Can India Afford Economic Boycott of China After Ladakh?

[RiazHaq]

https://www.southasiainvestor.com/2020/06/can-india-afford-to-boycott-china-after.html

Indian consumers are hooked to a whole range of Chinese products. India's industry sources critical components from China. Indian startups rely on Chinese venture capital. Can Indians really afford to boycott China without seriously hurting themselves after the killing of Indian soldiers by the Chinese Army in Ladakh? Let's look at the data.



China-India Lopsided Trade. Source: Times of India

Volume of China-India Trade:

India accounts for $70 billion of China's export, less than 3% of the country's $2.5 trillion in exports. Chinese products make up about 18% of India's total imports.

India imports almost seven times more from China than it exports to it, according Indian media reports. India runs huge trade deficit with China – its largest with any country. In 2018-19, India’s exports to China were mere $16.7 billion, while imports were $70.3 billion, leaving a trade deficit of $53.6 billion.

Indian Industries Dependence on China:

Indian industry depends on China for a range of raw materials. About a fifth of components used by Indian automobile industry come from China. 70 percent of all electronic components used by Indian companies are imported from China.

Over 45% of consumer durables, 70% of APIs (active pharmaceutical ingredients) come from China. Nearly 75% of the telecom equipment used by Indian carriers is from China, according to the Sunday Guardian.


Chinese Venture Capital in India. Source: Economic Times

Indian Startup Venture Capital:

China is the biggest source of venture capital in India. Chinese VCs have poured about $4 billion in 90 startups in India. Two-thirds of Indian start-ups valued at more than $1 billion have at least one Chinese investor. High-profile startups like Byju, Flipkart, Ola, PayTM and Zomato.

India's startup ecosystem continues to be dependent on large swathes of foreign funding given the ongoing absence of home-grown pools of capital. It will face significant near-to-medium term cash constraints if investors from the world’s second-largest economy walk away, according to Economic Times.

Summary:

With growing Chinese trade and investment in India, the Indian economy has become significantly dependent on China. Chinese VCs have poured about $4 billion in 90 startups in India. Two-thirds of Indian start-ups valued at more than $1 billion have at least one Chinese investor About a fifth of components used by Indian automobile industry come from China. 70 percent of all electronic components used by Indian companies are imported from China. Similarly, 45 percent of consumer durables, 70% of APIs (active pharmaceutical ingredients) come from China. Nearly 75% of the telecom equipment used by Indian carriers is from China, according to the Sunday Guardian. Indians can not boycott China without seriously hurting themselves.

Related Links:

Haq's Musings

South Asia Investor Review

China in Ladakh

Pakistan's Startup Ecosystem

Consumer Durables in India and Pakistan

Digital BRI and 5G in Pakistan

Pakistan Tech Exports Exceed Billion Dollars

Pakistan's Demographic Dividend

Pakistan EdTech and FinTech Startups

State Bank Targets Fully Digital Economy in Pakistan

Campaign of Fear Against CPEC

Fintech Revolution in Pakistan

E-Commerce in Pakistan

The Other 99% of the Pakistan Story

FMCG Boom in Pakistan

Belt Road Forum 2019

Fiber Network Growth in Pakistan

Riaz Haq's Youtube Channel

Viewpoint From Overseas Channel


https://www.southasiainvestor.com/2020/06/can-india-afford-to-boycott-china-after.html

 

[DrasticMeasure]

Simply put it cannot. China is worlds largest trader and largest trading partner of almost the entire world. No country can isolate itself from China anymore.

 

[Viet]

India can buy big chunks of TV, household appliances, smartphones, electronics from us in Vietnam. Why is there a problem?

Our manufacturing is competitive. long gone are the days when factories employed large number of personnels.

One person in a factory

 

[serenity]

Please buy from Vietnam. Chinese owned Vietnamese factories and Chinese share and backdoor distribution supply networks. A lot moved to Vietnam. You think just Americans can move their manufacturing to China and still make money while Chinese can't move some manufacturing to Vietnam and also still be making money? Sounds like some people only understand words "made in X" but not the real situation. Chinese businesses getting quite rich since 2000s. They are already starting to move some manufacturing to other countries for cheap labor costs. You know Chinese also make TV and electronics in India? So those items when sold, the company profits go to Chinese. Just like Apple makes some components in China doesn't mean the profits are Chinese. Just there are some cooperation and Chinese get some share of Apple profits. It's usually beneficial for both hence trade it's called and business. Dumb people can only read "made in X" and feel some cheap emotions.

Indians don't want Chinese investments?! Best news in the world. Indians don't want to buy Chinese products? Please buy German and Japanese and see how more poor you become. Please buy Vietnamese which is round way of buying Chinese hahaha. Please believe none of this is true so you do not wake up to reality even longer. Keep the wetdreaming alive.

The only real solution for India on this question is really to do everything itself. Please try. You will find in some years where China was in 1980s. But with much more political difficulties to organize your country and much more fighting and arguing within yourself.

 

[52051]

They could not but I hope they do

Basically trading with China is probably the only way for a stone-age country like india to be industrialized, by boycotting China, they have to spend far more money to buy the same manufacturing tools from the west countries (basically work as a re-seller of Chinese manufacturers).

So it is welcome move to China, it will ensure india stay in the stone age for the coming decades.

 

[RiazHaq]

#India's ex National Security Advisor M. K. Narayanan on ties with #China: "We cannot completely block off all relationships with China economically. At least, that’s the way I see it, because we need to progress" #Modi #Hindutva #Ladakh #economy #trade https://www.cnbc.com/2020/08/04/ind...fully-cut-off-economic-ties-with-beijing.html

The border clash soured public sentiment in India toward Chinese brands, leading to calls to boycott Chinese businesses. The bilateral relationship is currently skewed in China’s favor in areas of trade, investment and technology, data showed.

New Delhi has introduced measures in recent months that either sidelined or banned Chinese companies from one of the world’s largest consumer markets. They included restricting Chinese investments into India even before the border face-off occurred.

India also recently banned several dozen Chinese apps including the highly popular short video-sharing app, TikTok. Existing contracts with Chinese vendors were also canceled and there were reports suggesting Chinese telecom companies Huawei and ZTE might eventually be excluded from India’s 5G development.

In most of those decisions, India did not specifically name China but, rather, justified the moves on national security grounds, according to a note from consultancy Eurasia Group.

“We’re not enemies, but I think there’s always a problem about being friends,” Narayanan said. “There is a competition between the two civilizations.”

Narayanan explained that India needs to focus on managing its economic relationship with China rather than shutting it down completely.


He referred to India’s refusal last year to be part of the Regional Comprehensive Economic Partnership, which would form a major trading bloc involving Asia’s top economies, including China, and cover nearly a third of the world’s GDP. Some saw India’s presence in RCEP as a counterbalance to China.

“We left the field practically open for China,” he said. “I think India cannot afford to step back. India needs to be in the economic arena, the economic space. I think India’s drive in recent years has been such that I think we can fulfill that objective.”

Analysts have said that recent tensions between the two neighbors could potentially push India to establish closer ties with the United States and countries like Japan and Australia.

 

[achhu]

Simply put it cannot. China is worlds largest trader and largest trading partner of almost the entire world. No country can isolate itself from China anymore.

well it depends on china , if tension escalates we will do it .we have already begun working on it .

 

[achhu]

India can buy big chunks of TV, household appliances, smartphones, electronics from us in Vietnam. Why is there a problem?

Our manufacturing is competitive. long gone are the days when factories employed large number of personnels.

One person in a factory


View attachment 643402

very good option .