In today’s briefing:
- Balloons Aside, US-China Tensions Will Be Contained
- With FY24 Budget, India Shows Signs of Shift in Growth Strategy
Balloons Aside, US-China Tensions Will Be Contained
- The bizarre incident of a Chinese surveillance balloon into US airspace is a temporary setback in US-China relations, but long-run factors limit the downsides.
- Domestic politics are a moderating force against careless misjudgments by President Xi, even as US political dynamics point to more hawkish posturing from Washington.
- China will not revert to “wolf-warrior” diplomacy after the strategic setbacks it has suffered, and efforts to modulate its foreign policy approach will be largely unaffected.
With FY24 Budget, India Shows Signs of Shift in Growth Strategy
- The Modi administration’s latest budget will have a mildly contractionary stance for the economy. This is broadly appropriate to balance consolidation and growth concerns.
- The boost in public capital spending is welcome given the growing demands on India’s infrastructure, while consolidation is largely helped by a reduction in expected subsidy spending.
- The budget also shows signs of subtle shifts in the government’s economic and political strategy as it aims to boost both India’s growth and Modi’s electoral prospects.
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