Of late ( and from time to time ), there is debate
raging about boycotting of the Chinese products ( ie : cut back on imports from China )
Times
of India has neatly summarized this issue and provided a proper
perspective, in :
Boycott
China's products? Figure this out / 06
June 2020
For easier
understanding, I reproduce this report in following tabulation :
=========================================================
BOYCOTT CHINA’S
PRODUCTS ? FIGURE THIS OUT
=========================================================
|
Item
|
Market
Size ( Rs Cr )
|
Share
of Chinese Products ( % )
|
Possibility
of Substitution
|
|
Smart Phones
|
200,000
|
72
|
Very difficult
|
|
Telecom Equipment
|
12,000
|
25
|
Doable but costly
|
|
TV
|
25,000
|
Smart > 42-45
Non Smart > 7-9
|
Doable but expensive
|
|
Home Appliances
|
50,000
|
10 – 12
|
Easy now
|
|
Auto Components
|
$
57 Billion
|
26
|
Tough
|
|
Internet Apps
|
450 million smart phone users
|
66
|
Easy
|
|
Solar Power
|
37,916 MW
|
90
|
Almost Impossible
|
|
Steel
|
108.5 MT
|
18 – 20
|
Doable but tough
|
|
Pharma / API
|
$
2 Billion
|
60
|
Tough
|
My Take :
Ø
For decades, every country has been
trying to increase its EXPORTS and reduce its IMPORTS. Nothing new about this
Ø No country can perfectly ( 100 % ) balance its trade, with EACH and
EVERY of its trading partners . With some trading partners, it would have a
surplus and with some others, it would have a deficit
Ø
Most countries would be happy if they
manage to balance its OVERALL trade ( Total Exports = Total Imports )
Ø All countries would be happier if their total exports exceed their
total imports ( theoretically, impossible )
Ø
All countries realize – and reconcile with
the fact that their overall SURPLUS or DEFICIT will keep fluctuating from year
to year
Ø Even with any given trading partner, surplus / deficit , keep changing
Ø
Of late, this ongoing game of
trade-skirmishes have assumed the dimension of a full-fledged TRADE-WAR,
because, for past 2 / 3 years , entire World Economy has been going down
Ø This has dramatically worsened in past 5 / 6 months due to COVID
Ø
In most countries, millions have lost
their jobs
Ø Each country is trying to revive its economy by cutting back on Imports
and pushing its Exports, hoping that this would bring back the lost jobs
Ø
Countries are trying to reduce Imports
by imposing higher import duties
Ø They are trying to increase Exports by all kinds of Export Subsidies ,
ignoring WTO
Ø
WTO is as good as defunct !
Ø
For India , the only long-term solution
is to turn our economy into a LOW COST ECONOMY
Ø Even that World-Trade Super power China , in April 2020 , dropped its Imports by 16.7 % and dropped
its Exports by 3.3 %
Ø
India’s overall
exports (Merchandise and Services combined) in April 2020* are estimated to be
USD 27.96 billion, exhibiting a negative growth of (-) 36.65
per cent over the same period last year.
Overall imports in April 2020* are
estimated to be USD 27.80 billion, exhibiting a
negative growth of (-) 47.36 per cent over the
same period last year.
(
source : https://commerce.gov.in/ )
Ø According
to data compiled by Teamlease, a provider of employment-related services, there
are 57,000 compliance requirements and 3,100 filings for employers in
India.
Compliance requirements change perhaps 4,000 times a year, imposing a vast burden
on firms in the country.
India’s crisis is amplified by its red tape and
bureaucracy—estimates suggest it takes 29 days to start a business in the country, 58
days and an average 8 per cent of a property’s value to register it and about 1,445
days for a company to resolve a commercial dispute through a local court—three
times as long as it takes in high income economies.
As the China brand is sullied by the coronavirus crisis, the time
is ripe for India to aggressively go for “flick of the pen reforms and long term
structural reforms,” as Manish Sabharwal, chairman of TeamLease Services puts
it.
[ source : https://www.indiatoday.in/india-today-insight/story/made-in-china-is-here-to-stay-1686521-2020-06-07
]
Ø What can we do to cut back on our Imports
? Here is an “ Action Plan “ :
Making
Best of Worst Times ? …………………….[ 29 Feb 2020 ]
Related readings :
How china makes cheap ? ………………………………………………………………..[ 08 Nov 2014 ]
Prakash
/ Piyush / Nitin ko Kyun Gussa aata hai ? ……………………………….[ 12 Sept 2015 ]
Level-Playing Field is a Double
Edged Sword ! ……………………………………..[
08 Feb 2017 ]
Poverty Alleviation – the
Chinese Way ……………………………………………………..[ 02 Mar 2017 ]
When 2 is greater than 7 ? …………………………………………………………………. [ 04 June 2017 ]
Crying Wolf won’t Help ! ………………………………………………………………………..[ 08 July 2017
]
Hypocrisy : to the Nth degree
…………………………………………………………….[
13 July 2017 ]
Amitabh Kant ko Gussa Kyun aataa
hain ? ……………………………………………..[ 28 Aug 2017 ]
India
Economic Summit ………………………………………………………………………….[ 08 Oct 2017 ]
Free Electricity ? Possible ……………………………………………………………………….[ 28 Dec 2017 ]
A Trade War Epidemic ? ……………………………………………………………………….[ 22 Mar 2018 ]
The Second Shot ? ……………………………………………………………………………….[ 22 Mar 2018 ]
Costing Plays a Key Role …………………………………………………………………………[ 18 Oct 2018 ]
Foundation of Economy ……………………………………………………………………..[ 03
Nov 2018 ]
Amitabh says : Grow Big ……………………………………………………………………….[ 24 Dec 2018 ]
Low
Manpower Cost = Low Cost Economy ……………………………………………..[ 28 Sept 2019 ]
=====================================================================================
Dear
Shri Piyush Goyalji
( Commerce Minister / officeofmr@gov.in )
No one knows it better
than yourself that the current Trade-War is in the process of being PERPETUAL
Our only hope to SURVIVE (
leaving aside any wishful thinking of having a positive trade surplus with our
19 leading trade partners ), is to compete in the international market, with better
quality goods at low costs
No doubt private sector
companies will resort to reducing labor costs through greater mechanization /
low cost automation – with greater unemployment as an undesirable consequence
It is high time ,
government expands its coverage of existing schemes – and introduce new schemes
– meant to encourage SELF
EMPLOYMENT
With regards,
Hemen Parekh
hcp@RecruitGuru.com /
10 June 2020
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