Tuesday, July 14, 2020

CHINA TRADE (IN)DEPENDENCE - DO IT WHEN IRON IS HOT



          India has neighbours. Though we strive to have amenable relation with all our neighbours, however, there are two rogue neighbours. One is Pakistan, a declared enemy state, other is China. China is a threat and because of long standing boundary issues both the countries display lack of confidence in each other.
          Economically over the last two decades China has emerged as a leading nation and has started competing with other super powers-
a)    It has aggressively given long term loans to many smaller countries so that they become economically dependent on them.
b)    They have financially and militarily aided Pakistan so that it acts on their whims and fancies.
c)   Started investing in many strategic and media companies all over the world by way of investments thereby getting some control over them.
d) The ambitious Belt and Road Initiative, earlier known as One Belt One Road (OBOR), is a road/ rail and sea ways grid which will pass through 70 countries and create a business environment which can enhance economic activity in those countries. It is to be completed by 2050. This when done would permanently make all the countries dependent on each other for trade and somehow linked to China. Though China is touting this as an effort to enhance regional connectivity by constructing a unified market which would enhance GDP of all participating countries, it is largely seen as a way to enhance Chinese influence and domination in the region. India has refrained from joining this amidst pressure from all quarters.
e)    China was also rooting for free trade agreement (FTA) with our country so that in future the Indian dependency on China increases. These are all acts of China to take care of their interests and generate their employment and increase GDP. Congress sponsored Rajiv Gandhi Foundation trust received donations from Communist party of China and was actively lobbying for FTA by trying to influence intelligentsia in India to back FTA by holding seminars and sponsoring  writeups on FTA.

With a non-existing democracy, state holding and capital provision, China successfully created an ecosystem of manufacturing cheap, consumer, electronics and high-end technology products. This has created ripples all over the world. We Indians have lapped up cheap products from China. Many Indian businessmen and traders have used this route to facilitate Indian public in providing cheap products and in doing so have earned profits. So much so that, close to 70 percent of Imports are from China. Close to 15 percent of exports are to China. China is the largest partner in imports by India. The trade deficit is largest for India China trade. The trade deficit favors China. This was going on when China kept bullying us, kept encroaching and was never a friend of us.
Businessmen masked their selfishness by calling this act of doing business with China as pragmatism and practical sense. They have a point when they say, we import within the rules framed by the Indian Govt so what is wrong. True, therefore Indian Govt should change the rules of the trade. In a way, we became dependent on Chinese goods and products. We became so dependent that our mindset accepted it and we learnt to think that without Chinese goods we will not be able to survive.
          People including politicians said delink border issues from economic considerations. Let economic relations thrive. Indian businessmen and traders never got affected by China affront. Indian citizens mindset is to get anything that is cheaper. Indians never bothered that the profit which Chinese companies make from this economic activity goes in buying People’s Liberation Army (PLA) arms and ammunitions and building border roads. When something happens in far off Line of Actual Control, traders and Indian consumers are seldom affected, so they never bother. The same attitude would be a reason to get our boundaries shrink like we have already turned our boundary into a LAC and lost 37, 244 sq kms Aksai Chin (2/3 of Haryana in terms of area!!!!) way back in 1962.  One must remember that China is at war not only with India at the LAC – Galwan, Pangang -Tso but are instigators and -
a)    Started nudging Russia over Vladivostok territorial issues.
b)    Has a pie in Hongkong.
c)     Claimed Tibet
d)    Pressurising the communist government in Nepal to quarrel with our country.
e)    Is pestering Bhutan over Doklam.
f)     The Covid 19 pandemic brought by Chinese is none other than Biological Warfare. In a warfare, the country tries to inflict maximum wounds on the other country with minimum damage to self. Same thing has happened. China has come out of Covid 19 and has now very less deaths compared to other countries. Economically it has inflicted maximum damage to other countries and has recovered from it. All other countries should first acknowledge this as biological war started by China and hold it responsible and deal with it that way.
          It has to be a long-term policy of the Government to slowly wean away our Indian consumers to shun Chinese and buy Indian. It has to be a business-friendly environment by Indian govt to get traders and businessmen interested in sourcing local instead of Chinese. It has to be different kind of approach to make this happen and happen soon.
          It is a difficult task but it is always better to turn adversity into an opportunity. The opportunity is here. Post Galwan, two most important changes in our policy has brought about much needed impetus in achieving this task of shedding Chinese dependency. 
a)     All these years there was a policy of “seek permission from Delhi” before opening fire at the LAC, LOC or IB as Delhi feared of escalation beyond control. This has gone as this government has given free hand.  Which was seen during the counter attack. No sooner the CO of the battalion was taken in surprise by the Chinese when they crossed the ethical line, they were counter attacked. Imagine what would have happened if the battalion rear waited for orders to come from rear, far rear from Delhi. This new avtar or our forces have sent shivers down the adversary’s spine, which is first major change in the policy.  In the past even if the local forces took decisions Delhi never held their hand and distanced itself in a self-belief of being politically correct thinking that India’s image may take a hit with other nations. Not this time though. After the incident Delhi has held the hand of the forces. This was established by PM visit to the area and patting the back of the forces. This has bolstered the forces and gave a message to the world about the shift in policy.
b)     All these years our foreign policy revolved around the policy of delinking border issues from trade. Assuming that trade can be used as a CBM. This has not yielded any tangible results on ground near LAC. All that Aksai Chin which was gobbled during 1962 remained there as disputed and nothing changed. With the ban of these apps and cancellation of many Chinese tenders in different sectors, India has effect second major policy shift that it cannot enemy at border and friends in trade.
For this to happen traders and businessmen should slowly migrate to other sources than China. Indian consumers should show some resolve when making choices to buy a thing so as to punish a rogue state. Indian Government should chip in to make policy changes to aid the sentiment and to channelize Indian energies to wean Indian businessmen and consumers away from China. In that the government should –
a)    Build government owned huge business parks with all amenities such as worker hostels and canteens.
b)    The park to be ready with plug and play infrastructure provided by government in terms of transportation, electricity, water, hostels, sheds and security. Attract private business in this plug and play and create competition. This will ensure good quality low price items
c)     Like SEZ the parks should have long tax holidays and stable tax and labor laws. 
d)    Give ab initio clearances and for registering and starting an enterprise.
e)    Make available long-term loans at cheap rates.
f)      Start with low tech consumables and extend it to higher value goods in a phased manner.
g)    Make a standing committee where all grievances and demands are discussed and an amicable solution found. The standing committee should be empowered and should meet every fortnight.
Dependency is a mindset. All that it needs is a strong resolve of people of India and a nudge from the Government. ATMANIRBHAR BHARAT can become a starting point to shun Chinese dependency. When our nation is at war with China, China becomes our enemy. All Indians should think that way and act that way. Period.

2 comments:

Hemant Purohit said...

Very well explained. We have to fight this war not with weapons but by cutting trade with China. If Govt really implement points mentioned by you in last para we will definitely become ATMANIRBHAR. It will automatically increase GDP and create jobs / business opportunities to Indians.

Zachaldor said...

Well analysed.
The problem is not in government.
It is with our own individual mindsets.
We all are culprits and want the least cost option, even at the cost of our sovereign status.
Lack of one India feeling.
Your loss is my gain.
Conversely my loss is also to be paid by you.
This needs change.