China's dominance in speakers and it's supply chain

AV Cables

musikcan

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https://economictimes.indiatimes.co...&utm_medium=HP&utm_campaign=TN&utm_content=23

An eye opener about the dominance of China in speakers and amplifiers...

Behind this news is the $43 trillion debt the chinese have amassed (3 times their GDP), the highest in the world, currency manipulation at its finest, extremely large shadow banking system with its own set of massive NPAs.
That amount of debt is going to consume the country one day and it will not be pretty.
 

DB1989

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China does not operate on market economy principles. It is upon other countries to take corrective action if they face a threat. Till then, enjoy lower priced electronics. I think its a win win situation.
 

avtar2008

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if china economy falls someday, then other countries will come for its revival, since they so much depend on china that they cant survive without chinese products.
 

musikcan

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if china economy falls someday, then other countries will come for its revival, since they so much depend on china that they cant survive without chinese products.

The companies will slowly move out one by one to Vietnam, Thailand, Malaysia and some to India as well..China will feel the squeeze in the next 5-10 years
 

DB1989

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The companies will slowly move out one by one to Vietnam, Thailand, Malaysia and some to India as well..China will feel the squeeze in the next 5-10 years
If you mean the chinese companies who are going to move out, then yes. Chinese companies are already taking over companies in other countries or have started manufacturing outside china i.e. in other countries, either in collaboration with local players or sometimes on their own as well. When india imposed safeguard duty on solar cells and modules in 2018, the big chinese players simply moved base and started manufacturing elsewhere. Another great example is when moserbaer managed to get antidumping duties imposed on usb thumb drives in 2014 when imported into india fro China, sandisk simply shifted their manufacturing outside China.

So no, i don’t think Chinese companies are going to feel the squeeze any time soon.
 
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musikcan

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History is proof of when one country tries to become dominant, the fall can be very swift. What goes up too fast will come down, that is the nature of business cycle.
Australia has just started a rare earth mine in co-operation with US defence establishment in their country.
China is a big importer of food, and their top 3 importers in that sphere is US, Canada and Australia and they pick up a fight with all three. They can squeeze them anytime.
If you push a country too far who is capable of giving it back, your bad time has just started. Just one ban on an app like Tiktok from India and Bytedance IPO ($75B) dreams vanished and the company is struggling to survive. US just saw that and piled on the misery.
Do talk to Huawei folks and their misery is well underway. With impending ban from India on 5G from Huawei, they will lose more billions and market share.
 

DB1989

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History is proof of when one country tries to become dominant, the fall can be very swift. What goes up too fast will come down, that is the nature of business cycle.
Australia has just started a rare earth mine in co-operation with US defence establishment in their country.
China is a big importer of food, and their top 3 importers in that sphere is US, Canada and Australia and they pick up a fight with all three. They can squeeze them anytime.
If you push a country too far who is capable of giving it back, your bad time has just started. Just one ban on an app like Tiktok from India and Bytedance IPO ($75B) dreams vanished and the company is struggling to survive. US just saw that and piled on the misery.
Do talk to Huawei folks and their misery is well underway. With impending ban from India on 5G from Huawei, they will lose more billions and market share.
International diplomacy is beyond me. But it'll be difficult to squeeze China on all sectors.

India could ban tiktok and the US could compel Bydedance to sell because it is not a sector squarely covered by the rules of the General Agreement of Tariffs and Trade and General Agreement on Services on Trade to which both India, China and the US are parties.

Considering the scope for snooping through an IT product, its much easier to apply a ban or regulate it citing national security (under Article XXI of the GATT e.g. the 2018 restrictions imposed by the US on imports of steel) than something as simple as basic chemicals & compounds. It'd prove much more difficult for nations to justify how such goods are affecting national security if a ban was sought to be applied.

And herein lies China's strength. China is a huge producer and exporter of almost all commodities. Case in point, out of 1097 tariff items at the 4 digit level in our Customs Tariff, India imported goods under 1068 tariff items from China which is far more than any other country. This clearly demonstrates our huge dependency on China. The same is also applicable to all other major economies of the world.

You can check out this website to gauge the balance of trade of most countries in the world with that of China: https://www.trademap.org/

My point is, its going to take a mammoth effort and unless all the major economies are in cohorts and conspire/scheme/take an initiative (whichever term one uses depending on their ideological inclinations and biases) to put China out of business, I don't see it happening.

I reiterate, i'm no expert on international diplomacy as it is mostly abstract (at least to me - its beyond my comprehension) and dictated by those in power at a given point of time (it'll be interesting to see what happens if Biden wins) but considering the international agreements between the countries which are very much tangible and lay down a rule of conduct with some amount of certainty, I don't see it happening anytime soon.

However, aren't we digressing?

Fact is, China is producing cheap and it is a win win situation for us consumers! Competition is good! :D
 
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musikcan

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Countries can always restrict imports citing reciprocity which GATT does not penalize you on. They were routing their exports through countries which have a FTA with India and that is getting tightened. So it has always been an unfair dealing with them...Many of those items are not essential ones which can easily be replaced domestically or through other channels..
 

oldmonk

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the OP's article focussed on audio products and it is certainly true China has a towering presence in the audio gear manufacturing arena - for many reasons.

What they need to be careful about is :-

a. Pushing a good friendly peaceful neighbour to the edge where there is no choice left but to hit back.

I am quite confident when push comes to shove , we will deny China the last laugh - of selling to us as if nothing is happening.

I hope our government keeps the faith reposed in it and the man on the street expresses his or her views clearly to the government.

b.

Covid 19 after effects and the potential demise of a way of life fuelled by consumerism & fossil fuels.

The loss of job and the falling of economies like a pack of cards is bad for China also.

No demand means no buyer means no manufacturing means No China

Anyways - we are the lucky lot - Audio hobby is totally expendable compared to real life situations.

So i wont cry if my audio hobby stops tomorrow.

c.

Rise of Nationalism and globalization on a downslope

Chinese exports thrive on Globalist behavior where there is unrestricted movement of goods & services and people

China used to export its stuff but find a way to restrict non essential imports into its market.

Without hypocrisy there is hardly a business no ?

So countries like India cannot export as much as they can and there is always a trade imbalance to our dis-advantage.

The rise of nationalism in USA / Brazil / India / Russia and Europe ( besides originally China ) is not good news for China.

But of-course they will be counting on many nationalist leaders filling their own pockets - why there are also reports that President Xi's relatives have been filling their pockets too in Communist China !!

d.

Reduction in demand might mean countries taking back their manufacturing units to provide jobs for their own youth.

Jobless persons cannot be good for any country.

People have to be employed gainfully

So these are very critical time for the world at large and China also.

e.

Not to forget Chinese support for Mumbai attack terrorists housed in Pakistan and also the constant anti India movement made by China in world fora.

Not to forget China is still not allowing a proper investigation into the source of the Wuhan virus - this needs to be settled - once and for all - so we know the origin and the path the virus took - this will help preventing future pandemics.

If there is any deliberate helping hand provided - then suitable penalties should come IMO.

IMO - China isn't sitting too pretty itself ..economically despite it showing its size and making aggressive noises.

Lets hope that we all come out of this with our head held high and borders settled once and for all in a logical peaceful way.

Problem is - Hong Kong was to be maintained till 2047 but that hasn't been the case - can the CCP be trusted to keep its part of the deal ??

In all this - it is important to separate the Chinese people from the actions of the Chinese CCP.

It is possible Chinese people are certainly more humane than we think they are ( language and culture is a barrier ) but the success of Dangal in China proves that they do have a heart.

This last point is very critical.

We are all humans - pain / sorrow / suffering / blood shed - will cause pain to all of us.

Lets pray for peace and hope we come out of Wuhan virus problem as soon as is scientifically possible.
 

quad

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India has a long way to go to become a world class manufacturing hub - too much of
compliance burden, unfriendly interface of pretty much all govt depts - esp customs etc, archaic
laws which will be invoked as per convenience or mood of officials etc, infrastructure not up to
the mark, lack of all round supply chain / parts/components ecosystem, productivity....
 

DB1989

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Countries can always restrict imports citing reciprocity which GATT does not penalize you on. They were routing their exports through countries which have a FTA with India and that is getting tightened. So it has always been an unfair dealing with them...Many of those items are not essential ones which can easily be replaced domestically or through other channels..
Sir, I believe you are plainly wrong here. My line of reasoning is as follows (I'm not ruling out the possibility that I may be wrong also and I more than welcome you or anyone else to point out any fallacy in my reasoning):

Firstly, The principles of reciprocity have no application insofar banning imports of goods are concerned, especially in the situation/circumstances that you have envisaged. Firstly, there is no provision under the GATT which allows for unilateral withdrawal of concessions unless they are covered by the exceptions. I am unclear about which principles of reciprocity you are referring to. Could you point it out? Maybe i'm missing something? Its not entirely in the realm of the impossible.

Secondly, The founding principle of GATT is liberalisation of tariffs and trade barriers (please refer to principles of national treatment and most favoured nation in Article I, II and III of the GATT) and the exceptions are very few and far in between WHICH ARE ENUMERATED SPECIFICALLY IN THE GATT AND THEY DO NOT ALLOW FOR ANY OTHER EXCEPTIONS i.e. Article VI of GATT (Anti-subsidy measures and AntiDumping measures), Article XII (Restrictions to safeguard balance of payments), Article XIX of GATT (Safeguard Measures), Article XX of GATT (General Exceptions) and Article XXI (National Security Exceptions).

Let me give you an example: Even if an importing member of the WTO bans import of goods illegally, the exporting country facing the import ban is foreclosed from taking action unilaterally in response to such action and the proper modus operandi prescribed under the WTO is to approach the dispute resolution body (DSB). It is only when the DSB rules in favour of the complainant that they are allowed to withdraw equivalent concessions.

Looking at it conversely, there would be no reason for the DSB to exist if a party was allowed to take action unilaterally, right?

Insofar as routing goods through other countries with FTAs are concerned, you'd be interested to note or may already be aware of the fact that the Ministry of Finance has issued the "Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020" so these concerns have been adressed.

The Rules alongwith the circular clarifying it can be downloaded using the following link:

https://www.cbic.gov.in/resources//...ions/notfns-2020/cs-nt2020/csnt81-2020new.pdf

https://www.cbic.gov.in/resources//...ars/cs-circulars-2020/Circular-No-38-2020.pdf
 
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keith_correa

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And all posts were so good till now. Did not always make sense to me, but for the most part they did. But when facts are presented they most often than not always have to end this way - in a juvenile sulk! :rolleyes:
 

DB1989

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I will leave the discussion here as you are not an expert on GATT and WTO. Please buy only chinese and be happy
Sir, please do not take my explanations otherwise. I was only giving an opinion and it is just that, an opinion. I was not trying to suggest in any manner that you are wrong and I am right but only to clarify the correct factual situation as i know it to exist. That is the reason why I have tried my best to substantiate it with facts and references so that people viewing this thread can figure out where I am deriving my information and opinion from. Perhaps it could be an area of interest for them?

Also, what makes you believe i'm not an expert? ;) ;) ;)
 
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