<aside> 🔌 This translation is part of the ChinaIndia Networked, a (semi) regular newsletter by me, Dev Lewis, highlighting the networked relationship between the two regions at the intersection of technology, society, and politics. Subscribe to get on the mailing list

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<aside> ⚙ Author: Shenzhen Ningnin Shan . [深圳宁南山] Source: Zhihu

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Today two countries are boycotting the ‘Made in China’ hardware and software. One is a developed country, the United States, and the other is a developing country, India.

The US boycott is mainly at the government level through import tariffs and software bans.

Recently, such measures have been taken against Huawei, ZTE, Haikang, Dahua, and Tik Tok. India, on the other hand, is driven by anti-China sentiment, both from the Indian government and people are collectively resisting China. For example, a large number of Chinese made apps have recently been banned, Chinese companies have been banned from participating in Indian road construction, and Chinese companies have had their bids for Indian 4G network upgrades and maintenance canceled. Moreover, quite a large number of Indians are also claiming to boycott made in China goods.

https://lh5.googleusercontent.com/2DT1Z5-kYl6yClmkySnRZqEoN0jkXl83SOYXg62ZTs-vTfg_7LcCc5enLqZBZncfEq8FwF9u-n3Kkc_99xWFKaBHTU3WkVqSzry_n5W4omrKkBL8m211WQ6PstbuPCGtXcXQG6Jq

I find India hard to understand India.

A number of Indian reports on the border clash say that the number of Chinese casualties are double India’s. If they believe these reports then they should believe they’ve “won”. So why boycott Chinese goods?

In any case, when two countries’ relations are tense, is there a point to a government or public boycott of the other country’s goods?

Past cases from the Chinese market are useful to identify the value of boycotting foreign goods.

1. The benefits: In the short term, a country’s boycott of foreign goods can have a relatively large effect. Boycotts can cause foreign companies to suffer large losses, and can also exert pressure on foreign governments. In August 2012, with the arrest of Hong Kongers and the landing of Japanese right-wingers on the Diaoyu island, bilateral tensions between China and Japan and anti-Japan protests in China. There was fairly excessive behaviour such as smashing of Japanese cars that contributed to a sharp decline in sales of Japanese car brands in China to the extent that it caused a decline in annual sales. Among the three major Japanese auto companies Toyota, Honda, and Nissan in 2012, Toyota's overall sales in China in 2012 were 840,000 vehicles, a year-on-year decrease of about 5% to 6%, failing to complete the annual goal of 1 million vehicles; Honda Motor sold a total of 598,600 vehicles in China in 2012, a decrease of 3.1% from 2011; Nissan, which suffered the most severe losses, sold 1,181,500 vehicles in China in 2012, a year-on-year decrease of 5.3%.

  1. In the long run, boycotting foreign goods has little effect. The only way to sustain impact is through the rise of domestic products.

Following the boycott, the sales of Japanese cars in China gradually recovered. Take Toyota as an example. In 2019, sales of new vehicles in China were 1.6207 million, an increase of 92.9% from 840,000 in 2012; Honda sold 1.5544 million new vehicles in China in 2019. An increase of 159.6% from 598,600 vehicles in 2012; Nissan’s sales of new vehicles in China in 2019 were 1.5469 million vehicles, an increase of 30.9% from 1.1815 million vehicles in 2012. Japanese cars are in the Chinese market today, and resistance is already in the shadow of the past.

History tells us that the boycott of foreign goods can indeed bring losses to foreign manufacturers, thereby exerting pressure on foreign governments and also bringing certain opportunities to the development of domestic products.

From the comparison of the sales growth rate of Chinese and foreign brands in the Chinese market in each month of 2012, it can be found that in the fourth quarter of the Diaoyu Islands incident, the sales growth rate of Chinese brand vehicles increased sharply, hitting a sales growth rate of 18% for three consecutive months, which is much higher growth % than the growth rate of foreign auto brands, which shows that the boycott of Japanese goods brought short-term benefits to the development of Chinese brands, temporarily replacing a part of the market share of Japanese cars.

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However, viewing this over a longer period of time, since domestically produced cars cannot surpass the quality of foreign brands in a few quarters or years, market sales will return to the status quo. This shows that the only way to truly boycott foreign goods is to be strong domestically, and this requires a long period of development and capacity. Short-term boycotts are not a big help. In the long run a boycott doesnt make a difference if domestic production is not strong, boycotting can only cause temporary losses to the other party, and cannot fundamentally change the situation.

Side effects:

  1. Balance between freedom and order is important.