Should India pass a legislation regarding trade with China ?

[LETHALFORCE]

So basically some of our members are saying that while China continues to arm Pakistan and build trade surplus with India simultaneously and we should do nothing to stop them.

Has the govt done anything to raise objection?

Test a higher yield nuke
place economic sanctions
openly support an independent Tibet
Support ASEAN
put more bases on islands in the India ocean
get long range bombers(blackjacks)
form clear alliances
choose an MRCA winner that may help against China?
sign security pacts
Make Brahmaputra water threat an international issue


These are just some of the few things the Govt could do there are
probably hundreds more but govt has done none of the above.

 

[Sakal Gharelu Ustad]

There are a couple of things I picked out from your post. I wanted to just touch on them.

The weak currency has helped China I have not got any doubts on that. I however have to query you about what you think about the trade surplus which China has recycled into the US treasuries? Yes it gives China incredible buying power. But they can hardly spend even 10% of this surplus.

One, they are generating a lot of employment back home by siphoning back the dollars into US and keep the economy ticking. Second, they are madly acquiring stakes in US firms and property(something that Japanese did till the 90s)

You also mention Fed has kept inflation under control. I do find this quite unbelievable. It depends on who is doing the measurement. Government always doctors data to suit its agenda.

I find a better source of inflation data; look at John Williams @ Shadow Government Statistics : Home Page

I am sorry to say but here in this case I do not believe in conspiracy theories. Reason being, Fed is pumping in so much money to control deflation from happening. If you look at the great depression, this is what exactly happened. The economy spiralled into deflation and so to bring it up people sustained a bit of inflation rather than high unemployment. Right now, the US figures are not so good on unemployment and deflation is the persistent threat with near-zero interest rates. So, you hear the terms like quantitative easing which is nothing but last efforts to prevent deflation(Keynes came up with fiscal spending to fight ineffective monetary policy). So, US is actually on the verge of deflation rather than otherwise.

Closed Govt. like China doctor data but US normally believe that if more people have better information, they can do better in pressure situations. Although there are several ways of measuring inflation, which might throw up some discrepancies in measurement(for eg. month on month vs year or year or basket of goods etc.)

 

[Sakal Gharelu Ustad]

Has the govt done anything to raise objection?

Test a higher yield nuke
place economic sanctions
openly support an independent Tibet
Support ASEAN
put more bases on islands in the India ocean
get long range bombers(blackjacks)
form clear alliances
choose an MRCA winner that may help against China?
sign security pacts
Make Brahmaputra water threat an international issue


These are just some of the few things the Govt could do there are
probably hundreds more but govt has done none of the above.

The best way to handle these issues is to ensure we continue growing economically. If we can do that effectively by keeping the economy opened, we can invest in research that suits us. We need to worry only about our overall trade surplus and keep the budget deficit in rein. As I mentioned before trade deficit with a specific country does not matter as long as we maintain overall trade balance.

If China keeps beggars at its doors, it can not always support them. In the long run, greater economic integration is going to give us more muscle on the negotiation table rather than the alienating measures.

P.S. Always remember the fall of Russia. Stagnant economy is the biggest burden on any superpower's shoulders.

 

[roma]

Protectionism is a failed ideology, .......

protectionism in the form that you know it may be a failed policy but to protect oneself ,one's young ones to give them a chance to grow certainly isnt a failed policy, heck every parent does that

similarly take the case of malaysia in 1969 and malaysia today ....in 1969 the very same chicoms in malaysia were controlling the economy . The malay malasian government deceide to pass legislation to "force " the ethnic malays to "learn to do business .... at the beginning the learning process was slow and much ridiculed by the malaysian chicoms ..... a few decades later and we now see ethnic malays doing well in business in malaysia and thestranglehold the malaysian chicoms once had on the economy of malaysia is fast becoming a thing of the past

so there certainly is a strong case for india to enact legislation seeing that to protect a young industry is not wrong plus the fact that chicoms themselves are using hidden protective mechanisms and flouting the rules in many and varied underhanded ways .

 

[no smoking]

So basically some of our members are saying that while China continues to arm Pakistan and build trade surplus with India simultaneously and we should do nothing to stop them.

These are 2 question.

First, regarding china's policy to arm Pak, there is no violation of any international law as long as india doesn't declare war on Pak. By the way, USA is also arming Pak and Saudi Arab is providing financial support to Pak as well, will you do anything about that?

Second, there is law prohibiting making trading surplus unless you can prove that chinese is cheating in their trade deal to WTO.

 

[aerokan]

These are 2 question.

First, regarding china's policy to arm Pak, there is no violation of any international law as long as india doesn't declare war on Pak. By the way, USA is also arming Pak and Saudi Arab is providing financial support to Pak as well, will you do anything about that?

Second, there is law prohibiting making trading surplus unless you can prove that chinese is cheating in their trade deal to WTO.

Don't forget that if chinese can use some international laws to convince for all the shitty things they do in this world, indian govt can also find some law to justify the actions to prevent it.

On a side note, USA controls saudi and can bombs pakis if needed (which they do occasionally). Can China bomb Pak at will with ease? There is a difference in leaving wild animals unchained in a circus and leaving mad dogs on roads!!

 

[kickok1975]

Such legislation will only demonstrate weakness, not strength. It won't help India rather reinforces more entitlement and protectionism sentiment among Indian people. India could be a lot better if Indian government and people are willing to dig out and learn some lessons from these numbers, think positively instead of negatively and make some changes internally. After all, using trade sanction as threat will do minimum damage to your counterpart if you are on the weaker side. 27billion surplus may sound big, but it is less than 10% of China's annual surplus number.

 

[Sakal Gharelu Ustad]

protectionism in the form that you know it may be a failed policy but to protect oneself ,one's young ones to give them a chance to grow certainly isnt a failed policy, heck every parent does that

similarly take the case of malaysia in 1969 and malaysia today ....in 1969 the very same chicoms in malaysia were controlling the economy . The malay malasian government deceide to pass legislation to "force " the ethnic malays to "learn to do business .... at the beginning the learning process was slow and much ridiculed by the malaysian chicoms ..... a few decades later and we now see ethnic malays doing well in business in malaysia and thestranglehold the malaysian chicoms once had on the economy of malaysia is fast becoming a thing of the past

so there certainly is a strong case for india to enact legislation seeing that to protect a young industry is not wrong plus the fact that chicoms themselves are using hidden protective mechanisms and flouting the rules in many and varied underhanded ways .

India is already a heavily legislated country and have not yet come out of it officialraj. Protectionism is in our veins, look at the protests we saw with the mention of FDI in retail. So, government policies already hamper a lot of businesses and promote inefficient business practices.

As far as Chinese are concerned, I am not so worried about them. They are still a regimental society with little place for new innovation. A government controlled society can never think about making an ipad, develop a movie industry etc. etc. They badly flounder when it comes to unexplored avenues. India on the other hand is a individualistic and free society. We need less government control to unleash our creative geniuses. And we unlike Malays have great business acumen.

 

[no smoking]

Don't forget that if chinese can use some international laws to convince for all the shitty things they do in this world, indian govt can also find some law to justify the actions to prevent it.

As long as you can win in WTO court.

On a side note, USA controls saudi and can bombs pakis if needed (which they do occasionally). Can China bomb Pak at will with ease? There is a difference in leaving wild animals unchained in a circus and leaving mad dogs on roads!!

USA bombs the terrorists IN pakistan not pakistan army and China is arming Pakistan army not terrorists.

Maybe in indians' eyes, they are the same, it is not the case seen by chinese and american.

And please keep one thing in mind: Pakistan is the tool to contain india. That is the policy shared by Americans and Chineses.

 

[Ray]

China has around 40 billion $ trade surplus with India. And we know this is not going to benefit India in any way.

So should there be a legislation like USA that if any terrorist attack happens in India and if Pakistan is involved, then the company that imports goods from China should be penalised a fine.

We all know the diplomatic and military cover provided by Chinese to Pakistani terrorist.

A valid idea.

 

[ejazr]

The trade deficit with China has been around $20-25B range usually. Its only this year that the deficit ballooned to close $40B.

The best way is to keep an eagle eye out for any product dumping and apply anti-dumping duties. Maybe have a taskforce for Chinese products in particular. Make sure that Chinese products adhered to safety standards as well and when it comes to major machinery like Power station equipment and Telecom equiment, have provisions to localise manufacturing and create JVs so that the deficit also means jobs and local knowledge is also created.

Remember that as part of WTO, you can't have laws to just ban exports from a country or hike tariffs as it would be in violation of WTO agreements.

Also I disagree that India does not get any benefit. The reality is that we are getting these products cheaper from China and if these products were not there, then we would have to pay more for the same products or go without the benefit of having these products.

 

[aerokan]

As long as you can win in WTO court..

sure..

USA bombs the terrorists IN pakistan not pakistan army and China is arming Pakistan army not terrorists.

Maybe in indians' eyes, they are the same, it is not the case seen by chinese and american.

And please keep one thing in mind: Pakistan is the tool to contain india. That is the policy shared by Americans and Chineses.

That is the problem. It's always a zero sum game for both China and US. You guys couldn't understand the concept of win-win scenarios. Pakistan is a tool for China. Chinese are tools of CCP. All the more reason to be wary of China and control the trade with China. China surely will take advantage in the future when the trade value goes to a considerable extent. But i'm all for changing the public policy to facilitate in house development rather than restrict the trade with chinese.

 

[no smoking]

That is the problem. It's always a zero sum game for both China and US. You guys couldn't understand the concept of win-win scenarios. Pakistan is a tool for China. Chinese are tools of CCP. All the more reason to be wary of China and control the trade with China. China surely will take advantage in the future when the trade value goes to a considerable extent. But i'm all for changing the public policy to facilitate in house development rather than restrict the trade with chinese.

Economically, we are doing win-win game. India got the products it needs at cheaper price ( that is the only reason you buy it), China got the resource and market. As long as india's manufacturing is not catching up, this so called "unfair trading" will continue. You can cut the supply from China, but finally you have to buy it from somewhere else, then you got a new "unfair trading" partner with a higher price. So, currently, both countries are benefit from this trading.

Politically, we have win-win scenarios and also win-lose scenarios at the same time. Nothing is that simple: US wants to use india to counterbalance china and US/China want to use Pakistan to check india's influence while China & india work together to fight against USA on some international problems.

China will not take more advantage from this trade relationship in the future than today. As I said, india has the free will and power to cut the trading relationship at any time.