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No lull in the China shop

It took a traders’ hostage crisis and a fainting diplomat for New Delhi to finally pay attention to the most prevalent face of India inside China, the world’s largest exporter.

india Updated: Jan 06, 2012 23:08 IST
Reshma Patil

It took a traders’ hostage crisis and a fainting diplomat for New Delhi to finally pay attention to the most prevalent face of India inside China, the world’s largest exporter. He lives in an eastern Chinatown called Yiwu, the underbelly of Sino-Indian bilateral trade.

He wears a rip-off branded T-shirt, scruffy jeans and sneakers. A young Chinese woman is always by his side to negotiate in Mandarin. He walks a few kilometres a day in search of bargains inside the cavernous halls packed with over 60,000 booths comprising Yiwu’s wholesale market — the world’s largest. He is one of the unknown numbers of Indians who deliver the buttons on your shirt, the zip on your jeans, the Ganesha in your apartment and the Shivaji statue on a corporator’s desk in Mumbai.

The Indian embassy has warned Indians not to trade with this city of two million people, 1,900-km east of Beijing, where a Chinese mob held two Indians hostage for several days for their company’s non-payment of dues. S Balachandran, the diplomat sent to negotiate their release, fainted after the angry throng reportedly deprived him of food and medicine.

The showdown, a common scenario in Chinese factory towns, should have been anticipated. It will impact the short- and long-term business climate with our largest trading partner.

In economic diplomacy, the trader of ‘cheap’ made-in-China products is mistakenly ignored. He is dismissed as being a mere small-time, small-town player in the Sino-Indian trade growing to $100 billion by 2015. In reality, many Indian importers have come to small Chinatowns and become millionaires. China, the world’s most populous nation, has barely 25,000 Indian residents. So these importers thronging the export heartland of China are the most visible Indian presence who define India’s business image in public sentiment.

We need to change this image to effectively expand bilateral business and ensure that Indian entrepreneurs entering China face less distrust in future. Every Chinese trader I met in Yiwu in 2008 exclaimed that Indians are ‘cheapskates’ and lagga-rdly on payments. The long-term solution for mutual benefit is to bring these scattered traders into a formal lobbying group to mediate in disputes and support traders who appreciate business ethics. Encouraging aboveboard trade practices won’t be easy; most traders avoid regist-ering their presence with the embassy. Pricing and invoicing practices are dubious trade secrets.

India has issued the advisory on Yiwu in the confidence that it holds the future cards to trade with Chinatowns. Small-towns like Yiwu, more than Shanghai, Shenzhen and Guangzhou, epitomise the largest export-led economy’s dependence on the Indian consumer. Chinese sweatshops and migrant jobs depend more than ever on the Indian small-town market, which expanded while the West declined. The authorities in Yiwu will be secretly worried about losing Indian importers to competing provinces.

During the global economic tsunami, when western demand for toys and Chri-stmas trees crashed, Indians were the only buyers sourcing products from Yiwu. Nowhere else in China are Indian restaurants, advertising vegetarian kitchens, lined up in a row on real estate as prominently as the street across the buildings housing the world’s largest market. In a nation with restricted satellite television access, Yiwu screens are tuned to saas-bahu sagas.

The emerging middle-class in urbanising India is fascinated by made-in-China products for home décor and gift items. The risk of dealing with non-English speaking traders, signing Mandarin contracts and suffering bullying tactics in disputes is seen as worth the profit. An umbrella imported for Rs35 or less in China is sold for around Rs350 in India. The small-town trader will not stay away from Yiwu.