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Aesop's Fable May Come True as Us and China Fight Over Covid-19 and Get Ready for Trade War, India Swoops in to Take All

Updated on May 8, 2020
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MG is an air warrior and a global traveler who loves to visit and explore new places and trends

The Fable

Aesop was a Greek Fabulist and storyteller who is credited with writing many tales all with meaning. He was born in 620 BC and died in 564 BC at the age of 56. A fable is a short story, typically with animals as characters, conveying a moral. Aesop is credited with many fables.

One of his fables is the Lion, Bear, and the Fox. It runs something like this. Once upon a time a lion and a bear seized a small goat; a kid. Both the animals desired the kid and fought fiercely for its possession. They had long combat and after some time they were fatigued and tired and lay down to rest. There was a fox nearby who was watching the goings-on with interest. He saw the kid lying alive on the ground while the big beasts rested. He quickly ran to the kid and seized it and scampered off. Both the lion and the bear saw the fox running away with the kid but could do nothing as they were fatigued and tired.

Aesop’s fables never grow old, they are timeless. This fable is a reflection of the battle between the USA and China which in effect is a fight for global supremacy and trade is a big factor in it. While this is going on the fox which represents India may get the kid like the fox in the fable, stealing a march over both the powers.

The Mechanics

Trump and the US want to pin the entire blame for the Covid-19 pandemic on China. US secretary of state Mike Pompeo has claimed that America has enough evidence to prove the coronavirus leaked from a lab in Wuhan.

The US is at a loss because almost 75,000 Americans have died and nearly 30,000,000 are jobless. This is a stinging blow to American pride. In this light, America is getting ready for a new trade war with China. Another factor that adds color to the scenario in the coming US election. Trump has been perceived to be soft to China earlier when he went about praising present Xi and China. He is now trying to set the record straight because one factor that stands out that he underestimated the gravity of the spread of coronavirus.

Political observers are of the view that the US is readying legislation to impose new trade sanctions on China. Trump is trying to cover up his earlier prolonged denial of the dangers of the "China virus " spreading.

China also is in a similar boat and many fingers can be pointed to it. The world knows that at the instigation of China the World Health Organization underplayed the gravity of the situation. The Chinese have also been secretive and not allowed any investigation by any impartial observer or scientist to come to Wuhan.

Their entire approach has been suspect as those Chinese who raised the alarm about the virus in Wuhan were arrested. China is also floating without any evidence, a theory that the virus was unleashed by the US Army when it came to the military games there. As an aside, I am unable to understand why the USA was competing in the military games at Wuhan when in any case they put in a very pathetic show coming second from the bottom.

The situation is grim and many companies are scrambling to get out of China. This was inevitable with the atmosphere in China which all said and done is a naked dictatorship. Companies and countries want to look forward to a better environment and this is where the Modi government comes in the picture.


Advantage India

The situation is bad, many US companies are reworking their supply chain and are making plans to relocate to other places. Some US companies are planning not to outsource from China. Japan has already set the ball rolling and as per the reports coming from the island nation, the Japanese government has given a stimulus of $2.2 billion to Japanese companies to move production out of China.

In such a scenario India stands to gain immensely particularly in the field of pharmaceuticals, chemicals, engineering, and electronics. Even the Chinese are entering India in a big way and already their flagship Xiaomi is investing billions in electronics including mobiles, TV, washing machines, and other items.

The Modi government has seized the opportunity and had already announced incentives for manufacturing goods in India. A sum of $6.6 billion has been earmarked for this purpose.

There is no doubt that there will be a surge in investment in India and the GDP could grow by 25% by 2022.

India's biggest state Utter Pradesh with a population of 225 million, headed by Chief Minister Yogi Adityanath has set the ball rolling to attract investment to the state. Yogi Adityanath has asked officials to change dated labor laws. The state is also going high tech to help industries to relocate to UP by just applying online.

Other Indian states are also rolling out the red carpet to companies from western Europe, the USA, and Japan.

The Modi government has moved in a big way in the acquisition of land for foreign companies to set up manufacturing in India. Bloomberg has reported that 461,589 hectares – an area equaling two Luxembourgs – has been earmarked by the Modi government for those factories which are going to leave China. There is no doubt that after the spread of the coronavirus which has now been traced by many countries either by default, wilful, or otherwise to China, the industrialized nations are looking for better options.

India is a big country almost as big as the EU which has about 40 nations but Modi will have to show more urgency to implement reforms both for labour and tax.

Last Word-Miles to go but Almost There

The one thing that was detrimental to foreign investment in India was the ease of doing business on the ground. There has been some change there but still, a lot has to be done. As per the World Banks' ease of doing business rankings, are concerned at the moment India has jumped from 142 in 2014 to 63 in 2019.

A lot has still to be done and there are serious challenges in India because of the outdated labor laws, red tape, corruption, and an unstable tax regime. These cannot be wished away but one can see the Modi government trying to iron out these problems.

The big advantage is that India has a vast English speaking population and under Modi, India has a stable government and above all is a democracy. It is not a totalitarian state like China. India may just be Aesop’s proverbial fox. One plus side in this is the growing strategic cooperation between India and America and in the long run, America would definitely prefer India to China.


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