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Boycott The Chinese Economy Not Their Products

The Nation once again finds itself amidst a fiery debate – “To Boycott Chinese Products”. To simmer down the boiling sentiments of Indians over the loss of the Jawans as China ramps up military presence at friction points in Ladakh and other areas along LAC, the politicians loosely throw off the slogans of “Boycott”, “Ban” and “Prohibition”. The average attention span of an average Indian is being limited to the amount of prime-time given to a particular news item. Once off the channel, its off-our minds too. Whether it’s there on news channel or not, the problem continues. And this problem with China is not a new one. It’s historic! When Warren Hastings was the Governor-General of India from 1772 to 1785, he had stated that “One day China will come to Tibet, and it will become a problem for British India”. It was this prophesy which was realized in 1903, when Lord Curzon, Viceroy of India from 1899 to 1905, sent a British expedition to Tibet under Fransis Younghusband. Although it was to forestall the Russian advance but by marking Lhasa, the British ensured that no one eyed Tibet. When India’s former Defense Minister, Shri Gerorge Fernandes, called China as “Enemy Number 1”, a huge hue and cry was made then but he had made this statement on the fact that China was backing Pakistan and Mynanmar and also adopting a policy of encirclement against India and stockpiling nuclear weapons in Tibet near India’s border. 

It was 2003 and its 2020 now. A lot has changed in-between especially with respect to trading between India and China. The bilateral trade has increased from USD 38 billion in 2007-08 to USD 89.6 billion in 2017-18. Also in this same period, the imports from China have increased by USD 50 billion whereas exports from India have increased by USD 2.5 billion. And your elementary mathematics will help you understand the widened trade deficit. Some of the sectors that see a heavy reliance on Chinese imports for raw materials includes pharmaceutical where the dependency is 90%, solar industry imports almost 84% equipment, textile industry with increased synthetic fiber, firecracker industry and bicycle industry.

India’s anti-dumping duties (Dumping refers to the practice of exporting goods at a price lower than their market value in the originating country.  The importing country conducts detailed investigations and imposes anti-dumping duty for these goods) on Chinese goods are being evaded by misclassification of products, and the government is reluctant to review the effectiveness of anti-dumping measures undertaken by it. Chinese products have become inevitable in our day to day life from needle to toys, electronic gadgets, hot water bottles, cell phones, televisions, crackers, car components, textiles, garments, etc. When Indians buy cheaper Chinese products indirectly they strengthen the Chinese economy and weaken the Indian economy.

The poor quality Chinese products dominate the unorganized retail sector which is compromising with our domestic MSMEs, as they are producing more expensive but better quality products.  The problem is that the government is not supporting in a way that it should. It does not set up industries nor does it encourage private concerns or individuals to set up industries and on top of it, the government imposes a heavy tax burden on domestic industries subsequently increasing the price of furnished goods. The government should work on these problems so that India can also produce products at a cheaper rate. This will strengthen the Indian economy and solve the unemployment problem. And the slogan of “Made in India” would only then transform into our living reality.

Along with this infiltration in our domestic market, China-based companies are also stepping up their investments in Indian companies, including startups. Chinese investors have poured about USD 4 billion into Indian tech startups since 2015. Alibaba, for example, has invested in Indian e-commerce company Snapdeal, digital wallet Paytm and food delivery platform Zomato. Tencent is backing Indian messaging company Hike and ride hailing app Ola.

India has emerged as one of the biggest overseas market for Chinese mobile phones and this has been one of the most significant developments in China’s relations with India over the past five years. The Indian sales of the top Chinese smartphone brands has totaled to more than USD 16 billion. The Chinese smartphone makers, like Xiaomi, have built factories and created jobs in India. Interestingly, they have embraced Prime Minister Narendra Modi’s “Make in India” programme. Though it is globally perceived that India might be most impacted economically in case of a conflict with China, the fact is that China too will lose significantly.

“जब अपना घर अंदर से मजबूत होगा, तभी बाहरी तात्कतोह का सम्मना कर पाएंगे|” In a global economy, India cannot isolate itself. We are tied by many international forums and agencies to keep bilateral ties with our neighboring countries. Just to simmer down the sentiments and hoping that the angst of people will subside in few days and not taking concreate measurements that take us on a path of self-reliance, the country caretakers are being irresponsible, unprincipled and misleading the people of India.   

An Apprehensive Citizen : Dr Ajay Rana