The Impact of Manufacturing Transfer from China to India on China’s GDP and Employment

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1. SS: Economists at Renmin University and the Chinese Academy of Sciences estimate that long term China-to-India “industrial transfer could lead to a 15.6% reduction in China’s GDP, a 16.8% decrease in the overall income of the workforce, and a reduction in the number of employed people by 110 million”.

   The authors recommended that to alleviate this, Chinese leadership should invest further in domestic laggards as well as coordinate technology transfers to reduce the risks of manufacturing outflow. Much of the recent export controls the Chinese government has been leveraging along with the attempts at internal industrial stimulus align with the strategies proposed in the paper.

   It is with this context that India-China relations should be viewed. The same way that the US and China are on track for a Thucydides Trap, China and India are as well in spite of recent diplomatic developments. Recent Indian naval engagement in the [East Vietnam Sea](https://rsis.edu.sg/rsis-publication/idss/ip25013-indias-expanding-naval-presence-in-the-indo-pacific/) and [West Philippines Sea](https://apnews.com/article/india-philippines-south-china-sea-joint-sail-eecfaa6056d71937716fb4dc22f52b8a), and investments in [dual use ports](https://vir.com.vn/indias-adani-group-gets-nod-to-develop-a-port-in-danang-112652.html&link=autochanger) within striking distance of Yulin Naval Base, along with China’s continued [commitment to CPEC and Pakistan](https://www.reuters.com/markets/emerging/china-eyes-agricultural-mining-cooperation-with-pakistan-foreign-minister-says-2025-08-21/) highlight the continued distrust.

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