China Warns Of "Looming Trade War" With India In Retaliation To Anti-Dumping Duties

Tyler Durden's picture

One of the more under-reported stories - at least among the Western press - are the growing tension between China and India. As reported over the weekend, in the latest escalation, Indian and Chinese soldiers, in addition to the ongoing tense military standoff over a contested road in Doklam, were involved in an altercation in the western Himalayas on Tuesday, further raising tensions between the two countries which are already locked in a two-month standoff in another part of the disputed border. A widely circulated clip on social media showed many soldiers from the two countries punching and kicking each other and throwing stones, a clash which luckily ended before it could devolve into something far more dangerous.

Meanwhile, in addition to a territorial dispute that has the potential to devolve into a shooting skirmish at any moment as thousands of troops have amassed on both sides of the border, a trade war also seems to be looming between India and China after New Delhi imposed anti-dumping duties on 93 Chinese products amidst a military standoff in Doklam area, India's First Post reported last week.

The Indian publication cites an article in China's state-owned Global Times, which urged Chinese firms to "reconsider the risks" of investing in India and warned New Delhi to be "prepared for the possible consequences for its ill-considered action." The article said that China "could easily retaliate" with restrictions on Indian products, but added that it "doesn't make much economic sense" for the country.

Making a less than subtle hint that a trade war would have damaging consequences on the Indian economy, the Global Times cited figures from the Indian embassy in China to show that Indian exports fell by 12.3% year-on-year to $11.75 billion while India's imports from China rose by 2% to $59 billion, resulting in a trade deficit of $47 billion. Meanwhile, according to the Indian Commerce Ministry, the trade deficit with China last year mounted to over $52 billion when the bilateral trade stood at $70 billion.

Dispensing with diplomacy, the Chinese publication warned that "a trade war between China and India seems to be looming after the latter moved last Wednesday to impose anti-dumping duties on 93% from China," and added that "if India really starts a trade war with China, of course China's economic interests will be hurt, but there will also be consequences for India."

Meanwhile, the Global Times also took a swipe at the ongoing military standoff in Doklam in the Sikkim sector where India has protested the construction of a road by the Chinese military in the area claimed by its ally Bhutan, fearing it would allow Beijing to cut off India's access to its northeastern states. The Global Times report strongly cautioned India that "given the tense bilateral trade ties, China may consider temporarily suspending investment or economic cooperation projects in India to ensure the security of these investments."

A separate article in China Daily likewise warned that boycotting Chinese goods would harm India's economy.  Referring to the calls of boycott of Chinese products, it said the ongoing standoff in Doklam seems to have spilled over into bilateral exchanges.

"Suffice to say, calling for the boycotting of Chinese products and those related to Chinese investors is not just a fool's errand but also risks backfiring," it said and added that "it is the Indian economy that will suffer because of the boycott," it said. The editorial concluded that any attempt to keep Chinese cellphone companies at bay or shut down Chinese-invested factories will hurt the Indian economy and cost Indian jobs.

Separately, on Monday China expressed "strong dissatisfaction" with the U.S. decision announced on Friday to probe its intellectual-property practices and pledged to respond if needed. China's Commerce Ministry said that the U.S. "is irresponsible because it’s conducting the review under domestic laws and disregarding World Trade Organization rules." It also said that "the accusations against China aren’t objective and the probe sends the wrong signal as the countries are already making progress on separate negotiations", adding that the international community and U.S. industries will oppose the investigation.

The Commerce Ministry said the U.S. should work with China to press ahead on the one-year economic cooperation plan and keep bilateral economic ties on a healthy and stable track. It urged the U.S. to respect multilateral trade rules and act prudently, adding that the country will monitor the probe’s progress and take appropriate measures to defend China’s rights.

Going back to the latest spat between China and India, while it is still early to make a determination on how this latest trade escalation between the world's two fastest growing economies will be resolved, the troubling reality that China may soon - in a worst case scenario - find itself engaged in trade war on two fronts, with both the US and India, would have significant adverse consequences not only for the Chinese economy but would lead to another negative shock for the entire world, something which we doubt that central bankers are even remotely contemplating as they finalize their Jackson Hole speeches this Friday.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
baldknobber's picture

Hey you dumb chink bastards, you can't trade war with India. You are suppose to be trade Waring with US.

SilverRhino's picture

Trade Warring States Period coming right up.  


froze25's picture

Is this the move? Move the factories from China to India and let the Chinese implode? It could be done. India's demographics are setup perfectly for it right now.

baldknobber's picture

A lot of automotive parts companies have already started sourcing things from India. We noticed it on several very popular #s 3-5 years ago

knukles's picture

Oh fabulous, just plain fabulous.
A real global trade war. 
I wonder how amny wondows Krugman think's it'll break?
In fact, talking about Krugman, where has it been hiding?

Kayman's picture

Kruggy was last seen wearing a sphincter necklace.

Déjà view's picture

Trade War...India as U.S.= losing...Chicom has much more at stake...go ahead...cut nose off inspite of face...
India called bluff = action...U.S. = bluff B.S. poker faced!

Beijing: India’s trade deficit with China mounted to a whopping $46.56 billion last year as Indian exports continued to decline while the bilateral trade marginally slowed down by 2.1% to nearly $71 billion.

The total India-China bilateral trade in 2016 amounted to $70.8 billion, a decline of 2.1% as per the trade figures released by General Administration of Customs (GAC). China exports totaled to $58.33 billion, registering an increase of 0.2% compared to $58.25 billion in 2015, as GAC data accessed by PTI.

Son of Thor's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do...

peddling-fiction's picture

Thermometer reading: getting hotter and rising raBidly.

847328_3527's picture

I hope China shuts down foxxconn to teach Trump a

froze25's picture

I think Foxxconn its actually a foreign company to China.

Kayman's picture

Foxconn is just another Trojan Horse to steal American technology.

sinbad2's picture

What American technology, the wheel?

DaBears's picture

Foxconn is a Taiwan company, they hate the mainland communist party.

sinbad2's picture

People say Chinese stuff is shit, but compared to Indian stuff it is top quality.

As an example, the parts for a Bosch injector made in Germany last for about 300,000 miles, those same parts made in India last about 20,000 miles.

As a sailor I spent a lot of time in Asia, and Chinese traders although hard business men, would honour a deal once struck, the Indians were just crooks.

Indians are the Jews of Asia.

Another regional indian.'s picture

Because chinese manufacuring technology moved up the value chain. China's products were shit once too. but with manufacturing experience and from making and getting better manufacturing technology they made their products better. Japan's product were considered low grade in the 50s and 60s but by 80s they became better and infact considered the best, because of the above. India products may be low grade now (although not all of them) but once they get more experience and and make and get better manufacturing technology they will move up the value chain like china and japan.


As for rest of your stuff, i think you are just making it up. Bad people exist in india sure, but not all of them are bad. Same with other countries....they are both good and bad people in china too and also other countries.

AllBentOutOfShape's picture

You blame China?? Modi is clearly trying to further sabotage BRICS for the US. That much became clear the day he and Obama signed a "defense cooperation" agreement last year. It wasn't long after that that Modi banned gold hoarding in his country and then followed that up with an attack on cash. Now Modi is provoking China militarily. Things were looking up for India-China relations until Modi came into power.  FUCK that little curry stain.

misnomer00's picture

newsflash. gold is still hoarded here. attack on cash? everything is back to what it was. stop your fake news.

harrybrown's picture

A bit of needed proof for the "doubting Thomas'es"

Shift From West To East Occurring As The Dollar Dies:London Paul 

veritas semper vinces's picture

Exactly. India is still a colony and the zionists' bitch.

I put my money on China.

sinbad2's picture

You can't really count the war with the US, because the US is at war with the whole world.

AlphaSeraph's picture

Is it just me or is WW3 really firing up?

I am Jobe's picture

Nothing like a war to reduce population . All Engineered. I palce my bets on Chinese kciking India's butt. 

froze25's picture

I doubt a full fledged war between the two would stay just between the two for very long.

Kayman's picture

WWIII ? Naw, a deal is being worked out to make North Korea the Poland of 1939- China gets half, the U.S. gets the other half. And Kimbo gets to go to Disneyland.

I am Jobe's picture

India dosen't have anything to trade with. What trade IT call centers? Sheesh. 

null's picture

India does have this thing called "private property."
But sure, while the politburo is still standing, China can simulate this "feature" so perhaps it won't matter, until it does.

BritBob's picture

XI is too easily duped. Tell him a fairy story and he'll velieve it if its in China's interests. 

China – Argentina – the Falklands

In tune with Macri's words, Xi Jinping thanked Argentina "the support they have given us for our claim of a single China as we support theirs for the Falkland Islands."  (Telam 17 May 2017)

How can Argentina claim the Falklands when she has never legally owned them?

Falklands- Never Belonged to Argentina (1 page):



Kayman's picture

If Xi had any principles (and he doesn't) then he would be beating the drum to give Argentina back to the Diaguita and Guarani natives.  They have a greater claim to all of Argentina than what Argentina has to the Falklands.

sinbad2's picture

China has a policy that is the exact opposite of US policy, that is it does not interfere in the affairs of other countries.

harrybrown's picture

Can the former European - now- us invader's leave and let the native indians have THEIR land back
just couldnt resist when i hear people talking about "who should have rights to what lands lol

Just remember one thing... the Rothschild have a lot of grubby bits of paper saying they own the fucking planet,

...Does anyone have a match!

Death to the Zionst Money Changers

Wexx's picture

Is it me or are more countries trying to paint China into a corner? If China backed the Yaun with their gold reserves the dollar would vanish and eveyone else would be playing catch-up.

Arnold's picture

I would think the former Soviets would be right there too, if they could afford it.

Ben A Drill's picture

A Trade war is one step closer to a real war. Rock throwing and fist fights is just a precursor to bullets. Just a matter of time.

Dragon HAwk's picture

Why use rocks when you can use a machine gun,  just saying..  never take a rock to a machine gun fight.

Kayman's picture

Trade wars, per se, don't lead to real wars.  Blockades on the other hand....

Kevin Trader's picture

Booooorrrrinnng. Wake me when the first misle launch happens. I held on to my solar eclipse glasses...I bet they come in handy again

847328_3527's picture

Under Armour taking more hits this morning down almost 3%. Bashing our president and the American people has consequences. Maybe Planck can sell his stuff at BLM massacres and antifa rallies?

NuYawkFrankie's picture

RE photo

Why's that dude on the right in Roman Centurion head-gear?

just the tip's picture


are we doing this BRICS or what?

baldknobber's picture

This is all fake news, I was just talking to my India business  patrner today and she said everything was fine.


Ok I was actually on the tech line for direct tv to try and get the NFL ticket that I didn't order taken off my bill, but she said she was having a nice day so there

misnomer00's picture

modi is a shewd man with global ambitions. not a pushover, he will escalate. 

Phillyguy's picture

China is the second (in reality, probably the biggest) largest economy in the world. India is an economic basket case, where 75% of the population lives on less than $2/day. Guess who wins this fight?

Mile High Perv's picture

In a trade war, the country with the trade deficit in it's favor, loses, as it is reliant on exports.

If China is not able to export stuff for a few months, then all the factories will be shuttered, and the laid-off workers will get a rifle with a clip of ammo and a one-way ticket to the Chinese border.