India studying impacts of possible war
India has already begun a study to examine the wider impact of any war over the island that also involves the US and its allies. Top government officials said the study was initiated following discreet inquiries from the US on how New Delhi could contribute in the event of a war.One option the Indian military will study involves serving as a logistics hub to provide repair and maintenance facilities for allied warships and aircraft, as well as food, fuel and medical equipment for armies resisting China, the officials said. A more extreme scenario, they added, would assess the potential for India to get directly involved along their northern border, opening a new theater of war for China.
India has strengthened defense ties with the US in recent years, joining the Quadrilateral Security Dialogue along with Japan and Australia — a band of democracies intent on countering China’s growing influence.
Invasion by China less likely: Biden
However, US President Joe Biden recently indicated that China’s wobbling economy makes the possibility of an invasion less likely.
Many experts posited that Chinese President Xi Jinping may decide to invade the self-ruled island in an attempt to regain his deteriorating authority within the CCP and distract attention from the fact that his policies have not been able to reignite the economy post-Covid.
Biden, however, had a different take.
Speaking at a press conference in Vietnam, the US President said China’s growth was slowing due to a weak global economy. He called China’s economic situation a “crisis”, citing issues in the real estate sector and high youth unemployment.
“One of the major economic tenets of Xi’s plan isn’t working at all right now … I am not happy for that, but it’s not working … He has his hands full right now … I don’t think this is going to cause China to invade Taiwan. As a matter of fact, the opposite, [China] probably doesn’t have the same capacity that it had before,” said Biden.
Biden further described the United States as a Pacific power with no intention of withdrawing from the region.
Earlier, Biden had called China a “ticking time bomb” because of its economic challenges including weak growth. “They have got some problems. That’s not good because when bad folks have problems, they do bad things,” Biden had said at a political fundraiser in Utah.
Economic bubble about to burst?
Over the years, China has experienced significant nominal economic growth, but this expansion was accompanied by a massive increase in overall debt, which expanded ninefold. To sustain this growth, China doubled down on investments in infrastructure and property, diverting resources away from household consumption.
As a direct result, consumer demand remained weaker as a portion of GDP compared to most other countries. Meanwhile, the job market became increasingly concentrated in the construction and industrial sectors, which were less attractive to young university graduates.
This policy focus also inflated China’s property sector to account for a quarter of its economic activity, leaving local governments heavily reliant on debt.
The slump in the property market further exacerbated the situation, curbing China’s demand for building materials and causing economic ripples.
Moreover, the impact of the Covid-19 pandemic worsened existing issues, hindering the economy’s ability to recover despite China’s efforts to reopen.
“We’re just beginning to be confronted with the reality. We’re in untested territory,” Max Zenglein, chief economist at MERICS, a China studies institute, told Reuters.
(With inputs from agencies)
