Tag: China-India

Australia urges Sino-Indian ‘restrain’ & ‘de-escalation’; backs status quo at the LAC


By SAT News Desk

MELBOURNE, 31 July 2020: Australia has urged India and China to show ‘restrain’ at the Sino-Indian Line of Actual Control (LAC), ‘prevent escalation’ there and opposes any attempts to “unilaterally alter status quo” at the LAC. Australia’s High Commissioner to India, Mr. Barry O’Farrell in an exclusive interview with the ANI also said, ” We remain deeply concerned by actions in the South China Sea that are destabilizing and could provoke escalation. Last week, Australia launched a note with UB Secretary-General refusing China’s unlawful maritime claims in the South China Sea”.

Meanwhile, China’s Ambassador to India Mr. Sun Weidong in a Tweet says: “Noted remarks by Australian HC to India on #SouthChinaSea disregarding facts. #China’s territorial sovereignty & maritime rights &interests are in conformity w/ int’l law incl UNCLOS. It’s clear who safeguard peace&stability & who destabilize & provoke escalation in the region.”

Pointing at border tensions between India and China, Mr. Barry O’Farrell said, Australia supports India and opposes any attempts to unilaterally alter the status quo as it only increases tension and instability.

“It is important that bilaterally agreed principles and norms, which help prevent escalation, continued to be observed, he told the ANI.

Heavy tariff on Chinese products to curb imports? A Trump ‘solution’ for India


By counterview.net

By NS Venkataraman*
Whether Government of India would admit or not, it is crystal clear that India is facing a war-like situation with China today.The most important thing that India needs to do now is to convey firm impression to the Chinese government that India would not buckle under pressure and military threat.

This is what many countries in the world, which understand the tactics of China and are concerned about it, expect from India today. After all, India has to confront China on several fronts, including trade and economic front.

While China has created huge capacities in several industrial and commercial sectors, the fact is that China is excessively dependent on the world market for it’s industries to operate at economic capacity utilization level , by marketing their product internationally. This is the area where China has to be confronted.

U S President Trump has understood this and that is why he has initiated trade war with China, which is getting silent approval from several countries. Very few countries criticise USA for its trade war moves, which has made Chinese economy weaker, though not still weak at alarming level.

It is high time that India too starts a trade war with China. While there is high level of clamour amongst cross sections of Indians to ban import of goods and services from China, some “experts” have been stating that ban on the import of goods from China would nearly paralyse the Indian economy. This view is not based on facts and not based on clear understanding of the ground realities in India.

In the year 2019, China’s exports to India were $68.3 billion, while India’s exports to China were much lower level, at $17.1 billion, largely consisting of minerals and natural products.
Of the exports by China to India, drugs and drug intermediates constitute around 65% of the total import of bulk drugs and intermediates by India from various countries. Most of the import of bulk drugs and drug intermediates is avoidable, as India has enough capacity.
For example, a number of units in India have capacities for the production of several drugs such as ibuprofen, paracetamol, metronidazole etc. and still India imports these from China, leading to under-utilization of capacity in India.

In the same way, India has adequate installed capacity for several chemicals, yet even such chemicals are being imported from China. Several examples can be readily pointed out. India imports around 1 lakh tonne per annum of citric acid from China. Ironically, India was producing citric acid and then closed its plants due to import dumping from China.

Several Indian units such as Hindustan Antibiotics, Torrent Pharmaceuticals and others were producing Penicilin G earlier, and all of them have closed operations due to import dumping from China, and now India is largely importing these from China.

Why is this situation? The reason needs to be understood and tackled.

India is importing several pharmaceuticals and chemicals from China not due to lack of production capacity or technological capability, but Indian buyers are tempted by the offer of low price from China. Also, China provides liberal credit terms of as much as six months to the Indian buyers from the date of Bill of Lading, after the Indian buyer would open irrevocable Letter of Credit.

The fact is that China is a non-market economy and several hidden subsidies and support are given by the Chinese government to help Chinese industries export its products at low price, and there is no transparency in such matter.

There are enough capacities for producing drugs like ibuprofen, paracetamol, metronidazole etc., yet these are imported from China, leading to under-utilization of capacity in India

What is particularly surprising is that several buyers and traders in India succumb to the temptation of buying products from China due to low price and liberal credit terms, even if the quality and specification of Chinese products would be less than that of the products produced in developed countries.

Curbing the import of products from China is now a national necessity to protect India’s interests. There are many non-essential items imported from China such as furniture, beddings, toys, mobile phones, televisions etc., which India can do without supply from China.

In the case of chemicals, bulk drugs, auto parts etc., the capacity utilisation of Indian industries should be improved and production increased by curbing import from China. There are enough capabilities in India with regard to such products.
Even in the case of renewable energy sector, solar cells are imported from China in large quantity, while solar cell producers in India are languishing.

The Government of India should make the price of Chinese goods in India expensive by imposing safeguard duty to protect the Indian industries and national interest. With such protection, Indian industries will have the opportunity to expand capacities, increase production and optimise production cost, which they are unable to do now, as they are unable to operate with confidence due to import dumping from China.

India has to learn from the strategy of US President Trump, who has imposed tariffs on Chinese products heavily to curb import from China. China has tried to retaliate by imposing tariffs on US products. In the process, both the countries have not bothered about the regulations of World Trade Organisation (WTO) and WTO rules have gone with the wind.
India also needs to impose such tariffs on Chinese products without excessively being concerned about the WTO rules, which should be relevant only in normal times. China is occupying Indian territory and has killed Indian soldiers. In such circumstances, India starting a trade war with China is absolutely appropriate. Even as per the WTO rules, safeguard duty can be imposed on the imported product by any country, if the domestic industry would be adversely impacted.

Certainly, a trade war with India would not destabilize Chinese economy in big way, but it would cause concern to China. This would make it clear to China about India’s determination to confront China and would be a trend setter for several countries in the world who are equally concerned like India about China’s greed, ruthlessness and territorial expansionist policies.

*Trustee, Nandini Voice For The Deprived, Chennai

BUSINESS: China, India to dominate global investment by 2030

China and India are expected to be the largest investors by 2030, accounting for 38 percent of all global investment. PHOTO : Bigstock

China and India are expected to be the largest investors by 2030, accounting for 38 percent of all global investment. PHOTO : Bigstock

By Carey L. Biron

WASHINGTON, May 17 2013 (IPS) – Over the next decade and a half, a major global shift will result in the developing world controlling roughly half of the world’s capital, up from less than a third today.

According to new scenarios released Thursday by the World Bank, developing countries could control some 158 trillion dollars (at 2010 rates) by 2030, particularly in East Asia and Latin America. By that time, the developing world could account for 87 to 93 percent of global growth.

Under certain scenarios, “financial markets in economies like Brazil, India, and those of the Middle East will develop considerably, with these countries attaining, by 2030, a level of financial development comparable to the United States in the early 1980s,” a new report from the Washington-based development lender states. “Similarly, the quality of institutions in developing countries will tend to improve significantly.”

This analysis suggests that developing countries will soon gain the resources necessary to bankroll the major investments that the bank says will be necessary, particularly in infrastructure and services. This would mark a stark contrast with the past.

Further, World Bank analysts foresee a massive escalation of global investment from these countries. Whereas in 2000 international investment from developing economies constituted just a fifth of the global total, this could now triple over the next decade and a half.

“We found that developing economies will come to dominate investment,” Maurizio Bussolo, a World Bank lead economist and author of the new Global Development Horizons report, told reporters Thursday.

“By 2030, for every dollar invested around the world, 66 cents will be in developing countries. That’s a dramatic change, as for almost four decades such investments made up just 20 cents on the dollar.”

In fact, Bussolo suggests that developing countries will overtake the developed world in this regard much sooner, perhaps by the end of this decade.

Fast-strengthened systems

China and India are expected to be the largest investors by 2030, accounting for 38 percent of all global investment, almost as much as all high-income countries combined. In fact, China alone could be responsible for nearly a third of global investment by that time, the bank says, while Brazil, India and Russia will together constitute a larger investment bloc than the United States, at around 13 percent.

This means that total investments in the developing world could be half again as large as among developed countries, at 15 versus 10 trillion dollars.

Such changes will require the exponential development and strengthening of financial sectors in developing countries, as emerging economies inevitably move to quickly integrate with the international financial system in a way never before seen.

“Developing countries are currently almost absent from international financial markets, so you can see that we have a very long way to go in a historically short time period – 15 or 20 years for developing financial markets is not long,” Hans Timmer, director of the Development Prospects Group at the World Bank, told reporters.

“But we have seen in high-income countries that if you deregulate too rapidly you have a very dangerous situation. So we have a dilemma: the role of developing countries is increasing very rapidly, but we must deepen these financial markets only very gradually.”

Already, weak financial systems across the developing world are allowing for illicit outflows of capital that are at times far greater than the countries’ external debt, inexorably impacting on those countries’ ability to finance their public sector.

One report last year estimated that North African countries alone lost nearly a half-trillion dollars over the past four decades, almost the equivalent of their combined gross domestic product for 2010.

“It’s important to note that the World Bank is only talking about recorded capital here, but there’s so much illicit capital currently sloshing around that the multilateral institutions haven’t yet gotten their heads around,” Dev Kar, formerly with the International Monetary Fund (IMF) and currently the chief economist with Global Financial Integrity, a Washington advocacy group, told IPS.

“Our studies suggest that the unrecorded capital coming from developing countries is absolutely huge – the losers are losing far more than the gainers are gaining. As a result of these developments, you can understand why the North African countries blew up, as that kind of massive outflow of resources must have some kind of social impact.”

A level field

Of potentially considerable concern in the bank’s projections is where this new wealth will end up being concentrated.

“It’s one thing for the pie to be increasing, but how equitably is it being distributed?” Kar asks.

“Equity is a huge problem, as the rich seem to be getting richer and the poor getting poorer. Further, it seems the nouveau riche in the developing countries are a bit more callous than the established rich in developed countries.”

Kar notes that income inequality is generally not being helped through current redistribution mechanisms aimed at ensuring broader equal opportunity. Meanwhile, the poor, being unable to take advantage of globalisation, are being left behind across the globe.

According to the World Bank and numerous other analysts, wealth in developing countries is today largely locked up among the elite.

“For most of these countries, the first quarter of the population provides almost no savings. The bulk of savings comes from the richest quarter – there is lots of concentration,” the World Bank’s Bussolo told IPS.

In a separate statement, he noted: “Even if wealth will be more evenly distributed across countries, this does not mean that, within countries, everyone will equally benefit. Policymakers in developing countries have a central role to play in boosting private saving through policies that raise human capital, especially for the poor.”

In particular, the new report places significant focus on increasing government funding for education. It points to analysis from Mexico suggesting that changes in education could result in a five percent greater household saving rate by 2050.

“If the distribution of education among workers of future generations were to remain as unequal as it is today, this would perpetuate inequality of earning capacity, saving, and wealth in the future,” the report states.

“Leveling the playing field in terms of educational opportunities could thus be supported not just in terms of fairness but also – given the positive effect on private saving – in terms of efficiency.”