India bans 59 Chinese apps, including TikTok and WeChat, after deadly border conflict30. June 2020
India bans 59 Chinese apps, including TikTok and WeChat, after deadly border conflict
New Delhi/Beijing , 30.6.2020
India on Monday banned 59 Chinese mobile phone applications, including the extremely popular TikTok( 120 million users) and WeChat . The Ministry of Information Technology stated in its statement that the apps “engage in activities … that affect the sovereignty and integrity of India, the defence of India, the security of the state and public order. This decision, the ministry said, is a targeted step to ensure the security and sovereignty of Indian Cybrspace.
Relations between the two most populous nations in the world have been strained since June 15th following the deadly collision in the Himalayas. The Indian government was forced to act because of the rising rage throughout the country over the death of Indian soldiers. New Delhi has accused Beijing of invading its territory in the region, but the Chinese denied it. Thousands of soldiers remain on alert, although both sides said they were trying to resolve the stalemate through dialogue. The deaths triggered massive outrage and street protests in India. Calls were made for a ban on Chinese companies exporting goods worth almost USD 60 billion to India. What consequences this will have for the Indian economy and thus also for the protesters was obviously of no importance.
The Indian government under Prime Minister Narendra Modi has now also banned the import of Chinese food, because previously a prominent trade union had declared that it would boycott a number of goods imported from China. A hotel union announced last week that it would not allow Chinese guests to stay overnight on its properties.
Millions of Indians downloaded Remove China Apps, a mobile application that helped users identify and delete Chinese software before Google removed it from its Play Store. According to media reports, customs authorities “quarantined” Chinese goods in key Indian ports.
Most of the applications enjoyed great popularity in India, including ByteDance-powered video sharing apps TikTok and Helo, Alibaba’s file sharing app SHAREit and UC Browser, and UC News, which together have more than half a billion users.
It is estimated that there are about 120 million TikTok users in India, making the South Asian country with its 1.3 billion people the largest international market for apps. Other apps on the banned list include the microblogging app Weibo and strategy game “Battle of the Kings”.
In this heated atmosphere, the Chinese smartphone manufacturer Xiaomi launched a deceptive maneuver by advertising for itself in line with the government slogan “Make in India”. After all, Xiaomi’s market share is more than 30 percent. Overall, Chinese mobile phones have a share of almost 65 percent of the smartphone market. From toys, cosmetics, make-up and handbags to household appliances, pharmaceuticals, car parts and steel, China exports more than 3,000 products to India.
Beijing’s direct investment has soared from $1.6 billion in 2014 to at least $8 billion in 2017, while planned and ongoing investment is projected to reach $26 billion, according to the US think tank Brookings. Chinese investors have also invested millions of dollars in major Indian start-ups, including the delivery app Zomato and the payment app Paytm.
India is home to more than 1.3 billion people, has a huge smartphone user base and an English-speaking population, making it the largest social media market in the world. It is therefore perhaps no surprise that India is also the largest market for TikTok, with nearly 191 million downloads at the end of 2019, while the US is second with nearly 41 million downloads.
Social media have a disturbing history in India. TikTok and WhatsApp have also been armed with lethal weapons by India’s extreme right-wing Hindu nationalist movement: viral WhatsApp messages spreading false rumours have led to lynchings against lower castes Muslims and Hindus, while TikTok’s split-screen videos have also been used in caste-hate crimes. And, as we reported last year, Hindu nationalists flooded TikTok with anti-woman videos threatening to overrun Jammu and Kashmir, a province inhabited mostly by Muslims, and “turn it over” in Hindu terms by forcibly marrying Kashmiri girls and women.
India’s recent rise in nationalism towards China has spread to the economic areas. Together with the consequences of the deadly COVID-19 pandemic, this could lead to a 30 to 50 percent drop in bilateral trade this year.
China and India have developed close economic ties in recent years, with both sides maintaining comparative advantages in certain sectors such as car manufacturing, telecommunications and pharmaceuticals. Since they are highly dependent on Chinese supplies, many Indian industries cannot afford an irrational boycott of Chinese components. It would take India years of enormous effort to find a replacement, either by expanding its own industries or by attracting investment from other countries.
Because of these rapidly increasing uncertainties in bilateral relations, the Chinese should reconsider their involvement in India, experts in Beijing advise. There is also talk of a “comprehensive reassessment”. Chinese investors should be completely cautious, especially with regard to the spreading nationalism in India.
Before the clash, India announced increased control of foreign investments, which was seen as a measure to prevent takeovers by Chinese companies. This move served largely political purposes and reflected how immature the Indian market and Indian economic strategies are.
Following the decoupling efforts of the US, India wants to maintain industrial relocation from China. However, this is very difficult to achieve given its inadequate infrastructure for both hardware and software facilities.
It is not easy to sever economic ties with China. And Chinese companies that have invested or intend to invest in the Indian market should be very cautious of erratic nationalism and make a full assessment before investing in the country. The same scenario applies to foreign investments from other countries or regions if they cannot guarantee a lasting friendly relationship with India.
In such circumstances, bilateral trade between China and India is likely to decline by one-third per year in 2020 and could even fall by 50 percent.
Although the two countries have expanded their economic cooperation in recent years, India also complained about its trade deficit with China. Rather than asking China to reduce the deficit, it is more important for India to think about its own industrial competitiveness, since world trade is associated with the rule of comparative advantage.
Indian consumers prefer cost-efficient products. Chinese smartphones, for example, have higher comparative advantages than Indian products. One Chinese smartphone, the OnePlus 8 Pro, sold out in India despite the nationalist boycott of Chinese products just minutes after it hit the shelves on an e-commerce platform.
TikTok from ByteDance, which considers India to be its largest overseas market, is one of the apps now banned. According to Sensor Tower, a market research company for mobile apps, it generated more than 600 million downloads in India by April 29, which is about 30 percent of its total worldwide downloads.
The ban affects apps ranging from browsers to e-commerce, including three apps from the Alibaba Group: UC Browser, UC News and the VMate video platform. Club Factory, which claims to be the third largest e-commerce platform in India, was also banned.
“These apps have brought great benefits to the life and economic activities of the Indian people. They play a key role in improving the functional efficiency of Indian society,” Zhao Jianglin, an expert on Southeast Asian affairs at the National Institute of International Strategy of the Chinese Academy of Social Sciences, told the Global Times on Tuesday.
He added that the ban would eventually become “just a scrap of paper” as these apps are already embedded in the lives of the Indian population and will therefore be difficult to remove.