Sunday, September 27, 2009

Chinese Goods invade Indian market and LAC heats up

Chinese Ceramics Glamour

Just before the turn of this century, about the only thing Chinese found in Indian markets was little vials of balm. Now, seven years down the line, 'Made in China' goods make for an all-season flood, and nowhere more than in eastern India. The items range from toothpicks, toys, thermoses and blankets to high-end furniture, floor tiles and electrical goods manufactured in the Middle Kingdom. There has been a change of perception of Chinese goods even among the discerning and brand-conscious. And the import list, conservatively estimated at about 5,000 broadly categorised items, is only growing. The West Bengal Chamber of Commerce estimates that each household in the eastern region uses at least five Chinese-made items daily. That not only makes the 'Made in China' brand the most popular among foreign goods sold here, but puts China way ahead of any other country that exports to India in terms of volume and range of items.

One reason for their growing popularity is, of course, their attractive pricing, due to economies of scale as well as 'surreptitious subsidies' by the Chinese government. It also helps that Chinese manufacturers are far more innovative than their Indian counterparts and, since they cater intensively to Western markets, are fully conversant with latest design trends, which they incorporate in their goods. Plus, there's been a dramatic change in perception, even among the discerning and brand-conscious. Even till half a decade ago, the popular perception of Chinese goods was that they were cheap, but of very poor quality. The early Indian traders who started importing from China used to get only low-quality, cheap goods. But these days, CII's Eastern India regional director Sunil Misra told Outlook, Indian importers of Chinese goods have realised there's a huge market for quality products.

One of them is Ajay Bhartiya, who imports tiles, wooden and steel doors and windows, and home and office furniture from China. "Chinese manufacturers constantly upgrade their products. For instance, Chinese tile manufacturers change their designs every two months—something Indian manufacturers don't do," he points out. Bhartiya, who has a trade office in Guangzhon, imports at least ten container loads of tiles, building materials and furniture through Calcutta and Haldia ports every month. These are displayed in swanky showrooms in Calcutta, and are much in demand. Sarvesh Kumar, Tata Steel's chief of retail initiative, says Chinese steel furniture is elegant and of very high quality.

Chinese steel furniture accounts for at least a quarter of Calcutta store Steel Junction's monthly turnover of about Rs 50 lakh. Beautiful Living, on Camac Street, finds it difficult to keep pace with the huge demand for the Chinese furniture it imports. Understandably so, since the stools, settees and sofas there look straight out of a Western designer furniture catalogue. The Chinese sanitary ware and bathroom fittings it stocks are also extremely popular with construction companies in the eastern region.
Eastern India's retail market is in thrall of cheap, stylish Chinese goods

We are at Critical Juncture of History. Is Indian Corruption and Trade restrictions hurting China?
Like in the pre-1962 war period, India is again now at a critical juncture, it has become common place internationally to speak of India and China in the same breadth. The aim of “Mao’s India war,” as Harvard scholar Roderick MacFarquhar has called it, was large political: To cut India to size by demolishing what it represented— a democratic alternative to the Chinese autocracy. The swiftness and force with which Mao Zedong defeated India helped discredit the Indian model, boost China’s international image and consolidate Mao’s internal power. The return of the China-India pairing decades later is something Beijing viscerally detests.

China never thought India as an important trade partner or rival until now. China’s attitude towards India has always been contemptuous. When talking about Indian to Chinese people (Shanghaiese in particular), they will probably tell you that 70 years ago, Indians were working as doormen in Shanghai. A recently declassified letter (March 2, 1973), from Henry Kissinger to Richard Nixon, showcases the utter contempt Mao Zedong and Zhou Enlai had for the Indian leadership. Kissinger says, inter alia,

“In South Asia, the Chinese believe India remains Moscow’s principal agent; their distrust of New Delhi remains as potent as ever... Chou (Zhou) displayed a particular contempt for the Indians and a personal dislike for Indian leaders. He related several cynical and disdainful anecdotes about Prime Ministers Nehru and Gandhi.... In response, I said that we would go slow in any improvement of relations with New Delhi and would keep the PRC informed.”

Things are certainly changing now when China realized that the competition from India is real and serious. India is claiming to switch their focus from back office service to manufactory; India has English language advantage over China; Chinese Yuan is forced to appreciate against US dollar.
Is China itching a Border War?
China is far ahead: Anthony at the border 2 years ago

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