Boycott of Chinese Goods: Will Nationalism Win over Economics?

The month of June 2017 saw news channels and leading dailies filled with the political tension in

the border with China and the idea of boycotting started to occupy a major portion of this issue.

The patriotic feelings were questioned and have generated ultra nationalism from politicians,

Gurus, and even the general public. Nationalism has taken a different form which has blind

folded the true economic facts. An objective study into this problem will showcase us with very

strong economic problems that can be caused due to such an action.

A standoff between India and China in the Doklam region in June 2017 fuelled the idea of a

boycott. The boycott of Chinese goods can lead to severe retaliation from the other end. Such a

boycott will not affect the Chinese economy but can cause damage to India’s trade and its

position in the world economy. Doklam Region has been claimed by both India and China with

negotiations happening since 1985. But a feasible solution has not come out of these

negotiations. For India, Doklam Plateau is an area which connects it to the north eastern states.

The Chinese army was trying to build a road in this region which aggravated the situation

between two nuclear-armed giants. Many RSS- affiliated organization organized a meeting in

Agra on July 8 and 9 2017 and took a resolution to boycott Chinese thinking that such an action

would affect the Chinese economy adversely.

But with an increase in India's trade deficit 46.56 billion dollars last year, Indian economy is

dependent on China. The drop in Indian exports by 12% in 2015 is a testimony to this fact.

Pharmaceutical sector is a main sector of Indian economy having huge dependence on China for

raw materials for the preparation of various drugs. Apart from this, India accounts for only 2% of

Chinese exports. Hence, the political tensions had least effect on the trade between two

countries. Data for April-June quarter shows an increase in Chinese imports by 33%. The Indian

rupee appreciated by 5.5% against US Dollar and 3.7% against Chinese Yuan. This positively

affected the imports with a total of 18 billion dollar imports to the country. In October 2016 a

similar idea of a boycott was put forward by famous Yoga guru Baba Ramdev. Followed by this

there was an increase in imports by 7%. The trade deficit also increased as the exports fell by

11%. Generally, there exists a correlation between the political and economic implications,

which is absent in this case.

Consumer preference of Indians shows a clear upper hand for Chinese goods because of their

cheap price. Some ultra nationalists have been leading the campaign for the boycott of Chinese

goods. As an aftermath of China's pro-Pakistan stand in United Nations, BJP national general

secretary Kailash Vijayavargiya called for the boycott of Chinese goods. But a survey conducted

by "LocalCircles" reported in Hindustan Times showed more than 80% of Indian consumers

prefer Chinese goods. Poor people are attracted by the cheap prices which helped improve their

standard of living. The reactions of pro nationalist people through social media for the boycott

had the least impact on the trade. China is a huge producer of cheap electronic items which

flooded in Indian markets. Festivals are a major period where the message for the boycott is

spread massively. But unknowingly the products used for promoting the idea are also made in

China. Indian being an open economy cannot stay away from the trade relation with an Asian

nation.

The idea of a boycott cannot be rejected fully. In order to boost the Indian domestic market,

imports have to lower. Make in India campaign is a major step towards achieving this goal. From

the point of view of China, a decrease in imports to India will affect its idea of investing in India

through Chinese enterprises. Over the past few years, China is trying to achieve its dream to be a

global super power. One Belt One Road initiative aimed at connecting China with the countries

in Central Asia, Europe, and Indo-Pacific littoral countries. It involves building roads, railways,

oil pipelines and other infrastructural projects to connect China to the world. The artisans are

affected by Chinese imports during festivals. Since people prefer Chinese lights to due to cheap

prices.

India and China being the members of World Trade Organization, boycotting of goods is

impossible according to its rules and regulations. Consumer preferences play an important role in

this context and hence the boycott is not practically possible keeping in mind the middle class

and poor population of the country. Political unrest cannot be tackled with such strict economic

decisions. Protectionism and boycott will affect the bilateral trade and will not help bridge the

gap between both nations' political issues. Before taking decisions and spreading such campaigns

all the possibilities need to be thought. Nationalism should be shown by expressing the concern

for peace in the nation.