ini- deciding the diversion of trade. initiated a wide range of proj-
cially as complete decoupling tiative (SCRI) by the India–Ja- Moreover, US companies were ects across various sectors to
from China remains an unlike- pan–Australia trilateral, which already diversifying in the wake support manufacturing in the
ly scenario. seeks to de-risk supply chains of the US–China trade war, as country, with “Make in India”,
Simply put, the “China and create a sustainable GSC firms reduced purchases from “Digital India” and “Aatmanir-
Plus One” strategy aims at ex- network, has marked a shift in China and started buying more bhar Bharat” (self-reliant In-
panding and diversifying the policy towards collective bids from the rest of the world, no- dia) leading the way. Still, com-
GSCs by developing addition- at implementing a “China Plus tably India, Taiwan, Malaysia, petition from Southeast Asian
al manufacturing sites outside One” outlook. South Korea and Vietnam, states like Vietnam and India’s
China. The past decade has Despite challenges, con- where a production footprint rather low ease-of-doing-busi-
witnessed deliberations and sensus on the need to diver- already existed. ness rankings are challenges
gradual implementation of this sify from China has emerged Concurrently, for India, New Delhi must surf through
strategy by countries; however, strongly amongst powers like there exists an immense oppor- first. In addition, India’s some-
the COVID-19 pandemic has India, Japan, Australia, the US, tunity to emerge as a winner in what inward-focused financial
prompted greater execution the UK and some EU states. the “China Plus One” diversi- policies do not serve well in
by nations, both individually However, the degree of diver- fication trend. Though not as gaining an edge over its com-
and regionally via multilateral sification varies. For instance, much as Southeast Asia, India petitors. India’s average import
platforms. For instance, Japan for the EU and the US, the top has already witnessed modest duties have also significantly in-
is one of the first major econo- 10 goods by volume imported benefits from the trade diversi- creased over the last few years.
mies that offered subsidies to its from China are similar. In the fication in machinery and con- With China’s weakening
companies to move production case of the US, trade redirec- sumer goods (such as toys and global position, India is set to
out of China into neighbouring tion because of the additional furniture) amid the US–China Continued on next page... >>

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