Former RBI Governor Raghuram Rajan believes that there is a possibility that China may make a move on Taiwan and that it will attract a reaction from the Western world. Rajan, who is in India for promoting his latest book ‘Breaking The Mould’ was asked, during a podcast, whether he thinks there is a possibility of another world war. “I hope not,” he said in the podcast with Raj Shamani aired on Saturday. “But I do think we should be prepared for the possibility that China may act on Taiwan and the Western world will push back. That is a possibility.”
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Taiwan operates as an independent nation but Beijing considers it as part of mainland China. After Russia’s actions in Ukraine, speculations have grown that China may make a move on Taiwan as the US remains embroiled in Europe.
“When I talk to the Chinese people, they say no no…we are not going there. But who knows? The problem with more authoritarian countries is – it’s all in the mind of the leader. And you don’t know what goes on in the mind of a leader,” Rajan said in an apparent reference to Chinese President Xi Jinping, who last year changed the constitution to secure an unprecedented third term.
Raghuram Rajan, who served as RBI Governor from 2013 to 2016, also cautioned India to not follow China’s aggressive style of diplomacy. He said India has benefitted tremendously when it has opened to the world. “If we really want to sell our goods and services across the world, we have to be part of global supply chains….service or manufacturing. We need foreign companies to come and invest here in India. We need to be able to sell our goods across the world. So closing down our economy is a bad idea.”
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“We are seen as a friendly country relative to, say, China. We cannot be seen as an ugly superpower. We cannot exercise our muscles before our time has come, even when our time has come because we need to take countries with us rather than antagonise them and say – you should do this,” the former RBI governor said.
Rajan said the Chinese have a term for their ugliness, Wolf Warrior – “because you’re flexing your muscles and saying to rest of the world – be scared of us. That causes a reaction. The US imposes tariffs because they are scared of China. The countries around China have a dispute with it because they are scared of China.”
The economist said that the Indian term, which is now starting to emerge is – ‘Tiger Warrior’. “We also have a bunch of people who say – we are going to exercise our might on the rest of the world. It causes a reaction, we don’t want that reaction. It is better to be liked because they (other countries) open their trade, goods and services, and their universities to us. To be put in the same category as China would mean we don’t get the investment, trade, and people.”
China vs US over Taiwan
While Taiwan, a semiconductor powerhouse, maintains that it is an independent and sovereign country, Beijing says that it remains committed to uniting the island territory with mainland China.
In October last year, Chinese President Xi Jinping said it was up to the Chinese people to resolve the Taiwan issue and that China would never renounce the right to use force but would strive for a peaceful resolution. Taiwan, however, fired back and said it would not back down on its sovereignty or compromise on freedom.
Taiwan produces the world’s 60 per cent semiconductors, critical for auto, electronics, computing, and aerospace. China’s tough stand on Taiwan has increased tensions between Washington and Beijing.
As the tension between both countries grew, the US, in an unprecedented move last October, restricted exports of certain high-end chips used in military applications to China.
Last month, NBC News reported that Xi Jinping told US President Joe Biden at a recent summit in San Francisco that Beijing would reunify Taiwan with mainland China but that the timing had not yet been decided. However, US Commerce Secretary Gina Raimondo later said that Washington did not see any change in China’s tone on Taiwan.
In April 2011, US Secretary of State Antony Blinken said America was concerned about China’s actions against Taiwan and warned it would be a “serious mistake” for anyone to try to change the status quo by force. “What we have seen, and what is of real concern to us, is increasingly aggressive actions by the government in Beijing directed at Taiwan, raising tensions in the Straits,” Blinken said in an interview with NBC.
(With inputs from Reuters)
