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 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 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 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 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 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 its 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 its 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
- For instance, what about developing and underdeveloped countries
- that cannot develop 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 circumstance,s 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 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.
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 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 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
Infact, 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 the 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 what 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 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 the companies
They are provided with money and subsidies to export and dump in other countries
USB sticks, calculators, Vitamin C and E, 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
Indian government has begun a review of them
A news report of yesterday 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 aluminium in Australia
In fact, 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 USA
So, due to the aforementioned 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 the 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
because these effects will tell us- if we boycott China through reduced trade and increased tariffs
then what would the consequences be?
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 in 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
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 multi national 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 African 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 .debt trap of African countries by China.
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- 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 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
This map shows all the areas where China has financed ports all across the world
China is questioned on the same premise over its Belt and Road initiative
(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 wrong doing
This is the reason why, when the diseases like COVID 19 spread outside from their country
no body 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, USA and even Africa
So, if all of these countries come together and unite against China
then there is some hope
Thank you
