This article originally appeared on VICE World News India
China and India have been locked in a territorial dispute over the Galwan River valley since the 1960s. If you look at maps printed in China you'll see much of the valley runs within Chinese territory, while the reverse is true in India.
On June 17 this tension came to blows when a Chinese military deployment refused to leave the disputed valley, despite a previous de-escalation agreement. An ensuring squirmish resulted in the deaths of some 20 Indian military personal.
Reports now indicate China is moving hundreds of troops into the area, which for many Indians adds insult to injury, leading to widespread calls for a national boycott of all Chinese-made products.
On June 17, immediately after the border violence, a video surfaced showing three Indian men throwing an apparently Chinese-made television off a balcony.
Members of the Resident Welfare Association (RWA) in Delhi’s affluent Defence Colony locality, flouted social distancing norms to burn effigies of the Chinese leader Xi Jinping, as they declared “war against China.”
The hashtag #BoycottChina has been trending on Twitter, along with the #WinnieThePooh, which refers to China's ban on the cartoon after it was suggested that Xi Jinping resembles the bear. Ramdas Athawale, an Indian minister also suggested that Chinese restaurants should be banned across the country, apparently overlooking the fact that Chinese restaurants are often Indian-owned.
Indeed, most protesters have apparently overlooked the fact that most consumer products in India are made in China.
India imports about seven times more from China than they export, with an estimated US $70.3 billion spent on imports in 2018-19. During the same period China spent about $16.7 billion on Indian products.
Between 2017 to 2018, almost 60 percent of India's electronic consumer goods were manufactured in China. Four Chinese brands, namely Xiaomi, Vivo, Realme and Oppo, make up the top five best selling mobile phones in India.
Yet, while one news channel in India pushed for a ban on Chinese-made products, an on-screen banner highlighted that the debate was sponsored by Vivo, a Chinese phone company.
“A boycott is an emotional cause that only works if we have alternatives in place, and the fact of the matter is that India has a deficit because it doesn’t produce the kind of goods it needs,” Jabin T Jacob, an international relations and governance studies professor at India’s Shiv Nadar University told VICE News.
The Global Times, a daily tabloid newspaper controlled by China’s Communist Party, responded to the Indian call for a boycott.: “While assessing the new tensions at the border, India should understand that China's restraint is not weak. The two nations should cherish their precious development opportunities and maintain good bilateral ties.” The article also hinted that it would be “extremely dangerous” if India allowed its various anti-China groups to sway public opinion.
Chinese companies have invested big in hundreds of Indian startups. China’s Alibaba owns a majority stake of India’s largest digital payment app PayTM. It has also invested in e-commerce companies including Snapdeal and food delivery app Zomato.
Tencent holdings has nearly 10 percent of the stake in India’s cab operation service Ola, along with equity investments in e-commerce website Flipkart, online education service Byju’s, medical directory Practo, food delivery app Swiggy and music streaming service Gaana.
“It speaks poorly of our own planning that we allowed China to take over the technology sector,” said Jacob. The scholar believes that the Indian government made a misstep by allowing Chinese companies to buy shares in private technology. He's also against the push for disinvestment in public sector companies that can instead be strategically used to India's advantage, such as the ONGC oil drill in the South China sea.
In April, the Indian government
tightened its foreign direct investment
(FDI) policy for countries it shares a border with, which was seen as a move to rein in China.
Soon after the Galwan Valley face-off, India’s Department of Telecommunications (DoT) moved to ensure that the state-run network service Bharat Sanchar Nigam (BSNL) will upgrade its network without the involvement of Chinese telecom companies.
It has also terminated an INR 5 billion contract with the China Railway Signal and Communication (CRSC) Corporation to set up signalling systems for over 400 km of railway lines in India.
Indian intelligence agencies, backed by the National Security Council Secretariat, have also provided a list of 52 Chinese apps to block or ban in India.
However, there seems to have been no real impact on the sale of Chinese-manufactured mobile phones. And in another twist of irony, Chinese car firm Great Wall Motors signed a memorandum of understanding with India’s Maharashtra government to set up an Indian production facility on the same day of the fatal clash in the Galwan Valley.
Perhaps India's most vital import comes from China's chemical industry. Indian pharmaceutical companies currently obtain around 70 percent of their raw materials from China. These chemicals are used to make drugs like dexamethasone, which is being used in trials against COVID-19.
Meanwhile, as tensions rise along India's northwestern border, it's hoped that bilateral trade will continue to provide a barrier to outright war. Certainly one 2008 study by economists at Sorbonne University concluded that while a liberal approach to trade doesn’t automatically prevent war, the risk of conflict increases when countries grow less economically dependent on each other.
However, Jabin T Jacob from India’s Shiv Nadar University argues otherwise. “It’s a historical fallacy that better economic relations create better political relations," he said. "This only happens in the case of like-minded democracies, but not when core ideologies are so different. Jacob explained that while the initial years of the India-China relationship were beneficial because India's national budget was in surplus, the country has now fallen into a deficit.
“China had actively blocked India from entering sectors like pharmaceuticals, until they wanted to reduce their own public health insurance costs,” Jacob pointed out. He added that India too should have leveraged the relationship to its advantage and not allowed China to gain power in key sectors. “But I don’t believe that economic cooperation should be held hostage for better political relations.”
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