China has indulged in IP theft -Intellectual property theft- in almost every sector No matter which country a new technology is introduced in, clones will be developed in China Normally it would not have been possible in a democratic country For instance, if a company of the UK wishes to clone the product of a US company. then the US company can file a case in the courts in UK But there’s no question of court cases in China The dictator government there promotes these cloning companies and keeps them protected from these things Infact, the rules have been twisted in China to ensure benefits to these companies For example, according to one such rule ,if any foreign company wants to set up a business in China, then they will first have to transfer their intellectual property to their Chinese partners.
The European Union Commission had filed a complaint regarding this in the World Trade Organization in 2018 to highlight how China misuses these things China forces the foreign companies to forfeit their technology to China They would have to forfeit it for free if they wish to do business in China It has been estimated that USA incurs a loss between 300-600 billion dollars annually due to this pilferage by China The second weapon of China is what is called “dumping” in economics.
Dumping refers to the export of a locally made product at such ridiculously low prices so that it would drive the local industries of that country out of business Your market share would increase and you would gain monopoly in that industry and you would then take control of that particular industry in that country For instance, take the example of the toy manufacturers of India who manufacture toys at a certain cost But Chinese companies come in and sell these toys at much lower prices So the consumers would prefer to buy the less expensive Chinese alternatives And if this continued for a couple of years.
If nobody wishes to buy the Indian toys, the Indian toy makers would be driven out of business and the Chinese would gain monopoly over the Indian toy industry You might wonder how China is able to manufacture goods at such low prices that enables it to indulge in dumping There is a simple answer to this- The Chinese government supports dumping The Chinese government provides export subsidies to the companies They are provided with money and subsidies to export and dump in other countries USB sticks, calculators, Vitamin C and E, nylon cords, measuring tapes, CFL lamps caustic soda, kitchenware, tableware, solar cells.
This is a list of items that China is believed to be dumping in India Indian government has begun a review of them A news report of yesterday stated that China has begun dumping of a very important medicine in India and the Indian government is considering a tax hike on it to stop the dumping And India is not the sole country (that is facing this problem) Investigations are currently ongoing in Australia over how China is dumping steel and aluminium in Australia In fact, European Union has already increased the import tax on the steel that is coming in from China.
Their investigation revealed how China was dumping steel in Europe and USA So, due to the aforementioned reason and the dumping tactic, China is able to export so much more than what it imports today Its trade remains in surplus when compared to most other countries The local industries of the rest of the countries are destroyed by being driven out of business and makes the other countries dependent on itself These are the methods used by it.