Hello, 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. 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
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 harbour the misconception that only India is facing such a problem. The border 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 to 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 First, 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. The second reason could be the availability of a product or service in another country, at a cheaper price 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.
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’s good for every country.
In fact, trading is so beneficial that 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.
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 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 the consumers Imposing such taxes ensures benefits 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.
Let us now see how the Chinese Communist Party misuses trade and tariffs against the other countries
China joined the World Trade Organization 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, I-in China
These are all copycat 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 UK But there’s no question of court cases in China. The 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 the USA incurs a loss of between 300-600 billion dollars annually due to this pilferage by China.