India warning against China trading hub
The Indian Embassy in Beijing on Tuesday issued an advisory for Indian businessmen warning them against doing business in Yiwu where a diplomat and two traders were “mistreated” over allegedly unpaid bills.world Updated: Jan 04, 2012 17:41 IST
The Indian Embassy in Beijing on Tuesday issued an advisory for Indian businessmen warning them against doing business in Yiwu where a diplomat and two traders were “mistreated” over allegedly unpaid bills.
The two Indian businessmen, who had been held hostage by Chinese workers deep inside China’s trade hub of Yiwu over a financial dispute, have been shifted to a hotel for security, it was learnt on Tuesday.
Efforts were on to quietly shift them to Shanghai. But the controversy, which left a Indian diplomat in hospital first in Yiwu and then in Shanghai over the weekend and made the Indian government summon a senior Chinese diplomat in New Delhi on Monday, is likely to leave a negative impact on business; the Indian Embassy in Beijing on Tuesday issued an advisory for Indian businessmen warning them against doing business in Yiwu, located some 300 km from Shanghai.
“Indian traders and business men are hereby cautioned not to do business with Yiwu in Zhejiang province. They should be aware that when there are trade disputes with Yiwu, the Indian businessmen/traders can be illegally held under detention and mistreated by Chinese businessmen there. Based on experience, there is no guarantee that legal remedies will be readily available,” the advisory said.
The advisory went on to warn – with the incident involving Shyamsunder Agrawal and Deepak Raheja being a case in point – that, “…experience suggests that there is inadequate protection for safety of persons. All people who have business/trade with Yiwu are cautioned against doing business there and all people who do not have business/trade with Yiwu are requested to be careful that they do not do business with Yiwu. Indian businessmen are cautioned to stay away from Yiwu.”
The informal nature of the trade done in Yiwu – for example, transactions rarely involve issuing formal `line of credits’ pledged to banks – means that often business is done on trust or `word of mouth’. Once the trust is breached, the entire chain gets impacted. However, it is also true that the very volume of business done in Yiwu means that trade would continue despite a temporary stutter.
Official estimates are unavailable but the demand for goods made in villages around Yiwu – ranging from artificial jewellery, socks, bulbs, shoes, scarves and so on – is worldwide; it means that the total trade done there could add up to millions of dollars. Indian traders, for example, do not buy goods from Yiwu for the home market alone; they also cater to countries, say, in South America.
The situation continues to be tense for the two Indians. News agency PTI quoted Raheja as saying they were under police protection at a hotel that was surrounded by a large crowd of locals.
The amount approximately owed to local manufacturers was around Rs 48 million. The identity of the owner, possible a Yemini national, was still not clear; Indian diplomats too didn’t name either the owner or the company. The Chinese government here is yet to comment on the incident.