Shadow trade battle with China

Author: 
Mrinal K Biswas

Ever growing trade deficits with China, now reaching over $52 billion, has lately alerted both the government and people of India to control sales of artificially cheap basic metals from the land of the Hans though their low-priced engineering products, white goods in particular, have freely entered every living room of our country. In comparison, China remains an indifferent buyer of Indian goods and services.
So much so the flooding of Chinese products that the country’s ever increasing consumer society cannot maintain their upgraded standards of life without incoming utilities which become indispensible for their individual uses and home furnishings. Even the latest government pressure for online payments by people found an avenue in a China-promoted company to the consternation of an asserting swadeshi group campaigning for boycotting things Chinese. Not surprising, China protested.  There has been recently a kind of media spat on the issue.
When foreign suppliers dump their products to an importing country allegedly below the former’s cost of production of said items causing injures to the complaining domestic industries an anti-dumping action is called for. Presently, India’s Directorate General of Anti-dumping and Allied Duties (DGAD) decided that steel wire rod was being exported by China at rates “below the normal value” and the “domestic industry has suffered material injury” from these cheap imports.
As such the revenue department for the period 03 November 2016-04 February 2017 imposed an anti-dumping duty equivalent to the difference between the landed value of steel products and $499 per tonne exported by a named Chinese company. In case of other producers, the levy will be the difference the difference between the landed value and $538 per tonne. Reports say that the government may still impose an anti-dumping duty on 19 colour-coated steel products. The wire rods in question are used in automobile components, cables, welding electrodes, fasteners, railway sleepers and in construction industry.
Before this, India had imposed duties of 20 per cent on a range of steel products to guard domestic steel-making industry against flooding of cheap imports from China, Japan and South Korea. 
Though Japan threatens to lodge a protest against India in the World Trade Organisation, the international body to supervise and encourage fair trading among nations, it keeps its option open for bilateral talks for an “out of court (WTO)” settlement with India.
But not China. That northern giant has a separate agenda for India. Smarting under Indian sensitivities on land issues China is going against India’s interests. There is a rant and rave over Dalai Lama’s free movements, ignoring India’s protests on creation of a corridor through Pakistan-occupied Kashmir to access the Arabian Sea, backing Pakistan’s state policy on terrorism and host of other issues adversely affect India. China still appears determined to exploit the vast Indian market while xenophobia speedily engulfing the world.
Cold figures will show India exported $9 billion worth of goods to China in 2015-16, which is this country’s 3 per cent of total exports of $262 billion. China’s exports to India stand at $61.7 billion. Since China has an export-oriented economy the northern neighbour is somewhat concerned about 20 per cent drops in the sale of its products in New Delhi’s Sadar Bazar, India’s largest wholesale market for household goods. Boycott movement here has thus come under sharp Chinese attack. West Bengal’s Siliguri Hong Kong market is another centre through which smuggled cheap Chinese goods are suspected to be plentifully available to the Indian customers.
If India’s trade deficit is not addressed and flooding of the Chinese goods are not regularized India will perhaps backstep in persuading Chinese investments in future. Though the Chinese Press obliquely refers to inevitable failure of ‘Make in India’ idea because of what it calls endemic corruption in our country China will not be happy to see any reduction of  her seller’s market in South Asia. China herself has not escaped the curse of corruption, severely embedded in high places while widespread corruption in the elite 2 million strong People’s Liberation Army (PLA) threatens its fighting efficiency, to the dismay of   the power that in this communist power bloc pushing hard for an irreducible place in the capitalist world.

Saturday, 4 February, 2017