The Dossier
Boycott China

#BoycottChina: Is Trade Ban On China The Right Move?

Boycott China
(Photo credit: The Print)

Anti-China sentiments have been on the rise in India since last month’s fatal border clash between India and China. The outrage over the killing of 20 Indian soldiers led to calls for banning trade with China. The Indian government, though indirectly, is trying to raise guns to the border dispute with China via trade.

De-escalating the border crisis between India and China isn’t going to be easy. After the border clash between the two nuclear-armed neighbours on June 15, in which 20 Indian personnel, including a Colonel, were martyred in violent clashes with Chinese troops. The idea resonating in Indians is that they should boycott Chinese goods and thus ‘teach China a lesson’.

The given anti-China sentiment that has been brewing in the country, people have now taken up serious stances on boycotting Chinese products more than ever. The recent ban of 59 Chinese apps by the Indian government speeds up the #BoycottChina campaign, that the government describes necessary to protect the security and privacy interests of millions of Indian Internet users.

The visuals of the people breaking and burning their fully functional Chinese appliances such as Television sets and mobile phones have been doing the rounds in social media. Union minister Ramdas Athawale has even demanded a ban on restaurants serving Chinese foods even though these would be Indian restaurants, employing Indian chefs and using largely Indian agricultural produce to serve such Chinese dishes.

However, India would stand to lose more than China if trade were to be banned. The clamour for boycotting Chinese products is unrealistic for now. The anti-Chinese sentiments are not in the economic interest of the country. It is believed that banning Chinese products will help local and domestic traders, and will help India to achieve its goal of AtmaNirbhar Bharat.

The Indian government hasn’t explicitly announced a boycott, but states and public sector companies have been reportedly asked to desist from issuing new contracts to Chinese companies. And, according to reports, the government has also asked e-commerce companies to display the country of origin for the products they sell.

Also Read: Chinese App Ban: Government Invites TikTok To Submit Clarification

In 2018, the bilateral ties between the two countries got disrupted when India mulled extra tariffs and anti-dumping duties on Chinese imports. But still, China is India’s second-largest trading partner after the US. India’s trade deficit with China was roughly $57 billion last year, a giant figure when bilateral trade totals just $92.5 billion. About half of India’s electronics imports come from China, as do two-thirds of the materials it needs to make drugs for its lucrative generic pharmaceuticals sector.

One of the main reasons why banning trade has been the first reaction is the notion that having a trade deficit is somehow a bad thing. The fact is altogether different. Trade deficits or surpluses are just accounting exercises and having a trade deficit against a country doesn’t make the domestic economy weaker or worse off.

If deeper looked into the fact, at one level, no country is self-sufficient and that is why trade is such an important thing for every country. It allows countries to specialise in what they can do most efficiently and export that good while importing whatever some other country does more efficiently.

More to this, the poorest consumers in India will be the most affected because of their price sensitivity. It is believed that not only Indian consumers will be the affected ones, but small-scale producers are most likely to get affected by this trade ban. The important reason behind the problem is that many products that are manufactured in India have components that are of Chinese manufacturers.

A blanket ban on Chinese imports will hurt all these businesses at a time when they are already struggling to survive, apart from hitting India’s ability to produce finished goods.

India and China have also become increasingly integrated in recent years. Chinese money, for instance, has penetrated India’s technology sector, with companies like Alibaba and Tencent strategically pumping in billions of dollars into Indian start-ups such as Zomato, Paytm, Big Basket and Ola. This has led the Chinese giants to deeply embed themselves in India’s socio-economic and technological ecosystem.

Is self-reliance the answer?

If India manages to set up strong manufacturing capacities and reduces trade with China, the Chinese economy will certainly feel a pinch.

If India plans to do so in long run, then India should plan to become self-sufficient in manufacturing by not just focussing on the finished goods, but also on the products that are required for the manufacturing of goods. This will not happen overnight and therefore we need to be patient. However, our resolve too should be firm so that sooner or later we achieve our goal.

Even Chinese investments in Indian start-ups and companies should be monitored carefully and domestic investments should be enhanced. The need of the hour is to ramp up our manufacturing ability, increase domestic production, and then look at banning products from hostile nations.

Simultaneously, India needs to have an awareness drive on this so that it sparks off a citizen’s movement which can finally lead to Indian manufacturing capacity increasing manifold. Some experts have been saying that boycotting Chinese products will hurt the Indian economy more. Yes, it might be true, but over time as we speed towards self-reliance, our dependence on Chinese goods will reduce, without making much of a difference to India. конвертируемый займчастный займ без предоплат и комиссийзайм без проверки кредитной истории быстрый займ в домодедовозайм онлайн на карту безработнымзайм чебоксары

Mahima Joshi

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