After producing Ganesh idols for India, China takes over the kimchi market in South Korea
Say what you will of China but there is no denying that when it comes to cracking a market they have no peers in the contemporary world. Forget, for a moment, that an authoritarian state allows policy tweaks and targeted exports of selected goods to countries where the demand for those products is perennial, quite apart from managing to control workers' wages so that Chinese manufacturing units remain competitive globally. Still, it requires real trading nous — almost an inborn instinct — to ferret out a product that will sell in perpetuity and then astonishing the country importing it by producing it at a cost that puts local businesses virtually out of business! On such manufacturing nimbleness has the Chinese economy been built and kudos to Beijing, despite our reservations over the system of governance in and expansionist tendencies of China, for it. We can certainly learn a thing or two from our northern neighbours.
So, whether it's the Goa Chief Minister and former Defence Minister Manohar Parrikar being a little snarky about the shape of the eyes on made-in-China Ganesh idols that have flooded the Indian market, or South Korean politicians huffing and puffing over the fact that kimchi, the country's national dish of fermented cabbage with local spices which UNESCO put on its intangible cultural heritage list as a marker of Korean culture isnow being overwhelmingly manufactured in China which exported over 2,75,000 tonnes of kimchi last year serving 90 per cent of South Korean demand, countries across the world have to learn to manage this disruption of local businesses while at the same time ensuring consumers getting goods at a lower price are not deprived. And it's a tough call.One reaction by governments and private players in countries importing Chinese manufactured products has been to play what can only be termed the emotional-nationalist card. But that hasn't found many takers. So, the provenance of the idols of deeply venerated Hindu deity Ganesh in India, or that of kimchi in South Korea where the long-cherished tradition of the local culture has been for mothers-in-law to hand over the family recipe for the dish to their newly married daughters-in-law obviously does not matter to the consumers it has made little if any difference to their purchase choices.
The second broad reaction has been to disparage the quality of made-in-China products combined with slapping high import duties on these products or erecting other barriers. Such a strategy, we must point out, is subject to the law of diminishing returns; just ask US auto industry which followed a similar tactic when Japanese cars started flooding the North American market by the 1970s what happened! Attractive prices — Japanese cars were derided as being 'cheap and cheerful' — were certainly the initial 'pull' factor but once the brands were established, quality was quickly ramped up and the Japanese ruled both the top-end and the mass market over the next four decades. China is following the same path, scaled up exponentially given its size, and India, South Korea and indeed most countries of the world which have a mounting trade deficit with China need to work out domestic policies that encourage manufacturing in key product divisions in an increasingly globalized world.