Indian Election And Chinese Agression Continue To Shake Up Asia

Forbes Magazine columnist Gordon Ghang makes the case that the landslide victory of India’s Bharatiya Janata Party will result in a redirection of direct foreign investment to India and away from China. The losing Indian National Party represented the entrenched power, so voters rejection was a vote against subsidies and giveaways and “signals a change in the mentality of a country, a clear rejection of the socialism of its founders.”

With a slowdown in its manufacturing growth, that is particularly bad news for China, he contends.

“At the moment, the environment for foreign companies in China is still way better than that in the subcontinent.  Yet it is trend lines that are important for investment flows.  In China, things are getting worse for foreigners, and in India they are going to get a whole lot better.  A central tenet of Modinomics, as it is now called, is that large businesses create jobs, prosperity, and a better society,” Chang argues.

On Monday, the Brookings Institution held an in-depth discussion of the Indian election and its impact, which can be viewed on their website.

Panelists included Sadanand Dhume, resident fellow at American Enterprise Institute; Dhruva Jaishankar, Transatlantic Fellow for Asia Studies at the German Marshall Fund of the United States; Richard Rossow, the Wadhwani Chair in U.S.-India Policy Studies at the Center for Strategic and International Studies; and Milan Vaishnav, an associate in the South Asia program at the Carnegie Endowment for International Peace.

Rather than issuing a stern and united statement against China’s decision to begin drilling in a disputed area of the South China Sea, the 10-nation Association of Southeast Asian Nations, they simply and meekly issued a statement expressing “serious concerns.” The statement, writes Murray Hiebert of the Center for Strategic and International Studies, reflects ASEAN’s lack of agreement on how to respond to Chinese aggression.

Meanwhile, Dingding Chen says China’s deployment of an oil rig in disputed waters was anything but a strategic mistake.

In contrast to some analysis, Vietnam’s anti-China riots scare the Vietnamese government more than the Chinese with Exhibit One being the arrest of thousands of protestors in recent days.

“In short, China might not have gained a lot from the deployment of an oil rig in disputed waters, but it is certainly not a strategic mistake. Currently Vietnam does not have too many cards to play against China’s move. But China should make efforts to stabilize Sino-Vietnamese relations as it will not be good for China to force Vietnam into a corner,” Chen writes.

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