If India stops trading with China, how will it effect the Chinese and Indian economies?
Kingshuk Bandyopadhyay, MSc Economics
Very little. India buys just 2.2% of Chinese exports
For Indian consumers, it will be quite hard to find alternate sources of these goods. Chinese firms are the dominant producers of a lot of goods that India buys from them, like computers, phones, integrated circuits, factory machines, networking equipment etc.Some of these are not even manufactured anywhere else anymore (at that scale), so the options will be some combination of - (a) pay higher price, (b) buy inferior products , (c) stop using them altogether.
If Chinese consumers boycott Indian products, India will lose 4.8% of its exports.Proportionally, it will hurt the Indian economy bit more than it will hurt Chinese economy. Moreover, Indian exports to China are mainly commodities like cotton, copper, iron ore, granite, petroleum etc. It is easier to find alternate sources of these.
India will lose more than China economically. Politically of course it is terrible optics and childish, à la Donald Trump.
Thankfully none of the above will happen. This sort of nationalism is popular on the internet, not in real life. In real life, people will still need their smart phones and computers to post nationalistic slogans on Facebook. And without those cheap Huawei routers fewer people will be online.
Jayant Roy, works at Shipping Corporation of India
Lets start with how it will affect India:
Boycotting China will have a devastating effect for India, now and definitely in the future. An agrarian country that has catapulted into the ranks for a near developed country in such a short time speaks volumes for the people of that country. Take infrastructure. China is said to build small cities in 22 months and much before it is even required by the population. New empty cities stand waiting for people to move in as the development behemoth moves along. I have personally visited 2 new cities and they are beautiful. Ports are being developed at a rapid pace. Roads are incomparable and the railways are state of the art and the railway technology is not copied, it is own development. High speed trains connect most of the big cities. These technological advanced goods and services are cheap, instead of buying Japanese, western European or US, it would be preferred to buy from China. Next are the power plants, again cheap.
If India wants to progress rapidly, then at present the only solution is to embrace the Chines manufacture and technology. India can beat the drum after we really have had some domestic technological advancement and real manufactures, wherein we capture some of the world trade.
Most of the advanced goods are produced in China under license from the rest of the world, the finish is awesome and the goods are reliable (of course, if you want really cheap products, then do not expect really good items), Lenovo and Apple do outsource from China, so do not denigrate Chinese manufacturing.
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Next is the products that China produces are innovative and labour saving and sometime cost 1/10th the original cost.
So, India can boycott Chinese goods but this will come at a great cost.
For China, India is a “another country from which some goods are imported” not a critical country and a loss of Indian market will not set back the Chinese economy.
Reference, just look at the data for 2013, the exports from the Chinese ports within the top 10 ports in the world as per cargo handling:
No. 1 Shanghai 697 million tonnes (all figures rounded off)
No. 3 Tianjin 477 million tonnes
No. 4 Guangzhou 473 million tonnes
- 5 Quindao 450 million tonnes
No. 7 Ningbo 399 million tonnes
No. 9 Dalian 321 million tonnes
Please compare this with TOTAL cargo handled by ALL the major Indian ports (12 in all) in 2013: 546 million tonnes
SO is there a need to compare or discuss, which country will be affected?
Varun Pratap Singh, A fine line separates patriotism and jingoism, I seldom care where I stand
Everytime China does something sinister, this “boycott Chinese goods" campaign starts. People must understand that Chinese goods are not merely Chinese cheap mobile phones or some lame electronics.
Check out your home, office college for any type of electronic and electrical goods. Note down how many of them are MADE IN CHINA. From where do people think that most of our laptops, pc (lenovo, Dell, hp,Mac any brand), mobiles (Samsung, Sony, LG any other), PlayStations, iphones etc etc come from? Even mobile chargers, adapters, earphones.
Now run another search for iron, mixer grinders, nail cutters, razors, blades, knives and similar items and note down things which are MADE IN CHINA.
If you think that's all, Chinese goods have made considerable inroads into our diwali decorations, plaster of Paris idols and various other accessories which we fail to notice.
People may argue that most of the goods mentioned above are replaceable and their Indian made alternative are available. Indeed.
This amount of Chinese influence in the Indian market is the result of years, if not decades of business. Statistically speaking, Indian trade deficit with China is around 50billion us dollars in the favour of China. That means Chinese imports in India are valued 50billion us dollars more than Indian exports to China.
Even If we consider that we successfully boycott Chinese goods, economically it will hurt India. Because it will take Indian manufacturers years to fill the supply gap. The tremendous supply -demand mismatch will continue for years, and in the meantime, all such products will see their prices skyrocket and indian public will feel the burn.
We must first atleast get at par with China on the manufacturing front, if not ahead of it, before such adventurism.
“Statistics may hurt, but they don't lie”.