China, India and the West: A case of East meets West?

Important statements were made during the last meeting of the Communist Party of China. China, the world's largest productive power in real terms, has announced that it will implement deflationary measures.

This downturn should not be evaluated as an absolute contraction. Chinese investment in Asia, Africa, and Latin America has not stopped completely. But it is clearly limited. From now on, China's official policies will be internally shaped to solve the problems of instability affected by the development processes of Chinese society.

The turmoil, conflicts, and wars, which emerged in the main points of the "Belt and Road Initiative", lead to economic destabilization as well.

Then came the crisis of 2019, the crisis of the Corona pandemic, the decline in global GDP, contractions in energy markets, and problems in supply chains.

China is not fighting all this, but rather accepts the situation and implements the deflationary measures on itself.

There are three main consequences of this downturn. First, China will prioritize its domestic consumption with the goal of eliminating class inequality in society. China also says it will take steps to strengthen its military, while at the same time stepping up its investments in technology.

In fact, we can claim that this landscape is fundamentally different from the one that emerged after the 2007-2008 global financial crisis.

After the global financial crisis in 2008, economies were in decline, and many companies were on the verge of bankruptcy. The financial circles have implemented an unconventional monetary policy (quantitative easing) to remain as resilient as possible.

For the West, this decision had no hopes of reviving production. It was more like a temporary solution. It was like giving desperate patients in the intensive care unit some care to keep them alive as much as possible.

At this point, China, which also implemented a policy of quantitative easing, intervened, forcing banks to simultaneously shift their resources to both producers and consumers. In other words, it has made steps that will stimulate supply and demand.

The Chinese economy required very large amounts of energy and raw materials from the world. For example, the shrinking Australian economy began exporting a large number of raw materials to China, mainly mineral fuels.

Likewise, China has closed its famous copper mines in Chile.

Meanwhile, the great demand for Russian energy resources, especially by Germany and China, was one of the most important reasons that led to Putin's success in Russia.

What China did was sort of revitalize the global economy.

The shrinking economy is beginning to breathe a sigh of relief globally. The policy of quantitative easing did not bring any benefit or return to the West, and that policy did not turn into production or increase in employment.

But in China, the opposite happened, QE was backing up in one way or another, but it also had a problem.

After a while, its production shifted to various infrastructure sectors, especially in the real estate field. Resources have been transformed into contract-based sectors, and this is what we call the urban economy.

Türkiye has also had its share of the leap. We were saying at the time that the crisis passed accidentally on Türkiye and that we have the second largest contracting economy in the world after China.

On the other hand, China considered that these activities led to inefficiencies in the medium term.

(Remember the many apartment blocks in China that cannot be sold, and the empty cities where tens of thousands of homes have been built, but left unsold.)

Accordingly, China quickly launched a lot of capital and technology investments. The gift of this work was the fifth generation technology (and this is what Türkiye delayed and could not do).

Subsequently, China's competitors, such as Taiwan and India, directly entered this market and gained significant advantages.

At that point, it was reported that "Silicon Valley" in the United States was rapidly emptying.

The West, especially the United States, was losing its only advantage (in the field of technology), which pushed the trigger and began attempts to demonize China and Russia.

What the West could not achieve through the "aesthetic" of economic competition, it chose to achieve by imposing ideological and military power.

(The Ukraine war is a direct consequence of that.)

It is clear that this will not benefit the West, and will lose, according to the theory of "everything that is solid evaporates into the air."

But I feel Westerners are looking for another investment right now.

Despite all the strides China has made in the sectors that focus on capital and technology, a large group of sectors that require great labor and effort, are still burdened.

(Even Vietnam does not accept them).

In order to maintain this heterogeneous economy, it turns to following the system of "mercantilism" (modern mercantilism).

This, in turn, creates uncertainty about China's future. On the other hand, India is not. It has many stories that can be solved easily and it fits the different interpretations that can be answered on a global level, which has become very popular.

India, as a country with a democratic society, unlike China, stands by Russia. I think the West's concern now is to win over India, quietly and deeply.

The eradication of a shrinking China (if India falls, Russia and China are destined to fall), depends to a large extent on cooperation between India and the West.

West meets East through talented American violinist Yehudi Menuhin and talented Indian musician Ravi Shankar, and this is the only distinguishing feature of this encounter.

Is it a coincidence that Indian-born Rishi Sunak has become Britain's prime minister, and Indian-born Kamala Harris, who was born in India, is about to become US president in late November?