Turning India Into The Next China

turning india into the next china
Vivek Ramaswamy at the GOP debate last week. 

Submitted via Portfolio Armor

Reasonable On Russia, Questionable On Asia

In our last post (A Dangerous Escalation In The Russia-Ukraine War), I mentioned Viktor Orbán's recent interview with Tucker Carlson; in that interview, Orbán said that the way to achieve peace in Eastern Europe was to bring back Trump. Aside from Trump, the only Presidential candidate who has called for making peace with Russia is Vivek Ramaswamy. Given his rise in the polls, and de facto alliance with Trump, it's worth paying closer attention to Ramaswamy's positions. 

In an essay in The American Conservative earlier this week, Ramaswamy laid out his foreign policy views (A Viable Realism and Revival Doctrine). The part about Russia and the Ukraine was fairly reasonable, save for the part about getting Russia to exit its "military alliance with China". 

A good deal requires all parties to get something out of it. To that end, I will accept Russian control of the occupied territories and pledge to block Ukraine’s candidacy for NATO in exchange for Russia exiting its military alliance with China. I will end sanctions and bring Russia back into the world market. In this way, I will elevate Russia as a strategic check on China’s designs in East Asia.

It's unclear that Russia and China have a formal military alliance (although they have been conducting joint naval exercises together), but it also seems unlikely that Russia would change its relationship with China at the request of an American President. American Presidents come and go, but Russian and Chinese national interests persist. 

Unfortunately, Vivek's foreign policy ideas get worse as he gets further from Eastern Europe. He starts off with good models: George Washington and Richard Nixon. Washington, for his warning to avoid "entangling alliances", and Nixon for his foreign policy realism.

Rightly Faulting America's "Giveaways" To China... 

Vivek (he's the only "Vivek" in the race, so let's refer to him by that going forward) rightly faults the American establishment's policy toward China from the late 1990s to a few years ago: 

If only Nixon could have seen the giveaways future administrations would offer to China. He was wary of the Chinese and believed they would become a great power and a great threat by the 21st century, but he could not have imagined that a whole generation of American leaders would help them do it—“useful idiots,” in communist parlance.

As the Twitter account @acczibit once pithily once put it, 

Legit incredible that the western strategy re: China was to help the CCP secure a 3 decade streak of economic growth and upward mobility because "muh free market", then wait for the people to topple them because they suddenly want red/blue team voting and to post "Xi Man Bad" online

So far so good there... 

But Then Proposing New Giveaways To India

It's odd that no editor at The American Conservative pointed out to Vivek that he was proposing giveaways to India, that would effectively make it a rival military power: 

Right now, India is the world’s largest arms importer, as well as a strong center for technology and engineering. The American defense industry needs time to grow and recover from decades of post-Cold War mismanagement. India can serve as a helpful partner in the meantime. We can use trade and tech transfer [i.e., "giveaways"] to unleash India’s tech and manufacturing might to not just arm India but other regional allies – to transform them from importer to exporter. In a similar way, I will pursue an AUKUS-style deal to share nuclear submarine technology and empower the Indian Navy. 

Vivek goes on to say that this newly powerful Indian Navy would be able to assist the U.S. in a naval blockade against China in a future war over Taiwan. Setting aside the question of whether it makes sense to go to war with China over an island nearly the entire world recognizes as its legal territory, what if after we help build India up, like we helped build China up, India decides its interests are no longer aligned with ours? How is this not repeating the same mistake we made with China? 

The National Question 

Vivek has repeated tropes about how Americans are united by the ideals of the Founders (without every specifying which of those ideals Americans still agree on), but America's Founders saw themselves as bound by more than ideals. As John Jay said in Federalist No. 2 (emphasis mine):

With equal pleasure I have as often taken notice that Providence has been pleased to give this one connected country to one united people—a people descended from the same ancestors, speaking the same language, professing the same religion, attached to the same principles of government, very similar in their manners and customs, and who, by their joint counsels, arms, and efforts, fighting side by side throughout a long and bloody war, have nobly established general liberty and independence.

To current-year Americans (including Vivek Ramaswamy), that may sound like an anachronistic view of nationality, but it's not anachronistic to current-year Chinese and Indians. Chinese and Indians aren't bound by vague ideals; they are bound by ties of blood and history going back millennia, ties that have transcended different ideologies and forms of government. Just this month, two Chinese-American sailors in the U.S. Navy were arrested for spying for China. 

In America, our reigning ideology is that everyone is the same, so when someone named "Wenheng Zhao" raises his right hand and swears allegiance to a document signed by bewigged WASPs in 18th Century America, our ideology implies he's no more likely to spy for China than a descendant of John Hancock. The Chinese government, of course, sees this differently. Presumably, the Indian government will too, if we become geopolitical rivals. 

My view is that there's no reason for the U.S. to be enemies with Russia or China (or India, for that matter). We could just respect their backyards the way we expect them to respect ours (the Monroe Doctrine). Neither China nor Russia is trying to export a radical ideology, like the Soviets were during the Cold War. If anything, we're the ones pushing the radical ideology today (transgenderism). I suspect Vivek is attempting to curry favor with the national security establishment with his newfound China hawkishness, but I don't see how his colorblind nation of ideals can survive war with an ethnonationalist power. 

Let's wrap this up with a brief top names update. 

Top Names Update

Thursdays are when we typical post our top ten names on the Portfolio Armor trading Substack. Those are the stocks or exchange traded products our system estimates will have the best returns, net of hedging costs, over the next six months.

So far, our top names performance has been strong this year. For example, our top ten names from March 1st have more than doubled the performance of the SPY since then. 

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Authored by Portfolio Armor via ZeroHedge August 31st 2023