China warns of negative impact on India-bound investments
The Dollar Business Bureau
Amid the ongoing social media campaigns to boycott Chinese goods in Diwali festival, China on Thursday warned that any such decision will negatively impact the India-bound investments from Chinese enterprises and also the bilateral relations between the two neighbours.
China also underlined that while China’s exports will suffer marginally due to any such move, the biggest losers will be the Indian traders and consumers.
"The exports to India accounted for only 2% of China's total exports and India's boycott of Chinese goods will not have much impact on China's exports."China is more concerned that the boycott will negatively affect Chinese enterprises investing in India and the bilateral cooperation, which both Chinese and Indian people are not willing to see," the Chinese embassy said in a statement.
China is currently the world's largest trading nation in goods. Its exports in 2015 stood at $2276.5 billion.
Confederation of All India Traders (CAIT) in its recent statement said the sale of Chinese products in India may decline by 30% this Diwali.
India has been a big market for Chinese products, and imports of toys, furniture, building hardware, crackers, lighting and electric fittings, furnishing fabric, office stationary, electronic appliances, consumer electronics, kitchen equipment and appliances, gift items, watches etc from China have continuously increased in this market.
Chinese products are generally low-priced, which is why the infiltration of Chinese goods into the Indian market has been on a constant growth, CAIT said.
The Chinese embassy referred to reports that local sellers in Sadar Bazaar have complained about a 20% decline in the sale of Chinese goods. "The boycott effect will not limit to Diwali related products, but extended to other Chinese products that are not related to the festival. In the long-run, boycott will not only hurt Chinese goods sale, but also cause negative effects to consumers in India," it said.
Pointing out to China-India trade cooperation, the embassy said the bilateral trade has increased 24 times in 15 years, from $2.9 billion in 2000 to $71.6 billion in 2015. "China has become India's largest trading partner, source of imports and fourth largest export market. Moreover, India is China's largest trading partner in South Asia and ninth largest export market in the world," it said.
Indicating that this move or a similar move by China could cause a significant damage to the Indian industry, the statement said, "In 2015, China has imported 2 billion dollars worth of cotton and more than 100 million dollars worth of black tea from India, bringing benefits to 1.2 million cotton growers and 50,000 tea farmers and sellers in India.
"Moreover, 60-70% of Indian APIs for its pharmaceutical industry are from China. China has played an important role in Indian pharmaceutical industry's march to EU and American market,” the report said.
