Chanakya IAS Academy Blog

Relevance and use of the article in UPSC prelims and mains examination: Dear aspirants, china's trade is always a concern for india because it imbalances the trade as well as stimulate cultural and social change. Now anger against China has engulfed India in recent days consequent to their tense and deteriorating bilateral relations. This encompasses the ”technical hold” that China continues to impose on designating Maulana Masood Azhar as a terrorist by the United Nations and its opposition to India’s membership of the Nuclear Suppliers Group. The last straw on the camel’s back was the continued protection by China to its ‘’all-weather ally’’ Pakistan even after the gruesome Uri terrorist attack. Please read it carefully.

Boycott of Chinese goods:

  • Calls for boycott of Chinese goods have been made sporadically in the past. These have become more concerted and louder over the past few weeks.
  • Some Chinese think tanks said that this is bound to fail as Indian workers are lazy and inefficient and Indian goods cannot compete with high-quality, competitively-priced Chinese goods.
  • Moreover most Chinese goods being exported to India are technologically advanced, sophisticated and of high quality. It will not be possible for India to make a dent in China’s exports by such misguided actions.

Political and economic implications:

  • It will be useful to analyse whether in political and economic terms, India can materially influence China’s expanding exports to the Indian market. India-China trade has developed rapidly over recent years.
  • India’s trade deficit with China increased to US$ 53 billion in 2015 from US $ 48 billion in 2014 and US$ 36 billion in 2013. India’s trade deficit with China accounts for about 40% of its global trade deficit.
  • An important reason for the huge trade deficit is the web of non-tariff barriers imposed by China that do not allow access to the Chinese market.
  • Several Indian products are high quality and competitively priced eg pharmaceuticals, IT services, dairy and agricultural goods etc.
  • It is inaccurate to state that Indian exports to China are low because they are overpriced or are not of acceptable quality.
  • On account of its obligations under the WTO, India can neither ban nor officially boycott Chinese goods.

Reason why chinese goods are cheaper?

  • China is able to manufacture and export its goods at such low prices because its companies receive huge undisclosed and covert State subsidies and support from the government.
  • Although China became a member of WTO in 2001, it has still not embraced all features of a market economy.
  • China has been arguing that its Market Economy Status (MES) be recognized as of Dec, 2016 as stipulated in its Accession Protocol.

India's approach:

  • India also needs to consult its own companies, corporate houses and other stakeholders and finalise a well-considered and thought through position on the subject.
  • If China gets MES it will severely limit India’s capacity to launch anti-dumping action against its unfairly traded, low-priced goods into the country.
  • India did not use the leverage during China’s accession negotiations to WTO from 1986 to 2001 and allowed it a free ride into the Organisation. India should not repeat the same mistake and negotiate hard to drive a positive bargain for itself.
  • The campaign for boycotting Chinese goods can be undertaken and promoted at non-official and civil society level.

China's worry and positivities for india:

  • India is a large market for China. When all other markets are drying up, China sorely needs big, stable and growing markets.
  • India being the third largest economy in the world in PPP terms and the fastest growing economy is particularly attractive for China.
  • India needs to significantly and quickly enhance its manufacturing prowess and capabilities, both in quality as well as competitiveness.
  • The slew of national economic initiatives launched by the government like GST, Make in India, Skill India, Digital India, Smart Cities, Swachh Bharat and efforts to improve ‘’Ease of Doing Business’’ are steps in the right direction. They however need to be pursued and implemented with single-minded determination.

Social movement needed:

  • China takes money from India through its cheap exports and gives it to Pakistan. Such an approach at the level of common people can unite the people to create a movement against use of Chinese goods.
  • What is important is to launch the movement in a concerted and coordinated manner and to keep on expanding the coverage in terms of participating institutions, products, geographical area etc. The movement once launched should be persisted with and not allowed to fizzle out.
  • Festival season is the optimal time to start because purchases by common people see a significant rise during this period. China through its cheap and low quality products like crackers, fairy lights, electric goods etc has created a monopoly. Introduction of good quality, competitive Indian products in the market will go a long way in lessening China’s domination and send a strong and clear message to it that business as usual cannot continue.
  • China will be forced to moderate its position on issues that are of interest to India and be more mindful of India’s strategic concerns.

Other suggestions:

  • A significant decline in Chinese exports to India will put pressure on China to open up its market to Indian goods. This will help to increase Indian exports, production and productivity.
  • It is likely that in the short term consumers, businessmen and dealers might experience some temporary hardships. This would in all probability be short-lived as alternative products of better quality and at similar prices will become available to substitute them. Chinese goods might be cheap but their quality and longevity leaves a great deal to be desired.

Conclusion:

  • This will be done until china modify its position on India’s membership of NSG or UN Security Council. This will take some time but it will definitely force China to treat India with greater respect and take it more seriously.
  • The call to boycott Chinese goods is commendable but it can be successful only if it is pursued in a united and coordinated manner by civil society and leaders of business, trade and industry community.

Question:

“India’s arguments and reasoning with China on these issues in bilateral, regional and international fora have fallen on deaf ears. India always asserted that a climate of mutual trust and confidence; respect for each other’s sensitivities and concerns; and, peace and stability in our relations and along our borders are essential for us to realise the enormous potential in our relations.” dou you agree with this statement give your views? And do you think that curving chinese imports will solve the problem?

Suggested pints:

  • Place yor arguement that what china is doing to india at world arena.
  • Discuss about chinas allays, which is disastrous for india.
  • India and china trade, and indias situation.
  • A situation where india can curve chinese goods
  • Write down its economic implications.
  • Is india able to fill the vaccume in market created in the situation of bnanning chinese product.
  • People movement to ban the use of chinese imports.
  • Suggetions.
  • conclusion.

Link:http://www.firstpost.com/india/let-china-change-approach-to-india-if-it-wants-us-to-accept-chinese-products-3063984.html

Link:http://indianexpress.com/article/opinion/web-edits/why-boycott-of-chinese-made-products-is-not-a-feasible-idea-3087875/

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Read 754 times Last modified on Wednesday, 26 October 2016 10:57
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