Greetings, friends! The border tensions between India and China are the worst they have been in several decades More than 20 Indian soldiers have lost their lives. Economically, Politically and Geographically Don’t harbor the misconception that only India is facing such a problem. The border intrusions that China is doing in India, China is doing a similar thing with Taiwan simultaneously And what are the several tactics that China resorts to with other countries economically We will talk about all of this in today’s video So that we can come up with strategies against China along with other countries
What Can we do to Stop China?
Because today, China is not just a threat to India but poses a danger to all the democratic countries across the world When I say” China” here, I am only referring to the Communist Party of China. A party that has established its complete dictatorship over the people The Chinese people are not at fault here Come, let us see
Basics of Trade
First, we will talk about economic tactics. There could be three main reasons First, the non-availability of a certain product in your country while it is available in another country. For example, bananas were not available in Britain, in the UK, prior to 1633 because their climate was not suitable for growing bananas So, they would want to trade to import bananas The second reason could be the availability of a product or service in another country, at cheaper price as compared to your own country.
A good example of this would be the call centers in India US companies have set up their call centers In India because it’s cheaper for them to do so here as compared to the US. The third reason could be the availability of a product or service of better quality in another country That is why you would want to trade with them. So advantages of trading are very clear Consumers will have more choices and have access to cheaper goods Every country will be able to specialize in its own indigenous areas and be able to build better products and this could benefit all the countries internationally So economically its good for every country.
In fact, trading is so beneficial that research indicated that for every 1% increase in the trade to GDP ratio, There is a 0.47% increase in the GDP to per capita ratio of that country So, there is a clear cut relation here- trading increases the GDP of a country But this is a very simplistic explanation and there are many other complexities in the real world, For instance, what about developing and underdeveloped countries that cannot develop a specialization in any sector on their own? If a country neither has a great natural resource, nor a specialization in anything so they would not be able to export any product or service to other countries They would only have to import Under these circumstances,s trade will only result in losses for that country.
What can a country do in such a situation? In such a situation several developed and developing countries levy import taxes that are called tariffs Taxes would have to be paid to import a product from a country abroad This would make that product more expensive for the consumers Imposing such taxes ensures benefit to the local industries of the country There could be several other reasons for imposing tariffs For instance if a country wants to pressurize another country regarding a geopolitical decision, Or if a country disapproves of an economic decision of another country So tariffs are also imposed for mounting pressure. Let us now see how the Chinese Communist Party misuses trade and tariffs against the other countries
Evil Trade of China
China joined the World Trade Organization in 2001. Certain conditions were imposed upon China while joining the WTO China promised to liberalize and open up its economy further so that trade could be easily conducted between China and the other countries But today, 20 years later, China has opened up its economy to some extent But speaking broadly, China has aggressively misused the WTO for its own benefit So, what is the situation today?
You can find made in China products in almost every country across the world This is the extent to which China exports its products abroad As far as imports go, the largest social media networks in the world- YouTube, Facebook, Google, Amazon are nowhere to be found within China China has not allowed them to enter its realm This is a one-sided trade, in a way China allows the export of made in China products very easily but restricts the entry of other countries within their own realm Instead, China copied these companies and pilfered their technology and created copycat clones of these companies within their country
Then the US company can file a case in the courts in the UK But there’s no question of court cases in China The dictator government there promotes these cloning companies and keeps them protected from these things, In fact, the rules have been twisted in China to ensure benefits to these companies For example, according to one such rule, if any foreign company wants to set up a business in China, then they will first have to transfer their intellectual property to their Chinese partners The European Union Commission had filed a complaint regarding this in the World Trade Organization in 2018 to highlight how China misuses these things China forces the foreign companies to forfeit their technology to China They would have to forfeit it for free if they wish to do business in China It has been estimated that the USA incurs a loss between 300-600 billion dollars annually due to this pilferage by China
This is a list of items that China is believed to be dumping in India Indian government has begun a review of them A news report of yesterday stated that China has begun dumping of very important medicine in India and the Indian government is considering a tax hike on it to stop the dumping And India is not the sole country (that is facing this problem) Investigations are currently ongoing in Australia over how China is dumping steel and aluminum in Australia In fact, European Union has already increased the import tax on the steel that is coming in from China Their investigation revealed how China was dumping steel in Europe and USA
So, due to the aforementioned reason and the dumping tactic, China is able to export so much more than what it imports today Its trade remains in surplus when compared to most other countries The local industries of the rest of the countries are destroyed by being driven out of business and makes the other countries dependent on itself These are the methods used by it So the lesson is that the Indian government should keep its eyes open and remain alert and keep a tab of all the things that China is currently dumping in India to raise taxes on them accordingly and stay vigilant regarding these things
A third tactic is currency manipulation China is accused of deliberating undervaluing its currency in comparison to the US dollar in order to maintain its cost advantage So that the cost-benefit of 30-40% is maintained whenever someone wishes to buy a made in China product The low value of the currency that it maintains would not remain so, if viewed in the free market So this is another accusation that is leveled against China As a result of these reasons- the unfair trade practices, dumping, pilferage and the currency manipulation done by China These are the reasons due to which Donald Trump had declared a trade war against China Donald Trump had hiked the import tariffs to prevent China from harvesting these benefits and the trade war would have caused both the countries to incur losses I will talk about the effects of the trade war in a future video because these effects will tell us- if we boycott China through reduced trade and increased tariffs then what would the consequences be?
Chinese SPY Networks
Politically, the Chinese Communist Party is trying to exert its influence in the internal affairs of the other countries through nefarious means A great example of this is Australia China is trying to manipulate the people in the internal politics of Australia It has been alleged that China made several thousand Wechat accounts to defame and poke fun at the Australian Prime Minister And not only this, China is accused of building their spy networks in the Australian universities to spy on the Chinese students According to a news report of last year, a Chinese student was studying in the University of Queensland,
Australia He participated in a protest against the Chinese government that was being held in Australia and the Chinese government reached his family home in China and pressurized the family to keep their son under control and threatened them with dire consequences This is how the Communist Party of China is threatening the parents of the students studying in Australia Australian Strategic Policy Institute released a report last week which revealed how China is employing covert and deceptive methods to infiltrate the foreign political parties and the multinational companies to topple the democratic systems all across the world.