Dragon’s attack on India

Paper presented
by
Vishwajeet Shivbahadur Singh

On

National Seminar on “INDO-CHINA RELATION’S”

Organized by

Department of Political Science

RTM Nagpur University

Feb 26, 2010

Paper Title: Dragon’s attack on Indian Market

This paper attempts to intensify the effects of Chinese Goods on Indian Market adversely affecting the Economy of India. Chinese products are very cheap in the world market and become popular. Even in the Europe or Arabian countries importing from Chinese products with low price and high margin. I think Indian manpower still in higher side compare to Chinese. Or we are importing row material from other countries to make the product, that will cause problem for high price Electronics goods from China are already eating up a major share of other multinational companies (in mobile phones, pmp's, camera's etc). Since there are no Indian companies who are involved in the manufacture of these products, Chinese good's don't affect us in these areas. As far are plastic toys, clothes, electronic spare parts, speakers etc are concerned, Chinese products have been able to make a big dent in the Indian Market. In most cases Indian products are better than their Chinese counterparts but as India is a price sensitive market, Chinese products are sold more. All roadside seller's, have Chinese items. Now even the big malls and some reputed stores have started keeping Chinese goods. A good example is that of a child's toy called Beyblade (TM)(basically a variation of a spinning top). It was a must have for kids about 3-4 years ago. Though Funskool (a multinational company) had exclusive rights to make the original Beyblade (TM), it was the Chinese manufacturers who benifitted most. The Orignal Price of the Product was Rs. 249/- and upwards.The Chinese made were sold between Rs. 30/- to Rs 200/- The original Indian spinning top, with which we played in our villages as kids was simply out of the picture.The same thing applies to headphones, other children toys, and electronic spare parts from Indian or multinational manufacturer's. PS: Many people forget the Golden rule: QUALITY COMES AT A PRICE Chinese are doing well in this aspect they are using their resources very well and making the world’s cheapest goods. But one thing I observed is that the cheapest goods which were imported from china were very inferior quality.How ever the Chinese are also supplying the quality goods at a premier prices. Their manpower is commited towards the development of the country. There is no political biase in that country. Where as in India our leaders oppose the Industrial projects.Nano Car plant is one of such example in India. India cannot compete with China at least another Century. We love politics and politicians. We follow this vulgur culture and ignore the developments of our neighbours.

     They got professional / quality product but expensive too. I think their population making probelm in concern. Because they got population of 1.5 billion, it is a country in which the average factory wage is 40 cents an hour. But compare to India, China is “the world’s factory floor and…the world’s greatest market opportunity,”Also China has between 100 and 160 cities with populations more than one million as compared to U.S. Europe. According the survey, one district like Pudong itself nearly 6,000 foreign-funded businesses and companies working. Also they work 70 hours per week also half of the workers working 7 days a week. I felt toys, digital products, are considered the biggest threat to the book industry, According the survey conducted by Frankfurt Book Fair from 1324 publishers from 86 countries, saying 53 percent of digital products the biggest threat to the publishing industry, 11 percent believe that printed books will be out of date in 50 years, and 23 percent predict that book shops may be kicked out of the market.In any case, we clearly need either to stop importing scrap product into our country, otherwise what RK said our politician should consider to bringing a good economy to our country helping to produce quality product by ourselves. So we need to consider all the aspects.

India needs to have a national policy where it can impose strict restrictions on quality control for certain Chinese products such as toys. These toys have not undergone any toxicological tests and have dangerous levels of metals in the colourful paints which they use. Why cannot the Indian Government sensitise the public on such an important issue? Every imported toy from China can also be subjected to strict quality control tests and labelled as safe before the commercial sale. The lack of organised players in the toy segment in India is the main reason for this. I still wonder why big companies like Reliance and Tata have not set up any products in this most lucrative segment. If such players enter in to the toy segment, the Chinese policy of flooding the Indian market with inferior products would fail.

I think Chinese products in India have good and bad both effects but bad effects are greater than the good one. First I want to talk about good effects. There are large part of India living below poverty line and does not have resources to buy luxury products. But Chinese products provide them this opportunity to know and use these products. Chinese products are too cheap that they can afford easily. These products also providing business avenues to Indians also as Chinese can produce anything with limited recourses hence less cost of production. That’s why most of the biggest companies have manufacturing hub in China.However Chinese product quality is so bad sometimes the person buys it swears that he will never buy any Chinese products again. Also it seems that China is dumping their bad quality product in to India. The main problem faced by world from China is increase in pirated products. You will find everything pirated these days. But China provides a base for pirating. Not India whole world will facing this problem. Our products are superior than China’s but cost is so high and a country like India it is very necessary to keep your cost low as individual mentality hare is take products which has a less price. That’s where our producers loss battle. However in future I think people will reduce use of China brand as people want value for money and if they got cheated once with quality of Chinese product, they will go back to quality product and hence this will improve their position in Future.

Chinese products are in direct competition with Indian products in domestic market and the advantage will go to the one with lower prices. I think there is no need to any kind of restrictions. Now the Indian consumer is smart enough. There are issues of low quality Chinese electronic products, but not many cases have been reported. It all depends on whatever the importer wants to import from China. They ask them to produce low cost products, which China produces for its buyers in India.Our government can restrict few products (mobile) for safety purpose from China.I think whatever products imported from China unfortunately are mostly below any standards or quality criteria. So the consumer is not very keen to purchase Chinese products in India except for the toys. But if we think about the lamps or electronic products nobody is buying them mostly. India is not being threatened by China's cheap imports to India. The same country (China) is also supplying to US / Eurpoe / Gulf / Far East country/market where the consumer is quite quality conscious. So it depends on the buyers' demands. If the Indian buyers are asking for cheap products than China is producing these products for them.Foreign Trade specially with India-China bilateral trade can reach huge benefit to each other country.

we dont have to worry about the chinese products affecting our local market because some kind of competition is required for the local products to improve themselves.we cant stop them instead we should use this as an oppurtunity to improve ourselves.But at the same time we should not allow them to dump harmfull stuff on our shores.There was some recent reports about chinese chocolates having harmful chemicals.There are lot of chinese chocolates in our current market and i am not sure anyone is checking it.they got professional / quality product but expensive too.I think their population making probelm in concern. Because they got population of 1.5 billion, it is a country in which the average factory wage is 40 cents an hour.But compare to India, China is “the world’s factory floor and…the world’s greatest market opportunity,” Also China has between 100 and 160 cities with populations more than one million as compared to U.S. Europe. According the survey, one district like Pudong itself nearly 6,000 foreign-funded businesses and companies working. Also they work 70 hours per week also half of the workers working 7 days a week.I felt toys, digital products, are considered the biggest threat to the book industry, According the survey conducted by Frankfurt Book Fair from 1324 publishers from 86 countries, saying 53 percent of digital products the biggest threat to the publishing industry, 11 percent believe that printed books will be out of date in 50 years, and 23 percent predict that book shops may be kicked out of the market.In any case, we clearly need either to stop importing scrap product into our country, otherwise what RK said our politician should consider to bringing a good economy to our country helping to produce quality product by ourselves.So we need to consider all the aspects

Chinese manfactured products for "use and through". they dont think about the product life. they much aware about the price. i assured you get branded & duplicate you see the differances.

"I back the call for a boycott of goods Made in China"

(His Holiness the XIV Dalai Lama, The Independent, May 13, 1993)

"In the boycott of Chinese goods lies non-cooperation with the regime that is out to destroy Tibet, and humiliate and damage India. Buy Chinese goods if you wish to fund forced labour in China; Chinese repression in Tibet; and, China's aggression on India"

(Rajiv Vora, Advisor to MIC Boycott Campaign)

Advice to Indian Consumer’s:

Everytime You Buy A Product......make sure that you are not buying a product 'Made In China'. Many may wonder why one should not buy an affordable and attractive Chinese product which is easily available in any Indian shop.The reasons are many: 'One-hour technology' products from China started entering Indian households some years ago. Even though the majority of these products did not succeed in the Indian market due to their 'inferior' quality, the Chinese 'invasion' of our market is still continuing. The dumping of Chinese-made fans, locks, watches, bicycles, radios, batteries etc is slowly replacing our own products and has become a threat to Indian industry. China herself is one of the victims of the counterfeit products they produce; in the year 2001, fake and low-quality medicines produced in China killed about 192,000 people.

The Indian toy industry has been more or less wiped out due to the dumping of cheap Chinese toys produced mainly by the Chinese Military Industrial Complex of the People's Liberation Army (PLA). In the last few years, many manufacturing units in India have been closed down due to this competition. Some companies have adopted the next best line of action by joining the enemy. Many Indian companies have already shifted their production bases from small Indian towns and villages to China. This has resulted in unemployment for lakhs of workers, pushing them to the brink of starvation. China's steady entry into our textile, food, information-technology, pharmaceutical, automobile and other sectors may result in the collapse of many Indian industries -- in both organised and unorganised sectors.

'Made In China' can be classified into three categories: 1. Products Made in Forced Labour Camps 2. Products Manufactured by the Chinese Military 3. Products Manufactured by the Disenfranchised Labour Force. It is also a well-known fact that the ironically named People's Liberation Army (PLA), party leaders and cadres own over 95% of the Chinese economy (directly or through a variety of proxies).

Business is everything! In 1998, the New York police busted a racket of some senior Chinese officials involved in the sale of the organs of executed prisoners for transplantation. It is estimated that more than one crore people work in thousands of forced labour camps across China. This includes a big majority of 'political' prisoners. China tops the world with more than 2,300 executions per year. Most of the executions take place in front of crowds inside sports stadiums or public squares in the most preferred way -- 'a bullet to the back of the head,' because it does not contaminate the prisoners' organs with poisonous chemicals, as lethal injections do. Remember that every time you buy a product 'Made In China,' you are funding and empowering a brutal regime. We request you to boycott Chinese goods to save and protect the Indian industry and also to help end injustice and oppression in Tibet. Spread the word. Take a pledge that you will not buy, use or sell any product 'Made In China'.

No escape of it:

China today said that lack of regulations in the country (China) is facilitating entry of sub-standard goods into the Indian market. “Small business (small entrepreneurs) from India frequently travels to China and source cheap goods from small rural manufacturers (there). They then bring such goods to the Indian market. We don’t have any regulation to prevent this practice,” China consul-general Mao Sewei told reporters after addressing members of the Bengal National Chamber of Commerce and Industry om 10 Apr 2009Admitting that such Chinese goods imported to India were of very poor quality, he said, “Even people in China do not buy goods of such poor quality. Chinese goods are sold all over the world and enjoy goodwill everywhere.” Mao, however, denied that China was resorting to dumping. “Exports, which contributed 40 per cent of China’s GDP over the last few years, had seen a steady decline since last October owing to the meltdown. As a result, the economic growth slowed down to 6.8 per cent” he said. With the world turning into a global village and competition getting stiff, countries like China are ruling the roost in many a market in varied spheres.

India is the hub of diverse business opportunities, and slowly yet steadily, Chinese products like electronics, crackers, idols, apparels, etc. are predominating similar Indian products. The festive season is the season of business especially filling the pockets of traders. But instead of the domestic sector holding sway over the market, the opportunities are grabbed by Chinese manufacturers with their variety of exquisite products. Whether it is SMEs (Small and Medium Enterprises) or cottage industries, they are not able to provide a stiff competition to the cost effective offers provided by the Chinese. Due to this relentless import of Chinese products, most Indian cottage industries have closed down, and the future of the existing ones looks very bleak. The Chinese entrepreneurs have infiltrated the market in a very systematic manner with their well-planned marketing strategies and continuous innovations. They study the demand patterns and the market trends and work out the lowest price that they can offer to attract a huge section of the consumers while still maintaining a profitable margin.

As the Indian market is price-oriented, the domestic players are slowly losing their share to the strategic Chinese entrepreneurs. Chinese electronic goods like radio, torch, DVD players, etc. are reigning supreme in the Indian market. Decorative items, fashion accessories like slippers, jewelries, hand bags, etc. receive huge responses during festive seasons. This year, one saw the flooding of the Indian markets with Chinese made idols which were welcomed with open arms by the Indian Consumers.Commenting on the change of the market scenario, Mr. S.P Agarwal, President of Delhi Exporters Association, said, "Chinese manufacturers have created a big problem for the Indian manufacturers. Especially the cottage sector which produces goods like handicrafts, decorative items, gift articles, idols etc. has been drastically affected, by the dominance of Chinese products in the market. This has raised a question mark against the various marketing policies that the Indian Government is making."

Even the entry of these products is questionable.

According to Mr. Bikky Khosla, "The need of the hour is to address whether the products are fully duty paid or illegally imported to India. In the long run, with globalization and free trade becoming the norm of trade, Indian SMEs need to buckle up and get ready to face these challenges. No doubt SMEs have been affected, yet they need to be educated on latest market trends and technologies. SMEs should be encouraged and guided for the marketing of their products." Adding to this, S.P.Agarwal said, "Indian SMEs should learn from China about various marketing strategies undertaken by them. Rather than comparing the two countries, the Government should first focus on its policies and work on the ways to ensure that these products from China are heavily taxed so that the Indian craftsmen's only livelihood don't get affected due to the unrestricted import of Chinese made-products."

The only way the above problem can be solved up to an extent is by introducing SME favourable policies. The Indian Government should understand the basic fact that SMEs are the backbone of Indian economy and their growth will in turn add to the development of India.Indian SMEs should also continuously study the market needs and come up with innovative and cost effective products to tackle the burning issue.

MADE IN CHINA ->> the label has caused a sense of fear and anxiety among the Indian business houses. China opening up and operating on socialist market economy principles is a tough and competitive China; a dragon which is all set to sweep the world markets with its various goods, goods which are of good quality and are surprisingly priced at a low rate, which is something that baffles the world community. The low rate comes due to the fact that the Chinese Government lends a subsidy ranging from 30 per cent to 100 per cent. The Chinese made goods, of better quality and low rate, have flooded the Indian market in hordes encompassing all types of products – chocolates, toys, garments, computer hardware, and so on, and are finding ready and eager takers among the Indian consumers and this is the factor which has caused a great sense of uneasiness among the Indian industry community.

The goods coming in from China are through two sources – direct and indirect, the direct one pertains to the goods coming through proper channels and in a legal way and finding its way into the Indian shops. In competition with Indian make goods, the Chinese goods are finding ready acceptance among the Indian consumers due to its superior quality and low price. The indirect path relates to the goods being smuggled in through the border areas of India with Nepal, which is a porous one, and this coupled with poor policing plus the officers manning the border areas are themselves prone to taking bribes and other forms of gifts (the officers are by and large corrupt to the core). So, with all these factors, smuggling goes on a large scale and has become an alarming problem. What happens is that along with genuine make goods, fake makes goods also find their way through the border areas and land up in the Indian markets. Another pointer to be made is that large scale under invoicing of goods takes place resulting in the goods being priced at ridiculously low rates. A large number of Chinese made goods are flooding in this way the Indian local markets and have caused a lot of upheavals, which has dislocated the functioning of the Indian industry in their normal way. A lot of Indian small scale and medium sized industries have closed down their shutters due to their goods being not sold and left lying in the godowns, this has caused loss of employment to people who are dependent on the industry. Some of such industries have taken recourse to smuggling and selling Chinese make goods to sustain themselves.

Naturally, this has sent alarming signals among the Indian business houses and they are in a state of panic unable to make out as to how meet the threat. Two kinds of views have been expressed, totally different views. One camp comprising of industry leaders, through the President of All India Association of Industries Vijay Kalantri they have urged the Government to impose strong dumping duties on the Chinese make goods on the grounds a great majority of them are coming in through smuggled route and have caused enormous harm to their business as their products no longer find ready acceptance among the Indian general public. Another view expressed by the Infosys Supremo Mr N R Narayana Murthy has castigated the demand for imposing dumping duties and said that the mess has come about due to the inability of the Indian industries to come up with products that are of high quality and are able to find a place in global markets in competition with world leaders. He also said that the Indian goods by and large are of shoddy and poor quality and unfit to be used by the consumer. He asked the Indian industrial houses to instead come up with better and superior make goods and benchmark themselves with the best of the world leaders. Instead of hiding behind closed doors, he urged them to produce quality stuff and compete in the global markets on their own. Coming to smuggling issue, he said that the problem has to be tackled by the Government with an iron hand, loopholes plugged, the menace wiped out and stop finding scapegoats.

Coming to conclusion, it should be stressed that the days of molly cuddling and pussy footing are over, the days of protections and trade barriers are over, it is an open world, a competitive world in which one has to stand on his own and compete with the global leaders. If the Chinese make goods are finding good demand among Indian consumers, it is because they are of better quality and meet global standards and are priced competitively. The Indian industries should focus their energy on coming up with better, superior and world class products, earn popularity from the sale of the same and spread the brand name of ‘MADE IN INDIA’ far and wide.