Greetings, friends! The border tensions between India and China are the worst they have been in several decades. More than 20 Indian soldiers have lost their lives because of this. The sentiment of “boycott China” has started trending again in India to express this emotion, some people are even throwing their Chinese TVs out of their homes While some are breaking Chinese toys. “This is a Chinese product.” Here we will talk about how the Chinese Communist party is disturbing and taking all over the world and should India do to stop China.
I think if we want to make this Boycott china movement successful then it is not going to happen by breaking TVs and toys. We need to understand the root causes first of how the Chinese Communist Party wants to dominate the world and what dirty tactics they resort to for achieving this- Economically, Politically, and Geographically. Don’t harbor the misconception that only India is facing such a problem the borders intrusions that China is doing in India, China is doing a similar thing with Taiwan simultaneously. And what are the several tactics that China resorts to with other countries economically?
We will talk about all of this in today’s blog so that we can come up with strategies against China along with other countries because today, China is not just a threat for India but poses a danger to all the democratic countries across the world. When I say” China” here, I am only referring to the Communist Party of China, a party that has established its complete dictatorship over the people. The Chinese people are not at fault here.
Come, let us see First, we will talk about economic tactics. But I would like to begin with the basics of the trade. Why would any country trade with other countries? There could be three main reasons
1. The non-availability of a certain product in your country while it is available in another country. For example, bananas were not available in Britain, in the UK, prior to 1633, because their climate was not suitable for growing bananas. So, they would want to trade to import bananas.
2. The second reason could be the availability of a product or service in another country, at a cheaper prices as compared to your own country. A good example of this would be the call centers in India. US companies have set up their call centers In India because it’s cheaper for them to do so here as compared to the US.
3. The third reason could be the availability of a product or service of better quality in another country. That is why you would want to trade with them. So the advantages of trading are very clear. Consumers will have more choices and have access to cheaper goods Every country will be able to specialize in its own indigenous areas and be able to build better products and this could benefit all the countries internationally. So economically it is good for every country. In fact, trading is so beneficial. Research indicated that for every 1% increase in the trade to GDP ratio, there is a 0.47% increase in the GDP to per capita ratio of that country.
So, there is a clear cut relation here trading increases the GDP of a country. But this is a very simplistic explanation and there are many other complexities in the real world. For instance, what about developing and underdeveloped countries that cannot develop a specialization in any sector on their own?
If a country neither has a great natural resource, nor a specialization in anything so they would not be able to export any product or service to other countries. They would only have to import under these circumstances, the trade will only result in losses for that country. What can a country do in such a situation?
In such a situation several developed and developing countries levy import taxes that are called tariffs Taxes would have to be paid to import a product from a country abroad. This would make that product more expensive for consumers. Imposing such taxes ensures benefit to the local industries of the country. There could be several other reasons for imposing tariffs. For instance, if a country wants to pressurize another country regarding a geopolitical decision, or if a country disapproves of an economic decision of another country. So tariffs are also imposed for mounting pressure.
China is doing trade and business by copycat ideas…
Let us now see how the Chinese Communist Party misuses trade and tariffs against the other countries. China joined the World Trade Organization (WTO) in 2001. Certain conditions were imposed upon China while joining the WTO. China promised to liberalize and open up its economy further so that trade could be easily conducted between China and the other countries. But today, 20 years later, China has opened up its economy to some extent. But speaking broadly, China has aggressively misused the WTO for its own benefit. So, what is the situation today?
You can find made in China products in almost every country across the world. This is the extent to which China exports its products abroad. As far as imports go, the largest social media networks in the world- YouTube, Facebook, Google, Amazon are nowhere to be found within China. China has not allowed them to enter its realm. This is a one-sided trade, in a way China allows the export of made in China products very easily but restricts the entry of other countries within their own realm. Instead, China copied these companies and pilfered their technology and created copycat clones of these companies within their country. Today, in China, Youtube is replaced by Youku, Amazon by Alibaba, Google by Baidu, and Facebook by Weibo. These are all copy cat companies that stole the entire concept and ideas and have created their clones to prevent the other companies from reaping benefits and to prevent the other countries from benefiting from trade.
China has indulged in IP theft (Intellectual property theft) in almost every sector. No matter which country a new technology is introduced in, clones will be developed in China. Normally it would not have been possible in a democratic country. For instance, if a company of the UK wishes to clone the product of a US company. Then the US company can file a case in the courts in the UK. But there’s no question of court cases in China.
The Chinese dictator government there promotes these cloning companies and keeps them protected from these things. In fact, the rules have been twisted in China to ensure benefits to these companies. For example, according to one such rule, if any foreign company wants to set up a business in China, then they will first have to transfer their intellectual property to their Chinese partners. The European Union Commission had filed a complaint regarding this in the World Trade Organization in 2018 to highlight how China misuses these things. China forces foreign companies to forfeit their technology to China. They would have to forfeit it for free if they wish to do business in China. It has been estimated that USA incurs a loss between 300-600 billion dollars annually due to this pilferage by China.
The second weapon of China is called “dumping“. In economics, Dumping refers to the export of a locally made product at such ridiculously low prices so that it would drive the local industries of that country out of business. Your market share would increase and you would gain monopoly in that industry and you would then take control of that particular industry in that country. For instance, take the example of the toy manufacturers of India who manufacture toys at a certain cost, but Chinese companies come in and sell these toys at much lower prices. So the consumers would prefer to buy the less expensive Chinese alternatives, And if this continued for a couple of years. If nobody wishes to buy the Indian toys, the Indian toy makers would be driven out of business and the Chinese would gain a monopoly over the Indian toy industry.
You might wonder how China is able to manufacture goods at such low prices. That enables it to indulge in dumping. There is a simple answer to this- The Chinese government supports dumping. The Chinese government provides export subsidies to companies. They are provided with money and subsidies to export and dump in other countries USB sticks, calculators, Vitamin C and E capsules, nylon cords, measuring tapes, CFL lamps caustic soda, kitchenware, tableware, solar cells. This is a list of items that China is believed to be dumping in India.
Is China dumping only in India??
The Indian government has begun a review of them. A news report stated that China has begun dumping of a very important medicine in India and the Indian government is considering a tax hike on it to stop the dumping. And India is not the sole country (that is facing this problem). Investigations are currently ongoing in Australia, over how China is dumping steel and alumenium in Australia. In fact, the European Union has already increased the import tax on the steel that is coming in from China. Their investigation revealed how China was dumping steel in Europe and the USA.
So, due to the fore mentioned reason and the dumping tactic, China is able to export so much more than what it imports today. Its trade remains in surplus when compared to most other countries The local industries of the rest of the countries are destroyed by being driven out of business and makes the other countries dependent on itself. These are the methods used by it so the lesson is that the Indian government should keep its eyes open and remain alert and keep a tab of all the things that China is currently dumping in India to raise taxes on them accordingly and stay vigilant regarding these things.
A third tactic is currency manipulation China is accused of deliberating undervaluing its currency in comparison to the US dollar in order to maintain its cost advantage. So that the cost-benefit of 30-40% is maintained whenever someone wishes to buy a made in China product. The low value of the currency that it maintains would not remain so if viewed in the free market. So this is another accusation that is leveled against China.
As a result of these reasons, the unfair trade practices, dumping, pilferage, and currency manipulation done by China. These are the reasons due to which Donald Trump had declared a trade war against China. Donald Trump had hiked the import tariffs to prevent China from harvesting these benefits and the trade war would have caused both the countries to incur losses. I will talk about the effects of the trade war in future blogs because these effects will tell us- if we boycott China through reduced trade and increased tariffs then what would the consequences be?
How China is affecting other country’s internal affairs
Politically, the Chinese Communist Party is trying to exert its influence in the internal affairs of the other countries through nefarious. Means, A great example of this is Australia & China is trying to manipulate the people in the internal politics of Australia. It has been alleged that China made several thousand Wechat accounts to defame and poke fun at the Australian Prime Minister. And not only this, China is accused of building their spy networks in the Australian universities to spy on the Chinese students. According to a news report of last year, a Chinese student was studying at the University of Queensland, Australia. He participated in a protest against the Chinese government that was being held in Australia and the Chinese government reached his family home in China and pressurized the family to keep their son under control and threatened them with dire consequences. This is how the Communist Party of China is threatening the parents of the students studying in Australia.
Debt trap policy of China over African Countries
Australian Strategic Policy Institute released a report last week which revealed how China is employing covert and deceptive methods to infiltrate the foreign political parties and the multinational companies to topple the democratic systems all across the world. I have only spoken about the Western countries and India until now but even the Africans have not been spared by China. Taking advantage of the poverty of the African countries, China constructs highways, dams and large infrastructure projects at the expense of crores that is loaned out to them, and China is well aware that these African countries would not be able to repay it back, and when these countries are unable to repay their loans, China buys strategic locations in these countries. It assimilates them by physically occupying them.
If there is an important port, China takes over it by sending its military and then puts it to its own use. This is called the “debt trap of African countries by China“ Search and read up on it. A lot of material is available on google regarding it. It destroys a country completely by trapping it in debt. There are several examples of this, Take the example of Zambia– a country in Africa. A 2018 report revealed that the Zambian government was selling off the entire control of its National Electricity Company to China because it did not have money to repay China. The biggest and the most important port in Kenya– the port of Mombasa was forfeited to China because Kenya did not have money to repay China. Nigeria is set to become the next country to fall into the debt trap of China.
A similar thing is happening with several Asian countries as well. An island in the Maldives has been sold off to China completely, Hambantota is a very important, strategic port in Sri Lanka. Sri Lanka first got China to construct it And when Sri Lanka was unable to repay China. China took up the entire port of 15,000 acres on lease for 99 years. This port has a very strategic location which is extremely close to India. China can use it for anything- for its military warships, its navy, or even its army. In map shows all the areas where China has financed ports all across the world China is questioned on the same premise over its One Belt and One Road initiative.
What needs do India to counter China…?
(It is believed that) the road that China wants to construct through so many countries would basically be used to lure countries into debt traps and would then occupy their areas for its military use. Furthermore, there is no free media or opposition in the country due to the dictatorship in China which could hold the ruling party accountable in the wake of corruption or wrongdoing. This is the reason why, when diseases like COVID-19 spread outside from their country nobody knew anything about what they had done or whether all information had been disclosed or not. There is no free media to report that so these are the ways in which the Chinese Communist Party is exerting its influence on the rest of the world. You can see that saying “boycott China” and breaking TVs and toys would not have much of an impact China, here, is playing the game on the next level by trapping the countries in debt traps and by resorting to dumping. These small steps will make no difference. India would have to begin thinking on the next level to counter China. The good news is that China is against all- Australia, Europe, the USA, and even Africa. So, if all of these countries come together and unite against China then there is some hope.
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