India should not have imposed anti-dumping duties on Chinese products as it could trigger a trade war between the two countries, according to the Chinese media. An article in China's state-run publication the Global Times said that India was keen on bringing down the trade deficit between the two countries, but it warned New Delhi should not use "short cuts" to achieve this purpose. The ties between the two countries have strained owing to the standoff in the Doklam, and the Chinese media seem to acknowledge its repercussions on the trade between the Asian giants. Both have to lose, if the trade war begins, the article which has been published with the byline of Wang Jiamei, said. The article hinted it could result in a tit for tat situation as the Chinese companies could also curtail their investment in India, if New Delhi continued this approach. Chinese companies' investment in India would create millions of jobs, the article claimed.
India's exports to China fell by 12.3 percent year-on-year to $11.75 billion while India's imports from China rose by 2 percent to $ 59.43 billion, resulting in a trade deficit of $47.68 billion, the article said citing Embassy of India in China. The article called India's decision to impose anti-dumping duties on 93 products from China as "ill-considered action" and warned India should be ready to face the consequences. The article, however, acknowledged that China's retaliation to India would not make economic sense, and hinted the current situation could harm both countries.
"It is understandable for the Indian government to be eager to narrow the trade deficit with China, but trade remedy measures should not be used as shortcuts, a strategy that will only backfire. If India really starts a trade war with China, of course China's economic interests will be hurt, but there will also be consequences for India," the article said. The Global Times article pointed out that the India's strategy would backfire and Indian consumers would end up as losers since there is no alternative to many Chinese products in the Indian market. "First, it is not just Chinese companies that will face a setback due to the anti-dumping measures - India's consumers will also lose. Although Indian manufacturers are reportedly catching up with their Chinese peers, there is currently no alternative to many Chinese products in the Indian market, so Indian consumers will be the chief victims of the anti-dumping policy targeting Chinese products," it said.
The article also made a veiled reference to the Doklam standoff and said that considering the "tense" ties between the two nations, China could even suspend economic projects in India for security reasons. "Second, given the tense bilateral trade ties, China may consider temporarily suspending investment or economic cooperation projects in India to ensure the security of these investments," it said. The article further urged Chinese companies with investments in India to "be alert to...risk amid the growing policy uncertainties in India and should re-evaluate such projects".
"Chinese companies accounted for about $32 billion of the proposed total. For instance, Sany Group planned to invest nearly $10 billion in wind power, while Dalian Wanda Group considered investing about $5 billion in real estate projects. These Chinese-sponsored projects were expected to ease the bilateral trade imbalance. But as trade relations deteriorate, Chinese investors, increasingly concerned about potential risk, must reconsider their options. Many will probably shelve their projects, especially the large ones," the article concluded.