After the emergence of SARS COV-2 or COVID-19 China has been in the news for all the wrong reasons. Many countries including USA are very vocal about the mishandling of the deadly virus by the Chinese government. After Border intrusions by China with India and Taiwan the Chinese government has come under scanner for adoption unfair practices around the globe with a malicious motive to rule the world.

In this article we will cover all the unfair trade practices being adopted by China around the globe. The communist part of China has been the hot topic since 2001 when they joined the WTO (World Trade organisation) and agreed to follow the norms given by WTO and open up their economy. Till this date china has not complied with most of the norms and regulations of WTO in true sense.

Some of the unfair trade practices adopted by China are-

1. DUMPING OF GOODS

Dumping is when a country or company exports a product at a price that is lower in the foreign importing market than the price in the exporter’s domestic market. Because dumping typically involves substantial export volumes of a product. It often endangers the financial viability of the product’s manufacturers or producers in the importing nation. China dumps its goods in the foreign market at a price which lower than the cost of product to local manufactures and thus forces them to shut their business and develop monopoly in that country.

China has been dumping a lot of products all over the world. In India the dumping products includes USB, calculators, toys etc. The unfair trade practices are not limited to only Asia but have gone as far as European Union and Australia. European Union has already increased the import tariffs on steel. USA has started a trade war with China for the goods dumped by China.

2. IP THEFT

Another case of unfair practices by China is IP Thefts done by them. China has copied many brands and pilfered their applications and made a copy of them for use in China. Some of the major clones made by china are mentioned below in table:

In democratic countries like India and USA cloning of applications might attract hefty penalties but the Communist part of China supports such act and provides them protection under their law. Chinese government has been a support for such fraudulent acts and breach of Intellectual Properties. Chinese government has even put up a condition which says if a foreign company wants to use their IP technology in China they have to first transfer the IP to the Chinese partner and only then such technology shall be allowed.

3. CURRENCY MANIPULATION

Currency manipulation is a policy used by governments and central banks to artificially lower the value of their currency (in turn lowering the cost of their exports) to gain an unfair competitive advantage. China directly affects the U.S. dollar by loosely pegging the value of its currency, the yuan, to the dollar. China’s central bank uses a modified version of a traditional fixed exchange rate that differs from the floating exchange rate the United States and many other countries use. The Chinese government has been accused of undervaluing their currency in relation to US Dollar to get cost advantage in exports.

4. DEBT TRAP DIPLOMACY

Debt traps are circumstances in which it is difficult or impossible for a borrower to pay back money that they have borrowed. These traps are usually caused by high interest rates and short terms, and are a hallmark of a predatory lending. A debt trap occurs when a borrower is unable to make payments on the loan principal; instead, they can only afford to make payments on the interest. Because making payments on the interest does not lead to a reduction in the principal, the borrower never gets any closer to paying off the loan itself. It’s pretty similar to a hamster on its wheel: running and running but staying in the same place.

China has created a Debt trap for many developing and under developed countries in Africa as well as Asia. They give huge loans for building infrastructure in these countries and when they are unable to pay them back, the Chinese government buy strategic locations like ports and roads to create military basis. The Mombasa Port in Kenya, an entire island in Maldives and the Hambantota Port in Sri Lanka are prime example of such locations.

Conclusion: These unfair trade practices by China have caused unrest in many countries and every country needs to come together to beat China.