China and India Aren't Afraid to Use Money as a Weapon
India is generally believed to consider economic coercion to be a tool that does “not serve any purpose,” while China’s resistance to economic sanctions is said to be “legendary.” Incidentally, given India and China’s increasing economic might and growing external linkages, gaining their support for sanctions regimes has often become imperative for sustaining them. Like Chinese policies, India’s strategies for using economic measures for political purposes are opaque—providing them the ease of placing or axing such policies without much justification and media attention. Notwithstanding the upside of such a position, the two emerging powers will not be able to garner the deterrent effect that the great powers in the West enjoy by disclosing their option to implement such measures.
But New Delhi and Beijing must exercise caution, given that the West’s use of economic statecraft is undeniably less than ideal. Its effectiveness has been debated, has its humanitarian costs. Moreover, it cannot be overlooked that Western economic coercive measures have been imposed on both India and China in the past. As states that have dealt with economic coercive measures themselves, India and China should ensure that their use of economic diplomacy is sensible—minimizing collateral damage and civilian inconvenience.
Rishika Chauhan is a Visiting Scholar at the Centre for India Studies in China West Normal University.
Image: Chinese yuan. Wikimedia Commons/Creative Commons/@Junjiewu99