#BoycottChina – In a sensible way

Introduction:

When this article is being written, Covid19 has spread across more than 150 countries; infected approx 12 million people and caused the death of half a million people in the world. It started from Wuhan, China and due to negligence or deliberate hiding of information from Chinese authorities, it has been spread like a fire across the world. Further, it is quite surprising that apart from Vuhan and nearby areas, all other parts of China remained uninfected either in reality or as portrayed by the Govt of China. This works as a seed of #BoycottChina movement across the globe and starts trending as a chorus against China.

Later in India, virus outbreak started even upon so many preventive steps have been taken by authorities. People in India are also in anger against China. Meantime, #BoycottChina movement further fueled up as the Hon. Prime Minister of India, Narendra  Modi has announced #AtmanirbharBharat campaign in his address to the nation and gave a clarion call for “Be Vocal for Local”.

#AtmanirbharBharat has literally become a trend in India and inflammatory exasperation was more specifically targeted towards our immediate neighbour, China. People started posting social media updates, anti-china rallies were on full swing. On other hand, China has tried for encroachment in Indian territory at Galwan Wally which resulted in a fight between Chinese and Indian army, causing the death of approx 20 Indian soldiers and 40 Chinese soldiers. This incidence provoked #boycottchina twitter trend, anti-china rallies, vandalizing Chinese stores, removal of Chinese apps from cellphones and so on. 

But the million-dollar question is whether India can boycott China in real and if yes how is it possible? Before jumping into any details and discuss the matter further, let’s look at some facts and figures to understand the details of trade between these 2 Asian giants. China and India are doing approx $100 billion business and as per 2019 data, India exports goods to China worth approx $18 billion (INR 1.2 Lac Crores) and imports goods worth approx $72 billion (INR 5.2 Lac Crores) from China. Thus, India is more dependent on China rather China depends on India. Further, China exports approx 6% of its total export value to India and India imports a total of 13.8% of its total Import value from China. Hence, the question is how to reduce such high dependency and make #AtmanirbharBharat a reality?

For the same, India’s renowned scientist and educationist Mr Sonam Wangchuk has started a campaign namely “Answer to Bullet by Wallet” to counter the Chinese products in India. In fact, he was the first person who has started a #BoycottChina campaign and has divided India’s dependency on China into 4 broader categories.

Let’s discuss in details and the views are not exactly in line with Mr Sonam Wangchuk’s opinion and at some places it varies from what he is proposing. Before discussing the same, I would like to discuss the most important 5^th category for which Mr. Sonam Wangchuk has not given his opinion.

Some Hypocritic Nationalists have found out 1 more category and that is Chinese Food! Yes, you read it right, I am not kidding! – Such people have vandalized the Chinese food serving restaurants and food parlours without even knowing that it is a completely indigenous business where all raw materials used in the product manufacturing, people who are preparing the same and customers who are paying for the same are Indians only. On top of it, they even don’t know that nobody in China is eating such so-called “ Indian Chinese Food” as it is completely Indian food. So, I request everyone that don’t do this and allow as well as support such people, who are running their business and households by selling such foods.

A. Chinese Software and Applications in the Indian Market:

Chinese applications like Tiktok, Shareit, Xender, UC Browser and many more have captured Indian software markets heavily. People are quite dependent on such applications for their day to day life. You will be surprised to know that as per a reliable source of 2019, a famous short video making Application Tiktok has achieved 467 million downloads in India which is approx 35% of total Indian population against the same in counterpart China is 173 million downloads in China which are merely  12% of the total Chinese population. Hence, India has 3 times more downloads of Tiktok than the same in China.

Please don’t misunderstand by this data that Tiktok is Indian App, its a Chinese App but more loved in India due to generous nature or ignorance of Indian people.

Tiktok will definitely not add any value in youths of the youngest country with 2^nd largest population. Further, India has the cheapest 4G data in the world, Thanks to Reliance Jio, but people are still not using these resources in constructive learning and skill-building through platforms like YouTube, LinkedIn Learning, EdX, Vedantu, Shaw’s academy etc. But, they are just wasting time and resources in making and spreading videos on Tiktok. This article is definitely not written to support @CarryMinati for its YouTube Vs Tiktok debate, but its a bitter truth.

Initially, such Chinese apps have made so much hype in the Indian Market and with #BoycottChina campaign people started removing it. In this buzz time, M/s. OneTouch AppLabs has released “Remove China Apps” application for android and iPhones. It has crossed 10 million downloads in such a short span due to #BoycottChina sentiments. Apart from India, it has got popularity in Australia as well. However, Google has down the same due to their policy conflict.

Further apart from market share, there are serious privacy and security concerns are there with the usage of these apps and on time to time basis, we are listening that these Chinese Apps are collecting personal data of users and chances of misuse are there. Hence, to maintain the integrity and sovereignty of the country, Govt of India has banned 59 Chinese Apps under section 69 A with immediate effect. Further, Govt. of India has launched an “App Innovation Challange” under Digital India Campaign to boost up #AtmanirbharBharat Campaign and winners will get prices respectively for indigenous app development.

Hence, just boycott will not serve, but we need to compete and outperform them to win the battle which is fought daily within Indian markets. We need to use our available resources like data and time to upgrade our skills, become more productive, decrease the cost and increase the quality output. That’s the only foundation stone for #AtmanirbharBharat.

B. Chinese Finished Products sold in the Indian Market:

Finished Products are the products which will be directly consumed by the customer and there is no value addition process is required on such products. If we use the same, then it will not add any value in terms of contribution to the Indian economy, employment generation and development of any industry. Just to make people realize that how much they are addicted to Chinese products, we want to inform you that 90% of toys market,70% of the smartphone market, 50% of bicycles market and much more are in the hands of Chinese companies. Surprisingly you will see Chinese product or competitor in any market segment with 25-30% and in some case 50%-70% lower prices than that of the domestic products.

This attracts customers to go for it rather than domestic products of the particular country and it has forced to the closure of best in the class domestic industry. This is not the story of India alone but the entire world.

After Mr Sonam Wangchuk’s call for #BoycottChina, Confederation of All India Trader (CAIT) has started a campaign namely “Bharatiya Saman, Hamara Abhiman” means “Indian Goods, Our Pride” and under this campaign, they have decided to boycott approx 3000 Chinese products, which will replace with the domestic goods worth value of $13 billion by Dec 2021. It includes products from various categories, but to name a few smartphones, toys, fabric, cycle and many other products. 60 million traders or shopkeepers are part of CAIT and involved to achieve this vision. 

Govt of India has passed a new ordinance for “Declaration of Country of Origin” at the time of selling for all E-tail and e-commerce company, which will increase the feeling of patriotism in Indian population and boosted up the #AtmanirbharBharat campaign in a true manner.

Apart from this, Indian Tech companies and business owners have to identify the needs of the customer and shall focus on the development of Smartphones and Solar cell industry to feed the demand of such huge 1.35 billion population.

We also request Indian customers to support Indian products by giving them preference wherever it is possible. 

C. Chinese Raw materials/Components/Spare parts used in Indian Products:

During Covid-19 pandemic, India has risen as a pharmaceutical leader when the Indian drug Hydroxychloroquine has been proven useful partially for the treatment of Coronavirus infection. Looking to the same, many developed countries were also stand in a queue to get a supply of the same. India has supplied it to more than 60 countries in the world and even the World Health Organization (WHO) has appraised the efforts of India for fighting against Covid-19. But, this is the story of the front side and let’s see the other side of the story. For any drug manufacturing, basic raw material required which is known as Active Pharmaceutical Ingredient (API) and a majority of the same is imported from China. Hence, we are dependent on China for our core strength business as well.

According to Bloomberg, 70% of India’s imports of APIs come from China, totalling $2.4 billion of India’s $3.56 billion in import spending for those products each year.

Likewise, India is also dependent on Chinese components and spare parts for its whopping and ever-increasing automobile business. 30% components which are used in India automobile sector are being imported from China. All our biggest industrial and production sectors which are also contributing to Exports like Pharmaceutic, Automobile, Pesticides, Solar Panels etc are dependent on Chinese raw materials.

The biggest reason for the same is India cannot manufacture the same quality of raw materials or components or spare parts at the same cost and at the same scale in India.

Hence, without understanding the concern for such high performing companies if people start boycotting them just because they use Chinese components, then we will damage our country’s Unique Selling Proposition (USP) in the world market.

If we use any machine or raw materials or spare parts or components of Chinese origin by investing 10 million INR and if we generate business of 100 million, giving employment to Indian population and add value to the country’s GDP then there shall not be any problem. 

Meantime, we shall also develop the capability of manufacturing such raw materials and components in India and replace the Chinese share. It is a long term strategy and may take 3-5 years. Government is already focusing on strengthening the MSME sector and released economic package as well as promoting domestic industrial growth in many ways. But, it needs more support from Indian conglomerates, business owners, entrepreneurs and education institutes to work hand in hand for skill-building, industrial development, productivity increment, scaling up of operations and employment generation. Its a strategic move and cannot be done overnight. China also took 20 plus long years with consistent efforts to become a global production house.

As customers its a responsibility of every Indian as well to stand in support of Government and Industry to make it successful.

D. Chinese Investments in Indian Companies:

For starting and running any business, there is a need for lots of investment and this is more applicable for start-ups. After the last 10 years of hard work and consistent efforts, many Indian start-up companies have become huge brands and to maintain the same pace they need a lot of investments.

In a globalized world, getting investment from our own country may cost more as there are better international options available with less interest rate and better contract deals. China is in the prime position for making investments and they are in the process of identifying promising sectors like technology, mobility, e-commerce etc and started investing heavily in all growing economies of the world. India is also not an exception.

As per a March 2020 report published by Gateway House, ‘Indian Council on Global Relations’, Chinese Venture Capitalists have invested approx $ 3600 million or $ 3.6 billion in Indian start-ups and tech companies against the total investment from Indian Venture Capitalists which is mere $100 million. Further, due to last year economic crisis, many Indian Venture Capitalists have to sell their market share and most of the buyers were Chinese Venture Capitalists.

China has deep roots in all successful start-ups of India and few of them are Paytm, Flipkart, Swiggy, Buju’s, Big Basket, Zomato, Snapdeal, Dream 11, Ola cabs etc. As per a report published by Gateway House, a think-tank associated with the Indian Council on Global Relations estimates $4 billion of Chinese tech investment in Indian startups.

Chinese Investors and their investment details in Indian Companies	Total Investment (In million USD)
Alibaba Group	1750
Snapdeal	700
Paytm.com	400
Big Basket	250
Zomato	200
Paytm Mall	150
Byju’s	50
Tencent Holdings	1650
Ola	500
Swiggy	500
Flipkart	300
Dream11	150
Hike Messenger	150
Byju’s	50

Now, the question is when the entire world is facing an economic crisis, how China is investing so heavily in many countries? Because China has forex reserves of approx $ 3.0 trillion which is as equivalent to India’s total economy size. China got all these forex reserves by its exports in all countries of the world. Hence, when the entire world is suffering from Covid-19 and many reputed and age-old conglomerates are on the verge of bankruptcy, China has started investing heavily from these forex reserves and getting control over economies of the countries.

However, as a customer, you shall not boycott the companies who have Chinese investments if the investment percentage is less than 50% and China is not in controlling the position for decision making in the particular start-up. We need to support all such start-ups which ran by Indians after so much of efforts and generating employment for Indian youth. On other hand, start-ups shall also arrange their investments from non-Chinese source and make it more sustainable. 

Government is active in this front and the latest example is Union Minister Mr Nitin Gadkari has announced that they will not allow participation of any Chinese firm for Infrastructure projects in India. Even Govt has made provision for not to entertain Joint Ventures where Chinese companies are part of Indian firms. Due to such hard steps, there might be chances of incremental costing in infrastructure projects but in long-run it is very advantageous strategically that China will not have stakes in important Indian Infrastructure. Indian Railways has also cancelled contract worth INR 437 crores which were handed over to Chinese firms.  

All such steps will definitely have long term impact and may convert into trade-war with China. As per historical trade-wars, none of the countries gets benefited out of the same. Lets dig-up some history of trade-wars. Few examples are given below:

• China itself tried to boycott all Japanese products in the early 1930s to protest against Japanese colonisation.
• Similarly, US consumer forums tried to boycott French goods in 2003 to protest against France declining to send troops to Iraq post 9/11.
• Arab nations have also many times boycotted Israeli and American products with regard to there stand on Palestine 

Don’t even go that far, just take an example of recent US-China trade war wherein China faced  1% downfall in GDP whereas the US faces 0.9% downfall in GDP. Since these two are the largest economies of the world and they can sustain such loss. But India is a developing country and cannot sustain such hit to the economy. 

It’s a time where all stakeholders including Government, industries, entrepreneurs, venture capitalists and most importantly the people of India have to sensibly follow this movement and slowly and firmly buildup Atmanirbhar Bharat with a pragmatic strategic blueprint. We also need to learn a few lessons from China that how we can replicate or outperform its success story.

What to learn from China:

It is age-old saying that one should learn from its rival or competitor as well and it is the truth  that we have many things to learn from China. Few of them, I am enlisting here to give you people food for thought to make #atmanirbharbharat…

1. China’s ability to scale-up the operations in such a level where the cost of the product reduces drastically and with Government’s export promotion scheme, they are dumping their products in world markets at approx 30% lesser price than domestic products. This is the first lesson – Economy of scale-up

2. China’s Communist Government and Chinese Business sector work hand in hand across the globe where policy is driven by a strategy which can defend the interests of business owners and the Chinese Government as well. Lesson number 2 is policy shall be consistent and not deviate with Govt change after every 5 or 10 years which is the case in India.

3. Development of strong infrastructure and supply chain to become world’s production /business hub as like Belt and Road Initiative (BRI) of China. India has already the advantage of roadways, waterways and airways, so need to develop the structure to support industries.

4. Ease of doing business: In China, Govt ensuring the same at the highest level to get business from the world and support heavily in terms of Finance, the security of interests and export promotion.

5. Don’t become market for other players to sell their products. Make policies accordingly so interests of domestic players will be defended in domestic marker and indigenous player get an edge in the Export market.

It’s not an overnight thing and needs strategic efforts of 10-20 years to take a stage which is China enjoying now at world level.

Every Indian has to be Vocal for Local and build up Self Reliant India… I am ready, Are you?