Then, why is India lately feeding China with billions of dollars worth fodders in the guise of foreign trade to bolster the latter's economic health and help it build and flex its diplomatic and military muscle along the geographical borders between the two countries? The framework of the current Chinese economy is built on cheap exports and deliberately undervalued Yuan. Its strength is its dollar hoards, the largest by any country outside the USA. Things have changed after the collapse of some top US investment banks about 15 months ago bringing down the global economy on its knees. The Chinese economic powerhouse is suddenly under severe stress as its giant export industry is struggling for want of orders.

Now, here comes India, the economy of which has been thriving on increasingly insatiable domestic demands and growing foreign trade deficits, to the rescue of China importing goods like mad, from toothbrush to power plants, to protect millions of jobs in China. The latter is being decorated as India's biggest trading partner. And, it is to the full advantage of the People's Republic of China. India is desperately helping China in preventing its economic journey in the reverse gear. China's internal borrowing had shot up by 43 per cent on a y-o-y basis at the end of August 31, last, to pep up its internal demands and stop shutting down of enterprises.

Why is India doing this? Why it is feeding its more powerful enemy next door? The standard response is imports from China are cheap. But, can this factor alone allow China the most favored nation status in trade and economic cooperation? Economic relations between countries are not independent of political and diplomatic relations. Pakistan would rather import wire rods from, say, Trinidad and Tobago than India. How is China reacting to India's soft trade and economic policy towards the People's Republic? China is constantly spitting fire at India with frequent military incursions across the borders, from Arunachal Pradesh to Ladakh in Jammu & Kashmir, showing absolutely no respect for even bilateral agreements.

The Chinese policy of encirclement of India through economic and military aid to India's other border states such as Nepal, Pakistan, Bangladesh, Myanmar, Sri Lanka and the Maldives is rather scary. The interference into India's internal matters, raising the bogey of the so-called border disputes, is another despicable act of the latest Chinese diplomacy. And, yet, India's United Progressive Alliance (UPA) government and the country's self-serving business community are constantly pampering China with business lollypops ignoring even the obvious risk factors.

At present, the Chinese capital goods manufacturing industry and its core sector are busy manufacturing steel, cement, power equipment, boilers, turbines, heavy and light machinery and equipment, white and brown goods, home decorative etc. worth at least US$ 35-40 billion, all for Indian buyers. Tens of thousands of Chinese workers are engaged to manufacture and ship these India-bound products. China's huge idle shipping tonnage in the wake of recession in the US, its biggest trading partner, has again roared back to life, all ready to sail to Indian ports. Hordes of laid-off Chinese sailors are being asked to sign on for Indian sojourn. Indian businessmen are rushing to China with orders as if it has nowhere else to go.

After 22 Indian private sector thermal power plants placed orders for boilers and turbines with Chinese suppliers, even strategically located hydro electric power project promoters are now said to be opting for Chinese turbines. Chinese heavy equipment, the reliability of which have never been tested in India or under Indian conditions, are a big draw in India just because they are cheaper than those traditional supplies from countries such as Germany, the UK, the US, France, Sweden, Switzerland and Japan. The undervalued Yuan, the deliberate trade dumping policy, ruthless exploitation of domestic labour and subsidised shipping costs make Chinese goods cheaper and attractive to importers. But, taking chances with cheap capital goods could be risky both in the short and long run. The recent collapse of a large chimney at the under-construction Balco power plant using Chinese equipment, killing a few dozen Indian workers, should have served as a warning to other power plants going in for heavy Chinese capital goods. But, it has not. Even the government is not showing any concern.

If India had sought to import $30-billion worth capital goods from traditional suppliers and distributed the orders among firms such as Northern Engineering of the UK, GE and Westinghouse of the USA, Siemens of Germany, Asea AB of Sweden and Mitshubishi of Japan, the prime ministers or heads of governments of those countries would have landed in Delhi to shake hands with Dr. Manmohan Singh for extending such economic cooperation in these hard times. India is more familiar with these highly-reliable and universally-tested capital goods and technologies than those being imported from the Chinese industrial upstarts. Moreover, it would be foolish to ignore the typical trade tactics followed by many suppliers of cheap capital goods, who make up the price difference by hiking critical spare parts and attachments later forcing the importers carry increasing maintenance cost over the years. In the past, several Indian public sector undertakings had had such experience.

Equally, it would be unwise to discount the security aspect and future exigencies arising out of the performance of Chinese capital goods in critical sectors such as power, shipping and telecommunications. China is aggressively pursuing its telecom interests in India, especially in the areas of broadband and data-cards. China might have been denied to build a port in Kerala, but that may not prevent Chinese participation in constructing hydro-electric projects in the Himalayas. Why is the China-India business co-operation suddenly so important now, when it had almost nothing to do with Indian economy's phenomenal growth in the last 10 years? There is no need to feed Chinese industry and its work force in India's good times in preference to the country's traditional trade, technology and financial partners. It would be extremely unwise to divert chunks of the foreign funds (FDI) flowing into India from its traditional sources to China for the latter's economic and military expansion.

It is certainly not too late to suspend, if not wholly discard, cheap, unreliable and possibly security-jeopardising Chinese imports until China shows respect to India's democratic system, its government and geographic boundaries and stops anti-India postures. The least the government can do under the circumstances is to ask the promoters of power and other core and infrastructure sector projects to immediately suspend imports from China and explore alternative procurement sources. Cut the massive imports and hurt the Chinese economic lifeline, China will learn to respect India. (IPA Service)