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Doing business with Beijing is becoming a risky proposition across the board

Despite ringing in the new year with a bilateral investment deal, tensions between China and EU have soared over the past week with each side imposing sanctions on the other. It all began when the UK, US, Canada and EU sanctioned Chinese officials responsible for horrific human rights abuses in Xinjiang. China, in full wolf warrior diplomacy mode, immediately hit back targeting even European parliamentarians with its own sanctions. This compelled France, Germany, Denmark and Belgium to summon Chinese envoys and lodge protests. Meanwhile, Chinese social media have put out calls for boycott of Western brands, and Chinese e-commerce giants have dropped many of them from their platforms.

The latest row means that the China-EU investment deal is in serious jeopardy as it awaits ratification by the European parliament. That may never come if Beijing refuses to budge from its aggressive stance. For, China has made it amply clear that it would brook no criticism for egregious human rights violations. In such a scenario, it becomes increasingly difficult to do business with China as it weaponises trade and uses its huge market to punish those who have attracted its displeasure.

In fact, China’s approach effectively scuttles the WTO-supported trading system that aims for fairness and equitable rights, and also makes regional trade pacts it has signed tough to implement. Consider how strained the trade relationship between China and Australia – who are RCEP partners – has become. New Delhi’s staying out of RCEP now looks like an act of foresight. In any case, China won’t provide much market access to Indian products, RCEP or no RCEP. Against this backdrop of trade as a geopolitical weapon, countries are better off looking for alternative resilient supply chains and trade pacts that incorporate mutual respect and values.

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This piece appeared as an editorial opinion in the print edition of The Times of India.



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