[Updated] Rising tensions and effect on global trade

[Upgrade00]

India recently banned 59 Chinese apps within their region as tensions continue to rise between the two nations. India claimed to have received reports of data misuse by the Chinese apps which were blacklisted;

“The compilation of the data, its mining and profiling by elements hostile to national security and defence of India, which ultimately impinges upon the sovereignty and integrity of India, is a matter of very deep and immediate concern which requires emergency measures,” it said. “There have been raging concerns on aspects relating to data security and safeguarding the privacy of 130 crore Indians. It has been noted recently that such concerns also pose a threat to sovereignty and security of our country.”

This is the latest on the ongoing dispute between both nations over the Line of Actual Control that separates both territories for which dozens of soldiers were reported to have been killed just recently.

Both nations are the most populous in the world and trade tensions between them could impact the growth of businesses which are heavily reliant on the other. China are mostly the producers while India consumes their product, this ranges from a social platform to machinery;

"...According to the World Bank, India imports more goods from China than any other country, buying more than $90 billion worth of products in 2018 including machinery and electronics, chemicals and consumer goods. It exported less than a fifth of that amount to China.

Now, the spat is spilling over into technology, threatening billions of dollars worth of investments into India by Chinese tech giants.

India is now the biggest overseas market for Chinese smartphone makers, which have built factories and created jobs in the country. The attack on Chinese apps could jeopardize China's ambitions to dominate global tech, with India viewed as a major growth market for internet companies such as ByteDance..."
Source - https://amp.cnn.com/cnn/2020/06/30/tech/india-china-app-ban-intl-hnk/index.html

This appears to be a political move from one or both parties, the two possible scenarios are;
• The Chinese government is attempting to use the popularity of companies within its region to get public data
• The Indian government is trying to hurt Chinese based companies as it has one of the largest consumer base for their products.
The Indian government would likely encourage its citizens to use local products, this however could affect the nation if this does not meet the required standards.

Both countries are members of the World Trade organization, with the goal of maintaining a peaceful and efficient trade between nations.
How do you think political interventions would limit the growth of companies and affect global trade?
Edit:
More recently, The United States have imposed a ban on operations of Chinese apps within the country, notable Tiktok and WeChat. A day after the Mike Pompeo started a 'clean network' program;
"On Wednesday, U.S. Secretary of State Mike Pompeo expanded a program dubbed "Clean Network" to prevent various Chinese apps and telecoms firms from accessing sensitive information on U.S. citizens and businesses."

The U.S president Donald Trump issued a sweeping ban on both Chinese apps, citing security risk as the main reason. This ban which was made on the 6th of August, 2020 and would take effect on the 20th of September, 2020 (45 days after).

Winners and lossers
The losers here would be Tiktok, WeChat owned by Bytedance and investors Tencent holdings all of which may have already suffered loses or are estimated to. China released a statement following the announcement;
"China said on Friday the companies comply with U.S. laws and regulations and warned that the United States would have to "bear the consequences" of its action.

"The U.S. is using national security as an excuse and using state power to oppress non-American businesses. That's just a hegemonic practice," foreign ministry spokesman Wang Wenbin told a media briefing."

There are however winners in this, Microsoft are looking to purchase Tiktok USA before the end of the 45 day ultimatum, this would include all operations within the country. As the brand is banned it would definitely be rebranded.
Instagram are also planning on launching their new video based section, which has so many similarities with Tiltok. The weakening of their competition could give Facebook a route to exploit and gain more monopoly over the social market.
This was not lost on Tiiktok who retweeted the launch tweet by Instagram with a comment; "Well... this looks familiar"

Source - https://www.yahoo.com/news/trump-issues-orders-u-ban-023044461.html

Update
This weekend, Bytedance are reportedly planning to challenge the executive order;

TikTok's legal challenge pertains to an earlier executive order, which Trump issued on Aug. 6, the sources said. That order directed the Secretary of Commerce to come up with a list of transactions involving ByteDance and its holdings that should be banned after 45 days.

TikTok plans to argue that the Aug. 6 executive order's reliance on the International Emergency Economic Powers Act deprives it of due process, according to the sources. TikTok will also contest its classification by the White House as a national security threat, the sources added.

This legal step is most likely an attempt to improve their bargaining position as negotiations continue. It would not stop the process of then divesting their operations within the country.

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[Lucius]

"...According to the World Bank, India imports more goods from China than any other country, buying more than $90 billion worth of products in 2018 including machinery and electronics, chemicals and consumer goods. It exported less than a fifth of that amount to China.

In my view of the situation, this development does not surprise me at all, because it is only a policy of weakening China in the sense to prevent them to become the world's leading economic power. But that doesn't mean that India is doing it on its own, but that the whole thing has long been cooked in the US kitchen.

The war in the economy and the dominance over world control has been going on for decades between the USA (and its allies) on the one hand, and China (and its allies) on the other. The man who has become very important in the Trump administration is called Michael Pillsbury, and his book The Hundred-Year Marathon reveals some things he thinks have been done wrong for decades, resulting in a complete turn towards China.

A trade war between China and India would only mean an even greater weakening of China, as India will have to turn to imports from some other countries. I don't think you need to be too intelligent to see the bigger picture of the problem, and here the economic-political war is obviously at work in what seems to be its initial stage.

[fiulpro]

India recently banned 59 Chinese apps within their region as tensions continue to rise between the two nations. India claimed to have received reports of data misuse by the Chinese apps which were blacklisted;

“The compilation of the data, its mining and profiling by elements hostile to national security and defence of India, which ultimately impinges upon the sovereignty and integrity of India, is a matter of very deep and immediate concern which requires emergency measures,” it said. “There have been raging concerns on aspects relating to data security and safeguarding the privacy of 130 crore Indians. It has been noted recently that such concerns also pose a threat to sovereignty and security of our country.”

This is the latest on the ongoing dispute between both nations over the Line of Actual Control that separates both territories for which dozens of soldiers were reported to have been killed just recently.

Both nations are the most populous in the world and trade tensions between them could impact the growth of businesses which are heavily reliant on the other. China are mostly the producers while India consumes their product, this ranges from a social platform to machinery;

"...According to the World Bank, India imports more goods from China than any other country, buying more than $90 billion worth of products in 2018 including machinery and electronics, chemicals and consumer goods. It exported less than a fifth of that amount to China.

Now, the spat is spilling over into technology, threatening billions of dollars worth of investments into India by Chinese tech giants.

India is now the biggest overseas market for Chinese smartphone makers, which have built factories and created jobs in the country. The attack on Chinese apps could jeopardize China's ambitions to dominate global tech, with India viewed as a major growth market for internet companies such as ByteDance..."
Source - https://amp.cnn.com/cnn/2020/06/30/tech/india-china-app-ban-intl-hnk/index.html

This appears to be a political move from one or both parties, the two possible scenarios are;
• The Chinese government is attempting to use the popularity of companies within its region to get public data
• The Indian government is trying to hurt Chinese based companies as it has one of the largest consumer base for their products.
The Indian government would likely encourage its citizens to use local products, this however could affect the nation if this does not meet the required standards.

Both countries are members of the World Trade organization, with the goal of maintaining a peaceful and efficient trade between nations.
How do you think political interventions would limit the growth of companies and affect global trade?

Okay , let's face this, the trade industry kind of in a turmoil between the two nations , but at the same time it is supposedly a good thing :

•Bulbonic Plague is reported in China
•New Pandemic potential Swine flu virus was reported last week

I do think it's time we stay safe and if needed , ban the trade . Chinese products don't have much shelf life and are most of the times just used because they are cost effective. India can very easy employee their population for new industries and start producing things inside their own country.

They have millions of people who are in search of job and resources can be used Efficiently.

This fight is endless , they are fighting a cold war since ages and sooner or later were bound to have problems visible to the whole world. Right now we can only hope that they don't go into War , sign a peace treaty and leave both sides undisturbed.

War should never be an option.

[suzanne5223]

A situation like is expected to happen sooner or later because in the year 2019 before the pandemic issue, India was seen as one of the fastest growing major economy in the world and it was predicted to overtake of the U.K and Germany.
Meanwhile,their last year economy growth left some suspicion and China in the other are know for their centralization habit. I believe this is what led to the data misuse by the Chinese.
 As we're all aware that the two countries goals as a member of  World trade organization it better the political interventions make a positive correction rather add salt to the wound due to what are at stake.

[Sanugarid]

These application banning due to some possible 'data stealing' is an old way of hurting someone's economy, these are just a reason so China would respond properly. There have been applications, trending applications that has been reported to be stealing someone's data once they log into it, but I think those are not true. Last few weeks, there were reports circulated on the media that the FaceApp was used by some Russian organization to steal data from its users, turns out to be not true.


So I guess these things happening between China and India is real, it's not about the problem that they are fronting, it's about India telling China that they can fight them.

[Coyster]

A trade war between China and India would only mean an even greater weakening of China, as India will have to turn to imports from some other countries. I don't think you need to be too intelligent to see the bigger picture of the problem, and here the economic-political war is obviously at work in what seems to be its initial stage.

National trade policy has always involved politics in one way or another, countries trade more with those they have close political ties with, and the moment there's a fraction on their political landscape, they both seek means to frustrate the economy of the other (it being the backbone of every country) in anyway they can. China vs India are the latest in this economic cum political war and imo it's going to impede China more, they are more of the front-runners in the chase against the US to be the leading economy in the world; and obviously China threw themselves into this political war without assessing what they stand to lose in the grander picture.

I do think it's time we stay safe and if needed , ban the trade . Chinese products don't have much shelf life and are most of the times just used because they are cost effective. India can very easy employee their population for new industries and start producing things inside their own country.

Producing things/goods locally does not inhibit international trade, AFAIK it's not possible to use only things produced locally, and every country imports either goods or uses applications etc made by others. TikTok was one of those applications India banned, with more users there than anywhere else in the world, how do you expect all these people to leave TIkTok for another (local) app.

[Upgrade00]

I do think it's time we stay safe and if needed , ban the trade . Chinese products don't have much shelf life and are most of the times just used because they are cost effective. India can very easy employee their population for new industries and start producing things inside their own country.

A huge percentage of the world has become heavily dependent on Chinese products and a transition to some other source or locally produced goods would not be easily sustainable nor would it be swift.
A look at this chart from 2013 shows how the Chinese manufacturing sector kept rising during its industrialization, while most of the other nations in the top five had flattened out;

Source - https://www.stlouisfed.org/publications/regional-economist/april-2016/chinas-rapid-rise-from-backward-agrarian-society-to-industrial-powerhouse-in-just-35-years#fig2

And from then till now their reach has expanded further

and China (and its allies) on the other.

Pakistan appears to have picked their side they would reportedly gain funding for a hydroelectric project from China within the borders. It's now a struggle for individual and shared interests.

[Darker45]

While it is true that India may have political reasons or perhaps even economic reasons why they ban a lot of Chinese apps, they definitely also have valid security reasons against these technological inventions.

Of course, the tension between the two countries may have accelerated these decisions. However, we have to take note that India is not the only country in the world that bans certain Chinese apps on security grounds. These apps being found to be spying for China.

[bitbunnny]

A situation like is expected to happen sooner or later because in the year 2019 before the pandemic issue, India was seen as one of the fastest growing major economy in the world and it was predicted to overtake of the U.K and Germany.
Meanwhile,their last year economy growth left some suspicion and China in the other are know for their centralization habit. I believe this is what led to the data misuse by the Chinese.
 As we're all aware that the two countries goals as a member of  World trade organization it better the political interventions make a positive correction rather add salt to the wound due to what are at stake.

Just because the situation like you've described and tendency of some countries to grow and develope fast in economic way and thus overcome some other superior countries some say that this pandemic wasn't accidental and that the purpose was to create new world order and slow sone countries down, like India and China.
I.don't believe in conspiracy theories but on the other hand when we look in what world we live in nothing seems to be impossible.

[jrrsparkles]

AFAIK, apps are not included in the world trade list, so we can't do anything with respective government's decision.And we all knows that China is collecting user data from all over the world and in many countries their apps were banned temporarily so this as well will be a temporary ban.While China never allow any company to work in their region from any other country but they expect every country to allow their apps.Its unfair though.

[TheUltraElite]

AFAIK, apps are not included in the world trade list, so we can't do anything with respective government's decision.

The thing is that even if apps are not trade list, they are what is running the world today. Even new project is developing their own app and marketing it. This generate revenue and this what the smartphone ecosystem is working on.

Banning an app like say facebook would lead to massive amount of loss for the company and its investors. Thus it is a type of diplomatic stance to prevent them from doing what they were doing and making money off it. Now I agree that it does not seem conventional but it is effective. Some countries have done so in past and I appreciate this current stance by the Indian government.

The youth of this country needs to understand what is important to them and not get clogged on social media bullshit.

[ecnalubma]

China and India border tension surprised the chinese government they probably didn't see it coming, now their dream of becoming economic leader might slowly fade. If trade war between China and other nations get worse then billion dollars of revenues and deals will vanished.

I think China will have a hard time gaining good relationship between big and small countries they have created a lot of troubles this decade. From creating tensions in south China sea, crisis in Hongkong, trade war, the pandemic and now the tension between India. What will be next?

[TIDOVEE]

At first, if the Indian decides to ignore Chinese products, consider it as an opportunity for them to discover their potentials, time as come that every nation has to rise up and see how far they can be less dependent, I'm am not saying we do not need a mutual benefit relationship but looking beyond the political, see the way movement was restricted during the pandemic and now imagine how nations will survive if they will have to wait for another country.

[jrrsparkles]

AFAIK, apps are not included in the world trade list, so we can't do anything with respective government's decision.

The thing is that even if apps are not trade list, they are what is running the world today. Even new project is developing their own app and marketing it. This generate revenue and this what the smartphone ecosystem is working on.

Banning an app like say facebook would lead to massive amount of loss for the company and its investors. Thus it is a type of diplomatic stance to prevent them from doing what they were doing and making money off it. Now I agree that it does not seem conventional but it is effective. Some countries have done so in past and I appreciate this current stance by the Indian government.

The youth of this country needs to understand what is important to them and not get clogged on social media bullshit.

While China never allowed any company to work from outside of their country that is why google,facebook,whatapps even Chinese game like PUBG is not available in their country.This has political reasons though so China needs to change their behaviour towards other countries economically or they will get big damage to their economy in long run.

[Upgrade00]

Update:
Just days after the ban on Chinese apps by India, the U.S. appears to be planning a similar action. The United States is 'looking at' banning TikTok and other Chinese social media apps, Pompeo says
The secretary of state said during an interview in response to a question about the nation's stance that;

"With respect to Chinese apps on people's cell phones, I can assure you the United States will get this one right too, Laura," he said. "I don't want to get out in front of the President [Donald Trump], but it's something we're looking at."

Washington's top diplomat added that people should only download the app "if you want your private information in the hands of the Chinese Communist Party."

[slapper]

I believe this case will heavily damage the global trade and international business since both of them are countries with the most population in the world. They created a lot of jobs as well as consume a huge amount of product from each other. This move will affect the world a lot. However, in my opinion, this also a good chance for factories locating in China to be moved to India, which creates a lot of new work for employees and people. Moreover, this impact can also make China less powerful in the future, especially when they are having too many authorities to do whatever they want

Seeing both sides of a coin is always important. This conflict can not push the world into another chaos again. Let see how our world develops and become stronger day by day

[Lucius]

Update:
Just days after the ban on Chinese apps by India, the U.S. appears to be planning a similar action.

This only confirms what I wrote in my previous post, and that is that India is not making such moves on its own, but that it is under the influence of the US which values only cheap labor in China. Everything else is bad and a threat to national security, and even one application used mainly by teenagers is a danger? In the end, it all comes down to who is spying on whom - or rather, use Facebook and Twitter so that only our local security agencies can spy on you.

In other words, it is normal for us to spy on the whole world - but we will not allow anyone to spy on us Well, good luck with that idea, but as you treat others, they will they treat you.

[davis196]

To summarize the situation-No country in the world trusts China anymore.
China has been acting pretty sneaky after the coronavirus pandemic.They simply want to spy everyone.
I don't think that the upcoming trade war between India and China will have any impact over the global trade.
90 billion dollar import is not such a big amount.
India will slowly decrease it's dependence from Chinese import (by using the good old protectionist policies of reducing the import and stimulating domestic production)while China might become more isolated from the rest of the world-both economically and politically.The western countries will soon follow India's example.

[abhiseshakana]

If the two countries want to draw and not think of a counter strategy from the big powers, now is the right place for America's role in global leadership at its lowest point in history. Trump American First's policies and Trump's personal agenda for building dynasties in the US, following in the footsteps of Xi and Putin, then the Corona pandemic which made globalization degenerate and each country has the opportunity to make its own choices.

India's Chinese tensions also show that Personal diplomacy between Xi & Modi is more directed towards confrontation rather than maintaining a balance of power and active free politics between the two countries. Both are countries with large economic powers, although India lost the start and one level below China in the military field.

The pattern of relations here is that China is taking action and India is reacting. After success with OBOR (mastering land routes), China began to build its maritime power, the aim was to strengthen the influence of the Eurasian region and India to become a stumbling block China dominates Asia, let alone the close relations between India and America. Modi is very smart in dragging America into the Indian-Chinese conflict by making America a strategic partner. America will be a little cautious with India because wrong policies will trigger negative sentiments of Islamic countries.

Technology is one way India can take to fight. India needs to use skilled human resources in the field of information technology because India needs to create offensive cyberspace technology when there is a status quo in the region. India must be able to use the digital world and internet networks as part of intelligence-based warfare with AI applications. Technology is India's strength compared to China. So it will be India's priority to implement a broken petal strategy against China in various sectors.

[so98nn]

This appears to be a political move from one or both parties, the two possible scenarios are;
• The Chinese government is attempting to use the popularity of companies within its region to get public data
• The Indian government is trying to hurt Chinese based companies as it has one of the largest consumer base for their products.
The Indian government would likely encourage its citizens to use local products, this however could affect the nation if this does not meet the required standards.

Both countries are members of the World Trade organization, with the goal of maintaining a peaceful and efficient trade between nations.
How do you think political interventions would limit the growth of companies and affect global trade?

And this is not just speculation but it is actually taking effect. Many pharma companies are now on the verge of refusing the raw material that is used in the formulation of drug products. For example, most of the Active Pharmaceutical Ingredient (API) is imported from the chinese market because those people have ability to mfg it with bulk amount and thus reducing the costs.

However, due to poor infrastructure or low standardisation policies Indian API manufacturers have always failed to produce quality API which is why it was needed to import.

But with the PM's initiative of using local products may change the whole scenario and brand new manufacturers might start showing heads up very soon. I believe this is just start of one sector.

Many other sectors like mobile phone companies, electronic consumable, raw material will be getting produced inhere so as to boycott china stuff.

This is both good or bad for now, but we will get to know the results after couple of years How India is doing without China.