Tensions between India and China rising

<p>Kia ora,</p><p>Welcome to Tuesday's Economy Watch where we follow the economic events and trends that affect New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news of rising tensions between China and India.</p><p>But first in the US, the Dallas Fed manufacturing <a href="https://www.dallasfed.org/research/surveys/tmos/2021/2106.aspx" target="_blank"><strong>survey</strong></a> expanded at a faster pace in June, driven by strong production and new order levels. Price and wage pressures accelerated further, both to new record high levels.</p><p>As part of the 100 year celebration of the founding of the Chinese Communist Party, China is <a href="http://www.ce.cn/xwzx/gnsz/gdxw/202106/28/t20210628_36676294.shtml" target="_blank"><strong>claiming</strong></a> its per capita GDP now exceeds US$10,000. It seems an odd boast given that most observers had it higher than that a few years ago.</p><p>In China, their giant <a href="https://www.channelnewsasia.com/news/asia/china-giant-baihetan-hydro-plant-begins-generating-power-15107606" target="_blank"><strong>Baihetan hydroelectric dam</strong></a>, the second largest in the country after the Three Gorges Dams, began generating electricity yesterday. It is a piece of infrastructure <a href="https://www.interest.co.nz/opinion/110926/brahma-chellaney-says-communist-party-chinas-centenary-nothing-celebrate-neighbouring" target="_blank"><strong>abhorred by India</strong></a> because of its control over water flows to the Indian subcontinent.</p><p>On the Indian-China border that has been subject to dispute for decades, both the Chinese and Indians have <a href="https://www.bloomberg.com/news/articles/2021-06-27/india-shifts-50-000-troops-to-china-border-in-historic-defense-shift" target="_blank"><strong>amassing substantially larger forces</strong></a> recently. The Chinese effort is quite secret, while there is more visibility on the Indian moves. It is not a good sign.</p><p>In Australia, their Federa