Boycott China : The reality

The Chinese Game

we are very much aware about the dangerous and the dirty tactics that are adopted by the Chinese Communist Party to exert its influence over the world. And why is it important to boycott China, not only for India, but for every democratic country in the world? Come, let us see how it is possible to boycott. China realistically and practically by us and India. Some of you had asked that if China is resorting to such dirty means- dumping, theft, currency manipulation- then why are the rest of the countries not taking any action against China?

The Trade War

  Discussions are being held in Australia on how Australia, as a country, can reduce its dependency on China Due to these reasons, Donald Trump in the USA had announced a trade war against China in 2018 And not only Trump but many politicians of the opposition- the Democratic Party- also supported the trade war. So what exactly is entailed in a "trade war"? Trade war basically means that Trump said that all the Chinese goods that come into the USA, should be subjected to increased taxes and tariffs which would make these goods costlier. And if these goods become costlier, then the people in the USA would not want to buy them It is a very simple method to boycott Chinese products- straightaway increasing tariffs on the Chinese imports But doing this would obviously, cause USA to incur losses as well The US companies made products in China due to cheaper labor and now when they will import their own products into the US, then it would be costlier for them to do so Now, either these companies would have to bear losses themselves or they'd raise the cost of their products If they raise the prices of their products, then it would be a loss to the consumers. Things would become costlier for them On the other hand, China isn't going to sit quietly either. China would also hike its import taxes for all the goods that come to China from the USA So, basically, this is what is called a trade war Both the countries raise their import tariffs to make the to and fro movement of goods more difficult And this would result in economic losses for both the countries. And so it did happen As per the calculations of the Bank of Finland, until November 2019, there was a 1% difference in China's GDP growth rate due to this trade war and a difference of 0.9% on the GDP growth rate of USA In USA, the biggest losses were borne by the farmers, who exported their agricultural products like soybean to China But Donald Trump was aware that this trade war would negatively affect the economies of both the countries But this was not the purpose of the trade war The purpose was to build pressure upon China and force the latter to mend its ways and to decrease the dependency of USA upon China And both these aims were successful to some extent in some ways Under pressure from the trade war, China finally promised to stop currency manipulation in January 2020 and that it would provide stronger legal protection to intellectual property, copyrights, trademarks and patents and would help in putting an end to the ongoing IP theft China also promised that the foreign companies that come to China, who are forced to transfer their technology will no longer be forced by China to do so Only after China made these promises, a Phase 1 trade deal was signed between USA and China to mutually lower their tariffs. 

Another positive effect of this was that it forced several US companies to relocate their production facilities from China to some other countries if they wish to sell cheaper products So, a lot of US companies stopped dealing with China and shifted to other countries And overall, the US dependency on China began to shrink This can be seen in this graph In January-April 2019, as compared to January-April 2018, What were the percentage changes in the imports of US? There was a change of minus 10% in the imports coming to US from China The biggest gainers in this were- Vietnam, Taiwan, South Korea, Thailand and Netherlands The US companies that manufactured their products in China now shifted to these countries- Vietnam, Taiwan, Netherlands Another graph shows that Vietnam reaped the biggest benefit out of this trade war because a number of things that were manufactured in China are also supplied by Vietnam The aim behind the discussion on this entire trade war was to show you how easy it is to boycott Chinese products if the government imposes import taxes on the goods coming from China But doing this would result in a big blow to the Indian economy The losses would be far more than what US incurred in the US trade war In my opinion, India is not prepared to do this. 

Why Is India Not Prepared And What It Can Do To Be Prepared 

 The trade between India and China is extremely imbalanced Talking about 2018-19, then goods worth 70 billion dollars were imported in India from China and the goods exported to China from India was worth merely 16.7 billion dollars This lopsided imbalance is called a trade deficit There is a deficit of nearly 53 billion dollars And this trade deficit has been increasing over the past few years That means, this is a huge advantage for China that China has made India dependent on itself The thong which India imports the most from China and for which India is the most dependent on China is electronic stuff- for example, TVs, smartphones Speaking of smartphones, 76% of our market is replete with Chinese companies Next in line are pharmaceutical products. 65-70% of our medicines come from China These are the most important areas in my opinion which need thinking about how to replace Chinese goods When we talk of "Boycotting", this does not mean that we will completely stop using all products from China. We will have to look for another alternative We will have to look for alternatives to replace them Let us first talk about what can be done on an individual level as a consumer to replace the goods made by Chinese companies by the other companies Doing this is very easy in some fields. For example, if we talk about Chinese software.

 You can instantly delete the Chinese apps from your phones If you find an app useful, you will find a non Chinese alternative of it pretty easily There are numerous apps on the app store which are of better quality But I believe that there should be some government support to motivate the people for this It shouldn't be that we are boycotting Chinese apps on one hand, on the other hand, the Modi government is making an official Indian government account on TikTok So it is extremely essential to mount pressure on the government to at least stop doing this Leaving aside software and talking about hardware, then this too, can be achieved within one year, as Sonam Wangchuk had pointed out It is not that difficult to do.

 We are not saying that you should throw away the Chinese smartphone that you currently possess Don't buy a smartphone from a Chinese company, the next time you go to buy one For example, do not buy from Oppo, Vivo etc There are several other available options  - you can buy one from Samsung, which is a South Korean company HTC is from Taiwan, Nokia is a company from Finland, Asus is another company from Taiwan Apple is a company from the USA Micromax and LAVA are Indian companies You can buy your next smartphone from any of these companies Buy new TVs or electronics for home use from these companies Many out of you would also point out that several of these products use parts that are made in China What should be done in such a scenario? These things can be basically divided into four levels, in my opinion The first level is - Products made by Chinese companies The second level is- Made in China products that are manufactured by some other company. For example, the iPhone. It is made by Apple, which is a US company.

 But it is made in China The third level includes products that use Chinese parts And at the fourth level are companies that have a Chinese investment in them In my opinion, we need to stay alert at only the first level out of all these four levels We need to boycott products manufactured by Chinese companies Made in China products are not that big a deal, in my opinion Because, today, Apple manufactures its iPhones in China because the manufacturing costs are the lowest there But say, Trump kept the import taxes high on the iPhones that are made in China, or that Apple noticed that Chinese labor is increasingly becoming expensive, and that they would get cheaper labour in some other country, then Apple can shift its production companies with comparative ease And the iPhones that were "made in China" until yesterday will now become "made in Vietnam" or "made in India" So this isn't that big of a problem As long as the companies- be it foreign, Indian or non Chinese- manufacture products in China then I don't think that you should boycott them You can continue using such products There are so many Indian startups which have some percentage of their ownership in the hands of China Chinese companies have invested their money in them.

 

 Our popular companies- Zomato, Swiggy, Ola, Paytm, Ola, BYJU's Some percentage of all these companies are owned by Chinese companies Their case is extremely interesting On one hand, you could argue that these companies were started in India They provide both jobs and benefit to Indians and hence we should not boycott them On the other hand, you could also argue that Chinese companies own some portion of these companies So, some percentage of all the profit that these companies make would go to the Chinese companies and help them make profits And as you are aware, Chinese companies dance to the tunes of the Chinese Communist party They would give up their entire data if the latter demanded so I feel that both the arguments here hold weightage. We should evaluate what percentage of a company is owned by a Chinese Company If that figure is small- around 10-20%, then it wouldn't make that big of a difference but if that figure touches 40-60%, as in the case of Paytm, then we should not use these companies Because using them would be tantamount to transferring majority of the amount to China and Chinese companies are minting profit off of them And if the ownership is more than 50%, then the decision making also gets transferred into Chinese hands But what about made in India products manufactured by Chinese companies? I'd say that we should avoid them in this case as well because Chinese companies are our main target here And finally, there are some people that say that we should boycott Chinese food as well! And this is utter rubbish! You shouldn't do this at all. Think about it- Who is making the Chinese food? The Chinese restaurants in India, where Indian cooks are employed The restaurant has been set up by some Indian who is serving other Indians So how does it matter to the Chinese? The food is not being imported from China! In fact, you'd be surprised to know that several Chinese dishes that are served in India today in the name of "Chinese food", have actually originated in India You would not get such food if you ever go to China the food that you get in India in the name of "Chinese food" For example, a lot of people think that momos have come from China but they actually originated in North-east India So, there's no benefit in boycotting things like these By doing this, we would be going against the people of our own country and harming our own country Doing all this would only increase racism against the North eastern people And a similar malarkey is being out forward here Some BJP youth workers are rampaging shops because they sell Chinese toys Who is going to incur losses by doing this?  What can they do to boycott Chinese products? We need to understand one thing first Companies and business do what their customers demand If the customers demand the cheapest product available, then no company is that stupid that it would bear losses and sell costlier products that no one buys If they see that people buy made in China products because they are cheaper, then that is what they'll sell There's no sense in blaming the companies and businesses in this.

 This is why I am saying that it makes no sense to vandalize the shops of the shop owners We will have to motivate them in positive ways For example, these companies can use "not made in China" as a marketing tactic The shop owners can put up large signs in front of their shops declaring that they do not sell Chinese goods I feel that more people would want to come to such a shop The businesses of the shops would definitely increase if the owners use this as a marketing tactic and this is a positive way of doing this There is no force or vandalism involved But if something more has to be done, then it has to happen on the government level So let us now talk about what can be done on a government level to boycott China The first thing is - Free Trade Agreements Free Trade Agreements are signed to boost trade between two countries Both countries cut down their import taxes and remove other barriers to facilitate trade between both the countries If India wishes to reduce the imports from China, and wishes to lower its dependency on China, then it will have to ink free trade agreements with the rest of the countries India's free trade agreement with Australia has been stuck in negotiations for the past 8 years The government has been unable to negotiate with Australia to take this forward India's free trade agreement with the European Union has been stuck in negotiations for the past 10 years As long as India does not increase its trade with Australia and the European Union, the dependency on China cannot be lessened Taking advantage of India's laziness, other countries are getting ahead of India Vietnam has already inked a free trade agreement with the European Union and India will have to bear the brunt of this Export of footwear, marine products, garments, furniture that India sends to the European Union will now diminish because the European Union has  inked a free trade agreement with Vietnam so the products from Vietnam would now be cheaper for the people living in Europe India lagged behind here Furthermore, if you consider the trade war between US and China, when US companies were looking for alternatives to import from instead on China, then India should have been their next option. But most of the US companies did not choose India and opted for Vietnam, Thailand and South Korea instead This tells us that the economic conditions of India are not good today This shows the failure of the Indian government.

What India Needs To Do Ahead

 The infrastructure of India is not great, there is rampant corruption and there are several other reasons owing to which India could not compete with Vietnam Those companies made a beeline for Vietnam instead of coming to India The Indian government would have to make its industries stronger and would have to improve its economic condition and its social image in order to attract such companies to India Also, the government would have to admit what huge flops programs  like Make in India and Startup India have been Had they not been such huge flops, then the Chinese investments that you see in these startups would not have been made Indian startups would have got support as well as investment from the Indian government and they would have been able to sustain themselves In the last point, I'd like to mention that India needs to improve its foreign relations with its neighboring countries Nepal, Sri Lanka, Bangladesh, Pakistan- India would have to increase trade with all of these countries Relations need to be made friendlier so that India is able to reduce its dependency on China And doing this is no easy job Our government is failing in this front as well considering the relations we see with Nepal today So these are some ways that we can adopt on an individual level and what the government can adopt on its level in order to lower our dependency on China and to boycott it.