The Anti-China Sentiment | How is India to benefit?
The Anti-China sentiment has been brewing since the Coronavirus outbreak. President of the USA started calling it the "Chinese Virus". Germany's largest tabloid newspaper, Bild, put together an itemised invoice for 149 billion euros demanding compensation from China. Many other European countries like Italy, France and the UK feel China is to blame.
But what is the possible outcome for India during this global blame game?
On 12th May 2020, Narendra Modi addressed the nation in his usual style. The one-hour long broadcast had lots of big words but he displayed a lack of empathy for those affected by the crisis. The key highlight was that a 20 lakh-crore package was announced along with the hope to jump-start the economy. He said 'Be Vocal about Local'. After his speech, #BoycottChina and #MadeinIndia started trending on Twitter.
Let us compare India and China on the 3 Phases of Economic Development:
India is in phase 1 and has the potential for exponential growth. China has passed its peak and is showing stagnation. In 2019, China's GDP growth was the weakest in 29 Years. The Chinese economy advanced 6.0 per cent year-on-year in the December quarter of 2019, the same as in the previous quarter and matching market expectations. This remained the weakest growth rate since the first quarter of 1992.
If becoming the factory of the world is our mission, then what will it cost us?
The boom of the Chinese market was because the labour was so cheap it attracted foreign investment and the government had a pro-business policy. There was no basic wage, very little protection of the labours and no regard for environment degradation. However, after China progressed into phase II of economic development, labour demands started to rise adding to the cost of production. China is now deemed less competitive compared to other countries.
In India, we will see the rise of 'Surrogate Factories'
Many countries are already planning to shift base due to the anti-China sentiment. These companies would turn to India to set up a supply chain, often they are entangled with international laws on labour and human rights. The easiest way to by-pass this law is to "outsource" the contract to a local vendor. The local vendor with relaxed labour laws can provide the most 'efficient' cost. This practice is commonly followed in Bangladesh, where thousands of workers are hired by big global fashion brands without any liability.
The horror of this practice is that it's inhumane. One example is the Rana Plaza collapse in Bangladesh, where poor workers making garments for Zara, Walmart, Benetton and Mango were killed due to hazardous work environments and negligence by the factory owners.
We are following similar footsteps. In India, labour rights have been revoked. Yogi Adityanath suspended 38 major labour laws in Uttar Pradesh for 3 Years. Owners of factories have been given more powers to hire and fire without attracting punitive measures from the labour department.
The new ordinance also prevents the enforcement wing from raiding the premises of factories on minor issues.
Similarly, Rajasthan, Gujarat, Punjab, Himachal Pradesh, Maharashtra, and Uttar Pradesh have amended the Factories Act that allows firms to extend a factory worker’s daily shift to 12 hours per day, from the existing 8 hours. Excessive working hours have negative effects on workers’ health which leads to poor immunity and exposes them to a higher risk of industrial accidents. The laws have been redefined to protect the interests of employers instead of the workers. . It seems individual rights will cease to exist in front of the national agenda.
What is the way forward?
During the early phases of economic growth, Chinese products got a reputation for being cheap, tacky and unreliable. If India wants to be the 'factory for the world' we need to re-evaluate the quality of the product we supply. It's important to mention the need to preserve our national forest, environment and local culture. In China's quest for becoming a global superpower, it also gave rise to the worst polluted cities in the world - we cannot follow that route! Our pollution is terrible already!
What is conscious consumption?
Conscious Consuming is a social movement based around increased awareness of the impact of purchasing decisions on the environment, society and the consumer's health and life in general.
In the United States, CGS carried out a 2019 Retail and Sustainability Survey. The key findings were that buyers want sustainable products, and over one-third will pay 25% more for them. Also, younger buyers are more eco-aware.
A similar study in the UK revealed that from 74% of those surveyed would pay an extra 5% for their clothes if there was guarantee workers are being paid fairly and working in safe conditions. If you’re thinking that 5% doesn’t sound like a lot, consider the fact that the fashion industry could take a staggering 125 million people out of poverty by adding only 1% of its profits to workers’ wages.
The similar situation back home, a pan-India survey by the Mahindra Group in 2019 - revealed that four out of five Indians are aware of the impact of their actions on nature and climate change. 83% expressed ‘interest’ in making lifestyle changes. Such awareness and good intentions are not, however, matched by actual behaviour. Although the number of individuals willing to purchase green products and lead a greener life has increased a lot in the past few years, there is little evidence to suggest that the purchasing of green products has increased by much. The study reveals that the biggest barrier to sustainability is no longer consumer awareness or attitudes – the challenge lies in the availability of alternatives that are sustainable, viable and affordable. This is what makes sustainability the biggest business opportunity for this generation.
This wave of awakening needs to be capitalized by the Indian Entrepreneurs by providing ethically sourced, natural, vegan, organic or sustainable products. We should not aim to produce cheap products, but create products that have value. The 'Indianess' of the product should be the USP. A comprehensive system of valuation and certification will be the key to the brand's success.
Greenwashing and token CSR marketing campaigns are no longer enough. In an increasingly open, digital world where authenticity is the buzzword of choice, businesses must keep up with growing demands for ethical behaviour and transparency in the supply chain.
The new approach to consumerism is that the buyers want to scrutinize the supply chain. Further to that consumers have the power to effortlessly spread the word about businesses that still make use of ‘bad practices’. Energy demands need to be met with de-centralized solar energy, wind farms, biomass and carbon-neutral city planning. This is when we will start to lead the consumer revolution.
I strongly believe that information about supply chains, about materials and processes can be an inspiring part of a brand and a product’s story. India needs to lead with transparency, compassion and awareness for global trends to become the 'factory for the world' and this will NOT happen in slave labour conditions.
Is the only way to determine the success of a country is through its GDP?
Isn't this concept, in itself, is flawed? It reduced the entire population of humans to machines living to hit the next target - What about their happiness?
Yes, we need our economy to thrive especially after the Pandemic but it is important to keep the citizens happy too! Out of 156 countries, India rates are as low as 140 in the Global Happiness Index rating higher than sub-Saharan Africa and war-torn countries. The six factors that determine this index are - levels of GDP, life expectancy, generosity, social support, freedom, and corruption.
It's time we evaluate the sort of growth we want and the direction we take as a nation.
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Additional Reads | Sources :
'The True Cost' on Netflix
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