BoycottChina Movement- Myths vs Reality

Credits- Tech Crunch

BoycottChina and Uninstall TikTok was a popular hashtag trending on social media due to two reasons. The first reason was nothing but the Youtube vs TikTok struggle amongst the millennials. The second reason is the border standoff between India and China in Ladakh. Both these reasons collided with the COVID-19 sentiments calling for action against China for coronavirus. This reason is as if China wanted to deliberately let the virus go everywhere with its citizens travelling across the globe.

Credits- Tribune India

But the main reason for boycott china sentiment began when Sonam Wangchuk a local of Ladakh, whose story was made into 3 idiots film called for a boycott of Chinese apps like TikTok, calling it as an attack on Chinese software to hurt China's wallet. Nationalists took forward this idea made it a trending hashtag and used it for nationalistic/political gain. Government knowingly or unknowingly didn't respond to his call because the idea itself is a fantasy. This also comes amidst the fact that Modi announced Atma Nirbhar Bharath.

Credit- The Indian Express

Ever since June 15 fist conflict between the two armies- PLA and Indian Army, the boycott of China nationalist sentiment is higher than ever before. (It happens to be the birthday of Xi Jinping). Later a lot of foreign goods coming into India was held in various Indian ports claiming they have illegal drugs which are nothing but farse allegation. Chinese retaliated by blocking Indian imports at their ports of Hong Kong and Macao. 

Mr Nitin Gadkari later wrote a letter to Finance Minister saying that hooking Chinese Products will hit India more than China and asked this scrutiny lifted (which pretty much sums up this article). Ms Nirmala Sitaraman also said that there is nothing wrong with importing goods which help in productions. Both of these statements contradict PM Modi's stance who himself is business tycoon vouching for a free market economy in his home state of Gujarat when he was the CM.

In the IT advisory of 29th June instructed a ban on various Chinese origin apps, including Tiktok, Helo, CamScanner, UC browser etc. Apparently, the government made justification that it violates data security and privacy laws where these apps store data on foreign servers. Apparently, where does Google or Twitter or Amazon or Telegram or for that matter any apps store? It is their own data centres which are majority outside India, even many of the websites in India are stored elsewhere. So this argument of this kind is sham and everyone knows that this is an emotional decision taken by the Government to suppress the internal political sentiment and cool it down.

The world runs on facts and not sentiments.

What is the border dispute of China with India? 

The main dispute between India and China is in the Ladakh region and not Arunachal Pradesh. This dispute is way old from the 1960s, even before the invention of the Internet. The International border between India and China is known as the Line of Actual Control (LAC), dividing the Aksai Chin and Ladakh region. But unlike the Line of Control (LOC) with Pakistan which is properly demarcated, the LAC is not demarcated and still remains ambiguous at various points. Thus we can say Chinese and Indian territories overlap at the grey points. The militaries of both countries are actually not able to distinguish their claims as the terrain is rigid. Thus there is a standoff when Chinese and Indian soldiers patrol these regions. It happens quite often and this time it blew out of proportion. The main place of this dispute is the Pangong Tso lake where the 3 idiots film was shot. India and China are today aggressively building infrastructure on both sides of the border. This obviously created an inferiority complex in the Chinese Military which forced them to be aggressive.

Map of LAC and Galwan Valley. Credits- The Hindu

Indian and  Chinese military informed that they will solve this by dialogue and withdraw the troops they had deployed in the region. Different people have a different interpretation and perspective of this issue. Even though this is a standoff and violent skirmish, such incidents becoming chances of open war are not there. Both countries have stated that they don't a war. China has never fought a war after 1962 with any country. We are also seeing bloodshed on both sides of the border for the first time in four decades. Also given that we had enjoyed very good diplomatic relations with the Chinese. We will try to solve everything by talks is what governments have decided. 

How do economies work?

We are in a globalised world, where no country has/produces everything. One commodity for manufacturing one thing comes from one place and second from the other and so on. There is nothing like a fully locally produced smartphone or tablet or even a car. Even for cars which are manufactured in India, (make in India) have steel which is locally made, electronics which is either imported from China or Southeast, Software from the US or Europe, the oil comes from the Middle East and at the end of the day it's a Japanese or a Korean company.

Global Supply Chains Credits- Google Images

India doesn't even have a top electronic or manufacturing company in the world. Apple, Samsung, Sony, Qualcomm, Intel, One plus, Xiaomi, Skyworth, Oppo, Tencent, Apec, Huawei, Vivo, ZTE have their manufacturing in the single city of Shenzhen (bordering Hong Kong) which is the silicon valley of China. This is the electronic capital of the world. There is no city like Shenzhen elsewhere. The Shenzhen city has a free port and manufacturing centre called Shenzhen Special Economic Zone where tax is less than in the rest of China. Even the Vivo factory or Micromax in India imports many of its parts from China itself. Boycott sentiment that didn't reflect in the sale of Xiaomi, Vivo or OnePlus.

China is a free market economy. ie the govt has the least control of the privatised economy. Even though it's a free economy where private companies can compete, there are few restrictions posed by the government which make it a mixed economy. The majority of Chinese govt revenue comes from the Sinopec and Petrochina, which are a Trillion Dollar company and it has no market in India and it earns around $480 B compared to  People's Liberation Army's annual budget of $180 B. The Chinese economy is market-driven, ie whatever you produce elsewhere will have a demand in China. The entire army budget is peanuts compared to the GDP of China which is $14 Trillion.

The city of Shenzhen, Credits- SCMP

Does uninstalling/banning Chinese apps help solve the border dispute with India?

The question itself contradicts the basic economics. Software is not an expensive thing, neither is hardware. The dispute is age-old and it will be here to stay. Both the countries have a ceasefire line named LAC and that's the status quo, which Chinese have tried to change. Once we disturb the status quo, tensions rise. So, if you are saying that apps/phones funds Chinese PLA, you are absolutely wrong because these are all owned by private companies or owners and gives only a meagre revenue to the Chinese govt. None of the countries today, are fully dependant on one sole company. According to sources, Tiktok gets less than 0.03% of the revenue from India as per Ananthakrishna of The Hindu he claims that this is nothing but political showmanship. After banning, most of these companies which had Indian offices will lay-off their employees creating massive unemployment and so will the content creators from India be out of revenue. 

First of all, the government must maturely decide whether it is against the People's Liberation Army or the ordinary Chinese population or companies. Why choke ordinary people? Will the government bring any new changes in issuing visa to Chinese tourists, which are a source of revenue to India? Will local Indians consider them as enemies, or will any Indian visiting China be stamped as an Indian spy? These are really important questions. Just because we have skirmish on the borders with Chinese doesn't mean we abandon anything and everything with the name Chinese say like Chinese food as MP Ramdas Athawale claimed.  

There is still no logic which says that when you pay for a Chinese phone, that money is used to kill Indian soldiers. If that logic worked?. then are you paying Trump by using Whatsapp, Facebook and other Softwares? Are you funding the US military programme? Absolutely no, you pay for the service these companies provide or you use it for your convenience, you are not supporting US invasions or its operations in the Middle East. You pay the company who is an individual or an organisation. The tax they pay in a free market economy is minute. This logic is somewhere similar to how Facebook, Google and Twitter are banned in China because they are American and apparently Americans are spying. What a worthless argument by the Chinese govt.

Business in India vs Business in China 

India ranks 63 in the Ease of Doing Business Index while China ranks on 31. A big success story in Make in China is that of Tesla, where its factory started production started. The factory was built in two-three years. If it was in India, it would have taken years due to opposition and bureaucracy. Also, the business-friendly environment across Europe and the USA is far too low and that of China, Thailand, Vietnam, Taiwan etc is high. Even textile companies moving out of China got into Bangladesh and not India.  Last year Bangladesh was given a 97% discount on its exports to China.  A lot of companies are moving to China from the west. The taxes and incentives given to the companies are very high there. Even a lot of Indians are engaged in the business in China and have been successful. China liberalised in the 1980s, while India in 1990s. The ten-year gap then is now over 20-30 years back.

Credits- The Hindu

Only 3% of China's exports are in India. Many of India's pharma and drug companies import from China. Even the HCQ drug which India exports maximum requires the raw material API, chemicals which are imported from China. There are many companies which actually export products to China from India. Many Indian start-up companies like Zomato, Swiggy, Byjus, PayTM, Oyo etc receive fundings and investments from China. Top entrepreneurs of India have rejected the popular sentiment saying that it will hurt their business.

When Jet Airways, an Indian elite airlines company saw its collapse last year. The Indian government did nothing. We don't treat businesses here well. We need a change.  

The infrastructure of both nations can never be compared. In recent years China constructed over 2000 Km road-rail in the province of Tibet itself including highspeed rail. It had constructed a 1000 bed temporary hospital in Wuhan within 10 days. Wuhan is also the city which conducted mass testing of its 10 million population within 10 days. Xinjiang which is a separationist province has a big city like Urumqi which Malayali Journalist Baiju N Nair compares to Dubai. Nowhere else on this planet does such a thing happen.

The ambiguity of What is Chinese? or What is not Chinese?. Majority of products we use are not just manufactured in China, but are assembled elsewhere but use parts imported from China. Will there be also boycotted? How far will go? Will we boycott HCQs and medicines? Boeing uses parts imported from China too. Are we actually going to boycott Boeing planes? The major part of China's export come from intermediate or capital goods and not on finished products. Also, we don't consider a reaction from the Chinese govt on a real Boycott situation. A trade war will lead to a massive escalation and economic downfall. 

Education

China has been a destination for Education in Medical Sciences. There are a lot of students from India, studying there. So will the education of these students be affected? 

Indian manufactured phones

Lava and Micromax are Indian phones but they are nothing when it comes to quality. If these phones can import items from China and put it in a cover made in India, then Xiaomi manufactures 90% of phone for the Indian market in Sri City, Andhra Pradesh and Sriprendandurin Tamil Nadu where locals are employed should also be termed Indian. Even Vivo has a large facility in Uttar Pradesh which manufactures phones for major companies in India.

Credits- Redrop

4G/5G 

If you think to abandon mobile phone and go back to the land phone, then the majority of India's telecom sector relies on Huawei and ZTE which are Shenzhen Based companies. There is not even a single India company which can manufacture telecom infrastructure. Even in the entire world, only Huawei, ZTE, Erricson and Nokia manufacture telecom equipment. There is not even a single American company which can even come close enough. Huawei is the most popular telecom company in the US but has been facing wrath in America for violating Iranian sanctions.

When Indian govt instructed BSNL to put off its degradation to 4G because ZTE was Chinese, its employees protested saying that this decision will destroy BSNL because Airtel, Jio and Vodafone started working on 4G in 2016 itself.

Telecom reviews Asia

Power supply

Heavy electrical items used in Thermal and Nuclear powerplants are made in China, so if we use electricity we will be anti-national? On July 3rd the government informally announced that they will scrutinise imports of foreign power sector equipments. 

Iranian Model 

Iran is a country which faced a big backlash through the US sanctions. But how did Iran overcome it? As you know the govt has banned many American social media apps, but people there use VPN to bypass the ban. The studies have clearly shown that calling for a boycott of goods is considered as a sentimental move and it hardly takes any effect on the trade. Also, very less effect is seen on capital goods. So now, countries are looking for exporting cheap intermediate goods. At the same time, we need to understand the effects of US sanctions on the Iranian population. The fight between governments has failed ordinary people. 

Who is responsible for the flooding of India's market with Chinese goods?

There is no one literally forcing you to buy Chinese products. From the perspective of an Indian consumer, there is nothing that is Made In India, which is useful to him, while the same product is available in quality and cheap imported from China. From a manufacturers perspective, we can understand that the raw materials they require, equipment, machines etc are not available here, they are readily and cheaply available for purchase in China. It is not that Xi Jinping is forcing you to buy.

It is pretty much true that we moved away from a primary sector centric economy to services economy because of the job prospectus and attractive salary. No one wishes to work in a factory that too for a meagre salary. We saw this post the computer revolution. 

Chinese goods reach the Indian market due to its demand as well as lack of an alternative. China is like one of the top innovators and you have innovated stuff available in China which is attractive and can help your business here. There is an event named Canton fair in Guangzhou where Millions of Business enthusiasts come from across the globe to see different products and place bulk orders. These bulk orders are accepted and you can customise them as you want and it will get shipped to your place. It's the same way, many TVs, phones, toys, cutlery, etc even complex machines, buses, trucks etc arrive from various parts of China. There will be an Indian who must have gone there and placed an import order for these. A typical example will be the popular Jio Phone where Reliance had given the order to Zhejiang Techchain, a Shenzhen based company for manufacturing of Jio phones with KaiOS. These phones come with customised features as insisted Reliance Jio like Jio apps.

Canton Fair Credits- Business Insider

The license to start a company in India is given by the Government, Importing license is given by the government. The import duty of products in India is given to the government. And now the Government suddenly asks us to boycott thing for which you already took money from us?

And people are destroying TVs, toys and shops selling them with their own hard-earned money. Says too much about Indians as consumers and their awareness. The same people have stamped Zoom which is an American company as Chinese.

Credit- Navbharath times

China has escalated the trade situation by approaching WTO, saying that decision banning apps is a violation of International e-commerce agreements. China, later on, blocked Indian websites and VPNs. The chances are that this can blow out to full Indo-China trade war, where China can even plan to starve out essential supplies like Pharmaceuticals?

What can we do?

Boycott China is not the way, we can't do away with Chinese products and services for sure. We trend these tags are done from Chinese manufactured phones and computers. This is hypocrisy. Even all the alternatives are also not Indian, even Android OS software is not Indian. India does have border disputes with many of its neighbours. How feasible is it to boycott all goods and services from our neighbours? Now even China is investing heavily in all of India's neighbours.

Even now, India is facing a big economic crisis, the supply chains are affected, demand is down and slump GDP growth will indeed be a big challenge in attracting foreign investment. India now should not go back to pre-1990s due to protectionism and nationalism which is catastrophic for the Indian economy.

It is time to separate politics from economics. Both are pretty mutually exclusive...Good politics is bad economics. 

If it is going to be America first, China first, India first...God save Humans and this planet. We are building a cocoon for isolating ourselves.

Recent surveys have shown that consumers look for quality and price over country of origin, showing that the wallet does play an important role over sentiments. 

Solutions

Why on Earth do we want everything to be Made in India, it is a utopian idea. No country can ever make everything its own country. We can only manufacture what we can make- ie it depends on raw materials, skilled labour, market etc. That too only if we have that infrastructure. Even if India manufactures a lot it should be sent to consumers far and wide. We need a strong supply chain otherwise Indian market and manufacturing will steadily collapse due to excess supply and low demand.

Indian and Chinese Armies on July 1 has agreed for a temporary settlement on the issue and on July 8, both armies withdrew from both sides. Anyway, both countries don't want a war. They also don't want to risk their economies.

Revisit India's Foreign Relations- India had angered a lot of neighbours like Pakistan, Bangladesh, countries like Iran, Malaysia and Turkey. Many of these are of course neighbours and they are very important. We need more allies now, we need supply chains. The world is coming together. 

Ease of Doing Business- India is not Startup friendly. Banks don't give loans to startups in fear of NPAs. This should change. To even start a small business in India is a tedious task. Saheer from Kerala, who moved out Kerala and started business in Yiwu China, a few years back explains, how easy is it in China to start and run a business while it's very hard in India unless you have a lot of connections with politicians and bureaucrats. With petrol and diesel prices increasing it will put a lot of pressure on supply chains.

IT industry- Gone are those days when we had a lot of call centres for American companies because hiring Indian professionals, office rent etc was cheap here. We have one of the most brilliant coders and programmers as well as companies like TCS, Infosys and Cognizant, but we don't even have a single company based in India, which has a famous software product across the globe like Google, FB, Twitter etc. There is a lot of scope for freelancers too. Most IT professionals move out of India, due to stress work or attractive packages, to companies like Amazon, Google, Microsoft, Oracle, Facebook, Adobe, etc. 

Technology- I don't mean Phones and Software. They are not the only technology everyone has or is aware of. We need machinery for automation, vehicles, factory gear etc.

Let India be India and not China

What do foreigners think of India first when they hear INDIA? Think for 5 seconds.

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It is none other than Bollywood. Amitabh Bachan, Amir Khan, Shahrukh Khan does have a large fan following. Bollywood Films are an attractive source of revenue outside India, especially PK, Dangal,  3 idiots which earned a lot from China itself. 

Credits-Bollywood life

Arts and Culture- Another topic which is exclusive to India. Why does everyone have to be engineers and doctors? We don't give importance/value to talents because it is abundant here. We do have good authors but hardly we see any Indian book getting International attention. Why don't we rebrand these?

Incredible India tourism

Travel and Tourism- India is a well-known tourist destination known for its natural beauty and heritage. Why aren't we able to brand them? Why are there no facilities for the tourists who come here? We must learn how to get tourist from Thailand which has the world's most travelled city ie Bangkok. They build artificial tourist spot, gardens, jungles but we have them naturally. We have Hill stations like Munnar, Shimla, Kashmir, beaches of Goa, Heritage sites like Taj Mahal, Red Fort, Temples etc. The question of why should we bring sophisticated industries and destroy our environment also remains a matter of concern. We also need to make sure that locals also well trained to accept tourists and well behave with them.

Medical Tourism- For people in the middle east, India is a destination for low-cost medical treatments than west or the east. Why don't we invest in it more? We also need to improve the aviation sector post-COVID. More airlines and services to all parts of India must be there. 

From a useless social media campaign and sentimental games, both people and government must evolve and learn to be realistic, keeping aside emotions and sentiments. Understand that majority of these decisions are going to affect the ordinary people.

All the views expressed in the article are personal.

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