The global pandemic, on the heels of a bruising trade war and national security concerns over Huawei, has given new fuel to the US-China decoupling argument. The concentration of medical equipment and supplies manufacturing, in desperate need across the world, has brought this clamoring to a fevered pitch. But a truly decoupled relationship will further complicate our ability to address many of the world’s most daunting and vexing challenges, from climate change, coordinating efforts for the current and next pandemic, and ensuring security. And the economic costs would be significant for the US. We found in our recent econometric analysis of data till January 2020 that the US exports lose about 1.6 times more than Chinese exports, for every percent point increase in tariff rates.
There are many legitimate grievances among US businesses, workers, and others on China’s trade and domestic economic policies. And moves towards decoupling have taken root on both sides, beginning with China’s Great Firewall. China has transgressed on a number of fronts: Intellectual property and trade secret theft, industrial subsidies, limited market access in certain sectors, and the overlapping, entangled relationships between major corporations and the Communist Party. Many of these issues stem from China’s model of growth, where factors of production are directly or indirectly controlled by the state.
First, the economic pain will be felt by US households and businesses alike. China is the source of more than $400 billion in global intermediate goods and $452 billion in goods sold to the US. This has become acutely apparent during the current crisis and high concentration of personal protection equipment and pharmaceuticals, both medicines and ingredients, manufactured in China.
Many of the goods produced in China have few substitutes, and for many households, demand for these goods is weakly responsive to prices. Estimates over the past year have shown that the long-term effect of US tariffs on Chinese goods will cost households between $800 and $1,000 per year.
It’s true that many foreign companies are re-evaluating their exposure to China. Few locations around the world even now can compete with the manufacturing base and infrastructure of China, even with rising wages. For those not invested in access to the domestic market, diversifying production for many has become an imminent and pressing objective. This was made all the more necessary by a bruising (and still ongoing) trade war and the economic shutdown due to the coronavirus. But diversification is not the same as decoupling, the latter being a complete or significant severing of economic ties.
Second, punitive measures seldom work in inducing better behavior. Decoupling would be fostered through sustaining elevated tariffs indefinitely. The primary tools in the arsenal of US trade policy are tariffs, export controls, import controls, and non-tariff barriers. The Trump Administration has relied heavily on all these tools to force a wedge in US-China economic relations. Tariffs and retaliatory tariffs have cut into these trade flows. US exports to China fell nearly 20% in constant dollar terms from 2017 to 2019, and 9% from 2018 to 2019. For many US manufacturers and commodities producers, China is the major source of demand (soybean farmers alone in 2017 exported the equivalent of one third of their output to China).
Previously, we had predicted a trillion dollar loss over ten years from the sustained upholding of these tariffs, as covered in global media. Based on our analysis using a widely used global supply chain economic model named GTAP, the losses in GDP from the Covid-19 crisis could peak at $0.75 trillion in China and $1 trillion in the US, if the shutdown sustains for the rest of this year.
Using decoupling to separate/isolate China is ridden with weaknesses. China’s Belt and Road Initiative and soft power campaign will make it difficult for US allies to comply. China is already the second largest economy in the world and surging source of innovation. Instead, multilateral trade pacts—expressly anathema to the outgoing Trump Administration—have the best chance of encouraging better trade practices. A resurrected TPP (already in place as the CPTPP among the remaining 11 members) would carry enormous weight with the US behind it. Such a framework, rather than punishing China, would incentivize its leadership to reform from within to become part of a pact representing 40% of the global economy. We found, in our UNESCAP study, that such a strategy of trade liberalization, to benefit the world as a whole in the context of TPP among other deals. In an independent analysis we pursued for this article, using GTAP model, we observed that the US has a potential to reduce the exports from China by $3 billion, while boosting its GDP by $11 billion, if the US were to join TPP and signs TTIP now.
As we show in our recent analysis, irrespective of whether it is a ‘positive’ decoupling wherein many countries join hands together and reduce their tariffs mutually leaving out China, or ‘negative’ decoupling wherein many countries raise tariffs against China, with similar reciprocation from China, the world would still stay dependent deeply on China for the large part. With a positive decoupling, it is possible to slightly reduce such dependencies while strengthening the domestic capacities and trade among the other partners.
India is also no exception to this broad inference, though during Covid-19, India’s trade deficit with China has come down significantly—this is merely a short run fluctuation that may be reversed in the near future when the economies recover. Therefore, while we must continue our efforts to improve efficiencies and capacities domestically and forge partnerships globally, it is not necessarily a ‘good’ policy or an ‘easy’ exercise to explicitly decouple from China. Possibly, India can potentially enhance its investment climate and introduce market reforms so as to attract existing investments that may move away from China.
The Covid-19 virus has exposed many of the fault lines in relationship with China. Decoupling will do nothing to resolve these issues, to the detriment of the global economy.
Spencer Cohen, a Senior Fellow with Infinite Sum Modelling LLC, Seattle, USA, is a leading expert on Chinese and US regional economic and trade issues. Badri Narayanan is the founding director of Infinite Sum Modelling, Seattle and a senior economist with University of Washington Seattle.
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Aatmanirbhar bharat is a ‘phenomenal initiative’: Volvo group’s president, Kamal Bali
The President and Managing Director of the Volvo group, India, Mr Kamal Bali joined NewsX for an exclusive round of interview. Mr Bali has a distinguished career traversing over 3 decades, predominantly in the automobile division.
He addressed what a stressful and unprecedented sort of situation the ongoing coronavirus pandemic has created for the automotive industry. “This pandemic came out like a bolt from the blue and no one was prepared for it and especially our industry, the automotive industry which was already reeling under a demand slowdown towards the end of last year”.
Mr Bali was looking for better times with a lot of optimism, especially with the new emission norms coming in and lots of new models which were to come in for the entire auto industry. He told how the automotive industry’s slowdown impacts the entire country. “It was very big of a U-turn for the auto industry, it accounts for 7-8 per cent of our GDP, so it is a big jolt to the country and to the whole economy as such”.
Mr Bali believes that in terms of numbers, the recovery in the sector will be very slow. “The reason is that the industry was already going through a slowdown as I mentioned and in the current financial year 2020-21. There are estimates of different kinds but its likely that the industry will see a further contraction of between 25-35 per cent”.
According to Kamal Bali, it’s very difficult to say that what exactly they will end at because it will depend on the pathways of the pandemic. “How it does, how as an industry and how as a society we come in terms with. As ultimately, itsalso a question of lives and livelihoods”. So he thinks that its going to be challenging but he is still optimistic.
“Seeing numbers in June, there has been some improvement over May. May to June has been a huge, a positive reinforcement, which is good news for the industry even though it is much much lower than the June of last year”. So he thinks that there are some positive things but he also thinks that a lot more can be done. “Of course, it won’t be business going forward as usual but, a lot of other factors are going to come into play but I think if we can get a good fiscal stimulus, this industry can bounce back sooner than we expect”.
The Volvo President appreciates the limited elbow room, the finance minister had, and he thinks that despite that, she did a wonderful job. “I think the supply side thing was largely addressed, a lot of liquidity and monetary measures have been taken for the economy as a whole and also, addressing several vulnerable sections of the society and economy including the MSMEs and people at the economically weaker sections of the society, having said that I think the demand side also needs to be looked at now, this is the right time”.
He further said, “I think as the supply side is getting addressed, as factories have started manufacturing and remanufacturing, now, we have come to levels of 50-60 per cent of our original pre-COVID levels. I think now is the time when we also need a demand stimulus because discretionary demands have gone down. Since the economy is not at its full throttle the demand is not there”.
Mr Bali feels and what according to him the industry would like is four or five key things. “One is, a temporary reduction in the GST rates, things like trucks and buses fall under the luxury rate of tax which is 28 per cent GST. If this can be brought down to 12 or 18 per cent, if not permanently then at least for the next 6 months”.
He thinks that this can be a big boost because in any case, the industry has to spend more cost on the vehicles because of “transition from BS 4 to BS 6”. So this cost probably cannot be passed on fully to the customer as there are weaker sentiments in the marketplace.
So, if this reduction in the GST can be done temporarily, just to jump-start the economy, that’s one. The customers would be excited and they would like to look at the possibilities. “The second thing is lower interest rates, if some subventions can go on from typically 9 to 10 per cent to 6 per cent, I think that would be a big booster”.
According to Mr Kamal Bali, the third thing which could be the game-changer for the industry is the “scrap pitch policy”. He said, “So if they can decide on a 15-year or an 18-year scrappage policy, I think that could be a game-changer for the industry”.
Talking about the “Aatm nirbhar” campaign of Prime Minister Narendra Modi, Mr Bali called it a phenomenal initiative. “We completely support it. I think this gives very very good confidence to the industry and the society at large. If you look particularly at the automotive industry, we are in a large way self-reliant. Our industry as such is well matured. There are still some gaps, which of course we will, if global companies can start doing more and more work in India, I think we can fulfil the dream of aatmnirbhar Bharat”.
He said that as far as Volvo is concerned, they are fully committed to India. “We have been serial investors in India. In fact, over the last 20 years, we have made serial investments”. Mr Kamal shared an anecdote about a venture Volvo made with Eicher motors. “Eicher motors, which is a very very successful joint venture as well. So we believe in the India story and we believe that India is the market which is going to grow. There can be a temporary pause because of pandemic and because of certain other structural reasons. But I think, our trajectory, our direction is spot on”!
He thinks that they need to make the supply chain more integrated with the global supply chains. “I think the industry will respond to the clarion call of the Prime Minister for making India aatmnirbhar”. On behalf of the Volvo group, he said that Volvo group is completely committed and will do whatever is required in the interest of the country as well as the group itself.
Need to bring in tech to make India Atmanirbhar, says Arjun Bajaaj, Director, Videotex & Founder, Shinco
Director of Videotex & Founder of Daiwa & Shinco Arjun Bajaaj joined NewsX for an exclusive interview session and talked about his education, brands, making bases strong in the technology sector, India’s ban on Chinese apps, and more.
Mr. Arjun Bajaaj did his education from Pathways World School, a few kilometers away from Gurgaon, and then went to the University of Essex, UK to study Business Management.
The boarding school and the exposure overseas have really helped him become ‘confident and independent’. He also believes that this really helped him in the business world today.
The young entrepreneur, Arjun Bajaaj is really grateful to his parents for giving him this opportunity.
He also feels that the transition from college to his family business was not at all smooth and easy. He said that while he was in university, he did a lot of part-time jobs there. He went to retails, he also worked in some night clubs to get some exposure and understand the audiences. After completing his studies he came back to India and did his first internship in Samsung’s marketing department for a couple of months.
Mr. Arjun Bajaaj was put under six months of training when he joined his father’s company. That’s when he realized “we have a lot and we can take advantage of the infrastructure and the experience we have”.
When asked about his brand Daiwa, Arjun said that it isn’t easy creating one’s own brand. Sharing the details of the process, he said “My brand was pretty new in the market so I thought we will start with the e-commerce platforms. I reached out to a few e-commerce companies but they didn’t show a lot of interest initially. Then shop clues decided to support me.”
Arjun Bajaaj asked his father to lend him 50 TVs because no one was that confident that whether it would turn out well or not. Shopclues then predicted that they could sell probably around 100-150 TVs in the first month. So Arjun gave it a shot and ended up selling 50 TVs in a day. After this big achievement, he asked his father if he could lend some more TVs. He took around 150 more TVs which again were sold in 3 odd days. And that’s when they realized their potential that they can do well. In 2016, the journey of Daiwa began. They sold around 600 TVs in the first month. In 2018, Arjun Bajaaj took Daiwa to the offline space and it has been growing since then.
In 2018, Mr. Arjun launched another brand Shinco which is exclusively sold on the online space. Shinco became the best selling brand last year.
On asking how does Arjun makes his customer base strong, he replied that the manufacturing structure helps them today and they have the experience to build products for the Indian market. They design their products by knowing and understanding the likes of the audience, the problems they face.
The founder of Daiwa and Shinco also shared his views on the Chinese ban on 59 apps, the strict terms, and regulations on imports from China. He said that not many industry leaders are supporting the ban at the moment. A lot of things are manufactured in China and they have no choice but to buy certain parts from there. Talking about the TV industry, the biggest cost goes to the screen of the TV and that is not manufactured in India. ‘To make the Aatmnirbhar Bharat mission successful, we need to bring in that technology so that we can cover that major share that is missing.’
The government should ask the big brands who are selling in India today to bring the technology here because it requires very heavy investment and a lot of production. With that, it can open up gates for export. The entrepreneur, Arjun Bajaaj, advised other young entrepreneurs to learn from the mistake and try to fix them and keep moving forward. Sharing his success mantra on the NewsX A list show, Arjun Bajaaj said that he believes in staying positive. “If you stay positive and have the ability to work hard, then there is no way anyone can stop you”.
The products of Arjun’s brand are available in offline space with local retailers as well as some big retailers. Daiwa is present in the northern and western markets and in the Hyderabad area as well. By the end of this year, they will have coverage in entire India.
Shinco is available on Amazon as well as its website Shinco.in. So users can purchase the product either in the offline space or online space.
Health care should be available within 5 to 10 kilometers: Dr. Peddireddy Sridhar
In an exclusive conversation with NewsX in a special segment, NewsX A-list, Dr Peddireddy Sridhar, CEO of the Omega Hospitals group catches up with us. With 20 plus years of service in Oncology, Dr Sridhar shares his experience in healthcare and his leadership journey.
Describing the unique leadership skills that he has acquired over the years, Dr Sridhar shares, “It’s very important to lead from the front. That’s what I’ve always done. I am an extremely aggressive and tough leader when it comes to deadlines, but still if one sees my core team they have been with me for the last 18 years. The reason is though I am tough when it comes to work, I’m also very compassionate to make sure I’ve had them like hold their hands in all their ups and downs and that’s what actually matters.”
“They need the support of their leader from the back, which I believe I have done really good all these years apart from that it’s very important to understand people in your team, see what abilities they have which might encourage them to become leaders, to pull them into good managers because money is not always the motivator. But we need to give them the scope to grow in their careers.”
Opening about his journey and a high point in career, Dr Sridhar said, “People should always know when to enter and exit so I will tell my two high points. To start with the exit high point, I started my career in 1998 with probably one of the largest tertiary semi-government hospital, and during that period, I had a permanent job, and increment every year. But what happened is, after working for five to six years in the organisation I understood that this is not going to give me a platform to really show showcase my talent and potential.”
“So one fine day I decided to quit and joined a very small NGO with less than 40 employees. My reason for joining it was because it had some great potential and projects, which I thought will help me to really strengthen my grassroots knowledge of healthcare which would be important for me later in the career. That decision really changed my perspective towards healthcare and I learnt a lot of things during that period.”
With 20 plus years in Oncology, Dr Shridhar mentions how he decided to come back to mainstream administration in 2002 and took up oncology, “The reason is, I was sure that oncology is one sector which is going to grow leaps and bounds in next 30 years. And also when one see any cancer patients, they come with a lot of trauma both mentally and physically so apart from making a good career, I also could get a platform to help people and therefore I took the decision of entering into oncology as an administrator.”
Sharing his overall mantra as an expert in setting up new companies and taking them to new heights, Dr Sridhar says, “ It’s not a mantra but there is a particular bug in my mind where I can’t keep myself free, I need to have hands-on work on a regular basis, but what happens is when starting a new brand there is a lot of work in the first three or four years in terms of establishing service in place and financial issues are too up there so you’re owning a lot of risks.”
“Now I am associated with three major brands, Omega hospitals, Renova Hospital and Ziva IVF. Omega hospitals are like my mother organisation. I have been here for the last 10 years though the team has been working together for the last 16 years. After five to six years of starting Omega, I felt I’m getting a little free. Then I got this idea of Midland Multispeciality brand.”
Public Healthcare in India especially in tier 2 and smaller cities made him realise the importance of multi specialities and that idea motivated him to set up small Midland Hospitals on the periphery of Hyderabad. “Most of the major healthcare providers are located in major metros or cities, for example in Hyderabad where I come from, most of the major corporate hospitals are located in two major locations. If a patient comes from the periphery of the city to a big corporate hospital it will be taking more than two hours. In case of emergency, the treatment outcome changes because one is losing the golden time so that is when I thought I should start a model where I put small hospitals and multi-speciality hospitals and on the periphery of a big city. In just one year, I have already started four hospitals and I’m in the process of setting up another three hospitals.”
The doctor believes that health care should be available within five to 10 kilometres. The general public should not be forced to travel so much. “I started this model for the public and probably by adding another three to four hospitals I will try to cover the entire peripheries of Hyderabad and following which will try to reach out to another tier 2-3 cities and If I can succeed, then I will take this model to different cities of India.”
Touching on the importance of corporate social responsibility, Dr Sridhar in a very inspiring way says, “It should come from your heart and not be forced by the government in terms of policies.” On an ending note, the doctor says CSR is extremely crucial and when one is settled at a particular level in life they should look back and give back to the society. “As a part of that, I’ve started my own foundation one year back through which we’re trying to help underprivileged people in areas of health, education and sports.”
SANAV, 8-YEAR-OLD INDIAN CREATES WORLD RECORD
Sanav Ramsankar, an 8-year-old, from Tamil Nadu, India and a resident of Dubai, United Arab Emirates, created a World Record on 23rd November 2021 by reciting salient details of 186 Rivers from around the world covering the continents, length in kilometres, outflow/destination and countries each river flows through.
This record was administered through a virtual live event on 23rd November 2021 at 4:30 pm GST (6:00 pm IST) and was streamed live on Facebook and YouTube. During the event, Sanav recited the details of all the 186 world rivers in 15 mins 53 seconds and became the first in the world to create the “World Record” in this newly created category. Sanav is deeply interested in learning about geography and general landmarks in particular. To expand his knowledge, he has been avidly collecting and learning information through various sources from the Internet. Sanav also can recount the capitals and currencies of 196 countries. Noticing his talent and capabilities, his parents engaged Mr. Sushant Mysorekar (Founder of Brain Rhyme Pvt. Ltd., Singapore and an Internationally certified Intelligence Coach) to coach Sanav, and thus the journey towards this world record started.
It started about two months back under the mentorship of Mr. Sushant Mysorekar. Since then, Sanav has been training in memorizing the details through a combination of cognitive mindset and several creative learning and memory tools and techniques. A Grade Three student from GEMS The Millennium School (Indian CBSE Curriculum), Dubai, Sanav has put in around 60 hours of work to memorize the world river systems and its details.
Sanav shares the credit of his maiden world record achievement with his mentor and his parents. He says, ‘They have encouraged and worked hard to balance my day-to-day activities and priorities! They helped me practice effectively over the entire period.’ Sanav believes in “Work hard; have fun; learn from mistakes; make history!” and during the event, he conveyed a wonderful message – “Hard work never fails.”
Sanav loves his family comprising of his father, Ramsankar Rajendra Raja, from Tamil Nadu, India, a banking technology professional; his mother Aswini, a homemaker and his ever-playful younger brother, 3-year-old Sajiv.
Interestingly, Sanav also loves to play chess and soccer. He has earned medals and certifications from various internal tournaments in Dubai. His aim is to achieve international norms in chess. In addition, Sanav is a Brown Belt holder in Karate and is working towards receiving Black Belt at the earliest. He has also recently opened his own YouTube channel.
NISSAN WANTS EV TO ACCOUNT FOR 50% OF GLOBAL MODEL RANGE BY 2030
Japanese car manufacturer Nissan unveiled its Ambition 2030 plan on Monday with which it intends to invest heavily in making electric and hybrid vehicles half of its global variety by introducing 23 new car models.
“Based on customer demands for a diverse range of exciting vehicles, Nissan will introduce 23 new electrified models [EV], including 15 new EVs by fiscal year 2030, aiming for an electrification mix of more than 50 percent globally across the Nissan and INFINITI brands,” Nissan said in a statement. The company is planning to build its long-term strategy, Ambition 2030, around the concept of electrification, with the intention of investing 2 trillion yen ($17.6 billion) within five years to accelerate electrification of its line-up as well as level of technology innovation.
COUNTERFEIT RUPEE MADE IN PAKISTAN GOES FROM BANGLADESH TO INDIA
The counterfeit rupee is made in Pakistan—goes to India. The route of smuggling these counterfeit notes is Sri Lanka via Bangladesh, then India. This counterfeit rupee smuggling has been going on for a long time. Counterfeit rupee first arrives in Chittagong in a marble container from Pakistan. Then it was brought to Dhaka and stored. They are then smuggled across the border into India at convenient times. The police came to know about this after arresting two members of a fraud ring with a counterfeit currency of Rs 7.5 crore in a special operation in the capital. They were arrested by Gulshan police.
The arrested are Fatema Akhter Opi and Sheikh Mohammad. Abu Taleb. A case has been registered against the arrested at Khilkhet police station. The accused in the case have been sent to court for remand.
Dhaka Metropolitan Police (DMP) Gulshan Division Deputy Commissioner (DC) Assaduzzaman said this at a press conference held at the DMP Media Center on Saturday afternoon. He said two persons were arrested from Khilkhet and Demra areas of the capital on Friday night. DC Asaduzzaman said that Fatema Akhter Opi was arrested on the basis of information that a woman was standing in front of the gate of Banarupa residential area of Khilkhet with fake Indian rupees. Then 50,000 fake Indian rupees were recovered from him. On the basis of the information provided by her, another 7 crores 34 lakh 50 thousand counterfeit Indian rupees were recovered from his own house in Panditpara area of Dakshin Khan police station. Later, another member of the forgery ring Sheikh Mohammad from Demru’s Sarulia area.
DC Asaduzzaman said the arrested Fatema Akter was an active member of the International counterfeit Indian money-laundering ring. For a long time, he used to collect Indian counterfeit currency from Pakistan through international channels and smuggle it to India through marketing through domestic channels. Abu Taleb, who was arrested on November 23, handed over the recovered Indian counterfeit to Fatema Akhter Opi. Taleb, through Pakistani nationals Sultan and Shafi, skillfully smuggled out of 500 sacks of marble stones imported from Pakistan, 95 sacks marked with pink thread, to Bangladesh via Sri Lanka. Describing the ring as involved in the scam for nearly 10 years, DC Asaduzzaman said, “Fatima used to collect these counterfeit coins from Pakistani nationals Sultan and Shafi.
Fatema and Taleb used to hide these counterfeit rupees under the water tank of their house in Dhaka. Later, he used to smuggle it to India through various borders of the country. ‘ The police official further said that Danesh, the husband of Fatema Akter Opi, is a Pakistani citizen. He is ill and now lives at home. He was arrested by DB Motijheel Division a few years ago. There are two cases in his name. In addition, Abu Taleb was traveling to Pakistan. Since her husband is Pakistani, Fatima has also visited Pakistan many times. This is the source of their acquaintance with Sultan and Shafi, the leaders of the fake rupee cycle, and later they too became involved in this cycle.
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