Business Companies 19 Feb 2019 Chinese firms feel h ...

Chinese firms feel heat of Pulwama

Published Feb 19, 2019, 12:53 am IST
Updated Feb 19, 2019, 11:03 am IST
People call for a boycott of China products.
Paytm allows Indians to buy millions of Chinese products at affordable prices through its association with Alibaba Group.
 Paytm allows Indians to buy millions of Chinese products at affordable prices through its association with Alibaba Group.

Hyderabad: Ire over the Pulwama attack has spilt over to China with a section of society calling for a ban on Chinese products and boycott of companies with affiliations to that country.

As China continues to support Pakistan and reviews its stance on declaring Masood Azhar head of the Pakistan-based Jaish-e-Mohammed a terrorist, people are turning their ire on Paytm because of its affiliation to the Alibaba Group, a Chinese e-commerce company.


In 2015, as part of a strategic agreement, Paytm received funding from Ant Financial Services Group, an Alibaba Group affiliate. The group took 25 per cent stake in One97, Paytm’s parent organisation.

Paytm allows Indians to buy millions of Chinese products at affordable prices through its association with Alibaba Group.

Dr Satish Kaipilyawar, who has been working with NGOs and designing health programmes for over 30 years, explained why he stopped using Paytm about a year ago. “I didn’t want my purchases to directly benefit China. I think Paytm should stop collaborating with Chinese companies like Alibaba,” Dr Kaipilyawar said.

“Every other product in India has been made in China. It is time for a complete boycott of Chinese goods. It is time to hurt them economically. I have switched to bank cards to make payments. I call on others to do the same.”

Lt Gen K.R. Rao (retd.) agreed and brought up additional issues around online security. “My concerns are around data harvesting. Sites such as Paytm and Alibaba have access to people’s personal details. Why should we become vulnerable to it,” Lt Gen Rao asked. “I don’t have Paytm and don’t intend to have it either. The responsibility lies with everyone else to also say no to it.”

But the complexity of bilateral trade between India and China is, too, intricate to call for a complete ban on goods, say other defence personnel.

Data released by the ministry of commerce and industry shows that India’s trade deficit with China increased two-fold from $16 billion in 2007-08 to $51 billion in 2016-17.

India’s imports from China ($61 billion) in 2016-17 were six times its exports ($10 billion) – a trade deficit that is hugely in China’s favour.

Military historian K.S. Nair said India’s anger is justified, but public announcements of banning procurement from China will not change China’s behaviour.

China is so thoroughly integrated into the global manufacturing chain that it is very difficult for any country in the world to delink itself from it, specially at short notice.

Also, he said, India does not have the economic depth or the economic sophistication to take on China. Instead, India must find ways to change China’s behaviour and that will require more meaningful steps. “China has behaved in utterly unforgivable ways for many years, over supporting terrorism against India emanating from Pakistan, and in particular by blandly blocking otherwise unanimous motions to designate the UN-proscribed Pakistan-based terror group’s chief a global terrorist,” Mr Nair said. “China has invested $20-40 billion in the China Pakistan Economic Corridor programme, for which they have their own reasons. In addition, they rely on Pakistan to control leakage of Islamic extremism into their predominantly Muslim Xinjiang province.

“They use Pakistan as a proxy to trouble India and have until now protected Pakistan in all circumstances.” He further said: “Pakistan in turn is dependent on Chinese funding and financial assistance. Their economy is in a bad shape and they are completely dependent on funding they can source from China, or from Saudi Arabia.”

For India’s part, when it comes to boycotting Chinese products, an immediate blanket boycott will only end up hurting us. “China is our largest trading partner, and we have a trade deficit with China. We are not economically ready to take up that slack, unless the Indian population is willing to undergo 5-10 years of austerity,” Mr Nair said. “Those who are declaring a boycott of Chinese goods haven’t looked inside the boxes of their cars, washing machines and mobile phones. Many of them will at least have components sourced from China.”

The process has to be a long and gradual reduction on India’s reliance on China. “It can be done, but it will be a long and difficult process, requiring consensus across the political spectrum,” he said. “We can cause pain in other areas, for example by overtly supporting Taiwan in its disputes with China. We could start supporting some of the nascent movements around the world for Tibetan autonomy, if not independence.

“We could more firmly repudiate Chinese diplomatic efforts to marginalise the Dalai Lama. The present Indian government often claims that it has great support and respect from the US, the UK and the European Union let us prove that and get them to add actionable support to our concerns.”

Wing Commander T.J. Reddy (retd.), also president of Air Force Association, Telangana and Andhra Pradesh, said, “The US has already reduced import of Chinese goods from 95 to 82 per cent under President Donald Trump. We need to start doing the same. But withdrawal takes years. A call for withdrawal of online sites such as Paytm is quite right, but it will not affect China greatly. Only a nationalist fervour, making China realise that India is not the same anymore, can help. We need to emphasise how tough we are.”

Paytm was contacted for a response but had not replied till filing of this report.

Location: India, Telangana, Hyderabad