At times neighbours are adjacencies due to a point of political sleight. They were one, and then they became two. To an extent, China has today become the world’s factory

by Harish Bijoor

Neighbours don’t make the best of friends. Not yours. Not mine. I am talking about countries for now. The two Koreas, the two Germanys of yore, and India, Pakistan, China and now Nepal are classic examples. Neighbours are just too close to be good friends. There are issues common that are just too contentious. And more often than not, there is history and its leftover baggage that will just never let neighbours be good friends.

At times neighbours are adjacencies due to a point of political sleight. They were one, and then they became two. At times neighbours have a political line drawn through their drawing rooms due to a completely opposed colour of ideology to boot. Neighbours therefore lead divided lives.

The India-China face-off is the latest point of contention at hand. After four decades, the incident in the Galwan Valley, where both sides faced casualties, is a point of fractious debate across the borders of the two countries.

Even as a series of political and military actions are being contemplated, there is a huge debate on economic action. The key question is whether China has shot itself in the wallet this time round. This is 2020 and the wallet seems to be more important than even the foot.

We have seen visuals of China-made television sets being thrown off balconies, smashed with hammers; Chinese brands are on the back foot. Mobile handsets of Korean, Taiwanese and Japanese companies have come out of the closet quickly. In many ways, the #BoycottChineseProducts seems to have suddenly replaced the evocative #VocalForLocal movement all in a matter of days, much to the relief of brands of every other nationality. For now.

Economic action has been quick. There is a 15-point charter of action that delineates next steps put together. And even as this charter gets debated into a point of implementation, one needs to sit back and think about what is best for the country first and the consumer next. Must this be sudden death, or a slow one?

The argument of self-reliance is a solid one. It, however, needs to be a plan based on economic reality rather than mere popular rhetoric. Possibly a 15-year plan with a purpose. A plan that seeks import substitution in every realm to be a key part. A plan that will seek self-reliance in every realm for a start. Self-reliance in the space of agriculture, manufacturing and services in totality. In the space of grains and pulses that we import today. In the space of sudden onion imports to stabilise prices, in the space of cash crops we import so happily today, and in every commodity, be it oil or bauxite.

India continues to import from everywhere, seeking out the cheap and the much-needed. And roughly 24% of our imports come from China. We are yet to substitute our dependence on China, even in the arenas of low-tech manufacturing such as fans and ovens, leave alone high-end electronics. And components are indeed a high-value part of everything we import. If we are to actually do an audit in our modern day lives, there is a little bit of China in everything.

As we ask the consumer to boycott Chinese products, the important point is that the consumer today does not go to the market looking for a “Made in China” product. The consumer looks for a high-quality offering that is durable and comes at a price that is affordable. Strangely and not so strangely, China has cracked that mix.

To an extent, China has today become the world’s factory. The whole world has been using it as just that. China produces products in its gargantuan factories and sends it all across the world. And many of us don’t want to do what China does, at times for reasons related to the environment, and at times for reasons related to higher costs and lesser efficiencies. By and large, the biggest brands in the world have outsourced production to China.

China today is not a geography alone. It is much more than that. It is a currency. A currency that it invests all across the globe to insulate its inability to produce more for the world within its geography. China and companies of Chinese origin therefore invest across the world. China invests in nations (in terms of infrastructure projects), banks (as funders of the new global economy), businesses (of both the traditional and start-up variety) and consumers (in terms of creating new buyers and users for every application it makes for the new world, of which TikTok is the poster boy certainly).

As an endnote, the world has a fair bit of China in it today. It has happened slowly but surely since 1976. In hindsight, it does look like a part of a plan. A carefully thought-out plan that has China positioned as a factory to the world, a commodity, an infrastructure play, possibly a 5G play in the future, and most certainly as an investor in the sunrise sectors of the world.

A Boycott China plan can happen not suddenly, not overnight, but only as an equally carefully thought-out plan by India and the world at large. And it just might take all of 15 years to implement it in full, if not more.