IN FOCUS
By Dincy Adlakha

India-China trade: High record, higher tensions

On 14 January, the General Administration of Customs in China released statistics that showed an increase in India-China trade in 2021. The bilateral trade between India and China crossed previous records and reached over 125 billion USD. While China’s exports to India amounted to 97 billion USD, India’s exports to China were 28 billion USD. The overall trade rose 43.3 per cent from 2020.

While India majorly exports raw materials to China, the imports are heavier and costlier. The biggest export from India is 2.5 billion USD worth of iron ore. Other petroleum, seafood, cotton and spices exports amount to 3 billion USD. China dominates the Indian markets with its electronic gadgets and components amounting to 3.5 billion USD. Together, all categories of electronic imports from China reached 8 billion USD. The pharmaceutical industry also imports approximately 3 billion USD. Other major imports include toys, cheap plastic products, and regular items. However, it is the component and chemical-based products that make up most imports and drive the booming industries of India.

Many analysts attributed the surge in trade to the nature of industrial chains in India and China. For instance, the pharmaceutical industry is a major growth sector in India. China exports all the right chemicals and materials required for this industry. Similarly, India’s automobile industry is dependent on China’s components and machinery. Hence, due to the complementary nature of their products and industries, 60-70 per cent of the material imports for India come from China.

Despite Indian push for Aatmanirbharta or self-sufficiency clubbed with the wave of protests boycotting Chinese goods in India last year, a large section of the Indian middle class still uses Chinese goods due to cheaper rates and better finish.

Another reason behind this surge in trade is owed to the pandemic. Throughout 2021, industries, factories and ports in most of Europe and North America were under lockdown. However, the Chinese manufacturing units were operating at high capacities before the second wave hit China. The statistics also show that even though imports from all other countries decreased for India, the imports from China increased and maintained resilience.

For India, the record trade brings concerns of trade deficit and dependency on China. India’s imports from China are four times its exports to China, raising concerns for the country. Furthermore, its exports to China are majorly primary goods, while the exports comprise value-added goods and technology. This is a warning for any country against international economic exploitation and hierarchy.

The Chinese economy is five times bigger than the Indian economy. This signifies greater national power, too. Hence, the position as a regional hegemon remains undisputed for China and gives a push to China’s global economic ambitions. China is now looking at Asia and Eastern Europe, Latin America, Africa and Central Asia as arenas of economic triumph.

References:
“China-India trade hits record high of $126 billion, up 43.3% y-o-y despite tension,” Global Times, 14 January 2022
Karunjit Singh, “Amid bilateral chill, India-China trade marks record surge in 2022,” The Indian Express, 26 January 2022
Bejoy Sebastian, “Decoding India’s ‘paradoxical’ trade ties with China,” Modern Diplomacy, 9 February 2022
Prasanna Mohanty, “Why India's manufacturing dependence on China continues to grow,” Fortune India, 9 February 2022
“Trade and Economic Relations,” Embassy of India, n.d.

IN BRIEF
By Keerthana Nambiar and Avishka Ashok

INTERNAL
Chinese central government proposes to fully support HKSAR in the latest COVID-19 surge
On 10 February, the Chinese central government spokesperson reiterated that the central government will fully support Hong Kong to counter the latest surge of COVID-19. The spokesperson said: “The central government firmly supports the HKSAR government in taking resolute measures to contain the spread of the epidemic.” (“Central gov't to fully support HKSAR in countering latest COVID-19 resurgence: spokesperson,” Xinhua Net, 11 February 2022)

China Family Planning Association report causes confusion in public
On 11 February, Global Times reported that there has been wide discussion on the internet over a report published recently by the China Family Planning Association. The controversy is around Article 9 of the report that mentions special efforts and campaigns to address and intervene in abortions among unmarried people and adolescents due to unwanted pregnancies. The association has cleared its stance that the same has been added to improve reproductive health, national fertility and public health. However, the public fears forced prevention of abortion of unexpected pregnancies. The association has explained that there will be no ban on abortions. (Wan Hengyi and Fan Anqi, “China’s family planning roadmap aimed at protecting national fertility, not banning abortion: experts,” Global Times, 11 February 2022)

PLA conducts simultaneous exercises in sea regions near Taiwan
On 10 February, Global Times reported that the People’s Liberation Army recently conducted three simultaneous exercises near Taiwan. The exercises were conducted in three major sea regions. These exercises have followed massive military combat preparedness exercises of the US and Jaan near Taiwan. The three exercises by the PLA were conducted in the East China Sea, South China Sea and the Yellow Sea. (Liu Xuanzun, “PLA holds simultaneous drills after US, Japan exercise near Taiwan island,” Global Times, 10 February 2022)

REGIONAL
Chinese embassy in South Korea makes a statement regarding the latest controvery
On 10 February. Chinese Embassy in South Korea congratulated skater Hwang Dae-Heon for winning South Korea's first gold medal at the Beijing Winter Olympics 2022. The spokesperson at the embassy said that the Olympics is not just about competition but the spirit of “togetherness.” The statement came in from the Chinese embassy after controversies between Chinese and South Korean netizens regarding Hwang and another South Korean skater Lee June-SEO being disqualified in the semi-finals of 1000 meters. (“China, S.Korea call for more exchanges to cool down sentiments in ice rink,” Global Times, 11 February 2022)

INTERNATIONAL
China’s Ministry of Commerce urges the US to remove the additional tariffs and sanctions
On 10 February, the Ministry of Commerce spokesperson made a statement at the press conference urging the US to remove the additional tariffs and sanctions, and other suppressive measures on Chinese firms. The spokesperson Gao Feng further called upon the US to provide a “conducive atmosphere” and “sound conditions” to expand the trade cooperation. Gao stressed that broadening market access will be beneficial to both China and the US. He stated that China has fulfilled its commitments within the World Trade Organization rules and China’s economic success relies on government interference. (“China urges U.S. to scrap additional tariffs, sanctions,” Xinhua Net, 10 February 2022)

China and Ecuador commences the FTA negotiations
On 10 February, Ecuadorian President Guillermo Lasso made a statement on the commencement of free trade agreement (FTA) negotiations between China and Ecuador. President Lasso said: “The global economy is a reality…. I believe that sooner or later we had to reach this point with China.” He emphasized that China will create many opportunities in Ecuador and may “find a positive path in China” by developing trade. China’s Ministry of Commerce declared that China is Ecuador’s second-largest trading partner in 2021 with 10.95 billion US dollars. (“Economic Watch: FTA negotiations with China to bring growth opportunities, says Ecuadorian president,” Xinhua Net, 11 February 2022)

Iranian Ambassador underlines joint efforts with China in GT interview
On 10 February, Global Times interviewed Mohammad Keshavarzzadeh, the Iranian Ambassador. Iran is celebrating its National Day on 11 February. The Ambassador commended the Beijing Olympics and also emphasised the joint efforts by Iran and China towards regional and global peace and stability. He also stressed that the US should be warned against falling prey to its own policies. Additionally, the ambassador also vowed a steady supply of oil to China while also suggesting prospects of increased military cooperation with China. (Hu Yuwei and Bai Yunyi, “Joint Iranian and Chinese efforts to preserve territorial integrity, sovereignty and self-governance: Ambassador,” Global Times, 10 February 2022)

US Secretary of State refuses Quad purpose as countering China
On 10 February, the US Secretary of State Anthony Blinken said to Australian Broadcasting Corporation that the purpose of Quad alliance is not to counter a rising China. He said: “This is not about standing against anyone in particular. It is about standing up for a rules-based order, making sure that we uphold those rules and principles if they’re being challenged.” He suggested that diplomacy is about ambiguity and that the Quad has a wider range of aims and functions that to merely counter China. (Jacob Fromer, “Top US diplomat denies the Quad’s purpose is to counter a rising China,” South China Morning Post, 11 February 2022)