A Citizen’s Guide To The Hows And Whys Of Boycotting Chinese Products

A Citizen’s Guide To The Hows And Whys Of Boycotting Chinese Products

by R Jagannathan - Tuesday, June 30, 2020 03:19 PM IST
A Citizen’s Guide To The Hows And Whys Of Boycotting Chinese ProductsTime to boycott products made in China to show solidarity with the martyred soldiers.
  • #BoycottChineseProducts should be the citizen’s way to show solidarity with the 20 armymen whom the Chinese killed.

If there is any Indian who would still like to give Chinese intentions the benefit of the doubt, the killing of 20 Indian soldiers and officers in Ladakh should open their eyes. We cannot be in denial that China does not want peace except on its own terms – and its terms are about reducing India to a tributary or vassal, as is the case with pathetic Pakistan or Neanderthal North Korea.

One can question whether the scales have fallen from the eyes of Narendra Modi, who has pursued peace and dialogue with China after the Doklam standoff. But the time to criticise him for his failure to get the Dragon to treat India as an equal is not now – at the moment of crisis.

Suffice it to say that the Jawaharlal Nehru gene – the desire to be liked by everybody – exists in every Indian leader, whether it was Atal Bihari Vajpayee, or Manmohan Singh some time ago, or Modi now. Modi tried to be popular in SAARC when he called all leaders for his swearing-in in 2014; today all our neighbours have chips on their shoulders about us. Now it is the turn of China to give us the same message.

Nations do not exist to become popular with other nations; they exist to define and defend their interests. Friendship is merely about a convergence of interests between two countries.

China knows this, and thus it either buys allegiance or intimidates potential rivals with threats and blandishments.

Hopefully, the deaths of 20 soldiers will open India’s eyes once more, just as Pakistan’s repeated perfidies opened them earlier. What we should not do at this point is undermine the government’s genuine efforts to assess how to deal with the Chinese threat, and how to choose the right battlefield to start the fightback.

Those elements in social media and among the political class who are taunting Modi with jibes about his 56-inch chest, are essentially trying to panic the government into some kind of hasty retaliation that will cost us more than anyone else. These people can be anti-Modi, but they should know that their toxic pressure tactics are constraining India’s strategic options.

While one should leave strategic and military responses to the Chinese aggression to the political and military leadership, what citizens can do to help the government at this stage is to mobilise public opinion against Chinese economic interests in India. This effort involves sacrifices on the part of ordinary Indians, but every war – whether military or economic – costs both parties something. If we want to make China pay, we too must be willing to pay for this.

What follows is a citizen’s ready reckoner to start preparing herself mentally for economic warfare against China, primarily by boycotting Chinese products. Citizens should not be frightened by critics who try to paint the losses India will suffer as a result of the boycott as hugely damaging to us.

The idea of economic warfare is to hurt China more than ourselves, and anyone who looks at the raw numbers – where China has been collecting approximately $50 billion annually by exporting more to India than importing from it – will know who is benefiting more from trade. By allowing such a huge trade surplus to China, we are essentially financing them to do us harm. It is better that we harm ourselves a little now to prevent a larger harm later.

The arguments that will be used to weaken your resolves will be the following, and this is how you should answer them.

First, it will be said that China won’t be hurt by any trade or product boycott, for India accounts for just about 2 per cent of Chinese exports. That’s true, but over one-eighth of China’s external trade surpluses ($422 billion in 2019) comes from India (our trade deficit with China was $57 billion in 2019). Also, China has tried to hide its real trade surplus with India by routing some of its exports through Hong Kong.

So, the effective trade surplus of China has not materially altered from before, despite Indian calls for more balanced trade. China’s keenness to bring India into the RCEP (Regional Comprehensive Economic Partnership) is largely driven by the need to route its own exploitation of the Indian markets through third countries. It knows that most Indians do not have a positive view of China. So, it is trying to confuse us. Don’t be fooled, an effective boycott will hurt China more than us economically.

Second, attempts will be made to make us believe that China is multiple times India, and thus India should not stand up to it. This is true, and China’s gross domestic product (GDP) could be five times India’s in US dollar terms ($13-14 trillion versus India’s $2.7-$3 trillion).

But this is an exaggeration. In purely local terms, India’s purchasing power parity (PPP) GDP is $9 trillion versus China’s $22 trillion (rough estimates), according to World Bank calculations. So, the real economic strength gap in local purchasing power terms is roughly two-and-a-half times that of China.

This is largely a reflection of lower domestic prices of many comparable everyday goods in India compared to China, but it is not something to be ignored in India-China comparisons.

Third, we will be told that a China boycott will hurt millions of Indian consumers, for Chinese products, whether it is mobile phones or drug intermediates, are far cheaper than those from anywhere else in the world. Also, these sales are creating millions of jobs in logistics, trade, kirana shops, etc.

This is true, but the counter-arguments are the following: ultimately there are no irreplaceable imports or products in the world. So, if we boycott Chinese products, other countries’ products will be available.

An effective boycott will raise domestic prices in the short run, but the resultant higher prices in India will prompt more local production and higher imports from elsewhere. So, most of the jobs and economic activities that are impacted by the boycott will return in some form or the other once we create local supply chains.

The price to be paid for making China pay for its perfidies is higher product costs and some job losses in the short run.

This brings us to two larger questions we must ask ourselves. Do we want to do our bit for the country or only ask soldiers to lay down their lives for us? Any warfare costs the economy.

Do we believe that if the war is restricted only to the borders, our costs will be any less in terms of lives lost and hits on the exchequer than if we were to hurt China economically by boycotting its products in India? What kind of patriotism is this when we happily ask our soldiers to sacrifice themselves for their country, but we won’t pay a little more for our mobile phones or pharma products?

The other question is related to economic dependence and interdependence. It is good to trade, as it benefits both parties. But when this results in a sharp asymmetry – where one trade partner gains multiple times what the other does – the skew has to be addressed.

When we become over-dependent on China and its low product prices, we are no different from the drug addict who thinks the drug peddler who sells him cheap LSD or Ecstasy is his well-wisher. We should get into rehab and kick the habit of over-dependence on China – as the rest of the world too should.

Boycotting Chinese products must begin as a mass movement and ultimately be aided by the government with suitable tariff and non-tariff moves, including bans on Chinese technology on grounds of national security.

This means Huawei should be out of our 5G programme, and Chinese products should be subjected to tight security scrutiny (for spyware, quality issues, etc) at customs houses, which will raise the cost of imports and restrict imports.

For consumers who have already bought Chinese goods or had hoped to buy one, here is a simple thought: don’t feel guilty for what you did in the past, or even if you have no option but to buy Chinese now. But do follow a hierarchy of boycotts that are affordable and acceptable to you.

This hierarchy reduces our costs while maximising them for the Chinese.

(1) Delete all Chinese apps from your mobile phone;

(2) Ask for a ban on products like Ganesha murthis and agarbattis since these products are anyway available locally.

(3) Since it is impossible to avoid the use of Chinese components in almost any electronic gadget these days, make it a point to avoid Chinese brands, for brands maximise profits for Chinese companies, while mere usage of Chinese components in non-Chinese brands shifts most of the value addition to brand owners in the US, South Korea, Taiwan, Singapore and Europe.

(4) Don’t bother too much about Chinese funded start-ups right now. Most won’t succeed, and by the time they actually start making money, maybe China would have learnt a lesson from the boycott.

The Confederation of All India Traders (CAIT), an association that claims to represent seven crore traders, has called for a boycott of Chinese products. It has said that nearly 3,000 products currently imported from China have Indian alternatives. These include electronics, consumer goods, toys, furnishings, textiles, footwear, kitchen items, luggage, food and watches.

If these goods are boycotted and Indian products used instead, it will cut imports by more than Rs 1 lakh crore (over $13 billion) by December neat year. A consumer boycott aided by tariff and non-tariff measures will enable this to happen.

In short, #BoycottChineseProducts should be the citizen’s way to show solidarity with the 20 armymen whom the Chinese killed.

Jagannathan is Editorial Director, Swarajya. He tweets at @TheJaggi.
Join our Telegram channel - no spam or links, only crisp analysis.
Get Swarajya in your inbox everyday. Subscribe here.

An Appeal...

Dear Reader,

As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.

Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.

We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.

Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.

Become A Patron
Become A Subscriber
Comments ↓
Get Swarajya in your inbox everyday. Subscribe here.

Latest Articles

    Artboard 4Created with Sketch.