Boycott Chinese Products – smart or counterproductive?

Recent developments in India’s North East border involving China have given a rude jolt to many Indians. Although the standoff is still not over and always carries a risk of armed conflict, it may end up doing some good in the long run. Why? Because it has brought into sharp focus a few things:

  1. China’s overwhelming military superiority and India’s slow pace of catching up.
  2. China’s economic prowess that underwrites this military superiority
  3. How we have allowed Chinese products to control the Indian market and even every aspect of our daily lives.

Domination of Made in China

It is not just in India, even in Singapore, Dubai, London, Chicago or anywhere in the world, chances are 80-90% of the items you find in a typical departmental store are made in China. Other than vegetables and groceries, entire categories of products, shelf after shelf, are seemingly not manufactured anywhere else.

This domination took many years to achieve and has left in its wake closed factories, destroyed communities and devastated lives in many places. Given its scale and volumes, China will probably continue to do so and perhaps India is the only country in the world that has the capacity to challenge this domination. If only it takes decisive steps.

It is in this context that we have to take a look at #BoycottChineseProducts campaigns waged in social media as well as elsewhere, in India.  In fact popular legislators like Baijayant Panda have endorsed this.

While it is good to see Indians waking up to the threat from dominance of Chinese products, we have to question if such boycotts are the real solution.

  1. Many products, as we mentioned earlier, are simply not made anywhere else. Laptops, Mobiles are good examples. While some are indeed made in Japan or Taiwan, these are the high end ones that may not be sold in India. Even they have components made in China! This makes any “boycott” impractical.
  2. Flood of Chinese products has of course, affected some traditional manufacturing but these have also given a kick start for technology upgrades, quality improvements and design changes to stay in the game. Aligarh locks, Sivakasi fireworks, motorcycles, pens made in India have all managed to survive and fight back. This can only be good for us.
  3. Although some jobs are lost, cheaper imported products help keep inflation low and enhance the purchasing power of anyone that is not directly affected. Therefore, overall the economy benefits.
  4. Attitude changes take longer, but is already happening. Instead of seeing businessmen and factory owners as “class enemies” to be fought to death, workers are slowly realising how global competition works and how it impacts their rice bowl. This means working together with their bosses to secure both their futures. The decline of Marxist militant unions that killed Indian manufacturing to benefit China both directly and indirectly, has to be seen in this context.
  5. Officially it is very difficult for any ruling party to be seen as too close to such boycott campaigns. China has been very clever in organising such boycotts whenever some human rights or other issue is raised by Western countries or Japan, Korea etc offend its “pride”. India has to learn this trick too. Plausible deniability is the key. We Indians are too clumsy and noisy in general to do such sophisticated campaigns and yet deny them without batting eyelids!

Better focus on Make in India

At the policymakers’ level, India should use this upsurge in nationalist sentiments to boost manufacturing in India. Tougher reforms including labour related ones, are easier to sell if positioned carefully.

For critical products such as mobiles and semiconductors, the entire supply chain has to be built up, brick by brick. This takes years but it is a good idea to take baby steps and monitor progress at highest levels.

India should also work closely with Western and Japanese, Korean companies often target of vicious boycott campaigns in China, to invest more in India and spread their risks. Recently Hyundai and other Korean firms bore the brunt of such campaigns.

For products that we can and do manufacture, often with better quality, imports from China has to be discouraged. Given WTO and other obligations, it is hard or even impossible to do officially. This is where public consciousness can play a role. There are dozens of such products – domestic appliances, garments, locks, plastic decor items or festival lighting, Ganapathy idols(!) and so on. But this cannot be a license to shady Indian manufacturers to push shoddy goods at higher prices.

Those in the know should highlight laws, rules and procedures that come in the way of Make in India and the government should proactively remove them. By any global benchmark, doing business in India, particularly for SMEs and micro enterprises, is still horribly complex, unproductive and stifling.

The wake up call given loudly and clearly by China’s over aggressive media, amplified by its allies in India should be used to our advantage.

Your comments are welcome!