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Chinese Usage of Non Tariff Barriers- Symbol of Double Speak on Free Trade

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China’s rise as an economic powerhouse is often attributed to the comparative advantages it has in terms of cheap labor and manufacturing. However, less recognized are the trade barriers that have been utilized by China for its rise. While tariff barriers have now become an issue of an impending trade war between China and the U.S. and are more visible, Chinese restrictions on imports from other countries by stealth through the application of non tariff barriers often remains invisible. While China openly advocates globalization and the free flow of trade, a closer look at the patterns of trade it has with its top trading partners reveals the tools used by China to ensure that the balance tilts in its favor.

In 2017, China’s top trading partners in terms of export sales were the U.S., Hong Kong, Japan, South Korea, Vietnam, Germany, India, the Netherlands, the U.K. and Singapore. China incurred the highest trade surpluses with the U.S., amounting to US$ 276.8 billion; Hong Kong, amounting to US$273.6 billion; the Netherlands, amounting to US$56.1 billion; India, amounting to US$51.6 billion and the U.K., amounting to US$34.7 billion. Among the countries that generate the greatest positive balances of trade for China, surpluses with India, the U.S. and Mexico grew at the fastest pace from 2016 to 2017. For all the mentioned countries, there exist tariff as well as non tariff barriers in China, limiting imports from these countries, while Chinese exports to these countries grow continuously.

Tariff and non tariff barriers to trade are the most common measures implemented by countries to manage their exports and imports. For China, tariff barriers include raising taxes, while non tariff barriers are about increasing limits to the volume of goods traded. An example of a trade barrier China frequently uses is that of its low exchange rate, which encourages exports but restricts imports. As far as the less visible non tariff barriers are concerned, different measures are used for different countries trading with China.

In the case of American goods, the Chinese government attempts to manage the export of many primary, intermediate and downstream products by raising or lowering the value added tax (VAT) rebate available upon export. China sometimes reinforces its objectives by imposing or retracting export duties. In 2014, China agreed to improve its VAT rebate system, including by actively studying international best practices, and to deepen communication with the United States on this matter, including regarding its impact on trade. To date, however, China has not made any movement toward the adoption of international best practices. Additionally, the Chinese government uses Quarantine Inspection Permits (QIPs) to keep out American agricultural products, causing costly delays while they sit on the docks. Over and above these, China keeps out genuine exported commodities, while they are pirated in China. This is because of China’s maintenance of restrictions on the right to import and distribute legitimate copyright intensive products, such as music CDs, or movie DVDs for example. This is a painful exacerbation of China’s poor record of IPR protection. These restrictions delay the introduction of the products in to the marker, while creating time and space for infringing individuals and groups to ensure that infringement and patent violations continues to dominate the market in China. Also, as stated by a U.S. government report, Chinese government officials have pressured foreign companies to license their technologies or intellectual property on unfavorable terms! The U.S. attempts at getting China to address these issues have yielded negligent success.

In the case of Indian exports to China, certain oilseeds require as many as 11 certificates stating that they are pest free. Interestingly, 10 of the 11 pests are already present in China! Also, many if the Chinese standards such as the CCC require a certification by Chinese authorities before a product can be put on the Chinese market. The factory has to be inspected at the expense of the exporter, which is a lengthy, costly and cumbersome process, which at the end in most cases leads to no clear cut answer on the certification. This in itself discourages exporters. The sanitary and the phytosanitary certification requirements for items such as seeds, fruit, seafood, and vegetables exceed international standards, and to make matters worse, the international system of arbitration of disputes is not recognized in China. Additionally, difficult registration processes and frequent changes in rules relating to standards and frequent certification requirements hinder Indian exports in sectors such as pharmaceuticals.

The EU, which is also an important trading partner for China faces non tariff barriers. European exporters, similar to Indian exporters face an increasing number of unjustifiable non tariff barriers in the form of product certification, labeling standards, import approval requirements and customs clearance delays. In the telecoms and financial services sector, firms from the EU have been unable to expand significantly because of high capital requirements and extremely complex approval procedures. In the manufacturing sector, China continues to maintain restrictions on some key industries for Europe- such as automobiles, petrochemicals or steel. The delays in the CCC approvals from China also provide counterfeits with a wonderful opportunity to put the fakes of European products on the Chinese market, while the actual EU products continue waiting a CCC approval!

While China treats the EU as an important export market, and seeks to gain significantly from trade and investment; it also keeps its comparative advantages through making usage if various protective measures- be it tariff or non tariff. The usage of non tariff barriers is more appealing given the fact that they are more complex and more invisible in nature. The story is the same for all of China’s major trading partners. As compared to other countries, China is the most creative as well as active in the usage of non tariff barriers and this can be attributed to the fragile nature of its growth which has been modeled on exports; which the government desperately seeks to protect. The usage of non tariff barriers are signs of China’s self centered trade policies in juxtaposition to its official calls for globalization and free trade.

Dr. Sriparna Pathak is an Assistant Professor in the Department of Political Science, Nowgong College, Assam. Prior to this, she was an assistant professor at the Centre for South and Southeast Asian Studies, Gauhati University. She is also a Fellow at the South Asia Democratic Forum, Brussels. Previously she was a consultant in the Policy Planning and Research Division of the Ministry of External Affairs, New Delhi. She received her PhD from Jawaharlal Nehru University, New Delhi, and has spent two years in Beijing as an advanced research scholar on a joint scholarship from the Indian Ministry of Human Resources Development and the China Scholarship Council. She frequently writes on China's foreign policy, India-China relations and Chinese domestic economy. Her twitter handle is @Sriparnapathak and she can be reached at sriparnapathak[at]gmail.com

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Economy

Gender-based violence in Bangladesh: Economic Implications

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Violence against women is one of the most heinous crimes perpetrated in today’s   world. However, despite the gravity of the violence perpetrated against women, it is still the pervading reality in the world. Bangladesh is also afflicted with this malaise of violence against women which is manifested in the deluge of news across the media about the violence against women in various  form .While Bangladesh has made commendable strides in the economic front, the  perennial subjugation of the women who account  for virtually half of its population remains a hurdle. Against this backdrop, this article investigates the economic toll incurred to the economy owing to the entrenched culture of systemic violence in our country.

Women constitute nearly half of the population of Bangladesh. As such, their innate potentials have considerable bearing on the socio-economic progress of the country. Admittedly, advancement of a country in socio-cultural indicators presupposes the simultaneous improvement of  women from the subjugated position culturally attributed to them. It is impossible  to envisage a prosperous thriving economy without the contribution and participation of the women equally. Therefore, the lack of women’s participation commensurate with their capabilities   hinders the development of the country.

One of the obstacles women confront in their journey of transforming into human capital is perhaps the retrograde views that society harbor about the traditional gender role of the women which fetter their contribution to the economy and society by bestowing them only  the  circumscribed role of  looking after the domestic affairs and rearing and educating child. The pastoral as well as urban culture   perpetuate these traditional gender roles and deny women a free rein over their fate. Whenever  women   disavow the preordained and predictable roles  provided by the society, they  have  to face mounting pressure from society so as to conform to the prevailing norms .Failing to  conform to the  regressive gender role will spell grave consequences for the women .When the society fails to cower the woman with the threats that are at its disposal ,it resort to the egregious path of violence. While   violence against women is one of the most reprehensible crime one can ever commit, it however is normalized through a power dynamics that  reinforces the overbearing male role and relegate women to the subjugation. Therefore, the culture of violence against women isn’t anomalous rather is embedded in the prevailing  patriarchal power dynamics which deem chastising women for their  rebellious attitude is solicited and  invoke often contrived and distorted religious edicts in order to legitimize their deplorable crime. Moreover, the culture of violence against women which has been  aptly termed as a epidemic by the United Nations  is rooted in the prevailing socio-economic  structure of the country that  systematically condone the browbeating of women into submission to patriarchal  norms and wield violent measures when the woman stubbornly gainsay their patriarchal hegemony.

While the social, cultural and health toll of the violence perpetrated against women is undoubtedly strenuous, the economic losses incurred by the violence and the opportunities nipped in the bud owing to violence against women also need to be taken into account in order to the adequately discern the deleterious ramifications of the violence against women .However, despite profound economic toll that are inflicted due to the violence against women, it is still unaddressed in the economic literature worldwide and discussion and cognizance about this momentous issue and its economic implications still scant.

As has been mentioned earlier, women constitute the lynchpin of the economy of Bangladesh which has been adequately manifested in the participation of women in Bangladesh’s much-heralded RMG sector and other productive sectors. However, this success of the economy   overshadows the plight and perils  this working class women confront in their bid to become economically productive. The violence against women is systemically entrenched in the country and women’s engagement in the economic activities are frowned upon by the society and culture .Therefore ,the this patriarchal fetter women behind the door of their  houses  and worst women are inflicted  physical and mental violence in event of questioning the dictates of the elders and the male custodians. Therefore , the fundamental impact of violence against women on the economy of the country related to the untapped opportunities due to the constrains imposed by the patriarchal society on women under the pretext of social, religious and cultural norm. This threat alone or normalization of the gender role of the women as a care-giver hinder women in taking part in the economy on a par with their male counterparts  .

Beside the lost  opportunities that can be tapped, the violence against women has numerous other implications on the economy. Firstly, the violence against women inevitably  results in the physical damage and mental trauma of the victim which has enduring toll on her. Therefore ,violence against women translate to toll on the health of the victim and therefore the cost incurred on the victim due to medical fees  as a result of the violence is also included in the economic cost of violence against women. Secondly, the violence against women also leads to diminished productivity of the victim due to the health hazards. Therefore, violence against women has implicit economic cost on the economy as a result of the lost productivity.

Thirdly,the cycle of the violence against women negatively sensitize women in not challenging the sacrosanct patriarchal norms and therefore women fit themselves with the prevailing adverse society and they themselves reproduce and reinforce these norms .Therefore, a vicious cycle set in which prevents women to actualize their potential and stymie them in their path of realizing their goal .This result a sense of apathy in women with regards to education and other means of social mobility and they deliberately avoid the economically productive activities that are deemed taboo by the prevailing social norms and cultural ethos.

Moreover, violence against women is an egregious form of crime perpetrated by a   patriarchal agent while the society has entrenched roles, norms and ethos that condone and encourage such outrageous violence .Moreover, a vicious cycle is at play in the gender based violence. The economic repercussions of the violence committed against women is considerable. Violence against women hinder the development  of the women commensurate with their inherent potential which nip the dreams of women in the bud. Besides, gender based violence also deter women in challenging the prevailing patriarchal norms and undertaking productive economic activities that are frowned by the patriarchal society and are deemed taboo. Moreover, a widespread sensitization in societal level as well as a drastic  overhaul of the patriarchal structure is necessary in order to avert the adverse socio-economic consequences of gender-based violence and extirpate the heinous root of this deplorable crime.

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Economy

Omicron Variant: Implications on Global Economy

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The prolonged battering of the Covid-19 has been considerably hitting the world economy. While vaccination and a receding in the cases of the cases in virus transmission has provided   brief respite to   the countries that are grappling with the recurring surge of the virus, the resurfacing of another virulent   mutation termed as  Omicron sounds ominous for the future of the world economy .Against this backdrop, this article projects the plausible economic ramifications of the new strand of the virus on the global economy.

The economic downward trajectory occasioned by the Covid-19 has been unprecedented in recent global history. While the economic depression of 2007-08 proved disastrous for the world economy, the toll   emanating from Covid-19 pandemic and consequent   economic stagnation has surpassed all the previous   economic plunge .In fact, some analysts have gone to the extent of   comparing the Covid-19 induced economic depression with the great depression of the 1920s.However, whether the far reaching repercussions of the Covid-19 on the global economy will be as momentous is still remains to be seen. Nevertheless, the   profound   economic jolt triggered by the Covid-19 pandemic is poised to reverberate across the world through shaping socio-economic and political events

The scar inflicted by a protracted economic recession owing to Covid-19 is apparent in the arduous path of economic rejuvenation in the western countries and eastern countries alike. Virtually every country is grappling with the toll that Covid-19 has incurred in the economy. The western countries are finding it   difficult to retrieve the losses that Covid-19 has precipitated. Although the swift vaccination of the western countries at the expense of the developing countries has provided a fleeting lull in their battle against Covid-19,it seem however the virus has resurfaced with increasing virulence in order to offset whatever gain these embattled countries managed to garner in their fight against Covid-19.

The skyrocketing and unprecedented inflation of the western countries coupled with a plummeted consumer confidence has meant a prolonged period of stagnation of their economies. However, in the wake of vaccination induced temporary respite in the viral cases, the economies rebounded strongly from the pits of economic recession. However, these hard-earned   gains will be reversed in the event of the advent of any new strand of the virus. Already, the delta variant which originated in India had triggered a spate of Covid-19 flare-ups in the United   States and United Kingdom. Against this backdrop, the Omicron variant is set to aggravate the   economic woes of the western countries and in turn the world.

While the western countries are reeling from economic stagnation, the developing and underdeveloped countries are confronting many abysmal realities due to their prevailing economic backwardness. Their economic plight has been lingering in want of adequate vaccination due to the apathetic stance of the western countries and global governance institutions .Therefore, while the western countries has rebounded from the Covid-19 induces economic predicaments, the difficulties confronted by the developing countries has continued unabated. While the influence of advanced countries and their less advanced counterparts in world-economy is inextricably tied, the callous attitude of the developed countries to the vaccination of countries in Asia and South Asia turn out to   be sheer lack of economic prudence.

While western countries are considered as the economic hub of the world, it is however the developing countries on which the vital supply chains of the world economy hinges on. Therefore, the tardy pace of vaccination in these countries is prejudicial to the global economic stability. The economic ramification of the slow pace of vaccination is twofold for the world economy. Firstly, the slow vaccination hinders the revival of the economic activities in the developing countries thereby obstructing the supply chain of the commodities .This supply chain crisis has ripple effect in the western economies. The recent predicament of inflation and attending macroeconomic woes in countries like the United States and United Kingdom is manifestation of the supply chain crisis plaguing the world economy. Due to the paucity of commodities and raw materials, the prices of necessary goods has escalated in the western countries which has plummeted consumer confidence and triggered a vicious cycle of stagflation in the economy that is reminiscent of the 1970s when a similar crisis in oil supply has  precipitated economic downturn in the western economies.

Secondly, the slow rate of vaccination also run the risk of allowing the virus to mutating to newer and much virulent variants and due to the unfettered communication as a result of globalization the emergence of any new variant doesn’t remain in the confines of any border rather proliferate like wildfire and precipitate global crisis. Therefore, the lack of vaccination or slack pace therefore has global repercussions. Therefore, it is judicious of the developed countries to concentrate efforts in contributing to the vaccination of the less developed countries which will yield good results for their economy.

The ubiquitous mechanism in battling Covid-19 remains one of containment that entails halting economic and other activities and insulating the countries from other countries through imposing border controls, curbs on air communication and other stringent measures echoing protectionist attitude. However, these measures are antithetical to the spirit of the globalization and global trade. While lockdowns and other protectionist measures yield temporary improvement in the Covid  cases, it is not viable in the longer term. Besides, lockdowns have deleterious ramifications on the economy and further aggravate economic rebounding of the developed countries and developing countries alike. Therefore, efforts should be aimed at preventing the Covid cases rather than grappling with the Covid with a knee-jerk policy of improvisation. .

Moreover,Covid-19 has already occasioned far-reaching economic fallout in the world economy. Indications abound regarding the fact that the world economy is verging on profound and prolonged recession. Against the backdrop of ominous predictions and slackening growth and painful inflation of the world economy, the prospects of the world economy due the advent of a new variant remain mired in obscurity. It can be concluded that the economic repercussions of yet another novel variant will be momentous and will offset hard-earned growth of the countries .Unlike previous precedent of haphazard policy and knee-jerk policy solutions, this time around the countries need to undertake challenge much prudently and should concentrate all of their efforts aiming at universal vaccination of all countries so as to prevent the resurfacing of similar virulent viral strands.

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Economy

A Good Transport System Supercharges the Economic Engine

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The infrastructure bill in the U.S. has been signed into law.  At the American Society of Civil Engineers (ASCE), they are celebrating the fruition of a couple of decades, at least, of hard work publicizing the decaying infrastructure and lobbying for a fix-it bill.  Countless delegations have visited the White House and met with staff to present their case.  And something for their efforts is better than nothing. 

They also started a grading system, giving an overall grade — currently C minus, a notch above the previous one.  The bill seeks improvement in roads, bridges and transit although it falls short of the ASCE estimates for what is needed.  For example, the bill contains $39 billion for transit (ASCE grade of D minus) but there is a backlog of $176 billion that is needed.  Given Republican opposition to spending and the compromises made to pass the bill, the administration got what they could — they can always fight for more later. 

This opposition against infrastructure spending is somewhat incomprehensible because it generates jobs and grows the economy.  Too much spending, too fast has inflationary potential but that is caused by too much money chasing too few goods, usually not when there is a tangible product — improved transit, roads and bridges in this case.  And then there are also other ways of checking inflation. 

This bill is a start but still a long way from having high speed cross-country electric trains as in other major industrialized countries.  These are the least polluting and especially less than airplanes which emit six times more CO2 per passenger mile. 

Why is the U.S. so lagging in high-speed rail when compared with Europe and Japan?  Distances are one reason given although these are a function of time.  No one would have thought of commuting 30 miles each way to work in the 19th century but it is not uncommon now for some to be quite willing to sit 45 minutes each way on a train for the pleasure of living in the greenery of suburbia. 

The bill also includes $110 billion for roads and bridges.  Unfortunately the backlog of repair has left 42.7 percent of roads in sub-standard condition costing motorists an estimated $130 billion per year in extra vehicle repair and maintenance.  Some $435 billion is now needed to repair existing roads plus $125 billion for bridges, $120 billion for system expansion and $105 billion for system enhancements like increasing safety — a necessary improvement given a changing environment such as an increase in bicycle traffic.  Allowing for round-off discrepancies, the total amounts to $786 billion (in the funding and future need section of reference).  Increases in severe weather events have also had their effect, causing damage to roadways and further burdening the repair budget.  

New technologies (in the innovation section of reference) like advanced pavement monitoring on key roads, using moisture and temperature sensors embedded in the roadway, now make it possible to assess pavements quickly without impacting road users.  This leads to earlier repair and in addition new materials increase the life cycle.  Much of this requires increased investment up front to take advantage of the new innovations. 

Above all one can never afford to forget that a good transport system acts like a supercharger for the economic engine.

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